EX-10.1: DEVELOPMENT AND TOLL MANUFACTURING AGREEMENT

Manufacturing Agreement

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BAXTER HEALTHCARE CORPORATION | JAVELIN PHARMACEUTICALS

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Title: EX-10.1: DEVELOPMENT AND TOLL MANUFACTURING AGREEMENT
Governing Law: Delaware Date: 8/9/2007
Industry: Biotechnology and Drugs Sector: Healthcare

EX-10.1: DEVELOPMENT AND TOLL MANUFACTURING AGREEMENT, Parties: baxter healthcare corporation , javelin pharmaceuticals

Exhibit 10.1

[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

DEVELOPMENT AND TOLL
MANUFACTURING AGREEMENT

between

JAVELIN PHARMACEUTICALS

and

BAXTER HEALTHCARE CORPORATION

TABLE OF CONTENTS


1. DEFINITIONS			3

2. SUPPLY			6

3. SUPPLY OF API			8

4. MANUFACTURE			9

5. PRODUCT SPECIFICATIONS; CERTIFICATE OF ANALYSIS			10

6. LABELING AND PACKAGING			10

7. FORECASTS			11

8. PURCHASE ORDERS			11

9. DELIVERY			13

10. PRICE AND PAYMENTS			13

11. INSPECTION OF PRODUCT			14

12. ACCESS TO MANUFACTURING FACILITY AND RECORDS			15

13. REPRESENTATIONS AND WARRANTIES; DISCLAMERS;

LIMITATION OF LIABILITY			16

14. INDEMNIFICATION			18

15. RECALLS			19

16. TERM AND TERMINATION			20

17. CONFIDENTIALITY			21

18. INSURANCE			23

19. MISCELLANEOUS			23


SCHEDULE 1.9		API SPECIFICATIONS

SCHEDULE 1.24		NOVEL EXCIPIENT SPECIFICATIONS

SCHEDULE 1.26		PRODUCT SPECIFICATIONS

SCHEDULE 1.28		QUALITY AGREEMENT

SCHEDULE 2.1		DEVELOPMENT PLAN

SCHEDULE 2.2		PRODUCT DEVELOPMENT WORK AND BUDGET

SCHEDULE 10.1		PRICING

DEVELOPMENT AND TOLL MANUFACTURING AGREEMENT

This Development and Toll Manufacturing Agreement (this “Agreement”) is entered into as of this 25 day of April, 2007 (the “Effective Date”) by and between Javelin Pharmaceuticals, a Delaware corporation, having its principal place of business at 125 CambridgePark Drive, Cambridge, MA 02140 (“Purchaser”), and Baxter Healthcare Corporation, a Delaware corporation, having a place of business at 95 Spring Street, New Providence, NJ 07974 (“Supplier”).

WHEREAS, Supplier manufactures certain pharmaceutical products;

WHEREAS, Purchaser intends to distribute and market finished dosage pharmaceutical products, including, without limitation, a certain intravenous dosage product sometimes currently known as “Diclofenac Sodium Injection (the “Product”); and

WHEREAS, Purchaser wishes to procure from Supplier, and Supplier wishes to provide certain product development support and to supply to Purchaser, certain quantities of the Product in vials on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the covenants and obligations expressed herein, and intending to be legally bound hereby, the parties agree as follows:

1. DEFINITIONS. As used in this Agreement, the following terms shall have the following respective meanings:

	1.1		“ Acceptable Product ” has the meaning assigned thereto in Section 11.1.

	1.2		“ Act ” means the United States Food, Drug, and Cosmetic Act, as the same may be amended from time to time, and rules and regulations promulgated there under.

	1.3		“ Activities ” has the meaning assigned thereto in Section 4.3.

	1.4		“ Affiliate ” means any individual or entity directly or indirectly controlling, controlled by, or under common control with a party. For purposes of this definition, “control” means the direct or indirect ownership of at least fifty percent (50%) of the outstanding voting securities of a party, or the right to control the policy decisions of such party. Notwithstanding the foregoing, the term “Affiliate” does not include subsidiaries in which a party or its Affiliates owns a majority of the ordinary voting power to elect a majority of the board of

			directors, but is restricted from electing such majority by contract or otherwise, until such time as such restrictions are no longer in effect.

	1.5		“ Alternate Presentation ” means any injectible pharmaceutical other than two mL of Product in a two mL vial.

