Exhibit 10.14.1
CONFIDENTIAL TREATMENT
REQUESTED
The confidential portions of this
exhibit have been filed separately with the Securities and Exchange
Commission pursuant to a confidential treatment request in
accordance with Rule 24b-2 of the Securities and Exchange Act of
1934 as amended. REDACTED PORTIONS OF THIS EXHIBIT ARE MARKED BY AN
***.
FIRST AMENDMENT
TO
Supply and Manufacturing Agreement
THIS AMENDMENT,
dated as of this 24 th
day of
April, 2007, by and between Teikoku Seiyaku Co., Ltd./Teikoku
Pharma USA, Inc. (collectively, “TEIKOKU”) and ENDO
PHARMACEUTICALS INC. (“ENDO”).
WITNESSETH:
WHEREAS, TEIKOKU and ENDO are
parties to a Supply and Manufacturing Agreement, dated as of
November 23, 1998 (the “Agreement”), by and
between and ENDO, pursuant to which TEIKOKU has agreed to
manufacture and supply the Product on behalf of ENDO;
and
WHEREAS, the parties now wish to
amend certain provisions of the Agreement.
NOW THEREFORE, in consideration of
the foregoing and the mutual covenants and agreements set forth
herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties agree
as follows:
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1.
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Amendment to
Section 1.1 (Definition of Adverse Reaction)
. Section 1.1 shall be deleted
and replaced in its entirety with the following:
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“[INTENTIONALLY
OMITTED]”
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2.
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Amendment to
Section 1.9 (Definition of Intellectual Property
Rights) .
Section 1.9 shall be deleted and replaced in its entirety with
the following:
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“Intellectual Property
Rights” means the Patents, including those listed in Exhibit
A (as may be amended from time to time), and Know-How only for the
Product owned by or licensed to TEIKOKU which would be infringed by
the manufacture, export, import, sale or use of the
Product.”
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3.
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Amendment to
Section 1.16 (Definition of Product ). Section 1.16 shall be deleted and
replaced in its entirety with the following:
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“Product” means a
topical (patch) delivery system, which consists of a formulation of
*** lidocaine.”
CONFIDENTIAL TREATMENT REQUESTED
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4.
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Amendment to
Section 2.1(b) (ENDO’s Obligations)
. A new Section 2.1(b)(ii)
shall be added to Section 2.1(b) as follows:
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“(ii) ENDO is responsible for
certifying that facilities and operations of the Contract Packager
(as defined in Section 2.4) are in compliance with current
GMP. Further, ENDO will provide TEIKOKU with a GMP
confirmation letter from Contract Packager.”
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5.
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Amendment to
Section 2.2(a) (Supply of the Product) . A new sentence shall be added to
Section 2.2(a) as follows:
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“TEIKOKU hereby grants ENDO an
exclusive (even as to TEIKOKU) license to Intellectual Property
Rights to, use, sell, or offer for sale (but not make or have
made), the Product in the Territory; it being understood
that should Endo become the sole and exclusive distributor of
*** this grant shall apply thereto as well; provided
that Know-How shall be licensed to ENDO hereunder on a
non-exclusive basis; and provided further that
notwithstanding the foregoing TEIKOKU shall not, and shall not
permit any third party to, use, sell or offer to sell in the
Territory the Product manufactured by utilizing the
Know-How.
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6.
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Amendment to
Section 2.2(b) (Supply of the Product) . Section 2.2(b)(iv) shall be deleted and
replaced in its entirety with the following:
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“(iv)
Product Firm Ord ers. No later than the 15
th
day of
each month, ENDO will provide to TEIKOKU USA a firm purchase order
for the next succeeding month based on the then current monthly
forecast, which is *** months prior to the initial delivery
date stated on such purchase order. In an effort to more accurately
forecast required Product, ENDO will provide, on a monthly basis,
prior to the 15 th
of each
month, a “Proposed Monthly Forecast / Ordering Cycle”
to enable TEIKOKU JAPAN to plan raw material purchases and
manufacturing schedules. The Proposed Monthly Forecast will include
(1) current firm purchase orders for the next succeeding
*** month period, (2) estimated quantities of Product
needed for the next following *** months, (3) and
planned orders of Product for an additional *** months for a
total covering *** months. The firm purchase order each
month is guaranteed to be not less than *** or more than
*** of the previous month’s estimate. TEIKOKU
understands that the estimate and planned figures will be adjusted
monthly to more accurately predict quantities of Product needed in
succeeding months. In addition, ENDO hereby guarantees
TEIKOKU’s purchase of bulk lidocaine for up to ***
patches. It is understood that when ENDO orders approach ***
patches, TEIKOKU will request a renewal of this guarantee for the
purchase of bulk lidocaine.”
CONFIDENTIAL TREATMENT REQUESTED
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7.
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Amendment to
Section 2.2(b) (Supply of the Product) . The following new Section 2.2(b)(vii)
shall be added to the Agreement:
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“(iv) Delivery Schedule. Due
to the large quantities of Product delivered for each firm purchase
order, TEIKOKU understands that the delivery dates indicated on
firm purchase orders are approximate dates, and with advance notice
and approval, TEIKOKU can deliver Product earlier than the
“Required Date” stated on the purchase order. It is
also understood by ENDO and TEIKOKU that any one purchase order
will require three, four or more separate deliveries of Product
depending on the quantities ordered.”
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8.
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Amendment to
Section 2.3(c) (Adverse Drug Reactions/Product
Complaints) .
Section 2.3(c) shall be deleted and replaced in its entirety
with the following:
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“[INTENTIONALLY
OMITTED]”
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9.
