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EXHIBIT NO. 10.58
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
MANUFACTURING AND
SUPPLY (FILL AND FINISH)
AGREEMENT
BETWEEN
EYETECH PHARMACEUTICALS, INC.
AND
GILEAD SCIENCES, INC.
DATED AS OF NOVEMBER 26, 2003
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TABLE OF CONTENTS
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1.
DEFINITIONS.........................................................................................
1
1.1
Affiliate......................................................................................
1
1.2
Agreement......................................................................................
1
1.3 Annual Minimum
Volume..........................................................................
1
1.4
API............................................................................................
2
1.5 Applicable
Law.................................................................................
2
1.6 Business
Day...................................................................................
2
1.7
cGMP...........................................................................................
2
1.8 Claim or
Proceeding............................................................................
2
1.9 Commercial
Launch..............................................................................
2
1.10
Controlt......................................................................................
2
1.11
Environmental
Laws............................................................................
2
1.12
Environmental
Losses..........................................................................
2
1.13
Eyetech Indemnified
Party.....................................................................
2
1.14
Eyetech Product
Intellectual
Property.........................................................
2
1.15
Facility......................................................................................
3
1.16
FDA...........................................................................................
3
1.17
FDA
Act.......................................................................................
3
1.18
Gilead Indemnified
Party......................................................................
3
1.19
Governmental
Authority........................................................................
3
1.20
Hazardous
Materials...........................................................................
3
1.21
Hazardous
Waste...............................................................................
3
1.22
Information...................................................................................
3
1.23
Initial
Term..................................................................................
3
1.24
Inspection
Period.............................................................................
3
1.25
Intellectual
Property.........................................................................
3
1.26
Laws..........................................................................................
3
1.27
Losses........................................................................................
4
1.28
Manufacturing.................................................................................
4
1.29
Purchase
Order................................................................................
4
1.30
Person........................................................................................
4
1.31
Price.........................................................................................
4
1.32
Product.......................................................................................
4
1.33
Product
Materials.............................................................................
4
1.34
Product
Supplement............................................................................
4
1.35
Product
Warranty..............................................................................
5
1.36
Quality
Agreement.............................................................................
5
1.37
Quantitative
Defects..........................................................................
5
1.38
Recall........................................................................................
5
1.39
Regulatory
Approvals..........................................................................
5
1.40
Specifications................................................................................
5
1.41
Release.......................................................................................
5
1.42
Sublicensee...................................................................................
5
1.43
Term..........................................................................................
5
1.44
Territory.....................................................................................
5
1.45
Waste.........................................................................................
5
2. SUPPLY REQUIREMENTS; ORDERS; SHIPMENT AND DELIVERY TERMS;
REPORTS; ALTERNATIVE SUPPLY............... 6
2.1.
Agreement to
Supply...........................................................................
6
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2.2.
Use of Facility,
Equipment, Molds and
Tooling.................................................
6
2.3.
Current Production
Guidelines;
Capacity.......................................................
7
2.4 Forecasts and
Orders..........................................................................
8
2.5.
Standard
Forms................................................................................
10
2.6.
Procurement and
Approval of Raw
Materials.....................................................
10
2.7.
Supply of
API.................................................................................
11
2.8.
Product
Samples...............................................................................
11
2.9.
Alternative
Supply............................................................................
11
2.10. Start Up
Activities...........................................................................
12
3. SHIPMENT AND DELIVERY TERMS;
REPORTS................................................................
14
3.1.
Shipment
Reports..............................................................................
14
3.2.
Delivery/Shipping
Instructions/Risk of
Loss...................................................
14
4. PRICE; PAYMENT; PRICE ADJUSTMENTS;
TAXES............................................................
15
4.1.
Purchase Price; Yield
Adjustments.............................................................
15
4.2.
Price
Adjustments.............................................................................
15
4.3.
Invoices......................................................................................
15
4.4.
Payment.......................................................................................
16
4.5.
Taxes.........................................................................................
16
5. MANUFACTURING STANDARDS AND QUALITY
ASSURANCE.......................................................
16
5.1.
Manufacturing
Standards.......................................................................
16
5.2.
Modifications in
Specifications...............................................................
16
5.3.
Pest
Control..................................................................................
17
5.3.
Storage and
Handling..........................................................................
17
5.5.
Maintenance of
Facility, Equipment and
Molds..................................................
18
5.6.
Legal and Regulatory
Filings and
Requests.....................................................
18
5.7.
Analysis of
Materials.........................................................................
18
5.8.
Quality Tests and
Checks......................................................................
19
5.9.
Non-complying
Product.........................................................................
19
5.10.
Responsibility for Rejected and Non-Complying
Product......................................... 19
5.11. Disposal
of Rejected and Non-Complying Product and Product
Materials.......................... 19
5.12.
Maintenance and Retention of
Records..........................................................
20
5.13.
Quantitative Defects; Rejection of Product; Disposal of Rejected
Shipments.................... 20
5.14. Customer
Complaints and
Inquiries.............................................................
22
5.15. Government
Inspections, Seizures and
Recalls..................................................
22
5.16. Quality
Agreement.............................................................................
23
5.17.
Manufacturing
Committee.......................................................................
23
5.18
Audits and
Inspections........................................................................
25
5.19. Diversion
Issues..............................................................................
25
5.20. Notice of
Material
Events.....................................................................
25
5.21.
Survival......................................................................................
25
6. REPRESENTATIONS AND WARRANTIES;
DISCLAIMERS.........................................................
25
6.1.
Representations and
Warranties of
Gilead......................................................
25
6.2.
Representations and
Warranties of
Eyetech.....................................................
27
6.1.
No Other
Waranties............................................................................
28
6.4.
Survival......................................................................................
28
7. ENVIRONMENTAL REPRESENTATIONS, WARRANTIES AND
COVENANTS............................................. 28
7.1.
Compliance with
Environmental
Laws............................................................
28
7.2.
Permits, Licenses and
Authorization...........................................................
29
7.3.
Hazardous Materials
and
Waste.................................................................
29
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7.4.
Generation of
Hazardous
Wastes................................................................
29
7.5.
Diversion
Issues..............................................................................
29
7.6.
Health and Safety
Procedure...................................................................
29
7.7.
