<PAGE>
EXHIBIT 10.2
WHENEVER CONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH
OMISSIONS
ARE
DENOTED BY AN ASTERISK *), SUCH CONFIDENTIAL INFORMATION HAS
BEEN
SUBMITTED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
SUPPLY AGREEMENT
BETWEEN
ALKERMES, INC.
AND
CEPHALON, INC.
<PAGE>
WHENEVER CONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH
OMISSIONS
ARE
DENOTED BY AN ASTERISK *), SUCH CONFIDENTIAL INFORMATION HAS
BEEN
SUBMITTED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
SUPPLY AGREEMENT
THIS SUPPLY
AGREEMENT ("Agreement") is made and entered into, effective as
of June 23, 2005 (the "Effective Date"), by
and between Alkermes, Inc., a
Pennsylvania corporation, having a
principal place of business at 88 Sidney
Street, Cambridge, MA 02139 ("Alkermes"),
and Cephalon, Inc., a Delaware
corporation having a principal place of
business at 41 Moores Road, Frazer,
Pennsylvania 19355 ("Cephalon")
(collectively, the "Parties" or individually, a
"Party").
RECITALS:
WHEREAS,
concurrently with the execution of this Agreement, Alkermes and
Cephalon have entered into the License and
Collaboration Agreement (as defined
below), pursuant to which Alkermes granted
Cephalon a semi-exclusive license to
commercialize and sell the Product (as
defined below) in the Territory (as
defined below);
WHEREAS, under
the terms of the License and Collaboration Agreement,
Alkermes has an obligation to manufacture
and supply the Product to Cephalon for
development and commercial sale; and
WHEREAS,
Alkermes hereby agrees to manufacture and supply, and Cephalon
hereby agrees to purchase, the Product on
the terms and conditions set forth
herein.
NOW, THEREFORE,
in consideration of the premises and the mutual covenants
and agreements set forth herein, and other
good and valuable consideration, the
receipt and sufficiency of which are hereby
acknowledged, the Parties agree as
follows:
ARTICLE 1
DEFINITIONS
Capitalized
terms used in this Agreement, whether used in the singular or
plural, shall have the meanings set forth
below, unless otherwise specifically
indicated herein. Capitalized terms used in
this Agreement and not defined in
this Agreement shall have the meanings
ascribed to them in the License and
Collaboration Agreement. In the event of a
conflict between the definition of a
term contained herein and the definition of
such term in the License and
Collaboration Agreement, this Agreement
shall control.
1.1 "ACT" shall
mean the United States Food, Drug and Cosmetic Act, as
amended from time to time, and the
regulations promulgated thereunder including
the guidelines and guidance issued by the
FDA.
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1.2 "ADDITIONAL
COMPONENTS" shall mean all components supplied together
with the Product and the Diluent that are
necessary to reconstitute or
administer the Product, or that are
necessary for final packaging.
1.3 "AFFILIATES"
shall mean with respect to any Party, shall mean any
entity that controls, is controlled by, or
is under common control with such
Party, but only for so long as such control
shall continue. For these purposes,
"control" shall refer to: (i) the
possession, directly or indirectly, of the
power to direct the management or policies
of an entity, whether through
ownership of voting securities, by contract
or otherwise, or (ii) the ownership,
directly or indirectly, of at least fifty
percent (50%) of the voting securities
or other ownership interest of an
entity.
1.4 "ALKERMES
MANUFACTURING FACILITY" shall mean the facility owned and
operated by Alkermes or an Affiliate
located in Wilmington, Ohio, or any other
manufacturing facility owned and operated
by Alkermes or an Affiliate where the
Manufacture of the Product is performed for
supply to Cephalon pursuant to this
Agreement; provided, however, an Alkermes
Manufacturing Facility shall not
include a manufacturing facility owned and
operated by Alkermes or an Affiliate
that is constructed for the Manufacture of
the Product for supply outside the
Territory.
1.5 "ALKERMES
VIVITREX MANUFACTURING KNOW-HOW" shall mean the Alkermes
Manufacturing Know-How defined in the
License and Collaboration Agreement that
is necessary or directly related to the
Manufacture of the Product.
