CO-PROMOTION AGREEMENT BY AND BETWEEN SOLVAY PHARMACEUTICALS INC. AND CV THERAPEUTICS, INC.

Exhibit 10.42

 

CO-PROMOTION AGREEMENT

 

BY AND BETWEEN

 

SOLVAY PHARMACEUTICALS INC.

 

AND

 

CV THERAPEUTICS, INC.

 

December 6, 2004

 

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

 

 

TABLE OF CONTENTS

 

 

 

 

EXHIBITS

 

Exhibit A – Average Sales Price and Net Sales (As of [*])

 

Exhibit B – Business Plan Outline

 

Exhibit C – Safety Agreement

 

Exhibit D – Physician Samples Cost

 

Exhibit E – Draft Press Release

*	Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

 

CO-PROMOTION AGREEMENT

 

This Co-Promotion Agreement (the “Co-Promotion Agreement” or this “Agreement”), dated December 6, 2004 (the “Effective Date”), is made by and between Solvay Pharmaceuticals Inc., a corporation organized and existing under the laws of the State Georgia and having a principal place of business at 901 Sawyer Road, Marietta, Georgia 30062, U.S.A. (“Solvay”), and CV Therapeutics, Inc., a corporation organized and existing under the laws of the State of Delaware and having a principal place of business at 3172 Porter Drive, Palo Alto, California 94304, U.S.A. (“CV Therapeutics”).

 

RECITALS

 

1. Solvay has certain marketing and proprietary rights to the Product (as defined below);

 

2. Solvay and CV Therapeutics each have an internal sales and marketing organization to promote certain products to physicians and other health care professionals; and

 

3. Solvay and CV Therapeutics desire to share in marketing the Product by co-promoting and co-detailing the Product to selected physicians and other health care professionals within the Territory (as defined below) upon the terms and conditions contained herein.

 

Now, therefore, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:

 

1. Definitions. As used in this Agreement, the following capitalized terms have the following meanings:

 

1.1 “Affiliate” of any Party means any Person, directly or indirectly, controlling, controlled by or under common control with the Party. For purposes of this definition, “control” means (a) in the case of corporate entities, direct or indirect ownership of more than fifty percent (50%) of the stock or shares having the right to vote for the election of directors and (b) in the case of non-corporate entities, direct or indirect ownership of at least fifty percent (50%) of the equity interest with the power to direct the management and policies of the non-corporate entity, provided , however , that for purposes of this Agreement, the term “Affiliate” shall not include subsidiaries in which a Party or its Affiliates owns a majority of the ordinary voting power to elect a majority of the Board of Directors, but is restricted from electing such a majority by contract or otherwise, until such time as such restrictions are no longer in effect.

 

1.2 “Alliance Manager” as to either of Solvay or CV Therapeutics, as the case may be, means a full time, senior level employee of either Solvay or CV Therapeutics, as the case may be, having primary oversight responsibility for the implementation of that Party’s obligations under this Agreement.

 

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1.3 “Average Sales Price” means the weighted average result of the average sales price per dosage of the Product, with weighting based on the respective number of units of each dosage form sold. Namely, for each of the dosage forms of the Product, the average sales price per dosage is calculated by dividing Net Sales for each dosage form for the prior three months by the respective number of units of each dosage form sold over the same three month period. A calculation of the Average Sales Price of the Product effective as of approximately the Effective Date is set forth in Exhibit A to this Agreement.

 

1.4 “Baseline” means an amount of Net Sales of Product equal to [] quarterly, as may be adjusted from time to time during the Term as provided in Section 4.1 of this Agreement.

 

1.5 “Business Plan(s)” means one (1) or more plans detailing the activities to be performed by each Party in the Territory as more fully detailed in Article 2 of this Agreement.

 

1.6 “Commencement Date” means the [*] of the calendar month following [*] or [*]; provided , however , that CV Therapeutics may elect an earlier Commencement Date (on written notice to Solvay) if the initial Business Plan is approved by the JSC.

 

1.7 “Commercially Reasonable Efforts” means efforts and resources normally used by a Party for a product owned by it or to which it has rights, which is of similar market potential at a similar stage in its development or product life, taking into account issues of safety and efficacy, product profile, the competitiveness of the marketplace, the proprietary position of the compound or product, the regulatory structure involved, the profitability of the applicable products and other relevant factors.

 

1.8 “Commitment Year” shall mean a 12 month period beginning on the Commencement Date and on subsequent anniversaries of the Commencement Date; provided, however, that the last Commitment Year may be for a term of less than 12 months until the end of the Commitment Term.

 

1.9 “Commitment Term” shall have the meaning set forth in Section 3.4(e).

 

1.10 “Compensation Schedule” shall have the meaning set forth in Section 4.1(a).

 

1.11 “CV Therapeutics Minimum Commitments” has the meaning set forth in Section 3.4(e).

 

1.12 “CV Therapeutics PSR” means a member of CV Therapeutics’ sales force.

 

1.13 “Cost of Goods” as applied to Section 4.1(c) only, means the fully burdened costs incurred by Solvay including without limitation materials, labor, Quality

*	Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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Assurance and overhead to manufacture, test, release, store, package and ship the Products, calculated in accordance with U.S. GAAP, . plus the Wholesalers Fee for Service.

 

1.14 “Detail” means a face-to-face meeting, in an individual or group practice setting, between one (1) or more physicians and one Solvay PSR or CV Therapeutics PSR, as the case may be, during which a complete Product presentation is communicated. When used as a verb, “Detail” means to engage in a Detail.

 

1.15 “Direct Detailing Expenses” means the following costs and expenses associated with a Party’s PSRs, District Managers and Sales Management Team: all costs and expenses of salary, benefits and taxes (including but not limited to base salary, incentive compensation and options); all costs and expenses of recruiting and hiring; all costs and expenses of automobiles, equipment and supplies; and all travel costs and expenses. Direct Detailing Expenses do not include the costs and expenses associated with any of the following: sales training; sales meetings; sales operations support, consultants and data; sales aids and promotional materials; and samples, sample management and sample accountability.