Training......................................................................................
30
7.8.
Survival......................................................................................
30
8. OWNERSHIP; TRADEMARKS; PROPRIETARY
INFORMATION......................................................
30
8.1.
Eyetech's Ownership of
Intellectual Property; Eyetech Technology and
Information.............. 30
8.2.
Ownership of Other
Property...................................................................
31
8.3.
Limited Right to
Use..........................................................................
31
8.4.
License.......................................................................................
31
8.5.
Survival......................................................................................
31
9. INDEMNIFICATION; LIMITATIONS OF
LIABILITY...........................................................
32
9.1.
Indemnification of
Eyetech....................................................................
32
9.2.
Eyetech's
Indemnification of
Gilead...........................................................
32
9.3.
Assertion of
Claim............................................................................
32
9.4.
Limitation of
Liability.......................................................................
33
9.5.
Survival......................................................................................
33
10.
INSURANCE..........................................................................................
33
10.1.
Insurance....................................................................................
33
10.2.
Coverage.....................................................................................
33
10.3.
Certificates of
Insurance; Maintenance of
Coverage........................................... 34
11. Title, Risk of Loss and
Reimbursement..............................................................
34
11.1.
Testing......................................................................................
34
11.2.
Title and Risk of
Loss.......................................................................
34
11.3.
Reimbursement for Loss
of API; Non-Complying
Product......................................... 34
12. CONFIDENTIAL
INFORMATION..........................................................................
35
12.1.
Confidential
Information.....................................................................
35
12.2.
Exceptions...................................................................................
36
12.3.
Return or
Destruction........................................................................
36
12.4.
Terms of
Agreement...........................................................................
36
12.5.
Survival.....................................................................................
37
13. TERM,
TERMINATION..................................................................................
37
13.1.
Initial Term;
Term...........................................................................
37
13.2.
Termination by
Eyetech.......................................................................
37
13.3.
Termination by
Gilead........................................................................
38
13.4.
Effect of
Termination........................................................................
38
13.5.
Return of Materials,
etc. Supplied by
Eyetech................................................
38
14. FORCE MAJEURE; COMPETING
PRODUCT...................................................................
39
14.1.
Force
Majeure................................................................................
39
14.2.
Competing
Product............................................................................
39
15.
MISCELLANEOUS......................................................................................
40
15.1.
Relationship of the
Parties..................................................................
40
15.2.
Successors and
Assigns.......................................................................
40
15.3.
Notice.......................................................................................
40
15.4.
Entire
Agreement.............................................................................
41
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15.5.
Severability.................................................................................
41
15.6.
Waiver.......................................................................................
42
15.7.
Headings.....................................................................................
42
15.8.
Counterparts.................................................................................
42
15.9.
Governing
Law................................................................................
42
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MANUFACTURING AND SUPPLY AGREEMENT
MANUFACTURING AND SUPPLY AGREEMENT dated as of November 26,
2003
("Effective Date"), by EYETECH PHARMACEUTICALS, INC., a Delaware
corporation
having its principal office located at 500 Seventh Avenue, 18th
Floor, New York,
NY 10018 (hereinafter "Eyetech") and GILEAD SCIENCES, INC., a
Delaware
corporation having its principal place of business at 333 Lakeside
Drive, Foster
City, CA 94404 (hereinafter "Gilead").
WITNESSETH:
WHEREAS,
Eyetech desires to have Gilead manufacture and supply Eyetech
with certain quantities of Product;
WHEREAS,
Gilead desires to manufacture and supply to Eyetech with such
quantities of Product; and
WHEREAS,
the parties are willing to carry out the foregoing pursuant to
the terms and conditions set forth in this Agreement;
NOW,
THEREFORE, in consideration of these premises and the
covenants,
agreements, representations and warranties herein contained, and
for other good
and valuable consideration, the receipt and sufficiency of which is
hereby
acknowledged, the parties hereby agree as follows.:
SECTION 1. DEFINITIONS.
As used in
this Agreement, the following defined terms shall have the
meanings set forth below.
1.1
"Affiliate" shall mean, with respect to any Person other than a
natural person, any corporation or other business entity that
either directly or
indirectly, controls such Person, is controlled by such Person, or
is under
common control with such Person. For purposes of this definition,
the term
"control" means the possession of the power to direct or cause the
direction of
the management and policies of such Person, whether through the
ownership of
more than fifty percent (50%) of voting securities, by contract or
otherwise.
1.2
"Agreement" shall mean this Manufacturing and Supply Agreement and
all
attachments hereto as the same may be amended, supplemented or
otherwise
modified from time to time.
1.3
"Annual Minimum Percentage" shall mean, subject to Sections
2.3(b),
2.4(f)(iii) and 2.9(b), the minimum percentage of Eyetech's total
orders (on a
unit basis) from all sources for Product for distribution in the
Territory that
are scheduled for delivery during a calendar year that Eyetech is
obligated to
order from Gilead, for any calendar years that such minimum
percentage is set
forth in the Product Supplement.
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1.4 "API"
shall mean the bulk active substances specified in clauses (a)
and (b) of the definition of "Product", as used to Manufacture the
Product.
1.5
"Applicable Laws" shall mean all Laws applicable to Manufacture
of
Products for the Territory by Gilead at the Facility (including
ingredients,
testing, storage, handling, intermediates, bulk and finished
products),
including without limitation cGMP and any Environmental Laws.
1.6
"Business Day" shall mean any day other than Saturday, Sunday or
any
day on which banks located in New York, New York are authorized or
obligated to
be closed.
1.7 "cGMP"
shall mean all applicable current good manufacturing practices
for pharmaceutical products promulgated by any Governmental
Authority having
jurisdiction in the form of laws, regulations, (as applicable to
pharmaceutical
products and ingredients) as the same may be updated, supplemented
or amended
from time to time, as applicable to Products.
1.8 "Claim
or Proceeding" shall mean any third party claim, demand,
action, suit, proceeding or arbitration including any Governmental
Authority
investigation.
1.9
"Commercial Launch" shall mean the first day which Eyetech, the
Sublicensee, or one of their respective Affiliates makes a
commercial sale of
the Product following Regulatory Approval in the Territory.
