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U.S. CO-PROMOTION AGREEMENT BAYER PHARMACEUTICALS CORPORATION and ONYX PHARMACEUTICALS, INC.

Promotion Agreement

U.S. CO-PROMOTION AGREEMENT 

BAYER PHARMACEUTICALS CORPORATION
and
ONYX PHARMACEUTICALS, INC.
 | Document Parties: ONYX PHARMACEUTICALS INC | BAYER PHARMACEUTICALS CORPORATION You are currently viewing:
This Promotion Agreement involves

ONYX PHARMACEUTICALS INC | BAYER PHARMACEUTICALS CORPORATION

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Title: U.S. CO-PROMOTION AGREEMENT BAYER PHARMACEUTICALS CORPORATION and ONYX PHARMACEUTICALS, INC.
Date: 5/10/2006
Industry: Biotechnology and Drugs     Law Firm: Cooley Godward LLP;     Sector: Healthcare

U.S. CO-PROMOTION AGREEMENT 

BAYER PHARMACEUTICALS CORPORATION
and
ONYX PHARMACEUTICALS, INC.
, Parties: onyx pharmaceuticals inc , bayer pharmaceuticals corporation
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[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

Exhibit 10.31

U.S. CO-PROMOTION AGREEMENT

BAYER PHARMACEUTICALS CORPORATION
and
ONYX PHARMACEUTICALS, INC.

March 6, 2006

 


 

Table of Contents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page

 

 

ARTICLE I

 

DEFINITIONS

 

 

1

 

ARTICLE II

 

GRANTS OF RIGHTS

 

 

11

 

 

 

Section 2.1

 

 

 

Co-Promotion Rights Relating to the Co-Promotion Collaboration Product

 

 

11

 

 

 

Section 2.2

 

 

 

Co-Promotion Rights of other Collaboration Products, if any

 

 

11

 

ARTICLE III

 

MANAGEMENT

 

 

11

 

 

 

Section 3.1

 

 

 

Overview

 

 

11

 

 

 

Section 3.2

 

 

 

Joint Marketing Committee

 

 

12

 

 

 

Section 3.3

 

 

 

Committee Decision Making

 

 

13

 

 

 

Section 3.4

 

 

 

Obligations of the Parties

 

 

13

 

ARTICLE IV

 

RESPONSIBILITIES OF ONYX

 

 

14

 

 

 

Section 4.1

 

 

 

Promotion of the Co-Promotion Collaboration Product by Onyx

 

 

14

 

 

 

Section 4.2

 

 

 

CRM System and Sales/Prescriber Data

 

 

15

 

 

 

Section 4.3

 

 

 

Onyx Sales Force

 

 

15

 

ARTICLE V

 

RESPONSIBILITIES OF BAYER

 

 

16

 

 

 

Section 5.1

 

 

 

Promotion of the Co-Promotion Collaboration Product by Bayer

 

 

16

 

 

 

Section 5.2

 

 

 

CRM System and Sales/Prescriber Data

 

 

17

 

 

 

Section 5.3

 

 

 

Bayer Sales Force

 

 

18

 

 

 

Section 5.4

 

 

 

Manufacture, Shipment, Booking, Invoicing, etc. of the Co-Promotion Collaboration Product

 

 

18

 

ARTICLE VI

 

EMPLOYEES; TRAINING AND MARKETING MATERIALS

 

 

19

 

 

 

Section 6.1

 

 

 

Compensation of Sales Representatives

 

 

19

 

 

 

Section 6.2

 

 

 

Marketing Materials

 

 

20

 

 

 

Section 6.3

 

 

 

[ * ] of Employees

 

 

21

 

 

 

Section 6.4

 

 

 

Promotion of [ * ]

 

 

21

 

ARTICLE VII

 

REGULATORY MATTERS

 

 

21

 

 

 

Section 7.1

 

 

 

Licenses

 

 

21

 

 

 

Section 7.2

 

 

 

Labeling and Marketing Materials

 

 

21

 

 

 

Section 7.3

 

 

 

Efficacy and Safety Information

 

 

21

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

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Table of Contents
(CONTINUED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page

 

 

 

 

Section 7.4

 

 

 

Recalls

 

 

22

 

 

 

Section 7.5

 

 

 

Pharmacovigilance Agreement

 

 

23

 

 

 

Section 7.6

 

 

 

Transmittal of Advertisements and Promotional Labeling for Drugs and Biologics for Human Use

 

 

23

 

ARTICLE VIII

 

ECONOMICS OF CO-PROMOTION; PROFIT SHARING

 

 

23

 

 

 

Section 8.1

 

 

 

Overview

 

 

23

 

 

 

Section 8.2

 

 

 

Joint Profit and Loss Statement

 

 

23

 

 

 

Section 8.3

 

 

 

Reporting Sales

 

 

24

 

 

 

Section 8.4

 

 

 

Allowable Expenses

 

 

24

 

 

 

Section 8.5

 

 

 

Determination of Marketing Profit and Loss

 

 

25

 

 

 

Section 8.6

 

 

 

Allocation of Marketing Profit and Loss and Related Payments

 

 

25

 

 

 

Section 8.7

 

 

 

[ * ]

 

 

26

 

 

 

Section 8.8

 

 

 

Reimbursement of Development Payments

 

 

26

 

 

 

Section 8.9

 

 

 

Budget

 

 

26

 

 

 

Section 8.10

 

 

 

Royalties

 

 

26

 

 

 

Section 8.11

 

 

 

Federal and State Tax Characterization

 

 

26

 

ARTICLE IX

 

RECORDKEEPING AND AUDITS

 

 

26

 

 

 

Section 9.1

 

 

 

Audits

 

 

26

 

 

 

Section 9.2

 

 

 

Maintenance of Books and Records

 

 

27

 

 

 

Section 9.3

 

 

 

Compliance Audits

 

 

27

 

ARTICLE X

 

TERM AND TERMINATION

 

 

27

 

 

 

Section 10.1

 

 

 

Term of Agreement

 

 

27

 

 

 

Section 10.2

 

 

 

Breaches (General)

 

 

27

 

 

 

Section 10.3

 

 

 

Allegations of Material Breach

 

 

28

 

 

 

Section 10.4

 

 

 

Termination of Collaboration Agreement

 

 

29

 

 

 

Section 10.5

 

 

 

Effects of Termination

 

 

29

 

 

 

Section 10.6

 

 

 

Survival

 

 

29

 

ARTICLE XI

 

