CO-PROMOTION
AGREEMENT
This
CO-PROMOTION AGREEMENT (this “Agreement”
) dated October 25, 2006 (the “Effective Date”
), is entered into by and between MILLENNIUM PHARMACEUTICALS,
INC. a Delaware corporation ( “MLNM” ) and
ORTHO BIOTECH INC., a New Jersey corporation (
“OBI” ). MLNM and OBI are generically
referred to in this Agreement individually as a
“Party” and collectively as the
“Parties ”.
WHEREAS, MLNM and
OBI’s Affiliate Ortho Biotech Products, L.P. (“
Ortho Biotech ”) are parties to that certain
Collaboration, Distribution and Licensing Agreement made effective
as of June 30, 2003 (as amended from time to time, the
“Collaboration and License Agreement” ),
pursuant to which MLNM and Ortho Biotech agreed to globally develop
MLNM’s proprietary drug, VELCADE ®
(bortezomib) for Injection (the “Product”
) to be administered by injection for the treatment of multiple
myeloma and in other tumor type indications;
WHEREAS, OBI has
significant experience in the marketing and promotion of drugs
(including drugs administered by injection) for the treatment of
cancer and serious, cancer-related, chronic illnesses; and
WHEREAS, MLNM
wishes to engage OBI to Co-Promote (as hereinafter defined) the
Product in the Co-Promotion Territory (as hereinafter defined) and
OBI wishes to be so engaged subject to and upon the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in
consideration of the mutual representations, warranties, covenants
and undertakings contained in this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties hereto, intending to be
legally bound, agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION;
TERM
1.1
Definitions. Capitalized terms used in this Agreement
have the meanings assigned in Appendix A .
1.2
Construction. Except where the context requires
otherwise, whenever used, the singular includes the plural, the
plural includes the singular, the use of any gender is applicable
to all genders and the word “or” has the inclusive
meaning represented by the phrase “and/or.”
Whenever this Agreement refers to a number of days, unless
otherwise specified, such number refers to calendar days. The
headings of this Agreement are for convenience of reference only
and do not define, describe, extend or limit the scope or intent of
this Agreement or the scope or intent of any provision contained in
this Agreement. The term “including” or
“includes” as used in this Agreement means including or
includes “without limiting” or “without
limitation.” The wording of this Agreement shall be
deemed to be the wording mutually chosen by the Parties and no rule
of strict construction shall be applied against either Party.
1.3
Term.
1.3.1
This Agreement shall commence on the Effective Date and shall
continue in full force and effect until December 31, 2008, unless
extended or earlier terminated as hereinafter set forth. The
period beginning on the Effective Date and ending on December 31,
2006 is referred to as the “Pre-Commencement Period .
” The period beginning on January 1, 2007 and
ending on December 31, 2008, as may be extended by any Extension
Term(s) and as may be earlier terminated pursuant to this
Agreement, is referred to as the “Co-Promotion Term .
”
1.3.2
The Co-Promotion Term may be extended for two (2) additional
successive one (1) year periods (each, an “Extension
Term” ) by mutual written agreement of the Parties.
Prior to the expiration of this Agreement, unless earlier
terminated in accordance with Article 8, and in the event the sum
of the aggregate Net Sales of the Product in 2007 and the
Annualized Net Sales in 2008 exceed [**] Dollars ($[**]), the
Parties shall negotiate in good faith as set forth in this
Subsection 1.3.2 the extension of this Agreement for one (1)
additional year. Each Extension Term shall be governed by the
terms and conditions set forth in this Agreement except (a) to the
extent that such terms and conditions are amended as mutually
agreed to in writing by the Parties, and (b) the payment provisions
set forth in Article V hereof and as referenced elsewhere in this
Agreement, shall be subject to re-negotiation for each Extension
Term. In the event that a Party wishes to enter into an
Extension Term, it shall notify the other Party in writing at least
three (3) months prior to the expiration of the Co-Promotion
Term. Following receipt of such notice by the other Party,
the Parties shall negotiate the financial terms applicable to the
proposed Extension Term in good faith for a period of less than
sixty (60) days. In the event that the Parties fail to reach
agreement on the payment provisions prior to the expiration of the
Co-Promotion Term, then the Agreement shall expire upon expiration
of the Co-Promotion Term then in effect without further extension
at such time.
