AMENDED AND RESTATED DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT

Exhibit 10.1

 

AMENDED AND RESTATED

DEVELOPMENT,

LICENSE AND SUPPLY AGREEMENT

dated as of July 31, 2006

between

ETHYPHARM, S.A.

194 Bureaux de la Colline

92213 Saint Cloud

France

and

RELIANT PHARMACEUTICALS, INC.

110 Allen Road

Liberty Corner, New Jersey 07938

United States

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

CONFIDENTIAL

 

TABLE OF CONTENTS

 

 

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Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

CONFIDENTIAL

 

 

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Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

 

CONFIDENTIAL

 

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

 

CONFIDENTIAL

 

THIS AMENDED AND RESTATED DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT , dated as of July 31, 2006, by and between ETHYPHARM S.A., a corporation organized under the laws of France, with its principal offices at 194 Bureaux de la Colline, 92213 Saint Cloud, France (together with its subsidiaries and Affiliates, collectively, “ ETHYPHARM ”), and RELIANT PHARMACEUTICALS, INC., a Delaware corporation and the successor-by-conversion to Reliant Pharmaceuticals, LLC, with its principal offices at 110 Allen Road, Liberty Corner, New Jersey 07938, United States of America (“ RELIANT ”). Capitalized terms used herein without definition shall have the meanings specified in Section 1 hereof.

WITNESSETH THAT:

WHEREAS, as of May 7, 2001, Ethypharm S.A., Ethypharm Industries S.A. (which was subsequently merged into Ethypharm S.A.) and Reliant Pharmaceuticals, LLC (which was subsequently converted into Reliant Pharmaceuticals, Inc.) entered into a Development, License and Supply Agreement, which agreement was subsequently amended, modified and supplemented pursuant to a letter agreement, dated December 18, 2002, between Ethypharm S.A. and Reliant Pharmaceuticals, LLC, and Amendment No. 1 thereto, dated as of May 24, 2005 between Ethypharm S.A. and Reliant Pharmaceuticals, Inc. (as so amended, modified and supplemented, the “ Original Agreement ”);

WHEREAS, ETHYPHARM and RELIANT are also parties a letter agreement, dated August 15, 2005 (the “ Supply Side Letter ”), relating to certain supply matters under the Original Agreement; and

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

CONFIDENTIAL

 

WHEREAS, ETHYPHARM and RELIANT desire to amend and, except for certain exhibits incorporated herein by reference to exhibits to the Original Agreement, restate the Original Agreement as set forth herein.

NOW, THEREFORE, in consideration of the agreements and covenants hereinafter set forth and intending to be legally bound hereby, the parties hereto covenant and agree as follows:

 

1.	DEFINITIONS

“ Act ” shall mean the United States Federal Food, Drug and Cosmetic Act, 21 U.S.C. §301 et seq ., and the regulations promulgated thereunder, in each case as hereafter amended from time to time, and similar legislation in other countries of the Territory.

“ Additional Manufacturing Facility ” shall have the meaning specified in Section 5.4 .

“ Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such other Person. For purposes hereof, the term “ controlling ” (including the terms “ controlled by ” and “ under common control with ”), as used with respect to any Person, will mean the direct or indirect ability or power to direct or cause the direction of management policies of such Person or otherwise direct the affairs of such Person, whether through ownership of at least fifty percent (50%) of the voting securities of such Person, by contract or otherwise. In addition and not in limitation of the foregoing, the following entities shall be deemed Affiliates of RELIANT: (i) PharmBay Investors, LLC; (ii) Bay City Capital Fund II, L.P. and Bay City Capital Fund III, L.P.; and (iii) any of the lineal descendants of Nicholas J. Pritzker, deceased, trusts primarily for the benefit of such lineal descendants, entities controlled by such lineal descendants and/or trust for their benefit.

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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CONFIDENTIAL

 

“ API ” or “ Active Pharmaceutical Ingredient ” means the raw non-micronized fenofibrate used in the Product manufactured by a party other than ETHYPHARM or any of its Affiliates.

“ Applicable Laws ” means all laws, statutes, codes, treaties, ordinances, judgments, decrees, directives, injunctions, orders of any court, arbitrator or Governmental Authority, rules, regulations, interpretations, authorizations and Applicable Permits of any Governmental Authority applicable to any of the parties hereto, the transactions contemplated hereby and/or the Product.

“ Applicable Permits ” means any waiver, exemption, variance, permit, license, authorization, consent, certification, registration or similar approval (including, without limitation, any NDA), including, without limitation, product registrations by or of any Governmental Authority required to be obtained or maintained under Applicable Laws in connection with the formulation, development, registration, manufacture, packaging, labeling, import, export, shipment, receipt, storage, use, pricing or sale of the Product, regardless of the formulation or dosage form thereof, and any ingredient thereof.

“ Audit ” shall have the meaning specified in Section 7.7 .

“ Bulk Product Form ” shall mean the Product in such form which is ready for incorporation by or on behalf of RELIANT into Finished Dosage Form or such other form as may be sold commercially by RELIANT in the Territory.