1.10
"Control", "Controls" and "Controlled" mean, with respect to a
particular item of information or intellectual property right, that
the
applicable party owns or has a license to such item or right and
has the ability
to grant to the other party access to and a license or sublicense
(as
applicable) under such item or rights as provided for herein
without violating
the terms of any agreement or other arrangement with any third
party existing as
of the Effective Date.
1.11 "Environmental
Laws" shall mean all Laws whether currently in
existence or hereafter promulgated, enacted, adopted or amended,
relating to
safety, preservation or protection of human health and the
environment and/or
relating to the handling, treatment, transportation or disposal of
Waste
including any matters related to Spills and threatened Spills of
materials and
substances.
1.12
"Environmental Losses" shall mean any and all fines, penalties,
costs, liabilities, damages or losses incurred by Eyetech, an
Affiliate of
Eyetech, or the Sublicensee, or for which Eyetech, an Affiliate of
Eyetech, or
the Sublicensee is liable or obligated pursuant to any
Environmental Laws
arising out of any violation of any Environmental Laws by Gilead
that occurs in
the course of or results from the Manufacture of Product.
1.13
"Eyetech Indemnified Party" shall have the meaning set forth in
Section 9.1.
1.14
"Eyetech Product Intellectual Property" shall mean any
Intellectual
Property Controlled by Eyetech that covers the Manufacture of
Product by Gilead
pursuant to this Agreement or that is otherwise necessary or useful
for such
Manufacture.
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1.15
"Facility"" shall mean Gilead's manufacturing facilities located
at
502 Covina Boulevard, San Dimas, California and (for storage only)
542 Covina
Boulevard, San Dimas California, and, subject to Eyetech's prior
written
approval, such other facilities of Gilead used in (a) the
Manufacture of Product
or (b) storage of Product Materials and Product.
1.16 "FDA"
shall mean the United States Food and Drug Administration or
any successor agency.
1.17 "FDA
Act" shall mean the United States Food, Drug and Cosmetic Act,
as amended.
1.18
"Gilead Indemnified Party" shall have the meaning set forth in
Section 9.2.
1.19
"Governmental Authority" shall mean any duly authorized court,
tribunal, arbitrator, agency, commission, official or other
instrumentality of
any federal, state, province, county, city or other political
subdivision,
domestic or foreign.
1.20
"Hazardous Materials" shall mean any pollutant, contaminant,
hazardous or toxic substance, constituent or material, including
petroleum
products and their derivatives, or other substances generated or
utilized in the
course of Manufacture, whether or not regulated under or pursuant
to any
Environmental Law.
1.21
"Hazardous Waste" shall mean waste arising from the Manufacture
of
the Product, that is defined in, or which may be determined to be
hazardous
waste under, any Environmental Laws.
1.22
"Information" shall have the meaning set forth in Section 12.1.
1.23
"Initial Term" shall have the meaning set forth in Section
13.1.
1.24
"Inspection Period" shall have the meaning set forth in Section
5.13(b).
1.25
"Intellectual Property" shall mean (a) any processes, trade
secrets,
inventions, know-how, industrial models, designs, methodologies,
drawings,
formulae, procedures, techniques, clinical data or technical or
other
information or data, manufacturing, engineering and technical
drawings, and (b)
registered trade marks, trade mark applications, unregistered
marks, trade
dress, trade names, brand names, copyrights, patents, patent
applications, and
any and all provisionals, divisions, continuations, continuations
in part,
extensions, substitutions, renewals, registrations, revalidations,
reissues or
additions, including supplementary certificates of protection, of
or to any of
the aforesaid patents and patent applications, and all foreign
counterparts of
any, or to any, of the aforesaid patents and patent
applications.
1.26
"Laws" shall mean any law, statute, rule, regulation, ordinance
or
other pronouncements of any Governmental Authority having the
effect of law,
promulgated by any Governmental Authority having jurisdiction in
the Territory.
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1.27
"Losses" shall mean any and all damages, judgments,
liabilities,
fines, fees, settlements, payments, obligations, penalties,
deficiencies,
losses, costs and expenses (including Environmental Losses,
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).
1.28
"Manufacturing" shall mean the warehousing of Product Materials
and
API after receipt thereof, compounding, component preparation,
incoming and
outgoing quality control and other procedures, or any part thereof,
involved in
manufacturing Product from the Product Materials and API and
packing such
Product in accordance with the Specifications, which shall include
the
procedures of filling, inspecting, individual and/or bulk syringe
container
labeling, individual and/or bulk syringe container packaging (e.g.
bagging,
sealing, primary and/or secondary packaging) and shipping of
individual and/or
bulk syringes, and warehousing such Product in accordance with
the
Specifications, until delivery by Gilead in accordance with this
Agreement. The
terms "Manufacture", "Manufactured", "Manufacturing", in this
Agreement shall
have the identical meaning.
1.29
"Order" shall mean a written form submitted by Eyetech pursuant
to
Sections 2.4(b) and (e) and in accordance with the terms of this
Agreement to
Gilead authorizing the Manufacture of Product.
1.30
"Person" shall mean any natural person, entity, corporation,
general
partnership, limited partnership, proprietorship, other business
organization,
trust, union, association or Governmental Authority.
1.31
"Price" shall mean the price set forth in the relevant Product
Supplement to be charged by Gilead for Product Manufactured and
supplied
hereunder as delivered to Eyetech.
1.32
"Product" shall mean a filled syringe intended to be used for
injections directly into a patient's eye (i.e., not for use with
any drug
delivery system not requiring direct injections into a patient's
eye) and
packaged as set forth in the applicable Specifications that
contains a quantity
of either (a) the anti-VEGF aptamer know as "Macugen" or "EYE001",
or (b) any
metabolite or prodrug of such aptamer or any hydrate, conjugate,
salt, ester,
isomer, polymorph or analogue of any of the foregoing, either alone
or in
combination with one or more other therapeutically active
substances, that is
added to this Agreement as a "Product" pursuant to Section 2.1(b),
in each of
case (a) or (b) as stated in the applicable Specifications.
1.33
"Product Materials" shall mean the excipients with which API is
combined to manufacture Product, syringes, plungers, packaging
(e.g. bagging,
sealing, primary and/or secondary packaging) and miscellaneous bulk
shipping
materials.
