EXHIBIT 10.52
Confidential treatment has been requested for portions of this
exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are
designated
as ***. A complete
version of this
exhibit has been
filed separately with the Securities and Exchange Commission.
FINISHED GOODS SUPPLY AGREEMENT
(REVLIMID(TM))
This Finished Goods Supply Agreement (the "Agreement") dated this 8th
day of September 2004 between Penn Pharmaceutical Services Limited,
("Penn") and
Celgene Corporation, a Delaware corporation ("Celgene").
RECITALS
Whereas, Penn
and Celgene desire to establish a relationship, pursuant
to which Penn (or its
appropriate
Affiliates, as defined
herein) will supply,
and Celgene (or its
appropriate
Affiliates)
will purchase, the Commercial
Products, as defined herein.
In consideration of the foregoing premise, and the mutual covenants
and
obligations set forth herein, Celgene and Penn hereby agree as
follows:
ARTICLE 1
DEFINITIONS
1.1.
"AFFILIATE" shall
mean, with respect to any party, any person
or entity which,
directly or
indirectly
through one or more
intermediaries,
controls, is
controlled
by, or is under common
control with,
such party.
A
person or entity shall be deemed to control a corporation (or other entity) if
such person or entity possesses, directly or indirectly, the power
to direct or
cause the direction of the management and policies of such
corporation (or other
entity) whether
through the
ownership of voting securities, by contract or
otherwise.
1.2.
"API" shall
mean the active pharmaceutical ingredient
lenalidomide,
[3-(4'aminoisoindoline-l'-one)-1-piperidine-2,6-dione],
Celgene's
compound CC-5013.
1.3.
"BATCH" shall mean one (1) production lot of the Commercial
Products as defined in Exhibit A.
1.4.
"BATCH RECORD"
shall mean the
document created as
and after
each Batch is
manufactured
that, if complete and accurate, reflects and
incorporates all
aspects of the
Master Batch Formula, the Certificate of
Analysis, and any MD Reports issued, with respect to such
Batch.
1.5.
"CERTIFICATE OF ANALYSIS" shall mean a certificate
issued by
Penn stating that a Batch has been manufactured in accordance with the Master
Batch Formula and stating the Test results.
1.6.
"COMMERCIAL
PRODUCTS" shall
mean the formulations of
Revlimid(TM)
(lenalidomide) in
capsule form for oral administration as
identified in the NDA.
*** - indicates
material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange
Commission.
<PAGE>
1.7.
"CONFIDENTIAL
INFORMATION" shall
mean, with respect to a
party, all information
of any kind whatsoever
(including without
limitation,
data, compilations, formulae, models, patent disclosures,
procedures, processes,
projections,
protocols, results of experimentation and testing,
specifications,
strategies and techniques), and all tangible and intangible
embodiments thereof
of any kind whatsoever (including without limitation, apparatus, compositions,
documents, drawings, machinery, patent applications, records and
reports), which
is disclosed by such
party to the other party and is marked, identified as or
otherwise acknowledged to be confidential at the time of disclosure
to the other
party. Notwithstanding the foregoing, Confidential Information of a
party shall
not include
information
which the other party can establish by written
documentation (a) to
have been publicly known prior to disclosure of such
information by the
disclosing
party to the other
party, (b) to have become
publicly known,
without fault on the part of the other
party, subsequent
to
disclosure of such
information by the disclosing party to the other party, (c)
to have been received
by the other party at any time from a source, other than
the disclosing party,
rightfully having possession of and the right to disclose
such information,
(d) to have been
otherwise known by the other party prior to
disclosure of such
information by the disclosing party to the other party,
or
(e) to have been
independently
developed by
employees or agents of
the other
party without the use of such information disclosed by the disclosing party
to
the other party.
1.8.
"DMF" shall mean the Drug Master File that relates to the API
and that Celgene shall maintain.
1.9.
