DISTRIBUTION AND MANUFACTURING SERVICES AGREEMENT

 

CONFIDENTIAL

 

                                                                    EXHIBIT 10.3

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY

FILED HEREWITH OMITS THE INFORMATION SUBJECT TO THE CONFIDENTIALITY REQUEST.

OMISSIONS ARE DESIGNATED AS *. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED

SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

 

                                  DISTRIBUTION

                                       AND

                        MANUFACTURING SERVICES AGREEMENT

                                     BETWEEN

                                    LEVPHARMA

                                       AND

                                     SANQUIN

 

 

THIS AGREEMENT (the "AGREEMENT") is entered into effective as of 16 January

2004, (the "Effective Date") by and between LEV PHARMACEUTICALS, INC., a

corporation formed under the laws of the state of Delaware, having an address at

236 Old Lancaster Road, Merion Station, Pennsylvania 19066 ("LEVPHARMA") and the

SANQUIN BLOOD SUPPLY FOUNDATION, a not-for-profit organization formed under the

laws of The Netherlands, having an address at Plesmanlaan 125, 1066 CX,

Amsterdam, The Netherlands, acting for the purposes of the AGREEMENT through its

Plasma Products Division, ("SANQUIN") (collectively, the "Parties").

 

 

                              W I T N E S S E T H :

 

      WHEREAS, LEVPHARMA wants to develop the market for C1 Esterase Inhibitor

in the USA and certain other countries and, as a consequence, requires

manufacturing for clinical trial requirements and commercial sale of a C1

Esterase Inhibitor product (the "Product"); and

 

      WHEREAS, LEVPHARMA seeks to obtain a distribution license from an

established manufacturer of the Product for countries in which LEVPHARMA shall

obtain the necessary governmental and/or regulatory authorizations to market the

Product; and

 

      WHEREAS, SANQUIN has proprietary know-how concerning the manufacture and

marketing for clinical applications in humans of a C1 Esterase Inhibitor

containing product, marketed in The Netherlands and certain other countries

under the brand name Cetor(R); and

 

      WHEREAS, SANQUIN has full right and title in the Technology and facilities

used to manufacture the Product; and

 

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       WHEREAS, SANQUIN possesses suitable drug substance manufacturing

facilities and a process to manufacture the Product required by LEVPHARMA, and

will use its best efforts to manufacture the Product in a timely manner

according to the Specifications and in accordance with current Good

Manufacturing Practices (cGMPs) and the terms of this Agreement; and

 

      WHEREAS, SANQUIN is willing to invest in up-grading its facilities to meet

FDA-requirements at SANQUIN's cost; and

 

      WHEREAS, SANQUIN is willing to grant to LEVPHARMA the right to apply for

registration in certain countries, including the USA, at LEVPHARMA's cost;

 

      NOW THEREFORE, in consideration of the foregoing premises, which are

incorporated into and made a part of this Agreement, and of the mutual covenants

which are recited herein, the Parties agree as follows:

 

                             ARTICLE I - DEFINITIONS

 

1.1 "PRODUCT" shall mean C1 esterase inhibitor derived from human plasma as

manufactured by SANQUIN or its subsidiaries on behalf of LEVPHARMA.

 

1.2 "CLINICAL STUDY" shall mean the Phase III study performed to obtain

Registration of the Product for Hereditary Angioedema in the US.

 

1.3 "APPROVAL DATE" as applied to each Batch, shall mean the date on which

SANQUIN's Qualified Person approves the related Batch records and releases the

Product for delivery.

 

1.4 "BATCH" shall mean all material intended to have uniform character and

quality that is produced from a single manufacturing procedure in accordance

with established parameters and according to a single manufacturing order during

that same cycle of manufacture.

 

1.5 "MASTER BATCH RECORD" shall mean the criteria, methodology, manufacturing

Process, Specifications and formulae for the Product, which includes the

identity and quantities of the Raw Materials and other components, as such may

be amended by mutual agreement of the Parties from time to time.

 

1.6 "PROCESSING," "PROCESS," and "PROCESSED" shall have comparable meanings and

shall mean the act of manufacturing and inspecting Product in accordance with

the Master Batch Record and specified procedures.

