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Supply Agreement

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Date: 2/16/2010
Industry: Biotechnology and Drugs     Sector: Healthcare

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Exhibit 10.1





Les Laboratoires Servier

22 rue Garnier

92200 Neuilly sur Seine Cedex



Product Names:     [**]PCI-24781 (Pharmacyclics)








Pharmacyclics and Servier have entered into a Collaboration Agreement, effective April 9, 2009 to co-develop the HDAC Inhibitor identified as [**]or PCI-24781 (Pharmacyclics).  Pursuant to Section 4.3 of the Collaboration Agreement, Pharmacyclics has agreed to use “Reasonable Efforts” (as defined in the Collaboration Agreement) to manufacture or have manufactured quantities of [**]for clinical use by Servier.  With this agreement (the “Agreement”), Pharmacyclics will facilitate the manufacture of a targeted amount of [**] cGMP quality [**]through its Third Party Manufacturing organizations. The terms of this Agreement shall not amend the Collaboration Agreement signed on April 9 th , 2009, which specifies under Section 4.3 that a supply agreement shall be negotiated between the parties containing terms consistent with such Section 4.3 and such other terms as are reasonable and customary for arrangements of this type.












Scope of Work: Deliverables, Timing, Resources


The table below has the project divided into phases to show activities required to complete the manufacture of a targeted amount of [**] of [**]. The table outlines the timing and activities.


[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.





Phase 1



·     [**]

·     [**]





Phase 2



·      Preparation and procurement of raw materials

·      [**] drafts batch record for pilot plant scale manufacturing of [**].  Timing dependent on customer review and approval.

·      [**]

·      QC testing and release at Pharmacyclics.

·      QA release.










[**], is under contract with Pharmacyclics to manufacture [**].  For Phase 1 of this Agreement, [**] using their pilot plant facilities.


[**], is under contract with Pharmacyclics to manufacture [**].  For Phase 2, [**] will complete the [**]. Each batch will be performed at [**].


Pharmacyclics shall use Reasonable Efforts to ensure the Third Party Manufacturers produce the [**]according to cGMP and deliver product according to the timeline below.  Pharmacyclics will arrange to have a QC release testing sample provided to Servier after a batch is manufactured.  A copy of the completed manufacturing batch record will also be provided for Servier QA review.; Pharmacyclics will also perform all QC release testing and provide a certificate of analysis of [**] (as required with GMP – part 2).


With the change in product specification requested by Servier after issuance of PO [**], a contingency plan has been established to address potential failure of the drug substance to conform to the new specifications set forth in Section 3(b) below.  [**] will produce the first [**]batch of drug substance as an engineering batch under cGMP.  Successful manufacture of the engineering batch will lead directly to manufacture of the second [**]batch of drug substance and completion of the campaign.  Pricing for successful manufacture of [**] batches of drug substance will be as described in Section 6.


In the event the engineering batch fails to produce drug substance conforming to specification, [**], Pharmacyclics and Servier will discuss the necessary actions to be taken to remedy such situation. In any event, prior to [**] initiating any additional development work after a failed engineering batch and in conformance with Section 7(e) below, Pharmacyclics will review the failed engineering batch with Servier and [**] and obtain Servier’s prior approval for the planned development work and the estimated additional costs.


[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.



Below is a Gantt chart showing timing of events for manufacture of [**].  The timeline provides a best estimate of when Third Party Manufacturers will be able to schedule pilot plant time. Item 22 of the Gantt shall only be initiated after a meeting between Servier, [**] and Pharmacyclics has taken place.





Analytical Methods and Specifications




Method Transfer:

All analytical methods necessary for manufacture have been qualified by [**], [**][**] and Pharmacyclics.  Any testing to be performed by Servier will require analytical method transfer from Pharmacyclics to Servier. Such method transfer is outside the scope of this Agreement. However, such transfer is the responsibility of Pharmacyclics as indicated in Section 4.2 “Exchange of Data” of the Collaboration Agreement.




Specifications for [**]:









Documentation / Reports


Upon request, development and/or campaign reports will be provided to Servier by Pharmacyclics no later than five (5) months after delivery of product. These reports will be accompanied by a copy of the batch records used by [**] and [**] for the manufacture of the DS batches


[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.






Drug substance shipments will be FOB – [**] (as defined by the 2000 Incoterms of the ICC) to a destination to be provided by Servier.  Servier will be the importer of record and will pay all taxes due in France as well as being responsible for any and all customs requirements and payments.  Risk of loss will transfer to Servier upon [**]’s delivery of the shipment of [**] to the designated carrier, provided that Pharmacyclics agrees to obtain all necessary insurance for the proper shipment of the Drug substance at Servier’s expense and under Servier’s behalf. Pharmacyclics will invoice Servier separately for any and all shipping and insurance costs.









Terms and Conditions




This Agreement will serve as the supply agreement referred to in Section 4.3 of the Collaboration Agreement. A purchase order has been signed and purchase will be made under purchase order [**]. Terms or conditions of any purchase order, acknowledgement, or other form given or received that are additional to or inconsistent with this Agreement or such purchase order [**] shall have no effect and such terms and conditions are hereby excluded.




The current estimated costs per the contracts established to produce the desired [**] of [**] are $[**]

The project has been initiated by the receipt of PO [**] from Servier.

The PO is intended to cover the whole project and is in the amount of $[**].


i) Pharmacyclics will invoice an initial upfront prepayment for[**]% of the project in the amount of $[**].


ii) Pharmacyclics will invoice an additional [**]% upon completion of manufacture of [**].


iv) The remaining balance will be invoiced on acceptance by Servier and delivery of [**].


[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.



v) PO’s and remittances (prepayments, payments, and final payments) should be sent to the attention of:


Ramses Erdtmann, Vice President of Finance

Pharmacyclics Inc

995 E. Arques Ave.

Sunnyvale, CA 94085

Phone:        (408) 215-3325

Fax:            (408) 774-0340



vi) Key invoicing contacts for Servier:


Stéphane DEPIL




All prices are in US dollars.




This Agreement is effective as of the signature date of this agreement (“Effective Date”) and unless terminated otherwise in accordance with Section (i) below, shall be in effect until the first to occur of (i) delivery to Servier of the [**] batches of [**] as contemplated in Section 2 above, or (ii) termination of the Collaboration Agreement.




Pharmacyclics and its Third Party Manufacturer(s) will, in accordance with the Collaboration Agreement, apply Reasonable Efforts using the current synthetic route or process.  In the event that yields or purities obtained are contrary to those provided due to but not limited to difficulties of scale, chemistry inconsistencies or misrepresentation, Pharmacyclics and Servier will mutually agree to discuss pathways to proceed with the project. These discussions may potentially require scope changes to the program, extension of the project timeline, and additional monetary funds.




If there are unforeseen complications due to the nature of the project that significantly hinders Third Party Manufacturer’s ability to proceed with the completion of this project, Pharmacyclics will notify Servier of any such difficulties and the parties agree to act in good faith to resolve difficulties in an amicable manner. The project may require scope changes to the program, additional monetary funds and timeline extensions to properly

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