	1.6		“ Alternative Source Period ” has the meaning assigned thereto in Section 8.7.

	1.7		“ Annual Period ” means a period of twelve (12) calendar months beginning on the date of the Regulatory Approval by the FDA for the Product, and each 12-month period thereafter during the Term.

	1.8		“ API ” means the active pharmaceutical ingredient diclofenac sodium USP.

	1.9		“ API Specifications ” means the specifications for or concerning the manufacturing, testing, and packaging of bulk API set forth in Schedule 1.9 attached hereto, as the same may be amended from time to time upon written agreement of the parties.

	1.10		“ Binding Forecast ” has the meaning assigned thereto in Section 7.2.

	1.11		“ Calendar Year ” means a period of twelve (12) calendar months, beginning each January 1 and ending on the subsequent December 31 during the Term.

	1.12		“ Certificate of Analysis ” has the meaning assigned thereto in Section 5.2.

	1.13		“ cGMP ” means current good manufacturing practice promulgated by the FDA, including, without limitation, the Act, 21 C.F.R. Parts 210 and 211, and all applicable FDA rules, regulations, policies and guidelines in effect at a given time.

	1.14		“ Claim ” has the meaning assigned thereto in Section 14.3.

	1.15		“ Commercially Reasonable Efforts ” means efforts and resources normally used by a party for a compound or product owned by it or to which it has rights, which is of similar market potential at a similar stage in its product life, taking into account the competitiveness of the marketplace, the proprietary position of the compound or product, the regulatory structure involved, the profitability of the applicable product, and other relevant factors.

	1.16		“ Confidential Information ” means all proprietary and confidential information of a party, including, without limitation, trade secrets, technical information, business information, sales information, customer and potential customer lists and

identities, product sales plans, license and sublicense agreements, inventions, developments, discoveries, know-how, methods, techniques, formulae, data, processes, and other proprietary ideas, whether or not protectable under patent, trademark, copyright, or other legal principles, that the other party has access to or receives, but does not include information that (a) is or becomes publicly available through no breach of this Agreement by the receiving party; (b) was already known to the receiving party at the time it was disclosed to the receiving party hereunder; (c) is independently developed by employees of the receiving party without the aid, use, or application of Confidential Information received from the disclosing party hereunder; or (d) is received from a Third Party which is under no obligation of confidentiality to the disclosing party.

1.17 “ FDA ” means the United States Food and Drug Administration, or any successor entity.

1.18 “ Force Majeure Event ” has the meaning assigned thereto in Section 19.7.

1.19 “ Indemnitee ” has the meaning assigned thereto in Section 14.3.

1.20 “ Indemnitor ” has the meaning assigned thereto in Section 14.3.

1.21 “ Manufacturing Facility ” means Supplier’s facility located at 2 Esterbrook Lane, Cherry Hill, New Jersey 08003.

1.22 “ Materials ” means any or all chemical substances, inactive ingredients, excipients other than the Novel Excipient, components, labels, packaging materials, and other consumable materials used in the manufacture of the Product; provided, however, that the term “Materials” shall not include any equipment used in the manufacture of the Product.

1.23 “ Novel Excipient ” means Kleptose(r) HPB (hydroxypropylbetadex).

1.24 “ Novel Excipient Specifications ” means the specifications for or concerning the manufacturing, testing, and packaging of the Novel Excipient set forth in Schedule 1.24 attached hereto, as the same may be amended from time to time upon written agreement of the parties.

1.25 “ Product ” means the pharmaceutical product currently known as Diclofenac Sodium Injection or Dyloject(r) containing the API.

1.26 “ Product Specifications ” means the specifications for or concerning the manufacturing, testing, and packaging of Product set forth in Schedule 1.26

			attached hereto, as the same may be amended from time to time upon written agreement of the parties.

	1.27		“ Proposed Response ” has the meaning assigned thereto in Section 12.2.

	1.28		“ Quality Agreement ” means the applicable agreement, dated as of the date hereof, between Supplier and Purchaser, in the form of Schedule 1.28 attached hereto relating to the Product manufactured at Cherry Hill, New Jersey.

	1.29		“ Reasonable Steps ” has the meaning assigned thereto in Section 17.1.

	1.30		“ Recall ” means any action by Purchaser and its Affiliates, or Supplier and its Affiliates, to recover title or possession or halt distribution, prescription, or consumption of Product sold or shipped to Third Parties. The term “Recall” also applies to Product that would have been subject to recall if it had been shipped.