“ Business Day ” means any day except Saturday, Sunday and any day which shall be a federal legal holiday in the United States or a day on which banking institutions in the State of New Jersey or Paris, France are authorized or required by law or other government action to close.

“ Canadian/Mexican Product ” shall have the meaning specified in Section 14.3 .

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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CONFIDENTIAL

 

“ cGMP ” shall mean current Good Manufacturing Practices as in effect under the Act from time to time and similar regulations in other countries under Applicable Laws.

“ CMC ” shall mean the Chemistry and Manufacturing Controls section of the IND or NDA, as applicable, as then in effect.

“ Combination Product ” shall have the meaning specified in Section 6.10.

“ Competing Dosage Form ” shall mean fenofibrate monotherapy product marketed by or on behalf of RELIANT other than the Product in a formulation and dosage form that is substantially similar or identical to the Product. For the purposes of this Agreement, no Combination Product shall be considered a Competing Dosage Form.

“ Confidential Information ” means, with respect to any Person (including, without limitation, the parties hereto), all proprietary or confidential information of such Person (including such Person’s Affiliates and subsidiaries), including, without limitation, any non-public Intellectual Property, Know-How, financial information, procurement requirements, purchasing, manufacturing, customer or supplier information, business forecasts and plans, financing information, detailing, sales and merchandising, and marketing plans and information, pricing, and accounting policies and procedures of or related to such Person; provided, however , that Confidential Information shall not include and information that (a) was or becomes generally available to the public other than as a result of an unauthorized disclosure by a party hereto or any of such party’s subsidiaries, Affiliates, employees, agents or representatives; (b) was or becomes available to a party hereto on a non-confidential basis from a source other than (in the case of future information) any other party hereto (or any of such party’s subsidiaries, Affiliates, employees, agents or representatives), provided that such source was not known be bound by any agreement to keep such information confidential or otherwise prohibited from

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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CONFIDENTIAL

 

transmitting the information by a contractual, legal or fiduciary obligation; or (c) is independently developed by any party hereto without the use of or reference to the Confidential Information of the other party hereto or any of such other party’s subsidiaries or Affiliates.

“ Contract Manufacturing Agreement ” shall have the meaning specified in Section 5.5 .

“ Delivery Forecast ” shall have the meaning specified in Section 7.4 .

“ DMF ” shall mean the Drug Master File (together with all subsequent submissions, supplements and amendments thereto, and any materials, documents or information referred to or relied upon thereby) in the United States and any similar files in other countries of the Territory that relate to the Product.

“ ETHYPHARM ” shall have the meaning specified in the Preamble.

“ ETHYPHARM Indemnified Claims ” shall have the meaning specified in Section 6.4 .

“ ETHYPHARM Indemnified Parties ” shall have the meaning specified in Section 13.2 .

“ ETHYPHARM Infringement Indemnitees ” shall have the meaning specified in Section 6.5 .

“ ETHYPHARM Infringement Indemnity Cap ” shall have the meaning specified in Section 6.6A(a) .

“ Event of Default ” shall have the meaning specified in Section 12.1 .

“ Exception Notice ” shall have the meaning specified in Section 7.6 .

“ E-US Indemnified Claims ” shall have the meaning specified in Section 6.6A(a) .

“ FDA ” shall mean the Food and Drug Administration in the United States and similar Governmental Authorities in other countries within the Territory, including any successor agencies performing comparable functions.

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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CONFIDENTIAL

 

“ Finished Dosage Form ” means the Product in the form of single dose capsules containing the formulation and dosage of API as developed by ETHYPHARM and such quantity and type of excipients specified in the Specifications, which shall be labeled and packaged (in high density polyethylene (HDPE) bottles and/or blister packs as specified by RELIANT) such that it is ready for immediate marketing, sale or other distribution by RELIANT.

“ Governmental Authority ” means any international, national, domestic, foreign, regional, local or other governmental or regulatory body, agency, authority, court or other authorized Person, including, without limitation, all such Persons having jurisdiction over the formulation, development, registration, manufacture, packaging, labeling, import, export, shipment, storage, use, pricing or sale of the Product, regardless of the formulation or dosage form thereof, or health and safety matters generally.

“ IND ” shall mean an Investigational New Drug Application under the Act (together with all subsequent submissions, supplements and amendments thereto, and any materials, documents or information referred to or relied upon thereby) seeking authorization to commence clinical trials of the Product in humans, and similar applications or filings in the other countries within the Territory.

“ Initial Term ” shall have the meaning specified in Section 11.1 .

“ Intellectual Property ” shall mean all patents (including, without limitation, the Patents), copyrights, trademarks, service marks, service names, trade names, internet domain names, e-mail addresses, applications or registrations for any of the foregoing, or extensions, renewals, continuations or re-issues thereof, or amendments or modifications thereto, brandmarks, brand names, trade dress, labels, logos, know-how (including, without limitation, the Know-How), show-how, technical and non-technical information, trade secrets, formulae, techniques,

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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sketches, drawings, models, inventions, designs, specifications, processes, apparatus, equipment, databases, research, experimental work, development, pharmacology and clinical data, software programs and applications, software source documents, third-party licenses, and any similar type of proprietary intellectual property right vesting in the owner and/or licensee thereof pursuant to the applicable laws or regulations of any relevant jurisdiction or under any applicable license or contract, whether now existing or hereafter created, together with all modifications, enhancements and improvements thereto.