1.6 "BUSINESS
DAY" shall mean a day on which banking institutions in New
York, New York are open for business
1.7 "CERTIFICATE
OF ANALYSIS AND CONFORMITY" shall mean the certificate for
each batch or lot of Product delivered
hereunder in the form contemplated by
Section 3.11 of this Agreement.
1.8 "CGMPS"
shall mean the then current good manufacturing practices
promulgated by the FDA under the U.S. Food,
Drug and Cosmetic Act, 21 C.F.R.
Section 210-211, as amended from time to
time.
1.9 "CLINICAL
REQUIREMENTS" shall mean the quantities of the Product,
Placebo and Diluent required for the
conduct of pre-clinical studies and/or
Clinical Studies of Product in the Field
pursuant to a Development Plan.
1.10 "CLINICAL
STUDIES" shall have the meaning set forth in the License and
Collaboration Agreement.
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1.11 "COMMERCIAL
REQUIREMENTS" shall mean the quantities of the Product
required for (i) for commercial sale by
Cephalon and its Affiliates in the Field
in the Territory pursuant to the License
and Collaboration Agreement or (ii) for
compassionate use, use in
investigator-sponsored Clinical Studies or post
marketing clinical studies in the Field in
the Territory pursuant to the License
and Collaboration Agreement.
1.12
"COMMERCIALIZATION" (including variations such as "Commercialize"
and
the like) shall mean the performance by a
Party or its Affiliates of any and all
activities directed to promoting,
marketing, importing, exporting, distributing,
selling or offering to sell (including
pre-marketing), sampling, post-marketing
clinical trials and post-marketing drug
surveillance of the Product in the Field
in the Territory.
1.13
"COMMERCIALIZATION PLAN" shall have the meaning set forth in
the
License and Collaboration Agreement.
1.14
"COMMERCIALLY REASONABLE MANUFACTURING EFFORTS" shall mean
[**].
1.15
"CONFIDENTIAL INFORMATION" shall have the meaning set forth in
the
License and Collaboration Agreement with
respect to information and materials
furnished by a Party to the other Party
pursuant to this Agreement.
1.16 "CT" shall
mean a commercialization team established pursuant to the
License and Collaboration Agreement.
1.17
"DEVELOPMENT FTE RATE" shall have the meaning set forth in the
License
and Collaboration Agreement.
1.18
"DEVELOPMENT PLAN" shall have the meaning set forth in the License
and
Collaboration Agreement.
1.19 "DILUENT"
shall mean any injectable liquid pharmaceutical formulation
required to reconstitute the Product prior
to injection, filled in a primary
container.
1.20 "DOSAGE
UNIT" shall mean a unit of the Product or the Finished Product
determined by the amount of the single dose
of Naltrexone contained therein.
1.21 "DT" shall
mean a development team established pursuant to the License
and Collaboration Agreement.
1.22 "FDA" shall
mean the United States Food and Drug Administration or any
successor agency.
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1.23 "FIELD"
shall mean the treatment, prevention or diagnosis of any human
disease, disorder or condition, including
the treatment and/or prevention of
alcohol abuse/dependence.
1.24 "FINISHED
PRODUCT" shall mean a finished, packaged, labeled final
Dosage Unit of the Product plus Diluent and
syringes.
1.25 "FIRM PO"
shall have the meaning set forth in Section 3.8(a).
1.26 "FIRM ZONE"
shall have the meaning set forth in Section 3.7(d).
1.27 "[**] -YEAR
FORECAST" shall mean a [**] year annual forecast of the
Product Requirements and Placebo
Requirements in each year of such forecast,
starting with the next calendar year (i.e.,
the calendar year following the due
date of such forecast), provided that the
forecast for the first [**] months
shall be broken down by month.