 

1.16 “District Manager” means a full time employee of either Solvay or CV Therapeutics, as the case may be, who is responsible for supervising the respective Party’s PSRs.

 

1.17 “EUROPA sNDA” means a supplemental new drug application to be submitted by Solvay with the FDA, which includes all of the necessary information, including, but not limited to, the EUROPA clinical trial data, report, datasets, financial disclosure information and the proposed product labeling based on the EUROPA trial to support a fileable supplemental new drug application.

 

1.18 “EUROPA sNDA FDA Approval” means that the FDA issues an approvable letter or approval letter with respect to the EUROPA sNDA and such regulatory action letter requires only the negotiation of final labeling in order to launch the Product under the EUROPA sNDA. In order for a regulatory action letter which requires the negotiation of final labeling to qualify as the “EUROPA sNDA FDA Approval” the negotiation of final labeling that would still be required cannot include negotiation of any major or substantial issues and the issues to be negotiated must be reasonably expected to be resolved within 30 days after receipt of the regulatory action letter.

 

1.19 “FDA” means the United States Food and Drug Administration.

 

1.20 “Interested Party Agreements” has the meaning set forth in Section 1.46.

 

1.21 “JCC” has the meaning set forth in Section 2.2.

1.22 “JSC” has the meaning set forth in Section 2.1.

 

 

1.23 “Market” means, when used as a verb, to market, sell, distribute, Promote or advertise a product.

 

1.24 “Net Sales” means the sum of the gross invoiced sales prices charged for the Product by Solvay, its Affiliates, sublicensees and distributors, to wholesalers, retailers,

 

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pharmacies, hospitals or similar entities in the distribution chain, less value-added taxes (if any) levied on the sale, transfer, transportation or delivery of the Product borne by the seller thereof, and, to the extent specifically allocated to gross invoiced sales of the Product in finished form, which occur after the Commencement Date, less: (a) trade and/or quantity discounts, rebates or retroactive price reductions reasonably accrued for and adjusted quarterly to those actually allowed and properly taken that are normal and customary in the pharmaceutical industry; (b) amounts actually repaid or credited to customers by reason of rejections, recalls, defects or returns of finished Product; (c) chargebacks; and (d) cash discounts for timely payments reasonably accrued for and adjusted quarterly to those actually allowed and properly taken that are normal and customary in the pharmaceutical industry, calculated in accordance with U.S. GAAP. For avoidance of doubt, the Wholesalers Fee for Service will not be included as a deduction from gross invoiced sales prices. A calculation of the Net Sales of the Product effective as of approximately the Effective Date is set forth in Exhibit A to this Agreement, which calculation demonstrates the calculation of Net Sales from gross sales less all permissible deductions or adjustments described above.

 

1.25 “Party” means either of Solvay or CV Therapeutics and “Parties” means both of them.

 

1.26 “Person” means an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

 

1.27 “Personnel” has the meaning set forth in Section 3.4(j).

 

1.28 “Primary Detail” means a Detail in which Product information is communicated by a Solvay PSR or CV Therapeutics PSR, as the case may be, to a physician with the specified content as defined from time to time by the Parties, where (i) such information is the first product information communicated by the Parties and (ii)[*] of the time and emphasis during such communication is focused on the Product.

 

1.29 “Product” means ACEON ^® (perindopril erbumine) tablets in finished form.

 

1.30 “Product sNDA(s)” means, collectively, the EUROPA sNDA and any other supplemental new drug application filing(s) (if any) submitted to the FDA relating to the Product during the Term.

 

1.31 “Product Promotional Guidelines” has the meaning set forth in Section 2.4(b).

 

1.32 “Product Promotional Materials” has the meaning set forth in Section 3.5(a).

*	Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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1.33 “Promotion” means those activities, including, without limitation, detailing and distributing samples of a product, normally undertaken by a pharmaceutical company’s sales force to implement marketing plans and strategies aimed at encouraging the purchase and appropriate use of a particular prescription pharmaceutical product. When used as a verb, “Promote” means to engage in such activities.

 

1.34 “Promotional Expenses” means all costs and expenses of CV Therapeutics allocated to the Product, less all of CV Therapeutics Direct Detailing Expenses.

 

1.35 “PSR” means Professional Sales Representative, either a CV Therapeutics PSR or a Solvay PSR, and “PSRs” means both CV Therapeutics PSRs and Solvay PSRs.

 

1.36 “Quarterly JCC Meeting” has the meaning set forth in Section 2.2(a).

 

1.37 “Quarterly JSC Meeting” has the meaning set forth in Section 2.1(a).

 

1.38 “Residual Term” shall commence upon the expiration of the Commitment Term and continue as provided in Section 10.1(ii). As of such commencement of the Residual Term, CV Therapeutics’ obligations under Section 3.4(e) and 4.1(g), and any other obligation related to CV Therapeutics Minimum Commitments, shall terminate. All other obligations of the Parties under this Agreement shall continue in full force and effect, including, but not limited to, Solvay’s obligation to continue to compensate CV Therapeutics according to Section 4.

 

1.39 “Sales Call” means an interaction between a PSR and a physician or other health care provider in which the Product is the subject of a Detail.

 

1.40 “Sales Call Plan” means a plan established from time to time by the JCC and set forth in the Business Plan that sets forth, at a minimum, the profile of Target Physicians and the Detailing reach (i.e., number of physicians) and frequency (i.e., number of Details per physician and the relevant timing of such Details) objectives for the PSRs in a manner that reflects the agreed upon promotional effort for the Product as outlined in the Business Plan and this Agreement. The Sales Call Plan may be modified from time to time by the JCC.

 

1.41 “Sales Management Team” means one (1) or more regional directors of Solvay or CV Therapeutics, as the case may be, each of whom shall be (a) full time employees of Solvay or CV Therapeutics, as the case may be, and (b) primarily responsible for supervising a group of the District Managers within a geographic region of the Territory.