“ Know-How ” means any and all proprietary methods, devices, technology, trade secrets, inventions, compositions, designs, formulae, know-how, show-how, technical and training manuals and documentation and other information, including, without limitation, processes and analytical methodologies used in development, testing, analysis and manufacture, and medical, clinical and toxicological testing as well as other scientific data of ETHYPHARM, which is related to or used in connection with the Product or any ingredient thereof, and/or the formulation, development, registration, manufacture, packaging, labeling, import, export, receipt, shipment, storage, use, pricing or sale thereof, whether now known or hereafter developed.

“ Launch Date ” shall mean, with respect to each country in the Territory, the first date RELIANT [*] in such country. The parties agree that for all purposes under this Agreement the Launch Date for the United States occurred on February 2, 2005.

“ LET Notice ” shall have the meaning specified in Section 3.2 .

“ License ” shall have the meaning specified in Section 3.1 .

“ License Exclusion Transaction ” shall have the meaning specified in Section 3.1 .

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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CONFIDENTIAL

 

“ NDA ” shall mean any New Drug Application under the Act (together with all subsequent submissions, supplements and amendments thereto, and any materials, documents or information referred to or relied upon thereby) seeking approval to market, sell or otherwise distribute the Product, in any formulation or dosage form, in the United States, and similar applications or filings in the countries within the Territory.

“ Net Royalties ” means royalties payable to ETHYPHARM pursuant to the terms of this Agreement, net of any Taxes required to be withheld therefrom.

“ Net Sales ” means the aggregate amounts invoiced by RELIANT (including, as applicable, RELIANT’s assignees and sublicensees hereunder) for sales of the Product produced using ETHYPHARM Intellectual Property to independent and unrelated third parties in the Territory, less any and all (a) trade, quantity and cash discounts; (b) commissions, discounts, refunds, rebates, chargebacks, retroactive price adjustments and any other allowances which effectively reduce the net selling price; (c) returns, bad debts and uncollectible accounts; (d) Taxes collected, charged or otherwise required to be paid by RELIANT (including, as applicable, RELIANT’s assignees and sublicensees hereunder) in respect thereof; and (e) insurance, freight, warehousing and other transportation and storage costs related to shipment of the Product.

“ Nonparticipating Party ” shall have the meaning specified in Section 6.8 .

“ Original Agreement ” shall have the meaning specified in the Recitals.

“ Patents ” shall mean any issued patents and patent applications (including, without limitation, any applications or registrations therefor, extensions, renewals, continuations or re-issues thereof, or amendments or modifications thereto) that are currently owned or hereafter acquired or applied for by ETHYPHARM, which would be infringed by the formulation, development, registration, manufacture, packaging, labeling, import, export, receipt, shipment,

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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CONFIDENTIAL

 

storage, use, pricing or sale of the Product or any ingredient thereof in the Territory, but for the rights granted to RELIANT by ETHYPHARM under this Agreement, including but not limited to those patents and patent applications set forth on the Schedule of Patents attached hereto (as may such schedule shall be amended from time to time).

“ Person ” means any individual, partnership, association, joint venture, corporation, limited liability company, trust or Governmental Authority or other entity.

“ Product ” means a product composed of or containing micronized fenofibrate, in any dosage form, including encapsulated or bulk beads, granules or similar presentations, including, without limitation, the fenofibrate product developed by ETHYPHARM for RELIANT pursuant to this Agreement and the Product Development Program.

“ Product Development Program ” shall have the meaning specified in Section 2.1 .

“ Recall ” shall have the meaning specified in Section 7.9 .

“ Regulatory Applications ” shall have the meaning specified in Section 2.4 .

“ RELIANT ” shall have the meaning specified in the Preamble.

“ RELIANT Clinical Data ” shall have the meaning specified in Section 2.2 .

“ RELIANT Indemnified Claims ” shall have the meaning specified in Section 6.5 .

“ RELIANT Indemnified Parties ” shall have the meaning specified in Section 13.1 .

“ RELIANT Infringement Indemnitees ” shall have the meaning specified in Section 6.4 .

“ Specifications ” means the pharmaceutical formulation, manufacture, delivery, packaging, labeling, import, export, storage, receipt and shipment specifications for the Product (including Product in Bulk Product Form and Finished Dosage Form) and any excipients set forth on Exhibit A attached to the Original Agreement (as such Exhibit A may have been or may hereafter be amended or changed from time to time upon the agreement of the parties).

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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CONFIDENTIAL

 

“ Supply Failure Event ” shall mean a willful breach of this Agreement by ETHYPHARM that results in the failure of ETHYPHARM to meet its supply obligations for the Product hereunder, or an injunction or similar action or order that prohibits or prevents ETHYPHARM from meeting its supply obligations hereunder in any material respect, which failure is not cured within thirty (30) days following written notice from RELIANT thereof (including, but not limited to, any willful failure or refusal to supply as a result of or following a change of control of ETHYPHARM).