CONFIDENTIALITY

 

 

30

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

-ii-


 

Table of Contents
(CONTINUED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page

 

 

ARTICLE XII

 

INDEMNIFICATION AND INSURANCE; LIMITATION OF LIABILITY

 

 

30

 

 

 

Section 12.1

 

 

 

Indemnification by Onyx

 

 

30

 

 

 

Section 12.2

 

 

 

Indemnification by Bayer

 

 

31

 

 

 

Section 12.3

 

 

 

Product Liability Claims

 

 

32

 

 

 

Section 12.4

 

 

 

Direct Claims

 

 

34

 

 

 

Section 12.5

 

 

 

Insurance

 

 

35

 

 

 

Section 12.6

 

 

 

Limitation of Liability

 

 

35

 

 

 

Section 12.7

 

 

 

Disclaimer of Warranties

 

 

35

 

 

 

Section 12.8

 

 

 

Regulatory Compliance

 

 

36

 

ARTICLE XIII

 

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

 

37

 

 

 

Section 13.1

 

 

 

Representations by Onyx

 

 

37

 

 

 

Section 13.2

 

 

 

Representations by Bayer

 

 

38

 

ARTICLE XIV

 

NOTICES

 

 

39

 

ARTICLE XV

 

DISPUTE RESOLUTION

 

 

40

 

ARTICLE XVI

 

MISCELLANEOUS PROVISIONS

 

 

40

 

 

 

Section 16.1

 

 

 

Assignment

 

 

40

 

 

 

Section 16.2

 

 

 

Governing Law

 

 

40

 

 

 

Section 16.3

 

 

 

Waiver

 

 

40

 

 

 

Section 16.4

 

 

 

Entire Agreement

 

 

41

 

 

 

Section 16.5

 

 

 

Severability

 

 

41

 

 

 

Section 16.6

 

 

 

Relationship of the Parties

 

 

41

 

 

 

Section 16.7

 

 

 

No Implied Licenses

 

 

41

 

 

 

Section 16.8

 

 

 

Public Announcements

 

 

42

 

 

 

Section 16.9

 

 

 

Counterparts

 

 

42

 

 

 

Section 16.10

 

 

 

Force Majeure

 

 

42

 

 

 

Section 16.11

 

 

 

Interpretation

 

 

43

 

 

 

Section 16.12

 

 

 

Certain Expenses and Commissions

 

 

43

 

 

 

Section 16.13

 

 

 

Headings

 

 

43

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

-iii-


 

Table of Contents
(CONTINUED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page

 

 

 

 

Section 16.14

 

 

 

Days

 

 

43

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

-iv-


 

U.S. CO-PROMOTION AGREEMENT

     This U.S. CO-PROMOTION AGREEMENT (this “ Agreement ”) is entered into as of this 6th day of March, 2006 between BAYER PHARMACEUTICALS CORPORATION, a Delaware corporation (“ Bayer ”) and ONYX PHARMACEUTICALS, INC., a Delaware corporation (“ Onyx ”).

RECITALS

     WHEREAS, Bayer’s predecessor, Miles Inc., and Onyx entered into a Collaboration Agreement dated April 22, 1994, as amended on April 24, 1996, February 1, 1999 and as further amended by this Agreement (as amended, the “ Collaboration Agreement ”), pursuant to which the parties agreed to conduct a collaborative research program intended to discover and develop Ras Function (as defined by the Collaboration Agreement) modulators for all human and animal therapeutic, prophylactic, and diagnostic indications;

     WHEREAS, in connection with the Collaboration Agreement, Bayer and Onyx have developed BAY 43-9006 (sorafenib), now known as Nexavar, a pharmaceutical compound which is a Co-Promotion Collaboration Product under the Collaboration Agreement;

     WHEREAS, on December 20, 2005 (the “ Co-Promotion Effective Date ”), the parties obtained United States Regulatory Approvals to market and sell the Co-Promotion Collaboration Product;

     WHEREAS, under Section 13.4 of the Collaboration Agreement, Onyx has exercised its option to Co-Promote the Co-Promotion Collaboration Product in the United States; and

     WHEREAS, Bayer and Onyx desire to Co-Promote the Co-Promotion Collaboration Product in the United States, upon the terms and conditions set forth 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 is hereby acknowledged, the parties hereto agree as follows, with the intent to be legally bound:

AGREEMENT

ARTICLE I
DEFINITIONS

     Capitalized terms used herein without definition shall have the meanings specified in this Article I (such definitions to be equally applicable to both the singular and plural forms of the terms defined). Unless otherwise specified, all references in this Agreement to “Sections” are to Sections of this Agreement.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

1


 

     “ ACCME Standards ” shall mean the standards set forth by the Accreditation Council for Continuing Medical Education relating to educating the medical community in the United States.

     “ Act ” shall mean the United States Federal Food, Drug and Cosmetic Act, as it may be amended from time to time.

     “ Advertising and Education ” shall have the meaning specified in the Collaboration Agreement.

     “ Affiliate ” shall have the meaning set forth in the Collaboration Agreement.

     “ Agreement ” shall have the meaning set forth in the Preamble and shall include 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.

     “ Allowable Co-Promotion Expenses ” shall mean those expenses incurred by the parties following the date of receipt of United States Regulatory Approval that consist of (i) [ * ] , (ii) [ * ] , (iii) [ * ] , (iv) [ * ] , (v) [ * ] , (vi) [ * ] , (vii) [ * ] , (viii) [ * ] ; (ix) [ * ] , (x) [ * ] , (xi) [ * ] , (xii) [ * ] , (xiii) [ * ] ; and (xiv) [ * ] .

     “ Allocable Co-Promotion Overhead Costs ” shall mean all general and administrative overhead costs of the functions that directly support the promotion of the Co-Promotion Collaboration Product under this Agreement, including without limitation costs reasonably attributable to compliance, account administration, accounts payable and receivables management, interest on working capital associated with inventory and receivables of Co-Promotion Collaboration Product, and out-of-pocket, Third Party costs incurred for legal and accounting functions. Unless otherwise agreed to by the Executive Committee, all general and administrative corporate overhead items that are included in this definition of Allocable Co-Promotion Overhead Costs shall be [ * ] for Bayer at [ * ] at the Co-Promotion Effective Date and shall remain at such level pending adjustment in accordance with this definition by the Executive Committee. Unless otherwise agreed to by the Executive Committee, Allocable Co-Promotion Overhead Costs for Onyx shall be [ * ] .

