<PAGE>
EXHIBIT 10.38
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
DISTRIBUTION AND SUPPLY AGREEMENT
PREAMBLE
THIS
DISTRIBUTION AND SUPPLY AGREEMENT (the "Agreement") is entered into
as
of the 3rd day of March, 2006 (the "Effective Date") by and between
Myogen,
Inc., a Delaware corporation, with its principal place of business
at 7575 W.
103rd Avenue, Westminster, CO 80021-5426 ("Myogen") and SmithKline
Beecham
Corporation d/b/a GlaxoSmithKline, a Pennsylvania corporation, with
its
principal place of business at One Franklin Plaza, 200 North 16th
Street,
Philadelphia, PA 19101 ("GSK"). Myogen and GSK are sometimes
collectively
referred to herein as the "Parties" and separately as a
"Party."
WHEREAS, GSK desires to engage Myogen to exclusively promote and
distribute
Product (as hereinafter defined) in the Territory (as hereinafter
defined) to
ensure that life-saving product is available to those who need it
and to permit
Myogen to utilize GSK's Trademarks (as hereinafter defined) in
connection with
the promotion and distribution of Product in the Territory, and
Myogen desires
to be so engaged by GSK, in each case in accordance with the terms
and
conditions of this Agreement; and
WHEREAS, Myogen desires to purchase from GSK, and GSK agrees to
supply to
Myogen, Myogen's entire requirements of Product for distribution in
the
Territory during the Term (as hereinafter defined).
NOW,
THEREFORE, in consideration of the mutual covenants and agreements
set
forth herein and other good and valuable consideration, the receipt
and legal
sufficiency of which are hereby mutually acknowledged, Myogen and
GSK hereby
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used herein, the following capitalized
terms
will have the meanings set forth below when used in this Agreement,
and all
terms defined in the singular will have the same meanings when used
in the
plural (and vice versa), unless otherwise specified.
"Accredo" means Accredo Health Incorporated, a wholly owned
subsidiary of
Medco Health Solutions, Inc.
"Actual Quantity" will have the meaning set forth in Section
5.3(e).
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
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"Adjusted Gross Sales" means the number of units of Product sold by
Myogen
and/or its Affiliates or permitted sublicensees to Third Parties
(including, but
not limited to, Accredo and TheraCom) in arm's length transactions
multiplied by
the greater of: (a) Baseline WAC; or (b) the WAC in effect at the
time of such
sale. Any sales of Product between Myogen, its Affiliates and its
or their
permitted sublicensees, for resale, will be excluded from the
computation of
Adjusted Gross Sales.
"Adverse Event" means any untoward medical occurrence in a
patient
temporally associated with the use of Product, whether or not
considered related
to Product, including (a) any unfavorable and unintended sign,
symptom, or
disease (new or exacerbated) temporally associated with the use of
Product; (b)
an adverse event occurring from an overdose, whether accidental or
intentional,
related to Product; (c) an adverse event occurring from drug abuse
related to
Product; and (d) any failure of expected pharmacological action, or
such other
definition as may from time to time be set forth in 21 CFR Part
314.80.
An
"Affiliate" of a Party or Person means any Person, whether de jure
or de
facto, that directly or indirectly, controls, is controlled by, or
is under
common control with such Party or Person, as applicable. Solely as
used in this
definition, "control" means (a) direct or indirect ownership of
more than fifty
percent (50%) of the equity (or such lesser percentage which is the
maximum
allowed to be owned by a foreign corporation in a particular
jurisdiction)
having the power to vote on or direct the affairs of such Party or
Person, as
applicable, or (b) the possession, directly or indirectly, of the
power to
direct or cause the direction of the policies and management of
such Party or
Person, as applicable, whether by the ownership of stock, by
contract, or
otherwise.
"Agreement" will have the meaning set forth in the Preamble.
"Annual Meeting" will have the meaning set forth in Section
5.2(b).
"Anti-Kickback Statute" means the Medicare and Medicaid
Anti-Kickback
Statute set forth at 42 U.S.C. Section 1320a-7b(b).
"Applicable Law" means all applicable provisions of any and all
Federal,
national, state, provincial, and local statutes, laws, rules,
regulations,
administrative codes, ordinances, decrees, orders, decisions,
injunctions,
awards judgments, permits and licenses of or from governmental
authorities
relating to or governing the use or regulation of the subject item,
including,
without limitation, the Anti-Kickback Statute, the FD&C Act and
the PDMA.
"Average Selling Price" for each Product stock keeping unit (SKU)
in a
given Contract Year means the Gross Sales for such SKU of the
Product for such
Contract Year divided by the total number of units sold of such SKU
of the
Product in such Contract Year.
"Baseline Gross Sales" means, for the First Year, an amount equal
to GSK's
gross sales during the consecutive twelve (12) month period
immediately
preceding the Commencement Date; for the Second Year, an amount
equal to the
Gross Sales of the First Year; and for the
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
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<PAGE>
Third Year, an amount equal to the Gross Sales for the Second Year.
For the
purposes of this definition only, the term "GSK's gross sales"
means the gross
sales of Product by GSK to Third Parties in the Territory
(including, but not
limited to, Accredo and TheraCom), without any deduction for cash
discounts,
customary trade allowances or rebates actually taken.
"Baseline WAC" means GSK's [..**..] for Product to wholesalers or
direct
purchasers in the Territory as of the Effective Date, on a unit
basis consisting
of the total of (a) [..**..] for sterile diluent, (b) [..**..] for
Flolan 0.5mg
and (c) [..**..] for Flolan 1.5mg.
"Business Day" means any day other than a day which is a Saturday,
a Sunday
or any day banks are authorized or required to be closed in the
United States.
"Calendar Quarter" means each of the consecutive three (3) month
periods
ending March 31, June 30, September 30, and December 31, as the
case may be.
"Certificate of Conformance" means a document provided by GSK to
Myogen
that, for each specified lot of Product: (a) states that such
specified lot has
been manufactured in accordance with all Applicable Law and
licenses, (b)
certifies, by GSK's head of Quality Assurance, that such specified
lot is
suitable for release into interstate commerce, and (c) attests that
such
specified lot has been produced in accordance with the
Specifications and Good
Manufacturing Practices.
"CIP" means "Carriage and Insurance Paid to...," as defined in
INCOTERMS,
2000 edition, published by the International ChambeR of Commerce,
ICC
Publication 560.
"CMS" means the Center
for Medicare and Medicaid Services.
"Commencement Date" means the first day of the first full calendar
month
after the Effective Date following the date by which Myogen
provides written
notice to GSK that (i) Customers are notified and trained on how to
place
Customer Orders with Myogen, (ii) Myogen is ready to accept
Customer Orders,
(iii) Myogen is trained on how to deliver Purchase Orders to GSK
and (iv) Myogen
has in place capabilities to comply with its obligations under
Sections 3.5 and
3.6.
"Commercially Reasonable Efforts" means, (a) with respect to GSK,
efforts
and resources normally used by GSK in the Territory in the exercise
of its
reasonable business discretion relating to a prescription
pharmaceutical product
owned by it or to which it has exclusive rights, which is of
similar market
potential at a similar stage in its development or product life,
taking into
account issues of patent coverage, safety and efficacy, product
profile, the
competitiveness of the marketplace, the proprietary position of the
compound or
product, the regulatory structure involved, the profitability of
the applicable
products, and other relevant factors, including without limitation
technical,
legal, scientific, and/or medical factors; and (b) with respect to
Myogen,
efforts and resources normally used by a company similar to Myogen
in the
Territory in the exercise of its reasonable business discretion
relating to a
prescription pharmaceutical product owned by such company or to
which such
company has exclusive
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
3
<PAGE>
promotion and distribution rights, which is of similar market
potential at a
similar stage in its development or product life, taking into
account issues of
patent coverage, safety and efficacy, product profile, the
competitiveness of
the marketplace, the proprietary position of the compound or
product, the
regulatory structure involved, the profitability of the applicable
products, and
other relevant factors, including without limitation technical,
legal,
scientific, and/or medical factors.
"Confidential Information" means any and all information disclosed
to or
obtained by Recipient pursuant to or in connection with the
negotiation,
execution, delivery and performance of this Agreement or the
consummation of the
transactions contemplated hereby and any and all information
regarding, related
to, or associated with any or all elements of this Agreement,
including the
Product or each Party's operations, that is disclosed by the
Disclosing Party to
the Recipient; provided, however, that Confidential Information
will not include
information which: (a) at the time of disclosure is in the public
domain; (b)
after disclosure becomes part of the public domain, except through
breach of
this Agreement; (c) the Recipient can demonstrate by reasonable
proof was in its
possession prior to the time of disclosure by the Disclosing Party
hereunder,
and was not acquired directly or indirectly from the Disclosing
Party; (d) the
Recipient can demonstrate by reasonable proof was developed by or
on behalf of
Recipient independent of and without reference to the Disclosing
Party's
Confidential Information; or (e) becomes available to Recipient
from a Third
Party who did not acquire such information directly or indirectly
from the
Disclosing Party and who is not otherwise prohibited from
disclosing such
information.
"Confidentiality Agreement" will have the meaning set forth in
Section
11.1(h).
"Contract Year" means any of the First Year, the Second Year or the
Third
Year, and if the Agreement is extended as provided in Section 12.1,
each twelve
(12) consecutive calendar month period following the Third Year
during the Term
thereafter.
"Cure Period" will have the meaning set forth in Section 12.2.
"Current Accredo Agreement" means the Specialty Distribution
Agreement, as
amended, between GSK and Accredo, and effective as of September 1,
2000,
pursuant to which Accredo provides specialty pharmacy distribution
services
relating to Product and, if applicable, any extension thereof
setting forth the
terms and conditions pursuant to which Accredo will transition the
specialty
pharmacy distribution services provided under the Current Accredo
Agreement to a
another specialty pharmacy distributor.
