[ * ] = CERTAIN CONFIDENTIAL INFORMATION
CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Exhibit 10.1
GILEAD
WORLD MARKETS, LTD.-PHARMACHEM TECHNOLOGIES
(GRAND
BAHAMA), LTD.
TENOFOVIR DISOPROXIL FUMARATE
MANUFACTURING SUPPLY AGREEMENT
T HE P ARTIES HEREBY ACKNOWLEDGE AND AGREE THE FOLLOWING :
THIS SUPPLY AGREEMENT (
“Agreement” ) is entered into as of
July 17, 2003, by and between PharmaChem Technologies (Grand
Bahama), Ltd., a Commonwealth of the Bahamas company (
“PharmaChem” ) having its principal place of
business at [ * ] Freeport, Grand Bahama, Commonwealth of The
Bahamas, , and Gilead World Markets, Ltd., a company operating
under the laws of the Cayman Islands ( “GWM” )
having its principal place of business at Queensgate House, South
Church Street, PO Box 1234GT, Grand Cayman. PharmaChem and GWM may
be referred to individually as a “Party” and
collectively as the “Parties” in this
Agreement.
WHEREAS, PharmaChem is a known
manufacturer of active pharmaceutical ingredients with expertise in
cGMP manufacturing, and GWM and its designees manufacture and
market pharmaceutical products for human use, including tenofovir
disoproxil fumarate 300 mg known as Viread ® ( “Finished Product”
);
WHEREAS, PharmaChem and GWM desire
to establish mutually agreeable terms for the commercial supply of
bulk tenofovir disoproxil fumarate ( “Product” )
as an active pharmaceutical ingredient by PharmaChem to
GWM.
WHEREAS, the Parties’
obligations under this Agreement are subject to the condition
precedent of the Closing of the acquisition by PharmaChem [ * ] of
the plant located in [ * ] Freeport, Grand Bahama, (the “
Plant ”) within and not later than
August 31 st , 2003 (the business day immediately
after the date of Closing of the acquisition of the Plant is
hereinafter defined as the “ Effective Date
”).
NOW, THEREFORE, in consideration of
(i) PharmaChem’s agreement to manufacture and supply
Product to GWM for the monetary amounts set forth in this
Agreement; (ii) the promises, covenants, agreements and other
valuable consideration hereinafter set forth, and intending to be
legally bound, the Parties hereby, subject to the fulfillment of
the condition precedent of the acquisition of the Plant as
described in the recitals above, agree as follows:
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1.
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AGREEMENT
ACCEPTANCE: PharmaChem
has read and understands this Agreement and understands that it
will govern PharmaChem’s written acceptance of any order for
or delivery of Product. All terms and conditions with respect to an
order for Product proposed by PharmaChem or GWM that are different
from or in addition to this Agreement (including without limitation
any such terms in the General Sales Conditions of PharmaChem or the
General Purchase Conditions of GWM) and are not agreed to in
writing by both Parties are hereby expressly rejected and shall not
become a part of this Agreement or such order.
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[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R
ULE 24 B
-2 OF THE S ECURITIES E XCHANGE A CT
OF 1934, AS AMENDED .
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GWM has read and understands this
Agreement and will purchase the Product manufactured by PharmaChem
and pay for the supply of the Product in accordance with the terms
and provisions of this Agreement. Any delivery of Product after the
Effective Date of this Agreement shall be governed by the terms of
this Agreement. Any modifications to this Agreement shall, prior to
their implementation, be mutually agreed upon by the Parties hereto
and shall be made in accordance with Section 27. The Parties
agree and acknowledge that, as expressly contemplated by this
Agreement, certain of the Parties’ rights may be exercised
by, and certain of the Parties’ obligations may be fulfilled
by, corporate entities that control, are controlled by, or are
under common control with the respective Party (such Party’s
“Affiliates” ).
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2.
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TERM: The term of this Agreement shall begin as of the
Effective Date, and shall remain in effect until December 31,
[ * ] (the “Initial Term” ), and thereafter for
subsequent automatic [ * ] renewal terms (each a “Renewal
Term” ), unless terminated by either Party effective at
the end of the Initial Term or any Renewal Term by at least [ * ]
prior written notice or unless earlier terminated according to
Section 12 “Termination” of this
Agreement.
