Exhibit 10.34
Right of First
Refusal
Agreement
between
WARNER CHILCOTT COMPANY,
INC. , of P.O. Box 1005,
Fajardo, Puerto Rico, 00738 (“WCCI”)
and
LEO PHARMA A/S
, of Industriparken 55, DK-2750
Ballerup, Denmark (“LEO”)
(collectively, the
“Parties” and individually a
“Party”).
Capitalized terms not otherwise
defined herein shall have the meanings set forth in Article
1 of this Right of First Refusal Agreement (this
“Agreement”).
WHEREAS the Parties are interested in collaborating on
the development and marketing of certain products in the
Territory,
WHEREAS the Parties have entered into a series of
inter-related agreements relating to D/DC Products, and
WHEREAS LEO wishes to offer a first right of refusal
with respect to the Non D/DC Derm Products to WCCI.
NOW THEREFORE
the Parties hereby agree as
follows:
Article 1
Definitions
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1.1
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“Confidential
Information” shall
have the meaning ascribed to it in the Confidentiality
Agreement.
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1.2
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“Confidentiality
Agreement” shall
mean the Confidentiality Agreement dated as of 4 July 2005
between the Parties.
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1.3
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“DC
Agreement” shall
mean the License, Supply and Development Agreement dated as of even
date herewith between the Parties relating to certain D/DC Products
(as defined below), as may be amended from time to time.
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1.4
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“D/DC
Products” shall
mean (i) the pharmaceutical formulations containing
calcipotriol (calcipotriene) as the only active pharmaceutical
ingredient (including Dovonex® ointment, cream and scalp
solution) and any other such formulations and (ii) the
pharmaceutical formulations containing calcipotriol (calcipotriene)
and steroid including Dovobet® ointment, LEO 80185, LEO 80190
and any other such formulations, in each case, in any form
including, but not limited to, an ointment, cream, gel, solution,
foam, mousse or liquid, whether such formulation has been
developed, is being developed or may be developed in the
future.
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1.5
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“Master Agreement”
shall mean the Master Agreement
dated as of 1 April 2003 between GALEN (CHEMICALS) LIMITED and
LEO, as amended by WCCI and LEO on the date hereof and as may be
amended from time to time hereafter (with the consent of LEO GALEN
has assigned its rights and obligations under the Master Agreement
to its affiliate, WCCI).
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1.6
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“ Non
D/DC Derm Product ” shall mean products that are
developed (i) by LEO or (ii) by a third party and
licensed to LEO, in each case, principally for the treatment or
prevention of dermatological diseases (developed as a separate
product for the treatment or prevention of dermatological diseases,
i.e. with its own NDA or supplement to an NDA, dosage regimen,
packaging and tradename), other than D/DC Products.
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1.7
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“
Territory ” shall mean the United States of America,
the District of Columbia, its territories and current
possessions.
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1.8
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“
Territory Product ” shall mean any Non D/DC Derm
Product developed for distribution and sale solely within the
Territory.
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RIGHT OF FIRST REFUSAL
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2/11
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Article 2
Right of First Refusal to
products that are developed by LEO principally
for the treatment or prevention
of dermatological diseases
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2.1
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LEO will notify
WCCI and provide all relevant information and data relating to Non
D/DC Derm Products to WCCI after LEO has completed the end of Phase
II trial (proof of concept); provided that for any Territory
Product, LEO may notify WCCI at any time prior to the end of Phase
II trial (proof of concept) for such product. With respect to
products in-licensed by LEO from a third party, LEO will in good
faith use commercially reasonable efforts to obtain the right to
sublicense such products to WCCI in the Territory. In the event
that LEO is unable to obtain a license for such in-licensed product
in the Territory or LEO is unable to obtain the right to sublicense
such in-licensed product to WCCI, LEO will not be obligated to
offer a license to WCCI.
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2.2
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Within sixty
(60) days after receipt of such notice and information, WCCI
may elect to make an offer to license, on an exclusive basis
(subject to Article 3), such Non D/DC Derm Product in the
Territory, by notifying LEO. If WCCI elects not to make such an
offer, LEO is free to offer such product to any third party at any
time and shall have no obligations towards WCCI with regard to such
product. If WCCI elects to make an offer by notifying LEO, WCCI and
LEO shall exclusively negotiate in good faith the terms of a
written agreement for the license of the product. If the parties
cannot agree on mutually acceptable terms within sixty
(60) days of such offer, LEO may solicit offers from other
parties.