"Current Accredo Agreement Assignment" will have the meaning set
forth in
Section 2.2(a)(i).
"Current TheraCom Agreement" means the Specialty Distribution
Agreement, as
amended, between GSK and TheraCom, effective as of October 21,
1999, pursuant to
which TheraCom provides specialty pharmacy distribution services
relating to
Product, and, if applicable, any extension thereof setting forth
the terms and
conditions pursuant to which
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
4
<PAGE>
TheraCom will transition the specialty pharmacy distribution
services provided
under the Current TheraCom Agreement to a another specialty
pharmacy
distributor.
"Current TheraCom Agreement Assignment" will have the meaning set
forth in
Section 2.2(a)(ii).
"Customers" means Third Party purchasers of Product in the
Territory,
including in each case, without limitation, Accredo and
TheraCom.
"Customer Orders" will have the meaning set forth in Section
5.3(c)(i).
"DDMAC" means the FDA's Division of Drug Marketing, Advertising
and
Communications.
"Detail" means an interactive face-to-face visit in the Territory
by a
sales representative of Myogen with a Target Prescriber or his or
her legally
empowered designee, during which the FDA-approved indicated uses,
safety,
effectiveness, contraindications, side effects, warnings, and other
relevant
characteristics of Product may be described by such sales
representative in a
fair and balanced manner consistent with Applicable Law and the
PhRMA Code, and
using, as necessary or desirable, the product labeling or the
Promotional
Materials; however, incidental contacts between such sales
representatives and a
Target Prescriber will not constitute a Detail. When used as a
verb, "Detail"
means to engage in a Detail.
"Disclosing Party" will have the meaning set forth in Section
11.1(a).
"Dispute" will have the meaning set forth in Section 9.1.
"Dispute Notice" will have the meaning set forth in Section
9.1.
"Drug Master File" means the drug master file (as such term is
defined in
21 CFR. Part 314.420) filed with the FDA with respect to the
Product.
"Effective Date" will have the meaning set forth in the
Preamble.
"FDA" means the United States Food and Drug Administration, or
any
successor agency of the United States.
"FD&C Act" means the Federal Food, Drug and Cosmetic Act, as
amended, and
the regulations promulgated thereunder from time to time.
"First Year" means the consecutive twelve (12) month period during
the Term
commencing on the Commencement Date.
"Generic Equivalent" means a pharmaceutical composition sold by a
Third
Party, which pharmaceutical composition contains epoprostenol
sodium as an
active ingredient, is
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
5
<PAGE>
bioequivalent to Product with respect to pharmacokinetic properties
and approved
by the FDA under an Abbreviated New Drug Application ("ANDA") or
any equivalent
approval as may be available at the time.
"Good Manufacturing Practices" means all current good
manufacturing
practices as defined under 21 USC Section 351(a)(2)(B) and thE FDA
regulations
promulgated thereunder, as in effect from time to time.
"Governmental Authority" means any Federal, state, local or
foreign
governmental authority, regulatory agency or other governmental
body in the
Territory.
"Gross Sales" means the number of units of Product sold by Myogen
and/or
its Affiliates or permitted sublicensees to Third Parties
(including, but not
limited to, Accredo and TheraCom) in arm's length transactions
multiplied by the
WAC in effect at the time of such sale. Any sales of Product
between Myogen, its
Affiliates and its or their permitted sublicensees, for resale,
will be excluded
from the computation of Gross Sales.
"GSK" will have the meaning set forth in the Preamble.
"GSK
Indemnitee" will have the meaning set forth in Section 9.3.
"GSK
Promotional Materials" will have the meaning set forth in
Section
3.2(c).
"GSK
Publication" will have the meaning set forth in Section
11.3(b).
"GSK
Territory" will have the meaning set forth in Section 2.3(d).
"Incentive Compensation" will have the meaning set forth in
Section
3.9(c)(iii).
"Ineligible Person" means an individual or entity who: (a) is
currently
excluded, debarred, suspended or otherwise ineligible to
participate in the
Federal health care programs or in Federal procurement or
nonprocurement
programs, or (b) has been convicted of a criminal offense that
falls within the
ambit of 42 U.S.C. 1320a-7(a), but has not yet been excluded,
debarred,
suspended or otherwise declared ineligible.
"Indemnitee" will have the meaning set forth in Section 9.4.
"Indemnitor" will have the meaning set forth in Section 9.4.
"Intellectual Property" means all patents and patent applications
in
existence as of the Effective Date or during the Term, that
generally or
specifically claim or cover the manufacture, use, sale or
importation of the
Product, including those as set forth on Schedule 1.1A, attached
hereto and
incorporated herein.
"Losses" will have the meaning set forth in Section 9.2.
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
6
<PAGE>
"Myogen" will have the meaning set forth in the Preamble.
"Myogen Indemnitees" will have the meaning set forth in Section
9.2.
"Myogen Publication" will have the meaning set forth in Section
11.3(a).
"NDA" means a New Drug Application filed with the FDA for any
product,
requesting permission to place a drug on the market in accordance
with 21 CFR
Part 314, and all amendments or 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 such product
in the
Territory.
"NDC" means National Drug Code.
"Net
Effective Price Increase" means the percentage calculated by
dividing
the difference between the Average Selling Price for a given
Contract Year and
the Average Selling Price for the immediately prior Contract Year
by the Average
Selling Price for the immediately prior Contract Year. For the
First Year, the
Net Effective Price Increase means the percentage calculated by
dividing the
difference between the Average Selling Price for the First Year and
the Average
Selling Price for the twelve (12) consecutive month period prior to
the
Commencement Date by the Average Selling Price for the twelve (12)
consecutive
month period prior to the Commencement Date.
"New
Accredo Agreement" means a specialty distribution agreement
between
GSK and Accredo, which may become effective after the Effective
Date, pursuant
to which Accredo will provide specialty pharmacy distribution
services relating
to Product in the Territory.
"New
Accredo Agreement Assignment" will have the meaning set forth
in
Section 2.2(c)(i).
"New
TheraCom Agreement" means a specialty distribution agreement
between
GSK and TheraCom, which will become effective after the Effective
Date, pursuant
to which TheraCom will provide specialty pharmacy distribution
services relating
to Product in the Territory.
"New
TheraCom Agreement Assignment" will have the meaning set forth
in
Section 2.2(c)(ii).
"NOV" means notice of violation, otherwise known as an "untitled
letter"
sent by DDMAC.
"Party" or "Parties"
will have the meaning set forth in the Preamble.
"Patient Assistance Program" will have the meaning set forth in
Section
3.1(h).
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
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<PAGE>
"PDMA" means the Prescription Drug Marketing Act of 1987, as
amended, and
the regulations promulgated thereunder from time to time.
"Pfizer Supply Agreement" means the Supply Agreement, between
Wellcome
Foundation Limited (predecessor to GSK) and The Upjohn Company
(predecessor to
Pfizer), effective as of January 1, 1992, pursuant to which Pfizer
manufactures
and supplies to GSK epoprostenol sodium as the active
pharmaceutical ingredient
used by GSK to manufacture Product.
"Pfizer" means Pfizer, Inc.
"PhRMA Code" means the PhRMA Code on Interactions with Health
Care
Professionals, as amended.
"Person" means any individual, corporation, partnership, firm,
association,
joint venture, joint stock company, trust or other entity, or any
government or
regulatory administrative or political subdivision or agency,
department or
instrumentality thereof.
"Pre-Clearance Period" will have the meaning set forth in
Section
3.2(b)(ii).
"Pre-Clearance Process" will have the meaning set forth in
Section
3.2(b)(ii).
"Product" means any pharmaceutical composition which contains
epoprostenol
sodium as the sole active ingredient and is marketed under the
authority of GSK
or any Affiliate of GSK during the Term. As of the Effective Date,
the Product
is known as Flolan(R) and is marketed solely in the dosage form and
packaged in
the manner identified on Schedule 1.1B, attached hereto and
incorporated herein.
For the avoidance of doubt, "Product" will be deemed to include the
Sterile
Diluent for Flolan, and subject to Section 4.5, Product
Improvements.
"Product Action" will have the meaning set forth in Section
6.8(b)(i).
"Product Forecast" will have the meaning set forth in Section
5.2(a)(i).
"Product Registration" means the approvals or registrations for
Product
which have been received by GSK in the Territory, including without
limitation,
the Drug Master File (DMF) and NDA for the Product.
"Promotional Activities" will have the meaning set forth in Section
3.2(a).
"Promotional Materials" will have the meaning set forth in Section
3.2(a).
"Promotional Review Notice" has the meaning set forth in Section
3.2(b)(i).
"Purchase Order" will have the meaning set forth in Section
5.3(c)(ii).
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
8
<PAGE>
"Quality Agreement" means the agreement to be entered into by the
Parties
pursuant to Section 6.3.
"Quarterly Meeting" will have the meaning set forth in Section
5.2(b).
"Recipient" will have the meaning set forth in Section 11.1(a).
"Sales Representative FTE" will have the meaning set forth in
Section
3.9(b).
"Second Year" means the consecutive twelve (12) month period during
the
Term immediately succeeding the last calendar day of the First
Year.
"Serious Adverse Event" means an Adverse Event occurring at any
dose that
results in any of the following outcomes: death, a life-threatening
Adverse
Event, inpatient hospitalization or prolongation of existing
hospitalization, a
persistent or significant disability/incapacity, or a congenital
anomaly/birth
defect. Important medical events that may not result in death,
be
life-threatening, or require hospitalization may be considered a
Serious Adverse
Event when, based upon appropriate medical judgment, they may
jeopardize the
patient or subject and may require medical or surgical intervention
to prevent
one of the outcomes listed in this definition.
"Specifications" will mean the specifications for Product set forth
on
Exhibit A, attached hereto and incorporated herein, as may be
updated from
time-to-time by the Parties during the Term.