“ Supply Side Letter ” shall have the meaning specified in the Recitals.

“ Tax(es) ” means, with respect to any Person, all federal, state, local, county, foreign and other taxes, assessments or other government charges, including, without limitation, income, estimated income, gross receipts, profits, business, license, occupation, franchise, capital stock, real or personal property, sales use, transfer, value added, employment or unemployment, social security, disability, alternative or add-on minimum, customs, duty, excise, stamp, environmental or withholding taxes, including interest, penalties and additions in connection therewith for which such Person may be liable (including any such tax related to any other Person for which such Person is liable, by contract, as transferee or successor, by law, treaty or otherwise).

“ Term ” shall have the meaning specified in Section 11.1 .

“ Territory ” means: (a) the United States of America, its territories and possessions including without limitation, Puerto Rico; and (b) the Caribbean (including, without limitation, The Bahamas).

“ Third Party Infringement ” shall have the meaning specified in Section 6.8 .

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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2.	PRODUCT DEVELOPMENT PROGRAM; CLINICAL DATA; PRODUCT REGISTRATION

2.1 Product Development Program; Dosages . Since the date of the Original Agreement, ETHYPHARM and RELIANT have developed and, as applicable, during the remaining Term of this Agreement shall develop, the Product consistent with the terms of this Agreement in accordance with product development program set forth on Exhibit B attached to the Original Agreement (the “ Product Development Program ”), which Exhibit B specifies the proposed development timetable and each party’s respective responsibilities related to the development of the Product for sale in the Territory, including, without limitation, the preparation and filing of an NDA and the conduct of clinical trials related to the Product. As part of the Product Development Program, RELIANT established a highest dosage of [*] mg of API per capsule, however, RELIANT, at its option, may develop in collaboration with ETHYPHARM and conduct clinical trials in respect of other formulations and/or dosage forms of the Product. ETHYPHARM shall develop the formulations and dosage forms of the Product and manufacture the Product in such formulations and dosage forms as shall be requested by RELIANT or otherwise required to comply with the Act and any applicable NDA and in compliance with the Product Development Program.

2.2 Ownership of Clinical Data . Subject to the provisions of Section 2.3 , all preclinical, clinical, technical and other information relative to the clinical program, data, analyses, studies or similar information (including, without limitation, all Intellectual Property) generated or developed by or on behalf of the parties after the date hereof as a result of or in connection with the Product Development Program and the clinical trials conducted by

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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[*] hereunder and thereunder (collectively, the “ RELIANT Clinical Data ”), shall be owned exclusively by [*].

2.3 ETHYPHARM’s Right to RELIANT Clinical Data . The parties agree, that following the issuance of an NDA for the purpose of licensing the Product and subject to the terms and conditions of this Agreement, ETHYPHARM shall have access to the RELIANT Clinical Data for use outside the Territory on the basis of terms and conditions to be negotiated in good faith between the parties; provided, however, that the provisions of this Agreement shall not apply to the use by ETHYPHARM of the RELIANT Clinical Data in Canada and Mexico pursuant to Section 14 . For the avoidance of doubt, the parties acknowledge and agree that, except as provided herein, ETHYPHARM shall have no rights in or to any RELIANT Clinical Data until the terms and conditions of access are agreed or in the event that that the NDA is revoked, cancelled, withdrawn or otherwise impaired as a result of any act or omission by or behalf of ETHYPHARM of the types described in Section 4.4 of the Original Agreement.

2.4 Regulatory Applications and Related Filings . All applications, submissions and regulatory filings (together with all documentation, correspondence and other supporting materials related thereto, collectively, the “ Regulatory Applications ”) shall be filed and submitted in RELIANT’s name and shall be owned exclusively by RELIANT, and all Applicable Permits issued pursuant thereto shall be in the name of and owned exclusively by RELIANT. RELIANT shall be responsible for obtaining any and all necessary regulatory approvals from any Governmental Authority under any Applicable Law or Applicable Permit as a result of any changes to the Specifications requested by RELIANT and for reporting any such modifications to the Specifications to the applicable Governmental Authority as appropriate.

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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2.5 ETHYPHARM’s Development Responsibilities . ETHYPHARM has heretofore delivered (and, as applicable, shall prepare and deliver, and shall cause each applicable supplier or other third party (other than RELIANT) involved with the manufacture and packaging of the Product from time to time hereafter to prepare and deliver), to RELIANT and, as applicable, file or cause to be filed with the appropriate Governmental Authority: (a) the DMF, which shall be filed with FDA for the manufacture of the Product; and (b) the CMC section of the IND and the NDA, all of which shall be accurate and complete, and in form and substance reasonably satisfactory to RELIANT and suitable for inclusion in the applicable filing. ETHYPHARM shall, at its own cost, cooperate with and assist RELIANT in the preparation, filing and prosecution of the Regulatory Applications, and shall prepare and deliver such other documents, and take such other actions, as may be necessary or appropriate to apply for, prosecute or obtain any Applicable Permits. All materials to be prepared by or on behalf of ETHYPHARM hereunder shall be prepared and delivered and, as applicable, filed, in timely manner in accordance with timetable established by the parties hereunder. ETHYPHARM shall provide RELIANT with sufficient opportunity to review and comment upon all Regulatory Applications or portions thereof prepared by or on behalf of ETHYPHARM prior to their submission to any Governmental Authority. In the event that RELIANT requests any modifications to the Regulatory Applications or portions thereof required to be prepared by ETHYPHARM hereunder, the parties shall discuss such modifications in good faith; provided, however , that the party in whose name the Regulatory Application is being made shall retain the ultimate right to determine the contents thereof. In connection with this Agreement, ETHYPHARM shall also provide RELIANT with full access to all of its information and records, including, without limitation, its Intellectual Property and Confidential Information, related to the Product and its