ARTICLE II
PRE-COMMENCEMENT
ACTIVITIES
2.1
Generally. During the Pre-Commencement Period, the
Parties shall complete the activities described in Sections 2.2
through 2.4 below. In the event that, following all
commercially reasonable efforts of both Parties, all such
activities have not been completed on or prior to the commencement
of the Co-Promotion Term, then, so long as the Minimum
Pre-Commencement Activities have been completed on or prior to the
commencement of the Co-Promotion Term, the Parties shall proceed as
otherwise contemplated by this Agreement and shall continue to use
all commercially reasonable efforts to complete the remainder of
the activities that were supposed to have been completed during the
Pre-Commencement Period as soon as practicable, but in no event
later than March 31, 2007. In the event that the
Minimum Pre-Commencement Activities have not been fully performed
on or prior to the commencement of the Co-Promotion Term, then the
Parties shall proceed in accordance with the following Sections
2.1.1 and 2.1.2.
2.1.1
The Pre-Commencement Period shall be extended automatically to
January 29, 2007 provided that the Steering Committee shall convene
on or before December 31, 2006 to review the activities completed
by the Parties to date and shall assign clear
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responsibilities and
deadlines to each Party, as applicable, to facilitate completion of
the Minimum Pre-Commencement Activities by January 29, 2007.
OBI may not commence Co-Promotion of the Product until the Minimum
Pre-Commencement Activities have been completed unless otherwise
agreed upon by the Steering Committee.
2.1.2
In the event the Minimum Pre-Commencement Activities are fully
performed by January 29, 2007 but all activities described in
Sections 2.2 through 2.4 below have not been completed, the
Steering Committee shall convene on or before such date to review
the activities completed by the Parties to date and shall assign
clear responsibilities and deadlines to each Party, as applicable,
to facilitate completion of such activities as soon as reasonably
practicable but no later than March 31, 2007.
2.2
Co-Promotion Plan. The Parties shall develop and complete
a plan to Co-Promote the Product in the Co-Promotion Territory (the
“Co-Promotion Plan” ). The Parties shall amend
and update the Co-Promotion Plan semi-annually during each calendar
year or more frequently as determined by the Steering
Committee. The Co-Promotion Plan, as the same may be amended
and updated from time to time, shall be approved by the
Co-Promotion and Marketing Committee and incorporated into this
Agreement as Appendix B . Each Party shall use all
commercially reasonable efforts to complete the Co-Promotion Plan
within sixty (60) days of the Effective Date, but in any event,
subject to Section 2.1.1 and 2.1.2 of this Agreement, prior to the
commencement of the Co-Promotion Term. The Co-Promotion Plan
shall include, without limitation, the Target List, Call Plan and
Call Reporting and Review Requirements as described further in this
Section 2.2.
2.2.1
Target List . MLNM shall provide to OBI, for review by and
consultation with OBI, a list of First Position Targets and Second
Position Targets (collectively, the “Target
List” ) no later than [**] days following the Effective
Date, which Target List shall be incorporated into the Co-Promotion
Plan. The Target List shall include only health care
professionals [**] or any other indications for the Product that
are approved in the Co-Promotion Territory during the Co-Promotion
Term. OBI shall bring to the attention of the Co-Promotion
and Marketing Committee any prescribers of the Product known to OBI
who are not MLNM Targets. MLNM may, in consultation with the
Co-Promotion and Marketing Committee, update the Target List
semi-annually during each calendar year or more frequently as
determined by the Co-Promotion and Marketing Committee; provided,
however, that a change in the identity of more than [**] percent
([**]%) of the First Position Targets or [**] percent ([**]%) of
the Second Position Targets on the Target List shall require the
mutual agreement of the Parties.
2.2.2
Call Plan . OBI shall develop a plan for Calling on
the MLNM Targets (the “Call Plan” ) and update
the Call Plan at least semi-annually during each calendar year or
more frequently as OBI may determine. The Call Plan and each
update thereto shall be subject to review, input and approval by
the Co-Promotion and Marketing Committee and shall be incorporated
into the Co-Promotion Plan following approval by the Co-Promotion
and Marketing Committee. The Call Plan shall be consistent with the
requirements of Section 3.2.1. OBI shall provide all Sales
Representatives with a copy of the applicable Call Plan.
2.2.3
Call Reporting and Review Requirements . The
Co-Promotion and Marketing Committee shall develop reporting and
review requirements whereby OBI shall
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provide MLNM with
reports regarding execution of the Call Plan by OBI so that MLNM
may monitor execution of the Call Plan by OBI (the “Call
Reporting and Review Requirements” ).
