EXHIBIT 10.50
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS
EXHIBIT. THE COPY
FILED HEREWITH OMITS THE INFORMATION SUBJECT TO THE CONFIDENTIALITY REQUEST.
OMISSIONS ARE
DESIGNATED
AS ***. A COMPLETE
VERSION OF THIS
EXHIBIT HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
CELGENE CORPORATION
AND
EVOTEC OAI
LIMITED
SUPPLY AGREEMENT
*** - indicates
material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange
Commission.
<PAGE>
INDEX
1
DEFINITIONS AND
INTERPRETATION........................................1
2
PURCHASE AND
SALE.....................................................3
3
PRICING...............................................................3
4
FORECASTS AND
ORDERS..................................................4
5
SHIPMENT, INVOICES,
DELIVERY..........................................5
6
PAYMENTS..............................................................7
7
TERM AND
TERMINATION..................................................7
8
SUPPLY QUALITY AND SECURITY OF
PRODUCT................................8
9
RECALLS..............................................................11
10
WARRANTIES...........................................................12
11
INDEMNITY............................................................12
12
FORCE
MAJEURE........................................................13
13
PATENT
INFRINGEMENT..................................................14
14
CONFIDENTIALITY AND INTELLECTUAL
PROPERTY............................15
15
ASSIGNMENT...........................................................18
16
GOVERNING
LAW........................................................18
17
WAIVER...............................................................19
18
SEVERANCE OF
TERMS...................................................19
19
ENTIRE
AGREEMENT/VARIATIONS..........................................19
20
NOTICES..............................................................20
21
COUNTERPARTS.........................................................20
22
REGISTRATION.........................................................21
23
INDEPENDENT
CONTRACTORS..............................................21
24
COSTS................................................................21
i
*** - indicates
material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange
Commission.
<PAGE>
THIS AGREEMENT
(hereinafter
"Agreement")
is made as of the 1st
day of August
2004 BETWEEN:
(1) CELGENE
CORPORATION,
a Delaware
corporation
and having its
business
address at 7 Powder Horn Drive, Warren, New Jersey 07059, United
States
of America (hereinafter CELGENE).
AND
(2) EVOTEC
OAI LIMITED, a company incorporated in England and whose
registered office is
at 151, Milton Park,
Abingdon, Oxfordshire
OX14
4SD, UK (hereinafter EOAI).
WHEREAS:
CELGENE is the owner of the compound known as CC-5013 and wishes to
engage EOAI
to manufacture for CELGENE CC-5013 from time to time, as requested
by CELGENE.
NOW THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1
DEFINITIONS AND INTERPRETATION
1.1 In
this Agreement and in the Appendices to this Agreement, the
following words and
phrases shall have the following meanings unless
the context requires otherwise:
1.1.1
"Affiliate(s)" - shall mean any corporation, firm, partnership or
other
entity, whether de jure or de facto, which directly or indirectly
owns,
is owned by or is under common ownership with, a Party to this
Agreement to the extent of more then fifty percent (50%) of the equity
having the power to vote on or direct the affairs of the entity and
any
person, firm,
partnership,
corporation
or other entity actually
controlled by. controlling or under common control with a Party to
this
Agreement.
1.1.2
"Batch" - shall mean a
specific quantity of Bulk Compound that is
intended
to have uniform character and quality, within specified
limits, and is
produced according to a single manufacturing order
during the same cycle of manufacture.
1.1.3
"Bulk Compound"
- shall mean a bulk
quantity of the Compound as an
active pharmaceutical
ingredient that has
yet to be rendered into the
commercial dosage form.
1.1.4
"Business Day" - shall
mean 09:00 hours to
17:00 hours on a day other
than a Saturday,
Sunday, English
bank or ether
English or US
public
holiday.
1.1.5
"cGMP" - means currant Good Manufacturing Practices as promulgated by
the FDA as detailed
in Title 21, United States Code of Federal
Regulations, or when
appropriate, any
corresponding
statutes and/or
regulations of
any other country's prescription pharmaceuticals
regulating health authority or agency.
1.1.6
"Compound"
- the
compound
known
as
CC-5013,
being
3-(4-amino-1,3-dihydro-1-oxo-2H-isoindol-2-y)-2,6-piperidinedione.
*** - indicates
material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange
Commission.