"FDA" shall
mean
the United States Food and Drug
Administration, and any successor agency thereto.
1.10.
"FFDCA" shall mean the
United States
Federal Food Drug and
Cosmetic Act as amended from time to time.
1.11.
"cGMPS" shall
mean current Good Manufacturing Practices
promulgated by the FDA.
1.12.
"HAZARDOUS WASTE"
shall mean all waste that is defined as
hazardous by applicable federal, state, and local laws and
regulations, to
the
extent that
such waste arises out of Penn's Processing and Packaging of
Commercial Products in accordance with this Agreement.
1.13.
"IN-PROCESS
MATERIALS" shall
mean the API and the Raw
Materials with respect
to a Batch during the time period beginning at the time
Penn begins Processing
Commercial Products in
accordance with the Master Batch
Formula and
ending at the Penn
Approval Date (as defined in clause 2.7.1.
herein).
1.14.
"INTELLECTUAL
PROPERTY" shall
mean Celgene's and its
Affiliates' rights
existing as of the date hereof and as may be developed
hereafter in and to all Confidential Information, proprietary
information, trade
secrets, patent
rights, technology, know-how, developments, improvements,
techniques, data, methods, processes, instructions, formulae, recipes, drawings
and specifications
necessary to manufacture and supply the Commercial Products
hereunder.
2
*** - indicates
material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange
Commission.
<PAGE>
1.15.
"LABEL" OR
"LABELING"
shall mean (1) written, printed or
graphic materials, as set forth in the Master Packaging Record or
(2) the act of
supplying written,
printed or graphic materials, as set forth in the Master
Packaging Record,
including (i) upon the Commercial Product, (ii) upon any
container or wrapper utilized with the Commercial Product, or (iii)
accompanying
the Commercial Product, including, without limitation, package
outserts.
1.16. "MD
REPORT" or
"MANUFACTURING
DEVIATION REPORT" shall mean a
report indicating any deviation from the Processing and Packaging
procedures set
forth in the Master Batch Record.
1.17.
"MASTER BATCH FORMULA" shall mean the document containing the
formulas for API and Raw Materials and the description of the Process, as set
forth in EXHIBIT A.
1.18.
"MASTER BATCH
RECORD" shall mean the Master Batch
Formula,
Master Packaging
Record and Specifications, as such may be amended by the
parties pursuant to clause 2.3.1.
1.19.
"MASTER PACKAGING
RECORD" shall mean the document containing
the procedures and
specifications for
Packaging and Labeling, as set forth in
EXHIBIT B.
1.20.
"MSDS" shall mean the Material Safety Data Sheet for the API.
1.21.
"NDA" shall mean the New Drug Application for the Commercial
Product to be filed with the FDA by Celgene, and any supplements
thereto.
1.22.
"NON-CONFORMING BATCH"
shall mean any Batch that does not
comply with the Specifications or any batch processed in violation
of cGMPs.
1.23.
"NON-HAZARDOUS WASTE"
shall mean all rejected Commercial
Product or In-Process
Materials or waste arising out of Processing and/or
Packaging, including
without limitation,
rejected or unusable Raw Materials or
API, disposable
manufacturing
equipment (including
filters used in Processing
and Packaging),
wash rinse, and previously used or discarded protective
clothing, except to the extent that any of the foregoing is
Hazardous Waste.
1.24.
"PACKAGE" or
"PACKAGING" shall mean
the procedures
used in
packing the Commercial
Products into
containers, bottles,
cartons, shipping
cases or any other like matter, or the materials thereof, as set forth in the
Master Packaging Record.
1.25.
"PENN APPROVAL
DATE" shall mean the date on which Penn's
quality assurance department approves each Batch for shipment in
compliance with
the Master Batch Record.
1.26.
"PERSON" shall mean an individual, corporation, partnership,
limited liability
company, trust, business trust, association, joint stock
company, joint
venture, pool,
syndicate, sole
proprietorship,
unincorporated
organization,
governmental
authority or
any other form of entity not
specifically listed herein.
