AMENDED AND RESTATED LICENSE AND SUPPLY AGREEMENT

Exhibit 10.33

AMENDED AND RESTATED LICENSE AND SUPPLY AGREEMENT

“DOVONEX ^® AGREEMENT”

between

WARNER CHILCOTT COMPANY, INC.

and

LEO Pharma A/S

 

TABLE OF CONTENTS

 

Appendices:

 

 

AMENDED AND RESTATED LICENSE AND SUPPLY AGREEMENT

between

WARNER CHILCOTT COMPANY, INC. of P.O. Box 1005, Fajardo, Puerto Rico, 00738 (“ WCCI ”)

and

LEO Pharma A/S of Industriparken 55, DK-2750 Ballerup, Denmark (“ LEO ”).

Capitalized terms not otherwise defined herein shall have the meanings set forth in Article I of this Agreement.

WHEREAS , LEO has discovered and developed the Compound and Manufactures pharmaceutical products containing the Compound for human therapeutic use;

WHEREAS , WCCI has marketing expertise within the field of dermatology;

WHEREAS , WCCI and LEO are interested in collaborating on the marketing of the Compound in the Territory;

WHEREAS , LEO and GALEN (Chemicals) Limited (“GALEN”) entered into a License and Supply Agreement dated as of April 1, 2003 relating to the Compound (the “Original Agreement”);

WHEREAS, GALEN has assigned its rights and obligations under the Original Agreement to WCCI, an Affiliate of GALEN; and

WHEREAS , LEO and WCCI desire to amend and restate the Original Agreement as set forth below.

 

NOW THEREFORE , the Parties hereby agree as follows:

I - DEFINITIONS

 

1.1	“ Action or Proceeding ” shall mean any action, suit, proceeding, arbitration or Governmental or Regulatory Authority action, notification, investigation or audit.

 

1.2

“ Affiliate ” shall mean, with respect to any Person, any Person which, directly or indirectly, controls, is controlled by, or is under common control with, the specified Person. For purposes of this definition, the term “control” as applied to any Person, means the possession, directly or indirectly, of at least fifty-one per cent (51%) of the power to direct or cause the direction of the management of that Person, whether through ownership of voting securities or otherwise.

 

1.3	“ Agreement ” shall mean this Amended and Restated License and Supply Agreement between WCCI and LEO.

 

1.4	“ BMS ” shall mean Bristol-Myers Squibb Company.

 

1.5

“ BMS Agreements ” shall mean the agreement dated September 28, 1989 between BMS (as successor to E.R. Squibb & Sons Inc.) and LEO, as amended July 6, 1992, April 8, 1993 and as of April 1, 2003 and the Product Supply Agreement between BMS and LEO dated as of April 8, 1993, each as may be amended or supplemented by the parties in the future.

 

1.6	“ Combination Product ” shall mean the pharmaceutical formulations containing both the Compound and Betamethasone Dipropionate in an ointment.

 

1.7	“ Compound ” shall mean the compound Calcipotriene, a vitamin D analogue with the formula C 27 H 40 0 3 .

 

1.8	“ Confidentiality Agreement ” shall mean the Confidentiality Agreement dated as of 4 July 2005 between the Parties.

 

1.9	“ current Good Manufacturing Practices ” shall mean the regulatory and other standards of good manufacturing practice in the Territory, as in effect from time to time, relating to the Manufacture of medicinal products.

 

1.10	“ DC Agreement ” shall mean the License, Supply and Development Agreement dated as of the date hereof between LEO and WCCI.

 

1.11	“ Effective Date ” shall mean the date on which this Agreement becomes effective pursuant to Article 3.4(b) of the Master Agreement.

 

1.12	“ FDA ” shall mean the United States Food and Drug Administration.

 

1.13	“ Finished Product ” shall mean the Products which are ready for sale to customers in finished, final packaged form.

 

1.14	“ Governmental or Regulatory Authority ” shall mean any court, tribunal, arbitrator, agency, commission, official or other instrumentality of the United States or any relevant country, state, province, county, city or other political subdivision.