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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formulation, manufacture and packaging (including, without limitation, formulation, development, pharmacology and clinical data regarding the Product, any ingredient thereof (including fenofibrate)) in order that RELIANT may obtain and maintain the Applicable Permits contemplated by this Agreement and comply with Applicable Law.

2.6 Compliance of Specifications . The Specifications shall at all times be in compliance with the requirements of the Act and, in particular, an NDA applicable to the Product, such that RELIANT shall be entitled to market, sell and distribute the Product in the Territory, and the parties agree to make any changes to the Specifications as may be required to ensure such compliance.

 

3.	GRANT OF LICENSE

3.1 Grant of License; License Exclusion . Subject to the terms set forth herein and in consideration for the payments set forth in Sections 4 , 8 and 9 hereof, ETHYPHARM hereby grants to RELIANT the exclusive (even as to ETHYPHARM) royalty-bearing license to all of ETHYPHARM’s Intellectual Property related to the Product to make or have made (except to make or have made the Product in Bulk Product Form), package, develop, import, export, within the Territory, use, distribute, promote, market, sell and otherwise fully exploit the Product, in whatever formulation or dosage form, within the Territory (the “ License ”); provided, however , that the License shall not prevent ETHYPHARM from developing, manufacturing, licensing, promoting and marketing other products containing fenofibrate as the main active pharmaceutical ingredient in the form of microgranules, directly or through third parties, provided that fenofibrate is combined with another active pharmaceutical ingredient which does not belong to the statin family and for which there is no valid patent in the Territory (a “ License Exclusion Transaction ”).

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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3.2 RELIANT Right of First Refusal Regarding License Exclusion Transactions . In the event that ETHYPHARM desires to enter into or consummate a License Exclusion Transaction, ETHYPHARM agrees that it shall first provide RELIANT with at least [*] days prior written notice of such proposed License Exclusion Transaction specifying the terms and conditions of the proposed product, product specifications, manufacturing specifications, product development program, license and royalty arrangement and marketing strategy related thereto (each, a “ LET Notice ”). Following delivery of any LET Notice, ETHYPHARM shall provide RELIANT with such information as RELIANT may reasonably request in order to allow RELIANT to evaluate the proposed License Exclusion Transaction described therein. Within [*] days following its receipt of the LET Notice, RELIANT shall have the right, but not the obligation, upon delivery of written notice to ETHYPHARM to agree to enter into the transaction described by the LET Notice upon the terms and conditions stated therein. In the event that RELIANT notifies ETHYPHARM in writing that it does not wish to exercise its rights under this Section 3.2 or fails to respond to such LET Notice within such [*] day period, ETHYPHARM shall be free to enter into the License Exclusion Transaction described therein with a third party; provided, however , that ETHYPHARM may not offer to such third party any terms or conditions more favorable to such third party than those described in the LET Notice without first re-offering such opportunity to RELIANT pursuant to this Section 3.2 ; provided, further , that in the event ETHYPHARM shall not have entered into a binding agreement with such third party within [*] days following the date of the LET Notice, ETHYPHARM shall not enter into or consummate such License Exclusion Transaction without re-offering such opportunity to RELIANT pursuant to this Section 3.2 .

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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3.3 Sublicenses . RELIANT shall have the right to sublicense any and all of the rights granted pursuant to this Agreement, in whole or in part, to one or more Persons; provided, however , that RELIANT shall promptly (a) advise ETHYPHARM of the identity of any such sublicensee; and (b) provide ETHYPHARM with a copy of the sublicense agreement to establish that such sublicensee has been informed of the obligations under this Agreement. Notwithstanding the foregoing, RELIANT shall not be required to disclose to ETHYPHARM the amount or structure of any royalty or other payments due to RELIANT from any such sublicensees. RELIANT agrees that it shall require any sublicensees of any of its rights hereunder to preserve the confidentiality of any ETHYPHARM Intellectual Property or Confidential Information to the extent RELIANT is required to do so under this Agreement.

