ACQUISITION, LICENSING, DEVELOPMENT AND SUPPLY AGREEMENT

Exhibit 10.1

Execution Version

Confidential Material Omitted and filed

separately with the Securities and Exchange Commission.

Asterisks denote such omissions.

ACQUISITION, LICENSING, DEVELOPMENT AND SUPPLY AGREEMENT

THIS ACQUISITION, LICENSING, DEVELOPMENT AND SUPPLY AGREEMENT (this “ Agreement ”), is made and entered into as of this 22 ^nd day of June, 2008 (the “ Signing Date ”), by and among GTC Biotherapeutics, Inc., a corporation organized under the laws of the Commonwealth of Massachusetts (“ GTC ”), ATIII LLC, a limited liability company organized under the laws of the State of Delaware and a direct wholly-owned subsidiary of GTC (“ ATIII LLC ”), and Ovation Pharmaceuticals, Inc., a corporation organized under the laws of the State of Illinois (“ Ovation ”). GTC, ATIII LLC and Ovation may be referred to herein individually as a “ Party ” or collectively as the “ Parties .”

RECITALS

WHEREAS , GTC is developing the Product (as defined in Article 1 ) for the Territory (as defined in Article 1 );

WHEREAS , Ovation has substantial knowledge, experience and expertise in developing, marketing and selling pharmaceutical and biologic products in the Territory;

WHEREAS , on and subject to the terms and conditions set forth herein, GTC desires to sell, transfer, assign, convey and exclusively license, as the case may be, to Ovation, and Ovation desires to acquire and exclusively license, as the case may be, from GTC, all of GTC’s right, title and interest in and to the Product in, for and with respect to the Territory;

WHEREAS , GTC enjoys the full right, title and interest in and to the GTC Intellectual Property Rights, Trademarks, Technical Information and Other Product Assets (each as defined in Article 1 ), or valid licenses thereto, as applicable;

WHEREAS , on and subject to the terms and conditions set forth herein, GTC desires to sell, transfer, assign and convey to Ovation, and Ovation desires to acquire from GTC, (i) all right, title and interest of GTC in, under or with respect to the Product BB-IND’s, the Product BLA’s or other Registrations and the Orphan Drug Designations (each as defined in Article 1 ) (with such Product BB-IND’s, Product BLA’s and other Product Registrations to be formally transferred to Ovation, at Ovation’s option, at a later date as provided for in Section 5.2 of this Agreement), (ii) those GTC Intellectual Property Rights and Trademarks (and, with respect to such Trademarks, the good will appurtenant thereto) that are listed on Schedule 1 hereto and (iii) the Ovation Herd and Purchased Material (each as defined in Article 1 ) (collectively, the “ Purchased Property ”).

WHEREAS , on and subject to the terms and conditions set forth herein, GTC desires to grant to Ovation, and Ovation desires to accept from GTC, an exclusive license or sublicense, as the case may be (even as to GTC), in and for the Territory with respect to all GTC Intellectual Property Rights, Trademarks, Technical Information and the Other Product Assets which are not included in the Purchased Property (collectively, the “ Licensed Property ”).

Confidential Material Omitted and filed

separately with the Securities and Exchange Commission.

Asterisks denote such omissions.

 

WHEREAS , on and subject to the terms and conditions set forth herein, GTC desires to be the sole supplier to Ovation for the Product in the Territory on an exclusive basis (even as to GTC), and Ovation desires to accept such appointment as the sole recipient of GTC’s supply of the Product in the Territory and to purchase the Product for the Territory solely from GTC, provided that GTC has the capability to provide the Product in accordance with the terms of this Agreement, the Supply Agreement and the Quality Agreement;

WHEREAS , GTC entered into that certain Licensing and Supply Agreement, dated as of October 31, 2005 and as in full force and effect as of the Signing Date (the “ LEO Agreement ”), by and among GTC, ATIII LLC and LEO Pharma A/S (“ LEO ”), pursuant to which LEO acquired an exclusive license with respect to the Product in certain countries outside of the Territory; and

WHEREAS , on and subject to the terms and conditions set forth herein, the Parties intend to cooperate in the development of the Product for the Territory for the Indications (as defined in Article 1 ) set forth herein through clinical trials, regulatory approval, manufacturing, sales and marketing.

AGREEMENT

NOW, THEREFORE , in consideration of the foregoing and the mutual terms, conditions and agreements set forth herein and other good and valuable consideration, the sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE 1

DEFINITIONS

As used in this Agreement, the singular includes the plural and the plural includes the singular, wherever so required by fact or context. Titles used in the Articles hereof shall be only for convenience and shall not be regarded as part of this Agreement. “ Schedule ” shall mean any schedule to this Agreement, each of them being made a part hereof. As used in this Agreement, and unless otherwise provided, the following terms shall have the meanings specified below. Certain other capitalized terms are defined elsewhere in this Agreement. Any reference to the term “ Agreement ” contained in this Agreement shall mean and include this Agreement and all exhibits and schedules thereto.

Any reference in this Agreement to GTC shall also be deemed to include a reference to ATIII LLC, and a reference to ATIII LLC in this Agreement shall also be deemed to include a reference to GTC, as the two Parties shall be treated as one legal entity in all aspects for purposes of this Agreement. GTC and ATIII LLC agree and acknowledge that for the term of this Agreement, ATIII LLC shall remain a wholly-owned direct subsidiary of GTC, unless Ovation gives its prior written consent otherwise.

 

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Confidential Material Omitted and filed

separately with the Securities and Exchange Commission.

Asterisks denote such omissions.

 

“ Additional Indication ” means any indication for the Product other than the HD Indication, the HR Indication or the DIC/Sepsis Indication for which the Parties develop the Product for use in the Territory or seek Approval for the Product in the Territory.

“ Adverse Event ” shall mean any untoward medical occurrence in a patient administered a medicinal product and which does not necessarily have to have a causal relationship with this treatment as per the applicable FDA or ICH guidelines, including, without limitation, any unfavorable and unintended sign (for example, an abnormal laboratory finding), symptom, or disease temporally associated with the use of a medicinal product, whether or not considered related to this medicinal product.

“ Adverse Drug Reaction ” shall mean noxious and unintended responses to a medicinal product, as established by national and/or regional regulations, guidance, and practices.

“ Affiliate(s) ” shall mean with respect to any Party, any corporation, partnership or other business entity that controls, is controlled by, or is under common control with such Party. A corporation, partnership or other entity shall be regarded as in control of another corporation, partnership or entity if it owns or directly or indirectly controls at least fifty percent (50%) of the voting stock or other ownership interest of the other corporation, partnership or entity or if it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the corporation, partnership or other entity or the power to elect or appoint at least fifty percent (50%) of the members of the governing body of the corporation, partnership or other entity. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting securities, by contract or otherwise.

“ Applicable Laws ” means all applicable provisions of constitutions, statutes, laws, rules, treaties, regulations, orders and decrees of all applicable governmental authorities in the applicable territory, jurisdiction or region.

“ Approval ” means receipt of Regulatory Approval of a BLA or other Registration for the Product from the FDA for a certain Indication.

“ BB-IND ” means a biologic Investigational New Drug Application filed with the FDA with respect to the Product for the Territory.

“ Best Efforts ” shall mean the level of effort which, consistent with the exercise of prudent scientific and reasonable business judgment, is diligently applied by the relevant Party to its other therapeutic products at a similar stage of development and with similar commercial potential.

 

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Confidential Material Omitted and filed

separately with the Securities and Exchange Commission.

Asterisks denote such omissions.

 

“ BLA ” means a Biologic License Application filed with the FDA after completion of human clinical trials to obtain marketing approval for the Product for the Territory.

