Commercial Supply Agreement for Pramlintide

composition of matter, trade secret, invention, technology, information or other subject matter, including license application materials and all supporting documents, specifications for materials (including purification techniques), data, information (including information contained in registration dossiers, drug master files and other documents filed with Regulatory Authorities), quality control, validation and equipment necessary or useful for the manufacture, production, scale-up, processing or formulation of Product, which (a) Bachem conceived, reduced to practice, developed or obtained (or which Bachem has the ability to license or sublicense), or (b) is otherwise necessary or useful in the manufacture of the Product.

1.4 “Batch Production Records” means the lot production records for the batches manufactured by Bachem pursuant to this Agreement.

1.5 “cGMPs” shall mean then-current Good Manufacturing Practices as specified in ICH Guideline Q7A, the United States Code of Federal Regulations, or equivalent laws, rules, or regulations of an applicable Regulatory Authority at the time of manufacture.

1.6 “Contaminant” means any substance contained in the Product that (A) causes the Product to fail to meet any Product Specifications, (B) causes the Product to be adulterated within the meaning the Act, (C) is present in the Product at a level that exceeds the level allowed under Applicable Laws.

1.7 “DMF” shall mean a drug master file for Product in the United States (as such term is defined in 21 C.F.R. Part 314.420) or Europe.

1.8 “Effective Date” means the date first written above.

1.9  “Facility” means the facility in Torrance, California where Product is manufactured by Bachem under this Agreement.

1.10  “FDA” means the United States Food and Drug Administration and any successor entity.

1.11  “Hidden Defect” means a defect in any shipment of Product that could not reasonably be expected to have been found by diligent and adequate inspection by Amylin pursuant to Section 4.1, such as the presence of any Contaminant or failure to follow cGMPs.

1.12  “Materials” shall mean, collectively, all raw materials, ingredients and packaging components required to produce Product in accordance with the Product Specifications.

1.13  “NDA” means one or more New Drug Application(s) to make and/or sell commercially Product, filed with the FDA (as more fully defined in 21 C.F.R. Part 314.5 et seq. ) or with a Regulatory Authority in any jurisdiction outside of the United States, and all amendments and supplements thereto filed therewith.

1.14  “Product” means the bulk drug substance, pramlintide acetate, manufactured under this Agreement.

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1.15  “Product Specifications” means the written specifications for Product set forth in Appendix A, as amended from time to time in accordance with the Quality Agreement.

1.16  “Purchase Order” means Amylin firm orders for Product under this Agreement issued on Amylin’s form of purchase order.

1.17  “Quality Agreement” means that certain Quality Agreement dated as of June 14, 2005, between Amylin and Bachem containing, identifying and outlining the specifications, and certain of the technical and compliance terms and conditions, for the manufacture of Product under this Agreement.  The Quality Agreement is incorporated into and made a part of this Agreement.

1.18  “Regulatory Approval” means (a) in the United States, approval by the FDA of an NDA for the Product, and satisfaction of any related applicable FDA registration and notification requirements, if any, and (b) in any country other than the United States, approval by Regulatory Authorities having jurisdiction over such country of a single application or set of applications with respect to a Product comparable to an NDA, and satisfaction of any related applicable regulatory and notification requirements, if any, including pricing approvals where applicable, together with any other approval necessary to make, use, import, package, label, market, and sell Product commercially in such country.

1.19  “Regulatory Authority” means the FDA in the United States, or the applicable regulatory agency or entity having the responsibility, jurisdiction, and authority to approve the manufacture, use, importation, packaging, labeling, marketing, and sale of Product in any country other than the United States.

2.                Purchase and Sale of Product

2.1           Bachem agrees to manufacture Product using the process described in the Batch Production Records, subject to the terms and conditions of this Agreement.

2.2           Bachem agrees to manufacture and supply Product in quantities set forth in Purchase Orders submitted by Amylin in accordance with this Agreement.  The following table sets forth the quantities of Product that Amylin estimates, as of the Effective Date, that it will purchase for delivery during the period commencing January 2006 and ending December 31, 2011. 

The quantities listed are indicative in nature, are not intended to be binding on the parties and can be revised periodically to reflect better knowledge of Product demand. However, Bachem guarantees that it will be able to manufacture said quantities of Product, provided such Product is ordered in accordance with the terms of this Agreement.