3.4 Minimum Annual Sales Requirement . In order to maintain exclusivity of the License granted in Section 3.1 , RELIANT shall be required to reach minimum annual sales of capsules containing Product (“ Minimum Annual Sales ”) in the United States as set forth immediately below for the year ending on the anniversary of the Launch Date in the United States (subject to adjustment for introduction of generic competing products in the Territory as described below); provided, however, that if RELIANT is unable to reach its Minimum Annual Sales as a result of failure by ETHYPHARM to supply Product, then ETHYPHARM shall not have the right to convert the license to a non-exclusive license and RELIANT shall not be obligated to make any Make-Whole Payment (as defined below) hereunder:

 

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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No Minimum Annual Sales requirements shall apply after February 1, 2012 or in respect of any sales of the Product by RELIANT inside the Territory, but outside of the United States. Should RELIANT fail to reach the applicable Minimum Annual Sales target during any applicable twelve-month period, ETHYPHARM, as its sole remedy hereunder, may, upon at least sixty (60) days prior written notice to RELIANT, convert the exclusive license granted to RELIANT pursuant to Section 3.1 to a non-exclusive license in the Territory; provided, however , that RELIANT shall have the option, but not the obligation, to make an additional payment (the “ Make-Whole Payment ”), in addition to any other payments due to ETHYPHARM under Section 9.1 in respect of sales of the Product for said twelve-month period, such that ETHYPHARM receives an aggregate amount for sales of Product for said twelve-month period that is not less than the amount ETHYPHARM would have received under this Agreement had RELIANT achieved the applicable Minimum Annual Sales target for said twelve-month period, in which case ETHYPHARM shall have no right to convert the License to a non-exclusive license. For the purpose of calculating the amount of the Make-Whole Payment, RELIANT shall use the [*] per capsule for said applicable twelve-month period. For the avoidance of doubt, the parties agree and acknowledge that sales of the Product by RELIANT’s sublicensees shall be included for the purposes of determining whether the applicable Minimum Annual Sales target has been satisfied. The parties agree that in the event that any generic products that compete with the Product are introduced in the Territory during the period while any Minimum Annual Sales targets remain in effect, the applicable Minimum Annual Sales targets shall be reduced by [*] percent ([*]%) in the year of such introduction (pro rated for generic introductions in the middle

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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of the applicable year), by [*] percent ([*]%) in the following year, and by [*] percent ([*]%) for each remaining year thereafter. Notwithstanding any provision herein to the contrary, in the event that RELIANT shall not have transferred or sublicenced its rights under this Agreement on or prior to December 31, 2006, RELIANT and ETHYPHARM shall negotiate in good faith a mutually agreeable modification or replacement of this Section 3.4 and/or any terms of this Agreement, as applicable (it being agreed that this provision shall apply solely to RELIANT and not any assignee or sublicensee of RELIANT hereunder).

3.5 Cooperation Regarding Fenofibrate Product Development . During the term of this Agreement, ETHYPHARM shall provide RELIANT with periodic updates (not less frequently than semi-annually) regarding its products and product development plans relating to or involving fenofibrate. At RELIANT’s request, the parties shall discuss appropriate access to and/or other rights for RELIANT in respect of such other products and/or product development plans. Nothing contained in this Section 3.5 is intended to supersede or limit any other rights obligations of the parties under other provisions of this Agreement.

3.6 Competing Dosage Forms . RELIANT may not, within [*] years of the first Launch Date in the Territory, develop, have developed, promote, distribute or market any Competing Dosage Form within the Territory, without the prior written consent of ETHYPHARM; provided, however , that the foregoing restriction shall not prevent RELIANT from developing, having developed, promoting, distributing or marketing any Competing Dosage Form within the Territory provided that RELIANT pays ETHYPHARM royalties in respect of such Competing Dosage Form in accordance with Section 9 of this Agreement; provided, further , that should RELIANT decide to develop or have developed any Competing Dosage Form within the Territory, RELIANT shall send ETHYPHARM a written notification of such decision in order to

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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enable ETHYPHARM to propose within a maximum period of sixty (60) days from receipt of the written notification a similar or comparable product to the Competing Dosage Form; provided, further , RELIANT agrees to give ETHYPHARM at least ten (10) days prior written notice of RELIANT’s decision to promote, distribute or market any existing any Competing Dosage Form within the Territory. For the avoidance of doubt, the parties agree and acknowledge that the restrictions in this Section 3.6 shall not apply to any Combination Product.

 

4.	COMPENSATION – LICENSE FEES AND MILESTONE PAYMENTS

4.1 License Fees . In consideration of the services by ETHYPHARM to research and develop the Product, pursuant to the License and other rights granted hereunder, RELIANT has previously paid to ETHYPHARM license fees in the aggregate amount of US$[*]. In addition, RELIANT shall pay an additional US$[*] license fee upon the earlier to occur of (i) such time as cumulative Net Sales (measured from the Launch Date in the United States) exceed US$[*] (in which case such amount shall be payable at such time as the next payment is due to ETHYPHARM in respect of Net Sales pursuant to Section 9.1 hereof), and (ii) solely in the event that RELIANT sublicenses or makes an assignment of its rights hereunder, December 31, 2006.

4.2 Milestone Payments . In addition to the license fees set forth above, RELIANT has previously paid to ETHYPHARM milestone payments in the an aggregate amount of US$[*].

4.3 Method of Payment . All payments required to be paid under this Agreement by RELIANT to ETHYPHARM, or ETHYPHARM to RELIANT, shall be paid in United States dollars by wire transfer of immediately available funds to a dollar-denominated account located in the United States pursuant to written payment instructions, which shall be delivered to by the

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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party entitled to such payment at least five (5) Business Days prior to the date such payment is due. Such payment shall be deemed to have been made upon the issuance of a federal reference number for the wire transfer of said funds.

