EXHIBIT 10.38.4
CONFIDENTIAL TREATMENT
REQUESTED. CONFIDENTIAL PORTIONS OF
THIS DOCUMENT HAVE BEEN
REDACTED AND HAVE BEEN SEPARATELY
FILED WITH THE
COMMISSION.***
MARKETING AND PROMOTION
AGREEMENT
THIS MARKETING AND PROMOTION
AGREEMENT (this
“ Agreement ”) is entered into and
effective as of this 8th day of September, 2005 (the “
Effective Date ”), by and between KING
PHARMACEUTICALS, INC., a Tennessee corporation (“
King ”), and INYX, INC., a Nevada
corporation (“ Inyx ”).
WHEREAS , King owns certain technology and proprietary
materials related to the drugs Intal and Tilade;
WHEREAS, Inyx is a developer and manufacturer of
pharmaceutical aerosol products; and
WHEREAS , the parties have entered that certain
Collaboration Agreement, dated as of the date hereof (the “
Collaboration Agreement ”), for the purpose
of pursuing a collaboration relating to the development, marketing,
and promotion of Products (as defined herein);
NOW , THEREFORE , in consideration
of the mutual covenants and agreements set forth in this Agreement,
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
|
|
|
Definitions. (b) Unless otherwise specifically defined in
this Agreement, each capitalized term used herein will have the
meaning assigned to such term in the Collaboration
Agreement.
|
|
|
|
In addition to
the terms defined elsewhere herein, as used in this Agreement, the
following terms have the meanings specified below when used in this
Agreement:
|
“ Agreement ” means
this Agreement, together with all appendices, exhibits, and
schedules referenced herein or attached hereto, and as the same may
be amended or supplemented from time to time hereafter pursuant to
the provisions hereof.
“ Baseline Amounts
” has the meaning set forth in Section 8.1(a)(i).
“ Collaboration Agreement
” has the meaning set forth in the recitals.
“ 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 product is of similar market potential at a similar state in
its development or product life, taking into account issues of
safety, efficacy, product profile, the competitiveness of the
marketplace, the proprietary position of the product, the
regulatory structure involved, the profitability of the applicable
products, and other relevant commercial factors.
“ Copromotion Date
” has the meaning set forth in Section 3.2.
“ Detail(s) ” or
“ Detailing ” means a face-to-face
contact by a sales representative with a Physician, for the primary
purpose of delivering a sales message related to the Products,
during which time the Product is discussed for either the longest
period of time during the contact or, at a minimum, discussed no
less than the second longest period of time during the contact.
Further, the discussion of the Product must be specific to include
at a minimum the Product name, FDA or Regulatory Authority by
country approved indication, key attribute tied to a patient
benefit, and a request by the sales representative that the
Physician prescribe the Product for an appropriate patient
type.
“ Detail Cost ”
means the fully allocated cost per Detail to be established by the
AMC each year and included in the Marketing Plan and Budget for
such year. For purposes hereof, “fully allocated” shall
include all costs associated with Details, including salaries,
bonuses, and benefits (including automobile expenses) of sales
representatives, allocations of sales managers with respect to
oversight of Detailing, the fully allocated cost of services
overhead directly related to Details, and allocation of all
administrative and general expenses directly related to Details.
Detail Costs shall be determined by GAAP, applied on a consistent
basis.
“ Details Shortfall
” has the meaning set forth in Section 8.3.
“ Effective Date ”
has the meaning set forth in the recitals.
“ Electing Party ”
has the meaning set forth in Section 8.3.
“ Excess Details ”
has the meaning set forth in Section 8.3.
“ Exaeris ” has the
meaning set forth in Section 2.3.
“ Initiation Date ”
means the later to occur of (i) the Regulatory Approval of the
NDA, or foreign counterpart, for a particular Product or (ii) the
Copromotion Date.
“ Inyx ” has the
meaning set forth in the recitals.
“ Inyx Detail Report
” has the meaning set forth in Section 3.4.
“ King ” has the
meaning set forth in the recitals.
“ King Detail Report
” has the meaning set forth in Section 4.3(a).