* Confidential Treatment Request(ed)

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Commencing on the Effective Date Amylin will supply to Bachem rolling [***] non-binding forecasts containing its estimated requirements of Product, by [***]. This may be a fixed amount or a range of quantities.  Amylin shall update such forecasts every [***] ([***]) months.  Amylin shall submit Purchase Orders specifying the quantity of Product ordered, the required delivery date, and any special instructions.  Any Purchase Order(s) for delivery of up to the first [***]kg quantity of Product by [***] in a given [***] will be issued to Bachem by no later than [***]of the [***].  Following the issuance of any Purchase Order(s) for delivery of up to the first [***]kg quantity of Product in a given [***], any Purchase Order(s) covering any subsequent quantity of Product for delivery by [***] that [***] must be issued to Bachem no later than [***] of the [***]. Exact delivery schedules of individual batches will then be determined between Seller and Buyer, but in no event shall any batch of Product be delivered to Amylin after the delivery date specified in the applicable Purchase Order.  The Purchase Orders issued in accordance with this Section 2.2 will be binding on both Bachem and Amylin.

2.3                                  The price for the Product shall be based on [***] as set forth below and includes the costs of Materials and analytical release testing.  If Materials’ costs or waste disposal costs change by more than [***] % over [***], the price for the Product may be adjusted, subject to the parties’ mutual written agreement, to reflect the change in such costs.

2.4                                  Prices will be the following:  The first [***]kg of Product ordered in any [***] will cost $[***]/g.  The next [***]kg of Product ordered in [***] will cost $[***]/g. Any additional orders for Product in [***] will cost $[***]/g.

2.5                                  Potential Product overages will be tabulated after the delivery of the last batches made to satisfy total [***] Product orders.  Bachem will determine the quantity of batches needed to fulfill the total Product Purchase Order(s). Any Product produced in excess of the total quantity of Product ordered by Amylin pursuant to Product Purchase Order(s) will be considered as Product overages.  Amylin may elect, in its sole discretion, to purchase said overages of Product for the following prices: The first [***]g of  Product overage at a price of $[***]/g, the next [***]g of Product overages at $[***]/g and any overages of Product in excess of [***]g will cost $[***]/g.

•                   Prices are based on current Product Specifications.  The parties agree that changes to the Product Specifications that are set forth in Exhibit 1 as of the Effective Date to reflect requirements for commercial supply will not result in any change to the prices set forth above; provided, however that, if such changes to the Product Specifications reflect process capabilities that are outside the process capabilities demonstrated by Bachem in manufacturing validation batches, then the parties will discuss whether such prices would require adjustment as a consequence.  Any change in pricing would require the written consent of both parties.

•                   Pricing also includes stability testing of one single lot per calendar year, according to the protocol given in Appendix A.

2.6           Any federal, state, county of municipal sales or use tax, excise or similar charge, or other tax assessment (other than that assessed against income), license fee or other charge lawfully assessed or charged on the manufacture, sale or transportation of Product sold pursuant to this Agreement shall be paid by Amylin, provided evidence of such charge is provided to Amylin in

* Confidential Treatment Request(ed)

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writing.

3.                Manufacture of Product

3.1 Changes in the manufacturing site or the materials, equipment, process, or procedures used to manufacture the Products shall be handled by the parties as stated in the Quality Agreement. Bachem shall obtain Amylin’s prior written approval before it implements any such change.  Amylin shall have the right to raise with Bachem any perceived deficiencies regarding any aspect of Bachem’s manufacture of Product.  In the event that Amylin raises with Bachem any such deficiency both parties will engage in negotiations regarding remedial action.  Upon mutual agreement, (A) Bachem shall, at its sole cost, promptly submit to Amylin a written plan to correct any such deficiency and promptly correct any such deficiency to Amylin’s satisfaction, (B) Amylin shall reimburse Bachem for any reasonable incremental one­-time costs associated with such changes while any ongoing costs associated with such changes shall be reviewed by the parties and allocated between Amylin and Bachem as mutually agreed upon by the parties at such time. If such corrections are required to bring the Facility into compliance with Applicable Laws, then Bachem shall bear all associated costs.

3.2  Product Specifications may be modified from time to time by written agreement of the parties without the necessity of amending this Agreement. However, no changes in the Product Specifications will be made unless made in accordance with the terms and conditions of the Quality Agreement. If Amylin requests a change in the Product Specifications that would result in a material increase in Bachem’s cost of manufacture, the parties shall discuss what impact, if any, such change should have on the price of Product.  If either Bachem agrees to implement such change without additional charge, or Amylin agrees in writing to a proposed price increase to implement such change, the price change shall become effective only with respect to those orders of Product that are manufactured in accordance with the modified Product Specifications. If a Regulatory Authority requires a change in the Product Specifications that would result in a material increase in Bachem’s cost of manufacture, the parties shall discuss what impact, if any, such change should have on the price of Product and Amylin shall bear the increased cost.