1.34
"Product Supplement" shall mean the mutually agreed
Product-specific
supplement attached to this Agreement as Attachment 1 that
specifies
requirements for Manufacture of such Product in addition to the
Specifications
and cGMP. Attachment 1 may be amended in writing from time to time
upon written
agreement of both parties, including without
4
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limitation to add requirements for Manufacture, Specifications and
cGMP
requirements for additional Products.
1.35
"Product Warranty" shall have the meaning given such term in
Section
6.1(a)(i)(B).
1.36
"Quality Agreement" shall mean those supplemental quality
provisions
set forth in the Quality Agreement between Gilead and Eyetech
relating to the
Product executed prior to or concurrently with this Agreement and
incorporated
herein by reference, as the same may be amended or modified from
time to time as
set forth therein.
1.37
"Quantitative Defects" shall mean defects in a shipment of
Product
such that the shipment (as delivered pursuant to Section 3.2) has
less than the
invoiced amount of Product for such shipment.
1.38
"Recall" shall mean a "recall", "correction" (i.e. a field or
market
correction) or "market withdrawal" (i.e. a withdrawal from the
market not
requiring notification to the FDA) and shall include any post-sale
warning or
mailing of information.
1.39
"Regulatory Approval" shall mean approval of a New Drug
Application
(or equivalent thereof) issued by the FDA as required for marketing
of the
Product in the Territory.
1.40
"Specifications" shall mean the specifications for the
Manufacture
and shipping, of the Product, including all formulae, Product
Materials
requirements, analytical procedures and standards of quality
control and quality
assurance, which are attached hereto as Exhibit A to Attachment 1,
and as such
Specifications may be amended, supplemented or otherwise modified
by the parties
in accordance with Section 5.2 hereof.
1.41
"Spill" shall mean any spill, emission, leaking, pumping,
injection,
deposit, disposal, discharge, dispersal, leaching or migration into
the indoor
or outdoor environment, including the movement of Hazardous
Materials through
the ambient air, soil, subsurface water, groundwater, wetlands,
lands or
subsurface strata.
1.42
"Sublicensee" shall mean Eyetech's co-promotion partner, Pfizer
Inc.
and its Affiliates.
1.43
"Term" shall have the meaning set forth in Section 13.1.
1.44
"Territory" shall mean the United States of America, including
its
territories, possessions and Puerto Rico.
1.45
"Waste" shall mean all wastes that arise from Manufacture of
Product
hereunder, including Hazardous Waste.
The
definitions in this Section 1 shall apply equally to both the
singular
and plural forms of the terms defined. As used in this Agreement,
(i) the words
"include", "includes" and "including" shall be deemed to be
followed by the
phrase "without limitation"; (ii) the words
5
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"hereof", "herein", "hereby" and derivatives or similar words refer
to this
entire Agreement; (iii) all references to Sections and Attachments
shall be
deemed references to Sections of this Agreement and Attachments to
this
Agreement unless the context shall otherwise require; and (iv)
whenever this
Agreement refers to a number of days, such number shall refer to
calendar days
unless otherwise specified.
SECTION 2. SUPPLY REQUIREMENTS; ORDERS; ALTERNATIVE SUPPLY.
2.1. Agreement to
Supply.
(a)
During the Term
of this Agreement and subject to the provisions of
this Agreement, including the forecasting and ordering provisions,
Gilead shall
Manufacture and supply, exclusively to Eyetech, quantities of the
Product
identified in Section 1.32 for the Territory that are covered by
Orders
submitted by Eyetech in accordance with the terms of this
Agreement.
(b)
Upon mutual
agreement, the parties may include additional Products
under this Agreement by executing and delivering additional Product
Appendices,
whereupon the definition of "Product" shall be expanded to include
the
product(s) included in such new Product Appendix. Any such
additional Product
Appendices shall be governed by and made a part of this Agreement.
Gilead shall
Manufacture and supply, exclusively to Eyetech, quantities of such
additional
Products for the Territory that are covered by Orders submitted by
Eyetech in
accordance with the terms of this Agreement.
(c)
Both Gilead and
Eyetech acknowledge the fact that the Product is in
the developmental phase of the product life cycle and there is no
certainty that
the Product will be commercialized, as certain data and information
will become
available as the project progresses which may cause Eyetech, or the
Sublicensee,
to decide that the Product is not commercially viable in the United
States or
the FDA to decide the Product is not sufficiently safe or
efficacious enough for
its intended use to satisfy requirements for issuance of a
Regulatory Approval
therefor in the Territory. For the avoidance of doubt, nothing in
this agreement
obligates Eyetech to proceed with any commercial activities if
Eyetech should
chose not to commercialize the Product in the Territory, provided
that it
exercises its right to terminate this Agreement in compliance with
Section
13.2(f).
2.2. Use of Facility,
Equipment, Molds and Tooling.
(a)
All
Manufacturing shall be carried out by Gilead, at its Facility
utilizing equipment, molds and tooling in the manner set forth in
the
Specifications.
(b)
Eyetech will
purchase and pay for the equipment to be used for
Manufacture of the Product that Gilead does not currently own or
lease (such
equipment, which is identified in Attachment 2 hereto, together
with any
additional equipment so designated as set forth below in this
Section 2.2(b),
the "Critical Equipment"). Any such Critical Equipment will be
delivered to the
Facility and placed as designated by Gilead and dedicated to
Manufacture of the
Product,
6
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provided, however, that Eyetech will retain title to the Critical
Equipment.
Eyetech will fund the acquisition of replacement parts necessary
for the repair
of the Critical Equipment and Gilead will fund and provide routine
maintenance,
upkeep, cleaning and requalifications of the Critical Equipment.
Gilead will
provide the space for the Critical Equipment rent free in Facility
and will be
responsible for costs associated with the operation of the space.
The parties
acknowledge that certain expansions to the Facility, and the
acquisition of
certain additional equipment, which upon such acquisition and
delivery to the
Facility shall be designated "Critical Equipment" for purposes of
this
Agreement, that are the subject of the building and equipment
improvement plan
and budget attached to this Agreement as Attachment 2-A will be
necessary for
Gilead's performance under this Agreement and that Eyetech shall
fund such
Facility expansions and equipment acquisitions as determined by
the
Manufacturing Committee in accordance with Section 5.17(d)(iii).
