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MOLECULAR INSIGHT PHARMACEUTICALS, INC. | BIOMEDICA Life Sciences SA

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Title: SUPPLY AGREEMENT
Governing Law: Massachusetts     Date: 11/9/2009
Industry: Biotechnology and Drugs     Sector: Healthcare

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Exhibit 10.5

 

 

 

 

 

SUPPLY AGREEMENT

 

BETWEEN

 

BIOMEDICA Life Sciences, S.A.

 

AND

 

MOLECULAR INSIGHT PHARMACEUTICALS, INC.

 

dated as of

October 19, 2009


TABLE OF CONTENTS

 

Article 1

  

2

Definitions

  

2

Article 2

  

4

Supply of Compound and Product

  

4

Article 3

  

6

Price, Purchase Commitment and Payment

  

6

Article 4

  

8

Exclusivity and Non-Compete

  

8

Article 5

  

8

Term and Termination

  

8

Article 6

  

9

Confidentiality

  

9

Article 7

  

10

Indemnification and Insurance

  

10

Article 8

  

12

Dispute Resolution

  

12

Article 9

  

12

General Provisions

  

12

 

2


SUPPLY AGREEMENT

This supply agreement (“Agreement”), dated this 19th day of October, 2009 (the “Effective Date”) is entered into by and between Molecular Insight Pharmaceuticals, Inc. (referred to herein as “MIP”), a corporation organized and existing under the laws of The Commonwealth of Massachusetts and having its principal office at 160 Second Street, Cambridge, MA 02142 USA, and BIOMEDICA Life Sciences S.A., a corporation organized and existing under the laws of Greece, with offices at 4 Papanikoli Str., 15232 Halandri, Athens, Greece (referred to herein as “BIOMEDICA”), with Greek Tax ID of EL 094413470, from the tax office of FAEE Athens; each a “Party” and collectively the “Parties” hereto.

WHEREAS the Parties have executed a Territory License Agreement dated September 1, 2009;

WHEREAS, BIOMEDICA desires MIP to source and manufacture certain products (defined below) and supply such products to BIOMEDICA in accordance with the Territory License Agreement;

WHEREAS, MIP agrees to source and/or manufacture the products (defined below) and supply such products to BIOMEDICA;

NOW, THEREFORE, in consideration of the mutual covenants hereinafter expressed and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

1. DEFINITIONS

1.1. “Affiliate” shall mean any person, corporation, or other entity which controls, is controlled by, or is under common control with, a Party to this Agreement. A corporation or other entity shall be regarded as in control of another corporation or entity if it owns or directly or indirectly controls more than fifty percent (50%) of the voting stock or other ownership interest of the other corporation or entity, or if it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the corporation or other entity or the power to elect or appoint fifty percent (50%) or more of the members of the governing body of the corporation or other entity.

 

3


1.2. “Agreement” shall mean this Agreement together with all schedules, and appendices attached to this Agreement, all as respectively amended, modified or supplemented by the Parties in accordance with the terms of this Agreement.

1.3. “Compound” shall mean a lyophilized kit comprising the DOTA-chelated somatostatin peptide analogue known as edotreotide plus excipients provided.

1.4. “Confidential Information” shall mean any information relating to the scientific and business affairs of a Party disclosed to the other Party in connection with this Agreement, regardless of whether such information is specifically designated as confidential and regardless of whether such information is in written, oral, electronic, or other form. Such Confidential Information may include, without limitation, trade secrets, know-how, Inventions, non-published Patent Rights, technical data or specifications, materials formulations, compositions, processes, information, testing methods and/or results, business or financial information and methods, research and development activities, production and marketing plans, and customer and supplier information.

1.5. “Dose” shall mean a unit consisting of one patient vial of Compound or Product.

1.6. “Effective Date” shall mean the date first above written, which date post-dates the beginning of the Term as such as defined herein.

1.7. “Good Clinical Practice” or “GCP” shall mean the generally accepted standard of Good Clinical Practice within the pharmaceutical industry for the design, conduct, performance, monitoring, auditing, recording, analyses and reporting of clinical trials that provides assurance that the data and reported results are clinical and accurate and that the rights, integrity and confidentiality of the trial subjects are protected.

1.8. “Good Manufacturing Practices” or “GMP” shall mean the then current Good Manufacturing Practices as such term is defined from time to time by the FDA or other relevant governmental authority having jurisdiction over the development, manufacture or sale of the Compound or the Product in the Territory.