“ Business Day ” means any day other than Saturday, Sunday or a day which banking institutions in the State of Illinois or the Commonwealth of Massachusetts are permitted or obligated by law to close.

“ cGMP ” means the regulatory requirements for current good manufacturing practices promulgated by the FDA or other applicable Regulatory Authority.

“ Commercial Sale ” means any commercial arms-length Sale of Product by Ovation or any of its Affiliates or sublicensees to a Third Party (other than in any non-commercial patient use or in connection with clinical trials, compassionate use or patient assistance programs or sampling or free goods programs) following Approval and, as applicable, Reimbursement Approval of the Product in the Territory.

“ Cost of Goods ” means ************.

“ CTD ” means the Common Technical Document format (as defined by the ICH and adopted by the FDA) used to prepare an application to be filed with the FDA or other applicable Regulatory Authority in the Territory after completion of human clinical trials to obtain Approval in the Territory.

“DIC/Sepsis Indication ” means use of the Product for the treatment and/or prevention of Disseminated Intravascular Coagulation (“ DIC ”) associated with Sepsis.

“ Event of Default ” means any failure of a Defaulting Party (as defined below) to cure any breach of or default under any material covenant (including failure to perform) or agreement contained in this Agreement within a period of ************ after receipt by the Defaulting Party of notice of such breach or default from the other Party. “ Defaulting Party” shall mean the Party to which such an event relates.

“ FDA ” means the United States Food and Drug Administration or any successor agency with responsibilities comparable to the United States Food and Drug Administration.

“ Field ” means all therapeutic, diagnostic, prophylactic and monitoring applications of the Product in humans, including, without limitation, for (a) the HD Indication, (b) the HR Indication (unless Ovation elects not to pursue the HR Indication pursuant to Section 6.1(a)(i) ), (c) the DIC/Sepsis Indication (unless Ovation elects not to pursue the DIC/Sepsis Indication pursuant to Section 6.2(a)(i) ) and (d) any Additional Indication (unless Ovation elects not to exercise its right of first refusal with respect to such Additional Indication pursuant to Section 6.3 ).

 

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Confidential Material Omitted and filed

separately with the Securities and Exchange Commission.

Asterisks denote such omissions.

 

“ GAAP ” means United States generally accepted accounting principles, consistently applied.

“ GTC Intellectual Property Rights ” means those patents, patent applications and licensed or sublicensed rights relating to the Territory which are necessary to achieve the objectives of the Program for the purposes of this Agreement (including, without limitation, those set forth on Schedule 2 hereto) including, but not limited to, Patent Rights, divisional applications, continuation applications, continuation-in-part applications and any patent issued on said applications and any reissues, extensions or Supplementary Protection Certificates granted on such patents.

“ GTC’s Knowledge ” means the actual knowledge of any senior executive of GTC or ATIII LLC with operational responsibility, and the persons who report directly to such person, who would reasonably be expected to know of the subject matter of the applicable representation or warranty in the ordinary course of his/her employment with GTC and/or ATIII LLC, as applicable.

“ HD Indication ” means use of the Product as indicated for the prevention of peri-operative and peri-partum thromboembolic events, as well as the treatment of such events, in hereditary antithrombin deficient patients.

“ Herd Management Agreement ” means the Herd Management Agreement to be negotiated by the Parties prior to the Closing and attached hereto as Exhibit D .

“ HR Indication ” means use of the Product as indicated in patients with heparin resistance (meaning an inadequate response to heparin treatment which does not result in a medically acceptable activated clotting time) to enable surgery requiring cardiopulmonary bypass or in other clinical situations requiring management of activated clotting time.

“ ICH ” means the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use.

“ Indication ” means the HD Indication, the HR Indication, the DIC/Sepsis Indication or any Additional Indication.

“ Insolvency Event ” means: (i) filing a petition in voluntary bankruptcy or making an assignment for the benefit of creditors or consenting to the appointment of a receiver of all or any substantial part of the property of a Party, or filing a petition to take advantage of any debtors act; (ii) the commencement against a Party of any case, proceeding or other action seeking the adjudication of such Party as bankrupt by a court of competent jurisdiction or the appointment by such a court of a trustee or receiver or receivers of such Party or of all or any substantial part of the property of such Party upon the application of any creditor in any insolvency or bankruptcy proceeding or other creditors suit, which case, proceeding or other action is not dismissed within sixty (60) days after its commencement; or (iii) any event or act analogous to any of these.

 

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Confidential Material Omitted and filed

separately with the Securities and Exchange Commission.

Asterisks denote such omissions.

 

“ Invention ” means any invention conceived and reduced to practice (either actually or constructively) by GTC, Ovation or GTC and Ovation jointly during the course of conducting the development activities contemplated by this Agreement during the Term (whether or not such inventions are patentable) which is necessary or useful to discover, develop, make, use or sell the Product in the Field and in the Territory, and all Patent Rights and other intellectual property rights associated with the Invention

“ Launch Commercialization Plan ” means the marketing, sales and distribution plan developed by Ovation’s Sales, Marketing and Medical Affairs Departments for the initial commercialization of the Product for the HD Indication.

“ Licensed Intellectual Property ” means that GTC Intellectual Property which is included in the Licensed Property.

“ Licensed Patent Rights ” means those Patent Rights which are included in the Licensed Property.

“ Licensed Trademarks ” means those Trademarks which are included in the Licensed Property.

“ MedDRA ” means the Medical Dictionary for Regulatory Activities Terminology developed under the auspices of ICH.

“ Net Sales ” means the gross invoiced Commercial Sales of Ovation, or its Affiliates or sublicensees within the Territory of the Product billed to Third Party customers less, to the extent such amounts are included in the gross invoiced sales price, the actual amount of: (i) freight and insurance costs incurred in transporting such Product to such customers; (ii) quantity, cash and other trade discounts actually allowed and taken; (iii) customs duties, surcharges and taxes and other governmental charges incurred in connection with the exportation or importation of such Product in final form; (iv) amounts repaid or credited by reason of returns or rejections (due to Product spoilage, damage, expiration or useful life or otherwise) or retroactive price reductions; (v) amounts incurred resulting from governmental mandated rebate or discount programs; and (vi) Third Party rebates and charge backs actually allowed and taken, including, without limitation, hospital buying group charge backs, hospital buying group/group purchasing organization administration fees or managed care organization rebates.

“ Orphan Drug Designations ” means the Orphan Drug Designations granted by the FDA for the Product for the HD Indication and the HR Indication.

“ Other Product Assets ” means any assets or properties owned, held or licensed by GTC relating to the Product necessary or appropriate to achieve the objectives of the Program and the purposes of this Agreement.

 

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Confidential Material Omitted and filed

separately with the Securities and Exchange Commission.

Asterisks denote such omissions.

 

“ Ovation Herd ” means the herd of ************ genotypically qualified transgenic animals and their descendants used for development and manufacture of the Product to be developed and maintained by GTC pursuant to the Herd Management Agreement.

“ Patent Rights ” means: (a) an unexpired patent the claims of which have not been held invalid or unenforceable by a court of competent jurisdiction from which no appeal can be taken or has been taken within the required time period (excluding a writ of certiorari to the U.S. Supreme Court), including without limitation any substitution, extension, registration, confirmation, reissue, re-examination, renewal or any like filing thereof, and including any and all embodiments of the claims of such unexpired patent; and (b) pending patent applications, including without limitation any provisional, converted provisional, continued prosecution application, continuation, divisional, continuation-in-part or any like filing thereof.