     “ Allowable Expense Report ” shall have the meaning set forth in Section 8.4(a).

     “ Annual Sales Targets ” shall mean the aggregate level of Gross Sales each party’s sales force is required to achieve as set forth from time to time in the Budget.

     “ Applicable Laws ” shall mean all applicable federal, state and local laws, regulations, rules or guidelines that govern the Co-Promotion Program and activities and services in the United States and the other transactions contemplated by this Agreement (including without limitation the Act, as the same may be amended from time to time).

     “ Asserting Party ” shall have the meaning set forth in Section 12.4(a).

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

2


 

     “ Bayer ” shall have the meaning set forth in the Preamble.

     “ Bayer Indemnified Party ” shall have the meaning set forth in Section 12.1(a).

     “ Bayer Marketing Services ” shall have the meaning set forth in Section 5.4(d).

     “ Breaching Party ” shall have the meaning set forth in Section 10.2(a).

     “ Budget ” shall mean the annual budget for Allowable Co-Promotion Expenses to be incurred by both parties during each Contract Year of the Term in connection with the promotion and marketing of the Co-Promotion Collaboration Product, as annually prepared by the JMC and approved by the Executive Committee (or any duly constituted sub-committee thereof charged with such authority by the Executive Committee).

     “ Call Plan ” shall mean the call plan for detailing and implementing the sale of Co-Promotion Collaboration Product in the relevant territories by the Sales FTEs, which call plan shall be agreed upon by the JMC not later than [ * ] days prior to the introduction of additional products and the commencement of detailing of such additional products by either party’s Sales FTEs into the marketplace, and which call plan may be amended from time to time by the JMC.

     “ CIA ” shall mean the Corporate Integrity Agreement between the Office of Inspector General of the Department of Health and Human Services and Bayer Corporation dated January 23, 2001.

     “ Claims ” shall mean any and all claims, suits, proceedings or causes of action brought against a party.

     “ Code of Conduct ” shall mean the Healthcare Fraud and Abuse Code of Conduct of Bayer.

     “ Collaboration Agreement ” shall have the meaning set forth in the Recitals.

     “ Collaboration Revenue ” shall mean Co-Promotion Net Sales plus US Sublicense Revenues.

     “ Commercially Reasonable Efforts ” shall mean the level of efforts and resources (including the promptness with which such efforts and resources would be applied) commonly used [ * ] with respect to a product of commercial potential [ * ] to the Co-Promotion Collaboration Product at a [ * ] , taking into consideration its [ * ] and all other relevant factors.

     “ Committee ” shall mean any of the Executive Committee or JMC, or any other committee operating under delegated authority and formed with the approval of the Executive Committee or JMC.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

3


 

     “ [ * ] Product ” shall mean any product having the [ * ] as the Co-Promotion Collaboration Product and that is intended as a [ * ] for, and [ * ] for, the Co-Promotion Collaboration Product.

     “ Confidential Information ” shall have the meaning set forth in the Collaboration Agreement, as amended to include any Information (as such term is defined in the Collaboration Agreement) furnished by one party to another pursuant to this Agreement.

     “ Contract Year ” shall mean a 12-month period commencing as of January 1 and ending as of December 31. For the purposes of this Agreement, the first Contract Year shall commence on the Co-Promotion Effective Date and end on December 31 of the same calendar year; provided, however, that for purposes of measuring [ * ] under Sections 4.1 and 5.1 hereof, the first Contract Year shall commence on and as of January 1, 2006.

     “ Controlling Party ” shall have the meaning set forth in Section 12.3(e).

     “ Co-Promote ” or “ Co-Promotion ” shall mean the joint promotion of the Co-Promotion Collaboration Product through Bayer, Onyx and their respective sales forces under a single trademark in the United States.

     “ Co-Promotion Advertising and Education Expenses ” shall mean the costs (excluding Allocable Co-Promotion Overhead Costs or any other overhead costs) incurred by a party or for its account which are specifically identifiable to the Advertising and Education of the Co-Promotion Collaboration Product in the United States consistent with the Co-Promotion Program.

      “Co-Promotion [ * ]” shall mean the [ * ] , as determined in accordance with GAAP on a basis consistent with Bayer’s annual audited financial statements.

     “ Co-Promotion Collaboration Product ” shall mean any pharmaceutical form or dosage of the experimental compound designated as Bay 43-9006 (sorafenib).

     “ Co-Promotion Distribution Costs ” shall mean the costs incurred by Bayer or for its account in connection with the freight, transportation, insurance, handling, packaging and distribution of the Co-Promotion Collaboration Product in the United States, which shall be [ * ] of the Co-Promotion Collaboration Product.

     “ Co-Promotion Effective Date ” shall mean the date specified in the Recitals above.

     “ Co-Promotion Marketing Expenses ” shall mean the costs and expenses (not otherwise included in Co-Promotion Advertising and Education Expenses or as Co-Promotion Selling and Promotion Expenses, and excluding Allocable Co-Promotion Overhead Costs or any other overhead costs) incurred by the parties in connection with the marketing and support of the Co-Promotion Collaboration Product and approved by the Executive Committee, including without limitation [ * ] .

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

4


 

     “ Co-Promotion Marketing Profit or Loss ” shall have the meaning set forth in Section 8.5.

     “ Co-Promotion Net Sales ” shall mean Gross Sales less (a) sales returns and accruals for allowances, including trade, quantity and cash discounts and any other adjustments, including those granted on account of price adjustments, billing errors, rejected goods, damaged goods, returns, rebates, chargeback rebates, fees, reimbursements or similar payments granted or given to wholesalers or other distributors (including specialty pharmaceutical companies who act as distributors), buying groups, healthcare insurance carriers or other institutions, (b) any payment in respect of sales to any Governmental or Regulatory Authority in respect of any government subsidized program, including and without limitation Medicare and Medicaid rebates, and (c) any item substantially similar in character and/or substance to the above, all as determined in accordance with GAAP on a basis consistent with Bayer’s annual audited financial statements. In addition, Co-Promotion Net Sales by Bayer hereunder are subject to the following:

     (1) In the case of any sale or other disposal of a Co-Promotion Collaboration Product by Bayer to an Affiliate, for resale, the Co-Promotion Net Sales shall be calculated as above on the value charged or invoiced on the first arm’s length sale to a Third Party; and

     (2) [ * ]

     “ Co-Promotion Program ” shall mean the annual plan for the promotion, marketing and sale of the Co-Promotion Collaboration Product as developed by the JMC and approved by the Executive Committee. The Co-Promotion Program shall set forth the manner in which the Co-Promotion Collaboration Product is to be promoted and marketed in the United States during the period to which the Co-Promotion Program relates and shall include, at a minimum: (a) [ * ] ; (b) [ * ] ; (c) [ * ] ; (d) [ * ] ; (e) [ * ] ; (f) [ * ] ; (g) [ * ] ; (h) [ * ] ; (i) [ * ] ; (j) [ * ] ; and (k) [ * ] .