<PAGE>
1.1.7
"Compound
Specifications" -
means the written
physical and
chemical
specifications for the Bulk Compound referenced in Appendix 1
hereto as
amended from time to time pursuant to Clause 8.5.
1.1.8
"Confidential
Information" - means any information including, but not
limited to, ideas,
proposals,
plans, know-how, reports, drawings,
designs, data,
discoveries,
inventions,
improvements,
suggestions,
specifications
(including the
Compound Specifications), products,
samples, components
and materials relating
to the Compound and to the
Product, and all information relating to the manufacture,
formulations,
analysis, stability,
pharmacology,
toxicology,
pathology,
clinical
data, results of
clinical efficacy studies, clinical effects and
indications for use of the Product which a Party discloses,
directly or
indirectly, to the
other Party, so long as such information is
disclosed in
writing and marked "confidential" or with a similar
legend; or if verbal,
is reduced to writing
and marked as such within
thirty (30) days of disclosure.
1.1.9
"Contract Price" -
means the price par
kilogram of Bulk
Compound for
each Batch set forth in Clause 3.1.
1.1.10 "Contract
Year" - means,
for the first Contract Year, the period
commencing on the Effective Date and ending on 31st December
2004, and
for subsequent Contract Years the successive calendar years
thereafter.
1.1.11
"Effective Date" - means August 1, 2004,
1.1.12 "FDA" -
means the United
States Food and Drug
Administration and
any
successor entity thereto.
1.1.13 "Force
Majeure" - shall mean any significant, unexpected event which
is
beyond the reasonable
control of either Party and for which such Party
could not reasonably
have been expected to
have taken into account as
of the Effective Date.
1.1.14 "Party"
or "Parties" - means CELGENE or EOAI or both as the context may
dictate.
1.1.15 "Producer
Price Index" - shall mean the Producer Price Index for *** as
published by the Office of National Statistics (ONS) United
Kingdom.
1.1.16
"Product"- means
compound in finished
form suitable for use by the
ultimate consumer, packaged and labeled for marketing.
1.1.17 "Purchase
Order" - means a formal document issued by CELGENE containing
a firm order for delivery of Bulk Compound.
1.2 In this
Agreement -
1.2.1
"References" - unless the context otherwise requires, all
references to
a particular Clause, paragraph or Appendix shall be a reference to
that
Clause, paragraph or
Appendix, in or
2
*** - indicates
material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange
Commission.
<PAGE>
to this Agreement as the same may be amended from time to time
pursuant
to this Agreement.
1.2.2
"Headings" - a
table of contents and headings are inserted for
convenience only and shall be ignored in construing this
Agreement.
1.2.3
"Gender/Plurality" -
unless the
contrary intention appears, words
importing the
masculine gender shall include the feminine and VICE
VERSA and words in the singular include the plural and VICE
VERSA.
1.2.4
"Person" - unless
the contrary intention appears, words denoting
persons shall
Include
any individual, partnership, company,
corporation, joint
venture, trust, association, organization or other
entity, in each case whether or not having separate legal
personality.
1.2.5
"Include" - reference to the words "include" or "including"
are to be
construed without limitation to the generality of the preceding
words.
2
PURCHASE AND SALE
CELGENE shall
purchase from EOAI and EOAI shall sell to
CELGENE the
quantities of Bulk Compound ordered in accordance with Clause 4
hereof.
EON shall not at any time during the Term (as defined in Section 7.1
herein) or during the
two-year period thereafter, manufacture the
Compound for
any person or entity other than CELGENE or its
designee(s), without
the prior written consent of CELGENE. which shall
not be unreasonably withheld.
3
PRICING
3.1 Price
The
Contract Price to be paid by CELGENE to EOAI for each (***Kg)
Batch
of Bulk Compound
hereunder shall be as indicated below net of any
applicable Taxes (as defined in 3.2 below):
*** (in words: US Dollars ***) per Kg
The foregoing Contract
Price shall be payable in United States Dollars
and shall be adjusted
at the end of each
Contract Year for all Bulk
Compound ordered during the ensuing Contract Year by a percentage
equal
to the percentage
change in the Producer Price Index during the twelve
(12) months preceding the change in the Contract Year.
Any other adjustment to the Contract Price due to external factors
such
as raw material price
changes can be
implemented at any
time through
the agreement of both Parties.
3
*** - indicates
material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange
Commission.