(a)
The Call Reporting and Review Requirements shall be incorporated
into the Co-Promotion Plan and shall provide, inter
alia that:
(i)
During the Co-Promotion Term, within [**] days of the end of each
calendar month, OBI shall provide a final detailed report to MLNM
summarizing the Call activity for such calendar month (each such
report, a “Monthly Call Report” ). Each
Monthly Call Report shall include with respect to each Call made by
the Sales Representatives (1) the date of the Call; (2) the MLNM
Target (including identifying information mutually agreed upon by
the Parties in the Co-Promotion Plan); (3) the location of the
Call; (4) message information to the extent available in the OBI
call reporting system; (5) account information to the extent
available in the OBI call reporting system (including identifying
information mutually agreed upon by the Parties in the Co-Promotion
Plan); (6) identification of Sales Representative who performed the
Call; (7) position of the Product detail (i.e., First Position Call
or Second Position Call), and (8) any other information agreed to
by the Parties. OBI shall provide such Monthly Call Report to
MLNM in an electronic format mutually agreed to by the Parties;
(ii)
During the Co-Promotion Term, within [**] days after the end of
each calendar quarter, OBI shall provide a final detailed report to
MLNM summarizing the Call activity for such quarter and indicating
for each MLNM Target, the number of First Position Calls and Second
Position Calls by month achieved by OBI during such quarter with
respect to such First Position Target and such Second Position
Target, as applicable (each such report a “Quarterly Call
Report” ). OBI shall provide such Quarterly Call
Report to MLNM in an electronic format mutually agreed upon by the
Parties.
(iii)
OBI shall provide MLNM with copies of all significant
communications relating to the Product and this Agreement made by
OBI to its Co-Promotion Representatives (including, without
limitation, emails and Product specific information) within such
time frames and by such means as are specified in the Co-Promotion
Plan; and
(iv)
At MLNM’s written reasonable request, made not less than [**]
Business Days prior to the applicable event, MLNM shall have the
right to monitor the performance of Sales Representatives in a mix
of geographical territories through (1) [**] relating to this
Agreement and (2) [**] (including, without limitation, [**].
MLNM shall also have the right, upon written request
made to OBI from time to time, to review the results of [**] agreed
upon by the Parties to evaluate the knowledge of the Sales
Representatives with respect to the Product, the Promotional
Materials and the Call Plan and the performance of Calls by the
Sales Representatives.
(b)
MLNM, as part of the Co-Promotion Plan, shall within [**] Business
Days following the public release of its quarterly results, provide
to OBI Product sales data (for e.g., in vials, by account, by
month) to the extent available, in a form selected by MLNM that
will permit the manipulation and analysis of the data. OBI
shall be permitted to use such data for the sole purpose of
planning Co-Promotional activities set forth under this
Agreement. MLNM will in its sole discretion, provide
additional reports or data as may become
4
available to MLNM to
assist OBI in planning Co-Promotional activities under this
Agreement. For each MLNM Target, MLNM will provide to OBI to
the extent available the number of calls by MLNM sales
representatives received over the calendar quarter [**] days after
the end of each quarter. MLNM makes no
representation or warranty as to the accuracy or completeness of
such call activity data.
2.3
Training Plan and Activities. The Parties shall develop
a training plan (the “Training Plan” ) with
respect to their performance pursuant to this Agreement and the
Co-Promotion Plan pursuant to which (a) MLNM shall provide initial
and supplementary training pursuant to this Agreement to OBI
personnel who are designated by OBI as trainers of the other
Co-Promotion Representatives (the “OBI Trainers”
) with respect to their performance pursuant to this Agreement and
the Co-Promotion Plan, and (b) OBI Trainers shall provide initial
and supplementary training to the other Co-Promotion
Representatives. Each Party shall use all commercially
reasonable efforts to complete the Training Plan within [**] days
of the Effective Date and shall incorporate the same into this
Agreement as Appendix C . The Training Plan shall
include, without limitation, the following obligations of the
Parties:
2.3.1
OBI shall provide a sufficient number of OBI Trainers to train all
of the Sales Representatives. The OBI Trainers shall be
selected by OBI and have prior experience in selling oncology
therapeutics similar to those otherwise used by OBI for its own
products.
2.3.2
MLNM shall provide one (1) copy of training materials to OBI for
use solely in connection with (a) the training of the OBI Trainers
and (b) the training of the other Co-Promotion Representatives by
the OBI Trainers pursuant to the Training Plan. OBI shall
have the right to reproduce such training materials and provide
copies of the same to the OBI Trainers and the Co-Promotion
Representatives for use in connection with their training pursuant
to the Training Plan.
2.3.3
On or prior to December 31, 2006 MLNM shall complete its training
of the OBI Trainers with respect to (a) sales and scientific
materials regarding the disease state information on multiple
myeloma and (b) use of the Product in the approved indication for
multiple myeloma in the Co-Promotion Territory.
2.3.4
The Parties shall jointly develop assessment materials to allow
MLNM to test the performance of OBI Trainers and each OBI Trainer
shall be required to receive an individual minimum score of [**]
percent ([**]%) under such tests before he or she initiates
training of Co-Promotion Representatives.