     “ Co-Promotion Selling and Promotion Expenses ” shall mean all costs (excluding Allocable Co-Promotion Overhead Costs or any other overhead costs) incurred consistent with the Budget in the Co-Promotion Program, and specifically identifiable to the sales and/or promotion of the Co-Promotion Collaboration Product in the United States, including all costs associated with (a) [ * ] ; (b) [ * ] ; and (c) [ * ] . Co-Promotion Selling and Promotion Expenses shall exclude Sales Force Expenses and MSL Expenses.

     “ CRM System ” shall mean a customer relationship management system utilized in connection with the tracking of sales activity relating to the Co-Promotion Collaboration Product in the United States.

     “ Detail” or “Detailing ” shall mean each separate face-to-face contact by a sales representative with a Target Healthcare Professional during which time the promotional message involving the Co-Promotion Collaboration Product is presented and is a principal topic of discussion.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

5


 

     “ Development Payments ” shall mean those payments specified in Section 11.8 of the Collaboration Agreement.

     “ Direct Claim ” shall have the meaning set forth in Section 12.4(a).

     “ Dispute ” shall have the meaning set forth in Article XV.

      “Equivalent Sales FTE” shall mean a Sales FTE equivalent as determined under the standards and methods adopted by the Executive Committee under Section 3.1(g) hereof, which standards and methods will establish the means for measuring the performance required of a Sales FTE deployed to market multiple products in addition to his or her marketing and sale of Co-Promotion Collaboration Product.

     “ Executive Committee ” or “ EC ” shall mean that committee described and set forth in Section 3.1, which was originally organized as the JRDC under the Collaboration Agreement and which has been renamed the Executive Committee.

     “ FDA ” shall mean the United States Food and Drug Administration or any successor entity thereto.

     “ Force Majeure Event ” shall have the meaning set forth in Section 16.10.

     “ GAAP ” shall mean United States generally accepted accounting principles, as may be amended from time to time.

     “ Good Manufacturing Practices ” shall mean the current standards for manufacture, as set forth in the Act and applicable regulations and guidelines promulgated thereunder or any successor thereto, as shall be in effect from time to time during the Term.

     “ Governmental or Regulatory Authority ” shall mean any court, tribunal, arbitrator, agency, commission, official or other instrumentality of any government or of any federal, state, county, city or other political subdivision thereof, including without limitation the FDA.

     “ Gross Sales ” shall mean the amount of sales of Co-Promotion Collaboration Product in the United States invoiced by Bayer, its Affiliates, subcontractors and permitted sublicensees to Third Parties, in accordance with GAAP. For timing purposes, Gross Sales shall be recognized in accordance with the revenue recognition policies utilized by Bayer for financial reporting purposes.

     “ Indemnifiable Losses ” shall mean liabilities, losses, damages or other amounts payable to a Third Party claimant, as well as any reasonable attorneys’ fees and costs of litigation incurred by either the Bayer Indemnified Party or the Onyx Indemnified Party, as the case may be, in connection with any Claim.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

6


 

     “ Joint Development Committee” or “JDC ” shall mean that joint development Sub-Committee operating under delegated authority of the Executive Committee under Section 3.3(h) of the Collaboration Agreement.

     “ Joint Finance Committee” or “JFC ” shall mean that joint finance Sub-Committee operating under delegated authority of the Executive Committee under Section 3.3(h) of the Collaboration Agreement.

     “ Joint Marketing Committee” or “JMC” shall mean that committee described and set forth in Section 3.2.

     “ Joint Profit and Loss Statement ” shall have the meaning set forth in Section 8.2.

     “ Limited Recall ” shall have the meaning set forth in Section 7.4(a).

     “ Losses ” shall mean liabilities, losses, damages, as well as any reasonable attorneys’ fees and costs of litigation, incurred by a party.

     “ LMR ” shall mean Bayer’s Legal Medical Regulatory review team.

     “ Marketing Materials ” shall have the meaning set forth in Section 6.2(a).

     “ Material Breach ” shall have the meaning set forth in Section 10.3(a).

     “ Marketing FTE Expenses ” shall mean the aggregate of all salary and benefits expenses for a full-time equivalent (based on a full-time equivalent year of 2,080 hours, inclusive of vacation time and holidays) marketing personnel [ * ] .

     “ MSL Expenses ” shall mean those costs that are identified below and that are incurred by a party beginning [ * ] , in each case consistent with and specifically identifiable to the establishment and maintenance of medical affairs personnel (including MSLs and medical affairs field directors) to the extent such personnel are, or will be, assigned to supporting Co-Promotion Collaboration Product in the United States: (a) [ * ] ; (b) [ * ] ; (c) [ * ] ; (d) [ * ] ; (e) [ * ] ; and (f) [ * ] .

     “ MMA ” shall have the meaning set forth in Section 12.8(d).

     “ MSLs ” shall mean the medical science liaisons to be appointed by each party.

     “ NDA ” shall mean (a) the single application or set of applications for the Co-Promotion Collaboration Product filed by Bayer with the FDA or any successor agency having the administrative authority to regulate the approval for marketing of new human pharmaceutical products, delivery systems and devices in the United States, and (b) any related registrations with or notifications to the FDA.

     “ Non-Publishing Party ” shall have the meaning set forth in Section 16.8.

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     “ Non-Serious Adverse Event ” shall mean any adverse drug experience associated with the use of the Co-Promotion Collaboration Product in humans, whether or not considered drug-related, which is not a Serious Adverse Event.

     “ Notice of Termination For Material Breach ” shall have the meaning set forth in Section 10.3(c).

     “ Notifying Party ” shall have the meaning set forth in Section 10.2(a).

     “ OIG ” shall mean the Office of the Inspector General.

     “ Onyx ” shall have the meaning set forth in the Preamble of this Agreement.

     “ Onyx Indemnified Party ” shall have the meaning set forth in Section 12.2(a).