	1.31		“ Regulatory Approvals ” means all authorizations by the appropriate Regulatory Authorities that are required for the manufacture (other than manufacturing facility licenses, approvals, or authorizations), marketing, promotion, pricing, and sale of the Product in the Territory.

	1.32		“ Regulatory Authority ” means any national, supra-national, regional, state, or local regulatory agency, department, bureau, commission, council, or other governmental entity in the Territory involved in the granting of Regulatory Approval for the Product, including, without limitation, the FDA.

	1.33		“ Rolling Forecast ” has the meaning assigned thereto in Article 7.

	1.34		“ Seizure ” means any action by the FDA to detain or destroy Product or prevent the distribution, prescription, consumption, or release of Product.

	1.35		“ Technical Coordinator ” has the meaning assigned thereto in Section 2.2.1 hereof.

	1.36		“ Term ” has the meaning assigned thereto in Section 16.1.

	1.37		“ Territory ” means the United States and its commonwealths and territories (including, without limitation, Puerto Rico).

	1.38		“ Third Party ” means any person or entity other than Supplier, Purchaser, and their respective Affiliates.

	1.39		“ Unit ” means each two mL vial.

[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

2. BAXTER OBLIGATIONS FOR DEVELOPMENT AND SUPPLY .

	2.1		Process or Development Tasks . Supplier shall provide Purchaser with a timeline, milestones and FDA submission documentation that support internal product and process development tasks described in the development plan set forth in Schedule 2.1 (“Development Plan”). Purchaser and Supplier will agree upon those tasks that each will perform and the associated timelines. Supplier will develop price estimates for each major milestone. Purchaser will provide purchase orders to cover Supplier’s pricing for each major milestone.

	2.2		Development Work and Budget . Supplier shall perform the development and scale-up work described in the Development Plan (“Product Development Work”). Purchaser shall make payments to Supplier for its performance of the Product Development Work in accordance with the budget and payment schedule (the “Budget”) established with respect to the Product Development Work, as described in the Development Plan within [***] days of the later to occur of (i) completion of the relevant portion of the Product Development Work triggering such payment pursuant to the Budget, to Purchaser’s reasonable satisfaction, and (ii) receipt of a detailed invoice with respect to same.

	2.3		Obligation to Supply Product . During the Term, Supplier shall manufacture and supply Product to Purchaser, and Purchaser shall purchase Product from Supplier, pursuant to the provisions of this Agreement.

	2.4		Technical Coordinator .

	2.4.1		Appointment . Purchaser shall appoint an authorized technical representative and a back-up technical representative by providing written notice of such representatives to Supplier (each, a “Technical Coordinator”). Purchaser may replace either of its Technical Coordinators at any time, with or without cause, by providing written notice thereof to Supplier.

	2.4.2		Responsibilities of Technical Coordinators . The Technical Coordinators shall be responsible for communications, other than legal notices, between the parties in matters of quality, manufacturing, project management, and compliance with respect to the Product. The Technical Coordinators shall be available on a regular basis for consultation during the Term regarding Supplier’s performance under this Agreement, and compliance with applicable Specifications, Purchaser’s quality requirements, the quality requirements of applicable laws or Regulatory Authorities having jurisdiction over the manufacture of Product hereunder, cGMPs, and all other applicable regulatory requirements.

	2.5		Notification . Supplier shall immediately notify Purchaser of any event that is reasonably likely to cause a breach by Supplier of its obligations under this Agreement or of any issue that might result in a supply interruption of any duration,

	2.6		[***]

	2.7		Right of First Refusal for Additional Territories . Purchaser also grants to Supplier, under similar terms and conditions listed herein, and as may need to be modified by mutual agreement of the parties (including pricing), the right of first refusal to produce the Product, in the current presentation or in alternate presentations for distribution and sale in countries outside the Territory.

3. API. NOVEL EXCIPIENT AND MATERIALS .

	3.1		Supply of API and Materials . Purchaser has chosen those suppliers of API, Novel Excipient and Materials identified in it regulatory filing for the Product. During the Term, Supplier shall purchase API, Novel Excipient and Materials, from those companies included in the regulatory filing for Product, for use by Supplier in the manufacture of Product to be supplied to Purchaser under this Agreement.

	3.2		Testing of API and Novel Excipient . Supplier shall test API and Novel Excipient, in accordance with the procedures identified in Schedules 1.9 and 1.26 to verify that the API meets the API Specifications and that the Novel Excipient meets the Novel Excipient Specifications.