 

1.15	“ Gross Margin ” shall mean Net Sales less an amount equal to a percentage of Net Sales determined by adding the purchase price, as set forth in Article 3.2 and the applicable royalty rate, set forth in Article 5.1 .

 

1.16	“ IND ” shall mean the Investigational New Drug Application, as defined in the United States Federal Food, Drug and Cosmetic Act and applicable regulations promulgated thereunder as amended from time to time, filed in the United States for the Product.

 

1.17	“ Laws ” shall mean all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of any relevant Governmental or Regulatory Authority.

 

1.18	“ LEO Logo Guidelines ” shall mean the guidelines for use of the LEO name and the Assyrian Lion logo, as amended from time to time, Appendix II .

 

1.19	“ LEO Product Branding ” shall mean the Trademark, the LEO name, the Assyrian Lion, the LEO Logo Guidelines, the LEO Product Concept, and any domain names or websites related to the Product in the Territory.

 

1.20	“ LEO Product Concept ” shall mean the global concept for packaging and promotional materials related to the Products developed by LEO, as amended from time to time, Appendix III .

 

1.21

“ Losses ” shall mean any and all damages, fines, fees, penalties, deficiencies, losses and expenses (including without limitation interest, court costs, reasonable fees of attorneys, accountants and other experts or other expenses of litigation or other proceedings or of any claim, default or assessment).

 

1.22

“ Manufacture ” shall mean all the activities relating to production of each Product, spanning from purchasing raw materials to packaging Product including, but not limited to, purchasing raw materials, packaging materials, production, quality control and assurance, filling, labelling, packaging and finishing, release, holding and storage and the tests and analyses conducted in connection therewith.

 

1.23	“ Manufacturing Authorization ” shall mean the authorization to Manufacture the Products as granted by the relevant Governmental or Regulatory Authorities.

 

1.24	“ Master Agreement ” shall mean the Master Agreement dated as of 1 April 2003 between LEO and WCCI (as assignee of GALEN), as amended by Addendum I dated as of the date hereof between LEO and WCCI (“Addendum I to the Master Agreement”), as further amended from time to time.

 

1.25

“ NDA ” shall mean the New Drug Application filed with the FDA for a Product, requesting permission to place a Product on the market in accordance with 21 C.F.R. Part 314 and all supplements filed pursuant to the requirements of the FDA, including all documents, data and other information concerning such Product which are necessary for FDA approval to market a product in the United States.

 

1.26

“ Net Sales ” shall mean the adjusted gross invoice price, the adjusted gross invoice price being the aggregate sales of WCCI and its Affiliates of the Product to unaffiliated third parties in the Territory (but not including sales between WCCI and its Affiliates) less sales returns and allowances, including trade, quantity and cash discounts and any other adjustments, including those granted on account of price adjustments, billing errors, rejected goods, damaged goods, Recalls, returns, rebates, chargeback rebates, fees, reimbursements or similar payments granted or given to wholesalers or other distributors (including retailers), buying groups,

 

health care insurance carriers or other institutions, freight and insurance charges billed to the customers, customs or excise duties, sales tax and other taxes (except income taxes) or duties relating to sales, and any payment in respect of sales to any Governmental or Regulatory Authority in respect of any Federal or state Medicaid, Medicare or similar program, all as determined in accordance with generally accepted accounting principles on a basis consistent with WCCI’s audited financial statements, provided, however, that the deductions from aggregate sales described above shall in no event exceed eight percent (8%) of the gross adjusted price.

 

1.27	“ Party ” shall mean WCCI or LEO, as the case may be, and “ Parties ” shall mean WCCI and LEO.

 

1.28

“ Patents ” shall mean the patents and patent applications owned and controlled by LEO and listed in Appendix IV hereto, together with any reissues, extensions, substitutions, confirmations, registrations, revalidations, additions, divisions, continuations, or continuations-in-part, of or to the aforesaid patents and patent applications and/or any patents issuing thereon, and any other patents owned by, or licensed to LEO in the Territory which, in the absence of a license, would be infringed by the Manufacture, use, sale, offer for sale, import, storage or distribution of Products.