 

1.42 “Sales Territory” means one of the geographic regions within the Territory, as established from time to time by the JCC and set forth in the Business Plan, in which one or more PSRs will be assigned by Solvay and/or CV Therapeutics, as the case may be, to Promote the Product. The Sales Territories may be modified from time by the JCC.

 

1.43 “Samples” means individual physician sample units of the Product containing at least seven (7) tablets per unit.

 

1.44 “Sample Receipt Forms” means those multi-part paper or electronic forms for the purpose of recording Detail and Sample request and receipt activity performed by PSRs

 

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during Sales Calls. These forms are also used as Sample receipts on which to obtain a physician’s signature in acknowledgment of the physician’s receipt of a Sample.

 

1.45 “Secondary Detail” means a Detail in which Product information is communicated by a PSR to a physician with the specified content as defined from time to time by the Parties, where (i) such information is the second product information communicated by the PSR and (ii) [*] of the time and emphasis during such communication is focused on the Product.

 

1.46 “Solvay Interested Parties” means, collectively, (a) Les Laboratories Servier (“Solvay’s Licensor”), including its affiliates Adir, Biopharma, Oril, and (b) Solvay Pharmaceuticals Marketing & Licensing (“SPML”, formerly known as Dutraco), in each case with which Solvay has previously entered into contractual relationships relating to the Product (the “Interested Party Agreements”) and under which Solvay will continue to be bound and obligated by during the Term.

 

1.47 “Solvay Minimum Commitments” has the meaning set forth in Section 3.4(e).

 

1.48 “Solvay Promotional Review Committee” has the meaning set forth in Section 3.5(a).

 

1.49 “Solvay PSR” means a member of Solvay’s sales force.

 

1.50 “Target Physicians” means those physicians who meet the profile of Target Physicians established by the JCC and set forth in the Business Plan as may be modified from time to time by the JCC.

 

1.51 “Technical Agreement” has the meaning set forth in Section 7.4.

 

1.52 “Term” has the meaning set forth in Section 10.1.

 

1.53 “Territory” means the United States and its territories and possessions, including, without limitation, Puerto Rico.

 

1.54 “Trademark” has the meaning set forth in Section 3.6(b).

 

1.55 “Wholesalers Fee for Service” means those fees, if any, actually paid by Solvay to its wholesalers and resellers of the Product. Per EITF 01-9, these fees may be considered a reduction of net sales according to US G.A.A.P. For the purposes of this agreement, the parties agree that these fees will be included in the definition of Cost of Goods and not included as a reduction of gross sales in the definition of Net Sales.

*	Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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1.56 “Working Group” has the meaning set forth in Section 2.3, and includes (without limitation) the “Managed Care Working Group” or “MCWG” under Section 2.3(a) and the “Joint Regulatory Working Group” or “JRWG” under Section 2.3(b).

 

2. Governance and Business Plan

 

2.1 Joint Steering Committee .

 

(a) Structure . The Parties shall establish a Joint Steering Committee (the “JSC”) within ten (10) days of the Effective Date to oversee the JCC and relationship of the Parties under this Agreement, as described below. The JSC shall be comprised of at least three (3) representatives from each Party, each with appropriate decision-making authority. The chairperson of the JSC will be designated by Solvay. The chairperson shall distribute a draft agenda prior to, and meeting minutes reasonably promptly following, each meeting of the JSC. The JSC shall meet periodically as needed, but in no event less than once during each calendar quarter (each, a “Quarterly JSC Meeting”), in person (with locations to alternate between the Parties) or by teleconference as mutually agreed, to discuss matters within its purview. The members of the JSC shall seek to make all determinations to be made by them unanimously following full discussion thereof (with each Party’s representatives having, collectively, one (1) vote). If the JSC is unable to reach a unanimous decision on any matter, the dispute will be referred to the respective CEOs of each Party who shall attempt to resolve the matter in good faith. Should the Parties’ respective CEOs fail to reach agreement on a particular matter, the JSC will continue to apply and adhere to the previously agreed to plans and obligations, including the previously agreed to Business Plan, until such time (if any) as the matter can be resolved.

 

(b) Duties . The JSC shall be the forum for and shall be responsible for (i) executive and strategic management of the Parties’ relationship under this Agreement, including the review and approval of all Business Plans for execution by each Party during the Term, which shall contain at a minimum the items attached as described in Section 2.4 below and Exhibit B to this Agreement and shall be prepared by the JCC as provided in Sections 2.2 and 2.4; (ii) dispute resolution between the Parties (including matters referred by the JCC); (iii) oversight of all Working Groups (if any) of the JSC; and (iv) communications between the Parties regarding Coversyl (a product marketed by Solvay’s Licensor). In addition, the JSC through the Joint Regulatory Working Group (as defined below) and otherwise, shall be responsible for coordinating and managing the process and content relating to all Product sNDA(s) including the EUROPA sNDA

 

2.2 Joint Commercialization Committee .

 

(a) Structure . The Parties shall establish a Joint Commercialization Committee (the “JCC”) during the Term, which shall be comprised of at least three (3) members from each Party, each with appropriate decision-making authority. The chairperson of the JCC will be designated by CV Therapeutics. The chairperson shall distribute a draft agenda prior to, and meeting minutes reasonably promptly following, each meeting of the JCC. The JCC shall meet periodically as needed, but in no event less than once during each calendar quarter (each, a “Quarterly JCC Meeting”), in person (with locations to alternate between the Parties) or by teleconference as mutually agreed, to discuss matters within its purview. The members of the

 

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JCC shall seek to make all determinations to be made by them unanimously following full discussion thereof (with each Party’s representatives having, collectively, one (1) vote). If the JCC is unable to reach a unanimous decision on any matter, CV Therapeutics will be entitled to make all decisions relating to Marketing and Promotion of the Product that are consistent with and within the scope of the then-approved Business Plan, except in any of the following cases: (i) where Solvay, acting in good faith, has a legal or regulatory concern relating to the Product and its role as holder of the Product NDA, in which case the dispute will be referred to the JSC under Section 2.1 to attempt to resolve the matter in good faith (and if the JSC is unable to resolve the matter in good faith, to the respective CEOs of each Party as provided in Section 2.1); and (ii) as to material decisions where this Agreement expressly specifies and requires mutual agreement of the Parties (for example, with respect to Product pricing). Should the JSC (or the Parties’ respective CEOs, under Section 2.1) fail to agree on a particular matter, the JCC shall continue to apply and adhere to the previously agreed to plans and obligations, including the previously agreed to Business Plan, until such time (if any) as the matter can be resolved.