 

1.7 "PURCHASE ORDER" shall mean the document originated by LEVPHARMA which sets

forth the quantities of Product ordered and delivery dates mutually agreed to by

the Parties.

 

 

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1.8 "RAW MATERIALS" shall mean the plasma, excipients and associated

manufacturing components, all of which are utilized in Processing. The plasma

used to manufacture the Product or any component thereof shall at all times be

obtained from US licensed collection centers.

 

1.9 "REGULATORY AUTHORITIES" shall mean the FDA and all other governmental or

regulatory authorities having jurisdiction over the manufacture and commercial

sale of any Product.

 

1.10 "TECHNOLOGY" shall mean all the technical information, whether tangible or

intangible, including (without limitation) any and all data, techniques,

discoveries, inventions, Processes, formulations, know-how, patents (including

any divisional, continuation, extension, reissue, reexamination certificate, or

renewal patents), patent applications, inventor certificates, trade secrets,

methods of production and other proprietary information, that SANQUIN has rights

to (as either owner, licensee or sublicensee), or may hereafter obtain rights

to, relating to the Product.

 

1.11 "WORKING BATCH RECORD" shall mean the record, for each Batch, of the

criteria, methodology, manufacturing Process, Specifications and formulae for

the Product, which includes the identity and quantities of the Raw Materials and

other components, as set forth in the Master Batch Record, and serves as the

official documentation of that specific manufacturing process as it was

performed for each lot.

 

1.12 "cGMP" shall mean current Good Manufacturing Practice as defined in Parts

210 and 211 of Title 21 of the U.S. Code of Federal Regulations, as may be

amended from time to time, or any successor thereto.

 

1.13 "MANUFACTURING STANDARDS" shall mean, with respect to the Product, good

manufacturing practice as required by the Dutch authorities in order to be in

conformity with EU standards and such additional manufacturing Specifications or

standards as may be established by mutual agreement of LEVPHARMA and SANQUIN

from time to time and as more fully described in Sections 4.1(d) and (e).

 

1.14 "TERRITORY" shall mean all countries in North, Central and South America

with the exception of the Dutch Overseas Territories, Argentina, and Brazil. The

Territory may be expanded in accordance with the provisions in Sections 2.1

and/or 2.2(a) of this Agreement.

 

1.15 "REGISTRATION" shall mean, with respect to each country in the Territory,

approval of the Registration Application for any Product filed in such country,

including, where applicable outside of the United States, pricing or

reimbursement approval by the Regulatory Authority in such country.

 

 

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1.16 "REGISTRATION APPLICATION" shall mean a Biologics License

Application under the United States Federal Food, Drug and Cosmetics Act and the

regulations promulgated thereunder, or a comparable filing for Registration in

any other country in the Territory.

 

1.17 "REGULATORY FILING" shall mean any document required to be filed under the

United States Federal Food, Drug and Cosmetics Act and the regulations

promulgated thereunder, or any such comparable filing in any other country.

 

1.18 "SPECIFICATIONS" shall mean, with respect to the Product, the

Specifications for Processing the Product as agreed upon by LEVPHARMA and

SANQUIN, in consideration of the regulatory requirements in each country, as may

be amended from time to time and as more fully described in Sections 4.1(d) and

(e).

 

1.19 "CALENDAR QUARTER" shall mean the periods ending on March 31, June 30,

September 30 and December 31 of each year.

 

1.20 "CALENDAR YEAR" shall mean the period beginning on January 1 and ending on

December 31 of each year.

 

1.21 "AFFILIATE" shall mean, as to any person or entity, any other person or

entity which directly or indirectly controls, is controlled by, or is under

common control with such other person or entity and it shall include

subsidiaries. For purposes of the preceding definition, "control" means the

right to control, or actual control of, the management of such other entity,

whether by ownership of voting securities, by agreement, or otherwise.

 

1.22 "QUALIFIED PERSON" shall mean any person who possesses the skills,

experience, education, and authority to perform a task or job described in this

Agreement.