     “ PDMA ” shall mean the Prescription Drug Marketing Act of 1987, Title 21 of the U.S. Code of Federal Regulations, Parts 203 and 205, as amended, and any final regulations or guidances promulgated thereunder from time-to-time.

     “ Performance Qualifications ” shall mean those qualifications for the Sales FTEs reasonably established from time to time by the JMC.

     “ Permanent Recall ” shall have the meaning set forth in Section 7.4(a).

     “ Person ” shall mean an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, pool, syndicate, sole proprietorship, unincorporated organization, governmental authority, or any other form of entity not specifically listed herein.

     “ Pharmacovigilance Agreement ” shall have the meaning set forth in Section 7.5.

     “ PhRMA Code ” shall mean the Pharmaceutical Research and Manufacturers of America Code on Interactions with Healthcare Professionals, as hereafter amended from time to time.

     “ Product Liability Claim ” shall have the meaning set forth in Section 12.3(e).

     “ Product Technical Complaint ” shall mean any complaint that questions the purity, identity, potency or quality of the Co-Promotion Collaboration Product, its packaging or labeling or the compliance of any batch of the Co-Promotion Collaboration Product with Applicable Laws including current Good Manufacturing Practices; any complaint that concerns any incident that causes the Co-Promotion Collaboration Product or its labeling to be mistaken for, or applied to, another article; any bacteriological contamination or significant chemical, physical or other change or deterioration in the Co-Promotion Collaboration Product; any failure of one or more batches of the Co-Promotion Collaboration Product to meet the specifications therefor in the NDA; or any complaint or evidence of tampering with the Co-Promotion Collaboration Product.

      “Publishing Party” shall have the meaning set forth in Section 16.8.

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     “ Recall ” shall have the meaning set forth in Section 7.4(a).

     “ Regulatory Approval Date ” shall mean the date of receipt of United States Regulatory Approval with respect to the Co-Promotion Collaboration Product, December 20, 2005.

     “ Sales Force Expenses ” shall mean those costs that are identified below and that are incurred by a party beginning [ * ] , in each case consistent with and specifically identifiable to the establishment and maintenance of sales personnel (including a field-based sales force and regional managers) to the extent such personnel are, or will be, assigned to selling Co-Promotion Collaboration Product in the United States: (a) [ * ] ; (b) [ * ] ; (c) [ * ] ; (d) [ * ] ; (e) [ * ] ; and (f) [ * ] .

     “ Sales FTE ” shall mean a full-time equivalent (based on a full-time equivalent year of 2,080 hours, inclusive of vacation time and holidays) field-based pharmaceutical sales representative, district sales manager, or sales trainer who promotes a Co-Promotion Collaboration Product in the United States during the Term and who satisfies each of the following criteria:

 

(1)

 

[ * ] ;

 

 

 

 

 

(2)

 

[ * ] ;

 

 

 

 

 

(3)

 

[ * ] ;

 

 

 

 

 

(4)

 

[ * ] ; and

 

 

 

 

 

(5)

 

[ * ] .

      “SEC” shall mean the United States Securities and Exchange Commission.

     “ Serious Adverse Event ” shall mean any serious and unexpected adverse drug experience, as defined in 21 C.F.R. Section 314.80 or Section 312.32, associated with the use of the Co-Promotion Collaboration Product in humans, whether or not considered drug-related.

     “ Sub-Committees ” shall mean the JDC, the JFC and the JMC, and any other sub-committee(s) appointed by the Executive Committee from time to time pursuant to Section 3.3(h) of the Collaboration Agreement; any reference to a committee or sub-committee in this Agreement shall refer to an existing Sub-Committee.

     “ Target Healthcare Professionals ” shall mean physicians who are cancer specialists, radiologists or other prescribers of oncology therapeutics, including persons lawfully influencing (or in a position to lawfully influence) the opinions of such persons, in each case who are authorized by Applicable Laws to prescribe the Co-Promotion Collaboration Product.

     “ Term ” shall have the meaning set forth in Section 10.1.

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     “ Third Party ” shall mean any person or entity other than Bayer or Onyx, or an Affiliate of either of them.

     “ United States ” shall mean the United States of America, its territories and possessions.

     “ United States Regulatory Approval ” shall mean approval by the FDA or any successor entity of an NDA or other applicable filing and satisfaction of any related applicable FDA registration and notification requirements (if any), together with any pricing approvals and labeling approvals.

     “ US COGS ” shall mean, for sales of the Co-Promotion Collaboration Product in the United States, [ * ]

     “ US Sublicense Revenues ” shall mean all revenues received from Third Parties as consideration for the sublicensing of the manufacture, use and/or sale of the Co-Promotion Collaboration Product in the United States.

     “ US Third Party Royalties ” shall mean those royalties payable to a Third Party in respect of the import, sale, offer for sale, use or manufacture of the Co-Promotion Collaboration Product in the United States.

     “ Weighted Average ” shall mean X where X= [ * ] ÷ m , and where:

n1 is the number of [ * ] ;

d1 is the number of [ * ] ;

n2 is the number of [ * ] ;

d2 is the number of [ * ] ;

d1 + d2 shall [ * ] ; and

m is the aggregate number of [ * ] .

      For example : If the Co-Promotion Program requires that each party [ * ] , the Weighted Average would equal:

[ * ]

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ARTICLE II
GRANTS OF RIGHTS

      Section 2.1 Co-Promotion Rights Relating to the Co-Promotion Collaboration Product.

           (a) Pursuant to Section 13.4 of the Collaboration Agreement, Onyx has exercised its option to Co-Promote the Co-Promotion Collaboration Product in the United States. Subject only to Onyx’s compliance with the terms and conditions of the Collaboration Agreement relating to payment of one-half of the Co-Development Costs incurred worldwide for such Co-Promotion Collaboration Product (excluding Japan), Onyx has the right, on an exclusive basis together with Bayer, to Co-Promote the Co-Promotion Collaboration Product in the United States during the Term, upon and subject to the terms and conditions set forth in this Agreement.

           (b) Subject only to Onyx’s compliance with the terms and conditions of the Collaboration Agreement relating to payment of one-half of the Co-Development Costs incurred worldwide for such Co-Promotion Collaboration Product (excluding Japan), Bayer hereby undertakes its rights to Co-Promote the Co-Promotion Collaboration Product in the United States together with Onyx during the Term, upon and subject to the terms and conditions set forth in this Agreement.