2.3.5
OBI shall ensure that the OBI Trainers train the Co-Promotion
Representatives in accordance with the Training Plan. Prior
to January 29, 2007, OBI shall also ensure, through training
assessments jointly developed by the Parties for such purpose, but
administered by OBI, that each Co-Promotion Representative receives
training regarding (a) the Product, (b) the disease state(s) for
which the Product is indicated in the Co-Promotion Territory and
(c) the Calls to be conducted by the Co-Promotion Representatives
that meets current standards of OBI applicable to other
pharmaceutical products promoted by OBI, as well as applicable
industry standards for comparable pharmaceutical products.
OBI shall provide MLNM with reasonable advance notice and
opportunity to attend and participate in activities
5
related to the training
of the Co-Promotion Representatives pursuant to and in accordance
with the Training Plan.
2.3.6
MLNM shall provide supplementary training to OBI Trainers as deemed
necessary and appropriate by MLNM during the Co-Promotion Term
including without limitation training regarding any newly approved
indication for the Product or emerging Product safety
information. OBI shall cause the OBI Trainers to provide
initial training in accordance with the Training Plan to any
additional or replacement Co-Promotion Representatives and
supplementary training to other Co-Promotion Representatives as
deemed necessary and appropriate by OBI during the Co-Promotion
Term.
2.3.7
Each Party shall be responsible for ensuring that all of its
personnel involved in the activities set forth under this
Agreement, complies with all Applicable Laws. Each Party
shall ensure that all of its personnel involved in the Co-Promotion
receives such compliance training regarding Applicable Laws in a
manner consistent with all applicable pharmaceutical industry
standards.
2.4
Core Promotional Materials.
2.4.1
Prior to the commencement of the Co-Promotion Term, MLNM shall
develop a set of Promotional Materials for the purposes of this
Agreement for use during the Co-Promotion Term (the “Core
Promotional Materials” ). The Core Promotional
Materials shall be subject to timely review and approval in
accordance with MLNM standard operating procedures by duly
authorized representatives of each Party’s designated
promotional review team at a joint meeting of such
representatives. The Parties shall ensure that any Core
Promotional Materials to be used by Co-Promotion Representatives
comply with each Party’s applicable regulatory compliance
policies. For purposes of clarification, subject to Section
11.5.4, nothing in this Agreement shall restrict MLNM’s right
to independently undertake any promotional or marketing activities
with respect to the Product, or to develop and use Promotional
Materials for the purposes of promoting and marketing the Product,
in each case in the Co-Promotion Territory and its territories and
possessions.
2.4.2
The Core Promotional Materials shall contain the logos with
appropriate prominence of both MLNM and OBI with designation of OBI
as co-promoting the Product in the Co-Promotion Territory.
The location and statement of the OBI logo shall be as mutually
agreed upon by the Parties. MLNM may revise, update or
develop additional Core Promotional Materials from time to
time during the Co-Promotion Term subject to the review and
approval process described above. The Core Promotional
Materials shall also be subject to revision by MLNM during the
Co-Promotion Term as deemed necessary and appropriate by MLNM based
on (a) changes in the Product Label and Insert or (b) suggestions,
requirements or mandates of the FDA or other Governmental
Authorities and/or Applicable Law.
2.4.3
MLNM shall provide OBI with copies of the Core Promotional
Materials in the quantities requested by OBI from time to time
during the Co-Promotion Term to perform its obligations pursuant to
this Agreement and subject to the In Kind Payment set forth in
Section 5.2.2. MLNM shall ship such copies to OBI to one
distribution center designated by OBI.
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ARTICLE III
CO-PROMOTION
3.1
Rights and Obligation to Co-Promote; Combined Use with Doxil
®
3.1.1
Subject to the terms and conditions of this Agreement, MLNM grants
to OBI the co-exclusive right with MLNM, and OBI hereby accepts the
obligation, to Co-Promote the Product within the Co-Promotion
Territory during the Co-Promotion Term. OBI shall have the
non-exclusive right and obligation subject to the applicable terms
and conditions set forth in Section 9.8 of the Collaboration and
License Agreement to use the VELCADE ®
mark to the extent necessary for OBI to fulfill its
Co-Promotion obligations under this Agreement. Any rights of
MLNM not expressly granted to OBI hereunder with respect to the
co-promotion of the Product in the Co-Promotion Territory or
otherwise related to the Product shall be retained by MLNM in
accordance with the terms of this Agreement and the Collaboration
and License Agreement.