3.3  Bachem and Amylin shall comply with the terms and conditions of the Quality Agreement.  Bachem shall manufacture, package, label, and supply Product in accordance with the Product Specifications, cGMPs, the NDA, DMF or other applicable Regulatory Approvals, and all Applicable Laws.  Bachem’s responsibilities and obligations with respect to the manufacture of Products as set forth in this Section 3.3 are hereinafter referred to as the “Manufacturing Requirements.”  Bachem shall perform such quality control testing prior to shipment of Product to Amylin as is required to ensure that the Products delivered to Amylin under this Agreement comply with the Manufacturing Requirements and warranties described in Section 8, which testing shall include, without limitation, the performance of all required release testing and stability testing using the Amylin Test Methods (as defined below) and other tests designated by Amylin as found in Appendix A of this Agreement.  Bachem shall perform such tests itself or, with Amylin’s prior written consent, cause to be tested by a third party, each lot of Product before delivery, and shall provide to Amylin (A) a certificate of analysis containing the quality control test results for each such lot, and confirming that each such lot of Product conforms to the Product Specifications (the “Certificate of Analysis”), (B) a Certificate of Conformance confirming that such lot of Product was made in accordance with cGMPs and the process defined

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in the approved master batch record for such Product, and (C) copies of documents detailing any deviations from any manufacturing processes then in effect (the documents and information described in (A), (B) and (C), the “Bachem Release Documents”). Upon completion of the manufacture and testing of each lot of Product ordered by Amylin under this Agreement, Bachem shall send all the Bachem Release Documents to Amylin. Amylin is entitled to rely on the Bachem Release Documents for all purposes of this Agreement.

3.4 Bachem shall be responsible for obtaining any Materials required for the manufacture of Product, in reasonable quantities consistent with Amylin’s orders for Product and in accordance with the requirements of Section 8.1(H).  Bachem shall use and rotate all stock of Materials on a first-in, first-out basis as required by cGMPs.  Amylin shall assign lot numbers and retest dates to each lot of Product, and Bachem shall imprint such lot numbers and retest dates on each unit of Product shipped as required by cGMPs.

3.5 Bachem shall keep complete, accurate, and authentic accounts, notes, data, and records pertaining to its manufacture, processing, testing, packaging, storage and distribution of Product, including, without limitation, master production and control records and Product complaint files, in accordance with Applicable Laws.  In addition, Bachem shall retain samples of Products and isolated intermediates of each lot manufactured pursuant to this Agreement for a period of five (5) years after Amylin’s acceptance of such lot.  The sample size shall be twice the size necessary to conduct quality control testing.  Bachem shall retain such records and samples for a period of five (5) years following the date of manufacture, or longer if required by Applicable Laws, and, upon request, shall make available to Amylin copies of such records and portions of the samples.  After such time period, Bachem shall notify Amylin prior to destroying such records and samples and, at Amylin’s request and expense, shall provide such records and samples to Amylin.  Bachem shall provide Amylin and its representatives with access during reasonable business hours and after reasonable notice to those areas of Bachem’s manufacturing facilities where Product is manufactured, stored and handled and to manufacturing records, and testing and control records (including without limitation release and stability records), of Product manufactured by Bachem, so that Amylin and its representatives may perform a quality assurance audit of such facilities and activities. Use of all information gained in the course of audits is restricted to the purpose of quality assurance. Likewise, Bachem shall grant similar access to governmental regulatory agencies upon reasonable notice so that such agencies can perform inspections of its facilities.

3.6 Bachem shall promptly advise Amylin of any notice or request it receives from a Regulatory Authority or other governmental agency regarding inspection of its facilities relating to its manufacture of Product, and shall permit Amylin and its representatives to attend such inspection.  Bachem shall provide to Amylin all correspondence and reports that it receives from a Regulatory Authority or other governmental agency in connection with the manufacture of Product or with respect to the facility(ies) at which Bachem manufactures Product.  Bachem shall retain the right to delete information from these reports that would breach a confidentiality provision with any third party.

3.7 Bachem shall, at its own expense, obtain and maintain the necessary permits required for its manufacture and supply of the Products in accordance with this Agreement, including all

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required facility licenses.