	3.3		Failure to Meet API Specifications or Novel Excipient Specifications . If the API provided by the API supplier fails to meet the API Specifications, or the Novel Excipient provided by the Novel Excipient supplier fails to meet the Novel Excipient Specifications, Supplier agrees to notify Purchaser immediately in writing, which notice shall state with particularity the reasons such API fails to meet the API Specifications or such Novel Excipient fails to meet the Novel Excipient Specifications, and shall include copies of any documentation in

			support of Supplier’s conclusion. Purchaser shall timely cooperate with Supplier in addressing the failure, and if such failure cannot be remedied, in identifying and qualifying an alternate API supplier or Novel Excipient supplier. Such qualification shall be at Purchaser’s expense.

	3.4		Audit of API, Novel Excipient and Material suppliers . Supplier shall conduct routine audits, at Supplier’s expense, of all suppliers of API, Novel Excipient and Materials, as required to comply with the provisions of the Act. Major findings will be remediated or alternate suppliers will be identified by Purchaser and will be qualified at Purchaser’s expense. Any additional non-routine audits will be conducted by Supplier at Purchaser’s expense.

	3.5		Change Controls . Supplier shall require that API supplier, Novel Excipient supplier and suppliers of Materials will provide notice of any proposed change to the API, Novel Excipient or Materials, including process specifications, validation and/or controls, as well as the manufacturing and/or packaging of the API, Novel Excipient or Materials. Supplier shall not be responsible for any failure by any supplier to provide such notice. Purchaser shall cooperate with Supplier in addressing the failure, and if it cannot be remedied, in identifying and qualifying an alternate supplier. Such qualification shall be at Purchaser’s expense.

4. MANUFACTURE .

	4.1		Manufacturing Facility . Supplier shall manufacture all Product supplied to Purchaser pursuant to this Agreement at the Manufacturing Facility.

	4.2		Manufacture of Product . Supplier agrees to manufacture and supply the Product in accordance with (a) the Product Specifications, (b) the applicable Regulatory Approvals, as the same may be amended from time to time, (c) cGMP requirements, and (d) all other applicable laws, rules, regulations and internal specifications. Upon either Party becoming aware of any proposed changes in the Regulatory Approvals, it shall promptly notify the other Party and shall consult with the other party regarding the proposed changes and activities. Supplier shall not have the right to decline to implement any change in the Regulatory Approvals.

	4.3		Manufacturing Changes . The Product Specifications shall be amended as (a) reasonably requested by Purchaser or (b) necessary to conform such Product Specifications to the regulatory requirements necessary to obtain and maintain Regulatory Approvals with respect to the Product in the reasonable discretion of Purchaser. If any change in the Product Specifications, or if any change in the Regulatory Approvals, applicable laws, rules, or regulations or sources of

			Materials requires either (a) a change in the Product manufacturing process, or (b) Supplier to conduct development, testing, or other activities (e.g., process development stability testing, validation of new specifications) (collectively, “Activities”) in addition to those activities Supplier conducted or is required to conduct in its manufacture of the Product prior to such change being requested or required, Purchaser shall reimburse Supplier for all commercially reasonable documented costs incurred by Supplier in connection with such change. If Supplier requires regulatory changes to support improved process or yield improvements, then Purchaser, in consultation with Supplier, agrees to submit such changes to the FDA, as required, and Supplier shall pay for such changes. Changes implemented to support improved process or yield improvements shall not result in interruption in the supply or quality of the Product.

	4.4		Procurement of Materials . Supplier shall timely procure and maintain adequate inventories of all API, Novel Excipient and Materials necessary for the production of Product. Title to all such Materials shall reside in Supplier.

	4.5		Regulatory Filings . Each party shall provide the other, as applicable, with all Regulatory Approval submissions, annual reports, and correspondence to the FDA on issues reasonably related to the performance of Supplier’s obligations as set forth in this Agreement.

	4.6		Compliance with Laws and Regulations . While the Product is in its possession or under its control, Supplier shall comply with all applicable federal, state, and local statutory and regulatory requirements regarding the manufacture, handling, and storage of the Product.

PRODUCT SPECIFICATIONS: CERTIFICATE OF ANALYSIS .

	5.1		Product Specifications and Release Testing . As of the time of delivery by Supplier, each batch of Product shall conform to the Product Specifications. Supplier shall perform release testing according to the testing methods set forth in the Product Specifications.