"Supply Price" will have the meaning set forth in Section 5.5.
"Target Prescribers" will have the meaning set forth in Section
3.9(c).
"Term" will have the meaning set forth in Section 12.1.
"Territory" means the United States.
"TheraCom" means TheraCom, Inc.
"Third Party" means any Person other than the Parties or their
respective
Affiliates.
"Third Year" means the consecutive twelve (12) month period during
the Term
immediately succeeding the Second Year.
"Trademarks" means the FLOLAN(R) trademarks to be set forth on
Schedule
1.1C, which shall be delivered to Myogen after the Effective Date
and attached
hereto and incorporated herein.
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
9
<PAGE>
"Transition Period" means the period commencing on the Effective
Date and
ending at 12:01 a.m. Eastern Standard Time on the Commencement
Date.
"United States" or "U.S." means the fifty (50) states of the United
States
of America and the District of Columbia.
"WAC" means Myogen's list price for Product to wholesalers or
direct
purchasers in the Territory, including, without limitation, Accredo
and
TheraCom, but excluding prompt pay or other discounts, rebates or
reductions in
price, as reported in wholesale price guides or other publications
of drug or
biological pricing data.
Section 1.2 Clarification. The word "including" or any variation
thereof
means "including without limitation" and the word "including" or
any variation
thereof will not be construed to limit any general statement which
it follows to
the specific or similar items or matters immediately following it.
The word
"annual" means each period during the Term from January until
December, pro
rated as necessary.
ARTICLE II
APPOINTMENT OF DISTRIBUTION RIGHTS; RIGHTS AND LIMITATIONS
Section 2.1 Appointment of Promotion and Distribution Rights;
Transition
Period.
(a) Subject to the terms and conditions of this Agreement, GSK
hereby
appoints Myogen as GSK's exclusive distributor (except as otherwise
provided in
this Agreement) of Product in the Territory, and, in connection
therewith,
grants to Myogen the exclusive right (except as otherwise provided
in this
Agreement) to market, promote, advertise, sell and distribute
Product in the
Territory. In connection with the foregoing, GSK grants to Myogen
an exclusive
license under the Intellectual Property to sell and offer to sell
Product in the
Territory. The appointment and license made in the preceding
sentences will
commence on the Commencement Date and continue throughout the Term,
and for
clarity, such appointment will not survive past the expiration or
earlier
termination of this Agreement. Except as otherwise provided in this
Agreement,
GSK and its Affiliates will not engage in any marketing,
promotion,
advertisement, sale or distribution of Product in the Territory
after the
Commencement Date.
(b) GSK and its Affiliates will retain the exclusive right during
the
Term to manufacture Product and/or to have Product manufactured in
the
Territory, and to ship Product through its distribution channels in
the
Territory, as long as such shipment is solely in connection with
providing
Product to GSK's Affiliates or Third Parties for sale in the GSK
Territory,
and/or in connection with providing Product to Customers on behalf
of Myogen in
accordance with Section 5.3.
(c) During the Transition Period, GSK will continue to sell and
distribute Product in the Territory in a manner consistent with
GSK's practices
prior to the Effective Date.
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
10
<PAGE>
Further, during the Transition Period, GSK will be solely
responsible for
invoicing Customers for sales of Product and booking all sales of
Product in the
Territory.
Section 2.2 Specialty Pharmacy Agreements.
(a) Assignment of Current Agreements. Contemporaneous with the
execution of this Agreement, each Party will cause their respective
authorized
representative to execute:
(i) an assignment agreement with respect to the Current Accredo
Agreement (the "Current Accredo Agreement Assignment"), a copy of
which is
attached hereto and incorporated herein as Exhibit B, pursuant to
which as of
the Commencement Date, all rights and responsibilities of GSK under
the Current
Accredo Agreement will be assigned to Myogen, subject to the terms
and
conditions of the Current Accredo Agreement Assignment; and
(ii) an assignment agreement with respect to the Current
TheraCom
Agreement (the "Current TheraCom Agreement Assignment"), a copy of
which is
attached hereto and incorporated herein as Exhibit C, pursuant to
which as of
the Commencement Date, all rights and responsibilities of GSK under
the Current
TheraCom Agreement will be assigned to Myogen, subject to the terms
and
conditions of the Current TheraCom Agreement Assignment.
(b) Negotiation and Execution of New Agreements. After the
Effective
Date, GSK will use Commercially Reasonable Efforts to negotiate and
execute the
New Accredo Agreement and New TheraCom Agreement. GSK may, from
time to time
during the negotiations of either the New Accredo Agreement or New
TheraCom
Agreement, provide Myogen with an opportunity to review and comment
upon drafts
of such New Accredo Agreement or New TheraCom Agreement, which
comments GSK will
consider but will in no way be obligated to incorporate into either
the New
Accredo Agreement or New TheraCom Agreement. Myogen acknowledges
that GSK
desires to execute the New Accredo Agreement and New TheraCom
Agreement as soon
as possible after the Effective Date. Accordingly, Myogen agrees
that it will
use its best efforts to provide comments, if any, on any drafts of
the New
Accredo Agreement or New TheraCom Agreement as soon as reasonably
practicable
after receipt thereof from GSK. In the event that GSK is unable to
enter into
either the New Accredo Agreement or the New TheraCom Agreement for
the provision
of specialty distribution services relating to Product in the
Territory, GSK
will use Commercially Reasonable Efforts to identify other Third
Party specialty
pharmacy(ies) to be agreed upon by Myogen and GSK will use
Commercially
Reasonable Efforts to negotiate an agreement with such Third Party
which will be
assigned to Myogen. GSK agrees that it shall ensure that the terms
of the New
Accredo Agreement, the New TheraCom Agreement or any such other
Third Party
specialty pharmacy agreement shall not be materially
disadvantageous to GSK or
its assignee relative to the terms of the Current Accredo Agreement
or the
current TheraCom Agreement. GSK agrees that it shall negotiate in
any of the New
TheraCom Agreement, the New Accredo Agreement or any such other
Third Party
specialty pharmacy agreement a prompt payment discount to encourage
payment of
invoices within approximately thirty (30) days.
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
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(c) Assignment of New Agreements.
(i) Within five (5) Business Days after the execution of the
New
Accredo Agreement, each Party will cause their respective
authorized
representative to execute an assignment agreement with respect to
the New
Accredo Agreement (the "New Accredo Agreement Assignment"), a copy
of which is
attached hereto and incorporated herein as Exhibit D, pursuant to
which as of
the Commencement Date, all rights and responsibilities of GSK under
the New
Accredo Agreement will be assigned to Myogen, subject to the terms
and
conditions of the New Accredo Agreement Assignment; and
(ii) Within five (5) Business Days after the execution of the
New
TheraCom Agreement, each Party will cause their respective
authorized
representative to execute an assignment agreement with respect to
the New
TheraCom Agreement (the "New TheraCom Agreement Assignment"), a
copy of which is
attached hereto and incorporated herein as Exhibit E, pursuant to
which as of
the Commencement Date, all rights and responsibilities of GSK under
the New
TheraCom Agreement will be assigned to Myogen, subject to the terms
and
conditions of the New TheraCom Agreement Assignment.
Section 2.3 Territorial Limitation.
(a) Myogen agrees that it will conduct its marketing,
promotion,
advertisement, sale and distribution of Product solely in the
Territory. Myogen
will not sell, market, promote, advertise or distribute Product in
the GSK
Territory. Myogen will not knowingly sell or otherwise offer
Product, directly
or indirectly, to any Customer for resale in the GSK Territory.
Myogen will not,
directly or indirectly, sell or otherwise offer Product to any
Customer that
Myogen reasonably believes is going to sell such Product, directly
or
indirectly, in the GSK Territory, unless mutually agreed in writing
upon by both
Parties. It is acknowledged by the Parties, however, that certain
sales of
Product by Myogen to the United States Government, and its
subdivisions thereof,
may result in Product being shipped to military bases and other
government
installations that are in the GSK Territory and such sales will not
constitute a
breach of this Agreement.
(b) Subject to Applicable Law, Myogen will implement reasonable
safeguards so that Product is sold to Customers for resale only in
the Territory
and not for resale in any country in the GSK Territory. If Myogen
becomes aware
that any of its Customers has imported Product from the GSK
Territory or
exported Product into the GSK Territory, or has reason to believe
that a
Customer intends to import Product from the GSK Territory or export
Product to
the GSK Territory, Myogen, to the extent permitted by Applicable
Law, will take
Commercially Reasonable Efforts to cause such Customer to cease
such
unauthorized import/export activities; provided, however, that
nothing contained
in this Section 2.3(b) will obligate Myogen to take any action to
comply with
this Section 2.3(b) which is greater than that taken by GSK with
respect to the
Product prior to the Effective Date.
(c) GSK agrees that it will, and will use Commercially
Reasonable
Efforts to cause its Affiliates and their sublicensees to, conduct
the
marketing, promotion, advertisement,
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
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sale and distribution of Product solely in the GSK Territory. GSK
will not
(except as expressly permitted by this Agreement or as required by
Applicable
Law), and will use Commercially Reasonable Efforts to cause its
Affiliates and
their sublicensees not to, sell, market, promote, advertise or
distribute
Product in the Territory. GSK will not knowingly, and will use
Commercially
Reasonable Efforts to ensure that its Affiliates and their
sublicensees will not
knowingly, sell or otherwise offer Product, directly or indirectly,
to any Third
Party in the GSK Territory for resale in the Territory. GSK will
not, and will
use Commercially Reasonable Efforts to cause its Affiliates and
their
sublicensees not to, directly or indirectly, offer Product to any
Third Party
that GSK, such Affiliate or sublicensee reasonably believes is
going to sell
such Product, directly or indirectly, in the Territory, unless
mutually agreed
in writing by both Parties.