      Section 2.2 Co-Promotion Rights of other Collaboration Products, if any. Notwithstanding anything to the contrary contained herein, Onyx shall retain an option, pursuant to Section 13.4 of the Collaboration Agreement, to co-promote in the United States any other Collaboration Product (as such term is defined in the Collaboration Agreement) that receives United States Regulatory Approval, provided Onyx has paid one-half of the Co-Development Costs incurred worldwide for such Collaboration Product (excluding Japan). If Onyx exercises its right to co-promote another such Collaboration Product, the parties shall confer and enter into a separate definitive agreement substantially similar to this Agreement pertaining to such other Collaboration Product.

ARTICLE III
MANAGEMENT

      Section 3.1 Overview. The parties, by mutual consent, have treated the JRDC (as defined in the Collaboration Agreement) as the Executive Committee since the first two (2) calendar quarters of 2004 (the “ Executive Committee ” or “ EC ”). The activities of the parties under the Collaboration Agreement and this Agreement shall also be supervised and managed by the Executive Committee in accordance with the procedural and governance provisions of the Collaboration Agreement (as it may be hereafter amended from time to time). Nothing contained in this Agreement shall be construed to expand the authority of the Executive Committee. The Executive Committee shall perform the specific functions set forth in the Collaboration Agreement and in this Agreement, including the following additional general tasks in connection with the management of the Co-Promotion:

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                (a)  determine the overall strategy for the Co-Promotion in the manner contemplated by this Agreement;

                (b)  review and approve the Co-Promotion Program and Budget and all Co-Promotion Marketing Expenses;

                (c)  assess and determine if any Third Party technology should be acquired or licensed for purposes of commercialization of the Co-Promotion Collaboration Product;

                (d)  establish and delegate duties and responsibilities to other sub-committees on an “as-needed” basis to oversee particular projects or activities, including without limitation the Sub-Committees, by resolution without amending this Agreement or the Collaboration Agreement, pursuant to its powers under Section 3.3(h) of the Collaboration Agreement;

                (e)  oversee and approve the activities of the Sub-Committees;

                (f)  address disputes and disagreements arising in the Sub-Committees;

                (g)  if either party desires to utilize its Sales FTEs for the marketing and sale of one or more additional products with the Co-Promotion Collaboration Product, the EC shall determine [ * ] the number of Sales FTEs such party would be required to use to promote said multiple products so that such party’s allocation of Sales FTE effort promoting the Co-Promotion Collaboration Product is equivalent to the number of Sales FTEs for that party as was set by the EC. Notwithstanding the foregoing, in the event the Executive Committee is unable to reach agreement within [ * ] as to such [ * ] , then [ * ] within [ * ] , [ * ] . Such [ * ] shall [ * ] and shall [ * ] . Such party shall rely on the [ * ] to ensure that its allocation of Sales FTE effort promoting the Co-Promotion Collaboration Product is equivalent to the number of Sales FTEs for that party as set by the EC; and

                (h)  perform any other functions as appropriate to further the purposes of this Agreement as expressly set forth herein or as otherwise determined by the parties.

      Section 3.2 Joint Marketing Committee.

           (a) Formation and Membership. The Joint Marketing Committee (the “ JMC ”) shall consist of up to six (6) members, with up to three (3) each appointed by Onyx and Bayer, provided that one (1) member of each party will be a Vice-President of Sales and/or Marketing, or equivalent thereto, for such party. In the event the Executive Committee shall decide at any time to disband the JMC, all powers and delegated authority of the JMC shall automatically revert, without further action, to the Executive Committee. Notwithstanding anything to the contrary contained herein, the authority of the JMC shall be limited to the authority conferred upon it by the Executive Committee; nothing contained in this Agreement shall be construed to permanently fix or establish the powers and duties of the JMC, and the Executive Committee shall be free to expand or contract the powers conferred upon the JMC

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from time to time. Members of the JMC shall be composed of senior executives of each party authorized to make decisions with respect to the matters within the scope of the JMC’s authority. An alternate member designated by a party may serve temporarily in the absence of a permanent member designated by such party. Each party shall appoint and replace its representatives to the JMC, as appropriate during the Co-Promotion.

           (b) Functions and Powers of the Joint Marketing Committee. The Co-Promotion activities of the parties under this Agreement shall be supervised and managed by the JMC. The JMC shall perform the specific functions set forth in this Agreement, and in addition shall perform the following general tasks in managing the Co-Promotion:

                (i)  prepare the Co-Promotion Program and Budget for submission to the Executive Committee on an annual basis not later than [ * ] ;

                (ii)  oversee implementation of the Co-Promotion Program and Budget;

                (iii)  direct and oversee all marketing activities concerning the Co-Promotion Collaboration Product (whether conducted directly by the parties or through Third Party vendors);

                (iv)  prepare the sales strategy for the Co-Promotion Collaboration Product, including the development of the Call Plan (if applicable);

                (v)  establish and delegate duties to other Sub-Committees on an “as-needed” basis for purposes of advising the JMC as to matters within its responsibilities; and

                (vi)  perform any other functions as appropriate to further the purposes of this Agreement as determined by the provisions hereof or by the Executive Committee.

      Section 3.3 Committee Decision Making. Subject to the terms of Section 3.2 above, the JMC shall take action by unanimous vote with each party having a single vote, irrespective of the number of such party’s representatives actually in attendance. The members of the JMC shall act in good faith to cooperate with one another to reach agreement with respect to issues to be decided by the Sub-Committee. If the JMC is unable to reach unanimous consent on any matter over which the JMC has authority within [ * ] of the first consideration of such matter, the matter shall be referred to the Executive Committee for decision.

      Section 3.4 Obligations of the Parties. Onyx and Bayer shall provide the Executive Committee and the Joint Marketing Committee and their authorized representatives with reasonable access during regular business hours to all records, documents and information relating to this Co-Promotion which such Committee may reasonably require in order to perform its obligations hereunder, provided that if such records, documents and information are under a bona fide obligation of confidentiality to a Third Party, then Onyx or Bayer, as the case may be, may withhold access thereto to the extent necessary to satisfy such obligation. In addition, the parties agree to exercise Commercially Reasonable Efforts to provide one another with reasonable contractual rights of access to all such Third Party records, documents and

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

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information in connection with the execution of new (or amended) Third Party contracts entered into from time to time during the Term.

ARTICLE IV
RESPONSIBILITIES OF ONYX

      Section 4.1 Promotion of the Co-Promotion Collaboration Product by Onyx.