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2.3
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Subject to
Article 2.2 , if LEO receives a written bona fide offer from
an unaffiliated third party (a “ Bona Fide Offer
”) that is more favorable than WCCI’s offer, LEO shall
notify WCCI of such offer within five (5) business days after
receipt of such offer. Within ten (10) business days after
WCCI is notified of the Bona Fide Offer, WCCI and LEO shall refer
WCCI’s offer and the Bona Fide Offer to an independent third
party valuation specialist (such as a reputable investment bank)
mutually acceptable to WCCI and LEO (the “ Valuation
Specialist ”). Concurrently with delivery of the offers
to the Valuation Specialist, LEO shall provide the Valuation
Specialist with a calculation of projected net sales, based on
LEO’s forecast of the unit sales, projected gross invoice
price, and projected returns, allowances and other standard
adjustments, of the product that is the subject of the offers (the
“ Forecast ”). The Valuation Specialist shall
make a determination of the net present value to LEO of
WCCI’s offer and the Bona Fide Offer based on a discounted
cashflow analysis within 15 days after its engagement by WCCI and
LEO; provided that, for WCCI’s Offer and the Bona Fide Offer,
the Valuation Specialist shall assume (i) the net sales and
components of its calculation set forth in the Forecast (to be
applied equally to WCCI’s offer and the Bona Fide Offer), and
(ii) such other matters as the Parties and such Valuation
Specialist deem relevant. Such determination of the net present
values (the “ Valuation Report ”) shall be
delivered in writing to WCCI and LEO within such 15 day period and
shall be final and binding on, and nonappealable by, WCCI and LEO,
it being understood that the Valuation Report shall contain no
information with respect to the identity of the third party making
the Bona Fide Offer or the terms of the Bona Fide Offer other than
the net present value of
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RIGHT OF FIRST REFUSAL
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3/11
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such offer. WCCI and LEO shall each
pay one-half the costs incurred in connection with the engagement
of the Valuation Specialist under this Article 2 . The
cash-flows shall be discounted with an interest rate of 10% p.a.
Within thirty (30) days after receipt of the Valuation Report,
WCCI shall have the right to make an offer having the same net
present value as the Bona Fide Offer (a “ Matching
Offer ”) and LEO shall accept WCCI’s offer. If WCCI
does not make a Matching Offer, LEO is free to accept the Bona Fide
Offer and, subject to Article 2.5 , shall have no
obligations towards WCCI with regard to such product. If WCCI makes
a Matching Offer, WCCI and LEO shall exclusively negotiate in good
faith the terms of a written agreement for the license of the
product for a period of ninety (90) days from the date of
WCCI’s Matching Offer.
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2.4
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If after
expiration of the ninety (90) day negotiation period, despite
good faith negotiations, WCCI and LEO have not entered into final
written agreement(s), LEO shall have the right, subject to
Article 2.5 , at any time thereafter to sell or license the
product to any third party.
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2.5
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In the event
that (a) WCCI does not make a Matching Offer or (b) WCCI
and LEO have not entered into final written agreements for a Non
D/DC Derm Product within 90 days as set forth in Article 2.4
, prior to entering into any definitive written agreement with any
third party for the sale or license of such product, LEO shall
cause the Valuation Specialist to provide WCCI with the final net
present value (calculated in accordance with the cash flow analysis
procedures set forth in Article 2.3 ) of any such sale or
license to a third party. In no such event shall LEO sell or
license such product to any third party on terms and conditions
that have a net present value that is less than the net present
value of the last offer made by WCCI to LEO in writing.
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2.6
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With respect to
the foregoing, LEO shall act in good faith when determining whether
a product is developed “principally for the treatment or
prevention of dermatological diseases.” For example, WCCI
should be permitted to offer to license from LEO the product LEO
15520 for its dermatological use if such compound is developed as a
separate product for psoriasis, i.e. with its own NDA or supplement
to an NDA, dosage regimen, packaging and tradename.
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2.7
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If WCCI is
notified prior to the end of Phase II trial (proof of concept) with
respect to a Territory Product, WCCI may elect to negotiate an
agreement for LEO to complete a Phase I trial or Phase II trial, as
the case may be, and shall have an exclusive option to
lice
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