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New
Section 2.3(d) (NDA Maintenance) . A new Section 2.3(d) shall be added to
the Agreement as follows:
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“(d) NDA Maintenance .
ENDO and TEIKOKU shall collaborate to maintain the NDA
properly. For preparation of the Annual Report, QA/Regulatory
personnel from each company will meet to review any packaging
changes implemented or pending at such time. If, after filing
the Annual Report, questions are raised by the FDA, both parties
will collaborate to answer such questions and ENDO agrees to use
its reasonable best efforts to provide to Teikoku whatever data is
required to resolve such questions.”
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10.
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Amendment to
Section 2.4 (Payments) . The following shall be added to the end of
2.4(a) as follows:
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“Effective
with ENDO’s receipt of the first shipment of QA-released
commercial Product for sale in the U.S. after January 1, 2007,
the prices listed below shall apply and remain in effect until
*** ; thereafter such prices shall be adjusted on
December 31 st
of each
of *** (each, an “Adjustment Date”) by the Price
Index (as defined below). Specifically, on each Adjustment Date,
the parties shall multiply the price for the Product by a fraction,
the numerator of which is the average of the annual Price Index for
the *** preceding the Adjustment Date, and the denominator
is the Price Index for the month of December of the year such
adjustment is occurring. “Price Index” means the
Producer Price Index – Pharmaceutical Preparations, 1982-1984
= 100.*
CONFIDENTIAL TREATMENT REQUESTED
“Pricing of Bulk Lidoderm
Brand Product Package from 2007 through ***
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“Annual Quantity of
Envelopes
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Unit Cost per Bulk Product
Envelope
CIIF, Endo’s Designated Bulk
Package
Receiving Center,
USA
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*** patches ordered
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***
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*** patches ordered
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***
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***
“ENDO agrees to purchase a
*** patches per year for each year in the remaining Term of
this Agreement *** (the “ *** ”);
provided that , in the event that ENDO is prevented from
marketing and/or selling the Product in the U.S. due to external
regulatory or legal reasons, ENDO and TEIKOKU shall negotiate in
good faith to establish a new *** purchase requirement and
unit price for the Product.
“ENDO agrees that the prices
set forth in this Section 2.4 are for bulk delivery by TEIKOKU
of Product (Lidoderm patches in single-patch envelopes). ENDO will,
at its own expense contract separately with a contract packager for
the cartoning or other packaging work of the bulk Lidoderm
envelopes (such contract packager, the “Contract
Packager”).”
“After *** , either
party has the right to end the parties’ exclusivity
obligations relating to the Product upon thirty
(30) day’s written notice within sixty (60) days of
the below-referenced shortfall if, at the end of any calendar year,
Endo has failed to purchase *** million patches and has not
corrected this shortfall within forty-five (45) days of
receiving written notice of such shortfall from
Teikoku.”
“After *** , if
(a) the TEIKOKU Patent has not then expired or been found
invalid or unenforceable and (b) there are *** on the
market in the Territory *** and (c) at the end of any
calendar year, ENDO has purchased less
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For example: If
the annual Price Index is *** , then *** adjustment
would be ***. In such case, *** pricing would then be
as follows(illustration only):
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Annual Quantity of
Envelopes
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Unit Cost per Bulk Product
Envelope
CIIF, Endo’s Designated Bulk
Package
Receiving Center,
USA
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First ***
patches ordered
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***
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Over *** patches ordered
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***
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CONFIDENTIAL TREATMENT REQUESTED
than *** patches and has not
corrected this shortfall within forty-five (45) days of
receiving written notice of such shortfall from Teikoku, then
TEIKOKU shall have the right to end its exclusivity obligations to
the Product upon thirty (30) day’s written notice within
sixty (60) days of the above-referenced
shortfall.”
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11.
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Amendment to
Section 2.4 (Payments) . A new Section 2.4(c) shall be added to
the Agreement as follows:
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“(c) Following cessation of
ENDO’s obligation to pay royalties to HIND under Sections 4.1
(a), (b) and (c) of the Sole and Exclusive License
Agreement, dated as of November 23, 1998, as amended, between
HIND and ENDO, ENDO agrees to pay to TEIKOKU an annual royalty of
(i) *** f Net Sales per Fiscal Year of the brand
Product in the Territory for the term of this Agreement and
(ii) *** of Net Sales per Fiscal Year *** in
the Territory for the term of this Agreement.
“For purposes of this
Section 2.4(c), “Net Sales” shall be defined as
the gross amount invoiced by ENDO or its sublicensees or Affiliates
for the sale or other disposition of Licensed Product to
independent third parties less the following amounts:
(i) normal and customary trade, cash and quantity discounts
actually given, credits, price adjustments or allowances for
damaged products, returns or rejections of products;
(ii) chargeback payments and rebates (or the equivalent
thereof) granted to group purchasing organizations, managed health
care organizations or to federal, state/provincial, local and other
governments, including their agencies, or to trade customers;
(iii) freight, shipping insurance and other transportation
expenses directly related to the sale (if actually borne by ENDO,
its Affiliates or sublicenses without reimbursement from any third
party); (iv) required distribution commissions/fees payable to
any third party providing distribution services to ENDO;
(v) expired Product; (vi) sales, value-added, excise
taxes, tariffs and duties, and other taxes and government charges
directly related to the sale, to the extent that such items are
included in the gross invoice price and actually borne by ENDO, its
Affiliates or sublicensees without reimbursement from any third
party (but not including taxes assessed against the income derived
from such sale); and (vii) provisions for act