 

(b) Duties . The JCC shall have the overall responsibility to manage and coordinate all marketing, sales and commercialization activities relating to the Product in order to implement the then-current JSC-approved Business Plan. In addition, the JCC shall coordinate the activities of the Parties to implement the Business Plan, which activities shall include, without limitation, developing advertising, marketing and promotional strategies, reviewing Product pricing, developing managed care contracting criteria, developing and establishing all Product Promotional Guidelines, Sales Call Plans, Sales Territories and Target Physician lists. The JCC shall be responsible for drafting all Business Plans relating to the Product for JSC approval, for executing all JSC-approved Business Plans relating to the Product, and for overseeing all Working Groups (if any) of the JCC.

 

2.3 Working Groups . From time to time during the Term, the JSC and/or JCC may establish and delegate duties to other committees, sub-committees, or directed teams (each, a “Working Group”) on an “as needed” basis to oversee particular projects or activities. Each such Working Group shall be constituted and shall operate as the JSC or JCC, as the case may be, determines; provided that each Working Group shall have approximately equal representation from each Party except as otherwise mutually agreed by the Parties. Working Groups may be established on an ad hoc basis for purposes of a specific project, for the life of the Product, or on such other basis as the JSC or JCC, as the case may be, shall determine. Each Working Group and its activities shall be subject to the oversight, review and approval of, and shall report to, the JSC or JCC, as the case may be, that established such Working Group. In no event shall the authority of the Working Group exceed that specified for the JSC or JCC, as the case may be, under this Article 2. Without limiting the generality of the foregoing, as of the Effective Date, the Parties have agreed on the following Working Groups to function during the Term, unless determined otherwise by the JSC or the JCC, as the case may be:

 

(a) Managed Care Working Group . The Parties shall establish a “Managed Care Working Group” or “MCWG” of the JCC to provide coordination with respect to managed care-related activities under this Agreement, with each Party having managed care and marketing representation. The chairperson of the Managed Care Working Group will be designated by CV Therapeutics. The chairperson shall distribute a draft agenda prior to, and meeting minutes reasonably promptly following, each meeting of the Managed Care Working

 

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Group. The Managed Care Working Group shall meet periodically as needed as agreed upon, but in any event, no less frequently than once per calendar quarter, in person or by teleconference as agreed upon. The Managed Care Working Group will be responsible for covering Product-related contracting (including government contracting), discounts, rebates, pull-through plans and chargebacks as provided in greater detail in Section 3.4(f).

 

(b) Joint Regulatory Working Group . The Parties shall establish a “Joint Regulatory Working Group” or “JRWG” of the JSC within ten (10) days of the Effective Date to provide regulatory, clinical, and biometrics representation and review and approval of all key Product sNDA documents by both Parties with respect to the Product sNDA(s) including the EUROPA sNDA, and with respect to the Product. The chairperson of the JRWG will be designated by Solvay. The JRWG shall meet periodically as needed and agreed upon, but in any event no less than once quarterly, in person or by teleconference as agreed upon. The JWRG shall be responsible for the Product sNDAs (including the EUROPA sNDA) and providing input with respect to the Product as provided in greater detail in Section 7.1.

 

(c) Alliance Managers . Each Party shall appoint and notify the other Party of its respective Alliance Manager, including any changes in such designation from time to time during the Term.

 

2.4 Business Plan .

 

(a) Business Plan . The principal mechanism by which the Parties will coordinate their respective Marketing and Promotion activities under this Agreement will be through agreement on one (1) or more Business Plans, each to be prepared by the JCC, reviewed and approved by the JSC and periodically updated as set forth herein. No later than ninety (90) days after the Effective Date, the JCC shall submit a draft initial Business Plan to the JSC for review and approval. The initial Business Plan will cover an agreed upon initial period of time (not to exceed the end of calendar year 2005). Periodically thereafter, but no less frequently than annually, the JCC shall be responsible for preparing updated drafts of additional Business Plans for JSC review and approval, with each such Business Plan to cover a full calendar year period commencing no later than for calendar year 2006. Each draft annual Business Plan shall be ready for presentation to JSC not later than each September 1st, and shall be approved by the JSC not later than each November, in each case for the year preceding that year to which such annual Business Plan applies. The JCC shall assign responsibilities for updating the Business Plan(s) and preparing annual plans, budgets and revenue forecasts contained therein, according to a schedule and using a process that will enable the JSC and the JCC, as the case may be, to submit comments and supplement such Business Plan and matters contained therein in a timely fashion.