 

1.23 "REGULATORY APPROVAL" shall mean all approvals, licenses, registrations and

authorizations of all governmental agencies in a country necessary for the

manufacture, use, offer for sale, sale or import of the Product in the

applicable country.

 

1.24 "EUROPEAN UNION" shall mean all the members of the European Union as of

December 31, 2004.

 

1.25 "HANDLING SPECIFICATIONS" shall mean the Specifications for the handling,

the storage, the use, the transport and the general possession of the Product by

LEVPHARMA, in accordance with the specifications and standards defined and

specified in the Quality Agreement, which shall remain attached to this

Agreement as Exhibit 1, and this for the entire period the Product is in

possession and under the responsibility of LEVPHARMA, i.e. as from the time the

Product is shipped by SANQUIN "F.O.B., Amsterdam", in accordance with

LEVPHARMA's written instructions as detailed on the Purchase Order as defined in

section 4.4 of the Agreement, until such time the Product has been successfully

distributed, marketed, offered for sale, sold and/or imported by LEVPHARMA to a

third party, user of the Product.

 

 

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1.26 "EFFECTIVE DATE" shall mean the date put in writing on the first page of

this Agreement, upon execution of this Agreement on behalf of both Parties.

 

1.27 "CLINICAL DEVELOPMENT PLAN" shall mean plan to collect necessary data to

support licensure in the US.

 

1.28 "COMPETITOR" shall mean current manufacturer and/or distributor of C1

Esterase Inhibitor and/or any product marketed for the same clinical indications

as C1 Esterase Inhibitor.

 

                          ARTICLE II - GRANT OF RIGHTS

 

2.1 LEVPHARMA Rights. SANQUIN owns certain Technology and facilities to

manufacture the Product. Upon execution of this Agreement, SANQUIN agrees to use

the Technology to manufacture the Product for LEVPHARMA subject to the terms and

conditions set forth in this Agreement. LEVPHARMA shall have and SANQUIN hereby

grants to LEVPHARMA the exclusive right to distribute, market, offer for sale,

sell, import and promote the Product in the Territory and the first right of

refusal to distribute, market, offer for sale, sell, import and promote the

Product in the rest of the world outside of the EU as outlined below, which

shall become exercisable upon market introduction of the Product in the US.

 

In the event that SANQUIN is either approached by or approaches a third party to

distribute, market, offer for sale, sell, import and promote the Product in a

country or territory outside the Territory and the EU, SANQUIN shall provide

LEVPHARMA with notice of such interest, and shall allow LEVPHARMA thirty (30)

days to either accept or reject the right to distribute, market, offer for sale,

sell, import and promote the Product in such country or territory.

 

            (i) Should LEVPHARMA accept the right, then LEVPHARMA shall have 120

days to draft a plan to develop the Product in such country or territory,

including timelines, regulatory requirements (including, but not limited to,

plasma source and testing requirements) and sales volumes. The Parties agree

that all other terms of this Agreement shall apply to any such expansion of the

Territory. Upon LEVPHARMA submitting such a proposal, the Parties shall

negotiate in good faith to reach an agreement within 30 days. The Parties agree

that all meetings to discuss the expansion of the Territory shall be held in the

US.

 

            (ii) Should LEVPHARMA reject the right then SANQUIN shall be free to

grant the right to distribute, market, offer for sale, sell, import and promote

the Product in said country or territory to a third party.

 

            (iii) Should SANQUIN and LEVPHARMA not reach an agreement regarding

the proposal made by LEVPHARMA as under (i) above, then SANQUIN shall be free to

grant the right to said country or territory to a third party, but only on terms

not less favorable to SANQUIN than those contained in the LEVPHARMA proposal.

 

 

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2.2 SANQUIN Rights.

 

(a) SANQUIN shall retain all rights to develop, distribute, market, offer for

sale, sell, import and promote the Product in the EU. Should SANQUIN decide not

to obtain and/or maintain a marketing authorization in certain EU countries by

the time LEVPHARMA has successfully introduced the Product in the markets in the

U.S.A. , then the Parties agree to negotiate in good faith the expansion of the

Territory to include such EU countries where SANQUIN has not obtained and/or is

not pursuing a marketing authorization. The Parties agree that all other terms

of this Agreement shall apply to any such expansion of the Territory.