1.28 "FULLY
BURDENED MANUFACTURING COST" shall mean the costs incurred
(i.e., paid or accrued) by a Party, its
Affiliates or agents in the Manufacture
of a Product, Placebo or Diluent, as
applicable, which shall be [**]. Fully
Burdened Manufacturing Cost shall exclude
[**] that are required to obtain
Regulatory Approval for the Medisorb
Product for the Initial Indication (which
costs shall be borne solely by Alkermes).
In addition, for the avoidance of
doubt, any Manufacturing development costs
that are included in Shared Expenses
as Development Costs shall not be included
as part of the Fully Burdened
Manufacturing Cost.
1.29 "FTE" shall
have the meaning set forth in the License and
Collaboration Agreement.
1.30 "GOVERNMENT
AUTHORITY" shall mean any court, tribunal, agency,
department, legislative body, commission or
other instrumentality of any
federal, state, county, city or other
political subdivision in the Territory.
1.31 "JSC" shall
mean the joint steering committee established pursuant to
the License and Collaboration
Agreement.
1.32 "LAWS" or
"LAW" shall mean all applicable laws, statutes, rules,
regulations, ordinances and other
pronouncements having the binding effect of
law of any applicable Government Authority,
including the Act.
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1.33 "LICENSE
AND COLLABORATION AGREEMENT" shall mean that certain License
and Collaboration Agreement by and between
the Parties entered into as of June
23, 2005, as such agreement may be amended
from time to time.
1.34
"MANUFACTURING" (including variations such as "Manufacture")
shall
mean the performance of any and all
activities directed to producing,
manufacturing, processing, filling,
finishing, packaging, labeling, quality
control, quality assurance, testing and
release, shipping and storage of the
Product, Finished Product, Placebo, or
Diluent as applicable.
1.35
"NALTREXONE" shall mean [**].
1.36 "NDA" shall
mean the New Drug Application number 21-897 filed with the
FDA by Alkermes on March 31, 2005 with
respect to the Product.
1.37 "OUTBOUND
COSTS" shall mean any outbound costs associated with the
delivery of Product or Placebo including
costs related to transport, cold
storage shipping containers and external
storage (if required) of Product or
Placebo, such costs including freight,
duty, insurance and warehousing.
1.38 "PLACEBO"
shall mean an inactive substitute for the Product that does
not contain measurable quantities of
Naltrexone.
1.39 "PLACEBO
REQUIREMENTS" shall means the quantities of Placebo required
for the conduct of pre-clinical studies
and/or Clinical Studies of the Product
in the Field pursuant to a Development
Plan.
1.40
"PROCEDURES" shall mean the procedures for manufacturing, control
and
testing the Product as set forth in the
NDA, as such procedures may be amended
by amendment to such applications from time
to time.
1.41 "PRODUCT"
shall mean the injectable pharmaceutical product containing
Naltrexone utilizing Alkermes' Medisorb(R)
sustained-release technology as
described in the NDA.
1.42 "PRODUCT
REQUIREMENTS" shall mean Clinical Requirements plus
Commercial Requirements.
1.43 "QUALITY
AGREEMENT" shall have the meaning set forth in Section 3.12.
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1.44 "RECALL"
shall mean any action by Alkermes or Cephalon to recover
title to or possession of or to prevent the
distribution, prescription,
consumption or release of a Finished
Product or Product sold or shipped to Third
Parties. The term "Recall" also includes
the failure by Alkermes or Cephalon to
sell or ship a Finished Product or Product
to Third Parties that would have been
subject to recall if it had been sold or
shipped.
1.45 "REGULATORY
APPROVAL" shall mean any approvals of the FDA necessary
for the manufacture, marketing or sale of
the Product in the Territory.
1.46 "ROLLING
MONTHLY FORECAST" shall mean a rolling [**] month forecast
specifying Product Requirements and Placebo
Requirements for each month of such
forecast, starting with the calendar month
following the due date of such
forecast.
1.47 "SEIZURE"
shall mean any action by the FDA to detain or destroy a
Finished Product or Product or prevent the
distribution, prescription,
consumption or release of a Finished
Product or Product.
1.48 "SHARED
EXPENSES" shall have the meaning set forth in the License and
Collaboration Agreement.