1.9. “Inventory” shall mean Compound or Product.

1.10. “Product” shall mean the yttrium radiolabeled Compound for therapeutic use and indium-111 radiolabeled Compound for dosimetry purposes, both in a form ready for use in human clinical trials and/or by the ultimate consumer with the trademark of Onalta.

1.11. “Purchase Order” shall mean the order form to be completed and issued by BIOMEDICA to MIP or MIP’s designee for the purpose of ordering Compound or Product (Exhibit B).

1.12. “Qualified Manufacturer” shall mean a licensed manufacturer capable of manufacturing commercial scale radiopharmaceuticals, in accordance with cGMP requirements and all applicable national and European directives, laws and regulations.

 

4


1.13. “Specification(s)” shall mean the standards established for the characteristics, quality, and quality control testing of the Compound or the Product, and its constituents, components, and packaging, as described in the IMPD, Section 2.1 SS.4, 2.1 SK.4 and 2.1.P.5 and MIP product specification and as may be amended from time to time by the mutual written agreement of the Parties (Exhibit A).

1.14. “Term” shall mean the period commencing on the September 1, 2009 (the effective date of the Territory License Agreement) and continuing for 10 (ten) years thereafter, with a renegotiation of the terms during year five (5) for the second five (5) years. In no case shall the Term survive termination of the Territory License Agreement.

1.15. “Territory” shall mean those countries as of the Effective Date belonging to the European Union, the European Free Trade Association (Switzerland, Iceland, Lichtenstein and Norway), Eastern Europe, Russia and the other former Commonwealth of Independent States (CIS), the Middle East and Arabic States, Turkey, and the North Africa region. “Territory” shall specifically exclude the State of Israel unless and until such rights become available. For the sake of clarity, as of the Effective Date, the Territory shall mean the specifically enumerated countries listed in Exhibit F attached hereto.

The following Exhibits attached to this Agreement are hereby incorporated by reference:

 

 

Exhibit A:

Specifications

 

 

Exhibit B:

Purchase Order

 

 

Exhibit C:

Ordering and Fulfillment Process

 

 

Exhibit D:

Monthly Minimum Payment Obligation

 

 

Exhibit E:

Example of Over Achievement /Underachievement Adjustments

 

 

Exhibit F:

Listing of Countries in Territory

 

2. SUPPLY OF COMPOUND AND PRODUCT

2.1 Engagement. During the Term and after the Effective Date of this Agreement, BIOMEDICA hereby engages MIP and MIP accepts such engagement as BIOMEDICA’s exclusive supplier of Compound and Product subject to the terms of this Agreement.

2.2 Product and Specifications. MIP agrees to supply, directly or through a MIP designee selected by MIP to be identified to BIOMEDICA immediately upon signing of this Agreement, the Compound or the Product to BIOMEDICA according to the Specifications (Exhibit A), in accordance with current good manufacturing practices (“GMP”) and in accordance with any other applicable standards imposed by law.

2.3 Orders of Compound or Product. BIOMEDICA shall submit to MIP or MIP’s designee a binding Purchase Order substantially in the form attached hereto as Exhibit B by

 

5


facsimile (or other suitable means) at least 10 Business Days in advance of intended shipment, (see Exhibit C Ordering and Fulfillment Process). Such Purchase Orders shall specify the quantity of the Compound or Product ordered, the delivery date, and shipping information. The Parties agree that the terms and conditions of this Agreement shall control as to a particular Purchase Order unless otherwise agreed to in writing by the Parties.

2.4 Prior to the first shipment of Compound or Product to any third party site, BIOMEDICA or its licensee shall obtain and forward to MIP from such third Party its license evidencing proper legal authority for the receipt and possession of the Compound or Product. If and to the extent necessary, BIOMEDICA shall further obtain all approvals, licenses and permits required to import Compound or Product into each country in the Territory as directed by BIOMEDICA.

2.5 MIP or MIP’s designee shall deliver Compound or Product in accordance with the quantities and requested delivery date(s) specified in the relevant order. MIP or MIP’s designee will pack the Compound or Product for shipment and storage in accordance with the applicable Specifications.