 

(b) Plan Contents . Each Business Plan shall, at a minimum, include: a review of the marketplace and competition; Marketing and Promotion objectives/strategies for the Product; clinical and publication support plans and plans (if any) for Phase IIIb/IV studies and investigator-sponsored studies; delineation of Sales Force efforts, including a profile of Target Physicians, a Sales Call Plan, and a Samples plan; general delineation of Sales Territories; strategies and plans for Product pricing, inventory requirements and distribution; budgets; and revenue and expense forecasts for the Product in the Territory. The Business Plan shall also

 

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contain agreed upon promotional guidelines for the Product (the “Product Promotion Guidelines”), which shall be updated from time to time as necessary or desirable. Such Business Plan shall be in a form generally consistent with the outline attached hereto as Exhibit B , and shall include, among other items, the overall level of anticipated resource commitments on the part of each Party in the relevant time period. Each Business Plan shall also include a multi-year projection of Product plans, budgets and forecasts. `

 

3. Appointment and Obligations.

 

3.1 Exclusive Co-Promotion Arrangement . Solvay, as the owner of the exclusive rights in the Territory to the Product, hereby appoints CV Therapeutics, on an exclusive basis (except as to Solvay), and CV Therapeutics agrees, to Promote and Detail the Product in the Territory, commencing on the Commencement Date and continuing thereafter during the Commitment Term, jointly with Solvay, in accordance with the terms and conditions of this Agreement. Notwithstanding the previous sentence, Solvay may enter into co-promotion arrangements with its Affiliates; provided that it shall notify CV Therapeutics in writing of any such Affiliate arrangement, and provided further that Solvay guarantees the performance by any such Affiliate under this Agreement. Solvay may enter into co-promotion arrangements with third parties only as permitted under Section 3.2.

 

In implementing its obligations under this Agreement and as further described elsewhere in this Agreement, CV Therapeutics shall provide sales training materials and training and Solvay shall be solely responsible for the supply and distribution of the Product. The Parties specifically agree that, except as agreed upon by the JCC and JSC (including under a JSC approved Business Plan) or otherwise expressly permitted under this Agreement or agreed to in writing by the Parties, CV Therapeutics shall not sell or distribute the Product, place journal or other advertisements for the Product, issue press releases regarding the Product, conduct opinion leader development activity in connection with the Product, establish or participate in advisory boards concerning the Product, participate in or conduct peer selling activity concerning the Product, enter into or discuss with customers or potential customers (except as otherwise permitted under Section 3.4(f) of this Agreement) contracts for the sale of or discounts or rebates on the sale of Product or conduct other general marketing activities (other than the Detailing of the Product to the extent expressly permitted by this Agreement) with respect to the Product.

 

3.2 Change of Exclusivity . Solvay agrees and understands that CV Therapeutics would not enter into this Agreement, but for its exclusive nature. If Solvay desires to enter into a co-promotion agreement concerning the Product with a third party, it must first request prior written consent from CV Therapeutics, which shall be provided only after this Agreement is revised, as agreed to between the Parties, as to the obligations of the Parties, compensation arrangement, and coordination of co-promotion with such third party. However, if Solvay seeks to terminate this Agreement in good faith for cause under Section 10.2, and if after the sixty (60) day cure period CV Therapeutics’ breach remains uncured and this Agreement is terminated by Solvay under Section 10.2, Solvay may immediately enter into co-promotion agreements with third parties regarding the Product, without notice to CV Therapeutics. So as to enable Solvay to be able to promptly enter into any such third party agreements upon such termination, Solvay may commence discussions with potential third party co-promotion partners during the above sixty (60) day cure period, even if CV Therapeutics is diligently curing said

 

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breach, but may not enter into any such arrangement until this Agreement has been terminated under Section 10.2 and the terms of the forgoing provisions have been satisfied.

 

3.3 Undertaking by CV Therapeutics not to Compete . During the Term, CV Therapeutics shall not Market and shall cause each CV Therapeutics PSR not to Market, in the Territory, any angiotensin converting enzyme (ACE) inhibitor or any angiotensin receptor blocker (ARB), until such time as the CV Therapeutics Minimum Commitment expires or is no longer in effect under this Agreement (including as a result of early expiration, if any, under Section 3.4(e) below).

 

3.4 Co-Promotion Obligations.

 

(a) Marketing and Promotion Planning, Strategy and Content . During the Term, subject to JSC approval of the Business Plan, the JCC shall have exclusive responsibility with respect to Marketing and Promotion planning and strategy for the Product and the content of Product Promotional Guidelines. Subject to JSC approval of the Business Plan, the JCC shall have final authority for the Product’s Marketing and Promotion strategies and plans, identification of Target Physicians, Sales Call Plans, and the strategies and plans with respect to the Product Promotional Materials; provided , however , that prior to first use, the form and content of any and all Product Promotional Materials shall be subject to the approval of Solvay and CV Therapeutics as provided in Section 3.5(a) below.

 

(b) Co-Promotion; PSRs . As of the Effective Date for Solvay and as of the Commencement Date for CV Therapeutics, and thereafter during the Commitment Term, each Party shall, at its sole expense, diligently Promote the Product in the Territory in accordance with the terms and conditions of this Agreement. The Parties will Promote the Product in the Territory in accordance with the Marketing and Promotion strategies determined by the JCC under Section 3.4(a) and set forth in the then-current JSC-approved Business Plan. During the Term, neither Party will engage in any activities with respect to the Product that are outside or inconsistent with the then-current JSC-approved Business Plan for the Product, except with prior express approval of the JCC and JSC.

 

In connection therewith, as of the Effective Date for Solvay and as of the Commencement Date for CV Therapeutics, and thereafter during the Commitment Term, each Party shall maintain, in the Territory, a well-trained sales force consisting of full-time PSRs to Promote the Product using Product Promotional Materials generated by CV Therapeutics and reviewed and approved as provided in Section 3.5(a) below prior to first use. Each Party will supervise its respective sales force and be responsible for its remuneration, incentives and, subject to Section 3.4(c) below, general and Product-specific sales training. The Solvay PSRs and District Managers shall remain exclusively under the authority of Solvay and the CV Therapeutics PSRs and District Managers shall remain exclusively under the authority of CV Therapeutics.

 

(c) Sales Management . Each Party shall be responsible for supervising its PSRs. In connection therewith, as of the Effective Date for Solvay and as of the Commencement Date for CV Therapeutics, and thereafter during the Commitment Term, each Party shall provide a sufficient number of full time employees to serve as District Managers.

