Exhibit 10.12
SUPPLY
AGREEMENT
THIS SUPPLY AGREEMENT
is entered into this 27th day of
December, 2001 by and between PLANTEX USA, Inc., a corporation
organized under the laws of the State of New Jersey with offices at
482 Hudson Terrace, Englewood Cliffs, New Jersey 07632
(“PLANTEX”) and D-NOVO Therapeutics, Inc., a
corporation organized under the laws of the State of Delaware with
offices at 28202 Cabot Road, Suite 200, Laguna Niguel, California
92677 (“D-NOVO”).
WITNESSETH
WHEREAS, the parties wish to enter
into an agreement pursuant to which PLANTEX (or an Affiliate
thereof) will supply D-NOVO Active Pharmaceutical Ingredients
(“API”) (as defined below) for the Finished Product (as
defined below) and D-NOVO (including Affiliates thereof and their
respective licensees and contract manufacturing vendors, if any)
will purchase from PLANTEX requirements as set forth below, of API
used in the manufacture of Finished Product.
NOW, THEREFORE, in consideration of
the premises and of the mutual covenants and agreements set forth
in this Agreement, the parties agree as follows:
The following words and phrases
shall, for purposes of this Agreement, have the following meanings
(with any term or phrase referred to below, or defined elsewhere in
this Agreement, in the singular to include the plural and vice
versa as the context requires):
“ Action ” shall
mean any suit, action, investigation (governmental or otherwise),
claim or proceeding initiated or filed against a party to this
Agreement, which results in or could result in a Loss or Losses for
which indemnification is required by the other party under Article
13 below.
“ Active Pharmaceutical
Ingredients ” or “ API ” shall mean
bulk, unformulated Calcitriol.
“ Affiliate ” of
any party shall mean any Person that is controlled by, controls, or
is under common control with such party. For this purpose,
“control” of a corporation or other business entity
shall mean the direct or indirect beneficial ownership of more than
fifty percent (50%) in the equity of, or the right to appoint
more than fifty percent (50%) of the directors or management
of such corporation or other business entity.
“ Agreement ”
shall mean this Agreement as it is amended from time to time in the
manner provided herein.
“ ANDA ” shall
mean an Abbreviated New Drug Application filed with the FDA
pursuant to its rules and regulations.
“ Approval ”
shall mean any and all approvals, licenses, registrations or
authorizations of the applicable Regulatory Authority necessary for
the marketing of Finished Products in the relevant country in the
Territory.
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“ cGMP ” shall
mean current good manufacturing practices as set forth in
regulations issued by the FDA from time to time.
“ Contract Year ”
shall mean the twelve (12) month period measured from a
specific date or event.
“ DMFs ” shall
mean the drug master files covering the analysis and manufacture of
the API, comprising any and all technical information in the
possession of PLANTEX (or an Affiliate thereof), including, without
limitation, analytical methods, stability and pharmaceutical data,
impurities, and manufacturing processes with respect to the
API.
“ Effective Date
” shall mean December 27 th , 2001.
“ Finished Products
” or “ Finished Product ” shall mean such
pharmaceutical products developed and/or marketed by D-NOVO for the
treatment and/or prevention of any cancer containing API as shall
receive Approval for marketing by a Regulatory
Authority.
“ FDA ” shall
mean the United States Food and Drug Administration and all
agencies under its direct control or any successor
organization.
“ FFDCA ” shall
mean the Federal Food, Drug and Cosmetic Act of 1934, as amended
from time to time, and the regulations promulgated pursuant
thereto, or any successor statute adopted to replace such
act.
“ Indemnified Party
” shall mean the party to this Agreement entitled to be
indemnified by the Indemnifying Party against a Loss or Losses
pursuant to Article 13 below.
“ Initial Launch
” means the date on which D-NOVO (or any of its Affiliates or
their respective licensees, if any) makes its first commercial sale
in the Territory of any Finished Product to an unaffiliated third
party.
“ Loss ” or
“ Losses ” shall mean any liability, loss,
costs, damage or expense, including reasonable attorneys’
fees and expenses, incurred or suffered by a party to this
Agreement, except for consequential damages, for which
indemnification is required under Article 13 below.