“ King Summary Sales
Report ” has the meaning set forth in Section
4.3(b).
“ Marketing Data ”
has the meaning set forth in Section 4.1(b).
“ Marketing Materials
” has the meaning set forth in Section 5.2(a).
“ Minimum Targeted
Details ” has the meaning set forth in Section
8.3.
“ Nonelecting Party
” has the meaning set forth in Section 8.3.
“ Nonperforming Party
” has the meaning set forth in Section 9.5(a).
“ Offset Amount ”
has the meaning set forth in Section 8.2(c).
“ PDMA ” means the
Prescription Drug Marketing Act, as amended, and the implementing
rules and regulations thereunder.
“ Performing Party
” has the meaning set forth in Section 9.5(a).
“ Physicians ”
means primary care physicians ( i.e. , general
practitioners, family practitioners, internal medicine physicians,
and doctors of osteopathy), allergists, pediatricians,
pulmonologists, and other prescribers of asthma therapy, including
allied health professionals such as physician assistants and
nurses, and consistent with the Marketing Plan and Budget, in each
case who are authorized by applicable law to prescribe the
Products.
“ Primary Detail(s)
” means a Detail with respect to a Product during which such
Product is in the first position of the sales call and discussion
of such Product takes up no less than two thirds of the time of the
entire sales call.
“ Subject Quarter ”
has the meaning set forth in Section 8.3.
“ Term ” has the
meaning set forth in Section 9.1.
“ Trademark ” means
any trademarks and trade names, whether or not registered, and any
trademark applications, registrations, renewals, extensions, or
modifications thereto in the Territory together with all goodwill
associated therewith, trade dress, and packaging that are applied
to or used with Products, and any promotional materials relating
thereto.
|
|
|
Interpretation . When a reference is made in this Agreement to
Articles, Sections, Exhibits, or Schedules, such reference will be
to an Article or Section of or Exhibit or Schedule to this
Agreement unless otherwise indicated. The headings contained in
this Agreement are for reference purposes only and will not affect
in any way the meaning or interpretation of this Agreement.
Whenever the words “include,”“includes,” or
“including” are used in this Agreement, they will be
deemed to be followed by the words “without
limitation.” Unless the context otherwise requires, (i)
“or” is disjunctive but not necessarily exclusive, (ii)
words in the singular include the plural and vice versa, and (iii)
the use in this Agreement of a pronoun in reference to a party
hereto includes the masculine, feminine, or neuter, as the context
may require. The Schedules and Exhibits hereto will be deemed part
of this Agreement and included in any reference to this Agreement.
This Agreement will not be interpreted or construed to require any
Person to take any action, or fail to take any action, if to do so
would violate any applicable law.
|
|
2.
|
GRANT
OF RIGHTS TO INYX
|
|
|
|
Copromotion Rights . King hereby grants to Inyx and its Affiliates,
on a non-exclusive basis, together with King and its Affiliates,
the right to promote the Products in the Territory during the Term
of this Agreement, upon and subject to the terms and conditions set
forth in this Agreement; provided that the license to promote a
particular Product will only be effective on the Initiation Date of
such Product in the applicable country of the Territory in which
such Product has received Regulatory Approval and only for so long
as such Product has Regulatory Approval in such country. The
parties acknowledge and agree that, during the Term, the license
granted to Inyx under Section 4.1 of the Collaboration Agreement
will include a non-exclusive right under the Technology and Patent
Rights to sell, offer for sale, and import the Products in the
Territory, subject to the terms of this Agreement and the
Collaboration Agreement.
|
|
|
|
Required Use
and Compliance . Inyx
will promote the Products only under the Trademarks, which as of
the Effective Date are listed on Schedule 2.2 attached hereto,
which schedule will be updated from time to time during the
Term.
|
|
|
|
Validity of
Trademarks . Inyx
acknowledges that King will have sole and exclusive ownership of
all right, title, and interest on a worldwide basis, with full
rights to license or sublicense, subject to the licenses granted
Inyx hereunder, in and to any and all Trademarks. Inyx understands
and agrees that it will not have, assert, or acquire any right,
title, or interest in or to any of the Trademarks.