3.1.2
Subject to the terms and conditions of this Agreement, upon receipt
by OBI or its Affiliates, as applicable, of notice of acceptance by
the FDA of OBI’s or its Affiliate’s sNDA filing for the
marketing and sale of Doxil ®
for use in combination with the Product for treatment of
multiple myeloma (the “Combination sNDA Filing”
), OBI and its Affiliates hereby grant to MLNM: (a) a non-exclusive
right and license to promote in the Co-Promotion Territory and its
territories and possessions the use of the Product in combination
with Doxil ® in
accordance with the United States package insert for Doxil
® , (b)
a non-exclusive right and license to use the Doxil ®
trademark solely in connection with the marketing and sales
of the Product in the Co-Promotion Territory and its territories
and possessions for use in combination with Doxil ®
, (c) a non-exclusive right to use all Doxil ® Data
(as defined below) in connection with the marketing and sales in
the Co-Promotion Territory and its territories and possessions of
the Product for use in combination with Doxil ® , and
(d) a non-exclusive right to include such combination as a new use
on the Product Label and Insert and full prescribing information
for the Product in the Co-Promotion Territory and its territories
and possessions by cross-referencing the Doxil ®
label (or any data contained or referenced in any submissions
or applications made by OBI or its Affiliates for the marketing
approval of such combination by the FDA) in any submissions or
applications which MLNM may make to the FDA with respect to such
new use (the “Doxil ®
License” ). During the term of this
Agreement, the Doxil ®
License shall be royalty-free and fully paid-up. In the
event this Agreement is terminated pursuant to Sections 8.1.1,
8.1.2(a), (b) (solely in the event the basis of such termination is
a material breach by OBI), (c), (d), (e), (g) or (h), or Section
8.2, the Doxil ®
License shall survive such termination and shall be
royalty-free, fully paid-up, perpetual and
irrevocable. If this Agreement is terminated
pursuant to Section 8.1.2(b) in the event the basis of such
termination is a material breach by MLNM or pursuant to Section
8.1.2(f), the Doxil ®
License shall not survive unless if, on the applicable effective
date of termination of this Agreement under such sections, the FDA
has accepted MLNM’s sNDA filing for the marketing and sale of
the Product for use in combination with Doxil for treatment of
multiple myeloma, in which case, the Doxil ®
License shall survive and be royalty-free, fully paid-up,
irrevocable and perpetual; provided, however, if the FDA does not
approve the sNDA such license shall terminate. MLNM shall have no
right to transfer, assign or
7
sublicense its rights under the Doxil
®
License during the term of this Agreement and following its
termination except: (x) MLNM may assign its rights under the
Doxil ®
License to a Third Party in connection with an assignment of
this Agreement by MLNM to such Third Party pursuant to Section
14.11, and (y) MLNM may sublicense its rights under the Doxil
®
License to a Third Party in connection with a license to
Commercialize (as defined in the Collaboration and License
Agreement) the Product in the Co-Promotion Territory that is
granted by MLNM to such Third Party (to the extent permitted under
the Collaboration and License Agreement). For
purposes of this Section 3.1.2, “ Doxil ®
Data ” shall mean any data relating to Doxil
®
submitted by OBI or its Affiliate to FDA in the Combination
sNDA Filing and any data submitted by OBI or its Affiliate to FDA
to update, support or supplement the product label for Doxil
®
. OBI and its Affiliates agree to promptly disclose and
provide to MLNM any Doxil ® Data
provided to the FDA and, upon MLNM’s request from time to
time, all Doxil Data and any other data contained or referenced in
the Combination sNDA Filing and any updates thereto, to the extent
such information and data is available at the time of each such
request. Notwithstanding anything to the contrary herein, OBI
makes no representation or warranty to MLNM relating to (A)
MLNM’s ability to obtain FDA approval of the use of the
Product in combination with Doxil ® , or
(B) OBI’s and its Affiliate’s ability to obtain FDA
approval of the Combination sNDA Filing. MLNM shall ensure
(1) that all statements and claims related to Doxil ®
, including as to efficacy and safety, are consistent with and in
strict compliance with the Doxil ® label
and insert and all Applicable Laws, including the Act, and (2) that
all comments about Doxil ®
and OBI are truthful, accurate and in strict compliance with
Applicable Laws. In addition, at any time
during and after the Co-Promotion Term when such combination is not
included on the Product Label and Insert, MLNM shall ensure that
all statements and claims related to Doxil ®
are consistent with messaging approved in advance by the
Co-Promotion and Marketing Committee pursuant to Section 4.2.1 (or
otherwise approved by OBI in writing). MLNM shall ensure and
require that any permitted assignees and permitted sublicensees of
the Doxil ®
License comply with the foregoing requirements. Any
rights of OBI not expressly granted to MLNM hereunder with respect
to Doxil ®
shall be retained by OBI. OBI shall cause its
Affiliates promptly after execution of this Agreement to enter into
a fully paid up, royalty-free trademark license with MLNM
consistent with the terms of this Section 3.1.2 and any other
agreements necessary to effect the grants made under this Section
3.1.2, each in a form mutually acceptable to both Parties.
3.2
Reach and Frequency; Minimums.
