Exhibit 4.42
MANUFACTURE and SUPPLY
AGREEMENT
THIS AGREEMENT
is effective from the 3
rd day of March, 2003
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BETWEEN:
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BONE CARE INTERNATIONAL,
INC. , a corporation
incorporated under the laws of Wisconsin, having its head office at
1600 Aspen Commons, Middleton, Wisconsin, U.S.A., 53562, carrying
on business as Bone Care (“ Bone Care
”);
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AND:
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DRAXIS PHARMA INC.
, a corporation incorporated under
the laws of Canada having its principal place of business at 16751
Trans-Canada Highway, Kirkland, Quebec, H9H 4J4 (“
Draxis ”);
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WHEREAS Bone Care desires to have Draxis manufacture and
supply the Product listed in Schedule “A” attached
hereto in accordance with the provisions of this
Agreement;
AND WHEREAS
the Parties have already agreed upon
a proposal with respect to the terms related to the technical
transfer activities necessary to transfer the Product to the
Facility;
AND WHEREAS
the Parties now wish to confirm the
terms related to the ongoing commercial Formulation of the Product
at the Facility;
NOW THEREFORE
in consideration of the mutual
covenants and agreements in this Agreement, Bone Care and Draxis
agree with each other as follows:
ARTICLE I
INTERPRETATION
1.1
Defined Terms
. As used in
this Agreement, the following terms have the following meanings
unless the context clearly requires otherwise:
“ Active Ingredient
” means the Product active ingredient (doxercalciferol)
supplied by Bone Care to Draxis.
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“ Adverse Drug Event
Reports ” Means the report of any adverse event
associated with the use of the product in humans, whether or not
considered drug related.
“ Affiliate(s) ”
means with respect to any Party hereto, any entity which directly
or indirectly controls, is controlled by or is under common control
with any such Party. The term “control” means the
power to direct the affairs of such entity by reason of ownership
of at least fifty percent (50%) of such entity by voting stock,
equity interest, contract or otherwise.
“ Agreement ”
means this Manufacture and Supply Agreement and all schedules and
instruments supplemental to or amending or confirming
it.
“ Annual Forecasts
” has the meaning ascribed thereto in Section 4.1 (a)
hereof.
“ Annual Volume Discount
Entitlement ” has the meaning ascribed thereto in
Section 2.3(d) hereof.
“ Batch ” means a
production batch of Product as specified in Section 4.4
hereof.
“ Business Day(s)
” means any day(s) other than Saturday, Sunday or a holiday
generally recognized in Canada or the United States.
“ Calendar Year (s)
” means the period January 1 through to December 31
of any given yearof the Term, provided that the first and last
Calendar Years of the Term may be for less than a full twelve (12)
month period.
“ Capital Plan ”
has the meaning ascribed in Section 2.2(c) hereof and
referenced in Schedule “F” to this
Agreement.
“ Commercially Reasonable
Efforts ” means reasonable efforts and resources at least
equal to those normally used by, in the case of Draxis, a prudent
pharmaceutical contract manufacturer using such efforts to perform
obligations similar to those which are incumbent upon Draxis
pursuant to the terms of this Agreement and, in the case of Bone
Care, by a prudent purchaser of pharmaceutical products using such
efforts to perform obligations similar to those which are incumbent
upon Bone Care pursuant to the terms of this Agreement.
“ Deposit ” has
the meaning ascribed thereto in Section 2.1(d)
hereof.
“ Facility ”
means Draxis’ facility located at 16751 Trans-Canada Highway,
Kirkland, Quebec, Canada and, subject to Bone Care’s prior
written approval, such other facilities used by Draxis in the
Formulation of Product hereunder.
“ FDA ” means the
United States Food and Drug Administration or any successor to
it.
“ Field Alert Reports
” means any reported information concerning:
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(i)
any incident that causes the drug
product or its labeling to be mistaken for, or applied to, another
article; or
(ii)
any bacteriological contamination,
or any other significant chemical, physical, or other change or
deterioration in the distributed drug product, or any failure of
one or more of the distributed batches of the drug product to meet
the specifications established for it in the Product
NDA.