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3.
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SUPPLY: During the term of this Agreement, PharmaChem
will manufacture Product for GWM for use in manufacture of Finished
Product. During the term of this Agreement, PharmaChem is obligated
to manufacture Product at the location and in the quantities set
forth herein. PharmaChem will not manufacture or supply Product to
any person or entity other than GWM without GWM’s prior
written consent.
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a)
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Facility: PharmaChem will manufacture the Product for GWM
only at its facility located at [ * ] Freeport , Grand Bahama,
Bahamas, or such other facilities as the Parties agree to in
writing (collectively, the “Facility” ). GWM has
inspected the Facility and has acknowledged, based upon information
in its possession as of the Effective Date, that the Facility
appears to be appropriate for the purposes of manufacturing the
Products.
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b)
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Minimum
Quantities: During the
Initial Term and any Renewal Term GWM will purchase and PharmaChem
will deliver at least the quantities of Product set forth in
Exhibit A. Failure in any year by GWM to purchase the required
quantities will result in [ * ] an amount equal to the [ * ]
the [ * ], the invoice for which will be [ * ]. For clarity,
Regulatory Terminations shall not be deemed to be breaches of
GWM’s obligations under this Section 3(b).
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c)
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Forecasting: On the first day of [ * ] will provide to
PharmaChem the projected need for Product for [ * ] period
commencing [ * ] from the date the forecast is to be provided. The
quantities indicated in the [ * ] period of the [ * ] projection
will be an affirmative obligation for GWM to purchase, and an
affirmative obligation for PharmaChem to supply Product within the
limits of [ * ]. The quantities indicated in the [ * ] period of
the [ * ] projection will be considered as a forecast
only.
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d)
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Acceptance: PharmaChem will respond to each purchase order
received from GWM ( “GWM Purchase Order” )
within [ * ] calendar days of receipt. The response shall include
PharmaChem’s inability to comply with, or confirmation of the
delivery dates and quantities set forth in the GWM Purchase
Order.
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e)
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Failure to Supply:
If PharmaChem is unable to supply
sufficient quantities of the Product to meet either its minimum
obligations under Section 3(b), or should either Party
perceive
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[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R
ULE 24 B
-2 OF THE S ECURITIES E XCHANGE A CT
OF 1934, AS AMENDED .
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that a shortfall in delivery of
Product by PharmaChem is likely to occur for any reason, the
Parties will discuss appropriate steps to alleviate such a
shortfall [ * ] GWM will have the right [ * ]. Any quantities [ * ]
to meet such a shortfall shall be [ * ] and [ * ] in which the
shortfall occurs. If GWM must [ * ] PharmaChem shall be liable for
any costs beyond the prices applicable pursuant to Exhibit B for
the shortfall quantity, but limited to a total cost of not more
than [ * ] of such applicable prices. Repeated shortfalls may be
considered a material breach of this Agreement, as described in
section 12 of this Agreement.
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f)
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Delay: If release and/or shipment of any quantity is
delayed after PharmaChem has accepted an order, through the fault
of PharmaChem, by more than [ * ], the quantity shall be considered
a shortfall, and treated as above in Section 3(e). If such
delay is caused by the fault of GWM, GWM will make [ * ] to
remediate the fault as soon as reasonably practicable, however,
after (30) days from the date of expected release and/or
shipment, PharmaChem shall be entitled to issue the relevant
invoice(s) in any case.
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4.