3.2.1
During the Co-Promotion Term, OBI shall execute a Call Plan which
shall direct its Sales Representatives to complete [**] per month
within the Measurement Period for each First Position Target and
[**] per month within the Measurement Period for each Second
Position Target (collectively, the “Call
Standard” ). During each Measurement Period, OBI shall
use commercially reasonable efforts to cause its Sales
Representatives to conduct Calls in accordance with the Call Plan;
provided, however, that neither any failure of OBI to use such
commercially reasonable efforts nor any failure to meet the Call
Standard shall constitute a breach of this Agreement or otherwise
entitle MLNM to terminate this Agreement; and provided, further,
that in no event shall this proviso limit the rights of MLNM to
terminate under Section 3.2.4.
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3.2.2
In the event OBI fails, during any Measurement Period, to achieve
the Call Standard, OBI shall, in any event, cause its Sales
Representatives to conduct Calls with (a) a Reach of not less than
[**] percent ([**]%) of First Position Targets and not less than
[**] percent ([**]%) of Second Position Targets, and (b) a Minimum
Frequency of not less than [**] Calls within the Measurement Period
for Reached First Position Targets and not less than [**] Calls
within the Measurement Period for Reached Second Position
Targets. The aforementioned Reach and Minimum Frequency
requirements are referred to, collectively, as the
“Minimum Commitment” . For purposes of
subsections 3.2.2 through 3.2.4 of this Agreement: (x) “
Minimum Frequency ” means, with respect to a
Measurement Period, the ratio determined by dividing (i) the
aggregate number of Calls made to Reached First Position Targets or
Reached Second Position Targets (as the case may be) in such
Measurement Period by (ii) the number of Reached First
Position Targets or Reached Second Position Targets (as the case
may be) in such Measurement Period; (y) a “ Reached First
Position Target ” means, with respect to a Measurement
Period, a First Position Target who received at least [**] during
such Measurement Period; and (z) a “ Reached Second
Position Target ” means, with respect to a Measurement
Period, a Second Position Target who received at least [**] during
such Measurement Period. With respect to a particular MLNM
Target, no more than [**] Calls to such MLNM Target in a calendar
month and no more than [**] Calls to such MLNM Target in a
Measurement Period shall be included in the numerator of the
calculation of Minimum Frequency, provided, that, with
respect to First Position Targets, such Calls shall be First
Position Calls. For purposes of calculating Reach and Minimum
Frequency to a Second Position Target, a Call may be a First
Position Call or a Second Position Call.
3.2.3
In the event that OBI does not meet the Minimum Commitment during a
Measurement Period (a “Non-Performing Period” ),
then any Commission Payments due to OBI under Section 5.3 for the
calendar year during which the Non-Performing Period occurred shall
be reduced by [**] percent ([**]%). In the event one or more
than one Non-Performing Periods occurs in a calendar year, then any
Commission Payments due to OBI under Section 5.3 for such calendar
year shall be reduced by [**] percent ([**]%) multiplied by
the number of Non-Performing Periods in such calendar year.
3.2.4
In the event [**] Non-Performing Periods occur during the
Co-Promotion Term (whether occurring consecutively or not), such
event shall be deemed to be an “ OBI Non-Performance
Breach ” and (a) MLNM shall not be obligated to pay OBI
any Call Cost Payments with respect to the [**] Non-Performing
Period or any Variable Cost Payments with respect to the [**]
Non-Performing Period, (b) Commission Payments for the calendar
year in which the [**] Non-Performing Period occurs shall be
reduced as set forth in Section 3.2.3 and (c) MLNM shall have the
right to terminate this Agreement pursuant to Section 8.1.2(a) at
any time within one-hundred and eighty (180) days after the
occurrence of such Non-Performance Breach. In the event MLNM
does not elect to terminate this Agreement pursuant to Section
8.1.2(a) and additional Non-Performing Period(s) occur after the
[**] Non-Performing Period, the provisions of this Section 3.2.4
shall apply to such Non-Performing Period(s) without taking into
account the one-hundred and eighty (180) day period set forth in
clause (c) above.
3.2.5
Notwithstanding anything to the contrary in this Agreement,
termination of this Agreement by MLNM pursuant to Section 8.1.2(a)
(together with the modification to MLNM’s payment obligations
as described in Sections 3.2.3 and 3.2.4 above and the
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Termination Fee
pursuant to Section 8.3.2(a)) shall be the sole and exclusive
remedy of MLNM for any Losses of MLNM caused by or arising as a
result of OBI’s failure to satisfy the Minimum
Commitments. MLNM shall not have the right to terminate this
Agreement pursuant to Section 8.1.2(b) (relating to material
breach) on the basis of OBI’s failure to satisfy the Minimum
Commitments in one or more Measurement Periods which failure is a
basis for termination by MLNM pursuant to Section
8.1.2(a).