(d) Subject to Applicable Law, GSK will, and will use
Commercially
Reasonable Efforts to cause its Affiliates and their sublicensees
to, implement
reasonable safeguards so that Product is sold by or on behalf of
GSK, such
Affiliates or sublicensees only outside of the Territory ("GSK
Territory") and
except as set forth in this Agreement, is not sold by or on behalf
of GSK, its
Affiliates or their sublicensees in the Territory. If GSK becomes
aware that any
Affiliate of GSK, its sublicensee or any of their Third Party
purchasers has
imported Product from the Territory or exported Product into the
Territory, or
has reason to believe that any Affiliate of GSK, its sublicensee or
a Third
Party purchaser intends to import Product from the Territory or
export Product
to the Territory, GSK, to the extent permitted by Applicable Law,
will take
Commercially Reasonable Efforts to cause such Affiliate of GSK,
sublicensee or
Third Party purchaser to cease such unauthorized import/export
activities;
provided, however, that nothing contained in this Section 2.3(d)
will obligate
GSK to take any action to comply with this Section 2.3(d) which is
greater than
that taken by GSK with respect to Product prior to the Effective
Date.
Section 2.4 Restriction of Sub-Distributors. Without the prior
written
consent of GSK, Myogen will not grant to any Third Party any rights
to market,
promote, advertise, sell or distribute Product, and will not enter
into any
agreement or arrangement with respect to co-promoting the Product.
The foregoing
notwithstanding, Myogen may employ the services of a Third Party in
the
acceptance of orders, generation of invoices and collection and
management of
receivables with respect to Myogen's sales of Product in the
Territory.
Section 2.5 Compliance with Product Registration Resale in Same
Packaging.
Myogen will not at any time do, and neither will Myogen permit its
agents or
representatives to do, any act in violation of the Product
Registration for any
of Product in the Territory. In the event that any filings are
required to be
made with or approvals required to be obtained from applicable
Governmental
Authorities in order to sell Product to Myogen or for Myogen to
initiate
distribution, marketing, advertisement, sale or promotion of
Product in the
Territory, the Parties will use Commercially Reasonable Efforts to
ensure that
such filings and approvals are obtained or made as expeditiously as
reasonably
practicable. Myogen will not alter in any manner any of the Product
or its
packaging as sold to it by GSK hereunder and will resell Product
without
alteration in the form sold to it by GSK.
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
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Section 2.6 No Manufacturing Rights Conveyed on Effective Date.
Except for
Myogen's right to use the Trademarks pursuant to Section 3.3
hereof, no right or
license under any Trademark, or under any patent rights or know-how
owned or
controlled by GSK or any of its Affiliates to make or have made
Product is
granted under this Agreement to Myogen.
Section 2.7 Non-Compete. During the Term, and for the consecutive
[..**..]
period immediately succeeding the termination of this Agreement by
GSK pursuant
to Section 12.2, neither Myogen nor any of its Affiliates will
directly or
indirectly distribute, market, promote, detail, advertise or sell
any product
[..**..] other than Product. During the Term, and for the
consecutive [..**..]
period immediately succeeding the termination of this Agreement by
Myogen
pursuant to Section 12.2, neither GSK nor any of its Affiliates
will directly or
indirectly distribute, market, promote, detail, advertise or sell
any product
[..**..] other than Product or Product Improvements not included
within the
definition of Product pursuant to Section 4.5. The foregoing
covenants shall not
restrict either Party or any Affiliate from obtaining rights to, or
engaging in
research and development activities related to, products in such
class during
the restricted time period, so long as such Party or its Affiliate
does not
engage in the activities set forth in the first two sentences of
this paragraph,
as applicable.
ARTICLE III
MYOGEN RESPONSIBILITIES
Section 3.1 Distribution Diligence. In fulfillment of its
obligations under
this Agreement, commencing on the Commencement Date and continuing
during the
Term Myogen will:
(a) provide, at its expense, a traceability system for the
Product
reasonably comparable to customary industry practices;
(b) use Commercially Reasonable Efforts to ensure that all sales
force
personnel promote Product in a manner that is consistent with the
Product's
Product Registration and labeling, and that is permitted by
Applicable Law and
as otherwise provided in Section 3.2. If Myogen becomes aware of
any such
activity in contravention of the immediately foregoing standards,
Myogen will
take prompt affirmative action to ensure that such activity will
cease, and take
additional remedial action to advise its sales personnel concerning
the
activities described in this subsection;
(c) not take any action which constitutes a violation of
Applicable
Law, a breach of this Agreement, the Current Accredo Agreement,
Current TheraCom
Agreement, New Accredo Agreement or New TheraCom Agreement, in each
case that
would have a material adverse impact on:
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
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<PAGE>
(i) the commercialization of Product in the Territory; or
(ii) the then-existing business of GSK, its Affiliates and
licensees with respect to Product in the GSK Territory;
(d) use Commercially Reasonable Efforts to work with Customers
regarding the details of placing Customer Orders, method of payment
and other
administrative details as will be necessary to distribute and sell
Product after
the Commencement Date and during the Term;
(e) obtain, as soon as reasonably practicable following the
Effective
Date, and no later than three (3) months following the Effective
Date, at
Myogen's sole and exclusive expense, any and all requisite NDCs in
Myogen's name
for the Product, and, except as otherwise provided in this
Agreement, obtain any
and all governmental approvals as are required for Myogen to
fulfill its
obligations hereunder (including filings with the FDA for
distributor NDCs). GSK
will cause the NDC number obtained by Myogen to appear on all
Product (other
than Product consisting of current inventory of finished goods)
sold by GSK to
Myogen as soon as reasonably practicable after Myogen provides the
NDC to GSK;
(f) maintain the availability of the current package inserts
with
respect to the Product on any website maintained by Myogen or its
Affiliates for
the distribution, marketing, promotion, detailing, advertising or
sale of
Product and at such other locations where Myogen or any such
Affiliates make
information regarding the Product available;
(g) use Commercially Reasonable Efforts to sell, market,
detail,
promote, advertise and distribute the Product in a manner that will
not have a
material adverse effect on the Product; and
(h) support the Patient Assistance Programs with respect to Product
in
the Territory as GSK specifically requests and Myogen agrees. For
purposes of
this clause (h), the "Patient Assistance Programs" means the
indigent programs
maintained by Accredo and TheraCom during the Term, but for which
GSK will
determine all eligibility criteria in its sole discretion.
Section 3.2 Promotional Materials and Promotional Activities.
(a) Subject to the provisions of Sections 3.2(b) and 3.9 below,
after
the Commencement Date, Myogen will be solely responsible, at its
sole expense
and under its sole control, for designing and conducting all
promotional
activities used in the promotion, advertising, Detailing and
marketing of
Product in the Territory (the "Promotional Activities") and for
designing,
preparing and distributing all materials and advertisements used in
the
promotion, advertising, Detailing and marketing of Product in the
Territory
(collectively the "Promotional Materials"); provided, however, that
Myogen will,
upon the request of GSK, permit GSK personnel to accompany Myogen
sales
representatives when Detailing Product to Target Prescribers and to
participate
in Promotional Activities conducted by or on behalf of Myogen, in
each case from
time to time during the Term. Myogen will ensure that all
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
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Promotional Materials and Promotional Activities comply with, and
Myogen will be
solely responsible and liable for any failure of such Promotional
Materials and
Promotional Activities to comply with the applicable labeling and
Product
Registration for Product, Applicable Law, the PhRMA Code and the
PhRMA Guiding
Principles, Direct-to-Consumer Advertisements About Prescription
Medicines,
notwithstanding any prior review or approval of such Promotional
Materials or
Promotional Activities by GSK and notwithstanding that such
Promotional
Materials or Promotional Activities may have been previously
reviewed, used or
conducted by GSK or may be used or conducted by GSK during the Term
in the GSK
Territory. Myogen will be solely responsible for fulfilling
regulatory
requirements pertaining to the Promotional Materials and its
Promotional
Activities, including, without limitation, sole responsibility for
submitting to
FDA all Promotional Materials prepared by or for Myogen at the time
of initial
dissemination, by way of a Form FDA-2253, consistent with 21 CFR
Part 314.81. To
this effect, GSK will, upon the Commencement Date, or as soon
thereafter as is
reasonably practicable, place a letter on file with DDMAC with
respect to
Product advising DDMAC that Myogen will be the sole marketer and
promoter of
Product in the Territory and requesting that DDMAC address
regulatory inquiries
and concerns regarding Myogen's promotional activities solely with
Myogen.
Myogen will promptly, but in no event within more than two (2)
Business Days
after Myogen's receipt thereof, provide a copy to GSK of any
correspondence from
a Governmental Authority with respect to Product, including, but
not limited to,
the FDA, reflecting any purported legal or regulatory violations or
legal or
regulatory action being considered or taken by such Governmental
Authority,
including without limitation, copies of FDA NOV's and Warning
Letters. Unless
otherwise required, Myogen will not provide GSK with copies of any
Promotional
Materials or notify GSK of any Promotional Activities unless
pursuant to a
written request by GSK, in which case such information will be
provided by
Myogen to GSK within three (3) Business Days of such request by
GSK. Myogen will
absorb and be solely responsible for any and all lost profits, lost
revenues,
damages, losses, expenses and costs incurred by Myogen and its
Affiliates
arising from the failure of any Promotional Materials used, or
Promotional
Activities conducted, by Myogen to comply with the applicable
labeling, the
Product Registrations and/or with Applicable Law. Without limiting
the rights
GSK may have under the indemnification provisions of this
Agreement, but subject
to Section 9.5 hereof, Myogen will promptly reimburse GSK and its
Affiliates for
any and all documented damages, losses, expenses and costs suffered
or incurred
by GSK and its Affiliates arising from (i) the failure of any
Promotional
Materials used, or Promotional Activities conducted by, Myogen to
comply with
the applicable labeling, the applicable Product Registrations,
Applicable Law,
and/or any comments, guidance or direction given by FDA or DDMAC in
the
Pre-Clearance Process pursuant to Section 3.2(b)(ii), or (ii) the
failure of
Myogen or its representatives to promote Product in compliance with
the
applicable labeling, the applicable Product Registrations and/or
with Applicable
Law, including, without limitation, any damages, losses, expenses
and costs
reasonably incurred by GSK to so mitigate or limit the effect or
impact of (i)
or (ii) above, on GSK and its Affiliates' products or corporate
image
(including, but not limited to, the costs of any remedial action
GSK may choose
to undertake to communicate with physicians or Customers
(including, but not
limited to, so-called "dear doctor letters"). The foregoing
obligation of Myogen
will not include any obligation to reimburse GSK or its Affiliates
for damages,
losses, expenses or cost suffered or incurred by GSK as a result of
acts or
omissions of GSK, GSK' Affiliates or any of their
representatives.