 

1.29	“ Person ” shall mean any individual, firm, corporation, partnership, limited liability company, trust, joint venture, Governmental or Regulatory Authority or other entity or organization.

 

1.30	“ Product ” or “ Products ” shall mean the products listed in Appendix I .

 

1.31	“ Registrations ” shall mean the authorization to sell the Products in the Territory as granted by the FDA or other relevant Governmental or Regulatory Authority.

 

1.32	“ Specifications ” shall mean the specifications and procedures for Manufacturing the Product as contained in the Registration for the Product and any additional specifications as are mutually agreed upon by the parties hereto in writing, including all stability requirements set forth therein.

 

1.33

“ Technical Information ” shall mean all information in the possession of LEO and/or its Affiliates, and the information transferred from BMS to WCCI, regarding preclinical, chemical-pharmaceutical and clinical data or other scientific information (including Specifications, master batch records, analytical methods including validation protocol and the drug master file), or secret know-how about the Products including, but not limited to marketing know-how and show-how or uses for the Product in the possession of LEO regarding the Product necessary for WCCI to fulfil its obligations under the Agreement.

 

1.34	“ Territory ” shall mean the fifty (50) states of the United States of America, the District of Columbia, its territories and current possessions.

 

1.35	“ Trademark ” shall mean the trademark Dovonex ® owned by LEO.

 

1.36	“ WCCI Information ” shall mean any information (including, but not limited to, technical improvements, financial and marketing information) developed, made and/or generated by WCCI relating to and made as a result of its work with the Products.

II - RIGHTS

 

2.1

Grant . LEO hereby grants WCCI, and WCCI accepts from LEO, subject to the terms, conditions and provisions of this Agreement, an exclusive license subject to Article 4.1 , with the right to sublicense to WCCI’s Affiliates, under the Trademark, Patents and Technical Information owned by, or licensed to, LEO to import, store, distribute, use, sell and offer to sell the Products in the Territory.

The Parties acknowledge that in connection with WCCI’s efforts to market and sell the Products in the Territory, it is necessary for WCCI to establish Internet websites with domain names containing the word “dovonex” or other Trademarks (collectively, the “ Product Websites ”). As promptly as practicable following the execution of this Agreement, the Parties shall cooperate to develop a mutually acceptable strategy with respect to establishing the Product Websites including, without limitation, the negotiation and execution of mutually acceptable domain name license agreements if necessary to effectuate such strategy.

 

2.2

WCCI acknowledges that the FDA has required carcinogenicity studies, which started November 2001. If the studies are still running when this Agreement becomes effective WCCI agrees to pay fifty percent (50%) of the documented expenses for these studies for which LEO is responsible incurred after the date hereof. The estimated costs and timelines are described below.

BMS-181161 (Calcipotriene): 2-year dermal carcinogenicity study in mice .

 

BMS-181161 (Calcipotriene) Solution: 12-Month photocarcinogenesis study with ultraviolet radiation in hairless mice .

 

 

2.3

LEO shall disclose to WCCI full details of all work undertaken in connection with the carcinogenicity studies. LEO shall provide to WCCI written progress reports at intervals of not more than three (3) months. Meetings between LEO and WCCI shall be held at least two (2) times per year in order to review the progress of the studies and to determine further courses of action, as necessary.

 

2.4

LEO, its Affiliates and its partners having rights to the Products outside of the Territory (“Product Licensees”) will be free to use WCCI Information (other than confidential financial information regarding WCCI), but shall be subject to the same confidentiality obligations set forth in Article VIII .

 

III - SUPPLY OF FINISHED PRODUCTS

 

3.1

Supply . In order to ensure the quality of the Products to be sold by WCCI, WCCI shall purchase from LEO, and LEO shall supply to WCCI, according to supply conditions as set forth in this Agreement, either from LEO or from such other sources as LEO shall authorise subject to Article 3.9.1(b) , WCCI’s total requirements of the Products for use and sale for the term of this Agreement.