<PAGE>
3.2 Taxes
In the event that any national, federal, state, county, municipal or
other governmental excise, sales, import, export, stamp or other tax,
assessment, or other
government-imposed
charge (other than any tax
imposed upon the
Income of EOAI)
(collectively,
"Taxes") is
levied,
assessed or
charged to EOAI on or for the sale, production or
transportation of the Bulk Compound sold to CELGENE, the Contract
Price
shall be increased by an amount sufficient to cover such Taxes. Upon
request by CELGENE,
EOAI shall promptly
provide CELGENE with evidence
of payment of Taxes.
4
FORECASTS AND ORDERS
4.1 Initial
Forecast
Attached hereto as
Appendix 2 is the current forecast of the quantity
of Bulk Compound
that CELGENE will require for the first
twelve (12)
months of the Term (the "Initial Strategic Forecast"). The Initial
Strategic Forecast
shall constitute a
firm production
order against
which CELGENE
shall Issue Purchase Orders. CELGENE may, at its
discretion, issue
Purchase Orders for quantities of Bulk Compound
forecast for delivery
after the first twelve
(12) months of the Term.
It is intended that the forecasts be used by EOAI to ensure
appropriate
and timely replenishment of stock.
4.2 Rolling
Forecast
On or about the first week of each January and July of each Contract
Year, CELGENE
shall confirm to EOAI, or update as necessary, the
Initial Strategic
Forecast (it being understood that the Initial
Strategic Forecast
constitutes a firm
production
order according to
Clause 4.1) and each
successive forecast
subsequent
thereto (each a
"Semi-Annual
Forecast") for the
ensuing twelve-month period of the
Term. The second six (6) months of each
Semi-Annual
Forecast shall
constitute a firm
production order
against which CELGENE
shall issue
Purchase Orders.
4.3 Acceptance
of Purchase Orders
Subject to any adjustment that may be desirable to match
manufacturing
batch requirements
and which shall be
promptly notified to CELGENE,
EOAI shall accept firm Purchase Orders placed by CELGENE pursuant to
Clauses 4.1 and 4.2 above, within *** days of receipt, of such
quantity
up to ***
percent (***%) of the
then current firm
production
order.
EOAI shall
use commercially reasonable efforts, but shall not be
obligated, to supply any quantities ordered by CELGENE in excess of
the
*** percent (***%) cap. Within *** days after EOAI
receives CELGENE's
firm Purchase Order
for quantities of Bulk
Compound in excess of such
*** percent (***%)
cap, EOAI shall
notify CELGENE whether EOAI can
supply the quantities and by what date.
4
*** - indicates
material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange
Commission.
<PAGE>
4.4 Purchase
Orders
CELGENE shall
provide EOAI with Purchase Orders covering the firm
production orders detailed in Causes 4.1 and 42 above not less than
***
days after
provision of the Initial Strategic Forecast and each
Semi-Annual Forecast,
as applicable. Each Purchase Order made by
CELGENE shall be in
writing and,
in addition to any other terms or
requirements that the Parties may specifically establish in writing
for
such Purchase Order,
shall set forth the date by which the goods shall
be available for
collection (the
"Delivery Date'). EOAI shall make
available for
collection
each shipment of Bulk
Compound on or before
the Delivery Date;
provided that it is
understood
and agreed by the
Parties that
EOAI shall not be obligated to make available Bulk
Compound by the Delivery Date set forth in any Purchase
Order, which
Purchase Order is
received by EOAI less than *** days
prior to such
Delivery Date. The Delivery Date in such case shall be deemed to be
***
days after the date of receipt of the Purchase Order by EOAI.
4.5 Units to
be Ordered and Minimum Order Quantity
Purchase Orders will
be expressed
in terms of Batch
multiples.
The
standard Batch size is *** kilograms, from which the actual Batch
size
may vary by plus or minus *** percent (***%).
4.6
Conflicting Terms and Conditions
Except as otherwise provided in this Agreement, the terms and
conditions of
this Agreement shall govern, notwithstanding any
additional or
inconsistent terms or
conditions in
CELGENE's form of
Purchase Order
or similar document or in EOAI's acknowledgement,
invoice or similar document.
5
SHIPMENT, INVOICES, DELIVERY
5.1 Title and
Risk of Loss
Risk of loss for the Bulk Compound shall pass to CELGENE upon
delivery
FCA Abingdon
Incoterms 2000. Title shall pass to CELGENE on full
payment of the Contract Price to EOAI for the Bulk Compound.