|
|
|
|
Use of
Trademarks . In
connection with the subject matter hereof, Inyx will maintain
quality standards for all of its uses of the Trademarks in
connection with the Products that are substantially equivalent to
or, at King’s option, stricter than those standards used by
King in connection with its promotion of the Products. Subject to
the foregoing, Inyx acknowledges and agrees that King has the
right, at any time, to modify or supplement such quality standards
and that Inyx must implement such new standards or changes
following receipt of notice of such additions or changes. In order
to determine whether Inyx is in compliance with this Section
2.2(c), at the reasonable written request of King, and at
Inyx’s expense, Inyx: (i) will provide King with copies,
photographs, or representative samples of its advertising copy,
promotional materials, or other materials bearing any of the
Trademarks; and (ii) upon reasonable notice and during normal
business hours, will provide to King or its representatives access
to Inyx’s premises. Inyx covenants and agrees that it will
not use any Trademarks in connection with any goods or products
other than the Products, notwithstanding that such goods or
products are dissimilar to the Products or have a different
use.
|
|
|
|
Sublicensee. The parties acknowledge that Inyx may sublicense
its rights granted hereunder to Exaeris Inc. (“
Exaeris ”); provided that Exaeris agrees, in
writing, to be bound by the terms of this Agreement and the
applicable terms of the other Collaboration Documents, including
the confidentiality and assignment provisions thereof; and provided
further that the right to sublicense to Exaeris will immediately
terminate at such point as Exaeris is no longer a wholly owned
subsidiary of Inyx. As of the Effective Date, Inyx represents and
warrants that Exaeris is a wholly owned subsidiary of Inyx. Inyx
acknowledges and agrees that, as provided in Section 4.2 of the
Collaboration Agreement, Inyx will remain liable for all
obligations, including obligations to perform, under this Agreement
and for all actions of Exaeris under such sublicense.
Notwithstanding such sublicense, Exaeris will not be deemed a third
party beneficiary under this Agreement.
|
|
3.
|
RESPONSIBILITIES OF INYX
|
|
|
|
Promotion by Inyx . (a) With respect to each Product, commencing
as of the Initiation Date relating to such Product and continuing
throughout the Term, Inyx will use its Commercially Reasonable
Efforts to promote such Product in the Territory in accordance with
the then current Marketing Plan and Budget. The nature of the
promotion of the Products required as part of Inyx’s
promotion obligations hereunder will be determined by the AMC and
set forth in then-current Marketing Plan and Budget, but such
obligations may include the following:
|
|
|
|
Detailing the
Products to Physicians in the Territory;
|
|
|
|
meeting
targeted and minimum quarterly Detail requirements; and
|
|
|
|
attendance at
specified medical conventions to promote the Products.
|
|
|
|
Until the AMC
determines otherwise, all Details that Inyx is required to perform
pursuant to this Article 3 shall be Primary Details with respect to
Intal.
|
|
|
|
In performing
its duties hereunder, Inyx will, and will cause its employees and
the employees of its relevant Affiliates to, comply with all
regulatory, professional, and legal requirements, including the
FDA’s regulations and guidelines concerning the advertising
of prescription drug products, the American Medical
Associations’ Guidelines on Gifts to Physicians, the PhRMA
Guidelines for Marketing Practices, and the ACCME Standards for
Commercial Support of Continuing Medical Education, which may be
applicable to the services (including the warehousing, handling,
and distribution of the Products and Products samples) to be
provided by Inyx hereunder. No employee of Inyx or of any of its
relevant Affiliates will make any representation, statement,
warranty, or guaranty with respect to the Products that is not
consistent with current labeling of the Products or promotional
materials approved by the AMC, that is deceptive or misleading, or
that disparages the Products or the good name, good will, or
reputation of King. Inyx represents and warrants that its services
hereunder will be provided in a professional, ethical, and
competent manner.