 

3.2

Purchase Price . The purchase price will be twenty percent (20%) calculated on the Net Sales of Product sold by WCCI or its Affiliates in the Territory. It is understood that LEO has no obligation to deliver Products at a floor price below four (4) times the LEO group variable cost at all times (raw materials, packaging materials including art work, energy, labour etc.) of the manufacture of the Products.

 

3.3

Invoicing . LEO shall issue an invoice with each shipment of Products pursuant to this Agreement and WCCI agrees to pay such invoice in immediately available funds within end of month + thirty (30) days from the date of invoice. Invoicing and payments for Products shall be denominated in United States Dollars. Payment shall be made to an account designated by LEO in writing. The supply price of Products reflects shipping terms of FCA [Site of Production] (ICC Incoterms 2000).

3.3.1 Invoice Adjustments . Because the Purchase Price is based on Net Sales and will not be known precisely at the time of shipment of Products by LEO, such invoice price shall reflect an estimated Purchase Price agreed by the Parties.

Each year on 1 August (and as promptly as practicable after the date hereof with respect to 2006), the Parties shall mutually agree on an invoice price for the following calendar year based on the expected Net Sales and on 1 January the invoice price of the stock of Products at WCCI will be adjusted to the new invoice price agreed for that new year.

Adjustments to correct the invoiced amount shall be made quarterly following receipt of information on the actual Net Sales realized on the sale of Products during the applicable period.

 

WCCI shall render to LEO, within sixty (60) days after the end of each calendar quarter, a detailed report setting forth Net Sales for the preceding calendar quarter, the corresponding units by SKU represented by such Net Sales, the manner in which Net Sales have been calculated, as well as a calculation of said adjustments to invoice prices. Settlement is to take place at the time of delivery of the report.

Any payment made by WCCI hereunder after the date such payment is due, shall bear interest at the lesser of: (a) one and one half percent (1.5%) per month or (b) the maximum rate permitted by applicable Law. The interest on late payments shall be calculated from the date payment was due until such payment is received by LEO.

The provisions set forth in this Article 3.3 that are necessary to perform the adjustments described herein following the termination or expiration of this Agreement shall survive such termination or expiration.

 

3.4	Forecasts/Firm Orders .

(a) On the Effective Date, WCCI will provide LEO with a firm order for the period from the Effective Date up to and including the end of the fourth full month following the Effective Date. LEO will supply the quantities set forth in such firm order in accordance with the delivery schedule set forth therein, and to the extent such firm order is not sufficient to meet WCCI’s actual requirements of the Product for such period, LEO will use commercially reasonable efforts to supply WCCI with its requirements beyond the amounts specified in such firm order. It is understood that quantities supplied by LEO pursuant to the firm order delivered on the Effective Date will bear the trademarks and trade dress of the Product as marketed by BMS. WCCI represents and warrants to LEO that it has a limited license from BMS pursuant to the terms of that certain Asset Purchase Agreement between WCCI and BMS, pursuant to which WCCI acquired rights to the Product, to sell Product bearing the trademarks and trade dress of the Product as marketed by BMS for up to six months. WCCI understands and acknowledges that the lead time for shipment of Products following the receipt of such firm orders will be three (3) months. Notwithstanding the foregoing, LEO agrees that to the extent that BMS has placed firm orders for Product with LEO within the four months prior to the Effective Date, delivery of those orders scheduled for after the Effective Date will be based upon the lead times and the delivery dates set forth in the forecasts delivered by BMS pursuant to the BMS Agreements.

 

On the Effective Date, WCCI shall provide to LEO final specifications for the revised labelling and packaging of each presentation of the Product identifying LEO as the manufacturer of the Product and WCCI as the distributor thereof, including all necessary photo-ready art (or its substantial equivalent) reflecting such modification. WCCI understands and acknowledges that the lead time for the first shipment of Product following the receipt of such final specifications shall be four (4) months.

For periods thereafter, firm orders shall be filled by LEO in accordance with the firm orders placed by WCCI pursuant to Article 3.4(b) .