 

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Each Party may, but shall not be obligated to, designate one (1) or more full time employees to serve as regional directors having the responsibility for supervising a group of such Party’s District Managers in a particular geographic region of the Territory. Each Party shall provide the other Party with contact information for its District Managers and regional directors (if any) and shall update that information periodically. For the avoidance of doubt, each Party’s regional directors and District Managers may communicate directly with their counterparts of the other Party to support each Party’s obligations under this Agreement.

 

(d) Business Plan . The JCC shall prepare and the JSC shall review and approve Business Plan(s) for the Product under this Agreement as provided in Section 2.4.

 

(e) Details; CV Therapeutics Minimum Commitments; Solvay Minimum Commitments; Commitment Term . After the Commencement Date and thereafter during at least the Commitment Term (defined below), the Parties will detail and promote the Product in accordance with the JSC-approved Business Plan under Section 2.4 and JCC-approved strategies and tactics under Section 3.4(a), including by satisfying the specific commitments set forth in this Section 3.4(e). During the Term, neither Party will engage in any activities with respect to the Product that are outside or inconsistent with the then-current JSC-approved Business Plan for the Product, except with prior express approval of the JSC.

 

After the Commencement Date and thereafter during the Commitment Term, (i) CV Therapeutics at its own expense will be required to deliver a [*] per Commitment Year to Target Physicians, which amount will be prorated for any partial Commitment Year, until the Commitment Year, if any, in which CV Therapeutics launches a second product, and starting with the Commitment Year of the second product launch, CV Therapeutics will be required to deliver a [*] per Commitment Year to Target Physicians, which amount will be prorated for any partial year (collectively the “CV Therapeutics Minimum Details Commitment”); and (ii) CV Therapeutics will support the Marketing and Promotion of the Product under this Agreement in accordance with the then-current JSC-approved Business Plan with a minimum investment of [*] per Commitment Year (the “CV Therapeutics Minimum Marketing and Promotion Investment Commitment”), which amount will be prorated for any partial Commitment Year. This aggregate dollar amount will include all of CV Therapeutics’ costs and expenses for Marketing and Promotion under this Agreement except for Direct Detailing Expenses (which Direct Detailing Expenses shall not be counted towards satisfaction of CV Therapeutics’ expenditure commitment hereunder). CV Therapeutics’ Minimum Details Commitment and CV Therapeutics Marketing and Promotion Investment Commitment under this Section 3.4(e) are referred to herein, collectively, as the “CV Therapeutics Minimum Commitments”.

 

The CV Therapeutics Minimum Commitments will commence as of the Commencement Date and will terminate automatically upon the earlier of November 10, 2008 or when a generic to perindopril is approved by the FDA (the “Commitment Term”). During the Commitment Term, the CV Therapeutics’ Minimum Details Commitment and the

*	Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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CV Therapeutics Marketing and Promotion Investment Commitment automatically will decrease by [*] if (A) Solvay has not submitted the EUROPA sNDA by December 31, 2004, (B) the FDA does not accept the EUROPA sNDA for review within the standard sixty (60) days after submission, or (C) EUROPA sNDA FDA Approval is not obtained within ten (10) months after submission. Any automatic [*] reduction hereunder in the CV Therapeutics’ Minimum Details Commitment and the CV Therapeutics Marketing and Promotion Investment Commitment and the CV Therapeutics Minimum Commitments, if applicable, will continue until sixty (60) days after the date of EUROPA sNDA FDA Approval, at which time the CV Therapeutics’ Minimum Details Commitment and the CV Therapeutics Marketing and Promotion Investment Commitment and the CV Therapeutics Minimum Commitments automatically will be fully reinstated. For the avoidance of doubt, the Parties understand that any step down in the CV Therapeutics Minimum Commitments will be proportional for any given Commitment Year. By way of example only, [*], then the total CV Therapeutics’ Minimum Details Commitment for that Commitment Year will be [*] and the CV Therapeutics Marketing and Promotion Investment Commitment for that Commitment Year will be [*].

 

After the Effective Date and thereafter until the end of the Commitment Term, Solvay, at its own expense, will be required to deliver a [*] per Commitment Year to Target Physicians (“Solvay Details Commitment”) and [*] per Commitment Year (”Solvay Samples Commitment”), which amounts will be prorated for any partial Commitment Year. Solvay Details Commitment and Sample Commitment under this Section 3.4(e) are referred to herein, collectively, as the “Solvay Minimum Commitments.” If Solvay would like to provide less than the Solvay Minimum Commitments, or would like to increase its number of Secondary Details per year to Target Physicians [*], it shall notify CV Therapeutics in writing and the Parties shall agree in advance in writing on such change(s).

 

In no event shall any PSR or any member of the Sales Management Team for one Party at any time identify, either expressly or through implication, themselves as a an employee or agent of the other Party.

 

(f) Managed Care . The managed care strategy will be defined by the Managed Care Working Group under Section 2.3(a) above and approved by the JSC under Section 3.4(a). CV Therapeutics may (i) participate in discussions and negotiations with potential customers such as managed care organizations and (ii) utilize its own managed care resources to contact new potential managed care customers provided by CV Therapeutics to Solvay; provided that Solvay shall remain solely responsible, as the owner of the Product, for all contracting and final price negotiations to potential customers, subject to this Section 3.4(f) and Section 3.5(g). Commencing as of the Effective Date and thereafter during the Term, on a quarterly basis in conjunction with a meeting of the Managed Care Working Group, (i) the Parties will agree on parameters for Product-related managed care contracting, and (ii) CV Therapeutics must approve in advance (A) any new contracts and pricing relating to the Product, (B) any contract renewals relating to the Product with new or revised terms, and (C) any new

*	Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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rebates, chargebacks or discounts that affect the net price of the Product (other than government-mandated rebates, which Solvay may implement without the prior approval of CV Therapeutics). For any renewals of contracts that do not contain new or revised terms, Solvay shall provide CV Therapeutics with written notice within ten (10) days of execution of such renewal on the same terms as the previous contract, but CV Therapeutics’ approval thereof shall not be required hereunder.