“ Manufacture ”
and “ manufacturing ” and other forms of such
word or phrase shall refer to the manufacturing, handling,
packaging, storage and/or disposal of the API and the raw materials
and components used in connection therewith.
“ NDA ” means a
New Drug Application filed with the FDA pursuant to its rules and
regulations.
“ Party ” or
“ Parties ”, when referring to the parties to
this Agreement shall mean and include PLANTEX and D-NOVO, or each
of them individually.
“ Person ” shall
mean any individual, partnership, association, corporation, trust
or legal person or entity.
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“ Regulatory Authority
” shall mean any and all governmental bodies, organizations
and agencies whose approval is necessary to develop, manufacture,
import, use, and or market Finished Products in the relevant
country of the Territory.
“ Territory ”
shall mean worldwide.
The initial term of this Agreement
shall begin on the date hereof and unless terminated in the manner
provided in Article 14 hereof, shall expire upon the expiration of
the greater of (i) ten (10) Contract Years from the date
hereof or (ii) the tenth (10th) anniversary of the date
occurring prior to the tenth anniversary of the date hereof that
D-NOVO receives marketing approval for Finished Product from the
FDA (“Initial Term”). D-NOVO shall notify PLANTEX in
writing within five (5) days following receipt of such
marketing approval. This Agreement shall be automatically extended
upon the same terms and conditions for successive two (2) year
periods (“ Renewal Term”) unless either Party shall
have provided notice of its intent not to renew this Agreement not
less than one (1) year prior to expiration of the Initial Term
or any Renewal Term then in effect. For purposes of this Agreement
“Term” shall refer collectively to the Initial Term and
the Renewal Terms, unless the context otherwise
requires.
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3.
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SCOPE OF THE
AGREEMENT
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This Agreement shall apply to
purchases during the Term by D-NOVO (and its Affiliates and their
respective licensees and contract manufacturing vendors, if any) of
API and their respective, direct or indirect, successors and
permitted assigns, for the development, commercialization,
distribution and sale of Finished Product in the
Territory.
D-NOVO agrees at its sole cost and
expense to use its best efforts to obtain Approval to market
Finished Product in such countries in the Territory as shall be
reasonably determined by D-NOVO, except that D-NOVO shall use its
best efforts to obtain FDA Approval to market Finished Product in
the United States based upon a NDA or ANDA, as shall be determined
by D-NOVO. In connection with such FDA Approval, D-NOVO shall at
its sole cost and expense conduct all tests and studies reasonably
required to enable D-NOVO to apply for, obtain and maintain FDA
Approval for Finished Product. In connection with the development
of Finished Product and securing any Approvals, D-NOVO agrees, on
behalf of itself, its Affiliates and their respective licensees or
contract manufacturing vendors, if any, to use only API obtained
from PLANTEX (or its Affiliates) and purchase all of their
respective requirements of API from PLANTEX (or its Affiliates).
Upon the execution and delivery of this Agreement, PLANTEX shall
provide and deliver to D-NOVO without charge two grams (2 gms.) of
API. Thereafter, D-NOVO shall be charged [*] dollars ($[*]) per
gram for Developmental Orders (as herein defined) of API sold
hereunder and such price shall not be subject to increase or
decrease. As used herein, “Developmental Orders” means
orders placed prior to Approval by a Regulatory
[*] Certain information on this page has been
omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect
to the omitted portions.
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Authority and not in connection with
commercial production in connection with commercial launch
following any such Approval. All Developmental Orders shall be
minimum noncancellable orders for quantities of not less than [*]
grams each. Each of the Developmental Orders shall be deliverable
over periods not exceeding twelve (12) months, in partial
shipments of not less than [*] grams each.