1.49
"SPECIFICATIONS" shall mean the specifications for the
manufacture,
release, storage, handling and packaging of
the Product as set forth in the NDA,
as such specifications may be amended from
time to time as provided herein.
1.50 "STRATEGIC
FORECAST" shall mean a reasonable estimate of the
long-range (at least [**] years)
manufacturing capacity forecast for the
Alkermes Manufacturing Facility for supply
to Cephalon pursuant to this
Agreement, the current version of which is
attached as Exhibit A.
1.51 "SUPPLY
TEAM" shall have the meaning set forth in Section 2.1.
1.52 "TECHNOLOGY
TRANSFER AGREEMENT" shall have the meaning set forth in
Section 6.3.
1.53 "TERM" shall have
the meaning set forth in Section 6.1.
1.54 "TERRITORY"
shall mean the United States of America, its territories
and possessions, including the Commonwealth
of Puerto Rico.
1.55 "THIRD
PARTY" shall mean any entity other than the Parties or their
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respective Affiliates.
Where words and
phrases are used herein in the singular, such usage is
intended to include the plural forms where
appropriate to the context, and vice
versa. The words "including", "includes"
and "such as" are used in their
non-limiting sense and have the same
meaning as "including without limitation"
and "including but not limited to".
References to Articles, Sections,
subsections, and clauses are to the same
with all their subparts as they appear
in this Agreement. "Herein" means anywhere
in this Agreement. "Hereunder" and
"hereto" means under or pursuant to any
provision of this Agreement.
ARTICLE 2
SUPPLY TEAM
2.1
ESTABLISHMENT OF SUPPLY TEAM. The JSC shall establish a supply
team
(the "ST") no later than [**] days after
the Effective Date to coordinate and
implement all activities for the
Manufacture of the Product for sale to
Cephalon. One representative from each
Party shall be designated as that Party's
team leader to act as the primary ST
contact for that Party. The ST shall
consist of an equal number of
representatives of each Party as are reasonably
necessary to accomplish the goals of the ST
hereunder. Such representatives may
include individuals with expertise and
responsibilities in the areas of quality
control, quality assurance, operational
planning, supply chain management and
regulatory affairs. Either Party may
replace any or all of its representatives
at any time upon notice to the other
Party.
2.2 SUPPLY TEAM
RESPONSIBILITIES. The ST shall be responsible for:
(i) implementing the provisions set forth in this Agreement in
a
manner consistent with Alkermes'
Manufacture and supply obligations hereunder;
(ii) pursuant to Section 3.5, reviewing the Strategic Forecast and
the
long range plan for Commercialization of
the Product in the Territory;
(iiii)
developing a Manufacturing strategy for the Product, including
an annual Strategic Forecast, for review
and approval by the JSC;
(iv) formulating a plan for Manufacturing development to reduce
Manufacturing cost and enhance
Manufacturing output and associated annual
budgets and any substantive amendments
thereto for incorporation into the
Development Plans;
(v) reviewing quality issues and ongoing quality
control/quality
assurance programs;
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(vi) implementing all Manufacturing activities pursuant to the
Development Plans approved by the JSC;
(vii) exchanging information and facilitating cooperation and
coordination between the Parties as they
exercise their respective rights and
meet their respective obligations under the
Development Plans, the
Commercialization Plans and this
Agreement;
(viii) providing status updates and identifying critical issues to
the
JSC regarding Manufacturing activities;
and
(ix) performing such other functions as appropriate to further
the
purposes of this Agreement and the License
and Collaboration Agreement as
determined by the Parties.
2.3 SUPPLY TEAM
PROCEDURES. The Alkermes team leader shall serve as the
chairperson of the ST. The chairperson
shall establish the timing and agenda for
all ST meetings and shall send notice of
such meetings, including the agenda
therefor, to all ST members; provided,
however, either Party may request that
specific items be included in the agenda
and may request that additional
meetings be scheduled as needed. The ST
will meet at least once each calendar
month, or as agreed by the ST, for the
first [**] years following the Effective
Date, and at least once each calendar
quarter, or as agreed by the ST,
thereafter. The location of regularly
scheduled ST meetings shall alternate
between the offices of the Parties, unless
otherwise agreed. Meetings may be
held telephonically or by videoconference.