 

(g) Data Collection and Reporting Systems . As soon as practicable, but in any event prior to the Commencement Date, each Party, at no expense to the other Party, will establish and, during the Term and the three (3)-year period following the expiration or earlier termination of this Agreement, maintain true and accurate data collection and reporting systems for both Details performed and Samples distributed by such Party’s PSRs or any member of such Party’s Sales Management Team.

 

(h) Sales Force Incentive Plan . As soon as practicable, but in any event prior to the Commencement Date, each Party shall establish and, throughout the Commitment Term, maintain a sales force incentive plan for its PSRs and Sales Management Team responsible for the Promotion of the Product in the Territory, which in each case shall be consistent with the incentive plan and promotional strategy determined by the JCC and set forth in the Business Plan. [*] of such [*] shall be [*].

 

(i) Monthly Updates and Quarterly Report . Starting as of the Effective Date for Solvay and as of the Commencement Date for CV Therapeutics, at the end of every month during the Term, the Parties shall provide each other a written update providing Product and market information, including but not limited to the number of Details, Samples, gross sales, Net Sales and managed care updates. All such monthly reports shall be for the month just completed, except that all Sample reports shall be for the prior month (and CV Therapeutics shall not be required to provide reports on Sampling to Solvay prior to forty (40) days after the close of the month covered by the Samples report). Starting as of the Effective Date for Solvay and as of the Commencement Date for CV Therapeutics, at the end of each calendar quarter during the Term, each Party will provide to the JCC a quarterly written update providing Product and market information, including but not limited to numbers of Details, Samples, gross sales, Net Sales and managed care updates. Promptly after the Effective Date, the Parties will agree on mutually acceptable monthly and quarterly written report formats and contents (including the foregoing content); provided that each Party may reasonably request report modifications and/or additional Product-related information from time to time, particularly to satisfy accounting, regulatory or legal requirements, including, but not limited to, the Sarbanes-Oxley Act of 2002, as amended and all United States Securities an Exchange Commission (SEC) rules and regulations relating thereto. In each case, each Party shall provide a final report within thirty (30) days of the end of such period. In addition, with respect to the required report of Net Sales only, Solvay shall provide CV Therapeutics a preliminary report within five (5) business days of the end of each applicable period.

*	Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(j) Personnel . During the Term, each Party shall (i) maintain all necessary personnel and payroll records for such Party’s PSRs, Sales Management Team and any other employee or agent that is involved in performing such Party’s obligations under this Agreement (collectively, “Personnel”); (ii) compute the wages and other compensation of the Personnel and withhold applicable Federal, State, and local taxes and Federal FICA payments; (iii) remit employee withholdings to the proper governmental authorities and make employer contributions for Federal FICA and Federal and State unemployment insurance payments; (iv) pay net wages and fringe benefits, if any, directly to the Personnel; and (v) provide for liability and Workers’ Compensation insurance coverage applicable to the Personnel.

 

(k) Equal Opportunity Employer . During the Term, each Party shall not discriminate because of race, color, religion, sex, age, national origin, disability or status as a Vietnam veteran, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other employment-related activities concerning such Party’s Personnel. In addition, each Party represents and warrants that it is, and shall continue to be during the Term, an equal opportunity employer and shall comply with all applicable Federal, State and local laws and regulations including, to the extent required by such laws and regulations, Title VII of the Civil Rights Act of 1964; the Equal Pay Act of 1963; the Age Discrimination in Employment Act of 1967; the Immigration Reform and Control Act of 1986; the Americans with Disabilities Act; Executive Order 11246; the Rehabilitation Act of 1972; the Vietnam Era Veterans Readjustment Assistance Act of 1975; and any applicable additions or amendments to any of the foregoing.

 

(l) Compliance with Laws and Regulations . In connection with the Marketing and Promotion of the Product in the Territory and all other activities under this Agreement, each Party shall comply and shall cause each of its respective Personnel, including, without limitation, each PSR, to comply with all applicable laws and regulations in the Territory, including but not limited to all Federal and State Medicare and Medicaid anti-kickback statutes and regulations, the Prescription Drug Marketing Act of 1987 (“PDMA”) and regulations thereunder, the Food, Drug, and Cosmetic Act (“FD&C Act”) and regulations thereunder, and the Healthcare Insurance Portability & Accountability Act of 1996 (“HIPAA”) and regulations thereunder.

 

3.5 Responsibilities of the Parties .

 

(a) Product Promotional Materials; CME and Grants . All materials used in the Promotion of the Product or related to the Product that constitute advertising or labeling as defined under applicable laws and regulations in the Territory (collectively, the “Product Promotional Materials”), will be subject to the review and approval of an existing internal working committee at Solvay (the “Solvay Promotional Review Committee”) in advance of first use. CV Therapeutics will participate as a member in the Solvay Promotional Review Committee in connection with the review and approval of all Product Promotional Materials as provided herein. CV Therapeutics will submit all proposed Product Promotional Materials to the Solvay Promotional Review Committee at least seven (7) days prior to the next meeting of the Solvay Promotional Review Committee for review and approval, which meeting to review such submitted materials must be held within fourteen (14) days of such submission. Solvay shall permit CV Therapeutics to participate, in person or by phone, in any meeting of the

 

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Solvay Promotional Review Committee to discuss and jointly approve any such proposed Product Promotional Materials. Once approval has been granted by the Solvay Promotion Committee, Solvay shall within forty-eight (48) hours, submit such materials to Solvay’s Licensor and to SPML/Biopharma as required by their respective Interested Party Agreements, and Solvay will also submit all such Product Promotional Materials to the FDA on a timely basis if and as necessary.