5.2
Shipment
EOAI shall, as agent for CELGENE, arrange for shipment of Bulk
Compound
covered by firm Purchase Orders from CELGENE pursuant to this
Agreement
to the destination
advised by CELGENE
accompanied by
Certificates of
Analysis for each
Batch of Bulk Compound
included in such
shipment.
CELGENE shall be
responsible for
obtaining any
necessary import
and
export permits
and the like for Bulk
Compound. EOAI shall provide
reasonable assistance
to CELGENE in this respect. Where Bulk Compound
available for shipment has not yet received quality control release,
CELGENE reserves the
right to require in writing that such shipment be
made under quarantine.
5
*** - indicates
material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange
Commission.
<PAGE>
CELGENE shall
provide EOAI with appropriate instructions for each
shipment of Bulk Compound designating the destination,
including full
address
details.
Shipment
shall not be made without specific
authorization of
CELGENE. EOAI shall, as agent for CELGENE, be
responsible for arranging appropriate carriage and insurance
and shall
invoice CELGENE for such reasonable out-of-pocket expenses. CELGENE
shall have its choice of carrier on this basis.
5.3
Invoices
At the date the Bulk Compound is accepted by the carrier, as
authorized
by CELGENE pursuant to Clause 5.2 above, EOAI shall invoice CELGENE
for
the Contract Price for
the total Bulk Compound shipped. In the event
that Bulk Compound is stored at EOAI in accordance with the Agreement
for Storage referenced
in Clause 5.5 below,
EOAI will invoice CELGENE
upon placing the Bulk Compound into storage.
5.4
Addresses
Unless otherwise notified to the sending party in writing:
All Purchase Orders shall be sent to:
Evotec OAI Ltd
151 Milton Park
Abingdon, Oxon OX14 4SD
United Kingdom
Attn: ***
Tel: ***
Fax: ***
All shipments of Bulk Compound shall be sent to: to be informed
All invoices shall be sent to:
Celgene Corporation
7 Powder Horn Drive
Warren
New Jersey 07059
United States of America
Attn: ***
Tel: ***
Fax: ***
5.5
Storage
Contemporaneously with
the execution and
delivery of this
Agreement,
the Parties hereto are
executing and exchanging an Agreement for
Storage in the form attached as Appendix 3 hereto.
6
*** - indicates
material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange
Commission.
<PAGE>
6
PAYMENTS
Payment shall be due
no later than *** days from the date of invoice.
Late payments shall
attract interest at an
annual rate of *** percent
(***%) above the base lending rate of Barclays Bank plc at of the date
such payment becomes past due and as may be adjusted from time to
time.
Payment shall be made in *** by wire transfer to an account
indicated
by EOAI, the details of which shall be notified to CELGENE by EOAI
from
time to time.
7
TERM AND TERMINATION
7.1 Term
Except as
provided in Clauses 7.2 and 7.3 below, the term of this
Agreement commences on
the Effective Date and continues until the end
of the *** Contract Year (the "Term").
7.2 Renewal
Term
The Term shall be
automatically renewed
for a period of ***
upon the
end of the *** Contract Year and upon the end of each
renewal period
unless either Party to this Agreement notifies the other in writing
at
least *** prior to the
commencement of such
renewal that such renewal
shall not occur.
7.3 Early
Termination
7.3.1 In
addition to the provisions of Clauses 7.1 and 7.2 above, this
Agreement may be terminated prior to the expiration of the
Term:
(a)
by the
non-breaching Party on
*** written notice in the event
of materiel
breach, or breach of a material
term, of this
Agreement by the
other Party which breach has not been
remedied by such
other Party within such *** period; or
(b) by
the non-defaulting Party on *** written notice (if
reasonable steps
toward cure have not been made during
such
time) if the other
Party suspends payment of its debts or
otherwise ceases
or threatens to cease to carry on its
business, becomes bankrupt or insolvent, goes into liquidation
(except for the purposes of reconstruction or amalgamation),
or compounds or enters into an arrangement with its creditors,
or a receiver
or manager of the
other Party's
business is
appointed, or a
petition is presented
for the winding-up
of
the other Party.
7.3.2
Notwithstanding Clause
7.2 above, CELGENE shall have the right to
terminate this
Agreement for any
reason upon *** prior written notice
to EOAI.