Upon
termination of this Agreement, or upon Gilead's ceasing to use the
Critical
Equipment for production of the Product, Gilead will cooperate
reasonably with
Eyetech to arrange for the prompt removal on a reasonable schedule
of such
Critical Equipment and to take such other steps as reasonably
necessary for
Eyetech to protect its ownership of the Critical Equipment (and as
agreed to in
that certain Master Security Agreement No. 4134080 dated July 26,
2002 among
General Electric Capital Corporation, Eyetech and Gilead with
respect to the
Syringe Filler referred to therein).
2.3. Current
Production Guidelines; Capacity.
(a)
The Product
Supplement sets forth Eyetech's initial good faith
non-binding (except as otherwise set forth in Section 2.4(i)) five
(5) year
forecast of its Orders for Product from Gilead on a calendar year
basis (as
updated annually, the "Planning Forecast"). The first year of each
Planning
Forecast will include planned Orders on a unit basis and a monthly
basis. During
the Term, Eyetech shall update such Planning Forecast on an annual
basis on or
before July 1 of the first year of such Planning Forecast and shall
include in
each such update a forecast for an additional year commencing at
the end of the
existing Planning Forecast (if such additional year would fall
within any
portion of the Term then remaining). Subject to the terms hereof,
Gilead shall
devote adequate manufacturing capacity to be capable of producing
and supplying
Eyetech (and/or its Affiliates or designees) during a calendar year
[**] percent
([**]%) of the quantity of Product stated in the Planning Forecast
for such
calendar year ("Order Limit").
(b)
Eyetech will
promptly notify Gilead of any potential increases in
Eyetech's Orders for Product over the quantities stated in the
Planning
Forecast. If requested by Eyetech at least one (1) year in advance
of the
applicable calendar year, the parties will discuss in good faith
any potential
adjustment of manufacturing capacity at Gilead necessary to
accommodate Orders
for Product in a calendar year in excess of the applicable Order
Limit for such
calendar year. Gilead will make any capacity adjustment to
accommodate such
increased Orders in accordance with the parties' agreement as to
the process,
schedule, and appropriate compensation, investment or payment by
Eyetech
therefor. If the parties fail to agree on such a potential increase
of
Manufacturing capacity, then Eyetech's Annual Minimum Percentage
obligation
shall be limited to purchasing a quantity of Product that is equal
to or greater
than the Annual Minimum Percentage of Eyetech's Orders excluding
amounts in
excess of the agreed Order Limit.
7
<PAGE>
(c)
The parties
acknowledge that the Commercial Launch of the Product
will constitute the launch of a new pharmaceutical product in the
Territory and,
therefore, actual demand may vary considerably from forecasted
demand.
Accordingly, the parties each agree to use best efforts to
cooperate with one
another in a manner that enables Gilead to accommodate changing
demand.
2.4. Forecasts and
Orders.
(a)
Forecast
Schedule. Eyetech shall provide Gilead with a rolling
forecast schedule of demand for Product ("Forecast Schedule") for
the following
twelve (12) calendar months. Each Forecast Schedule shall be
expressed in
integer multiples of the current batch size agreed by the parties
and shall be
compiled and updated on or before the first day of every month. The
initial
Forecast Schedule is set forth in the Product Supplement. Eyetech
shall also
keep Gilead updated through monthly review meetings involving the
relevant staff
from each party as to its revised forecasts in order to enable
capacity planning
and other such activities to be carried out.
(b)
Order
Quantities. The quantities of Product detailed in the first
three (3) months of each Forecast Schedule will be quantities for
which Eyetech
shall place a firm order ("Order") that, subject to Section 2.4(f),
Gilead shall
accept, confirm and fulfill in accordance with this Section 2.4.
The required
delivery dates for each such Order shall be specified in the Order.
Required
delivery dates shall be no sooner than twelve (12) weeks after
delivery of the
first Forecast Schedule and Order including such delivery dates,
unless
otherwise mutually agreed in writing by the parties.
(c)
Non-binding
Forecast. The last 9 months of the Forecast Schedule
shall constitute a good faith estimate by Eyetech of its future
Product
requirements and does not constitute any minimum purchase
requirement or any
binding commitment by Eyetech to purchase such Product
requirements, subject to
Section 2.4(i).
(d)
Terms. Eyetech
shall place Orders for Product in whole numbers of
batches. Gilead shall Manufacture Product only in whole numbers of
batches and
shall have no obligation to accept or meet any Orders for Product
that are for
other than whole numbers of Batches.
(e)
Placement and
Confirmation. Eyetech shall place Orders for Product
by sending an Eyetech Order form to Gilead by facsimile or in any
other written
or electronic form. Gilead shall respond to each Order received
from Eyetech
within five (5) Business Days of receipt and accept or reject the
Order;
provided, however, that (i) Gilead shall only reject an Order for
quantities
covered by the binding portion of any Forecast Schedule in
accordance with the
limitation set forth in Section 2.4(f)(i) and (ii) if Gilead fails
to respond
within such time period, it shall be deemed to have accepted such
Order. If
Gilead receives any Eyetech Order, Planning Forecast or Forecast
Schedule after
the close of business on a Business Day, then Gilead will not be
deemed to have
received such Order, Planning Forecast or Forecast Schedule until
the start of
the next Business Day. Any acceptance of an Order shall include
confirmation of
the delivery dates, delivery site and quantity as set out in the
Order.
8
<PAGE>
(f)
Limitations.
(i) If any Order
covering a one month period is for a quantity
greater
than the quantity for such period as provided in the Forecast
Schedule
in which that month was the fourth month of the previous such
forecast
("Forecast Quantity"), Gilead shall not be obligated to supply
Eyetech
with any quantities that are in excess of [**] percent ([**]%)
of
the
Forecast Quantity, with any amounts in such Order in excess of
such
amount
being the "Excess Amount", unless mutually agreed in writing by
Gilead and
Eyetech. If Eyetech submits an Order that includes an Excess
Amount,
then promptly after Eyetech receives Gilead's response to
Eyetech's
Order that includes such Excess Amount, Gilead and Eyetech
shall
discuss
the possibility of Gilead supplying Eyetech with all or a
portion
of such
Excess Amount. If discussion is required on the amount or
timing
of
production and delivery, then the relevant planning personnel from
both
parties
will agree upon and confirm any agreed amended forecast within
three
Business Days of Gilead's first receipt of the relevant
Forecast
Schedule.