“ Firm Zone ” has
the meaning ascribed thereto in Section 4.2 (a)
hereof.
“ Force Majeure ”
has the meaning ascribed thereto in Section 8.2(a)
hereof.
“ Formulate ” or
“ Formulated ” means to effect the operation
required in the manufacture, processing, testing, packaging, or
storage, as the case may be, of the Product by Draxis.
“ Formulation ”
or “ Formulating ” means any operation required
in the manufacture, processing, testing, packaging, labelling, or
storage, as the case may be, of the Product by Draxis from raw
material input through batch release from Draxis’ Quality
Assurance Department.
“ Good Manufacturing
Practices ” or “ cGMP ” means current
Good Manufacturing Practices and all other applicable laws,
regulations and rules in the United States and Canada related to
the Product including, without limitation, as set out in the
guidelines published as the Good Manufacturing Practices for Drug
Manufacturers and Importers by the Health Products and Food Branch
of Health Canada, as amended from time to time, for the manufacture
of pharmaceutical products and the Current Good Manufacturing
Practices as defined in United States 21 CFR 210, 211 et. seq., as
amended from time to time. Manufacture of the Product must be
in compliance with the cGMP requirements of the country where the
Product is to be distributed.
“ Governmental
Authority ” or “ Governmental Authorities
” means any court, tribunal, arbitrator, agency, commission,
official or other instrumentality of Canada or the United States,
any foreign country or any territory, or any domestic or foreign
state, province, country, city or other political subdivision
thereof.
“ Handling Charges
” means all freight, transportation, insurance, customs
duties and brokerage charges relating to the Product and the
movement of the Product.
“ HPF ” means
both the Therapeutic Products Directorate and the Inspectorate of
the Health Products and Food Branch of Health Canada, or any
successor to it.
“ Incoterms 2000
” means the International Commercial Terms published by the
International Chamber of Commerce, as amended from time to time,
codifying the contractual rules for the interpretation of
standardized commercial terms for transactions.
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Incoterms 2000 shall be deemed to
have been incorporated by reference in this Agreement except in so
far as they may conflict with any other provisions of this
Agreement in which case the Agreement provisions shall
prevail.
“ Indemnitees ”
means either Party, as the case may be, and that Party’s
shareholders, directors, officers, employees, agents and
representatives.
“ Industry Price Index
” means the Consumer Price Index for Canada (P119500), as
published by The Bank of Canada, or a successor agency, or if this
index ceases to be published, the factor provided by any other
comparable guide as agreed to by both Parties.
“ Law ” means any
law, statute, rule, regulation, guideline (including current Good
Manufacturing Practices), ordinance or other pronouncement of any
Governmental Authority having the effect of law in Canada, the
United States, any foreign country or any territory or any domestic
or foreign state, province, county, city or other political
subdivision, and which is relevant to the Product Formulated
hereunder.
“ Licences ”
means the licences issued to Bone Care by the relevant Governmental
Authority for the Formulation and manufacture of the
Product.
“ Losses ” mean
any and all damages, fines, fees, settlements, payments,
obligations, penalties, deficiencies, losses, including, without
limitation, losses of revenues, costs and expenses (including
without limitation, interest, court costs, reasonable fees of
attorneys, accountants and other experts and other reasonable
expenses of litigation or other proceedings or of any claim,
default or assessment).
“ Materials ”
mean all raw materials, ingredients, packaging materials and any
other materials used in the Formulation of Product by Draxis but
excludes the Product Active Ingredient.
“ Material Zone ”
has the meaning ascribed thereto in Section 4.2(b)
hereof.
“ Minimum Guarantee
” has the meaning ascribed thereto in Section 2.1 (b)
hereof.
“ Open Zone ” has
the meaning ascribed thereto in Section 4.2(c).
“ Party ” means
either Bone Care or Draxis, individually; “ Parties
” means Bone Care and Draxis collectively.