1.27.
"PPI"
shall mean the Producer Price Index for *** as published
by the Office of National Statistics in the UK.
3
*** - indicates
material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange
Commission.
<PAGE>
1.28.
"PROCESS" or
"PROCESSING"
shall
mean the pharmaceutical
manufacturing
procedures, or any
part thereof, involved
in manufacturing
the
Commercial Product
from the API and Raw
Materials as set forth in the Master
Batch Formula.
1.29. "RAW
MATERIALS"
shall mean the excipients necessary for
Processing (exclusive of the API) as listed in the Master Batch
Formula.
1.30. "RAW
MATERIAL COST" shall
mean the cost of Raw Materials used
to manufacture the Commercial Products, determined in accordance with
generally
accepted accounting
principles and consistent with Penn's accounting practices
for other manufactured products.
1.31.
"SPECIFICATIONS" shall
mean the appropriate standards of
identity, strength,
quality and purity for
the Raw Materials,
API, In-Process
Materials and Commercial Product, and the Tests thereof, as set
forth in EXHIBIT
C.
1.32.
"STORE" or "STORAGE"
shall mean the warehousing of Commercial
Products according
to cGMP and
other applicable U.S. laws and regulations
subject to clause 2.7.1.
1.33.
"TEST" or "TESTING" shall mean the analytical procedures, as
applicable, for Raw
Materials, API, In-Process Materials and Commercial Product
as set forth in the Specifications.
ARTICLE 2
MANUFACTURE, SUPPLY AND PURCHASE
2.1.
LICENSE GRANT. Celgene
hereby grants to Penn a non-exclusive
license to use and practice the Intellectual Property solely to manufacture
the
Commercial Products
for Celgene in accordance with the provisions of this
Agreement. The
Intellectual Property
licensed hereunder is sufficient to allow
Penn to perform its
obligations
hereunder.
Except as provided in
this clause
2.1, Penn acknowledges that it has no intellectual property rights in the
Commercial Products or in the API.
2.2.
SUPPLY AND
PURCHASE OBLIGATIONS. During the term of this
Agreement, Penn shall manufacture and supply Commercial Products
exclusively for
Celgene. Celgene
shall purchase a minimum *** percent (***) of its annual
requirements of Commercial Products from Penn pursuant to clause
2.6.4 below and
subject to clause 2.6.2 below unless Penn fails to supply
conforming
Commercial
Products (subject
to clause 2.6.3 below) for any two (2) out of four (4)
consecutive calendar
quarters. Upon the written request, and at the sole
expense, of
Penn, Celgene shall permit an independent certified public
accounting firm, selected by Penn and reasonably acceptable to Celgene, to have
access during normal
business hours to such of the records of Celgene as may be
reasonably necessary
to verify that the Commercial Products supplied to Celgene
pursuant to this
Agreement represents
at least *** percent
(***) of Celgene's
requirements during the preceding year.
2.3.
MANUFACTURING PRACTICES.
2.3.1. MASTER
BATCH RECORD. Penn shall Process, Test (unless
Penn is requested by Celgene to conduct a full analysis),
Package and Label
the
Commercial Products in conformity with the Master Batch Record.
Unless otherwise
required by law,
Penn shall not
4
*** - indicates
material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange
Commission.
<PAGE>
make any changes to the Master Batch Record without prior written consent from
Celgene, which consent shall not be unreasonably withheld.
Celgene shall
notify
Penn in writing of any proposed changes to the Master Batch
Record. Penn shall
use reasonable
commercial efforts to
promptly implement
changes directed by
Celgene to the Master Batch Record at Celgene's sole expense,
including, but not
limited to, any required capital equipment expenditures. The Price (as defined
in clause 3.1), shall
be increased to incorporate the costs associated with any
such changes to the Master Batch Record as applicable. Penn shall
notify Celgene
and obtain prior
written approval
(such approval shall not be unreasonably
withheld) for any proposed changes related to the Commercial
Product outside the
Master Batch Record prior to their implementation by Penn.