3.3
Sales Representatives.
3.3.1
OBI shall not use any contract sales organizations or other Third
Parties to satisfy any or all of its obligations under this
Agreement. Subject to Section 11.8, MLNM at its discretion
may use a contract sales organization to supplement its employee
sales force.
3.3.2
At all times during the Co-Promotion Term, OBI shall use all
commercially reasonable efforts to deploy a sales force (the
“OBI Sales Force” ) of at least approximately
the same number (the “Current Sales Force Size”
) of sales representatives as are in the OBI oncology field sales
force on the Effective Date. The OBI Sales Force shall be
responsible for Co-Promoting the Product in accordance with this
Agreement and the Co-Promotion Plan. Such responsibilities
shall be in addition to but not to the exclusion of the promotion
of Doxil ®
and Procrit ® on
behalf of OBI. During the Co-Promotion Term, OBI shall
promptly notify MLNM at least [**] days in advance, to the extent
practical but in no event later than the first of the following
occurrences, of (a) the implementation of any reduction in the OBI
Sales Force to less than [**] percent ([**]%) of the Current Sales
Force Size or (b) the removal of one or more of the aforementioned
products (Doxil ®
and Procrit ® )
from the group of products that the OBI Sales Force is engaged to
promote or the addition of one or more products to their
promotional activities. In addition, as soon as practicable
but no later than [**] days after such notification to MLNM, OBI
shall provide the Steering Committee with a written plan that
demonstrates that OBI shall continue to direct the OBI Sales
Representatives to meet the Call Standard following
such reduction in the Sales Force and/or change in the product
mix. In the event that OBI fails to meet the Call Standard,
and does not satisfy the Minimum Commitment in the first full
Measurement Period occurring after notification of such sales force
reduction or product mix change, an OBI Non-Performance Breach
shall be deemed to have occurred and such Measurement Period shall
be treated as the [**] Non-Performing Period under Section 3.2.4
if, at any time prior to such first full Measurement Period, there
is one or more Non-Performing Period.
3.3.3
OBI shall provide appropriate incentives that are competitive in
the marketplace to its Co-Promotion Representatives to optimize
OBI’s Co-Promotion of the Product in accordance with
Applicable Laws. Such incentives shall include, without
limitation, attributing not less than [**] percent ([**]%) of the
total target incentive compensation that may be earned by each
Sales Representative to his or her efforts towards Co-Promotion of
the Product in the Co-Promotion Territory. OBI shall be
solely responsible for providing compensation and benefits due to
the Co-Promotion Representatives.
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3.4
Promotional Materials.
3.4.1
All electronic and physical advertising, promotional, educational,
training and communication materials for marketing and
advertisement of the Product in the Co-Promotion Territory
including, without limitation, detail aids, file cards, premium
items, reprints, booth panels and any other promotional support
items (collectively, the “Promotional Materials”
) shall be developed, produced and revised solely by or at the
direction of MLNM, provided, however that the Core
Promotional Materials shall be developed and revised as set forth
in Section 2.4. Promotional Materials include Core
Promotional Materials.
3.4.2
In the event that there are certain MLNM Promotional Materials
other than the Core Promotional Materials that OBI considers useful
in its Co-Promotion of the Product, such as MLNM’s Patient
Starter Kit, OBI shall notify the Co-Promotion and Marketing
Committee. If approved by such committee, MLNM shall provide
such other Promotional Materials to OBI and charge OBI an amount
equal to MLNM’s direct cost. OBI shall pay to MLNM such
amounts within [**] days after OBI’s receipt of an invoice
for such amounts.
3.4.3
OBI shall provide sales direction, training and communications to
all Co-Promotion Representatives on a basis and in a manner that is
consistent with the Product Label and Insert and Promotional
Materials that OBI received pursuant to this Agreement. OBI
shall, and shall cause its Sales Representatives to (a) only use
such Promotional Materials provided by MLNM in connection with the
Co-Promotion of the Product, (b) ensure that all statements and
claims related to the Product, including as to efficacy and safety,
are consistent with and in strict compliance with the Product Label
and Insert and such Promotional Materials, and all Applicable Laws,
including the Act, (c) ensure that all comments about the Product,
Product competition, other products and MLNM are truthful, accurate
and in strict compliance with Applicable Laws, and (d) not change
such Promotional Materials in any respect. Without limitation
to the foregoing, OBI shall not, and shall not cause or permit its
Sales Representatives to make any untrue or misleading statements
or comments about the Product, and/or take any action that
jeopardizes, or could reasonably be expected to jeopardize the
goodwill or reputation of MLNM or its products.
3.5
Product Sales.
