EXHIBIT 10.2
***Text Omitted and Filed
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Commission. Confidential
Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and
240.24b-2
COST ALLOCATION
AGREEMENT
This COST ALLOCATION
AGREEMENT (this “Agreement” ) is
entered into and effective as of May 4, 2009 by and between
ELI LILLY AND COMPANY , a corporation organized and existing
under the laws of the State of Indiana, whose principal place of
business is Lilly Corporate Center, Indianapolis, Indiana, 46285,
United States of America ( “Lilly” ) and
AMYLIN PHARMACEUTICALS, INC. , a corporation organized and
existing under the laws of Delaware, whose principal place of
business is 9360 Towne Centre Drive, San Diego, California
92121, United States of America (
“Amylin” ). Unless otherwise
designated, capitalized terms used but not otherwise defined herein
shall have the meanings provided in the Collaboration Agreement
(defined below).
WHEREAS, Lilly and Amylin are parties to several
agreements, including: (i) that certain Collaboration
Agreement, dated September 19, 2002, as amended to date (the
“Collaboration Agreement” ) (including by
the Amendment to Collaboration Agreement, dated October 31,
2006 (the “Amendment” )) and
(ii) that certain Exenatide Once Weekly Supply Agreement,
dated October 16, 2008 (the “EQW
Agreement” and together with the Collaboration
Agreement, the “Impacted Agreements”
);
WHEREAS, each of the Impacted Agreements provide that the
Parties will share certain costs related to the
collaboration;
WHEREAS, the Parties have had on-going discussions
regarding the proper allocation of global Development and
Commercialization Costs under the Collaboration Agreement;
and
WHEREAS, the Parties now wish to enter into this
Agreement to (i) set forth the terms upon which all
Development Costs, Commercialization Costs, and EQW Manufacturing
Development Costs, incurred from and after January 1, 2009 in
connection with the Impacted Agreements, will be shared by the
parties, and (ii) adjust the royalties paid to Amylin in
connection with sales of Products outside the United States from
and after January 1, 2009.
NOW, THEREFORE
, in consideration of the mutual
covenants and agreements set forth herein, and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Lilly and Amylin agree as follows:
1.
Cost Sharing.
Except as otherwise set forth
below, effective as of and after January 1, 2009, all
Development Costs, Commercialization Costs, and EQW Manufacturing
Development Costs (as defined in the EQW Agreement) which are
subject to cost-sharing provisions in the Impacted Agreements shall
be shared by the Parties as follows:
(a)
US Costs. Notwithstanding anything to the contrary
in the Impacted Agreements, Lilly shall pay 50% and Amylin shall
pay 50% of the Development Costs and/or Commercialization Costs
associated with activities undertaken with the expectation of
generating utility predominantly in the United States (
“US Costs” ), regardless of the degree of
utility actually realized in the Territory outside the United
States (“ OUS ”), including by way of
example and without limitation, Study GWCO costs,
Amylin-Lilly Grant Office (“ALGO”) costs, US sales
force costs, and US marketing and commercialization
expenses.
*** Confidential Treatment
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***Text Omitted and Filed
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Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and
240.24b-2
(b)
OUS Costs.
Notwithstanding anything to
the contrary in the Impacted Agreements, Lilly shall pay 100% of
the Development Costs and/or Commercialization Costs associated
with activities undertaken with the expectation of generating
utility predominantly OUS ( “OUS Costs”
), including by way of example and without limitation, , Study GWCL
costs, Study GWCK costs, the UK Detemir study costs, OUS BID
Development Trial Costs, OUS BID Commercialization Trial Costs, OUS
Non-BID Development Trial Costs, OUS Non-BID Commercialization
Trial Costs and OUS BID Product Development Costs (each as defined
in the Amendment).
(c)
Global Costs.
Notwithstanding anything to
the contrary in the Impacted Agreements, Lilly shall pay 53% of
Global Costs and Amylin shall pay 47% of Global Costs.
“Global Costs” are Development Costs and
Commercialization Costs associated with activities undertaken with
the expectation of generating utility in both the U.S. and OUS,
including by way of example and without limitation, the CV Outcomes
Trial costs, costs associated with the 2009 development program for
transdermal, Study 108 costs, Study GWCH costs, and costs
associated with developing the RTU formulation. The parties
specifically agree that EQW Manufacturing Development Costs,
including EQW pen manufacturing development costs, shall be Global
Costs. The parties specifically agree that the costs of Dual
Use Studies (as defined in the Amendment) shall be Global Costs;
provided, however, that the costs of Dual Use Studies shall
not be Global Costs before April 1, 2009, and the costs of
such Dual Use Studies shall continue to be shared by the parties
pursuant to the Dual Use Cost Allocation set forth in paragraph
3(c)(ii)b of the Amendment until and including March 31,
2009.
For the avoidance of doubt,
Commercialization Costs, as such term is used in this Agreement,
includes Reimbursable Marketing Expenses.
(d)
Designation of
Costs.
(i)
Development Costs and
Commercialization Costs shall be designated “Global”,
“US”, or “OUS,” in good faith, by the
relevant Alliance committee, which shall include, if appropriate,
the Exenatide Leadership Team (the “ ELT
”), and approved by the Alliance Steering Committee (
“ASC” ) at the time plans applicable
thereto are made. If the Parties cannot agree in good faith
on the designation of a particular cost, the Parties reserve their
respective rights under the dispute resolution provisions of the
Collaboration Agreement. For costs associated with activities
that are underway as of the date of this Agreement, the ASC shall,
in good faith, designate such costs as “Global”,
“US”, or “OUS” at the next ASC Meeting
after the date of this Agreement and, if the Parties cannot agree
in good faith on the designation of a particular cost, the Parties
reserve their respective rights under the dispute resolution
provisions of the Collaboration Agreement.
(ii)
Once a cost or expense has been
designated as any of “Global”, “US”, or
“OUS”, then such designation shall not be subject to
revision unless agreed to by the ASC; provided, however, that while
this provision shall in no way eliminate the recharacterization
procedure described in Section 3(c) of the Amendment,
such recharacterization procedure shall require the approval of any
successor committee to the GDCC (as defined in the
Amendment).
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