 

5.	DELIVERY OF PRODUCT FOR CLINICAL AND REGULATORY PURPOSES; PRODUCT LAUNCH; ADDITIONAL MANUFACTURING FACILITY

5.1 Clinical Formulations and Placebos . ETHYPHARM shall manufacture, deliver and sell to RELIANT such quantities of validated clinical formulations of the Product, in such formulations and dosage forms as requested by RELIANT, together with matching quantities of placebos, to enable RELIANT to conduct all clinical trials to be conducted pursuant to the Product Development Program established hereunder. All Product, regardless of formulation or dosage form, and placebos for use by RELIANT in clinical trials shall be: (a) sold to RELIANT at ETHYPHARM’S actual cost as determined in accordance with Exhibit D attached to the Original Agreement; and (b) delivered by ETHYPHARM within thirty (30) days of ETHYPHARM’s receipt of RELIANT’s order therefor.

5.2 Registration Batches . ETHYPHARM shall manufacture, deliver and sell to RELIANT such quantities of full commercial scale batches of the Product, in such formulations and dosage forms as requested by RELIANT, determined by RELIANT to be necessary to satisfy requirements under Applicable Law or Applicable Permit (including, without limitation, in connection with the filing and approval of an NDA with the FDA) to market the Product in the United States. All Product, in whatever formulation, for use by RELIANT to satisfy such requirements shall be: (a) sold to RELIANT at ETHYPHARM’S actual cost as determined in accordance with Exhibit D attached to the Original Agreement; and (b) delivered by ETHYPHARM within thirty (30) days of ETHYPHARM’s receipt of RELIANT’s order therefor.

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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5.3 Promotion of the Product . For a period of three (3) years following the first Launch Date in the United States, RELIANT shall use its commercially reasonable efforts to promote the Product utilizing a sales force consisting of at least one hundred fifty (150) sales representatives.

5.4 Additional Manufacturing Facility . On or prior to December 31, 2006, ETHYPHARM shall establish, validate and certify an additional manufacturing facility at Châteauneuf-en-Thymerais, France for the Product, which facility may be owned by ETHYPHARM or a third party contract manufacturer (such facility, the “ Additional Manufacturing Facility ”). ETHYPHARM shall certify in writing to RELIANT that the Additional Manufacturing Facility (and, as applicable, any third party contract manufacturer): (i) has the requisite capacity to satisfy ETHYPHARM’s production, packaging and delivery obligations, and to meet RELIANT’s order requirements, hereunder with respect to the Product in accordance with the Specifications and the terms and conditions of this Agreement; (ii) complies and will comply with all Applicable Laws and holds all Applicable Permits necessary for the manufacture and packaging of the Product in compliance with cGMP; and (iii) has and will have the irrevocable right to use all Intellectual Property and Confidential Information of ETHYPHARM necessary to manufacture and package the Product in any formulation or dosage form required hereunder, in accordance with the Specifications and the terms and conditions of this Agreement.

5.4A Validation Batches . In addition to complying with any other requirements or specifications hereunder, any validation batches of the Product produced at the Additional

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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Manufacturing Facility shall be finished and delivered to RELIANT in saleable condition for sale to the trade or as samples, as shall be directed by RELIANT. RELIANT shall pay for such validation batches in accordance with Section 8.1(a) .

5.4B Suspension of Certain Activities Under Supply Side Letter . Provided that ETHYPHARM is in compliance with its supply-related obligations under this Agreement, RELIANT agrees that it shall not pursue commercialization of any Product manufactured pursuant to the terms of the Supply Side Letter.

5.5 RELIANT Third-Party Beneficiary Rights . In the event that ETHYPHARM contracts with any third party (other than RELIANT or any of RELIANT’s Affiliates) to establish the Additional Manufacturing Facility and to provide the manufacturing services required under Section 5.4 hereof (such contract, a “ Contract Manufacturing Agreement ”): (a) ETHYPHARM shall deliver to RELIANT a true and complete copy of such Contract Manufacturing Agreement promptly following the execution thereof; (b) such Contract Manufacturing Agreement shall explicitly provide that RELIANT is a third party beneficiary thereof with the right to enforce the provisions thereof for its benefit; and (c) such Contract Manufacturing Agreement shall contain such terms and conditions that are consistent with those contained herein (including, without limitation, the obligation to manufacture, package, sell and deliver Product to RELIANT, and the right of RELIANT to conduct an audit an inspection of the Additional Manufacturing Facility pursuant to Section 7.10 hereof). The parties agree and acknowledge that the foregoing requirements are necessary in order that RELIANT may be assured that it will continue to be supplied with the Product in accordance with the terms and conditions of this Agreement, and meet its contractual obligations to various third parties. Notwithstanding the foregoing, RELIANT shall not be required to make any payment or render

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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any performance hereunder to any Person other than ETHYPHARM, except as RELIANT may agree in writing.