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
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(b) Promotional Review
(i) If Myogen (or GSK) receives a Warning Letter from the FDA
which relates to marketing, promotion, advertisement, sale or
distribution of
Product after the Commencement Date, or Myogen (or GSK) receives
two (2) NOV's
from the FDA which relate to marketing, promotion, advertisement,
sale or
distribution of Product after the Commencement Date, GSK will have
the right to
call, and Myogen will participate/or attend at its own expense, a
meeting of
Myogen (which will include senior level marketing and sales
management of
Myogen) and GSK, to be held at GSK's offices in Research Triangle
Park, N.C. The
purpose of such meeting will be to discuss the Promotional
Materials or
Promotional Activities which led to the issuance of the Warning
Letter or the
NOV's, as the case may be, and to discuss, if appropriate,
appropriate
corrective or remedial measures to Myogen's promotional review
process.
Subsequent to any such meeting or in lieu of such meeting (if such
meeting is
not held as a result of the mutual agreement of the Parties or as a
result of
Myogen's failure or refusal to attend), GSK may, in its sole and
absolute
discretion, at any time after the issuance of a Warning Letter or a
second NOV
from FDA related to Product after the Commencement Date, decide to
invoke the
promotional review procedures set forth in Section 3.2(b)(ii) below
by sending
written notice thereof to Myogen (hereinafter, a "Promotional
Review Notice").
(ii) In the event that GSK sends a Promotional Review Notice to
Myogen, Myogen will comply with the procedures set forth in this
Section
3.2(b)(ii). Myogen will ensure that all Promotional Materials and
Promotional
Activities comply with the applicable labeling and the applicable
Product
Registration for Product and with Applicable Law, including,
without limitation,
addressing any concerns which were the subject of such FDA
letter(s). For a
period of [..**..] after the Promotional Review Notice (the
"Pre-Clearance
Period"), Myogen will submit all of the following for review and
approval by
DDMAC (the "Pre-Clearance Process") prior to use or dissemination:
any and all
Promotional Materials and Promotional Activities (including,
without limitation,
detail aids, brochures, reprints and other printed materials shown
to or left
with healthcare providers, letters, brochures and other printed
materials
intended for consumers, website content, materials for use in
promotional
programs, and any print, television, radio, and other media
advertising
materials intended for healthcare providers or consumers, speaker
slide kits).
Myogen will not use any materials or make any claims in
advertising, promoting
or selling Product which have not gone through the Pre-Clearance
Process and
received specific and entire written approval by DDMAC; provided,
however, that
in the case of materials not accepted for review by DDMAC, Myogen
will ensure
that all such materials and the claims and promotional messages
therein: (A) are
consistent with the materials and claims that have gone through
the
Pre-Clearance Process and received written approval by DDMAC, if
any, and (B)
comply with all comments, direction and guidance given by DDMAC
during the
Pre-Clearance Period, if any. Myogen will use Commercially
Reasonable Efforts to
ensure that all Promotional Activities of all sales representatives
promoting
the Product comply with any and all comments, direction or guidance
given by
DDMAC during the Pre-Clearance Period. Upon expiration of the
Pre-Clearance
Period, Myogen will continue to promote, detail, sell and advertise
Product in a
manner consistent with all comments, directions and guidance
received from
DDMAC. Myogen will be solely responsible for submitting all
Promotional
Materials
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
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prepared by or for it to the FDA by way of a Form 2253 or
otherwise. GSK will
have the right to terminate this Agreement on thirty (30) days
written notice
if: (1) Myogen fails to fully comply with the requirements of this
Section
3.2(b)(ii); or (2) FDA issues a Warning Letter or NOV with respect
to Product at
any time during or after the Pre-Clearance Period. Myogen will
immediately cease
the promotion of the Product upon receipt of such notice of
termination from
GSK.
(c) GSK will provide Myogen with copies of any advertising,
promotional or training materials in its possession and previously
used by GSK
relating to Product in the Territory ("GSK Promotional Materials"),
and will
permit Myogen, subject to compliance by Myogen with Applicable Law,
to update,
adapt and use such GSK Promotional Materials in the Territory in
developing new
Promotional Materials (subject to any copyrights or other rights
reserved to
GSK, its Affiliates and to Third Parties in such materials). GSK
reserves and
retains title and all rights, including copyright rights, in and to
all GSK
Promotional Materials, whether written, visual or electronic works
provided by
it to Myogen under this Agreement. Subject to the foregoing, Myogen
is granted
the nonexclusive right under this Section to use, copy, modify, and
distribute
such GSK Promotional Materials only for the purposes of this
Agreement and in
furtherance of the rights granted to Myogen hereunder, for the Term
for the
Product to which such works and materials relate. Myogen will
ensure that all
copyright notices and this permission notice appear on all copies
of the written
materials provided by GSK and all adaptations and derivative works
thereof. Any
and all new Promotional Materials developed by Myogen, including
that which
adapts or utilizes the GSK Promotional Materials supplied to Myogen
by GSK, will
be filed by Myogen with FDA at the time of initial dissemination
via Form
FDA-2253.
(d) Myogen will have strategic responsibility and sole authority
and
responsibility, at its sole expense, for independent and
non-independent
symposia, speaker training and engagement programs, advisory board
meetings and
other consulting arrangements, scientific exhibits and other types
of scientific
exchange, and other such events or programs as Myogen, in its sole
discretion,
deems to be appropriate with respect to the Product in the
Territory; provided,
however, that any and all such events and programs must comply in
all respects
with Applicable Law and relevant FDA policies, including without
limitation, the
FDA's Guidance on Industry-Supported Educational and Scientific
Activities.
(e) Myogen will provide GSK with copies of any market research
conducted after the Commencement Date regarding Product.
Section 3.3 Use of Trademarks; Trade Dress. After the Commencement
Date and
for the duration of the Term, and subject to the terms and
conditions of this
Agreement:
(a) GSK hereby grants to Myogen an exclusive (except as
otherwise
provided in this Agreement), royalty free license to use the
Trademarks to
promote, market, sell and distribute the Product in the Territory
during the
Term. Myogen will not identify Product by any designation other
than the
Trademarks, except that Myogen may identify itself as distributor
of Product.
With respect to Product which bears Myogen's NDC codes as provided
herein,
Myogen will be identified as the distributor of such Product on the
Product's
label as the same
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
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may be required and specified under Applicable Law, or if
Applicable Law does
not specify how the distributor will be indicated on a Product's
label, then as
determined (including without limitation as to size and placement)
jointly by
GSK and Myogen. The use of the Trademarks by Myogen will be
expressly subject to
subparagraph (c) below.
(b) Myogen will use the Trademarks solely with respect to
Product
purchased from GSK or its designee as provided in this Agreement,
only in
accordance with the standards of quality established or approved by
GSK or its
designee, and only in the Territory. Myogen will permit duly
authorized
representatives of GSK to inspect, on the premises of Myogen or
its
subcontractors and agents, at reasonable times during normal
business hours and
upon not less than ten (10) Business Days prior written notice,
inventory of
Product, Myogen's quality control records, and Myogen's facilities
used in or
relating to the sale of Product to ensure compliance with quality
control
standards and with applicable terms of this Agreement pertaining to
the use of
the Trademarks.
(c) Whenever Myogen uses the Trademarks in any Promotional
Materials
or in any other manner in connection with Product, Myogen will
clearly indicate
that the Trademarks are owned by the GlaxoSmithKline group of
companies. When
using the Trademarks under this Agreement, Myogen will comply with
all
Applicable Law pertaining to the Trademarks in force at any time in
the
Territory. During the Term, Myogen will provide GSK with copies of
Promotional
Materials on a periodic basis, as requested by GSK, for review of
the use of the
Trademarks by Myogen. Myogen will promptly take any and all actions
directed by
GSK with respect to Myogen's use of the Trademarks that are
reasonably designed
to ensure compliance with the provisions of this Section 3.3.
(d) Myogen acknowledges and agrees that GSK and/or its Affiliates,
is,
and at all times will remain the owner of the Trademarks. Myogen
will not at any
time do, cause to be done, or permit any of its employees, agents,
contractors
and subcontractors to commit any act inconsistent with, contesting
or in any way
impairing, or tending to impair, such ownership. Myogen agrees that
all use of
the Trademarks by Myogen will inure to the benefit of and be on
behalf of GSK or
its Affiliates. Myogen acknowledges that nothing in this Agreement
will give
Myogen any right, title or interest in the Trademarks other than
the right to
use the Trademarks within the Territory in accordance with this
Agreement.
Myogen agrees that it will not challenge GSK's or its Affiliates'
title to, or
ownership of, the Trademarks, or attack or contest the validity of
the
Trademarks. All goodwill accruing to the Trademarks as a result of
the use of
the Trademarks in the performance of this Agreement will belong
solely to GSK or
its Affiliates. In the event that Myogen acquires any rights in the
Trademarks
in connection with Myogen's activities pursuant to this Agreement,
Myogen will
assign, and hereby does assign, to GSK or its Affiliates all such
rights,
including any related goodwill.