(ii) If any Order
covering any one month period would make the
total
Orders for such calendar year exceed the applicable Order Limit
(as
defined in
Section 2.3(a)), Gilead shall not be obligated so supply
Eyetech
with any portion of such Order that would cause such Order
Limit
to be
exceeded. If Eyetech submits an Order that if fulfilled would
cause
the Order
Limit to be exceeded for such calendar year, then promptly
after
Eyetech
receives Gilead's response to such Order, Gilead and Eyetech
shall
discuss
the possibility of Gilead supplying Eyetech with all or a
portion
of such
Excess Amount.
(iii) If Gilead rejects any Order(s) or any portion(s) of
Order(s)
in
accordance with this Section 2.4(f), then Eyetech's Annual
Minimum
Percentage
obligation shall be limited to purchasing a quantity of Product
that is
equal to or greater than the Annual Minimum Percentage of
Eyetech's
Orders excluding such Order(s) or portion(s) of Order(s).
(g)
Acceptance of
Orders and Fulfillment. Subject to the terms of this
Agreement, including the limitations in Section 2.4(f), Gilead
shall accept,
confirm and fulfill Orders submitted by Eyetech in accordance with
this Section
2.4 in accordance with their terms (including without limitation
with respect to
quantities ordered and delivery dates specified in such Orders).
Gilead shall
use commercially reasonable efforts to fulfill other Orders and to
satisfy any
changes in quantity, delivery phasing or dates requested by Eyetech
in respect
of any Order accepted by Gilead, provided that Gilead shall not be
required to
incur any additional costs to satisfy such changes, unless the
amount of such
costs has been agreed upon in writing in advance between the
parties, and
Eyetech has agreed in writing to reimburse all such costs.
(h)
Order
Non-Satisfaction. If Gilead becomes aware that any Order
previously accepted or confirmed in accordance with Section 2.4(g)
will not be
satisfied as to quantity or delivery date, then Gilead shall inform
Eyetech as
soon as reasonably practicable and in any event within two (2)
Business Days.
9
<PAGE>
(i)
Annual Minimum
Percentage. Subject to Sections 2.3(b), 2.4(f)(iii)
and 2.9(b), Eyetech shall order quantities of Product from Gilead
in any
calendar year that equal or exceed the Annual Minimum Percentage
for such
calendar year, if any. The quantities in any Order cancelled by
Eyetech and any
quantities by which any Order is reduced shall not be counted
toward
satisfaction of this obligation; provided that such cancellation or
reduction is
not due to a failure by Gilead to accept, confirm and fulfill
Orders in
accordance with this Section 2.4 (in which case the cancelled or
reduced
quantities shall be counted toward satisfaction by Eyetech of this
obligation,
whether or not Gilead informs Eyetech as required under Section
2.4(h)). Eyetech
shall keep or cause to be kept records relating to the volume of
Product ordered
from Gilead and any other supplier for a period of four years after
the time
period to which such records relate. Gilead shall be entitled to
inspect such
records at least once per year. For the avoidance of doubt, Gilead
hereby
acknowledges that Eyetech Annual Minimum Percentage obligations do
not apply to
the manufacture of products other than the Product. If Eyetech
fails to order
quantities of Product from Gilead in any calendar year that equal
or exceed the
Annual Minimum Percentage for such calendar year, then Eyetech
acknowledges and
agrees that the difference between (i) the amount Eyetech would
have paid Gilead
had it ordered the Annual Minimum Percentage for such calendar year
and (ii) the
amount Eyetech actually paid Gilead for Product for such year
constitute an
appropriate measure of Gilead's damages resulting from such failure
and Gilead
acknowledges and agrees that such damages shall constitute Gilead's
sole and
exclusive remedy for such failure to purchase Annual Minimum
Percentages.
2.5. Standard
Forms.
Any Orders for Product submitted by Eyetech shall reference this
Agreement. In
ordering and delivering the Product, Eyetech and Gilead may employ
their
standard forms, but nothing in those forms shall be construed to
modify, amend
or supplement the terms of this Agreement and, in the case of any
conflict
herewith, this Agreement shall control. Any term or condition in
any Order,
confirmation or other document furnished by Eyetech or Gilead with
respect to
orders or deliveries of Product that is in any way inconsistent
with the terms
or conditions of this Agreement is hereby expressly rejected.
2.6. Procurement and
Approval of Product Materials.
Subject to Sections 5.4(c) and 2.4(f), Gilead shall order
sufficient quantities
of all Product Materials to enable Gilead to Manufacture, and to
deliver, the
Product in accordance with Orders placed by Eyetech and accepted by
Gilead
pursuant to Section 2.4(e). All Product Materials used in the
Manufacture of the
Product and the supplier(s) thereof shall have been approved in
writing by
Eyetech. Gilead shall issue and pay all purchase orders for such
Product
Materials. Gilead may not substitute or otherwise replace any
Product Materials
and/or any supplier thereof without the prior written consent of
Eyetech. Gilead
agrees to provide Eyetech, on a timely basis, all information that
Eyetech may
reasonably request in order to comply with internal Eyetech
procedures regarding
approval of a change in Product Materials and/or any supplier
thereof. The costs
of Product Materials and the management and procurement of such
Product
Materials shall be included in the Price in accordance with the
terms of Section
4.1 hereof. If Eyetech designates certain suppliers, Gilead shall
obtain Product
Materials from such suppliers and the Price shall be
10
<PAGE>
adjusted to account for any cost savings or increased costs
resulting from
obtaining Product Materials from such suppliers.
2.7
Supply of
API.