7.3.3 Upon
the early termination of this Agreement by Celgene for any
reason,
EOAI agrees to cooperate reasonably with CELGENE in good faith as
may
be reasonably
necessary to
7
*** - indicates
material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange
Commission.
<PAGE>
facilitate the timely qualification of an alternative manufacturer for
the Bulk Compound at Celgene's expense.
7.4 Effect of
Termination
7.4.1
Survival of Liability
Termination under
Clauses 7.1, 7.2 or 7.3 above shall not relieve
either Party of its liability for breach of its obligations
pursuant to
the terms and
conditions
of this Agreement incurred prior to such
termination.
7.4.2
Stock
In the event of early
termination by CELGENE under Clause 7.3.2 above,
CELGENE has the
obligation to purchase
from EOAI all usable stocks of
Bulk
Compound then on hand not exceeding the amount of the then
current
firm production order.
7.4.3 In
case of early
termination by EOAI
under Clause 7.3.1 or by CELGENE
pursuant to Clause 7.3.2 above, CELGENE shall be responsible to EOAI
for all amounts
for which EOAI is contractually obligated to its
contractors that are
not Affiliates
provided such
contracts relate
solely to the
production
of Bulk Compound, and are not reasonably
avoidable, and
provided further that EOAI uses commercially reasonable
efforts to mitigate same.
8
SUPPLY QUALITY AND SECURITY OF PRODUCT
8.1
Certificate of Analysis
EOAI shall
test or cause to be tested each lot of Bulk Compound
according to the
Compound
Specifications
pursuant to this
Agreement
before delivery,
and a Certificate of Analysis shall set forth the
items tested,
specifications and
test results for each lot delivered.
EOAI shall send or cause to be sent such certificates to CELGENE
and to
CELGENE's designated subcontractor prior to shipment, together with
the
delivery of
Bulk Compound. CELGENE is entitled to rely on such
certificates for all
purposes of this Agreement. Unless otherwise
requested in writing by CELGENE, EOAI shall release the Bulk Compound
to CELGENE or to
CELGENE's designated subcontractor after testing
against the Compound Specifications.
8.2 Good
Manufacturing Practices Audits
At CELGENE's request
and upon fourteen (14) days prior notice to EOAI,
EOAI shall
arrange
CELGENE
or CELGENE's agents (bound by
confidentiality
obligations
similar to
those contained in its
Agreement) access
during reasonable
business hours to
those areas of
EOAI's facilities where Bulk Compound is manufactured, analyzed,
stored
and handled and to
manufacturing,
analytical and quality
records of
Bulk Compound manufactured for CELGENE. Such visits shall be
limited to
two (2) times per year, other
8
*** - indicates
material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange
Commission.
<PAGE>
than in extenuating
circumstances.
The right to access
contained in
this Clause is
exclusive of the rights discussed in the following
paragraph.
EOAI shall advise CELGENE immediately if an authorized agent of the
FDA
or any other governmental agency visits or announces plans to visit
any
of EOAI's manufacturing facilities concerning Bulk Compound.
CELGENE
shall be entitled, where practicable and relevant, to be present at
any
such inspection
and, where notice of
such inspection is
available to
satisfy itself prior to such inspection that reasonable best efforts
are being made to ensure a satisfactory outcome of the inspection.
EOAI
shall furnish to
CELGENE the report by
such agency of such
visit and
the application of such report to Compound, if any, within forty-eight
(48) hours of EOAI's receipt of such report.
8.3 Discrepant
Test Results
Notwithstanding Clause 8.1, on receipt of the Bulk Compound,
CELGENE or
its designated
subcontractor or agent may conduct analytical testing
within sixty (60) days of receipt of such Bulk Compound in accordance
with Clause
8.4. In the event of a
discrepancy
between EOAI's test
results and those of
CELGENE or any of
CELGENE's subcontractors or
agents, such that one set of results fall within the Compound
Specifications
and the other results fall outside the Compound
Specifications and in
the event that such discrepant results cannot be
resolved to both
Parties' satisfaction, the Parties shall cause a
recognized independent
testing laboratory to perform comparative tests
on samples of the allegedly defective Bulk Compound, provided that
such
independent laboratory
is mutually agreeable to the Parties. The
independent tester's
results shall be final and binding. The costs of
the testing shall be borne by