(e) Myogen is limited to using the Trademarks in connection with
the
Internet as follows:
(i)
the use must be in compliance with local rules regarding
advertising of pharmaceuticals on the Internet;
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
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<PAGE>
(ii) the use of any Trademarks as a domain name is limited to
the
relevant country code domain within the Territory. No license is
granted to use
the ".com generic code domain" or any other such top-level domain.
All domain
names containing the Trademark will be registered and maintained by
and in the
name of GSK or its designee;
(iii) the use of any Trademarks as a domain name is limited to
use on websites with universal resource locaters using the relevant
country code
domain within the Territory and aimed at audiences in those
countries in the
Territory;
(iv)
appropriate disclaimers must be included in any website to
the effect that it is intended for residents in that country within
the
Territory only; and
(v) in using any of the Trademarks as a domain name or on the
Internet, Myogen will not have and will not represent in any way
that it has any
title or right to the ownership or registration or their use,
except as provided
in this Agreement. Myogen will at all times indicate that each of
the Trademarks
is a trademark of the GlaxoSmithKline group and is used under
license.
Section 3.4 Trademark Infringement by Third Parties. If either
Party
becomes aware that a Third Party is infringing any Trademark used
in connection
with Product in the Territory, such Party will give written notice
to the other
Party describing in detail the nature of such infringement. GSK and
its
Affiliates will have the first right, but not the obligation, to
enforce any
such Trademarks against such Third Party infringer, in their
reasonable
discretion, and to settle or compromise any such possible
infringement by taking
such action as GSK or its Affiliates may determine in their sole
and absolute
discretion; provided, however that no settlement or consent
judgment or other
voluntary final disposition of any suit or action pursuant to this
Section 3.4
may be entered into without the consent of Myogen if such
settlement would
subject Myogen to an injunction or if such settlement or judgment
would
materially diminish or limit or otherwise materially and adversely
affect the
rights, activities or financial interests of Myogen. If GSK does
not commence a
particular infringement action within ninety (90) calendar days of
receipt of
the notice of infringement, then Myogen, after notifying GSK in
writing, will be
entitled but will have no obligation to bring such infringement
action at its
own expense. In any event, GSK and Myogen will provide the other
Party with all
reasonable assistance (including, without limitation, making
documents and
records available for review and copying, and making persons within
its control
available for pertinent testimony), at the other Party's expense,
in such
enforcement.
Section 3.5 Rebates and Chargebacks.
(a) GSK's Obligations. GSK will be responsible for all
governmental
and commercial rebates and chargeback claims for Product dispensed
prior to the
Commencement Date (it being understood and agreed that the
information contained
in any report from the applicable rebate program will be deemed to
be the date
for purposes of determining the date of such claim) and after the
expiration or
termination of this Agreement. GSK will also be
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
20
<PAGE>
responsible for all rebates pursuant to any government rebate
programs with
respect to government claims for Product dispensed during the
Calendar Quarter
which encompasses the Commencement Date (it being understood and
agreed that the
information contained in any report from the state rebate program
will be deemed
to be the date for purposes of determining the date of such claim).
GSK will
reimburse Myogen for all rebates and chargebacks that Myogen is
obligated to pay
with respect to claims for Product dispensed on and after the
expiration or
termination of the Agreement, which is labeled with Myogen's (or
any of its
Affiliates') NDC number and for which GSK is responsible pursuant
to this
Section 3.5(a). All payments due to Myogen by GSK as set forth in
the
immediately preceding sentence will be made by GSK to (or its
Affiliates) within
thirty (30) calendar days after GSK's receipt of an invoice from
Myogen (or its
Affiliates) setting forth requested payments in reasonable
detail.
(b) Myogen's Obligations. Myogen will be responsible for all
commercial rebates and chargeback claims for Product dispensed on
and after the
Commencement Date during the Term (it being understood and agreed
that the
information contained in any report from the applicable rebate
program will be
deemed to be the date for purposes of determining the date of such
claim).
Myogen will also be responsible for all rebates pursuant to any
government
rebate programs with respect to government claims for Product
dispensed during
the Term after the Calendar Quarter which encompasses the
Commencement Date (it
being understood and agreed that the information contained in any
report from
the state rebate program will be deemed to be the date for purposes
of
determining the date of such claim). Myogen will reimburse GSK for
all rebates
and chargebacks that GSK is obligated to pay with respect to claims
for Product
dispensed on and after the Commencement Date, which is labeled with
GSK's (or
any of its Affiliates') NDC number and for which Myogen is
responsible pursuant
to this Section 3.5(b). All payments due to GSK by Myogen as set
forth in the
immediately preceding sentence will be made by Myogen to GSK (or
its Affiliates)
within thirty (30) calendar days after Myogen's receipt of an
invoice from GSK
(or its Affiliates) setting forth requested payments in reasonable
detail.
Section 3.6 Medicaid
Information. With respect to Product sold by Myogen
after the Commencement Date that bears an NDC number of GSK or any
of GSK's
Affiliates, Myogen will deliver to GSK, within fifteen (15)
calendar days after
the end of each Calendar Quarter or reporting period as designated
by CMS to
include monthly, the following information: (a) the "best price"
(as defined
under the Social Security Act, 42 USC Section 1396r-8(c)(1)(C)) for
all Product,
identified by NDC number; (b) the "average manufacturer price"
(AMP) (as defined
under the Social Security Act, 42 USC Section 1396r-8(k)(1)) and
the relevant
sales dollar amount as well as the number of units applicable to
each
calculation for all of such Product, each identified by NDC number;
(c) the
"average sales price" (as defined under the Medicare Modernization
Act, 42
U.S.C. Section 1395w-3); and (d) the relevant sales dollar amount
as well as the
number of units applicable to each calculation for all of such
Product, each
identified by NDC number. Myogen agrees to provide to GSK any
additional data or
other information required for the calculation and reporting of a
government
mandated price as well as the calculation of the rebates
contemplated in Section
3.5. Myogen agrees that GSK may use all information described in
this Section
3.6 in reporting to the CMS. GSK will provide Myogen with Medicaid
pricing data
required to support the continued filing for Product with the CMS
after the
transition to
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
21
<PAGE>
Myogen's NDC number, including, Base Date Average Manufacturer's
Price as
defined under the Medicaid Rebate Law (MRL).
Section 3.7 Pricing. As of the Commencement Date and continuing
during the
Term, Myogen will have the sole authority to determine the prices
of Product
sold by it during the Term and to establish its own pricing policy
for the
Product in the Territory, including price increases or decreases
and the timing
thereof as determined by Myogen; provided, however, that the Net
Effective Price
Increase in any Contract Year for any SKU of the Product will not
exceed
[..**..], without the prior written consent of GSK, which may be
provided at its
sole discretion. So as to enable GSK to make any necessary
adjustments to the
Supply Price calculations in GSK's systems, Myogen will provide GSK
with at
least [..**..] calendar days' written notice prior to making any
changes to the
WAC.
Section 3.8 Sales Force.
(a) All members of Myogen's sales force (including management
and
sales representatives) will complete a Product-related training
program
conducted by Myogen at its cost and expense. All members of
Myogen's sales force
(including management and representatives) must pass a competency
test with
respect to the Product with a score of [..**..] or higher. In
connection with
Myogen's Product-related training program, GSK will, to the extent
available and
in GSK's possession, provide Myogen with copies of any training
materials
previously used in training sales representatives in the Territory
on the
Product. Myogen will have the sole responsibility for any such
materials and for
preparing additional and new materials for the Product for sales
training
purposes as needed. Ongoing training of Myogen's sales
representatives and other
personnel will be the responsibility of Myogen at its cost and
expense. The
contents of any training provided by Myogen that relates to the
Product will be
developed and coordinated by Myogen, and Myogen will be solely
responsible for
training its sales force (including management and sales
representatives) with
regard to Applicable Law and directing such sales force and sales
force
personnel to be compliant with Applicable Law, regardless of
whether Myogen
utilized GSK provided materials for training.
(b)
As of the Commencement Date and continuing during the Term,
Myogen
will maintain a compliance and audit program to ensure that the
activities of
its sales force (including management and sales representatives)
are consistent
with the FD&C Act, the Anti-Kickback Statute, the PDMA and the
PhRMA Code.
(c) Myogen will not hire or employ an Ineligible Person as either
an
employee or contractor to conduct any promotional, sales,
distribution and/or
any other activities relating to Product in the Territory under
this Agreement.
To prevent the hiring or engaging of Ineligible Persons, Myogen
will screen all
prospective employees and contractors prior to engaging their
services pursuant
to this Agreement by (i) requiring such Persons to disclose to
Myogen whether
they are Ineligible Persons; and (ii) appropriately querying the
General
Administrative Services Administration's List of Persons Excluded
from Federal
Programs (currently available through the Internet at
http://oig.hhs.gov). In
addition, Myogen represents and warrants to GSK that
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
22
<PAGE>
during the Term, Myogen will maintain policies and procedures in
effect that
require, and that it will otherwise require, all employees and
contractors to
immediately disclose to Myogen any debarment, exclusion, suspension
or other
event that may make such employee or contractor an Ineligible
Person. If Myogen
has actual notice that one of its employees or contractors
providing services
under this Agreement has become or is likely to become an
Ineligible Person,
Myogen will remove such Person from any responsibility associated
with this
Agreement and the Product. If Myogen has actual notice that one of
its employees
or contractors is charged with a criminal offense related to any
Federal health
care program, or is proposed for exclusion, Myogen will take all
appropriate
action to ensure that the responsibilities of such Person have not
and will not
in the future adversely affect this Agreement and the Product.
Section 3.9 Diligence Requirements.