           (a)  Throughout the Term, Onyx shall contribute fifty percent (50%) of the overall number of Sales FTEs required by the Co-Promotion Program as developed by the JMC and approved by the Executive Committee. Onyx shall use its Commercially Reasonable Efforts to market and promote the Co-Promotion Collaboration Product to Target Healthcare Professionals in the United States in accordance with the then-current Co-Promotion Program, and shall perform additional services assigned to it from time to time by the Executive Committee. Subject to Section 4.1(b), the exact number of Sales FTEs to be provided by Onyx will be determined by the JMC and approved by the Executive Committee and established under and pursuant to the Co-Promotion Program.

           (b)  (i) Onyx shall provide a minimum Weighted Average of not less than [ * ] of all [ * ] assigned to Onyx in each [ * ] of each [ * ] of the Term. In the event that Onyx provides less than a Weighted Average of [ * ] of all [ * ] assigned to Onyx for any given [ * ] following the first Contract Year (based on the Weighted Average number of [ * ] for each [ * ] of the relevant [ * ] , on an average basis), then Onyx shall incur a [ * ] calculated as follows:

      [ * ]

Any [ * ] due and payable under this Section will be due to Bayer no later than thirty (30) days following the expiration of the [ * ] that gave rise to the [ * ] . In the event that the parties disagree whether Onyx has satisfied its obligation to provide a Weighted Average of [ * ] of all [ * ] assigned to Onyx in the given period, the matter shall be reviewed by the JFC for up to [ * ] days in an attempt to resolve the matter. In the event the JFC cannot resolve the issue within such time period, either party shall be entitled to submit the issue to the Executive Committee for resolution pursuant to Article 25 of the Collaboration Agreement.

               (ii) Onyx shall provide at least [ * ] of the [ * ] for each [ * ] period beginning on each anniversary of commercial launch of the Co-Promotion Collaboration Product. The initial [ * ] shall be equal to the [ * ] . In each case the Onyx sales force fails to meet [ * ] of the [ * ] for a [ * ] , Onyx shall [ * ] of the applicable Sales FTE rate for such year. The determination of whether the [ * ] have been met shall be measured within [ * ] days following each anniversary of a commercial launch, and shall begin on the second anniversary of the commercial launch. For clarity, the [ * ] provided in this Section 4.1(b)(ii) shall be additive to the [ * ] set forth in Section 4.1(b)(i).

           (c)  Unless the parties otherwise agree, Onyx shall provide fifty percent (50%) of the overall number of MSLs required by the Co-Promotion Program to support the Co-

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

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Promotion Collaboration Product, and Onyx shall be solely responsible for 100% of its own MSL Expenses, unless otherwise provided under Section 8.4(a) below.

           (d)  The MSLs provided by Onyx, together with the MSLs provided by Bayer, shall develop for approval by the JMC an integrated medical affairs program and policies thereto approved by the MSLs of each party that includes [ * ] from the appropriate MSLs to any query from the field or from either party.

           (e)  In performing its duties hereunder, Onyx shall, and shall cause its employees to: (i) [ * ] ; and (ii) [ * ] . No employee of Onyx shall make any representation, statement, warranty or guaranty with respect to the Co-Promotion Collaboration Product that is not consistent with current labeling of the Co-Promotion Collaboration Product or Marketing Materials developed in conformity with Section 6.2(a) hereof, that is deceptive or misleading or that disparages the Co-Promotion Collaboration Products or the good name, goodwill and reputation of Bayer. Onyx shall use Commercially Reasonable Efforts to ensure that its services delivered pursuant to this Agreement will be provided in a professional, ethical and competent manner.

      Section 4.2 CRM System and Sales/Prescriber Data. Bayer shall [ * ] exercise Commercially Reasonable Efforts to [ * ] to the CRM System with [ * ] to include Onyx as a licensee and subscriber. Such [ * ] shall provide that Bayer and Onyx shall be [ * ] to the CRM System and to [ * ] related to the Co-Promotion Collaboration Product. Notwithstanding the foregoing, each party’s sales representatives shall be responsible for providing information on an ongoing basis as requested in the CRM System, including without limitation [ * ] information. Information contained in the CRM System pertaining to Onyx shall be treated as Confidential Information of Onyx and shall not be used or disclosed to Third Parties without Onyx’s prior written approval or direction, unless otherwise required by Applicable Laws.

      Section 4.3 Onyx Sales Force.

           (a)  The parties agree, for purposes of this Agreement, that each Sales FTE shall initially be assigned a Sales FTE rate of [ * ] , which rate is based upon Bayer’s and Onyx’s [ * ] . The Sales FTE rate shall be adjusted annually by the Executive Committee in connection with the approval of the Budget and shall be [ * ] ; provided , however , that in the event the Executive Committee is unable to adjust the Sales FTE rate by [ * ] of the calendar year preceding the adjustment year due to any deadlock of the Executive Committee, the Sales FTE rate shall be adjusted to reflect any [ * ] . Onyx shall be solely responsible for all of its own Sales Force Expenses in promoting the Co-Promotion Collaboration Product, unless otherwise provided under Section 8.4(a) below. Each Sales FTE of Onyx shall be an employee of Onyx and shall remain under the direct and exclusive authority, supervision and control of Onyx at all times during the Term. Onyx shall supervise and maintain such competent and qualified sales representatives as may be required to promote the Co-Promotion Collaboration Product as provided herein and in the Co-Promotion Program and shall cause the sales force to meet the Performance Qualifications. In the event that Onyx commences sales of another product using the same sales force as used to promote the Co-Promotion Collaboration Product, Onyx shall still

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be obligated to satisfy its obligations hereunder, including without limitation to provide its minimum number of Equivalent Sales FTEs required to promote the Co-Promotion Collaboration Product. Onyx shall not [ * ] without the prior approval of the Executive Committee. For the period commencing on the Co-Promotion Effective Date and for [ * ] thereafter, Onyx shall [ * ] ; provided , however , that (subject to Section 4.1(a)) Sales FTEs may be added or removed at the discretion of Onyx.

           (b)  Subject to Section 6.2(a), all written, electronic and visual communications provided to any of Onyx’s sales representatives regarding strategy, positioning or selling messages for the Co-Promotion Collaboration Product will be subject to review and approval by the [ * ] to ensure uniform messaging and execution. The costs and expenses of providing such written, electronic and visual communications shall be considered Allowable Co-Promotion Expenses.