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GOOD
MANUFACTURING PRACTICES. PharmaChem will manufacture all Product in
accordance with, as then in effect, all laws, rules and regulations
applicable in the U.S., the European Union (
“EU” ) and its member states, The Bahamas, and
other countries in which the Finished Product is or is intended to
be clinically tested or marketed pertaining to the manufacture,
use, storage, handling, testing and transport and disposal of
pharmaceutical products and materials, which laws, rules and
regulations are applicable to PharmaChem’s activities with
the Product, including without limitation (i) the U.S. Food,
Drug and Cosmetics Act, as amended, (ii) the Federal Public
Health Service Act, (iii) then-current good manufacturing
practices ( “cGMP” ) as established by the
United States Food and Drug Administration (
“FDA” ) or the European Medicines Evaluation
Agency ( “EMEA” ) or regulatory authorities in
such other countries of member states of the EU for the manufacture
of pharmaceutical materials, and (iv) ICH Q7A Guideline
(collectively, “Legal Requirements” ). Each
Party will promptly notify the other of any new instructions or
specifications required by applicable Legal Requirements and will
confer with each other with respect to the best means to comply
with such requirements and will allocate any costs of implementing
such changes on an equitable basis. Upon written request of GWM,
PharmaChem will permit representatives of GWM to observe such
manufacture, or any government inspection of PharmaChem’s
manufacturing process for the Product, at mutually agreeable times
and, PharmaChem will permit GWM to inspect copies of
PharmaChem’s manufacturing records, including its batch
records, for the purposes of assuring product quality and
compliance with agreed-upon manufacturing procedures.
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5.
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MANUFACTURING
PROCESS: GWM will make
available to PharmaChem [ * ] all such know-how, information, and
technical assistance that is necessary for PharmaChem to
manufacture the Product to the standards set by GWM or as stated in
any current New Drug Applications for Finished Product filed in the
U.S., any current Marketing Authorization Application filed for
Finished Product in the EU, or any equivalents thereof in other
jurisdictions (collectively, “Regulatory Approval
Applications” or “RAAs” ), as will be
more precisely described by GWM in writing to PharmaChem before the
start of manufacturing of the Product. PharmaChem will manufacture
the Product in conformance with the specifications (the
“Specifications” ), as set forth in the RAAs, as
amended and the Gilead Contract Manufacturing Manual for Product
that is in effect on the Effective Date of
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[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R
ULE 24 B
-2 OF THE S ECURITIES E XCHANGE A CT
OF 1934, AS AMENDED .
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this Agreement, and as thereafter
amended (the “Contract Manufacturing Manual” ),
and according to the manufacturing process description as set forth
in the RAAs and the Contract Manufacturing Manual.
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6.
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RAW
MATERIALS: PharmaChem
will use raw materials in the manufacture of Product that conform
to the specifications set forth in the Contract Manufacturing
Manual (the “Raw Material Specifications” ), and
PharmaChem will verify such conformance in accordance with the
testing standards and procedures specified therein. PharmaChem will
facilitate changes to the Raw Material Specifications that are
necessary or appropriate in light of FDA, EMEA or other regulatory
requirements. PharmaChem shall not be liable under this Agreement
for any Product that fails to conform to the Specifications if the
raw materials used meet the Raw Material Specifications and such
non-conformity is due to the inadequacy of the Raw Material
Specifications.
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7.
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CHANGE IN
MANUFACTURING PROCESS: PharmaChem will obtain GWM’s prior written
approval before implementing any planned change (including
substantial improvements) in the materials, equipment, process, raw
material suppliers, analytical methods, or procedures used to
manufacture the Product that would constitute a major change under
cGMP, would impact the validation status of the process, or may be
interpreted to be noncompliant with the manufacturing process set
forth in the RAAs or the Contract Manufacturing Manual. PharmaChem
will disclose all proposed changes in such manufacturing materials,
equipment, process, or procedure to GWM at a level reasonably
sufficient to enable GWM to practice such changed manufacturing
process. GWM will notify PharmaChem in writing with reasonable
notice of any change (including substantial improvements) in the
materials, equipment, process, raw material suppliers, analytical
methods, specifications, or procedures to be used in the
manufacture of the Product whether such changes are to be reflected
as updates to the Contract Manufacturing Manual or otherwise, and
PharmaChem will implement within a reasonable time as agreed by the
Parties. PharmaChem will provide GWM with an authentic copy of the
current Master Batch Record for the preparation of the
Product.
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[ * ] will bear any increased costs
of implementing any amendment or change of whatever nature to the
procedures or specifications described in the RAAs or the Contract
Manufacturing Manual as they exist on the Effective Date of this
Agreement, as well as any extra costs resulting from the
implementation of such change, through an [ * ] which the Parties
will negotiate in good faith.
a) [ * ] \will communicate promptly
to [ * ] any idea or substantial improvement (patented or
unpatented) made or developed by [ * ] solely or jointly with [ * ]
employees or agents arising from its activities under this
Agreement and relating to the processing, manufacture or testing of
the Product ( “Improvement” ).
b) [ * ] shall own all right, title
and interest in and to Improvements [ * ].
c) [ * ] shall own all right, title
and interest in and to Improvements [ * ]. [ * ] shall [ *
].