“ Pharmacovigilance Procedures Agreement ” means the Pharmacovigilance Procedures Agreement to be negotiated by the Parties prior to the Effective Date and attached hereto as Exhibit A (which agreement shall include, among other things, terms and conditions consistent with the pharmacovigilance principles set forth on Schedule 6 attached hereto).

“ Positive Opinion ” shall mean an opinion by ************ of the members of the Advisory Committee with respect to the BLA for the HD Indication that the Advisory Committee would grant Approval for the HD Indication without material restrictions or commitments.

“ Product ” shall mean released and accepted finished product or partially finished product (as defined in the Supply Agreement) that is a pharmaceutical preparation for human use incorporating ************ as its active pharmaceutical ingredient.

“ Program ” means the marketing, sales, manufacturing, distribution and clinical development activities related to the Product with respect to the Territory which are described in this Agreement.

“ Purchased Intellectual Property ” means the GTC Intellectual Property (including, without limitation, the Purchased Patent Rights) which is included in the Purchased Property.

“ Purchased Patent Rights ” means those Patent Rights which are included in the Purchased Property.

“ Purchased Material ” means reasonable quantities of frozen semen and frozen source material (i.e., milk containing the recombinant form of ATryn) which are required to manufacture the Product pursuant to the Specifications, the cGMP and the BLA(s).

“ Purchased Trademarks ” means those Trademarks which are included in the Purchased Property.

 

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Confidential Material Omitted and filed

separately with the Securities and Exchange Commission.

Asterisks denote such omissions.

 

“ Quality Agreement ” means the Quality Agreement to be negotiated by the Parties prior to the Closing and attached hereto as Exhibit B

“ Registration ” means a marketing authorization application or similar application (other than a BLA) filed with a Regulatory Authority in the Territory after completion of human clinical trials to obtain marketing approval for the Product in the Territory.

“ Regulatory Approval ” means receipt of a license from a Regulatory Authority to sell the Product in the Territory following review of a BLA or other Registration or for revision of a BLA or other Registration for any Product issued by any Regulatory Authority in the Territory that is required for the commercial sale of such Product in the Territory. Regulatory Approval shall not include Reimbursement Approval.

“ Regulatory Authority ” means any federal or state regulatory authority in the Territory with responsibility for approving the Product for sale in and throughout the Territory, including, without limitation, the FDA.

“ Reimbursement Approval ” means, if applicable, the approval of the Reimbursement Price for any Product as established by a Reimbursement Authority in the Territory. Reimbursement Approval shall not include Regulatory Approval.

“ Reimbursement Authority ” means any regulatory authority in the Territory (if applicable) with responsibility for setting the Reimbursement Price within the Territory.

“ Reimbursement Price ” means the reimbursement price, if applicable, for the Product established, approved and as modified from time to time by the Reimbursement Authority in the Territory.

“ Responses to Medicinal Product ” means that a causal relationship between a medicinal product and an adverse event is at least a reasonable possibility (as per ICH guideline E2A ) . A reaction, in contrast to an event, is characterized by the fact that a causal relationship between the drug and the occurrence is suspected. For regulatory reporting purposes, if an event is spontaneously reported, even if the relationship is unknown or unstated, it meets the definition of an adverse event.

“ Sale(s) ” (or “ Sell ” or “ Sold ”) means any sale, assignment, transfer, conveyance or other disposition of the Product by Ovation or any of its Affiliates or sublicensees to a Third Party (other than for quality assurance or control purposes). For the sake of clarification, a sale, assignment, transfer, conveyance or other disposition of the Product by Ovation to any of its Affiliates shall not be considered a Sale for purposes of this definition.

“ Serious Adverse Event/Adverse Drug Reaction ” means, in accordance with the applicable ICH guidelines, a serious adverse event or drug reaction is any untoward medical occurrence that at any dose:

 

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results in death

 

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Confidential Material Omitted and filed

separately with the Securities and Exchange Commission.

Asterisks denote such omissions.

 

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is life threatening (i.e. at risk of death at the time of the event/reaction, and not an event/reaction which hypothetically might have caused death if it were more severe)

 

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requires inpatient hospitalization or results in prolongation of existing hospitalization

 

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results in persistent or significant disability/incapacity

 

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is a congenital anomaly/birth defect

 

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results in other medically important conditions.

“ Sharing Percentage ” means, as to each Party, the percentage of ************.

“ Specifications ” means the set of criteria for acceptance/rejection of bulk drug substance or the Product, as the case may be, when tested by methods described in the BLA (or other Registration), as approved by the FDA and any additional specifications as are mutually agreed upon by the Parties, whether in writing or through the applicable Committee.

“ Strategic Partner ” means a Third Party engaged in the pharmaceutical or biologic industry which enters into a license and development agreement (or similar agreement) with GTC pursuant to which such Third Party and GTC shall work collaboratively to develop the Product for a Rejected Indication. For purposes of clarification, Strategic Partner shall not be deemed to include a Third Party primarily engaged in the financing or lending industry.

“ Supply Agreement ” means the Supply Agreement to be negotiated by the Parties prior to the Closing and attached hereto as Exhibit C .

“ Technical Information ” means all information in the possession of GTC and/or its Affiliates (to the extent GTC and/or its Affiliates are not prohibited from licensing such information as a result of contractual obligations to LEO under the LEO Agreement) regarding preclinical and biological-chemical-pharmaceutical and clinical data or other scientific information (including specifications, master batch records, analytical methods including validation protocols and the drug master file), trade secrets and know-how or uses for the Product including, but not limited to, marketing know-how or uses for the Product in the possession of GTC regarding the Product necessary or appropriate for Ovation to fulfill its obligations under this Agreement.

“ Territory ” means the United States of America and its territories, possessions and protectorates (including, but not limited to, the District of Columbia and the Commonwealth of Puerto Rico).

“ Timely Approval ” shall mean receipt of Approval for the Product with respect to the HD Indication ************.

“ Third Party ” means any person other than a Party or its Affiliates.

 

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Confidential Material Omitted and filed

separately with the Securities and Exchange Commission.

Asterisks denote such omissions.

 

“ Trademarks ” means all of GTC’s trademarks, service marks, trade names, trade dress and logos used on or in connection with the identification or marketing of the Product, including, without limitation, those listed on Schedule 2 attached hereto (as the same may be amended and supplemented from time to time by the Parties, whether in writing or by decision of the Joint Steering Committee).

“ Unit ” means one international unit of antithrombin as measured by a thrombin inhibition assay as defined by the World Health Organization for International Biological Standards and as described and approved by the EMEA and/or national authorities.

“ Vial ” means approximately ************ of the Product, or the applicable number of USP units as may be required by the FDA for the Territory.

“ Waste ” shall mean a “hazardous substance” (as defined in the Federal Comprehensive Response, Compensation and Liability Act, as amended) and “Waste” (as defined in the Federal Resource Conservation and Recovery Act, as amended), and includes waste of any kind, including without limitation both routine process waste and by-product which are disposed of, and the foreign equivalents of such terms as defined by the relevant regulatory authorities of countries other than the United States.

ARTICLE 2

ACQUISITION, LICENSE GRANT AND APPOINTMENT

2.1 Purchased Property .

(a) Acquisition . Subject to the terms and conditions hereof, at the Closing, GTC agrees to sell, assign and transfer to Ovation, and Ovation agrees to purchase from GTC, the Purchased Property (including, without limitation, the good will appurtenant to the Purchased Trademarks), in all respects free of any and all liens, hypothecations, mortgages, charges, security interests, pledges and other encumbrances and claims of any nature (“ Liens ”), whether such assets are held by GTC, ATIII LLC or any of their respective Affiliates.