(b) LEO will within five (5) working days following the end of each calendar month receive from WCCI a rolling forecast covering twenty four (24) months of which the first four (4) months must be covered by firm orders (consisting of the then current month and the following three (3) months). LEO shall, to the best of its ability, supply to WCCI the exact amount of Finished Products that WCCI has ordered. WCCI accepts that a variation in deliveries of +/- ten percent (10%) may occur. If LEO does not deliver Finished Products at the delivery dates stated in the respective firm order for technical reasons, LEO shall immediately inform WCCI. Both Parties will agree to a postponement or cancellation of the firm order affected. In the event of a postponement, LEO shall deliver within four weeks of the original delivery date. If LEO does not deliver Finished Products at the delivery dates stated in the respective firm order (or at a date otherwise agreed upon with WCCI) for any reason other than technical reasons, LEO shall deliver within four weeks of the original delivery date. Subject to timely supply by LEO pursuant to Article 3.4(b) , WCCI shall maintain at least two (2) months’ inventory of the Product (two (2) month’s inventory of each stock keeping unit (SKU)).

If this Agreement is terminated, and such termination results from the breach of WCCI, then any amounts owed by WCCI to LEO in respect of firm orders as of the date of termination must be paid by WCCI.

 

(c) The batch-size and minimum order quantity per delivery shall be as set forth in Appendix V hereto.

 

3.5

Delivery . All shipments shall be shipped to such named place as WCCI shall with reasonable notice designate in writing, and will be in accordance with the delivery instructions and with the specifications for shipping and packing included with each purchase order. Delivery will be made by LEO to a common carrier as WCCI shall direct or to any special carrier which WCCI shall designate, along with a certificate of compliance and analysis in accordance with Article 3.9.12 . All risk of loss, delay or damage in transit after delivery to such carrier shall be borne by WCCI. WCCI shall pay freight and insurance on all such shipments and all customs brokers’ fees.

 

3.6	Controlling Provisions . In ordering and delivering, WCCI and LEO may employ their standard forms, but nothing in those forms shall be construed to modify or amend the terms of this Agreement and in case of conflict herewith, this Agreement shall control.

 

3.7	Acceptance of Shipments .

3.7.1 Initial Acceptance . After receipt of a Product shipment, WCCI shall, within thirty (30) days, visually inspect the Product shipment and communicate acceptance or rejection to LEO in writing. The Parties agree that WCCI’s visual inspection consists 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.

3.7.2 Return and Replacement . Any quantities of the Products that are rejected and/or returned by WCCI in accordance with this Agreement and the rejection has been accepted by LEO shall be returned to LEO at the expense of LEO and at WCCI’s option (a) shall be replaced by LEO as quickly as possible at its sole expense and the payment in respect of such quantities postponed until such replacement quantities are received and accepted by WCCI or (b) LEO shall refund any amounts paid in respect of such quantities to WCCI.

 

3.7.3 Independent Verification . If LEO does not agree to the rejection of the Product the Parties will seek the opinion of an independent laboratory reasonably acceptable to both Parties, whose opinion shall be final and binding. The expenses for such expert opinion shall be borne by the Party shown to be wrong, or, if the expert cannot identify the responsible Party, then the Parties shall share equally the expenses connected with the expert and the expenses connected with the Products rejected and/or returned.

 

3.8	Representations, Warranties and Covenants of WCCI . WCCI hereby represents, warrants and covenants to LEO as follows:

3.8.1 Packaging Components . Subject to Article 3.9.8 , WCCI shall provide LEO with all artwork or other material developed or produced by WCCI for product labels, product inserts and other printed packaging material. WCCI shall be responsible for ensuring that Product labels and Product inserts that it provides pursuant to Article 3.9.8 , and any other printed materials it provides, comply with all applicable Laws and with conditions set forth in the Registration. LEO has the right to purchase packaging components for six (6) months’ use based on the forecasts delivered at the time when LEO purchases and WCCI shall reimburse LEO for costs involved in connection with discarded components due to changes wanted by WCCI in such components. The same applies if sale of a package size is discontinued, including, but not limited to, in case of termination of this Agreement by LEO due to a breach by WCCI, but excluding discontinuation or withdrawal in the case of termination of this Agreement by WCCI due to a breach by LEO.