2.6 Delivery. MIP or MIP’s designee shall ship the Compound or the Product to BIOMEDICA’s facility (or as otherwise reasonably directed by BIOMEDICA in writing) using a carrier of BIOMEDICA’s selection, approved by MIP or MIP’s designee. MIP or its designee shall ship the Compound and the Products to BIOMEDICA or it’s designees in accordance with all appropriate regulations. BIOMEDICA shall be responsible for providing evidence of proper legal authority for the receipt and possession of Compound or Product in each country in the Territory. BIOMEDICA shall obtain all approvals, licenses appointing any customs brokers, and acquiring any necessary licenses or permits, including but not limited to obtaining the necessary import licenses from the appropriate governmental authorities. Delivery of Final Product as directed by BIOMEDICA shall be FCA (INCOTERMS) MIP or MIP designee’s facility shipping dock. Title and risk of loss for the goods shall pass to BIOMEDICA at point of delivery by MIP or MIP’s designee to the selected carrier. All transportation and packaging costs incurred to deliver Compound or Product ordered by BIOMEDICA shall be borne by BIOMEDICA.

2.7 Packaging Information. Packages will consist of one Dose per package. The package design for the Product will be IAEA compliant Type A packaging for international transportation. BIOMEDICA is solely responsible for compliance of the text of the package labels with applicable regulations in the Territory countries for both the Product and the Compound. It is the intent of the Parties that the package label will indicate BIOMEDICA as the Party for whom the Compound and/or Product is manufactured.

2.8 If either Party or its designee discovers that the Compound, Product and/or Dose does not comply with Specifications, then the discovering Party shall within 1 (one) business day inform the other Party of such non-compliance to determine a mutually agreed course of action. With respect to any such Compound, Product and/or Dose which do not comply with Specifications as a result of shortcomings in process or parameters under the direct control of

 

6


MIP or MIP’s designee, then MIP or MIP’s designee promptly will replace such Compound, Product and/or Dose at no additional cost to BIOMEDICA.

2.9 BIOMEDICA shall not modify the Compound or the Product, or use alternative radioisotopes with the Compound or Product. Yttrium-90 isotope supply must meet Specifications (Exhibit A) and be qualified and validated for the Product and/ or Compound. MIP will provide BIOMEDICA with two (2) qualified and validated suppliers of Yttrium-90. BIOMEDICA shall not be limited to these two suppliers to the extent additional suppliers of qualified and validated Ytrrium-90 may also be available.

2.10 During the period that precedes availability of the Product, MIP agrees to provide the Compound for purposes of radiolabeling by BIOMEDICA in connection with its Onalta compassionate use and clinical study activities in the Territory subject to BIOMEDICA first securing and providing MIP with evidence of receipt of all relevant licenses and regulatory approvals required in each relevant country in the Territory. The final formulation and doses of Compound will be compounded at the treatment center or designated site and coordinated by BIOMEDICA. BIOMEDICA shall be solely responsible for preparing or having prepared any Product and insuring compliance with GMP (Good Manufacturing Practices) and GCP (Good Clinical Practices) standards required or customary in the Territory.

2.10.1 Certificates of Manufacturing Compliance. At the request of BIOMEDICA and at BIOMEDICA’s expense, MIP shall provide or cause to be provided for such Compounds or Products purchased, a certificate of manufacturing compliance, containing the types of information reasonably agreed upon by BIOMEDICA and MIP. Such certificate shall certify that the Compounds or Products were manufactured in accordance with the specifications provided by BIOMEDICA and in compliance with all local laws in the country of manufacture.

2.10.2 Prior to the initial release and shipment of the Compound or Product in each country in the Territory, BIOMEDICA shall provide MIP or MIP’s designee with applicable radioactive license(s) and regulatory documentation authorizing the use and administration of the Compound or the Product in humans.

2.10.3 Compound Radiolabeling Tech Transfer Support. MIP will provide up to ****** hours for Compound radiolabeling tech transfer support to BIOMEDICA personnel without a labor charge but with reimbursement for all reasonable expenses incurred. At BIOMEDICA’s request, MIP will provide BIOMEDICA additional tech transfer support, for which support, BIOMEDICA agrees to reimburse MIP for at a daily rate range of ****** depending on the technical expertise and experience level required for the specific assistance requested by BIOMEDICA, plus reasonable expenses incurred. BIOMEDICA will provide MIP an advance notice of 30 days for requested support.