|
|
|
|
Inyx
Sales Force . Inyx
agrees that, immediately after the Effective Date, Inyx or its
Affiliates will begin developing a specialty sales force for
purposes of fulfilling its obligations hereunder consisting of at
least *** field sales representatives and ancillary sales support
staff. Without limiting the obligations to use Commercially
Reasonable Efforts, Inyx must demonstrate to the reasonable
satisfaction of the AMC, as evidenced by written approval from the
AMC, that such sales force has been developed and fully organized
and has completed a core training program on the Products conducted
by King, as well as sales effectiveness training conducted by King
under guidelines agreed by the AMC. After Inyx has demonstrated the
foregoing, Inyx may begin Detailing the Products. Beginning on the
date of the first such Detail (such date, the “
Copromotion Date ”), and continuing
thereafter throughout the Term, Inyx agrees that it will have at
least *** field sales representatives and ancillary sales support
Detailing the Products and conducting other active promotion in the
Territory, except as otherwise agreed to by the parties.
|
|
|
|
Costs
of Inyx Sales Force . (a) Until the Copromotion Date, except as
agreed to by the parties, and subject to the terms and conditions
of this Agreement, Inyx will be solely responsible for the costs
and expenses of establishing and maintaining Inyx’s (and its
Affiliates’) sales force of the size required by Section 3.2,
and conducting Inyx’s other activities under this Agreement;
following the Copromotion Date, such costs and expenses of Inyx
will be deemed Collaboration Costs. Notwithstanding the foregoing,
Inyx will pay incentive compensation to its sales representatives
having primary responsibility for Detailing the Products with
respect to sales of the Products in the Territory in accordance
with Inyx’s incentive compensation plans for its own
products, it being understood that Inyx will determine the target
payout for the Products in a manner consistent with the way in
which it determines the target payouts for prescription drug
products of comparable commercial potential. In connection with the
development of Inyx’s sales force, (i) all training will
be conducted in accordance with Section 5.1, (ii) the content
and strategic direction of any training provided by Inyx that
relates specifically to the Products will be coordinated with the
AMC, and (iii) all costs with respect to training Inyx’s
sales force with respect to the Products will be deemed
Collaboration Costs.
|
|
|
|
To the extent
practicable, all written, electronic, and visual communications
provided to any of Inyx’s (and its Affiliates’) sales
representatives regarding strategy, positioning, or selling
messages for the Products will, at the request of the AMC, be
subject to review by the AMC in accordance with
Section 5.2(a).
|
|
|
|
Inyx
Detail Reports .
Commencing on the Initiation Date and throughout the Term, Inyx
will provide the AMC and King with a report (each an “
Inyx Detail Report ”) within thirty (30)
calendar days after the end of each Calendar Quarter, with the
first such report due for the Calendar Quarter during which the
Initiation Date occurs, setting forth the following information
regarding the efforts of Inyx’s sales representatives in
promoting and Detailing the Products during the preceding quarter
(or part thereof): (i) the number of Details made and recorded
by Inyx’s standard record keeping procedures, and approved by
the AMC, based on data recorded by the sales representatives;
(ii) the names and addresses of the Physicians called upon and
the date of the Detail; (iii) the percentage of Physicians
Detailed who were provided with samples of the Products;
(iv) the actual number of such samples delivered on each
Detail and the dates of such delivery; (v) a breakdown of all
information required to be contained in each report on an
individual sales representative and aggregate basis; and
(vi) such other information as may be required in the then
current Marketing Plan and Budget. Each such Inyx Detail Report
will be in an electronic format and in hard copy form. Inyx will
also provide King on-request access to all call reporting data at
the lowest level of information content, through file extraction or
electronic query, Detailing and sampling data at the
Physician-sales representative level, including such measures as
prescriptions, decile, target status, products Detailed, order of
the Detail, products, and quantity sampled. This data shall be in
the electronic format readily used by analytic functions such as
market research or business analysis.
|
|
4.
|
RESPONSIBILITIES OF KING
|
|
|
|
Marketing by King . (a) With respect to each Product,
commencing as of the Initiation Date relating to such Product and
continuing throughout the Term, King will use its Commercially
Reasonable Efforts to market and promote the Products in the
Territory in accordance with the then current Marketing Plan and
Budget. The nature of the promotion of the Products required as
part of King’s marketing obligations hereunder will be
determined by the AMC and set forth in then-current Marketing Plan
and Budget, but such obligations may include the
following:
|
|
|
|
marketing and
promoting the Products to Physicians in the Territory;
|
|
|
|
meeting
targeted and minimum quarterly Detail requirements; and
|
|
|
|
attendance at
specified medical conventions to promote the Products.