(b) Grant of License to GTC . During the Term, Ovation agrees to grant to GTC, and GTC accepts from Ovation, a non-exclusive license, with the right to sublicense, within the Field and in the Territory with respect to the Purchased Property, but only for the purpose of carrying out GTC’s rights, duties and obligations under this Agreement and the Supply Agreement, including with respect to any Rejected Indication (the “ GTC License ”).

2.2 Appointment and Grant of License . During the Term (subject to Section 15.4(b) ) and subject to the terms and conditions of this Agreement, GTC agrees to grant to Ovation, and Ovation accepts from GTC, an exclusive license (even as to GTC) within the Field and in the Territory, with the exclusive right to sublicense within the Territory, to and under the Licensed Property and any Inventions owned by GTC pursuant to Section 10.2 , including, without limitation, the right to import, store, package, label, use, develop, register, sell, offer for

 

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Confidential Material Omitted and filed

separately with the Securities and Exchange Commission.

Asterisks denote such omissions.

 

sale, distribute and have imported the Product in the Field (the “ License ”). Ovation shall ensure that any sublicense Ovation enters into under the License shall adhere to the terms and conditions set forth in this Agreement, and Ovation shall notify GTC of any such sublicenses Ovation enters into within ************ thereof. In no other respect, other than as set forth in this Agreement (including, without limitation, under the License and to the extent such GTC Intellectual Property Rights, Trademarks or Technical Information constitute Purchased Property transferred to Ovation pursuant to Section 2.1 ), may Ovation or its sublicensees practice GTC Intellectual Property Rights, Trademarks or Technical Information. The Parties agree that the patent license referenced herein is governed by Section 365(n) of the Bankruptcy Code (11 U.S.C. Section 365(n)).

ARTICLE 3

COMMITTEES

3.1 Establishment of Joint Steering Committee . Promptly after the Effective Date, the Parties shall establish a committee consisting of personnel from GTC and Ovation with expertise in the commercialization, manufacturing, clinical development, medical and regulatory affairs, reimbursement, sales, marketing, intellectual property and finance of pharmaceutical and biologic products in general and, in particular, the Product in the Field (the “ Joint Steering Committee ”). The Joint Steering Committee shall be comprised of such number of members as the Parties may determine from time to time, provided that each Party shall at all times ************. A Party may replace one or more of its representatives on the Joint Steering Committee at any time. A member of the Joint Steering Committee may be replaced at any meeting by another person appointed by the respective Party which appointed such replaced member. Both Parties shall have equal voting rights on the Joint Steering Committee, notwithstanding the number of representatives of each Party present at any meeting of the Joint Steering Committee. The Joint Steering Committee may, in its discretion, establish subcommittees consisting of individuals from GTC and Ovation with expertise in particular areas relevant to the Product in any Indication in the Field; provided , that the composition of such subcommittee shall comply with all terms of this Section 3.1 relating to the composition of the Joint Steering Committee. Without limiting the generality of the foregoing, the Joint Steering Committee shall decide on the following matters with respect to any Indication in the Field (except as otherwise set forth herein):

(a) development of the Product within the Territory and all potential investigator sponsored studies;

(b) any and all issues related to the manufacturing and/or quality of the Product including, but not limited to, changes therein that can affect the Product registration file, regardless whether such changes are required or discretionary in nature;

(c) until such time as the BLA(s) are transferred to Ovation pursuant to Section 5.2 hereof, all issuances of, or changes to be made to, the Product regulatory files or labeling within the Territory; and

 

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Confidential Material Omitted and filed

separately with the Securities and Exchange Commission.

Asterisks denote such omissions.

 

(d) such actions as the Parties may decide are appropriate to further the development of the Product such as a review of scientific publications and medical information provided to healthcare professionals both within and outside of the Territory, respectively.

The Joint Steering Committee shall discuss and review the development of the Product and all potential investigator-sponsored studies outside the Territory, to the extent they may negatively impact the commercialization or sales of the Product within the Territory, as well as all changes to be made to the Product regulatory files or labeling outside the Territory, to the extent such changes may negatively impact the commercialization or sales of the Product within the Territory.

The Joint Steering Committee shall be provided the Launch Commercialization Plan for purposes of review and shall be consulted regarding overall strategy for launch and commercialization of the Product; provided , however , that the approval of the Launch Commercialization Plan and any decisions regarding launch and commercialization of the Product shall be at the sole discretion of Ovation.

3.2 Operation of the Joint Steering Committee . The Joint Steering Committee shall meet at such times and places as it may determine but, in any event, it shall meet within ************ after the Effective Date and at least ************ during each ************ after the Effective Date. If the Joint Steering Committee does not determine to meet elsewhere, its meetings shall alternate locations between the offices of GTC and Ovation, with the first meeting to be held at Ovation. The Joint Steering Committee may meet in person or by video or telephone conference (as practical), and individual members may participate in any of the foregoing ways. All costs of participation by each member in the activities of the Joint Steering Committee shall be borne by the Party appointing such member. Ovation and GTC shall each designate one (1) of their respective representatives on the Joint Steering Committee to act as Co-Chair. The Joint Steering Committee shall appoint a secretary each year that shall maintain the records of the Joint Steering Committee and shall keep minutes of the meetings thereof. The secretary shall distribute minutes to all members of the Joint Steering Committee at the same time not later than two weeks following said meeting. The secretary shall be provided on a rotating basis each year by GTC and Ovation (initially to be selected by Ovation). Moreover, each Party shall appoint one person as the point person for communications between the Parties regarding on-going progress hereunder.

3.3 Decision-Making . The Joint Steering Committee will strive to reach consensus on matters over which it has authority. Subject to the foregoing and except as otherwise provided herein, if, at a meeting of the Joint Steering Committee, the Joint Steering Committee is unable to reach consensus on a particular issue, the members of the Joint Steering Committee will make good faith efforts to resolve such issue over ************. If after ************ such effort is unsuccessful, the Parties will refer any such dispute to two duly appointed senior officers of the Parties, one officer from GTC and the other officer from Ovation, for attempted resolution by good faith negotiations. Either Party may reject a proposal which the Party can demonstrate by objective financial, economic or regulatory data is likely to have a negative impact on the Party, it being understood and agreed that a “negative impact” shall not include

 

12

Confidential Material Omitted and filed

separately with the Securities and Exchange Commission.

Asterisks denote such omissions.

 

any duty or obligation of a Party under this Agreement, the Quality Agreement, the Pharmacovigilance Procedures Agreement or the Supply Agreement. If, after a further period of ************, the appointed officers of the Parties are still unable to resolve the matter successfully, the Parties will refer the pending dispute to the respective chief executive officers of the Parties for a final attempted resolution by good faith negotiations. In the event the chief executive officers are also unable to resolve the dispute, the matter may be referred to arbitration as set forth in Article 16 below.

3.4 Limitations of Joint Steering Committee Powers . The Joint Steering Committee will have only such powers as are specifically delegated to it in this Agreement, and shall have no power to amend this Agreement or waive a Party’s rights or obligations under this Agreement.

3.5 Appointment of Joint Steering Committee Members . The appointment of members of the Joint Steering Committee is a right of each Party and not an obligation and shall not be a “deliverable” as defined in EITF Issue No. 00-21. Each Party shall be free to determine not to appoint members to the Joint Steering Committee. If a Party does not appoint members of the Joint Steering Committee, it shall not be a breach of this Agreement, nor shall any consideration be required to be returned and, unless and until such persons are appointed, the other Party may discharge the role of the Joint Steering Committee.