“ Person(s) ”
means any natural person, entity, corporation, general partnership,
limited partnership, proprietorship, other business organization,
trust, union, association or Governmental Authority.
“ Proceeding ”
means applicable action, claim, suit, proceeding, arbitration or
Governmental Authority action, notification, investigation or
audit.
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“ Product ” means
the product to be Formulated by Draxis for Bone Care in accordance
with the specific terms of this Agreement, as more particularly
described in Schedule “A” to this Agreement, as
such schedule is amended from time to time by mutual agreement
of the Parties.
“ Price ” means
the price for the Product listed in the attached
Schedule “C” to this Agreement, and, thereafter
the price for the Product established in accordance with
Section 2.3.
“Quality
Manual” means the
Bone Care & Draxis. Hectorol ® Injection Drug
Product Quality Manual, attached hereto in Schedule G, the
content of which applies to Hectorol ® Injection
drug product manufactured by Draxis for Bone Care.
“ *** Rolling Forecast
(s) ” has the meaning ascribed thereto in
Section 4.1(b) hereof.
“ Sample Forecast
” has the meaning ascribed thereto in Section 4.1 hereof
and shall be in the form annexed as Schedule “B”
to this Agreement.
“ Specifications
” means the procedures, requirements (regulatory or
otherwise), standards and other items necessary to Formulate the
Product, as described in Schedule “D” to this
Agreement and, subject to Section 2.4, as may be amended by
Bone Care.
“ Technical Transfer
Terms ” means the agreed upon terms by which the Product
is transferred into the Facility for Formulation, the details of
which are set in Production Proposal No. SPD-A2-NTS-001.1 entered
into between the Parties on April 12, 2002 and attached hereto
as Schedule “H”. To the extent of any
inconsistency between the Proposal and the Agreement, the Agreement
shall govern to the extent of such inconsistency.
“ Term ” means
the term of this Agreement as defined in Article VII
hereof.
1.2
Incorporation of
Schedules .
Schedules and other documents attached or referred to in this
Agreement are an integral part of the Agreement, including the
following:
Schedule “A”
Description of Product
Schedule “B”
Sample Forecast
Schedule “C”
Product Price
Schedule “D”
Specifications
Schedule “E”
Volume Discount Plan
Schedule “F”
Capital Plan
Schedule “G”
Quality Manual
Schedule “H”
Production Proposal
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1.3
Accounting
Terms .
Accounting terms not specifically defined in this Agreement are to
be construed in accordance with United States generally accepted
accounting principles.
1.4
Currency
. Except as otherwise
expressly stated, all dollar amounts referred to in this Agreement
are in United States dollars.
1.5
General
. Section headings in
this Agreement are for convenience only and shall not be used in
interpreting this Agreement. The Agreement shall be read with
such changes in gender or number as the context
requires.
ARTICLE II
MANUFACTURING AND
SUPPLY
2.1
Agreement to Formulate
Product .
(a)
In consideration of the execution of
Bone Care’s obligations hereunder, for the duration of this
Agreement, Draxis shall Formulate the Product in the Facility for
Bone Care and supply Product to Bone Care in accordance with the
terms and conditions set out in this Agreement, in quantities
sufficient to satisfy Bone Care’s requirements as set forth
in the Quarterly Rolling Forecast provided to Draxis.
(b)
In consideration of the Formulation
and supply of Product to Bone Care in accordance with this
Agreement, subject to the provisions of Section 4.3 and 7.2(d)
herein, Bone Care shall, for the duration of this Agreement,
purchase Product from Draxis in quantities and on terms of supply
in accordance with this Agreement. ***
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***
(c)
Subject to Section 2.4 and the
provisions of Schedule “F” of this Agreement, the
equipment costs required for the Facility to Formulate the Product
shall be borne by Draxis provided, however, that Bone Care will
reimburse Draxis for costs related to purchasing one set of
dedicated changed parts (filling needles, pistons, etc.) for each
ampoule filler required to Formulate the Product.
(d)
***
2.2
Terms of Supply
.