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[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R
ULE 24 B
-2 OF THE S ECURITIES E XCHANGE A CT
OF 1934, AS AMENDED .
d) [ * ] shall own all right, title
and interest in and to Improvements [ * ]. [ * ] hereby grants to [
* ] a worldwide royalty-free exclusive sublicensable license
limited to processing, manufacturing and testing the Product and
any structurally related [ * ] pharmaceutical compound. If [ * ]
engages another contract manufacturer for the processing,
manufacturing or testing of the Product or of structurally related
GWM pharmaceutical compounds, [ * ] may disclose and sublicense
such Improvements to such contract manufacturer solely for the
purpose of processing, manufacturing or testing the applicable GWM
pharmaceutical compound(s), and the Parties [ * ].
e) Right, title and interest in and
to Improvements not covered by Sections 6(b), (c) or
(d) shall be as follows: if such an Improvement is invented
solely by agents and employees of one Party, such Party shall
solely own such Improvement; if such an Improvement is invented
jointly by agents and employees of both Parties, the Parties shall
jointly own such Improvement with the right to sublicense without
the consent of the other Party and with no duty of accounting to
each other.
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9.
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QUALITY
CONTROL SAMPLE AND DOCUMENTATION: PharmaChem will manufacture the Product at all
times in strict conformance with the Specifications, and PharmaChem
will verify such conformance in accordance with the testing
procedures specified in the Specifications and the Standard Test
Methods as set forth in the Contract Manufacturing Manual. Prior to
the delivery of any batch of Product, PharmaChem will provide GWM
with (i) a quality control sample of such batch to be held by
GWM for analytical reference, (ii) written confirmation that
PharmaChem’s quality assurance unit has reviewed and approved
the relevant batch records (“Certificate of
Compliance”), and (iii) a Certificate of Analysis
confirming that such batch meets Specifications ((i), (ii) and
(iii) collectively being the “Quality
Documentation”). PharmaChem will conduct quality control
sampling in accordance with the most current Drug Substance
Sampling/Testing Plan contained in the Contract Manufacturing
Manual, unless otherwise specified by GWM in writing.
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10.
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QUANTITY AND
PRICE: Subject to
adjustment as provided in this Agreement, GWM will pay to
PharmaChem the prices pursuant to Exhibit B. Using Exhibit B,
“Invoice” price is set on [ * ] of each calendar year
for the subsequent calendar year.
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If, due to market conditions, the
cost of a raw material purchased by PharmaChem for manufacture of
Product increases or decreases by [ * ] of the cost therefor upon
which the then-current applicable Product price quote was based,
the Parties will [ * ].
If there are either alternative raw
materials sources or arrangements identified by PharmaChem or
Improvements, in each case that materially reduce the Product
manufacturing cost, that are mutually agreed to be implemented in
accordance with Section 7, the Parties will [ * ], on the
principle that [ * ].
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11.
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DELIVERY,
SHIPPING, BILLING AND PAYMENT :
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a) Delivery: Unless otherwise
agreed by the Parties in writing, PharmaChem will deliver all
shipments [ * ] (Incoterms 2000) ] , provided, however, that
[ * ] shall be responsible for the [ * ] (the “
Carrier ”) [ * ].
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[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R
ULE 24 B
-2 OF THE S ECURITIES E XCHANGE A CT
OF 1934, AS AMENDED .
b) Shipment: PharmaChem in
cooperation with the Carrier, but under GWM and Carrier’s
sole responsibility, will provide all necessary assistance in order
to package and ship the Products in accordance with
PharmaChem’s customary practices for pharmaceutical
compounds, unless otherwise specified by GWM. PharmaChem and the
Carrier will ship Product pursuant to written instructions provided
by GWM to PharmaChem or in a GWM Purchase Order, to a facility of
GWM, or a GWM designee (each such facility, a
“
