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EXHIBIT 10.8
WHEREVER CONFIDENTIAL INFORMATION IS
OMITTED HEREIN (SUCH OMISSIONS ARE DENOTED
BY AN ASTERISK), SUCH CONFIDENTIAL
INFORMATION HAS BEEN SUBMITTED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
AMENDMENT TO MANUFACTURING AND SUPPLY AGREEMENT
THIS
AMENDMENT (the "Amendment") is made and entered into as of
December
22, 2003 to the Manufacturing and Supply
Agreement entered into as of August 6,
1997 by and between JPI PHARMACEUTICA
INTERNATIONAL, a division of Cilag AG
International Zug ("JPI"), JANSSEN
PHARMACEUTICA INC. ("JANSSEN US") and
ALKERMES CONTROLLED THERAPEUTICS INC. II
("ACT II"), as amended (the
"Agreement") (any terms used but not
defined herein shall have the meaning set
forth in the Agreement).
RECITALS:
WHEREAS, JPI, JANSSEN US and ACT II have entered into the
Agreement; and
WHEREAS, the parties now wish to enter into this Amendment to
clarify the
terms for payment of the Manufacturing Fee
as set forth in the Agreement by
amending the terms and conditions of the
Agreement as set forth below;
NOW,
THEREFORE, in consideration of the mutual promises contained
herein
and other good and valuable consideration,
the receipt and sufficiency of which
is hereby acknowledged, the parties agree
as follows:
1. Article 1.3 of
the Agreement shall be deleted in its entirety and
replaced with a new Article 1.3 which shall
read as follows:
1.3 "Final Product" shall
mean a Presentation Form approved and marketed by
JANSSEN, their Affiliates and licensees, ready for sale to the
final
customer.
2. Article 1.5 of
the Agreement shall be deleted in its entirety and
replaced with Article 1.5(a) and Article
1.5(b) which shall read as follows:
1.5(a) "U.S. Licensed Net Selling Price"
shall mean the * offered by JANSSEN,
its
Affiliates or licensees in a given calendar year (or such
shorter
period as may be applicable) to independent third parties for
each
Presentation Form of the Final Product for sale in the United
States, its
territories and possession, less deductions for (i) trade, cash
and
ordinary business discounts allowed; (ii) allowances or credits
to
customers on account of rejection or return of Final Product; and
(iii)
managed care rebates or allowances and mandatory price allowances
imposed
by
governments.
If
JANSSEN, its Affiliates or licensees sell any Presentation Form of
the
Final Product in the United States in such a manner that the * of
the
same
is not readily identifiable then the * shall be whichever is
the
higher of (i) the fair market value of such Final Product or (ii)
the
proportion of the bundled price attributed to such Final Product
by
JANSSEN, its Affiliates or licensees whenever the Final Product is
sold
as o
part of a package of products or services. For the purpose
hereof
"fair market
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value" shall mean, without limitation, the value of such Final
Product
sold
to similar third parties in similar quantities in the United
States.
If
the fair market value cannot be determined in the United States,
the
fair
market value will be negotiated by the parties in good faith.
1.5(b) "ROW Licensed Net Selling Price"
shall mean the * offered by JANSSEN, its
Affiliates or licensees in a given calendar year (or such shorter
period
as
may be applicable) to independent third parties for each
Presentation
Form
of the Final Product for sale in the Territory (other than the
United States, its territories and possessions), less deductions
for (i)
trade, cash and ordinary business discounts allowed; (ii)
allowances or
credits to customers on account of rejection or return of Final
Product;
and
(iii) managed care rebates or allowances and mandatory price
allowances imposed by governments.
If
JANSSEN, its Affiliates or licensees sell any Presentation Form of
the
Final Product in a country in the Territory (other than the
United
States, its territories and possessions) in such a manner that the
* of
the
same is not readily identifiable then the * for that country shall
be
whichever is the higher of (i) the fair market value of such
Final
Product or (ii) the proportion of the bundled price attributed to
such
Final Product by JANSSEN, its Affiliates or licensees whenever the
Final
Product is sold as part of a package of products or services. For
the
purpose hereof "fair market value" shall mean, without limitation,
the
value of such Final Product sold to similar third parties in
similar
quantities. If the fair market value cannot be determined in any
given
country, the fair market value will be determined by the value of
such
Final Product sold to similar customers in countries with similar
pricing
and
reimbursement structures and for similar quantities.
3. Article 1.7 of
the Agreement shall be deleted in its entirety and
replaced with a new Article 1.7 which shall
read as follows:
1.7 "Manufacturing Fee"
shall mean the fee to be paid by JPI and JANSSEN US
to
ACT II for each Presentation Form of the Product in consideration
for
the
Manufacture of Products supplied to each of them in accordance
with
the
terms hereof and which fee will be calculated as a percentage of
the
U.S.
Licensed Net Selling Price and/or the ROW Licensed Net Selling
Price, as applicable, for each Presentation Form of the Final
Product in
accordance with the mechanism set forth in Article 6.
4. A new Article 1.13
shall be added to the Agreement which shall read as
follows:
1.13 "Presentation Form" shall mean a
form of the Product or the Final Product
determined
by the amount of the single dose (either 25 mg., 37.5 mg. or 50
mg.) of
the depot formulation of Risperidone contained therein.
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5. Article 6 of the
Agreement shall be deleted in its entirety and replaced
with a new Article 6 which shall read as
follows:
6.1 In consideration of the
manufacturing activities to be performed by ACT II
hereunder,
JPI and JANSSEN US will pay the Manufacturing Fee for the
Products
supplied to each of them.
The
Manufacturing Fee will be calculated as a certain percentage of
the
U.S.
Licensed Net Selling Price and/or ROW Licensed Net Selling Price,
as
applicable. Subject to the terms and conditions set forth in
this
Agreement,
the actual percentage that shall apply with respect to a given
calendar
year will be determined in accordance with the mechanisms set
forth in
this Article 6 and Exhibit D attached hereto.
6.1.1 The
Manufacturing Fee for calendar year 2002 has been established
pursuant
to Exhibit I hereto.
6.1.2 (a)
Determination of Manufacturing Fee. Subject to the terms and
conditions set
forth in this Article 6.1.2, the Manufacturing Fees for
calendar
year 2003 and any subsequent calendar year will be calculated
on
the basis
of the (i) U.S. Licensed Net Selling Prices and/or ROW Licensed
Net
Selling Prices for such calendar year (expressed in USD at the
exchange
rates then applied by JANSSEN in accordance with its normal
accounting
procedures), as applicable, for each Presentation Form of the
Final
Product and (ii) the total amount of Product expressed in units
that
has been
Manufactured and shipped pursuant to Article 4 by ACT II for
such
calendar
year.
(b)
Determination of
a Provisional Manufacturing Fee. For the sake of
administrative ease, by *, JANSSEN and ACT II will agree in good
faith on
the "U.S.
Provisional Manufacturing Fee" and the "ROW Provisional
Manufacturing Fee" for each Presentation Form of the Product for
the
upcoming
calendar year. The "U.S. Provisional Manufacturing Fee" for
each
such
Presentation Form of the Product shall be calculated by taking
the
forecast
submitted by JANSSEN in * for the upcoming calendar year in
accordance
with Exhibit E (the "* Forecast"), to determine an estimated
total
amount of Product to be ordered, then determining the
applicable
percentage
from Exhibit D to the Agreement (based on the such estimated
total
amount of Product) (the "Applicable Percentage") and adding *
to
facilitate
cash flow (the "Additional Percentage") to such Applicable
Percentage
to determine the "Provisio