3.8 Bachem further agrees to use its commercially reasonable efforts to assist Amylin in obtaining FDA approval of its NDA with respect to Product, as well as Regulatory Approvals from any other Regulatory Authority.  Bachem specifically agrees to cooperate with any inspection by the FDA or other Regulatory Authority, including but not limited to any inspection prior to approval of Amylin’s NDA.  Bachem shall, on a timely basis, provide Amylin with information in Bachem’s possession relevant to its role as the manufacturer of Products that is reasonably necessary for and relevant to Amylin’s efforts to obtain and maintain Regulatory Approvals for Product.  Without limiting the generality of the foregoing, Bachem agrees to establish and maintain a DMF for the Product in accordance with the requirements of the FDA and any other applicable Regulatory Authorities, and to provide Amylin with letters of access to, and rights to reference, the DMF and any other comparable files.  Bachem shall file and establish the DMF in a timely manner to support Amylin’s NDA filing, and shall provide to Amylin such documentation, data and other information relating to Products as Amylin may require for submission to Regulatory Authorities.  Bachem shall also provide, upon request by Amylin, information concerning its production processes and quality control procedures with respect to Products.

3.9 Each party shall promptly advise the others of any safety or toxicity problem of which such party becomes aware regarding the Product.

3.10 Bachem shall promptly notify Amylin of any problems, supply, or other situations that are likely to adversely affect the production of any Product, or its timely delivery to Amylin in accordance with the Purchase Order therefore.  Amylin may participate in the resolution of any such problem or production situation unless Amylin agrees with Bachem that such participation is unnecessary.

3.11  The conditions under which Product is manufactured shall be provided to Amylin for inclusion in Amylin’s regulatory filings.  Bachem further agrees to provide to Amylin all information regarding any aspect of manufacture of Product that is necessary and related to Amylin’s regulatory filings.  Bachem also agrees to authorize the FDA, or other Regulatory Authorities, to inspect any aspect of Bachem’s manufacture of Product.

3.12  The parties agree that Amylin shall be the sole and exclusive owner of all right, title and interest in and to any NDA filed with the FDA and the other Regulatory Authorities outside of the United States, and that Amylin shall be the sole and exclusive owner of any Regulatory Approvals related to Product.  Bachem shall assist Amylin in the preparation of all documents necessary to effectuate Amylin’s rights in each NDA and Amylin’s rights to such Regulatory Approvals, and agrees to transfer, effect, confirm, perfect, record, preserve, protect and enforce all rights, title and interests transferred hereunder, at the reasonable request and expense of Amylin.

3.13  Amylin shall disclose to Bachem, or provide Bachem with access to, the test methods specified in the Product Specifications (“Amylin Test Methods”) for Bachem’s use solely to perform its obligations under this Agreement.  Bachem understands and agrees that the Amylin Test Methods shall be the sole and exclusive property and Confidential Information (as defined

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in Section 10) of Amylin.  Any and all inventions or discoveries, including without limitation, information, processes, improvements, innovations, suggestions and ideas, whether or not patentable, conceived or reduced to practice by Bachem, alone or with others, that are related to any or all Amylin Test Methods, shall be owned solely and exclusively by Amylin.  The terms “conceived” and “reduced to practice” shall be given the meaning of those terms as used and interpreted for 35 U.S.C. § 102 (g).  Bachem will promptly notify Amylin of any such invention or discovery and shall transfer, effect, confirm, perfect, record, preserve, protect and enforce all rights, title, and interests therein to Amylin.

3.14    During the term of this Agreement, Bachem shall not manufacture any products containing pramlintide acetate or derivatives covered by an Amylin patent for any party other than Amylin.

4.  Acceptance of Product

4.1 Not later than [***] days after Amylin’s receipt of all Bachem Release Documents, Amylin shall examine the Bachem Release Documents for the Product’s compliance with the Product Specifications and other warranties in Section 8.  Amylin may reject any shipment of Product (or part thereof) that does not conform to the Product Specifications or other warranties in Section 8.  If Amylin believes that any such shipment does not comply with the Product Specifications or other warranties, or is otherwise deficient, Amylin shall promptly, but not later than [***] days after receipt of all Bachem Release Documents, notify Bachem. Any such notice of rejection shall be in writing and shall indicate the reasons for such rejection.  The invoice for any rejected Product shall be cancelled.  If no such notice of rejection is received, Amylin shall be deemed to have accepted such shipment upon the expiration of such [*