5.1 D-NOVO Purchases . D-Novo
covenants and agrees for and on behalf of itself, its Affiliates
and their respective licensees and contract manufacturing vendors,
if any, to purchase all requirements for API used by any of them in
connection with the manufacture, sale and distribution of Finished
Products within the Territory shall be purchased from PLANTEX (or
its Affiliates as shall be designated by PLANTEX). Any license or
contract manufacturing agreement for the benefit of D-NOVO or any
Affiliate thereof, shall contain a provision requiring such
licensee or contract manufacturer to purchase from PLANTEX (or its
Affiliate as shall be designated by PLANTEX) all of their
respective requirements of API used by such party in connection
with the manufacture, sale or distribution of Finished Product upon
the terms and conditions applicable to purchases hereunder by
D-NOVO. Any such license or contract manufacturing agreement shall
make specific reference to this Agreement and state with
affirmative language that PLANTEX shall have the rights of a third
party beneficiary with respect to such Agreement.
5.2 Exception . During any
period in which PLANTEX, for any reason, including, but not limited
to force majeure as provided for in Section 15, fails
to supply, is unable to supply or anticipates that it will not
supply, the quantities of API to D-NOVO included within any Firm
Purchase Order (as defined below) or any other purchase order
confirmed in writing by PLANTEX, D-NOVO shall be free to fill such
specific purchase order for API (or any unfilled portion) from an
alternative source. This shall be the sole remedy for D-NOVO in the
event that PLANTEX advises that it is unable to supply API. PLANTEX
shall notify D-NOVO promptly upon becoming aware of any facts or
circumstances which causes it to believe that it will be unable to
meet shipment obligations hereunder.
5.3 Sole Supply . PLANTEX
shall not supply API to any other entity during the Term of this
Agreement for use in the field of the treatment and/or prevention
of any cancer, except for a pharmaceutical product that in the
reasonable judgment of D-NOVO shall not be in direct competition
with D-NOVO’s approved NDA Product, such determination to be
made by D-NOVO promptly following the written request therefore by
PLANTEX.
5.4 Specifications . PLANTEX
shall provide with each shipment of API a certificate of analysis.
PLANTEX (or an Affiliate thereof) shall file and maintain a valid
DMF for the API with the FDA, which is in full compliance with FDA
requirements for DMFs. Provided that D-NOVO is not in material
breach of its obligations hereunder, D-NOVO shall have the right to
reference PLANTEX’s DMF for API in any drug application
seeking Approval for Finished Product from a Regulatory
Authority.
[*] Certain information on this page has been
omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect
to the omitted portions.
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All API shall be manufactured in accordance with
cGMP and shall meet the specifications set forth in Schedule A
annexed to this Agreement.
5.5 Forecasts and Purchase
Orders . Prior to Approval, D-NOVO will provide PLANTEX with a
[*] month rolling forecast of its requirements by calendar quarter
for API. Such rolling forecasts shall be delivered to PLANTEX by or
on the fifteenth (15th) day of each calendar quarter during
the Term of this Agreement. Notwithstanding the foregoing,
D-NOVO’s initial [*]month forecast following Approval shall
be provided to PLANTEX within ninety (90) days prior to the
anticipated date determined in good faith by D-NOVO for FDA
Approval of Finished Product. The first calendar quarter of each
[*] month rolling forecast shall be binding on PLANTEX and D-NOVO
and shall constitute a firm purchase order (“Firm Purchase
Order”) for the API indicated for such calendar quarter.
PLANTEX shall supply D-NOVO with (i) the quantities set forth
on each such Firm Purchase Order and (ii) such additional
amounts that D-NOVO may order in excess of its forecasted amounts
constituting Firm Purchase Orders hereunder, provided that PLANTEX
shall have confirmed and accepted such additional orders within
thirty (30) days of PLANTEX’s receipt of any such
additional purchase order. PLANTEX agrees to use reasonable
commercial efforts to meet any such additional orders. In the event
that PLANTEX determines for any reason (other than force
majeure as provided for in Section 15) to discontinue the
manufacture of API, PLANTEX shall have the right to terminate its
delivery obligations hereunder upon the giving to D-NOVO not less
than [*] months prior written notice. The terms and conditions of
this Agreement shall apply to all purchase orders issued hereunder,
and, if any terms or conditions contained in such purchase orders
shall conflict with any terms and conditions contained herein, the
terms of this Agreement shall control. No additional terms or
conditions set forth in any such purchase order (other than the
quantities and delivery dates set forth therein and conforming to
the provisions of this Agreement) shall be binding upon PLANTEX,
unless agreed to in writing by PLANTEX. Any additional terms
therein contained shall be deemed to be a proposed offer of amended
terms that shall be deemed objected to by PLANTEX and of no force
and effect, notwithstanding any action or inaction by PLANTEX other
than its express written approval of such additional
terms.