(a)
Long Term Supply
. Subject to early termination
of this Agreement in accordance with the provisions of
Section 7.2 hereof, Draxis shall Formulate the Product for
Bone Care for the duration of this Agreement.
(b)
Raw Materials and
Supplies . Draxis
shall purchase from third parties such quantities of Materials as
Draxis requires to produce the Product to be sold to Bone Care
hereunder; provided, however, that Bone Care shall supply to Draxis
the Product Active Ingredient for use in Formulating the
Product. Draxis agrees that it shall not use such Active
Ingredient for any other purpose other than Formulating such
Product. Draxis shall not sell the Product to any other
person, company or entity other than Bone Care. The cost of
shipping and delivery of the Active Ingredient to Draxis shall be
solely Bone Care’s obligation, provided, however, that Draxis
shall take reasonable measures to
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ensure that the Active Ingredient is
stored at the Facility in accordance with such Active Ingredient
specifications, in accordance with the requirements set forth in
Paragraph G entitled “Environmental Requirements –
Doxercalciferol Storage” at page 6 of the Quality Manual, and
in accordance with reasonable customary industry
practice.
(c)
Capital . Capital requirements and related costs
necessary for Draxis to Formulate Product in accordance with the
provisions of the Agreement and the Technical Transfer Terms shall
be in accordance with the provisions of
Schedule “F” (“Capital
Plan”).
2.3
Consideration
.
(a)
Price of Product.
***
(b)
Price Adjustments
. ***
(c)
Effective Date of Price
Adjustments .
***
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(d)
Volume Discount
. ***
(e)
Payment . ***
(f)
Taxes . ***
2.4
Costs of
Changes .
Bone Care shall be responsible for
costs associated with changes required in the Formulation of the
Product in order to comply with changes to cGMP occurring after the
date of this Agreement or to comply with changes to the
Specifications as amended from time to time by Bone Care, including
additional validation work required for the Product or any
stability testing required with respect to such changes.
Draxis will be required to provide reasonable documentary proof of
such costs and the connection between such changes to FDA cGMP or
Specifications and the costs incurred. Draxis cannot make any
changes to the Specifications without prior written approval by
Bone Care.
2.5
Product Format
.
Except as otherwise set out in this
Section 2.5, Draxis shall Formulate Product in the product and
packaging formats described in Schedule “A” for
each Product. Any changes to such Product and packaging
formats requested by Bone Care shall be subject to the provisions
of Section 2.4 and Article IV hereof.
2.6
Good Manufacturing
Practices .
Draxis shall Formulate the Product
in accordance with current Good Manufacturing Practices as
determined by the Governmental Authorities of the jurisdiction in
which the Product will be distributed by Bone Care. Each
Party shall promptly notify the other upon acquiring knowledge of
any new instructions, processes or
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specifications required in order to
comply with Good Manufacturing Practices, and shall cooperate in
agreeing on the best means to comply with any new
requirements.
2.7
Inspection
.
Draxis shall allow representatives
of Bone Care to observe the Formulation of the Product, at mutually
agreeable times, for the purpose of determining compliance with
applicable laws, regulations and Specifications. Such
inspection shall take place during Draxis’ normal business
hours and upon prior written notice to Draxis of a reasonable
amount of time, at least ten (10) Business Days, unless otherwise
agreed upon by the Parties. Bone Care’s exercise of
these rights shall in no way modify or diminish Draxis’
obligations under this Agreement. As set forth in Paragraph
AF entitled “Compliance Audits” of the Quality
Manual, Bone Care shall also conduct an annual inspection of
Draxis’ manufacturing facilities.
2.8
Regulatory
Matters .
(a)
Except as otherwise provided in this
Section 2.8, Bone Care shall be responsible for the costs of
any regulatory efforts required relating to the Formulation of the
Product including changes to the Specifications. For greater
certainty, by way of example and without limitation, Bone Care
shall register and obtain all required Licenses and provide all
necessary updates regarding the Product. Draxis shall be
responsible for, and bear any cost associated with, maintaining the
Facility in compliance with FDA cGMP standards.