 

(b) SANQUIN shall have the following rights to acquire LEVPHARMA-owned

Registration(s) and/or Registration Application(s) for the Product and any

LEVPHARMA-owned authorization(s) to market the Product, in accordance with the

applicable regulations including but not limited to the FDA regulations, in the

following circumstances and according to the terms and conditions agreed to by

the Parties at such time:

 

            i) In the event that LEVPHARMA ceases to distribute the Product in

            any country of the Territory where LEVPHARMA holds a valid

            Registration for the Product, SANQUIN shall have the first right of

            refusal to acquire LEVPHARMA-owned Registration(s) and/or

            Registration Application(s) for the Product and any LEVPHARMA-owned

            authorization(s) to market the Product. The parties shall negotiate

            in good faith to set the terms of such a transfer;

 

            ii) In the event that LEVPHARMA files for bankruptcy under either

            Chapter 7 or Chapter 11 of the US Federal Bankruptcy Code, SANQUIN

            shall have the right to immediately assume all LEVPHARMA interests

             in the Registration(s) and/or Registration Application(s) for the

            Product.

 

Notwithstanding the above and in accordance with paragraph 1.10 of the

Agreement, SANQUIN is and remains at all time the exclusive owner of the rights

to the Technology. LEVPHARMA has no right with respect to the Technology other

than those expressly granted under this Agreement, and subject to the terms

hereof.

 

 

                        ARTICLE III - REGULATORY MATTERS

 

3.1 In General.

 

In connection with performing their obligations pursuant to this Agreement,

LEVPHARMA and SANQUIN shall use all commercially reasonable efforts to perform

such responsibilities diligently, with the objective of maximizing the sales

potential of the Product and promoting the therapeutic profile and benefits of

the Product in the most commercially beneficial manner. Without limiting the

generality of the foregoing, each such Party shall:

 

            (i) collaborate and cooperate in the preparation and filing of all

            Regulatory Filings and all other aspects necessary to implement this

            Agreement;

 

 

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<PAGE>

 

            (ii) use commercially reasonable efforts to perform the work set out

            for such Party to perform in this Agreement;

 

            (iii) conduct all work pursuant to this Agreement in good scientific

            manner, and in compliance in all material respects with all

            requirements of applicable laws, rules and regulations, and all

             other requirements of any applicable cGMP, good laboratory practice

            and current good clinical practice to attempt to achieve the

            objectives of this Agreement efficiently and expeditiously; and

 

            (iv) maintain records, in sufficient detail and in good scientific

            manner, which shall be complete and accurate and shall fully and

            properly reflect all work done and results achieved in connection

            with the Product in the form required under all applicable laws and

            regulations.

 

3.2 Pre-approval.

 

(a) The Parties shall collaborate and cooperate in the preparation and filing of

all Regulatory Filings. LEVPHARMA shall be the party primarily responsible for

conducting the Clinical Study and all regulatory matters necessary to support,

prepare and file any Regulatory Filing. LEVPHARMA shall be the party primarily

responsible for preparing all Regulatory Applications necessary or desirable to

register the Product. LEVPHARMA shall be responsible for filing all Regulatory

Applications and, thereafter, to conduct all communications with the Regulatory

Authorities during the registration process. However, LEVPHARMA shall consult

extensively with SANQUIN and submit the protocol for the Clinical Study and all

documents related to such Regulatory Applications to SANQUIN for review before

submitting those to Regulatory Authorities. SANQUIN shall provide all technical

data and support necessary to assist LEVPHARMA to prepare such Regulatory

Applications. LEVPHARMA shall keep SANQUIN informed as to the status of all

efforts related to the regulatory and clinical trial process. Such information

shall comprise, but not be limited to, providing SANQUIN with copies of all

correspondence received from Regulatory Authorities as well as providing SANQUIN

with the opportunity to review any revisions to any filings with Regulatory

Authorities during their preparation. LEVPHARMA shall confer with SANQUIN

regarding the preparation of such filings and the registration process.