5.6 Capacity . PLANTEX
covenants to maintain capacity to manufacture on an annualized
basis [*] percent ([*]%) of the forecasted requirements of API set
forth in any [*] month forecast submitted by D-NOVO in accordance
with this Agreement, provided that the forecasted amount does not
exceed the forecasted amount for the preceding year by [*] percent
([*]%) or more. Additionally, following FDA Approval of Finished
Product and continuing for the Term, PLANTEX shall maintain in
inventory a [*] month supply of API, based upon D-NOVO’s then
current forecasted amount. In order to further secure a supply of
API hereunder, PLANTEX shall develop a production contingency plan
(which plan shall be presented to D-NOVO for its approval, which
approval shall not be unreasonably withheld) designed to relocate
the API site listed in the DMF for API or utilize an additional
site in the event that PLANTEX makes a good faith determination
that it is necessary to relocate such site or to utilize an
additional site in order to meet D-NOVO’s requirements of
API.
[*] Certain information on this page has been
omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect
to the omitted portions.
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Such plan shall contemplate completion of
relocation and securing necessary regulatory approvals within [*]
of the determination by PLANTEX that such relocation was required.
In the event that relocation has not been completed within such [*]
period, D-NOVO’s sole remedy shall be to terminate this
Agreement.
5.7 Recordkeepinq . D-NOVO
shall keep and maintain or cause to be maintained books and
records, pertaining to the use of API by D-NOVO and its Affiliates
and their respective licensees or contract manufacturing vendors,
if any, in the manufacture sale or distribution of Finished
Products within the Territory, sufficient to enable PLANTEX to
verify and confirm compliance by D-NOVO with the terms and
conditions of this Agreement, including, without limitation, the
purchase of all requirements obligations provided for in this
Agreement. Such books and records shall be maintained in accordance
with U.S. generally accepted accounting principles consistently
applied. D-NOVO shall permit an independent accounting firm
selected by PLANTEX and acceptable to D-NOVO, at reasonable times
and upon reasonable notice, to have access during normal business
hours to the books and records of D-NOVO (and its Affiliates) as
may be necessary to verify and confirm compliance with the terms of
this Section 5.7. The costs of any such examination shall be
borne by PLANTEX unless it shall be determined that the quotient,
q/r, expressed as a percentage, is less than ninety-seven percent
(97%), when (q) equals the aggregate quantities expressed in
kilograms of API purchased from PLANTEX (or its Affiliates) by
D-NOVO and its Affiliates, and their respective licensees or
contract manufacturing vendors if any, for use in the manufacture,
sale or distribution of Finished Product in the Territory, and
(r) equals the aggregate quantities expressed in kilograms of
API purchased from all sources by D-NOVO and its Affiliates and
their respective licensees and contract manufacturing vendors, if
any, for use in the manufacture, sale or distribution of Finished
Product in the Territory, in which event D-NOVO shall reimburse
PLANTEX all reasonable costs and expenses of such examination.
PLANTEX shall keep and maintain or cause to be maintained books and
records pertaining to the manufacture of API for at least five
(5) years or as required by law, whichever is
longer.
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6.
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PRICE;
PAYMENTS; DELIVERY
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6.1 Price .
6.1.1 The price payable to PLANTEX
hereunder for API shall be [*] dollars ($[*]) per gram. During
development of the Finished Product, PLANTEX agrees not to increase
the price of API with respect to developmental quantities. At such
time as D-NOVO receives FDA approval to market Finished Product,
PLANTEX shall have the right to reevaluate the contract price for
commercial quantities of API based upon its documented investment
in the development of this product and D-NOVO and PLANTEX agrees to
negotiate in good faith an increase in the price per gram based
thereon. Notwithstanding the foregoing, provided that D-
[*] Certain information on this page has been
omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect
to the omitted portions.
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NOVO purchases not less than [*]
grams of API in the first Contract Year following Approval by a
Regulatory Authority and in each Contract Year after the second
an