Gilead will not purchase API. Eyetech will supply API at its own
expense on a
schedule sufficient to permit Gilead to Manufacture the quantity of
Product
specified in the Forecast Schedule and Orders. Gilead shall not be
obligated to
supply Product to fulfill Orders if Eyetech does not supply Gilead
with
sufficient quantities of API in a timely manner. At Eyetech's
election, the API
may be delivered directly from Eyetech's vendor to Gilead at the
vendor's or
Eyetech's expense. Eyetech or its vendor shall supply Gilead with a
copy of the
certificate of analysis for the API no later than the date of
delivery of the
API to Gilead. Gilead shall provide Eyetech with monthly reports of
Gilead's
usage of API supplied by Eyetech, which reports shall account for
all used and
unused API in a manner that provides Eyetech with a reasonable
basis for
anticipating Gilead's needs for API for fulfillment of pending and
subsequent
Orders.
2.8.
Product Samples.
Gilead shall provide Eyetech (or any such other Person as Eyetech
shall
designate) with representative lot samples of each production batch
of Product
promptly upon request. Eyetech shall be entitled to review, upon
reasonable
prior written notice and during normal business hours, all
manufacturing records
relating to such samples including all analytical procedures and
cleaning
validation relating to the equipment used in connection with the
Manufacture of
the Product. Such Product samples shall be delivered and shipped to
Eyetech (or
such other Person as Eyetech shall designate) in accordance with
the provisions
set forth in Section 3.2 hereof, or as otherwise instructed by
Eyetech. Eyetech
shall pay for such samples when invoiced in accordance with Section
4.3 hereof.
2.9.
Alternative
Supply.
(a)
Nothing in this
Agreement shall prevent Eyetech, the Sublicensee or
any of its Affiliates from manufacturing, or engaging third parties
to
manufacture on their behalf, Products for the Territory, provided
that Eyetech
satisfies its Annual Minimum Percentage obligations pursuant to
Section 2.4(i)
for each Product. Gilead shall cooperate with all reasonable
requests by Eyetech
to assist at Eyetech's expense in the transfer qualification
activities
undertaken by Eyetech or any such third party, provided that
Eyetech satisfies
its Annual Minimum Percentage obligations for the applicable
Product pursuant to
Section 2.4(i). Gilead will provide such technology transfer
activities at the
agreed upon technical rate and mutually approved work plan.
(b)
Subject to the
limitations set forth below in this Section 2.9(b),
if (i) there is a failure by Gilead to accept Orders submitted by
Eyetech in
accordance with Section 2.4 in any [**] consecutive calendar
quarters or a
failure by Gilead to fulfill Orders accepted by Gilead in any [**]
consecutive
calendar quarters, such that Gilead has not delivered at least [**]
percent
([**]%) of the Product quantities ordered by Eyetech during such
consecutive
calendar quarters within [**] days of the delivery dates specified
in the
relevant Orders, or (ii) Gilead gives notice
11
<PAGE>
to Eyetech pursuant to Section 2.4(h) that clause (i) will be true,
then Eyetech
shall have the right reduce the Annual Minimum Percentage for the
remaining term
of this Agreement by up to the greater of [**] percent ([**]%) or
the reasonably
anticipated amount of shortfall in timely, conforming supply by
Gilead, and have
such quantities of Product supplied by other suppliers qualified
pursuant to
Section 2.9(a); provided that, if the occurrence as described in
clause (i) or
(ii) results primarily from events outside the reasonable control
of Gilead and
Gilead subsequently provides Eyetech with commercially reasonable
assurances
that it can resume supply of Product to Eyetech in a timely manner
in compliance
with this Agreement, then Eyetech's Annual Minimum Percentage
obligation shall
thereafter be restored to its prior level. If an occurrence as
described in
clause (i) or (ii) occurs, the Manufacturing Committee (as defined
in Section
5.17) will use good faith efforts to resolve any such supply
failures as soon as
commercially practicable; provided that, Eyetech shall have the
termination
right set forth in Section 13.2(b) unless both (A) the occurrence
as described
in clause (i) or (ii) results primarily from events outside the
reasonable
control of Gilead and (B) Gilead subsequently provides Eyetech with
commercially
reasonable assurances that it can resume supply of Product to
Eyetech in a
timely manner in compliance with this Agreement. In addition, if
the FDA imposes
requirements on the Manufacture of the Product that requires
Eyetech to modify
the Specifications, the Manufacturing Committee will use good faith
efforts to
resolve any resulting issues (including costs increases resulting
from such
FDA-imposed requirements) that would prevent Gilead from
Manufacturing the
Product in accordance with this Agreement. If the Manufacturing
Committee is not
able to resolve such issues, Eyetech shall have the termination
right set forth
in Section 13.2(b).
2.10 Start Up
Activities.
In addition to quantities of Product ordered and supplied pursuant
to Section
2.4, Eyetech will purchase and Gilead will supply Product as set
forth in this
Section 2.10:
(a)
Registration (or
Clinical) Batches: The parties acknowledge that
prior to the Effective Date Gilead provided Eyetech with certain
batches of
Product to support Product registration or for use in clinical
trials
(collectively, the "Registration Batches"). Each Registration Batch
consists of
approximately [**] units (i.e., single dose units) of Product that
Gilead has
tested in-process in accordance with the Specifications in the
Product
Supplement. Each Product in a Registration Batch consists of 0.3
mg, 1 mg or 3mg
of Macugen as requested by Eyetech. To the extent that Eyetech has
not already
made such payments prior to the Effective Date, Eyetech will pay
Gilead batch
charges at $[**] (i.e., $[**] per single shift of aseptic filling)
plus an
additional filling charge of $[**] for each unit of Product (i.e.,
$[**] per
single dose unit), as invoiced by Gilead. For Registration Batches
packaged by
Gilead, Eyetech will pay (to the extent not already paid prior to
the Effective
Date) Gilead an additional packaging charge of $[**] (i.e., $[**]
per single
shift of packaging activities) per lot. For Registration Batches
tested by
Gilead, Eyetech will pay (to the extent not already paid prior to
the Effective
Date) an additional testing batch charge of $[**] per lot. This
price will be
adjusted for increases due to changes to the Specifications or
changes to the
Product Supplement provided to Gilead after the Effective Date.