 

* Confidential Treatment Required *

 

7


3. PRICING, PURCHASE COMMITMENT AND PAYMENT

3.1 Minimum Purchase Obligation. During the Term of this Agreement BIOMEDICA commits to purchase or otherwise pay MIP certain guaranteed monthly minimum amounts. Such guaranteed monthly minimum amounts shall commence at the beginning of Q3 2010 and continue through Q4 2013 inclusive. The cumulative guaranteed monthly minimum amount due in any given quarter shall define a target guaranteed quarterly minimum amount for calculating any underachievement adjustment or overachievement adjustment to be received by BIOMEDICA in an immediately subsequent quarter under the conditions set forth in 3.1.1 and 3.1.2.

3.1.1 Adjustments Underachievement Associated with Minimum Purchase Obligation. ****** of any payment made by BIOMEDICA to meet a Minimum Purchase Obligation amount in any particular quarter will be applied by MIP as an Underachievement Adjustment against any overachievement amount in excess of a subsequent quarter’s Guaranteed Quarterly Minimum Purchase Amount. In no case shall such an underachievement adjustment exceed any payment due by BIOMEDICA to MIP in excess of the minimum payment required in the subsequent quarter. In no case will the underachievement adjustment survive beyond such subsequent quarter. In no event will the underachievement adjustment reduce the subsequent quarter’s target Guaranteed Quarterly Minimum Amount to less than zero. ******

3.1.2 Adjustments Overachievement Associated with Minimum Purchase Obligation. ****** of any amount paid by BIOMEDICA in excess of the Guaranteed Quarterly Minimum Amount due in any particular quarter for Compound and/or Product, where such payment has taken into account any overachievement or underachievement adjustments, will be applied by MIP as an Overachievement Adjustment against any underachievement amount that may be owed by BIOMEDICA toward the subsequent quarter’s target Guaranteed Quarterly Minimum Amount. In no case will the overachievement adjustment survive beyond such subsequent quarter. In no event will the overachievement adjustment reduce the subsequent quarter’s target Guaranteed Quarterly Minimum Amount to less than zero. ******

3.1.3. For purposes of this section, “Material Change” shall mean an identifiable event or events that give rise to a significant and material adverse change in demand for Compound and/or Product in any given quarter by more than ****** of projected figures contained in the BIOMEDICA Business Plan attached and incorporated into the Territory License Agreement between the Parties dated September 1, 2009 for that quarter. A change in demand for either Compound or Product of less than ******, or a change in demand attributed substantially and directly to conduct within BIOMEDICA’S reasonable control, or where the cause of the event is not identifiable with reasonable certainty, shall not constitute a Material Change. Any increase beyond projections of Compound or Product shall not constitute a Material Change. BIOMEDICA and MIP

 

* Confidential Treatment Required *

 

8


agree to account for Material Changes in the demand for Compound and/or Product only during the portion of the Term during which minimum purchase obligations are applicable.

3.1.3.1 MIP agrees that if BIOMEDICA can demonstrate that a Material Change outside of BIOMEDICA’s reasonable control has occurred, such as major regulatory, legal or reimbursement change, the Parties will promptly meet to discuss in good faith an appropriate reforecast of the minimums. During the period of good faith discussions, the Parties agree that the existing minimum monthly purchase obligations as set forth in this Agreement will continue to be paid by BIOMEDICA. Upon agreement on reforecasted minimums, any overpayment made by BIOMEDICA from the date on which the Material Change was demonstrated will be refunded to BIOMEDICA.

3.2 Pricing Commitment. The agreed upon pricing for the Compound and the Product shall be as follows:

3.2.1 Pricing ******

 

 

 

Compound Transfer Price is set at ****** per Dose

 

 

 

Product for clinical trials is set at ****** per Dose

 

 

 

Product Transfer Price. The BIOMEDICA price per dose of the Product will be determined by the national competent authority of each country of the Territory in which the Product will be launched. If the price per dose for the Product by the national competent authority is set below ****** then the Parties will renegotiate in good faith the transfer price for Product in that country in the Territory.

 

Price Per Dose*

  

Transfer
Price

  

Percentage
of Onalta
Price Per
Dose**

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*

Minimum transfer price is set at ****** for the initial five year period

 

**

Governing equation

 

* Confidential Treatment Required *

 

9


 

3.2.2

Pricing ****** Product Transfer Price. BIOMEDICA and MIP will negotiate new transfer prices after the ****** anniversary of the Supply Agreem


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