(b)
Bone Care shall prepare and submit
any reports related to matters regarding the manufacture and
production of the Product required by FDA or any applicable
Governmental Authority including but not limited to Adverse Drug
Event Reports and Field Alert Reports except (a) for reports that
Draxis, as a manufacturer, has a nondelegable obligation to submit
under law, statute or regulation and (b) reports for which Draxis,
following a request made in writing by Bone Care, fails to supply
to Bone Care, on a timely basis, all pertinent information in its
possession or control for the preparation of such reports (it being
further understood that Bone Care shall make its written request to
Draxis in a timeframe which provides Draxis adequate time to supply
the said information). Draxis shall advise Bone Care of any
occurrence or information associated with Product manufacturing and
production activities that could reasonably be expected to have
adverse regulatory compliance and/or reporting
consequences.
2.9
Accounting
Audit .
(a)
Bone Care shall, upon not less than
ten (10) Business Days’ notice, have the right to request
Draxis to make available to an independent certified public or
chartered accountant, selected by Bone Care and reasonably
acceptable to Draxis, all relevant books, records and other data
which are reasonably necessary to evaluate any adjustments made
pursuant to Sections 2.3 and 2.4. Bone Care may exercise such
right not more than once in any Calendar Year, and then only with
respect to adjustments made during the preceding five Calendar
Years. Such accountant shall agree to disclose to Bone
Care
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only such information as is
necessary to determine if the adjustments made pursuant to Sections
2.3 and 2.4 were accurate. Such accountant shall also agree
to disclose to Draxis the results of its review.
(b)
If such accountant concludes that
adjustments made by Draxis were not made in accordance with this
Agreement and resulted in additional expense to Bone Care, Draxis
shall refund such amounts plus interest charged at the rate of
prime plus two percent per annum, based upon the prime rate in the
U.S. markets prevailing for the period commensurate with the dates
of adjustments determined to be in violation of this Agreement, to
Bone Care within thirty (30) days, and Draxis shall reimburse Bone
Care for the entire cost of such accountant’s work, including
all reasonable expenses, provided that the overcharge to Bone Care
exceeds the cost of the accounting audit, otherwise such costs and
expenses shall be paid by Bone Care. In addition, if such
accountant concludes that adjustments made by Draxis resulted in
Draxis undercharging Bone Care, Bone Care shall pay to Draxis the
amount of such undercharge within thirty (30) days and shall
furthermore pay all costs and expenses relating to the accounting
audit.
ARTICLE III
QUALITY ASSURANCE
3.1
Testing
.
(a)
Testing of Product shall be
performed in accordance with the applicable terms of the Quality
Manual.
(b)
In the event that any delivery fails
to conform to the Specifications as described in
Schedule “D”, or shall have been Formulated under
conditions that do not comply with applicable FDA requirements of
the provisions of this Agreement, Bone Care may reject such
shipment by giving written notice to Draxis within sixty (60) days
after delivery of the Product specifying the manner in which such
delivery fails to meet the requirements thereof. Draxis shall
have thirty (30) days within which to accept or reject Bone
Care’s claims. Bone Care may withhold payment for any
delivery of Product which fails to meet the requirements
hereof. With respect to claims accepted by Draxis, the
invoice covering such shipment will be revised to reflect that no
payment is due on such rejected Product.
(c)
In the event of a dispute as to
Section 3.1(b), such dispute shall be resolved promptly by an
independent testing organization of recognized repute within the
pharmaceutical industry where Bone Care intends to sell the
Product, mutually chosen by the Parties, the appointment of which
shall not be unreasonably delayed by either Party. The
analytical methods used shall comply with FDA cGMP. Until a
dispute is resolved, neither Bone Care nor Draxis will dispose of a
non-conforming delivery without prior written authorization from
the other Party. The fees and costs of the testing
organization, and storage and handling of the Product, shall be
borne by the Party determined by such testing organization to have
not fulfilled their respective obligations und