(a) Myogen will employ sales force representatives and other
marketing
personnel, who will have successfully completed all required
training programs
as set forth in Section 3.8(a), to Detail and otherwise promote
Product in
accordance with Applicable Law and the terms and conditions of this
Agreement.
(b) Myogen will employ a sufficient number of sales representatives
in
order to provide not less than the following number of sales
representative full
time equivalents with respect to Product ("Sales Representative
FTEs") during
each Contract Year of the Term:
(i) First Year - [..**..] Sales Representative FTEs;
(ii) Second Year - [..**..] Sales Representative FTEs; and
(iii) Third Year - [..**..] Sales Representative FTEs.
(c) (i) Myogen acknowledges and agrees that not less than
[..**..]
Details per Contract Year will be provided by each Sales
Representative FTE and
such Details will be provided during at least [..**..] Business
Days during each
Contract Year at an average rate of [..**..] Details during each
such Business
Day, provided, however, that the Parties agree to pro-rate the
Details required
for the First Year. Accordingly, Myogen will provide, at a minimum,
the
following number of Details during each Contract Year:
(A) First Year - [..**..] Details;
(B) Second Year - [..**..] Details; and
(C) Third Year - [..**..] Details.
Myogen will cause its sales representatives to, among other things,
Detail
Product to at least [..**..] physicians, who will be identified by
Myogen within
thirty (30) calendar days after the Commencement Date, and
modified
periodically, as being among the highest treaters of primary
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
23
<PAGE>
pulmonary hypertension (the "Target Prescribers"). The list of
Target
Prescribers will be subject to the approval of GSK, not to be
unreasonably
withheld. At either Party's request, the Parties shall consult on a
Calendar
Quarterly basis regarding the list of Target Prescribers. If Myogen
fails to
provide the minimum number of Details specified for a given
Contract Year, but
provides at least [..**..] of such number, Myogen shall not be in
breach of such
obligation, provided that it pays to GSK an amount equal to
[..**..] in the
number of required Details multiplied by [..**..], such payment to
be made
within thirty (30) calendar days of the end of the applicable
Contract Year.
(ii) In addition to Sales Representative FTEs, Myogen
acknowledges and agrees that within thirty (30) calendar days after
the
Commencement Date and for the duration of the Term, it will
maintain the
following marketing personnel to support Myogen's obligations with
respect to
Product in the Territory:
(A) [..**..];
(B) [..**..];
(C) [..**..];
(D) [..**..]; and
(E) [..**..].
Myogen represents and warrants that no individual will hold more
than one
position set forth above.
(iii) Myogen acknowledges and agrees that during the First
(1st)
Contract Year, the Incentive Compensation for Product available to
be earned by
each sales representative and sales marketing personnel involved in
the
promotion of Product in the Territory will be [..**..] the
Incentive
Compensation (defined below) available to be earned for any other
product for
which such sales representative or sales marketing personnel is
being
compensated. During the second (2nd) Contract Year and each
Contract Year
thereafter during the Term, the Incentive Compensation for Product
available to
be earned by each sales representative and sales marketing
personnel involved in
the promotion of Product in the Territory will be [..**..] the
Incentive
Compensation available to be earned by such sales representatives
and sales
marketing personnel for all products promoted by Myogen to Target
Prescribers
multiplied by a fraction, the numerator of which is equal to the
number of Sales
Representative FTEs required to be provided during such Contract
Year under
Section 3.9(b) and the denominator of which is equal to the number
of Myogen
sales representatives actively Detailing physicians who are
treaters of
pulmonary hypertension during such Contract Year. For the purposes
of this
Section 3.9(c)(iii), "Incentive Compensation" means incentive
compensation for a
product available to be earned by a sales representative or sales
marketing
personnel of Myogen based on [..**..] quota attainment pursuant to
the terms of
the then current incentive compensation plan for such sales
representative or
sales marketing personnel. During the Term,
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
24
<PAGE>
Myogen acknowledges and agrees that [..**..] quota attainment for
Product, if
based upon Gross Sales in any Contract Year, will not be based on a
Gross Sales
amount that is greater than the Baseline Gross Sales for such
Contract Year.
(iv) Myogen will be solely responsible for the costs and
expenses
of establishing and maintaining its sales force and marketing
functions for the
Product, and for conducting its other activities under this
Agreement, and
subject to the foregoing, will have the sole authority to control
its sales
force and direct the activities of its sales force.
(d) Myogen acknowledges and agrees that it will spend not less
than
the following for advertising and promotion activities relating to
Product under
this Agreement (including Myogen's reasonable, documented internal
costs for
personnel providing services in connection with such activities
that would
typically otherwise be provided by a Third Party vendor (e.g., an
advertising
agency)); provided, however, that such amounts will not include
those expenses
relating to the compensation of sales force and marketing personnel
as set forth
in Section 3.9:
(i) If no Generic Equivalent is sold in the Territory prior to
the start of the [..**..] Calendar Quarter of [..**..], then:
(A) for the First Year - [..**..] of Gross Sales;
(B) for the Second Year - [..**..] of Gross Sales; and
(C) for the Third Year - [..**..] of Gross Sales;
(ii) If a Generic Equivalent is not first sold in the Territory
until after the end of the [..**..] Calendar Quarter of [..**..]
but prior to
the start of the [..**..] Calendar Quarter of [..**..], then:
(A) for the First Year - [..**..] of Gross Sales;
(B) for the Second Year - [..**..] of Gross Sales; and
(C) for the Third Year - [..**..] of Gross Sales; and
(iii) If a Generic Equivalent is sold in the Territory prior to
the end of the [..**..] Calendar Quarter of [..**..], then:
(A) for the First Year - [..**..] of Gross Sales;
(B) for the Second Year - [..**..] of Gross Sales; and
(C) for the Third Year - [..**..] of Gross Sales.
For
avoidance of doubt, Myogen shall not be obligated to incur expenses
for
advertising and promotion activities relating to Product in excess
of the
amounts stated above, unless Myogen elects in its sole discretion
to do so. If
Myogen fails to spend the applicable, specified amounts for
advertising and
promotion activities in a given Contract Year, but spends at least
[..**..] of
such amounts, Myogen shall not be in breach of such obligation,
provided that it
pays to GSK an amount equal to the spending shortfall, such payment
to be made
within thirty (30) calendar days of the end of the applicable
Contract Year.
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
25
<PAGE>
(e) Myogen will keep complete and accurate records of the number
of
sales representatives and marketing personnel providing services as
provided in
Section 3.9(a) and promotional activities of such sales
representatives directed
toward the Target Prescribers. In addition, Myogen will keep
complete and
accurate records of all amounts spent by Myogen relating to sales
force
requirements and Promotional Activities for Product under this
Agreement. Myogen
and its Affiliates will keep such records for at least three (3)
years from the
end of the calendar year to which they pertain. Such records will
be made
available to GSK for audit or review under the provisions of
Section 7.4.
(f) Myogen will, not later than fifteen (15) Business Days after
the
end of each month following the Commencement Date and continuing
during the
Term, provide GSK with unaudited data with respect to those
Promotional
Activities conducted by Myogen during the immediately preceding
month regarding
Product in the Territory. Myogen will, not later than fifteen (15)
Business Days
after the end of each Calendar Quarter during the Term, provide GSK
with a
report setting forth in reasonable detail those Promotional
Activities conducted
by Myogen during the immediately preceding Calendar Quarter
regarding Product in
the Territory, including, without limitation, Detail activity to
Target
Prescribers (e.g., physicians, frequency of details, etc.) and
other Promotional
Activities (e.g., dinners, speaker events, etc.), and the amounts
spent by
Myogen on such Promotional Activities.
ARTICLE IV
GSK'S RESPONSIBILITIES
Section 4.1 Supply and Distribution of Product. In order to ensure
the
quality of Product to be sold by Myogen under the Trademarks, GSK
will supply
exclusively for Myogen, pursuant to Articles V and VI hereof and
subject to the
other terms and conditions as set forth in this Agreement, Product
for
marketing, sale and distribution by Myogen in the Territory after
the
Commencement Date and continuing during the Term.
Section 4.2 Retention of Product Registrations.
(a) GSK will have sole responsibility for maintaining, and will
maintain, the Product Registration in the Territory at its expense,
including
without limitation filing NDA Annual Reports, with copies to
Myogen, and paying
all user fees, product fees and establishment fees associated with
the Product
Registrations in the Territory. GSK will keep Myogen informed on a
timely basis
as to any developments that may have a material adverse effect on a
Product
Registration. Myogen will cooperate with GSK with respect to
obtaining and
maintaining the Product Registrations, and will execute,
acknowledge and deliver
such further instruments at GSK's request and expense, and use
Commercially
Reasonable Efforts to do all such other acts, as promptly as
possible, which may
be necessary or appropriate to obtain and maintain the Product
Registrations in
the Territory. Myogen will, on a timely basis and in response to
requests made
by GSK from time to time, provide to GSK all information that
Myogen has from
time to time during the Term for the Product that is reasonably
necessary and
relevant to GSK's
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
26
<PAGE>
obligations hereunder to fulfill such Product Registration
maintenance
requirements (including, but not limited to, providing sales
distribution
information concerning the Product). GSK will have the final
decision-making
authority in every case on whether and how to supplement, amend or
otherwise
alter the Product Registrations and any other issues in connection
with such
Product Registrations (including, but not limited to, decisions,
subject to
Section 6.8, to recall the Product) and on whether and how to
communicate with
the FDA and other applicable governmental agencies or authorities
in connection
with such Product Registrations.