ARTICLE V
RESPONSIBILITIES OF BAYER

      Section 5.1 Promotion of the Co-Promotion Collaboration Product by Bayer.

           (a)  Throughout the Term, Bayer shall contribute fifty percent (50%) of the overall number of Sales FTEs required by the Co-Promotion Program as developed by the JMC and approved by the Executive Committee. Bayer shall use its Commercially Reasonable Efforts to market and promote the Co-Promotion Collaboration Product to Target Healthcare Professionals in the United States in accordance with the then-current Co-Promotion Program, and shall perform additional services assigned to it from time to time by the Executive Committee. Subject to Section 5.1(b), the exact number of Sales FTEs to be provided by Bayer will be determined by the JMC and approved by the Executive Committee and established under and pursuant to the Co-Promotion Program.

           (b)  (i) Bayer shall provide a minimum Weighted Average of not less than [ * ] of all [ * ] assigned to Bayer in each [ * ] of [ * ] of the Term. In the event that Bayer provides less than a Weighted Average of [ * ] of all [ * ] assigned to Bayer for any given [ * ] following the first Contract Year (based on the Weighted Average number of [ * ] for each [ * ] of the relevant [ * ] on an average basis), then Bayer shall incur a [ * ] calculated as follows:

      [ * ]

Any [ * ] due and payable under this Section will be due to Onyx no later than thirty (30) days following the expiration of the [ * ] that gave rise to the [ * ] . In the event that the parties disagree whether Bayer has satisfied its obligation to provide a Weighted Average of [ * ] of all [ * ] assigned to Bayer in the given period, the matter shall be reviewed by the JFC for up to [ * ] days in an attempt to resolve the matter. In the event the JFC cannot resolve the issue within such time period, either party shall be entitled to submit the issue to the Executive Committee for resolution pursuant to Article 25 of the Collaboration Agreement.

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               (ii) Bayer shall provide at least [ * ] of the [ * ] for each [ * ] period beginning on each anniversary of commercial launch of the Co-Promotion Collaboration Product. The initial [ * ] shall be equal to the [ * ] . In each case the Bayer sales force fails to meet [ * ] of the [ * ] for a [ * ] , Bayer shall [ * ] of the applicable Sales FTE rate for such year. The determination of whether the [ * ] have been met shall be measured within [ * ] following each anniversary of a commercial launch, and shall begin on the second anniversary of the commercial launch. For clarity, the [ * ] provided in this Section 5.1(b)(ii) shall be additive to the [ * ] set forth in Section 5.1(b)(i).

           (c)  Unless the parties otherwise agree, Bayer shall provide fifty percent (50%) of the overall number of MSLs required by the Co-Promotion Program to support the Co-Promotion Collaboration Product, and Bayer shall be solely responsible for 100% of its own MSL Expenses, unless otherwise provided under Section 8.4(a) below.

           (d)  The MSLs provided by Bayer, together with the MSLs provided by Onyx, shall develop for approval by the JMC an integrated medical affairs program and policies thereto approved by the MSLs and the Regional Sales Manager of each party that includes [ * ] from the appropriate MSLs to any query from the field or from either party.

           (e)  In performing its duties hereunder, Bayer shall, and shall cause its employees to: (i) [ * ] ; and (ii) [ * ] . No employee of Bayer shall make any representation, statement, warranty or guaranty with respect to the Co-Promotion Collaboration Product that is not consistent with current labeling of the Co-Promotion Collaboration Product or Marketing Materials developed in conformity with Section 6.2(a) hereof, that is deceptive or misleading or that disparages the Co-Promotion Collaboration Products or the good name, goodwill and reputation of Onyx. Bayer shall use Commercially Reasonable Efforts to ensure that its services delivered pursuant to this Agreement will be provided in a professional, ethical and competent manner.

           (f)  In the event the Executive Committee decides to promote the Co-Promotion Collaboration Product to healthcare professionals in the [ * ] field, [ * ] shall be included in such promotion activities. The Executive Committee shall determine the appropriate weighting of such sales effort, taking into consideration the [ * ] . Under such circumstances, other promotion activities undertaken by Bayer and Onyx related to the Co-Promotion Collaboration Product shall then be adjusted in order to maintain equality in overall sales efforts by each party.

      Section 5.2 CRM System and Sales/Prescriber Data. As set forth in Section 4.2 above, Bayer shall [ * ] exercise Commercially Reasonable Efforts to [ * ] to the CRM System with [ * ] to include Onyx as a licensee and subscriber. Such [ * ] shall provide that Bayer and Onyx shall be [ * ] to the CRM System and to [ * ] related to the Co-Promotion Collaboration Product. Notwithstanding the foregoing, each party’s sales representatives shall be responsible for providing information on an ongoing basis as requested in the CRM System, including without limitation [ * ] information. Information contained in the CRM System pertaining to Bayer shall be treated as Confidential Information of Bayer and shall not be used or disclosed to

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Third Parties without Bayer’s prior written approval or direction, unless otherwise required by Applicable Laws.

      Section 5.3 Bayer Sales Force.

           (a)  The parties agree, as specified in Section 4.3 above, each Sales FTE shall initially be assigned a Sales FTE value of [ * ] , which rate is based upon Bayer’s and Onyx’s [ * ] . The Sales FTE rate shall be adjusted annually by the Executive Committee in connection with the approval of the Budget and shall be the [ * ] ; provided , however , that in the event the Executive Committee is unable to adjust the Sales FTE rate by [ * ] of the calendar year preceding the adjustment year due to any deadlock of the Executive Committee, the Sales FTE rate shall be adjusted to reflect any [ * ] . Bayer shall be solely responsible for all of its own Sales Force Expenses in promoting the Co-Promotion Collaboration Product, unless otherwise provided under Section 8.4(a) below. Each Sales FTE of Bayer shall be an employee of Bayer and shall remain under the direct and exclusive authority, supervision and control of Bayer at all times during the Term. Bayer shall supervise and maintain such competent and qualified sales representatives as may be required to promote the Co-Promotion Collaboration Product as provided herein and in the Co-Promotion Program and shall cause the sales force to meet the Performance Qualifications. In the event that Bayer commences sales of another product using the same sales force as used to promote the Co-Promotion Collaboration Product, Bayer shall still be obligated to satisfy its obligations hereunder, including without limitation to provide its minimum number of Equivalent Sales FTEs required to promote the Co-Promotion Collaboration Product. Bayer shall not [ * ] without the prior approval of the


 
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