	5.2		Certificate of Analysis . Supplier shall provide to Purchaser a Certificate of Analysis with each shipment of Product to Purchaser or its designated recipient stating that the Product conforms to the Product Specifications. The Certificate of Analysis shall be in a format agreed upon by Supplier and Purchaser, and such Certificate of Analysis shall include the results of release testing conducted by Supplier on the Product. At Purchaser’s expense, ([***] per page) Supplier shall also provide Purchaser with a copy of the manufacturing and controls information for the applicable batch(es) delivered.

6.		LABELING AND PACKAGING . All Product shipped and delivered by Supplier to Purchaser, under this Agreement shall be packaged and labeled in accordance with this Agreement, the then-current packaging and labeling specifications provided by Purchaser, and cGMPs. Prior to the Effective Date, Purchaser supplied Supplier with labeling for the Product {including the NDC number(s) for the Product). Supplier shall print, either directly or through a Third Party, labels and other printed material to be included as part of the Product, From time to time, Purchaser may provide Supplier with modified labeling and upon receipt thereof, Supplier shall use its Commercially Reasonable Efforts to incorporate such new labeling on the Product in accordance with Purchaser’s requested schedule therefore. Purchaser shall provide Supplier with any modifications to the labeling for the Product as promptly as possible in order to ensure compliance with any and all applicable regulations. Purchaser shall reimburse Supplier for all commercially reasonable costs incurred by Supplier in making modifications to labeling, branding, or imprinting packaging and/or manufacturing processes to accommodate Purchaser’s new labeling or to accommodate any other changes requested by Purchaser and agreed to by Supplier. Such reimbursement shall be made pursuant to invoices submitted by Supplier to Purchaser, which invoices shall be payable within [***] days after Purchaser’s receipt thereof. Upon Purchaser’s request, Supplier shall promptly enter into a separate written label agreement with Purchaser, setting forth Supplier’s obligations relating to the labeling of Product hereunder.

7.		FORECASTS . Throughout the Term, Purchaser, shall provide Supplier with a rolling one (1) year forecast by calendar month (the “Rolling Forecast”) of its expected purchases of Product as follows:

	7.1		Forecasts . On or before each January 1, April 1, July 1, and October 1 during the Term after Purchaser receives Regulatory Approval for the Product from the FDA, Purchaser shall provide Supplier with a written forecast of Purchaser’s expected purchases of Product for a period of [*] calendar months beginning on the date of such forecast. [] percent ([]%) of the forecast for the [] calendar months and [] percent ([]%) of the forecast for the [] calendar months shall be binding on Purchaser, subject to Section 8.3, and the forecast for the [*]calendar months shall not be binding on Purchaser.

	7.2		Binding Forecasts . The portion of each Rolling Forecast that is binding on Purchaser as provided in Section 7.1 shall be a “Binding Forecast.” The portion of each Rolling Forecast that is not binding on Purchaser as provided in Section 7.1 shall be used by Supplier and Purchaser solely for planning purposes.

PURCHASE ORDERS .

8.1

Placement of Purchase Orders . From time to time during the Term, Purchaser shall place purchase orders with Supplier, in a format chosen by Purchaser, specifying the quantity of Product desired (in full lots of Product), and the place(s) to which and the manner and dates by which delivery is to be made; said delivery dates to be no earlier than [***] calendar days after the purchase order date. All purchase orders shall be sent by Purchaser to the following address:

Baxter Healthcare Corporation
2 Esterbrook Lane
Cherry Hill, New Jersey 08003
Attn.: Lawrence Katz
Tel.: 856-489-2243
Fax: 856-424-2592

			or to such other addresses as Supplier may notify Purchaser from time to time.

	8.2		Acceptance of Purchase Orders . Purchase orders made in accordance with this Article 8 shall be deemed to be accepted by Supplier if Supplier has not rejected said purchase orders within [***] business days after receipt of the same; provided, however, that Supplier shall not reject any purchase order specifying quantities which purchase orders are otherwise in accordance with the provisions of this Article 8.

	8.3		Quantity Limitations . Supplier shall execute all accepted purchase orders for quantities of Product ordered up to and including [*]percent ([*]%) of the quantity of Product set forth in the applicable Binding Forecast for each calendar month. Supplier shall use its Commercially Reasonable Efforts to fulfill orders for quantities of Pr

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