A quorum of at least half the ST
members appointed by each Party shall be
present at or shall otherwise
participate in each ST meeting. Alkermes
shall appoint one person (who need not
be a member of the ST) to attend the
meeting and record the minutes of the
meeting in writing. Such minutes shall be
circulated to the Parties promptly
following the meeting for review, comment
and approval.
2.4 SUPPLY TEAM
DECISION MAKING. As a general principle, the ST will
operate by consensus with each Party
collectively having one vote. In the event
that the ST members do not reach consensus
with respect to a matter that is
within the purview of the ST within [**]
days after they have met and attempted
to reach such consensus, such matter shall
be presented to the JSC for
resolution; provided, however, that to the
extent any matters are required by
Law or by safety concerns with respect to a
Product to be resolved within a
shorter period of time, the periods set
forth in this Section 2.4 and in Section
2.1.4 and Article 12 of the License and
Collaboration Agreement shall be
shortened as appropriate to permit the
resolution of such matters within the
required period.
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2.5 LIMITATION
ON SUPPLY TEAM DECISION MAKING. Neither the ST nor the JSC
shall, without the consent of Cephalon,
have any authority to modify or reduce
Alkermes' obligation under this Agreement
to use Commercially Reasonable
Manufacturing Efforts as set forth in
Section 3.15 or to amend any provision of
this Agreement. Notwithstanding anything to
the contrary in the License and
Collaboration Agreement, Alkermes shall not
have any right to resolve any
Reserved Dispute in any manner that
modifies or reduces Alkermes' obligation
under this Agreement to use Commercially
Reasonable Manufacturing Efforts as set
forth in Section 3.15 or to amend any
provision of this Agreement.
ARTICLE 3
SUPPLY OF PRODUCTS
3.1 PURCHASE AND
SALE OF PRODUCT. During the Term, and subject to the terms
and conditions hereof, Alkermes agrees to
supply to Cephalon, and Cephalon
agrees to purchase exclusively from
Alkermes, Cephalon's Product Requirements.
During the Term and subject to applicable
Law, Alkermes agrees to use
commercially reasonable efforts to limit
the ability of Third Parties to which
Alkermes supplies Product for sale and
distribution in the ROW Territory [**].
Alkermes agrees that, if at any time during
the Term Alkermes is unable to fully
satisfy worldwide demand for the Product,
[**].
3.2 MANUFACTURE
OF THE PRODUCT. Alkermes shall Manufacture the Product for
supply to Cephalon. Alkermes shall
Manufacture, or have Manufactured by a
designated Third Party, the Diluent, the
Additional Components, and the Finished
Product (packaging and labeling of the
Product) for supply to Cephalon.
3.3
MANUFACTURING DEVELOPMENT. Alkermes shall conduct Manufacturing
development for the Product to reduce
Manufacturing cost and enhance
Manufacturing output. The ST shall submit a
plan and budget for such
Manufacturing development to the DT, which
in turn shall incorporate this plan
into the Development Plan submitted to the
JSC for review and approval. Such
plan and budget shall be consistent with,
and reasonably calculated to enable
Alkermes to perform, its obligations
pursuant to Section 3.15. Alkermes shall
then conduct Manufacturing development in
accordance with the Development Plan
and budget approved by the JSC.
3.4
MANUFACTURING FACILITY. Alkermes shall Manufacture the Product at
the
Alkermes Manufacturing Facility. In
accordance with the terms and conditions set
forth in the Quality Agreement, Cephalon
shall have the right from time to time,
upon reasonable advance notice to Alkermes,
to inspect the Alkermes
Manufacturing Facility, to review all
records kept by Alkermes relating to the
Manufacture of Product hereunder and to
observe Alkermes' conduct of
Manufacturing operations with respect to
the
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Product.
3.5 STRATEG