2.3.2.
REGULATORY COMPLIANCE.
Penn shall
manufacture
the
Commercial Products in
accordance with cGMPs
and all applicable
U.S. federal
laws and regulations.
2.3.3. TECHNICAL
REQUIREMENTS.
Penn shall
comply with the
technical requirements set forth on EXHIBIT D.
2.4.
RAW MATERIALS, LABELING AND PACKAGING.
2.4.1. RAW
MATERIALS. Penn shall
purchase the Raw Materials
necessary for manufacturing Commercial Products as specified in the
Master Batch
Formula from vendors
mutually agreed to in writing by the parties, the cost of
which shall be included in the Price.
2.4.2. LABELING
AND PACKAGING. Penn shall acquire all
Labeling and Packaging
for the Commercial
Products to the bulk
stage and such
Labeling and Packaging shall be in accordance with the Master
Packaging Record,
the cost of which shall be included in the Price. Penn shall afford Celgene the
opportunity to approve, on a sample basis, and Celgene
shall review and approve
the Labels for the
Commercial Products so
as to assure that the labels conform
to all applicable laws, rules, regulations and requirements of
all appropriate
regulatory authorities. Should Celgene desire or be
required to make any change
to any such Labels,
Celgene shall revise and update all artwork and text
associated with such
change and provide such changes to Penn or its Affiliates.
Penn shall make all commercially reasonable and necessary
arrangements to print
such changed Labels and shall provide printer's proofs to Celgene
for review and
approval. Celgene
shall promptly
provide Penn with any
necessary
corrections
thereto or notify Penn of its approval of such proofs. Celgene shall reimburse
Penn for the cost of preparing the printer's proofs, as well as all other
costs
associated with such new Labels including, but not limited to, reimbursement
of
costs relating to unusable or superseded Labels; provided, however,
that Celgene
shall not be
responsible for any
such costs that result from Penn's failure to
act within commercially reasonable care and diligence.
2.5.
API.
2.5.1. API
DELIVERY. At least ninety (90) days prior to
Celgene's first firm purchase order submitted under clause 2.6.4,
Celgene shall
identify the source of the API to Penn and shall furnish the API to Penn,
free
of charge, in such quantities as are necessary to enable Penn to
manufacture the
Commercial Products
ordered. Celgene or
its designee will ship to Penn the API
released with a certificate of analysis for the API.
5
*** - indicates
material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange
Commission.
<PAGE>
2.5.2. API
SEGREGATION.
Penn shall keep all
API segregated
from other
materials within its reasonable control so as to maintain the
integrity of the
substance and shall
not allow any samples of the substance to
be used or Tested by any party not under its direct supervisory
control for any
purposes. Penn shall
perform only such Tests and analysis as it deems necessary
for this Agreement and shall maintain the confidentiality of such Test results
in compliance with clause 8 below. The API shall remain the property
of Celgene
until used by Penn in the Processing.
2.5.3. API
VERIFICATION. Penn
shall verify the quantity and
quality of all API received by Penn according to the methods and
procedures set
forth in the
Specifications within
sixty (60) days of receipt by Penn of
the
API. Within such sixty (60) day period, Penn shall inform Celgene in
writing of
any discrepancies
in the quantity
and/or quality of the API received and
the
documents accompanying each shipment of the API.
2.5.4. TIMELY
API DISCREPANCY. If Penn notifies Celgene of a
discrepancy in the
quantity or quality of the API within
such sixty (60)
day
period, Celgene shall
endeavor in good faith to ship additional API within the
time period necessary for Penn to manufacture Commercial Product in accordance
with the completion
date for delivery of
Commercial
Product pursuant to the
applicable purchase
order. Penn shall not
be liable to Celgene for any losses,
liabilities or claims resulting directly or indirectly from the
late delivery of
API by Celgene.