5.6 RELIANT Step-In Rights Following Supply Failure Event .

(a) Upon the occurrence of a Supply Failure Event, in the event that RELIANT does not exercise its rights under Section 12 , RELIANT shall have the option to exercise step-in rights and ETHYPHARM shall cooperate with RELIANT in the exercise of such rights. Such step-in rights shall include, without limitation, and to the extent allowable under applicable law and regulation, ETHYPHARM’s grant to RELIANT of such additional license rights, rights of access, rights of observation and rights of management, direction and control as may be necessary or desirable to enable and permit RELIANT (or RELIANT’s designee) to attempt to cure or mitigate such Supply Failure Event, to the extent the same is subject to cure or mitigation, and/or otherwise to ensure that supply of the Product shall continue to be available to RELIANT under this Agreement. If RELIANT uses a designee, RELIANT shall be responsible for such designee’s compliance with the provisions of Section 14.2 (Confidentiality) of this Agreement. The foregoing rights shall apply with respect to any facility at which the Product (and/or API or any excipient used therein) is manufactured, tested, labeled, encapsulated, stored or otherwise handled, in each case to the extent necessary for RELIANT to preserve and protect supply of the Product as contemplated by this Agreement. In the event that ETHYPHARM cures the Supply Failure Event subsequent to RELIANT’s exercise of its step-in rights, both ETHYPHARM and RELIANT shall reasonably cooperate to effect a termination of RELIANT’s step-in rights with respect to such Supply Failure Event in such a manner and at such times so as to minimize the liabilities as a result of such termination. For the avoidance of doubt, RELIANT’s exercise of its step-in rights under this Section 5.6 shall not waive or restrict any

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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other rights or remedies of the parties under this Agreement, including, without limitation, RELIANT’s right to terminate this Agreement.

(b) In furtherance and not in limitation of the foregoing, in addition to rights provided above, the parties hereby agree that in the event of a Supply Failure Event, RELIANT shall have the right, without terminating this Agreement, to cause ETHYPHARM to effect the technology transfer as contemplated under Section 12.3 .

(c) In the event that ETHYPHARM shall cure, or cause to be cured, any Supply Failure Event prior to the exercise by RELIANT of its rights under this Section 5.6 , RELIANT shall cease to have any further rights hereunder in respect of such Supply Failure Event (but shall have rights hereunder with respect to any future Supply Failure Event).

5.7 Other RELIANT Rights Regarding Supply .

(a) Notwithstanding any provisions herein to the contrary, RELIANT shall, upon reasonable notice to ETHYPHARM, have the right to visit any manufacturing facility at which the Product is manufactured (or to be manufactured), and to observe the manufacture of the Product(s), not more than twice per year (except as otherwise permitted under Section 5.7(b) ).

(b) In the event of any event, condition or other occurrence that could reasonably result in the inability of ETHYPHARM to meet its supply obligations hereunder, ETHYPHARM and RELIANT shall consult and cooperate to address such matter and to ensure ETHYPHARM’s ability to continue to meet such supply obligations.

(c) In the event of a shortage of supply of the Product, API and/or any other materials necessary for the manufacture and supply of the Product, ETHYPHARM shall allocate to RELIANT supply of the Product pro rata in accordance with RELIANT’s firm orders for the

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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Product so that RELIANT is treated at least as favorably as any other affected ETHYPHARM customers for such formulation, API and/or any such other materials, as applicable.

(d) Prior to July 31, 2006, ETHYPHARM shall take such actions as are necessary to appoint RELIANT as its sole and exclusive agent for United States customs purposes relating to matters under this Agreement.

 

6.	OWNERSHIP AND USE OF INTELLECTUAL PROPERTY; DEVELOPMENT OF COMBINATION PRODUCT

6.1 Ownership . Subject to the terms hereof, including, without limitation, the License and other rights granted by ETHYPHARM to RELIANT hereunder, all existing and future Intellectual Property of the parties with respect to the Product shall be owned as follows:

(a) other than as provided below or elsewhere in this Agreement, all Intellectual Property owned by any party hereto on the date hereof shall continue to be owned by such party;

(b) any Intellectual Property developed, created or discovered solely by ETHYPHARM and subject to the license granted hereunder during the Term of this Agreement relating to the Product and its manufacturing shall be owned by ETHYPHARM; and

(c) any Intellectual Property developed, created or discovered by or on behalf of RELIANT during the Term of this Agreement relating to any of the clinical development and methods of use of the Product, in any formulation or dosage form, and any Intellectual Property that is otherwise developed by RELIANT shall be owned by RELIANT.

Each party agrees to execute and deliver to the party that owns or is entitled to own any Intellectual Property hereunder, such instruments of transfer and assignment as may be requested by the owner party to vest fully in such party the ownership rights in said Intellectual Property;

 

[*] =

Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

 

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provided, however , that each party hereto shall be entitled, during the Term of this Agreement, to use and practice any and all Intellectual Property owned by the other party of the types described in foregoing clauses (a), (b) and (c), without additional payment or royalty, for purposes not inconsistent with this Agreement and in accordance with the terms and conditions hereof. In any event, RELIANT may not use ETHYPHARM’s Intellectual Property to apply for a patent outside the Territory. Each party shall be free to use and practice its own Intellectual Property in a