Cooperative Advertising Agreement - Legal Document Example

EXHIBIT 10.1

TRIPLICATE ORIGINAL

AMENDMENT NO. 2 TO CO-PROMOTION AND MARKETING SERVICES
AGREEMENT

     This Amendment No. 2 to Co-Promotion and Marketing Services Agreement (this “Amendment”) is dated May 4, 2009 (the “Amendment Execution Date”), by and between Cornerstone Therapeutics Inc. (formerly known as Critical Therapeutics, Inc.), a Delaware corporation with its principal offices located at 1255 Crescent Green Drive, Suite 250, Cary, NC 27518 (“CRTX”) and Dey, L.P. , a Delaware limited partnership with its principal offices located at 2751 Napa Valley Corporate Drive, Napa, CA 94558 (“DEY”).

     WHEREAS, the Parties entered into that certain Co-Promotion and Marketing Services Agreement dated as of March 13, 2007 (the “Co-Promotion Agreement”);

     WHEREAS, the Parties entered into that certain Amendment No. 1 to the Co-Promotion Agreement dated as of June 25, 2007 (hereinafter, the Co-Promotion Agreement, as amended by Amendment No. 1, shall be referred to as the “Agreement”); and

     WHEREAS, the Parties desire to amend certain terms of the Agreement by way of this Amendment.

     NOW, THEREFORE, in consideration of the promises made herein and other good and valuable consideration, the receipt and sufficiency of all of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

“Detail Targets” means, for the Pre-Launch and Launch Period, the Detail Targets will be those who the JCC agrees qualify as potential targets for the Products, and, thereafter, the Detail Targets shall include the PUDs and all other office based physicians and other health care professionals in the Territory that significantly influence use with respect to any Product in the Territory as mutually agreed upon by the Parties.

1.23(a) “Amendment No. 2 Effective Date” means January 1, 2009.

“Forecast(s)” means a twelve month rolling forecast provided by DEY to CRTX on a calendar quarterly basis listing DEY’s monthly requirements for Samples. Such forecast shall be provided to CRTX at least six (6) months in advance of the first applicable Calendar Quarter in such forecast.

“Promotional Materials” means all written, printed or graphic material provided by CRTX and intended for use by a Party’s Sales Representatives during a Call, or during marketing sponsored speaker programs including, but not limited to, visual aids, file cards, premium items, clinical studies, reprints, drug information updates and any other promotional support items or advertising that CRTX (following consultation with (i) the Committee during the Pre-Launch Period and the Launch Period or (ii) DEY in accordance with Section 4.4(8) thereafter), deems necessary or appropriate in connection with the Promotion of Product. Promotional Materials shall include only those materials describing FDA-approved indicated uses, safety, effectiveness, contraindications, side effects, warnings and other relevant characteristics of a Product that meet the regulations as outlined in the Code of Federal Regulations. Promotional Materials shall not include any Product packaging, Product labeling or Sample labeling.

“Promotion Plan” means a plan relating to the Promotion of a Product. During the Pre-Launch Period and the Launch Period, the Promotion Plan will be as established by the Committee. Thereafter, the Promotion Plan will be established by the individual Parties in their sole discretion, subject to the terms of the Agreement, as amended herein.

“Samples” means Products provided primarily to Detail Targets for no consideration in accordance with PDMA guidelines.

“Non-personal Promotion Expenses” mean those Promotion Expenses not associated with Details. Together Non-personal and Personal Promotion Expenses equal the Promotion Expenses.

“Personal Promotion Expenses” mean those Promotion Expenses associated with Details.

“PUD(s)” means, for any particular date, the pulmonary specialists identified and defined by IMS Health (or by mutual written consent of the Parties another Third Party data vendor such as Wolters Kluwer) as either Pulmonary Critical Care Medicine or Pulmonary Disease Specialists during the period

beginning on the Amendment No. 2 Effective Date and ending on such particular date. Any doctor identified as a PUD at any time during the Term of this Agreement, based upon the definition above, shall remain a PUD throughout the remainder of the Term for purposes of this Agreement.

“PUD Prescription Ratio” means, for any particular Calendar Quarter, the ratio of total prescriptions written for the Products by PUDs to the total prescriptions written for the Products, based upon data published by IMS Health for such period. If IMS Health data is not available, Wolters Kluwer prescription data will be used by the Parties. If neither IMS Health nor Wolters Kluwer data is available, the last available PUD Prescription Ratio will be used for the remainder of the Term. For example, in order to calculate the PUD Prescription Ratio for the third calendar quarter of 2008 (July 1, 2008 through September 30, 2008), the total number of prescriptions written by PUDs for the Products ([***]) is divided by the number of total prescriptions written for the Products ([***]) to arrive at the PUD Prescription Ratio, which is [***]% (actual data from IMS Health NPA, including LTC, used for this example). For comparison, PUD Prescription Ratio using Wolters Kluwer data for this same quarter was [***]% ([***] divided by [***]).

For the Pre-Launch Period and the Launch Period, the Parties shall establish a Joint Commercial Committee on the following terms and conditions. As of January 1, 2009, the Joint Commercial Committee shall be disbanded and this Section 3.1 shall be of no further effect.