ARTICLE 4

MANUFACTURE AND SUPPLY OF PRODUCT

4.1 Manufacture of Product, Supply Agreement and Quality Agreement . At or prior to the Closing, the Parties shall enter into (a) the Supply Agreement to be attached hereto as Exhibit C to govern the manufacture and supply of the Product hereunder and to establish operating procedures for forecasting, ordering, production scheduling and inventory management of the Product and (b) the Quality Agreement to be attached hereto as Exhibit B . All terms and conditions of the Supply Agreement and the Quality Agreement shall be in accordance with the terms, conditions and principles set forth in this Article 4 . GTC shall be the sole and exclusive supplier of Product to Ovation at all times during the Term, and Ovation shall purchase all of its requirements for the Product during the Term from GTC (provided that GTC has the capability to provide the Product in accordance with the terms of this Agreement, the Supply Agreement and the Quality Agreement).

(a) Covenants of GTC . GTC or its subcontractors shall manufacture the Product in accordance with cGMP, the Specifications and the BLA(s) and deliver, within designated timeframes and agreed upon quantities in accordance with the terms of the Supply Agreement and the Quality Agreement, the Product to Ovation at such location or locations, specified by Ovation, all in accordance with the Supply Agreement and the Quality Agreement and orders placed by Ovation thereunder. Without limiting the foregoing, GTC shall, and shall cause its subcontractors to, perform, or have performed, at GTC’s own expense each of the following activities with respect to Product to be supplied to Ovation or intended for use or sale by Ovation (in each case, in accordance with and subject to the terms and conditions of the Supply Agreement and the Quality Agreement):

(i) register and maintain a valid registration of the GTC manufacturing facility (and/or, such other suitable facility, including a Third Party manufacturing facility, as GTC may designate with Ovation’s prior written consent, which consent shall not be unreasonably withheld) with the relevant and appropriate Regulatory Authorities (including, without limitation, the FDA) as a facility performing manufacturing operations for pharmaceutical and biologic products and prepare site master files as required by Applicable Laws and regulations. GTC shall not make any change or take any action which requires amendment of the BLA or other Registration, including, but not limited to, transfer of any Product to alternative manufacturing facilities or changes in or replacement of equipment or a change in the Specifications, without the prior written consent of Ovation, which consent shall not be unreasonably withheld. GTC shall pay for all manufacturing-related costs for any harmonized (meaning U.S. and E.U.) regulatory compliance for the HD Indication. In the event GTC makes a change or takes an action for good reason, including, without limitation, a change mandated by a Regulatory Authority, any costs relating to such change or action shall be at the sole expense of GTC. Ovation will discuss in good faith investments that may be necessary for capacity expansion required for Approval of the HR Indication, DIC/Sepsis Indication and/or Additional Indications.

 

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(ii) validate and operate the production process for the Product to ensure that such process is compliant with cGMP in the Territory. All Product delivered by GTC to Ovation hereunder shall have been manufactured using a process that (x) has been validated in accordance with cGMP and (y) has been and is in compliance with the Specifications and BLA(s) for such Product and with cGMP and all Applicable Laws with respect to the manufacture of each Product;

(iii) handle and store the Product prior to shipment to Ovation (x) as mandated by cGMP and (y) to ensure that the raw materials, recipients, packaging articles, intermediate products and the Product are handled and stored under such conditions and that the quality of such materials and the Product manufactured therefrom are not affected;

(iv) ensure that each shipment of the Product meets the Specifications, the requirements of the BLA(s) and all applicable warranties set forth herein;

(v) deliver the Product to Ovation in accordance with the Supply Agreement and the Quality Agreement;

(vi) handle, store, treat and dispose of Wastes generated in the performance of its obligations pursuant to this Section 4.1(a) and the Supply Agreement and the Quality Agreement;

 

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(vii) comply with all Applicable Laws and regulations relating to its activities under this Section 4.1(a) and the Supply Agreement and the Quality Agreement, including, without limitation, cGMP;

(viii) if the GTC manufacturing facility (or other such facility as in accordance with Section 4.1(a)(i) hereof) is being used to manufacture material other than the Product, adopt and enforce a standard operating procedure for segregation of the Product from such other manufactured materials;

(ix) supply sufficient quantities of the Product to Ovation to satisfy the purchase requirements of Ovation in accordance with the Supply Agreement In consideration of the arrangements provided in this Agreement, GTC agrees that Ovation will be treated with “most favored distributor” status in connection with allocation of Product, so that if there is a shortfall of Product as between Ovation and a distributor (including GTC or LEO) outside the Ovation Territory, GTC will allocate Product in such a manner no less favorable to Ovation than a percentage that is equivalent to the current Sharing Percentage of Ovation. Failure by GTC to supply sufficient amounts of Product based on the above forecasting shall not constitute a breach of this Agreement by GTC, provided such inability is caused by an increase in the quarterly manufacturing forecast by more than ************ compared to the previous quarterly forecast received from Ovation;

(x) except as otherwise specifically agreed between the Parties in writing, be responsible for procuring all raw materials and other components for each Product. GTC shall be responsible for testing of all raw materials and components procured by or on behalf of GTC and used in the Product to ensure that they meet applicable Specifications and quality standards (including, but not limited to, those set forth in the Quality Agreement); and

(xi) perform all of the services provided herein in compliance with all environmental laws and shall be solely responsible for all environmental losses at sites controlled by GTC. GTC shall be solely responsible for implementing and maintaining health and safety procedures for the manufacture, generation, packaging, handling and storage of the raw materials, hazardous materials, Waste, packaging components and Product as provided herein. Such procedures shall comply with all relevant environmental laws. Ovation shall have no responsibility for developing, implementing or overseeing health and safety programs at GTC.

Subject to the covenants, duties and obligations of GTC under this Agreement, GTC shall be permitted to contract with one or more Third Parties to perform the activities described in this Section 4.1(a) and the Supply Agreement, in accordance with the terms hereof and thereof, as applicable. GTC shall be responsible for the performance of its subcontractors under this Agreement, the Quality Agreement and the Supply Agreement.

 

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(b) Covenants of Ovation . In carrying out its covenants, duties and obligations hereunder and under the Supply Agreement, Ovation shall, and shall cause its subcontractors (if any) to comply with all Applicable Laws and regulations relating to its activities hereunder, including all requirements of the applicable Regulatory Authorities (including, without limitation, the FDA) and cGMP. Ovation shall be responsible for the performance of its subcontractors, if any, under this Agreement and the Quality Agreement.

4.2 Quality Assurance . The Quality Agreement shall contain applicable provisions regarding quality assurance and quality control of the Product.

4.3 Orders and Shipments.

(a) Ovation shall order the Product from GTC, and GTC shall supply the Product to Ovation, in accordance with the terms and conditions of the Supply Agreement and to fulfill Ovation’s Product requirements for the performance of clinical trials and sale and distribution of the Product within the Territory.

(b) Subject to Section 4.7 , the Product supplied by GTC for purposes of Commercial Sale shall have a minimum shelf life of ************ from the date of delivery. Ovation and GTC shall agree upon the minimum shelf life of Product supplied by GTC for purposes of clinical studies prior to the shipment of such Product; provided , that if Product for clinical studies is not able to be used in the intended clinical study due to expiry, then GTC shall either credit Ovation’s account for the full price paid for such expired Product or replace such expired Product at no further cost to Ovation.

(c) After delivery, Ovation shall, within ten (10) Business Days, visually inspect the Product shipment, with visual inspection by Ovation consisting of (i) comparing the applicable order against the documentation accompanying the shipment to verify that the delivery date, identity, quantity and exterior shipment labelling comply with the order and (ii) visually inspecting the exterior of the Product shipment to verify that the shipment appears to be in good condition. Promptly after visual inspection of the Product shipment (or ten (10) Business Days from the date Ovation becomes aware of any hidden defect and the Product fails to meet the Specifications or the requirements of the BLA(s)), determine whether to reject such Product shipment and communicate such rejection to GTC in writing.