(b) GSK and Myogen each will make its respective facilities
available
at reasonable times during business hours for inspection by
representatives of
Governmental Authorities relating to the manufacture, sale,
marketing,
promotion, distribution, or use of Product in the Territory. GSK
and Myogen each
will notify the other within twenty-four (24) hours (or, if such
twenty-four
(24) hour period ends on a day that is not a Business Day, then
prior to Noon on
the next following Business Day) of receipt, and provide a copy
thereof, of any
notice of any FDA or other Governmental Authority inspection,
investigation or
other inquiry, or other material governmental notice or
communication, relating
to the manufacture, sale, marketing, promotion, distribution, or
use of Product
in the Territory. Myogen and GSK will cooperate with each other
during any such
inspection, investigation or other inquiry. Myogen and GSK will
discuss any
response to observations or notifications received in connection
with any such
inspection, investigation or other inquiry and each will give the
other an
opportunity to comment upon any proposed response before it is
made; provided,
however, that (i) GSK will not be required to discuss with Myogen
any issues
specific to the manufacture of Product, unless it impacts Myogen's
ability to
distribute the Product under this Agreement, or to obtain the
consent or
agreement of Myogen with respect to issues related thereto, and
(ii) Myogen will
be solely responsible for responding to inquiries and actions from
Governmental
Authorities relating to Promotional Activities and Promotional
Materials as
contemplated by Section 3.2. In the event of disagreement
concerning the form or
content of such response, however, GSK will be responsible for
deciding the
appropriate form and content of any response with respect to any of
its
governmental agency cited activities and Myogen will be responsible
for deciding
the appropriate form and content of any response with respect to
any of its
governmental agency cited activities. Myogen and GSK will provide
each other
with copies of all correspondence received by it from, or filed by
it with, any
Governmental Authority to the extent pertaining to Product in the
Territory or
its labeling, packaging, distribution, promotion, advertisement,
marketing or
sale in the Territory; provided, however, that Myogen will not
provide copies of
Promotional Materials to GSK unless requested by GSK in writing as
provided in
Section 3.2(a). In addition, GSK will provide Myogen copies of all
material
correspondence received by GSK from, or filed by GSK with, any
Governmental
Authority to the extent such correspondence or filing could
reasonably, in GSK's
opinion, have an affect on Myogen's ability to perform its
obligations under
this Agreement. Nothing in this Section 4.2(b) will limit or
condition the
rights of either Party under Section 6.12.
(c) GSK will have sole responsibility and authority for, and
control
of, all package inserts and package labeling (and any changes or
supplements
thereto) for Product, and will have
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
27
<PAGE>
the responsibility at its expense for securing any approvals
required by FDA to
any such changes or supplements thereto. Myogen will not at any
time do, and
neither will Myogen permit its agents or representatives to do, any
act in
violation of the Product Registration for Product in the Territory.
In the event
that any filings are required to be made with or approvals required
to be
obtained from applicable regulatory authorities in order to change
or supplement
the package inserts and labeling, GSK will have the sole
responsibility for and
authority to effect such filings and the sole right and discretion
on how to
effect such changes at GSK's expense. GSK will promptly, but in no
event less
than five (5) Business Days, advise Myogen in writing of any
changes or
supplements to the package inserts and package labeling for
Product. The Parties
acknowledge and agree that Product sold immediately after the
Commencement Date
will be sold under a GSK label; however, as soon as reasonably
practicable
following the Commencement Date, all Product will be identified as
product
manufactured by GSK and Myogen will be identified as the
distributor thereof,
including the Myogen NDC and logo. Myogen will, within thirty (30)
calendar days
after the Commencement Date, provide GSK with all information for
Myogen's logo
and NDCs.
Section 4.3 Prosecution and Maintenance of Trademarks and
Patents.
(a) GSK will register and maintain, or cause to be registered
and
maintained, at its cost and expense, the Trademarks in the
Territory during the
Term. The rights of the Parties with respect to Trademark
infringement are set
forth in Section 3.4 of this Agreement.
(b) Notwithstanding any other provision of this Agreement to
the
contrary, GSK and its Affiliates will have the right but not the
obligation to
prosecute, maintain or abandon any patent rights and know-how owned
or
controlled by GSK covering the Product. GSK will not abandon any
patent right or
know-how owned or controlled by GSK with respect to the Product in
the Territory
without giving thirty (30) days prior written notice to Myogen.
Should GSK elect
to abandon any patent in the Territory contained in the
Intellectual Property,
GSK will (i) provide Myogen with written notice as soon as
reasonably possible
after making such election but in any event no later than sixty
(60) calendar
days after making such election but in any event before a possible
loss of
rights, and Myogen will have the right to prosecute and maintain
such patent in
its sole discretion, at its sole expense and in GSK's name,
Myogen's name or the
name of both GSK and Myogen, as determined by GSK in its sole
discretion.
(c) GSK will have the sole right, but not the obligation, at its
sole
discretion and expense, to maintain and enforce any contract
entered into by GSK
covering the supply of any compounds, intermediates, biomaterials,
packaging
components, containers and other materials used in the manufacture
of Product.
(d) If either Party becomes aware of actual or threatened
infringement
of a patent included within the Intellectual Property anywhere in
the Territory
by a Third Party, including any action or proceeding filed in
connection with an
ANDA filed by a Third Party related to the Intellectual Property,
that Party
will promptly notify the other Party in writing. GSK will have the
first right,
but not the obligation, to bring, at its own expense, an
infringement action
against any Third Party. If GSK does not commence a particular
infringement
action within ninety (90) calendar days of receipt of the notice
of
infringement, then Myogen, after
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
28
<PAGE>
notifying GSK in writing, will be entitled but will have no
obligation to bring
such infringement action at its own expense. The Party conducting
such action
will have full control over and will use Commercially Reasonable
Efforts to
conduct such action, including settlement thereof subject to
Section 4.3(f). In
any event, GSK and Myogen will provide reasonable assistance to one
another and
will reasonably cooperate in any such litigation at the other's
request [..**..]
to the requesting Party.
(e) GSK and Myogen will recover its actual and reasonable
out-of-pocket expenses associated with any litigation or settlement
thereof from
any recovery made by either Party. In the event GSK was the Party
to commence an
infringement action pursuant to Section 4.3(d), any excess amount
attributable
to compensatory and punitive damages for infringement of any patent
included
within the Intellectual Property, such amount will be shared
between Myogen and
GSK, provided that Myogen's share of any excess amount attributable
to
compensatory and punitive damages for sales of the product that was
the subject
of the litigation will be limited to the amount of, or
proportionate to,
compensation that Myogen would have been entitled to receive had
those been
sales of Product in the Territory made by Myogen. In the event
Myogen was the
Party to commence an infringement action pursuant to Section
4.3(d), then any
excess amount attributable to infringement of any patents included
within the
Intellectual Property will be retained solely by Myogen.
(f) The Parties will keep one another informed of the status of
its
activities regarding any litigation or settlement thereof
concerning the
Intellectual Property; provided, however that no settlement or
consent judgment
or other voluntary final disposition of any suit or action pursuant
to Section
4.3(d) may be entered into without the consent of the other Party
if such
settlement would subject such Party to an injunction or if such
settlement or
judgment would materially diminish or limit or otherwise materially
and
adversely affect the rights, activities or financial interests of
such Party.
(g) Each Party shall retain the right to be represented by counsel
of
its own selection and its own expense in any suit or other action
instituted by
the other Party pursuant to Section 4.3(d).
Section 4.4 Patient Assistance Programs. During the Term, GSK will
use
Commercially Reasonable Efforts to continue to support the Patient
Assistance
Programs by (a) overseeing Accredo's and TheraCom's enrollment of
eligible
Patient Assistance Program recipients, (b) providing sufficient
inventories of
Product to Accredo and TheraCom for distribution under the Patient
Assistance
Program, (c) providing Myogen with monthly reports, which reports
will set forth
the number of patients receiving Product under the Patient
Assistance Program
and the amount of Product shipped to Customers pursuant to the
Patient
Assistance Program, (d) issuing a credit to Myogen for any amounts
paid by
Myogen to GSK for Product distributed under the Patient Assistance
Program, and
(e) providing such additional information as reasonably requested
by Myogen
regarding the Patient Assistance Program.
Section 4.5 Product Improvements. GSK will have no obligation,
express or
implied, to develop new formulations, indications, dosages,
presentations, forms
of administration, or
[..**..] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF
1934, AS AMENDED.
29
<PAGE>
preparations for Product. However, if GSK does develop a new
formulation,
dosage, presentation, form of administration or preparation for
Product (a
"Product Improvement") during the Term, such Product Improvement
will be deemed
to be included within the definition of Product; provided, that the
Parties
agree in writing upon any terms in addition to those set forth in
this Agreement
(including, without limitation, promotional diligence and supply
price) pursuant
to which Myogen will promote and distribute, and GSK will supply,
such Product
Improvement in the Territory. If the Parties, despite good faith
negotiations,
cannot reach agreement on such additional terms, the Product
Improvement will
not be deemed to be included within the definition of Product and
GSK will be
free to market, promote, advertise, sell and distribute such
Product Improvement
in the Territory during the Term; provided, however, that GSK will
not enter
into any agreement with a Third Party with respect to such Product
Improvement
in the Territory that includes terms that are less favorable to GSK
than those
last offered by Myogen during the Parties negotiations.
Section 4.6 Personnel. GSK will not hire or employ an Ineligible
Person as
either an employee or contractor to conduct any manufacture,
distribution and/or
any other activities relating to Product in the Territory under
this Agreement.
To prevent the hiring or engaging of Ineligible Persons, GSK will
screen all
prospective employees and contractors prior to engaging their
services pursuant
to this Agreement by (i) requiring such Persons to disclose to GSK
whether they
are Ineligible Persons; and (ii) appropriately querying the
General
Administrative Services Administration's List of Persons Excluded
from Federal
Programs (currently available through the Internet at
http://oig.hhs.gov). In
addition, GSK represents and warrants to Myogen that during the
Term, GSK will
maintain policies and procedures in effect that require, and that
it will
otherwise require, all emplo