2.5.5. LEGAL
NOTICE OF DISCREPANCY;
OR API DAMAGE. If
Penn
fails to inform Celgene of any discrepancy in the quantity or
quality of the API
within such
sixty (60) day period or if there is
damage to the API within the
foregoing sixty (60)
day period and Penn
cannot demonstrate
that such damage
occurred prior to delivery to Penn or if any such damage is the
result of Penn's
failure to handle the API in accordance with the terms of this
Agreement,
then
Penn shall (a) at
Penn's option
return the API to Celgene or dispose of
same
according to Celgene's
instructions and (b)
at Celgene's
option, either (i)
purchase from
Celgene replacement API for a value equal to Celgene's then
current API cost for the API that is lost, damaged or destroyed,
or (ii) credit
Celgene on it's next invoice for an amount equal to Celgene's
then-current cost
for such API.
2.5.6. OTHER
API DAMAGE OR LOSS. Subject to Celgene
notifying Penn of the
replacement
value of the API at or
about the time
Penn
receives such item,
Penn shall assume
responsibility and
liability for, and
shall defend,
indemnify and hold Celgene harmless from and against, any loss
of
or damage to the API while Penn has custody and control over the
API, In-Process
Materials and/or the
finished Commercial Product. Such responsibility and
liability shall commence upon Penn's receipt of the API at Penn's
manufacturing
facility and end upon the delivery of the Commercial Product to a
common carrier
at the manufacturing
facility for shipment to Celgene.
Without limiting the
generality of the
foregoing,
lost or damaged API shall be disposed of and
replaced or credited as provided in clause 2.5.5.
2.6.
FORECASTS AND ORDERS.
2.6.1.
FORECASTS. Beginning
with the first
full calendar
quarter, not less
than forty-five (45) days prior to the first day of each
calendar quarter, Celgene shall prepare and provide Penn with a
written forecast
of the estimated
Commercial Product
requirements of
6
*** - indicates
material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange
Commission.
<PAGE>
Celgene and its Affiliates for each of the following four (4)
calendar quarters.
Without the prior
written consent of Penn, Celgene shall not increase or
decrease the quantity
estimated for the first calendar quarter of each forecast
by more than
twenty-five percent
(25%) from the
quantity estimated for the
second calendar quarter of the previous forecast.
2.6.2. PURCHASE
REQUIREMENTS.
Celgene shall be
required to
purchase not less than one hundred percent (100%) of the quantity of
Commercial
Product forecasted for
such first calendar
quarter in the most recent forecast
under clause 2.6.1 above.
2.6.3. SUPPLY
REQUIREMENTS.
Each calendar quarter, Penn
shall manufacture,
supply and deliver to
Celgene such quantities of Commercial
Products as Celgene
orders pursuant to
clause 2.6.4 below,
up to one hundred
percent (100%) of the quantity forecasted for such calendar
quarter in the most
recent forecast
under clause' 2.6.1 above. Penn shall use its commercially
reasonable efforts
to manufacture and supply to Celgene any quantities of
Commercial Products as
Celgene orders pursuant to clause 2.6.4 below, in excess
of one hundred percent
(100%) of the
quantity forecasted for such calendar
quarter in the most recent forecast under clause 2.6.1 above, provided that
Celgene has furnished
Penn with the necessary amount of API pursuant to
clause
2.5.1 above to enable
Penn to manufacture
the additional quantity. If Penn
becomes aware
of any circumstances that may cause Penn to default in its
obligation above to deliver such quantities of conforming
Commercial Products as
Celgene forecasted
for any calendar
quarter, Penn shall give Celgene
prompt
written notice describing such circumstances, together with a
proposed course of
action to remedy such
failure; provided,
however, that the provision of such
notice shall not relieve Penn of its delivery obligations
hereunder.