(d) If GTC does not agree to any rejection of the Product, the Parties will seek the opinion of an independent laboratory expert reasonably acceptable to both Parties, whose opinion shall be final and binding. The expenses for such expert opinion shall be borne by the Party against whom the expert rules, unless the expert cannot make a determination with respect to the matter, in which event the Parties shall share equally the expenses connected with the expert and the expenses connected with the Products rejected and/or returned.

4.4 Storage . Ovation shall store and transport the Product in accordance with the Applicable Laws and regulations of the Territory (and/or any international rules and regulations, if applicable) and the national Regulatory Authorities within the Territory. In all cases, Ovation shall comply with all Applicable Laws, rules and regulations concerning the labeling, packaging, warehousing and distribution of the Product in the Territory.

 

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Asterisks denote such omissions.

 

4.5 Return and Replacement of Product .

(a) Any quantities of the Product that are rejected and/or returned by Ovation in accordance with this Article 4 , the Quality Agreement or the Supply Agreement whose rejection has been accepted by GTC shall be returned to GTC at the expense of GTC and, at the option of Ovation, (i) shall be promptly replaced by GTC at GTC’s sole expense, and Ovation’s payment for such replaced quantities shall be postponed until such replacement quantities are received and accepted by Ovation, or (ii) GTC shall refund any amounts paid for such quantities to Ovation.

(b) Ovation may return to GTC any Product which is not in all respects in accordance with this Article 4 and the terms and provisions of the Supply Agreement and the Quality Agreement. If GTC so notifies Ovation of its desire to destroy such returned Product, such Product shall be transported to a location designated by GTC for destruction. The destruction is to take place by an organization authorized for this purpose, such organization to issue an official confirmation of the destruction to GTC. All expenses regarding the transportation and/or destruction of such Product are to be paid by GTC. Upon the return of such Product to GTC or the delivery of such Product to a location for destruction, GTC shall credit Ovation’s account in the amount of the actual purchase price paid by Ovation for the Products returned and/or destroyed.

4.6 Prices and Payments .

(a) Price for Product for Commercial Sales . For the term of the Supply Agreement, GTC shall supply Ovation with released and accepted finished Product for Commercial Sale by Ovation and its Affiliates and sublicensees in accordance with the Supply Agreement for a price equal to the following:

(i) for a given ************ during such term, if Ovation’s annual firm orders for the Product are less than or equal to ************, then the price of the Product for such ************ shall be equal to the Cost of Goods for such Product, which Cost of Goods shall in no event exceed ************ per Unit, plus a transfer price of ************ per Unit;

(ii) for a given ************ during such term, if Ovation’s annual firm orders for the Product are greater than ************, then the price of the Product for such ************ shall be equal to the Cost of Goods for such Product, which Cost of Goods shall in no event exceed ************ per Unit, plus a transfer price of ************ per Unit; and

(iii) for any ************ during such term which commences after the ************ of the first Commercial Sale of the Product in the Territory by Ovation or its Affiliates, if Ovation’s annual firm orders for the Product for such ************ do not exceed ************, then the price of the Product for such ************ shall be equal to the Cost of Goods, which Cost of Goods shall in no event exceed ************ per Unit;

 

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provided , however , that in the event that for any ************ during such term, the Cost of Goods is equal to or less than ************ per Unit, Ovation shall pay to GTC a price equal to the Cost of Goods plus a transfer price of ************ per Unit.

(b) Clinical or Non-Commercial Materials . Notwithstanding the foregoing, the price for all Product supplied by GTC to Ovation on an ex-factory basis for clinical or other non Commercial Sale uses shall be equal to the Cost of Goods for such Product; provided , however , that such price shall not in any event exceed, on a per Unit basis, the price for the Product for Commercial Sale as in effect under Section 4.6(a) excluding any transfer price thereon.

(c) Payments . Ovation shall pay GTC for all shipments of Product in accordance with the terms and conditions of the Supply Agreement and in the manner provided in Article 8 below.

4.7 Initial Supply of Product . As soon as practicable, and as forecasted by Ovation, following receipt of Approval for the HD Indication, GTC shall supply, or cause to be supplied, to Ovation ************ Vials of released and accepted finished Product (which Product is satisfactory to Ovation and has a minimum shelf life of ************) (the “ Initial Supply ”) in accordance with the terms of this Article 4 and the Supply Agreement, and Ovation shall purchase the Initial Supply from GTC for the price for such Product set forth in Section 4.6(a) (which price ************). In the event that any of the Initial Supply expires prior to being sold and distributed by Ovation, then Ovation may return such expired Product to GTC, and GTC shall credit Ovation’s account for the full price paid for such expired Product or replace such Product at no further cost to Ovation.

4.8 Term of Supply Agreement and Quality Agreement . The term of the Supply Agreement and the Quality Agreement shall be no less than twenty (20) years from the date of Approval of the Product for the HD Indication.

ARTICLE 5

OBLIGATIONS OF THE PARTIES REGARDING MANUFACTURING, SALE AND

CLINICAL DEVELOPMENT OF PRODUCT

5.1 General Obligations . GTC shall be solely responsible for obtaining Approval of the Product with the FDA for the HD Indication. Except as otherwise expressly set forth in this Agreement, during the term of the Supply Agreement, GTC shall be responsible for the manufacturing, testing, purification filling and finishing (to coded vials) of the Product. In the Territory, except as otherwise expressly set forth in this Agreement, during the Term, Ovation shall be responsible for regulatory guidance, adverse experience reporting, packaging, labeling, storage, marketing, sales and distribution of the Product with respect to the HD Indication (subject to Section 5.2 and Article 6 below).

(a) GTC’s Obligations for HD Indication . Except as otherwise expressly set forth in this Agreement, prior to Approval of the Product for the HD Indication, GTC shall be responsible for the conduct of all clinical activities and other clinical responsibilities regarding the Product with respect to the HD Indication Except as otherwise expressly set forth in this Agreement, GTC will be responsible for, and will use Best Efforts with respect to, all product quality and safety-related issues (subject to Section 5.2 hereof) in connection with the Product with respect to the HD Indication. The Joint Steering Committee shall monitor GTC’s performance of its obligations and progress towards achieving the goals set forth in the development plans for the HD Indication presented to and approved by the Joint Steering Committee.

 

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(b) Ovation’s Obligations for HD Indication . During the Term, Ovation will be responsible for, and will use Best Efforts with respect to, all non-clinical, marketing, sale and distribution issues in connection with the Product with respect to the HD Indication in the Territory, as well as those safety-related responsibilities set forth in the Pharmacovigilance Procedures Agreement. The Joint Steering Committee shall monitor Ovation’s performance of its obligations and progress towards achieving the goals set forth in the development plans for the HD Indication presented to and approved by the Joint Steering Committee.

5.2 Assignment and Transfer of BLA’s, BB-IND’s and other Registrations . GTC shall, at or prior to the Closing, execute and deliver such documents and instruments to Ovation for filing with the FDA in order to assign and transfer to Ovation GTC’s BLA filing or other Registration for the Product with respect to the HD Indication, and all documents, instruments, and certificates related thereto, including, without limitation, with respect to the BB-IND’s for the Product (collectively, the “ HD BLA Assignment Documents ”), and shall take all such actions reasonably requested by Ovation in order to effect such transfer and assignment; provided , however , that GTC shall hold the BLA until such time, if any, that Ovation, in its sole and absolute discretion, elects for the BLA to be assigned and transferred to Ovation. After the BLA(s) or other Registrations for the Product for the HD Indication have been transferred to Ovation hereunder, Ovation shall thereafter be responsible with respect to the Product in the Territory for (a) transfer fees, annual Product and Establishment fees required by PDUFA and other administrative fees associated with the regulatory maintenance of such Product BLA or other Registrations in the Territory and (b) adverse experience reporting with respect to the Territory.