LEVPHARMA shall, where practicable, discuss with Sanquin any commitments to

Regulatory Authorities prior to agreeing to them. Any commitments made by

LEVPHARMA which have not been agreed to beforehand by SANQUIN will be submitted

to SANQUIN by LEVPHARMA as soon as possible afterwards and will be subject to

SANQUIN's agreement.

 

(b) SANQUIN shall deliver to LEVPHARMA copies of all relevant and material data,

studies and other written materials in SANQUIN's possession, relating to the

Product, or the Processing of the Product , including manufacturing information,

clinical and pre-clinical studies, and any other information required by

LEVPHARMA to make a Regulatory Filing.

 

 

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(c) LEVPHARMA and SANQUIN shall share all the data resulting from the Clinical

Study as well as any other data of which either party may come into possession

related to the Product. The Parties agree to mutually consult with each other in

the interpretation and reporting of such data. LEVPHARMA and SANQUIN shall have

the right to use such data free of charge in reporting and up-dating files.

 

 

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3.3 Post Registration. The Parties shall collaborate and cooperate in all

regulatory matters. Specifically, all obligations and commitments as to sharing

and delivery of data as under article 3.2 above shall continue to apply.

However, LEVPHARMA shall be primarily responsible for all regulatory activities

in a country in the Territory after Registration in such country has been

obtained by LEVPHARMA, including but not limited to regulatory compliance,

worldwide safety surveillance, adverse event reporting and all other necessary

support services. LEVPHARMA shall be the party responsible to the Regulatory

Authorities for ensuring compliance of the Product Specifications with all

applicable Manufacturing Standards. However, SANQUIN shall be responsible for

compliance of the manufacturing and Processing procedures according to the

Specifications and Manufacturing Standards as defined by the Parties. Each Party

will provide reasonable assistance to the other, at no charge, if necessary to

respond to FDA or other regulatory audits, inspections, inquiries or requests

concerning the Raw Materials or Product. LEVPHARMA shall refrain from making

commitments in communications with Regulatory Authorities unless, where

practicable, such commitments have been brought to the attention of SANQUIN in

writing and discussed with SANQUIN beforehand. Any commitments made by LEVPHARMA

which have not been agreed to beforehand by SANQUIN will be submitted to SANQUIN

by LEVPHARMA as soon as possible afterwards and will be subject to SANQUIN's

agreement as described in Article VI.

 

3.4 Ownership. LEVPHARMA shall be responsible for obtaining Registration

approval for Product in the Territory and shall own the regulatory approvals in

the Territory. SANQUIN agrees to comply with all commitments made in any

Registration Application, having provided their input into and prior written

review of such commitments, regarding SANQUIN's manufacturing responsibilities

as described herein. SANQUIN shall be responsible for the maintenance of the

Drug Master File covering the SANQUIN Facility.

 

3.5 Notices Regarding Product. SANQUIN and LEVPHARMA shall each give the other

prompt notice of any information either of them receives regarding the safety of

the Raw Materials or Product, including any confirmed or unconfirmed information

on adverse, serious or unexpected events associated with the use of the Product.

For serious or unexpected events, notice must be given by telephone within one

(1) business day after receipt of the information and followed by written notice

not less than one (1) week thereafter. All responsibility, including responses

due and cost for filing any reports with the FDA or other Regulatory Authorities

concerning such reactions (including Drug Experience Reports) caused by the

Product manufactured for LEVPHARMA shall be LEVPHARMA's. SANQUIN will provide

timely assistance in responding to any complaints including reviews of Batch

records and retained samples as well as testing of Product engendering a

complaint if required, and LEVPHARMA will reimburse SANQUIN for reasonable

expense incurred therewith. The costs of such testing shall be borne by

LEVPHARMA; however, if it is determined that the Product complaint was directly

or indirectly caused by SANQUIN's failure to Process the Product in accordance

with the Specifications, or was caused by a manufacturing error or omission,

SANQUIN shall reimburse LEVPHARMA for the actual and reasonable costs of such

testing and shall defend, hold harmless and indemnify LEVPHARMA with respect to

all Claims arising therefrom or relating thereto.