During the Post-Launch Period and the Post-Exclusivity Period, and as long as no generic competition for Zileuton XR has entered the market in the Territory, DEY shall deliver at least [***] Details per full calendar month to PUDs for Zileuton XR in the second position. DEY shall have no obligation to deliver Details during any Calendar Quarter for which CRTX is unable to deliver to DEY (i) at least seventy-five percent (75%) of the Samples forecast by DEY for such quarter or (ii) a reasonably adequate supply of Promotional Materials. Once a Third Party AB-rated generic product to Zileuton XR has entered the market in the Territory, [***]; provided, however, each of DEY and Mylan Inc. (“Mylan”) covenant and agree that, during the Term, neither DEY, Mylan nor any of their Affiliates will introduce in the Territory the first AB-rated generic product to either (i) Zileuton XR or (ii) Zileuton IR.

Intentionally Omitted.

For Details described in Subsections 4.3(1) through (2), DEY shall provide Details to Detail Targets who the JCC agrees qualify as potential targets for the Products, and the JCC also will determine an optimal level of Detail frequency for all targeted physicians.

In Year 2008, DEY will contribute fifty percent (50%) of the documented total Zileuton XR Promotion Expenses that are developed and approved by the JCC. During the Term of the Agreement, DEY also is responsible for salaries for its own employees performing marketing functions, which shall be separate from and in addition to the required Zileuton XR Promotion Expenses for Year 2008. DEY shall bear its Sales Representative expenses and Sample expenses, which shall also be separate from and in addition to the required Zileuton XR Promotion Expenses for Year 2008. DEY shall bear its Sales Representative expenses and Sample expenses for the remainder of the Term.

Intentionally Omitted.

(11) (a) Neither DEY nor Mylan Inc. (“Mylan”) shall directly or indirectly, manufacture, Detail, sell, market or promote any product (except for Products during the Term of this Agreement) containing Zileuton as one of the active pharmaceutical ingredients for sale in the Territory during the Term. If this Agreement expires or terminates for any reason, neither DEY nor Mylan shall directly or indirectly, manufacture, Detail, sell, market or promote any product containing Zileuton as one of the active pharmaceutical ingredients for sale in the Territory until the later of (i) one year after such expiration or termination or (ii) March 31, 2012 (the “Post-Termination Non-Compete Period”); provided, however, if: (x) a Third Party AB-rated generic product to Zileuton XR not expressly authorized by CRTX enters the Territory during this Post-Termination Non-Compete Period, DEY and Mylan will no longer

be held to the Post-Termination Non-Compete Period; or (y) a Third Party AB-rated generic product to Zileuton IR not expressly authorized by CRTX enters the Territory during this Post-Termination Non-Compete Period, DEY and Mylan will no longer be held to the Post-Termination Non-Compete Period with respect to such a product. Nothing set forth in this Agreement is intended to prevent DEY and/or Mylan from being able to take any and all actions necessary to be ready to launch a product containing Zileuton as one of the active pharmaceutical ingredients for sale in the Territory simultaneously with the market entry of a Third Party AB-rated generic product to Zileuton XR and/or Zileuton IR not expressly authorized by CRTX. Notwithstanding the foregoing, if this Agreement is terminated by DEY pursuant to Section 12.2(4) or by DEY pursuant to Section 12.2(6), the Post-Termination Non-Compete Period in this Section 4.3(11) shall be void; provided, however, DEY and CRTX shall continue to abide by the provisions of Section 9 of this Agreement after such termination.

(b) If at any time CRTX decides in its sole discretion to launch an authorized generic of Zileuton XR and/or Zileuton IR in the Territory, DEY and/or Mylan shall have the exclusive right to be CRTX’s exclusive authorized generic distributor in the Territory. DEY and/or Mylan shall have thirty (30) days after CRTX’s written notice of its decision to launch such authorized generic(s) in the Territory to elect in writing to exercise its right to commercialize such authorized generic(s) in the Territory. CRTX’s written notice to DEY shall include DEY’s Transfer Cost (as defined below), CRTX’s manufacturing lead times and the applicable CRTX Royalty (as defined below). To the extent DEY and/or Mylan do not timely make such election, CRTX shall be free to commercialize such authorized generic(s) on its own or through a Third Party on terms no more favorable than the terms offered to DEY and/or Mylan. To the extent DEY and/or Mylan timely make such election, CRTX shall exclusively supply DEY and/or Mylan with such authorized generic at [***] (“DEY’s Transfer Cost”) and upon such other terms and conditions mutually agreed to in good faith by the Parties. If DEY and/or Mylan elects to order inventory of the authorized generic in anticipation of the potential launch of a generic by a Third Party (the “Pre-launch Inventory”) and the Pre-launch Inventory is not sold, DEY shall, at CRTX’s option, either: (i) sell back to CRTX at DEY’s Transfer Cost all of the Pre-launch Inventory, or (ii) destroy the Pre-Launch Inventory. If the Pre-Launch Inventory is destroyed as a result of such product not being commercially launched by DEY and/or Mylan because the potential launch of a generic by a Third Party does not actually occur, the parties shall divide the transfer and destruction costs of the Pre-launch Inventory eighty percent to be paid by CRTX and twenty percent to be paid by DEY and/or Mylan; provided, however, CRTX shall have no obligation to share such costs if the applicable inventory has more than twelve (12) months of remaining shelf life on the actual launch date of a generic by a Third Party. DEY and/or Mylan shall sell and distribute the authorized generic in the Territory using commercially reasonable efforts to maximize profitability. Within thirty (30) days following the end of each Calendar Quarter, DEY and/or Mylan shall