 

CV Therapeutics, at its sole expense, shall be responsible for the production of all Product Promotional Materials for the Product; provided , however , that Solvay shall reimburse CV Therapeutics for the costs and expenses of the production of all Product Promotional Materials provided to Solvay PSRs and Solvay Sales Management Team. All Product Promotional Materials shall comply with the Product Promotional Guidelines set forth in the then-current Business Plan, and neither CV Therapeutics nor Solvay shall distribute or permit any use of any materials within the above definition of Product Promotional Materials that are not approved by the Solvay Promotional Review Committee as provided herein. Each Party shall be responsible, at its own expense, for distributing Product Promotional Materials to their respective PSRs and Sales Management Team, and for ensuring use only of Product Promotional Materials approved as provided hereunder. Product Promotional Materials shall be used only for the purposes of this Agreement and all unused quantities of such Product Promotional Materials shall be properly destroyed upon expiration or earlier termination of this Agreement. The quality and form of the Product Promotional Material selected by the JCC and approved by the Solvay Promotional Review Committee shall be adequate to meet the Marketing and Promotion objectives set forth in the then-current JSC-approved Business Plan.

 

For the avoidance of doubt, CME and grant programs shall be part of the Business Plans prepared by the JCC pursuant to Section 2.4 of this Agreement, will not be considered Product Promotional Materials for purposes of this Agreement, and will not be the subject of separate review or approval even if such CME or grant program is not reflected on such Business Plan; provided such grant is for a de minimus amount.

 

(b) Samples . Solvay shall use its Commercially Reasonable Efforts to provide CV Therapeutics with Samples for distribution to Target Physicians in accordance with Section 11 of this Agreement. With respect to the distribution of Samples to CV Therapeutics, Solvay will be responsible, at its own expense, for delivering the Samples to one (1) site location, and one (1) site location only, to be selected by CV Therapeutics. Each Party shall cause, and shall maintain written procedures to ensure that all of its PSRs comply with all applicable laws, rules and regulations relating to the distribution of, and accountability for, Samples, including but not limited to the PDMA and regulations thereunder. Sample Receipt Forms, final reconciliation reports, signature audit data and findings, and for-cause investigation reports and associated data with respect to Samples of the Product for distribution in the Territory or otherwise for distribution to customers in the Territory for free, where the purpose of the free supply is to maximize sales and market share during the Term, shall be generated from compliance reports, accountability cards and the like produced by CV Therapeutics or Solvay, as the case may be, and shall be maintained by the Party for a period of not less than three (3) years. CV Therapeutics shall fully cooperate with Solvay in the production and delivery of any such documentation as may be requested or required by FDA and/or other governmental agencies. CV Therapeutics shall compile Sample reports on the Sample Receipt Forms that are completed

 

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and returned by each CV Therapeutics PSR, and shall share such reports with Solvay as provided in Section 11.

 

Solvay agrees that CV Therapeutics may develop its own, or with a third party, Sample systems, policies, procedures and documentation (including Sample Receipt Forms), subject to Solvay review and approval for use with the Product.

 

(c) Sales Training . Promptly following the Effective Date, Solvay shall provide CV Therapeutics with complete copies of all existing current training materials relating to the Product. As soon as practicable, but in any event before the Commencement Date, CV Therapeutics shall, at its own expense, organize and conduct one (1) or more sales training meetings at a location or locations selected by CV Therapeutics to educate the CV Therapeutics’ PSRs and CV Therapeutics’ Sales Management Team on the Product and the Promotion thereof. CV Therapeutics shall direct the CV Therapeutics PSRs and each member of CV Therapeutics’ Sales Management Team to attend at least one (1) such sales training meeting. After the initial sales training meeting described herein, CV Therapeutics shall, at its own expense, periodically provide additional training to the CV Therapeutics’ PSRs and CV Therapeutics’ Sales Management Team during the Commitment Term. Such additional training shall be conducted on an as needed basis in CV Therapeutics’ reasonable discretion, provided , however , that upon Solvay’s reasonable written request, not more frequently than once per year during the Commitment Term, CV Therapeutics shall conduct, at regular CV Therapeutics sales meetings and at CV Therapeutics’ expense, additional sales training sessions for the CV Therapeutics PSRs and CV Therapeutics’ Sales Management Team. All training of the CV Therapeutics PSRs and CV Therapeutics’ Sales Management Team members shall be conducted by experienced sales training personnel. CV Therapeutics shall be responsible for all expenses incurred in connection with the training of its designated sales training personnel, the CV Therapeutics PSRs and the CV Therapeutics Sales Management Team. Each Party shall have the right to have one (1) or more of such Party’s employees attend, at such Party’s expense, any Product sales training meetings held by the other Party. Solvay shall be responsible, at its own expense, for making copies of and distributing to the Solvay PSRs and Solvay’s Sales Management Team, Product related sales training materials, and for maintaining adequate training of its designated sales training personnel as well as the Solvay PSRs and Solvay Sales Management Team.

 

(d) Promotional Claims . CV Therapeutics and Solvay each agree to limit the claims of efficacy and safety for the Product made by the Parties’ respective PSRs and Sales Management Teams to those that are consistent with FDA-approved labeling for the Product in the Territory. Neither Party shall add, delete or modify claims of efficacy or safety in its Promotion of the Product nor make any changes in Product Promotional Materials approved by the Solvay Promotional Review Committee pursuant to Section 3.5(a) above. Each Party’s Detailing and Promotion of the Product shall be in strict adherence to all regulatory, professional and legal requirements including, without limitation, FDA regulations and guidelines concerning the advertising of prescription drug products, the American Medical Association’s Guidelines on Gifts to Physicians, the PhRMA Code on Interactions with Health Care Professionals, the ACCME Standards for Commercial Support of Continuing Medical Education and the Product Promotion Guidelines in the then-current JSC-approved Business Plan for the Product, and any approved updates thereto.

 

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(e) Communications with Sales Representatives . Each Party shall have full responsibility for the dissemination of information regarding the Product to its Sales Management Team and PSRs based on the Product Promotional Guidelines and the Product Promotional Materials approved by the Solvay Promotional Review Committee pursuant to Section 3.5(a) above. All written communications including sales training materials fro