 

 

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                       ARTICLE IV - MANUFACTURE AND SUPPLY

 

4.1 Supply of Product

 

(a) Supply for the Clinical Study. SANQUIN shall supply all Product necessary

for the Clinical Study, but limited to the maximum aggregate amount of * units,

supplies being divided in time as follows:. SANQUIN shall supply at least *

units as soon as possible after SANQUIN is able to obtain an export license for

the Product, but no later than July 1, 2005. SANQUIN shall also provide an

additional amount of Product so that a total of * units are delivered to

LEVPHARMA no later than July 1, 2005. SANQUIN shall provide an additional *

Units to LEVPHARMA by December 31, 2005. Thereafter, the Parties shall agree to

a timetable for the manufacture and delivery of the remaining * Units. SANQUIN

shall provide the Product for the Clinical Study in a form and in packaging as

required by LEVPHARMA necessary to complete the Clinical Study. Such packaging

shall include all materials needed to infuse the Product or placebo. However,

LEVPHARMA shall be responsible for identifying at least three different

FDA-approved vendors, acceptable to SANQUIN, for such materials, i.e. suitable

water for injection and all other accessories needed, and obtaining quotations

from such which vendors to be submitted to SANQUIN for SANQUIN to negotiate and

select an appropriate vendor at SANQUIN's cost. Such Product shall be supplied

by SANQUIN in accordance with the Clinical Specifications and Manufacturing

Standards as described in Section 4.1(e) below and in accordance with forecasts

provided by LEVPHARMA after the Regulatory Filing has been filed with the FDA

for said Clinical Study, which forecasts shall not exceed the delivery schedule

outlined above. SANQUIN shall invoice LEVPHARMA for the Clinical Product

according to the terms outlined in Section 5.2(a).

 

(b) Placebo for the Clinical Study. LEVPHARMA shall, in accordance with the

needs pursuant to the protocol for the Clinical Study, obtain suitable placebo

from a third party at LEVPHARMA's responsibility and cost. LEVPHARMA shall

provide SANQUIN with such placebo free of charge and SANQUIN shall package the

placebo in a way similar to the Product to be used in the Clinical Study, and

shall deliver the labeled and packaged placebo according to LEVPHARMA's

requirements.

 

(c) Commercial Supply. Commencing on the commercial launch of the Product and

thereafter during the term of this Agreement, subject to the terms and

conditions of this Section 4, SANQUIN shall supply LEVPHARMA with LEVPHARMA's

requirements for Product for commercial use in each country pursuant to this

Agreement where LEVPHARMA has Regulatory Approval. Said Product shall at all

times be ordered and supplied according to the procedures outlined in sections

4.2 and 4.3

 

 

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            (i) Minimum Annual Purchase.

 

            A) In the Calendar Year that LEVPHARMA receives Regulatory Approval

            in the US, LEVPHARMA shall purchase and SANQUIN shall supply a

            minimum of the Pro Rata share of * units based on the actual number

            of days from when the Registration Application is approved by the

            Regulatory Authorities in the United States until the end of the

            year in which the approval is received.

 

            B) Each Calendar Year thereafter, LEVPHARMA shall purchase and

            SANQUIN shall supply a minimum of * units of Product.

 

            C) Should LEVPHARMA require more than * Units per Calendar Year,

            SANQUIN shall supply such additional amounts. However, SANQUIN shall

            never be obliged to supply to LEVPHARMA more than * Units of Product

            per Calendar Year under the terms of this Agreement.

 

            D) The quantities mentioned under (B) and (C) above are applicable

            to the Territory as defined on the Effective Date of this Agreement.

            These quantities may be modified by mutual agreement of the Parties

            in the event that the Territory is extended according to Sections

            2.1 and/or 2.2(a).