|
All costs and
expenses associated with the foregoing and with the support
described in Section 4.1(b) will be deemed Marketing Costs
and, as such, Collaboration Costs.
|
|
|
In addition,
King will provide the following marketing support for the Products:
(i) direct marketing to Physicians that are high-potential primary
care prescribers; and (ii) development and maintenance of a
marketing database, which includes contract information, response
data, behavioral data, demographic data, and attitudinal data
(collectively, “ Marketing Data ”).
King will provide Inyx with access to the Marketing Data, including
all primary and secondary market data and research, and historical
data as may be reasonably requested by Inyx; provided, however,
that the sharing of any purchased data by King with Inyx will be
subject to the approval of the data sources; and provided further
that all such Marketing Data will be deemed the Confidential
Information of King.
|
|
|
|
In performing
its duties hereunder, King will, and will cause its employees and
the employees of its relevant Affiliates to, comply with all
regulatory, professional, and legal requirements, including the
FDA’s regulations and guidelines concerning the advertising
of prescription drug products, the American Medical
Associations’ Guidelines on Gifts to Physicians, the PhRMA
Guidelines for Marketing Practices, and the ACCME Standards for
Commercial Support of Continuing Medical Education, which may be
applicable to the services (including the warehousing, handling,
and distribution of the Products and Products samples) to be
provided by King hereunder. No employee of King or of any of its
relevant Affiliates will make any representation, statement,
warranty, or guaranty with respect to the Products that is not
consistent with current labeling of the Products or promotional
materials approved by the AMC, that is deceptive or misleading, or
that disparages the Products. King represents and warrants that its
services hereunder will be provided in a professional, ethical, and
competent manner.
|
|
|
|
Costs
of King Sales Force . (a) From the Effective Date, except as
agreed to by the parties and subject to the terms and conditions of
this Agreement, to the extent King elects to have a sales force,
King will be solely responsible for the costs and expenses of
establishing, maintaining, and training such sales force of King
(and its Affiliates); provided that all such costs and expenses
incurred will be deemed Collaboration Costs. In connection with the
foregoing, (i) such training will be conducted in accordance with
Section 5.1 and (ii) the content and strategic direction of any
training provided by King that relates specifically to the Products
will be coordinated with the AMC.
|
|
|
|
To the extent
practicable, all written, electronic, and visual communications
provided to any of King’s (and its Affiliates’) sales
representatives regarding strategy, positioning, or selling
messages for the Products will, at the request of the AMC, be
subject to review by the AMC in accordance with Section
5.2(a).
|
|
|
|
King
Detail and Sales Reports . (a) Commencing on the Initiation Date and
throughout the Term, if King elects to establish, and at such time
as King has established, a sales force, King will provide the AMC
and Inyx with a report (each a “ King Detail
Report ”) within thirty (30) calendar days after the
end of each Calendar Quarter, with the first such report due for
the Calendar Quarter during which such sales force has been
established, setting forth the following information regarding the
efforts of King’s sales force in promoting and Detailing the
Products during the preceding quarter (or part thereof):
(i) the number of Details made and recorded by King’s
standard record keeping procedures, and approved by the AMC, based
on data recorded by the sales representatives; (ii) the names
and addresses of the Physicians called upon; (iii) the
percentage of Physicians Detailed who were provided with samples of
the Products; (iv) the average number of such samples
delivered on each Detail; (v) a breakdown of all information
required to be contained in each report on an individual sales
representative and aggregate basis; and (vi) such other information
as may be required in the then current Marketing Plan and Budget.
Each such King Detail Report will be in an electronic format and in
hard copy form.
|
|
|
|
Commencing on
the Initiation Date and throughout the Term, within fifteen (15)
days after the end of each month, King will provide to the AMC and
Inyx a summary report (each a “
King
|
|