5.3 Specific Ovation Obligations . Ovation hereby agrees (and shall use its reasonable Best Efforts to impose similar obligations on its distributors and agents within the Territory) to exercise their respective Best Efforts to import, label, pack, store, market, sell and distribute the Product in the Territory for the HD Indication (and other Indications, as applicable) after receipt of the Approval for the HD Indication (and other Indications, as applicable), which shall include:

(a) promoting the sale of the Product in the Territory, and preparation and dissemination of promotional materials and advertising in the Territory regarding the Product;

 

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(b) establishing and maintaining a well-trained sales force for the Product (together with a well-trained support staff) adequate to service all the customers of Ovation and to promote the sale of the Product in the Territory and keep the sales force knowledgeable and fully informed as to the Product;

(c) maintaining an effective distribution system for the Product in the Territory in accordance with good business practice, the Quality Agreement and the requirements of its customers;

(d) transportation and storage of the Product to preserve the quality of the Product in accordance with the Quality Agreement and all Applicable Laws and regulatory filings in the Territory;

(e) obtaining and maintaining all material licenses, approvals and permits (other than those which must be obtained by GTC as set forth in this Agreement or the Supply Agreement) in the Territory necessary for Ovation to perform its obligations under this Agreement;

(f) notifying GTC as soon as reasonably practicable upon Ovation’s becoming aware of any material occurrence of disparagement of the Product or infringement of any rights relating to the Product in the Territory;

(g) promptly evaluating any Adverse Events with respect to the Product as a result of Ovation’s performance of its obligations hereunder to determine if they are Serious Adverse Events, and report to GTC any Serious Adverse Events in accordance with the Pharmacovigilance Procedures Agreement attached hereto as Exhibit A ;

(h) establishing and maintaining suitable systems and records (including lot numbers of the Product sold and the purchasers of the Product) to enable a recall of Product in a timely, efficient and accurate manner and otherwise in accordance with Applicable Laws and regulations in the Territory;

(i) abiding by all applicable rules and regulations related to sales, marketing and reimbursement with respect to the Product in the Territory;

(j) ensuring that no Product shipped by Ovation is, at the time of shipment, adulterated or misbranded as a result of Ovation’s acts or omissions; and

(k) providing timely and reasonable assistance to GTC to enable GTC to comply with its obligations under this Agreement, including, without limitation, by responding to reasonable requests by GTC and providing GTC with reasonable information relating to the Product;

 

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(l) maintaining adequate control over the physical security of the Product, including, but not limited to, controls necessary to prevent potential distribution or sale of the Product outside of the Territory; and

(m) complying with, and causing all Affiliates, sublicensees and subcontractors of Ovation to comply with, all terms and provisions of the Quality Agreement.

5.4 Commencement of Marketing and Sales . Ovation shall, in accordance with the Launch Commercialization Plan and other actions validly taken by the Joint Steering Committee, commence the marketing, sale and distribution of the Product in the Territory as soon as commercially reasonable following the date on which Approval and, if applicable, Reimbursement Approval for the Product are granted, to the extent GTC has supplied Ovation with the Product in accordance with the terms of Article 4 hereof and the Supply Agreement.

5.5 Restrictions .

(a) Restrictions on Ovation’s Activities . Notwithstanding the above and to the extent allowed by Applicable Law within the Territory, Ovation agrees that during the Term of this Agreement it shall not sell, co-promote or market, by itself or in cooperation with a Third Party, any plasma derived or recombinant antithrombin product which is competitive to the Product; provided , however , that ************. Ovation shall refrain from seeking customers, establishing any branch and/or maintaining any distribution depot regarding the Product outside the Territory (except with the written approval of GTC or as otherwise contemplated by this Agreement or the Supply Agreement), and shall take reasonably appropriate legal measures to assure that no Product sold by Ovation or its Affiliates or sublicensees is exported to any other country outside the Territory for any purpose (except with the written approval of GTC or as otherwise contemplated by this Agreement or the Supply Agreement). GTC has neither expressly nor implicitly given its consent to Ovation to the storage (except, if applicable, as otherwise contemplated by this Agreement or the Supply Agreement), distribution, promotion, marketing and sale of the Product by Ovation outside the Territory, and GTC expressly reserves its right to enforce Trademarks and the GTC Intellectual Property Rights in the Product outside the Territory and to prevent the importation, storage (except with the written approval of GTC or as otherwise contemplated by this Agreement or the Supply Agreement), distribution, promotion, marketing and sale of the Product to any location outside the Territory, to the extent such prevention is legally possible.

(b) Restrictions on GTC’s Activities . During the Term of this Agreement, GTC shall refrain from (i) seeking customers, establishing any branch and/or maintaining any distribution depot regarding the Product for Commercial Sale within the Territory and (ii) selling, co-promoting or marketing (except for the purposes of conducting clinical trials in the HD Indication (or other Indication, as applicable) by itself or in cooperation with a Third Party, any plasma derived or any recombinant antithrombin product or combination product incorporating the Product which is competitive to the Product.

 

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5.6 Specific GTC Obligations . GTC hereby agrees to exercise its Best Efforts to do the following:

(a) ensure that all Product shipped hereunder at the time of shipment is not adulterated or misbranded as a result of acts or omissions by GTC or its Affiliates or subcontractors;

(b) obtain and maintain in its name or in the name of any of its Affiliates all material licenses, approvals and permits (other than those which must be obtained by Ovation) for the Product necessary for GTC to perform fully its obligations under this Agreement;

(c) provide Ovation, from time to time, with data, analyses, studies and other information available to GTC at any time during the Term which the Joint Steering Committee (or other Committee, as applicable) believes will assist Ovation in its brand planning and marketing activities for the Product in the Territory;

(d) promptly evaluate any Adverse Events with respect to the Product as a result of GTC’s performance of its obligations hereunder to determine if they are Serious Adverse Events, and report to Ovation any Serious Adverse Events in accordance with the Pharmacovigilance Procedures Agreement attached hereto as Exhibit A ;

(e) provide timely and reasonable assistance to Ovation to enable Ovation to comply with its obligations under this Agreement, including, without limitation, by responding to reasonable requests by Ovation and providing Ovation with information relating to the Product reasonably available to GTC;

(f) establish and maintain suitable systems and records to enable a recall of Product in a timely, efficient and accurate manner and otherwise in accordance with Applicable Laws and regulations;

(g) promptly after the Closing, provide Ovation with relevant data and information with respect to GTC’s Product BLA or other Registrations for the HD Indication and, to the extent not prohibited by the terms of the LEO Agreement, LEO’s Product registrations or marketing authorization applications outside the Territory to assist Ovation in making appropriate filings in the Territory.

(h) provide Ovation with an Approved Product for the HD Indication (and other Indications, as applicable) in the Territory; and

(i) comply with, and cause all Affiliates, sublicensees and subcontractors of GTC to comply with, all terms and provisions of the Quality Agreement.

5.7 Pharmacovigilance . At or prior to the Closing, GTC and Ovation shall enter into a Pharmacovigilance Procedures Agreement substantially in the form attached hereto as Exhibit A , which shall govern collection, investigation and reporting to the regulatory authorities and each other of Product-related adverse drug experience reports, quality reports and complaint

 

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reports post-Approval of the Product for the HD Indication, such that each of the Parties may be in compliance with all Applicable Laws. The Parties shall promptly amend or modify the standard operating procedures described in the Pharmacovigilance Procedures Agreement as required by changes in Applicable Laws. Additionally, in the event that GTC receives notice of (or otherwise becomes aware of) any adverse drug experience reports, quality reports or complaint reports related to the Product outside of the Territory (whether from LEO or otherwise), GTC shall promptly notify Ovation of such reports, if any, and provide details reasonably requested by Ovation with respect to such reports, if any.