Gilead will
deliver entire Registration Batches of the Product, bulk packaged
only, CPT to
the finished packaging site designated by Eyetech (Incoterms 2000)
and will
deliver
12
<PAGE>
partial Registration Batches of the Product FCA Gilead's San Dimas
facility
(Incoterms 2000). Gilead will provide for storage up to 90 days
following
completion of production (i.e., the Batch is packaged and ready for
shipment to
Eyetech), with a provision for longer storage as follows:
<TABLE>
<CAPTION>
Days over 90 days:
[**]
[**]
<S>
<C>
<C>
<C>
Room
Temperature Storage per pallet/day
$[**]
$[**]
Refrigerated Storage
per pallet/day
$[**]
$[**]
</TABLE>
(b)
Process
Validation Batches: Gilead will provide Eyetech with at
least 3 batches (anticipated) of Product of each strength (i.e. 0.3
mg, 1 mg or
3mg of Macugen) that Eyetech has plans to commercialize, for
purposes of process
validation ("Process Validation Batches"). Each Process Validation
Batch will
consist of approximately [**] units of Product. Each Product in a
Process
Validation Batch will consist of 0.3 mg, 1 mg or 3mg of Macugen as
requested by
Eyetech. Eyetech will pay Gilead batch charges at $[**] (i.e.,
$102,000.00 per
single shift of aseptic filling) plus an additional filling labor
charge of
$[**] for each unit of Product (i.e., $[**] per single dose unit),
as invoiced
by Gilead. For Validation Batches packaged by Gilead, Eyetech will
pay Gilead an
additional packaging charge of $[**] for each unit of Product
(i.e., $[**] per
single dose unit), as invoiced by Gilead. Also for Validation
Batches packaged
by Gilead, Gilead will charge for additional support
services/handling
requirements/materials purchasing as it relates to all aspects
(except the
packaging labor charge identified above) of primary (i.e., the
pouch/bag/tray
directly containing the filled syringe) and of secondary (i.e.,
product shelf
cartoning) labeling and packaging materials, on a cost plus [**]%
basis. For
process Validation Batches tested by Gilead, Eyetech will pay an
additional
testing charge of $[**] per lot. This price will be adjusted for
increases due
to changes to the Specifications or changes to the Product
Supplement provided
to Gilead after the Effective Date. Gilead will deliver entire
Process
Validation Batches of the Product, bulk packaged only, CPT to the
finished
packaging site designated by Eyetech (Incoterms 2000) and will
deliver partial
Process Validation Batches of the Product FCA Gilead's San Dimas
facility
(Incoterms 2000). Gilead will provide for storage up to 90 days
following
completion of production (i.e. the Batch is packaged and ready for
shipment to
Eyetech), with a provision for longer storage as follows:
<TABLE>
<CAPTION>
Days over 90 days:
[**]
[**]
<S>
<C>
<C>
<C>
Room
Temperature Storage per pallet/day
$[**]
$[**]
Refrigerated Storage
per pallet/day
$[**]
$[**]
</TABLE>
(c)
Additional
Charges: The following charges will not be included in
the cost/price of the Registration or Process Validation Batches
and shall be
separately invoiced by Gilead, provided that Eyetech has approved
such charges
in advance and such charges are reasonably documented by Gilead:
(i) third party
contractor costs for installation of and support for Critical
Equipment; (ii)
travel, accommodation, and FTE costs for Gilead employees and other
Gilead out
of pocket expenses in support of the technology transfer to a third
party, which
shall be covered under the work plan as specified in Section
2.9(a), (iii)
acquisition and repair of Critical
13
<PAGE>
Equipment (iv) other unique/non-routine requirements associated
with the
Product, including but not limited to additional (i.e., other than
the one
annual Product stability lot) stability studies, costs for project
start-up
including process validation activities (e.g., writing, executing
and approval
of respective validation documents), development of expanded
regulatory
documentation and/or filings and the Product's technology transfer
to Gilead's
QC laboratory that will be provided upon request after requirements
are mutually
agreed upon by Gilead and Eyetech pursuant to a "work plan" as
contemplated in
Attachment 1. In addition, Eyetech will pay Gilead's costs incurred
in
accordance with Attachment 4 (as modified from time to time by
mutual agreement
of the parties, which shall not be unreasonably withheld) for
project start-up
including process validation activities and the Product's
technology transfer to
Gilead's QC laboratory for Product to be ordered and supplied
pursuant to
Section 2.4.
2.11 Stability Work
Plan. Promptly after the Effective Date, the parties shall
use good faith efforts to agree upon a stability work plan, which
will be
incorporated into and made a part of this Agreement. The stability
work plan
shall include a description of services relating to stability and
other tests to
be performed by Gilead at Eyetech's request and additional
compensation terms
relating to Gilead's performance of such services.
SECTION 3: SHIPMENT
AND DELIVERY TERMS; REPORTS
3.1. Shipment
Reports.
On the date of each shipment of Product, Gilead shall submit to
Eyetech, via
e-mail in the manner detailed above, a report detailing the branch
order number,
ship date, container/trailer number and contents of each such
shipment.
3.2. Delivery/Shipping
Instructions/Risk of Loss.
Gilead shall deliver Product and any Product samples requested by
Eyetech
pursuant to Section 2.8 hereof FCA (Incoterms 2000) the Facility
and otherwise
in accordance with this Section 3.2. With the initial shipment of
Product from a
specific batch, Gilead shall include a certificate of compliance
and a
certificate of analysis with such shipment. The Price reflects
shipping terms of
FCA (Incoterms 2000) from the Facility for an entire batch. Partial
batch
shipments will be subject to additional charges if such partial
shipments are
requested by Eyetech and are not due to failures by Gilead to
deliver Product in
accordance with accepted Orders. Gilead shall coordinate with
Eyetech for the
shipment of the Product with a common carrier from Gilead's
Facility to
Eyetech's designated facilities in accordance with shipment
instructions
provided by Eyetech. Eyetech will provide a list of common carriers
and will pay
the outbound freight delivery costs. Gilead will schedule freight
pick up, load
the carrier's trailer and complete documentation all in accordance
with
Eyetech's requirements. Gilead will communicate storage and transit
requirements
provided by Eyetech to selected carriers.
14
<PAGE>
SECTION 4. PRICE; PAYMENT; PRICE ADJUSTMENTS; TAXES.
4.1. Purchase Price;
Yield Adjustments.
(a)
Eyetech shall
purchase the Product from Gilead at prices as set
forth in Attachment 1.
(b)
After Gilead
Manufactures the [**] batches of Product having the
same concentration and the same process/equipment trains, the M