2.6.4. ORDERS.
Celgene shall
purchase Commercial Product
hereunder by submitting firm purchase orders to Penn. Each
purchase order shall
be in writing in a form reasonably acceptable to Penn, and shall specify the
Commercial Products ordered, the quantity ordered and the required
delivery date
therefor, which
shall not be less than
ninety (90) days after the date of such
purchase order. The minimum size of any order for Commercial
Products shall be a
single Batch with larger orders being in whole number multiples of a Batch. In
the event of a conflict between the terms and conditions of any purchase
order
and this Agreement, the terms and conditions of this Agreement
shall prevail.
2.7.
STORAGE, DELIVERY AND ACCEPTANCE.
2.7.1. STORAGE.
Penn shall have no
obligation to Store
the
Commercial Product and
may ship the Commercial Product to Celgene immediately
following the Penn Approval Date.
2.7.2. DELIVERY.
All Commercial Products supplied under this
Agreement shall be shipped F.O.B. Penn's place of manufacture.
Celgene shall pay
all freight, insurance
charges, taxes (excluding Value Added Tax ("VAT")),
import and export duties, inspection fees and other charges
applicable to the
sale and transport of Commercial Products purchased by Celgene
hereunder. Title
and risk of loss and
damages to Commercial Products purchased by Celgene
hereunder shall pass to Celgene upon delivery to Celgene's
designated
carrier.
Penn shall provide a
copy of a complete and
accurate Batch Record to Celgene
within five
(5) business days following the Penn Approval Date for the
applicable Batch of Commercial Products.
7
*** - indicates
material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange
Commission.
<PAGE>
2.7.3. REJECTION
AND CURE.
(i) REJECTION.
The Batch Records shall be
accepted as complete and accurate unless Celgene notifies Penn in
writing within
thirty (30) days of delivery of Commercial Products that Celgene has
determined
that either the Commercial Products do not conform to the
Specifications or that
the Batch Records are not complete; provided, however, in the case
of Commercial
Product having latent
defects, which upon diligent examination in accordance
with all quality control testing procedures set out in the
Specifications
upon
receipt could not have been discovered, Celgene must give notice to Penn
within
twenty (20) days after
discovery of such
defect, setting forth the specific
basis for such
rejection. Upon
written notification
by Celgene of a deficient
Batch Record or
Non-Conforming Batch,
Penn shall review the specific basis for
such rejection and
upon acceptance of
such rejection,
Penn shall correct
the
deficiency to
the Batch Record or replace the Non-Conforming Batch or
non-conforming portion
thereof within forty-five (45) business days with no
additional cost to Celgene (subject to clause 2.7.3 (ii)
below).
(ii)
DISPUTES. If
prior to either Celgene's
acceptance of the
Batch Record,
or Celgene's
notification
to Penn of latent
defects, the parties
disagree concerning
whether the Commercial
Product meets
Specifications or
whether the Batch
Records are
complete, either party may
request, in writing,
at any time,
that an independent laboratory be used to
determine whether the Commercial Product meets Specifications.
Thereafter,
the
parties shall, within fourteen (14) days, promptly name a reputable
and mutually
acceptable independent
laboratory (the
"Laboratory") that has
been or will be
qualified for the appropriate testing method(s) set forth in the
NDA and in the
absence of agreement
by the parties, the dispute shall be referred to the
laboratory used by the Home Office Forensic Science Service from time to
time.
The Laboratory
shall Test the Commercial Product for compliance with the
Specifications, and
such Test results obtained by the Laboratory shall be final
and controlling.
(iii)
CURE. If the Laboratory determines that the
Commercial Product
meets Specifications, Celgene shall (1) pay to Penn the
amount invoiced for such Commercial Product pursuant to clause 3.2 below,
and
all other expenses
reasonably
attributable
or resulting
from the
Laboratory
referral and (2) pay
to the Laboratory
the amount of the fees
charged by the
Laboratory for such
Testing. If the Laboratory findings