5.8 Ovation’s Option to Manufacture . During the term of the Supply Agreement, Ovation may, upon written notice to GTC, initiate good faith negotiations with GTC for the ************ right to test, purify, fill and finish (to coded vials) the Product in the Territory. Under such terms, Ovation shall have the right to appoint or assume subcontractors to perform these duties on behalf of Ovation. ************.

5.9 Plans for Securing Raw Materials . Within ************ following the Signing Date, GTC shall provide sufficient evidence to Ovation, in Ovation’s discretion, that GTC has prepared and implemented sufficient detailed back-up plans for securing adequate supplies of raw materials to meet Ovation’s requirements for the Product pursuant to Article 4 and the Supply Agreement.

5.10 Tax Credits . To the extent Ovation funds any clinical development under this Agreement (including, without limitation, pursuant to Article 6 hereof) for any Indication, Ovation shall retain all tax attributes associated with such clinical development funding, including, without limitation, the Credit for Increasing Research Activities and the Orphan Drug Tax Credit (each as defined in Section 41 of the Internal Revenue Code of 1986, as amended). GTC agrees to retain and make readily available to Ovation all supporting documentation reasonably requested by Ovation related to the funding of such clinical development (including, without limitation, copies of invoices, work orders and project summaries).

ARTICLE 6

OTHER INDICATIONS

6.1 HR Indication .

(a) With respect to the HR Indication, the Parties hereby acknowledge that prior to the Closing, Ovation will not have obtained, audited or verified the accuracy of the data to be provided by GTC with respect to the HR Indication and cannot, therefore, determine in advance of a meeting with the FDA regarding the “HR Phase III Clinical Study Protocol” the regulatory weight, if any, that the FDA will give to GTC’s pre-clinical and clinical data in support of the HR Indication. Accordingly, promptly after GTC receives the final FDA comments or other guidance regarding the HR Indication and the “HR Phase III Clinical Study Protocol,” GTC shall deliver such FDA comments and guidance to Ovation for its review, analysis and consideration and, within ************ thereafter, Ovation shall have the right, in its sole and absolute discretion, to:

(i) elect not to proceed with the development plans for the HR Indication, in which event Ovation shall have no further obligations under this Section 6.1 and the HR Indication shall no longer be included in the Field; or

 

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(ii) elect to proceed with the development of the Product for the HR Indication under the modified clinical study protocol and/or regulatory development plans with respect to the HR Indication if, subsequent to the FDA comments and other guidance received, additional clinical development or related work is likely to be necessary for Ovation’s receipt of timely and feasible FDA Approval of the Product for the HR Indication in the Territory;

In the event that Ovation does not notify GTC of its election to proceed with the development plans for the HR Indication pursuant to Section 6.1(a)(ii) within the ************ described above, then Ovation shall be deemed to have elected not to proceed with the development plans for the HR Indication pursuant to Section 6.1(a)(i) .

(b) Subject to Section 6.1(a) , in the event that Ovation decides to proceed with the development of the HR Indication, in addition to payments, if any, to be made by Ovation to GTC pursuant to Article 4 , Article 8 and Section 6.2 hereof, Ovation will pay to GTC the following amounts in accordance with Section 8.7 hereof:

(i) Ovation shall provide funding for the clinical development of the Product for the HR Indication up to a total of ************ (in addition to the price payable for the Product for such clinical development set forth in Section 4.6(b) ), which funding shall be made in installments by Ovation to GTC, with each installment set forth on Schedule 3 hereto becoming due and payable within ************ following the occurrence of the event opposite such installment on Schedule 3 ;

(ii) within ************ after ************, Ovation shall pay to GTC the amount of ************; and

(iii) within ************ after ************, Ovation shall pay to GTC the amount of ************.

(c) GTC shall be responsible for conducting the clinical development program for the HR Indication and preparing and filing all proper regulatory submissions in connection therewith; provided, that in the event the development of the Product for the HR Indication under the modified clinical study protocol and/or regulatory development plans with respect to the HR Indication incurs costs in excess of a total of ************ (in addition to the price payable for the Product for such clinical development set forth in Section 4.6(b) ), then the Parties shall negotiate in good faith regarding each Party’s responsibilities with respect to such excess costs. Ovation shall be the holder of the BLA or other Registration for the Product for the HR Indication in the Territory, and Ovation and its Affiliates and sublicensees, if any, shall be the sole entities permitted to market, distribute and sell the Product for the HR Indication within the Territory.

 

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6.2 DIC/Sepsis Indication .

(a) With respect to the DIC/Sepsis Indication, the Parties hereby acknowledge that prior to the Effective Date, Ovation will not have obtained, audited or verified the accuracy of the data to be provided by GTC with respect to the DIC/Sepsis Indication and cannot, therefore, determine, in advance of a meeting with the FDA or the European Medicines Agency (the “ EMEA ”) regarding the “DIC/Sepsis Phase III Clinical Study Protocol” the regulatory weight, if any, that the FDA will give to GTC’s pre-clinical and clinical data in support of the DIC/Sepsis Indication. Accordingly, within ************ after all of the following have occurred: (x) GTC receives the final FDA and EMEA comments or other guidance regarding the DIC/Sepsis Indication and the “DIC/Sepsis Phase III Clinical Study Protocol,” and GTC has delivered such FDA and EMEA comments and guidance to Ovation for its review, analysis and consideration, (y) the FDA and EMEA regulatory processes are harmonized and (z) GTC, Ovation and LEO have agreed upon a plan and process for obtaining Regulatory Approval for the Product for the DIC/Sepsis Indication from the FDA and EMEA, Ovation shall have the right, in its sole and absolute discretion, to:

(i) elect not to proceed with the development plans for the DIC/Sepsis Indication, in which event Ovation shall have no further obligations under this Section 6.2 and the DIC/Sepsis Indication shall no longer be included in the Field; or

(ii) elect to proceed with the development of the Product for the DIC/Sepsis Indication under the modified clinical study protocol and/or regulatory development plans with respect to the DIC/Sepsis Indication if, subsequent to the FDA and/or EMEA guidance received, additional clinical development or related work is likely to be necessary for Ovation’s receipt of timely and feasible FDA Approval of the Product for the DIC/Sepsis Indication in the Territory.

In the event that Ovation does not notify GTC of its election to proceed with the development plans for the DIC/Sepsis Indication pursuant to Section 6.2(a)(ii) within the ************ period described above, then Ovation shall be deemed to have elected not to proceed with the development plans for the DIC/Sepsis Indication pursuant to Section 6.2(a)(i) .

(b) Subject to Section 6.2(a) , the Joint Steering Committee shall form a subcommittee that shall work collaboratively with LEO with respect to the DIC/Sepsis Indication (which subcommittee may include personnel from LEO with expertise in the commercialization, manufacturing, clinical development, medical and regulatory affairs, reimbursement, sales, marketing, intellectual property and finance of pharmaceutical and biologic products in general and, in particular, the Product with respect to the DIC/Sepsis Indication possibly becoming full or ad hoc members of the DIC/Sepsis Committee, if GTC and Ovation mutually agree). Such subcommittee, on behalf of the Parties, and in collaboration with LEO shall govern all matters with respect to the development, clinical studies and obtaining regulatory approvals for the Product for the DIC/Sepsis Indication for the Territory.

 

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