 

            (ii) Scale Up

 

            SANQUIN agrees to perform an analysis of the feasibility of scaling

            up the production of the Product and provide the results of this

            analysis to LEVPHARMA no later than 10 months after the Clinical

            Study is initiated. The parties shall then make a mutual decision on

            whether or not to scale up the production of the Product (the "Scale

            Up"). In the event that a Scale Up is agreed to, the Parties shall

            negotiate in good faith to reach an agreement on the details of the

            Scale Up. However, the following timelines should be included in any

            such agreement:

 

                  o      12 months after the initial Clinical Study is initiated:

                        final decision on Scale Up

                  o      20 months after the initial Clinical Study is initiated:

                        clinical trial material from Scale Up is validated

                   o      24 months after the initial Clinical Study is initiated:

                        clinical trial for Scale Up Product is initiated

                        (clinical trial #2)

                  o      36 months after the initial Clinical Study is initiated:

                        commercial product from Scale Up is available

 

(d) Processing. SANQUIN, as the owner of the Technology and any improvements

thereof, shall be responsible for Processing the Product, whether by itself or

by third parties or subsidiaries, including, without limitation, CAF-DCF

cvba-scrl in Brussels, Belgium according to the applicable Commercial

Specifications and Manufacturing Standards as outlined in section 4.1(f) and

according to any and all marketing authorization(s) or product approvals in the

Territory. Said Processing shall include, without limitation, all Product

labeling and other package inserts and materials required by the applicable

Regulatory Authorities. SANQUIN shall ensure that all services, facilities and

goods used in connection with such manufacture comply with the applicable cGMPs

in effect. In the event that SANQUIN intends at any time to provide the

Commercial Supply from a facility or manufacturing process that is different

than that used to provide the Clinical Supply:

 

 

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            i) SANQUIN shall obtain the consent of LEVPHARMA (which consent

            shall not be unreasonably withheld) prior to making any changes.

 

            ii) SANQUIN shall complete and bear all costs associated with

            implementing said changes and performing the studies necessary to

            meet any and all requirements from the Regulatory Authorities needed

            to approve such change, except that LEVPHARMA shall complete and

            bear the costs of any clinical trial necessary to implement said

            changes.

 

            iii) SANQUIN shall supply at their expense the Product required for

            any clinical trial necessary as a result of a change in either the

            facility or manufacturing process from that used to provide the

            Product for the Clinical Study. It is stipulated that LEVPHARMA

            shall bear the costs except for the supply of Product, for any

            clinical trial required as a consequence of the Scale Up as

            contemplated under 4.1(c).(ii) above or a change in the facility or

            manufacturing process as described under 4.1(d).

 

(e) Clinical Study Specifications and Manufacturing Standards. The Product for

the Clinical Study shall be manufactured by SANQUIN according to the Clinical

Specifications and Manufacturing Standards that are attached hereto as Exhibit 1

and any amendments thereto, (the Quality Agreement.) Said Clinical

Specifications and Manufacturing Standards shall conform in all material

respects to the current process used by SANQUIN to manufacture the Product.

In addition, Parties agree to the following:

 

            i)     SANQUIN will use its reasonably best commercial efforts to

                  obtain an export license prior to September 1, 2004. Should

                  SANQUIN fail to obtain such a license by September 2004,

                  SANQUIN shall not bear any liability to LEVPHARMA under the

                  terms of this Agreement.

 

            ii)    SANQUIN will not be required to fulfill its obligations to

                  supply product until such a license is obtained.

 

            iii)   Both parties will cooperate fully to obtain an export license

                  as soon as possible.

 

            iv)    In the event that SANQUIN fails to obtain such a license prior

                  to September 1, 2005, Parties shall terminate this Agreement

                  without any Party bearing any liability to the other party

                  under the terms of this Agreement.

 

 

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(f) Commercial Specifications and Manufacturing Standards. The Commercial

Product shall be manufactured by SANQUIN at the same location and according to

the same manufacturing process as that used to produce the Product for the

Clinical Study unless otherwise agreed to by the Parties according to Section

4.1(d) above. LEVPHARMA and SANQUIN shall cooperate in good faith and shall,

upon the written agreement of the Parties, up-date where necessary the Quality

Agreement to reflect the Commercial Specifications and Manufacturing Standards

for this Agreement. The Parties agree that the Commercial Specifications and

Manufacturing Standards for this Agreement shall conform to any requirements

from the FDA or any other Regulatory