3.8.2 Storage . WCCI represents and warrants that Products delivered hereunder will be stored in full accordance with the applicable Laws in the Territory, and with the instructions given by LEO, and the national health authorities in the Territory. LEO has the right at any time during normal business hours, upon reasonable notice, to audit premises used by WCCI for holding and storage of Products in Territory and examine those parts of the premises, procedures and documentation involved in the activities of this Agreement.

3.8.3 Changes in Product Labels and Printed Materials . In the event that WCCI requests changes in product labels, printed packaging materials or packaging inserts for Products and LEO has components for such materials in stock that it has purchased specifically for such Product that can no longer be used as a result of

 

such changes, WCCI shall have the obligation to purchase the lesser of (a) all of the LEO stock of such components and (b) six months supply of the LEO stock of such components, at cost. WCCI shall give LEO at least four (4) months’ notice in advance of any changes required to be made to the packaging materials. In case of termination of this Agreement, caused solely by WCCI’s breach, WCCI shall reimburse LEO the cost of all packaging materials in stock, purchased specifically for the Products, at the time of such termination.

3.8.4 Repackaging . WCCI is not allowed to repack the Products or in any way change the original packaging of Products.

 

3.9	Representations, Warranties and Covenants of LEO . LEO hereby represents, warrants and covenants to WCCI as follows:

3.9.1 Valid Manufacturing Authorization . (a) LEO owns a valid Manufacturing Authorization issued by the relevant Governmental or Regulatory Authority.

    (b) LEO shall not make changes or take actions which will require WCCI to amend any 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 WCCI, which consent shall not be unreasonably withheld; provided that such amendment is for good reason, and any costs relating to such change or action shall be at the sole expense of LEO.

3.9.2 Conformity with Specifications and Laws . Each Product delivered by LEO to WCCI hereunder has been Manufactured using a process that has been validated in accordance with current Good Manufacturing Practices and has been Manufactured in compliance with the Specifications for such Product and with current Good Manufacturing Practices and all Laws with respect to the Manufacture of each Product. Each Product conforms to any further affirmation of fact as may be made on or in any other documentation associated with or related to such Products.

3.9.3 Creation and Retention of Records . LEO shall be responsible for creating and retaining all records relating to Manufacturing, analysis, testing and release of materials, production and quality control (including in-process controls) for each Product, all in accordance with current Good Manufacturing Practices and shall provide copies to WCCI upon its reasonable request.

 

3.9.4 Stability Studies . LEO shall conduct relevant stability studies on each Product to assure validity of such Product for its shelf life in accordance with the requirements set forth in the NDA with respect to such Product.

3.9.5 Raw Materials and Products Provided by LEO . Except as otherwise specifically agreed between the Parties in writing, LEO shall be responsible for procuring all raw materials and other components for each Product. All raw materials and components procured by LEO and used in the Products shall be tested (by LEO or the supplier thereof) to assure that they meet applicable Specifications and quality standards.

3.9.6 Packaging Material . Unless required by Law no changes may be made by LEO to the packaging material for any Product without the prior written consent of WCCI. If changes are required by Law LEO shall consult with WCCI prior to the implementation of such changes.

3.9.7 Storage . LEO shall store the raw materials, excipients, packaging articles, intermediate products and the Products under such conditions that the quality of such materials and the Products Manufactured therefrom are not affected.

3.9.8 Approval of Product Labels, Printed Packaging Materials and Inserts . Prior to the first production of each Product for WCCI, LEO shall provide WCCI with information regarding the possible dimensions and parameters of product labels, printed packaging materials and inserts. Unless required by Law LEO will make no change to Product labels or Product inserts, submitted by WCCI in accordance with Article 3.8.1 , without the prior written approval of WCCI. If changes are required by Law LEO shall consult with WCCI prior to the implementation of such changes.

3.9.9 Reference Samples . LEO shall retain reference samples from each batch of Finished Products for the period of time required by applicable Law after the expiry date. Finished Products will be kept in their final packaging and stored under the recommended conditions. Samples of starting materials (other than solvents, gases and water) will be retained for the period of time required by applic