3.5.1
MLNM shall have the sole right and responsibility for establishing
and modifying the terms and conditions of the sale of the Product
within the Co-Promotion Territory, including (a) the price at
which the Product shall be sold, (b) whether the Product shall
be subject to trade or quantity discounts, (c) whether any
discount shall be provided for payments on accounts receivable,
(d) whether the Product shall be subject to rebates, returns
and allowances or retroactive price reductions, (e) the
channels of distribution of the Product, (f) whether credit is
to be granted or refused in connection with any sale of Product,
and (g) discussions with Government Authorities regarding Product
pricing or reimbursement.
3.5.2
MLNM shall provide Sales Representatives with general information
related to the placement of orders for the Product by health care
professionals with prescribing authority in the Co-Promotion
Territory. OBI shall not, and shall not permit its Sales
Representatives to, solicit or accept orders for the Product but
rather, shall promptly direct any orders that it receives and cause
its Sales Representatives to promptly direct any orders they may
receive to MLNM or to its sole distributor,
MillenniumDirect™, or any other such distributor as
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designated by
MLNM. MLNM shall cause its sole distributor to accept all
orders for the Product within the Co-Promotion Territory at pricing
determined by MLNM in its sole discretion and subject to
MLNM’s standard terms and conditions. Such standard
terms and conditions as in effect on the Effective Date are
attached as Appendix D to this Agreement and MLNM shall
provide any modification thereto to OBI as soon as practicable but
no later than within [**] days after the effectiveness of such
modifications, along with a corresponding update to Appendix
D . MLNM shall be solely responsible for responding to
requests from MLNM Targets for individual patients who need the
Product but are unable to afford it. OBI shall promptly
direct any such requests that it receives and cause its Sales
Representatives to promptly direct any such requests that they may
receive to MLNM.
3.6
Product Recall and Withdrawal. Recalls and withdrawals
of the Product shall be handled in accordance with the
Collaboration and License Agreement. In the event that MLNM
decides to conduct a recall in the Co-Promotion Territory in
accordance with the Collaboration and License Agreement, MLNM shall
advise OBI with respect to any actions to be taken by OBI in
connection with the recall.
3.7
Product Return. MLNM shall have the sole responsibility
and right to accept, either directly or indirectly, any request to
return Product in the Co-Promotion Territory. OBI shall not
solicit the return of any Product and shall promptly notify MLNM of
any returned Product received by OBI by contacting the MLNM Medical
Drug Information Call Center at 1-866-VELCADE or as may otherwise
be reasonably directed by MLNM from time to time. Any Product
returned by OBI shall be accompanied by a fully completed return
form provided by MLNM and shall be shipped by OBI to a facility
designated by MLNM. All reasonable shipping costs of OBI in
connection with any Products returned by OBI to MLNM in the
Co-Promotion Territory shall be reimbursed by MLNM.
3.8
Product Medical Inquiries.
3.8.1
MLNM shall have the exclusive right to respond to all questions or
requests for information about the Product made by any medical
professionals or any other person to OBI or its Sales
Representatives that (a) are not appropriate, per Applicable Laws,
for a response to be made by a Sales Representative, (b) if
appropriate per Applicable Law for a response to be made by a Sales
Representative, warrant a response beyond the knowledge or
understanding of such Sales Representatives, or (c) are beyond the
scope of the Core Promotional Materials (all such questions or
requests being referred to as “Product Medical
Inquiries” ). OBI shall direct its Sales
Representatives to direct all Product Medical Inquiries within [**]
of their receipt thereof to the MLNM Medical Drug Information Call
Center at 1-866-VELCADE or as may otherwise be reasonably directed
by MLNM from time to time. In no event shall OBI respond to,
or permit its Sales Representatives to respond to any Product
Medical Inquiry.
3.9
Additional Activities. OBI shall not be prohibited from
undertaking promotional activities with respect to the Product that
are in excess of those for which OBI is responsible under this
Agreement and the then current Co-Promotion Plan, provided that
such excess promotional activities (a) are not inconsistent with
this Agreement or the then current Co-Promotion Plan, (b) are
approved by the Co-Promotion and Marketing Committee, (c) are
in
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compliance with
Applicable Laws and industry guidance, including, without
limitation, the Accreditation Council for Continuing Medical
Education Standards for Support of Continuing Medical Education,
the American Medical Association Guidelines on Gifts to Physicians
from Industry, the Pharmaceutical Research and Manufacturers of
America Code on Interactions with Healthcare Professionals,
(d) do not involve the development or use of additional promotional
materials, (e) are undertaken and performed at the sole cost and
expense of OBI, and (f) MLNM receives a report within [**] days of
the end of each calendar month during which such activities are
undertaken, describing such activities, including but not limited
to, call information, frequency and other items identified by the
Co-Promotion and Marketing Committee.
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