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SUPPLY AGREEMENT FOR LICENSED PRODUCT

Technology License Assignment Agreement

SUPPLY AGREEMENT FOR LICENSED PRODUCT | Document Parties: Avantogen Oncology Inc | Resistys Inc | RESprotect, Resistys, Avantogen Limited | SciClone Pharmaceuticals, Inc You are currently viewing:
This Technology License Assignment Agreement involves

Avantogen Oncology Inc | Resistys Inc | RESprotect, Resistys, Avantogen Limited | SciClone Pharmaceuticals, Inc

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Title: SUPPLY AGREEMENT FOR LICENSED PRODUCT
Date: 8/8/2007
Industry: Biotechnology and Drugs     Law Firm: DLA Piper;Mayer Brown     Sector: Healthcare

SUPPLY AGREEMENT FOR LICENSED PRODUCT, Parties: avantogen oncology inc , resistys inc , resprotect  resistys  avantogen limited , sciclone pharmaceuticals  inc
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EXHIBIT 10.19

CONFIDENTIAL PROVISIONS REDACTED

Supply Agreement

for Licensed Product

Between

SciClone Pharmaceuticals, Inc.

901 Mariners Island Blvd.

Suite 205

San Mateo, California 94404

United States of America

(hereinafter referred to as “SciClone”)

And

RESprotect GmbH

Fiedlerstrasse 34

01307 Dresden

Germany

(hereinafter referred to as “RESprotect”)

      CONFIDENTIAL TREATMENT

 


PREAMBLE

 

1. RESprotect possesses certain intellectual property rights related to RP101 ((E)-5-(2-bromovinyl-)2’-deoxyuridine—also known as BVDU).

 

2. Resistys Inc. (“Resistys”) and RESprotect entered into a license agreement dated as of September 13, 2004 (hereinafter the “2004 License Agreement”) whereby Resistys obtained a license from RESprotect to, among other things, the use of the active pharmaceutical ingredient (“API”) RP101 ((E)-5-(2-bromovinyl-)2’-deoxyuridine—also known as BVDU), salts of BVDU or a prodrug of BVDU (if developed by RESprotect) under the RESprotect Patent Rights (as further defined in the License Agreement), (hereinafter “Licensed Product”), for the purpose of developing and obtaining certain regulatory approval for the Licensed Product in finished form (“Licensed Finished Product”).

 

3. Resistys and RESprotect entered into a Supply Agreement for Clinical Trial Material dated September 13, 2004 (hereinafter the “2004 Supply Agreement”).

 

4. Pursuant to a non-binding Term Sheet, effective March 15, 2007, RESprotect, Resistys, Avantogen Limited (“Avantogen”), Avantogen Oncology Inc. (“AOI”) and SciClone, agreed, among other things, to complete certain definitive agreements, including an assignment by Resistys and Avantogen to SciClone of the 2004 License Agreement and an assignment by Resistys to SciClone of the 2004 Supply Agreement.

 

5. On the Effective Date, Resistys and Avantogen assigned the 2004 License Agreement to SciClone and Resistys assigned the 2004 Supply Agreement to SciClone, with the consent of RESprotect.

 

6. On the Effective Date, RESprotect and SciClone, entered into an Amended and Restated License Agreement (the “2007 License Agreement”) setting forth amendments to certain terms and conditions of the 2004 License Agreement.

 

7. On the Effective Date, SciClone will pay to RESprotect US $365,474 in consideration for [****], currently in inventory, pursuant to the [****] Invoice No. 12688 (which corresponds to RESprotect invoices designated 07/2006 and 08/2006).

 

8. Under Article 6 of the 2007 License Agreement RESprotect agrees to manufacture and supply the quantities of Licensed Product as required for conducting clinical trials (“Clinical Trials”) in order to obtain regulatory approval for the Licensed Product and the quantities of Licensed Product required for commercial purposes following regulatory approval. These supplies are the subject-matter of this Agreement.

 


**** Certain information on this page has been omitted and filed separately with the commission. Confidential treatment has been requested with respect to the omitted portions.
   2    CONFIDENTIAL TREATMENT

 


9. For the sake of clarification, the Licensed Product for Phase II Clinical Trials will be supplied in filled, finished [****] and all other supplies of Licensed Product for Clinical Trials as well as Licensed Product for commercial purposes will be supplied as the untableted API. RESprotect and SciClone may choose to use the same tablet manufacturer to benefit from economies of scale.

 

10. For the sake of further clarification, the terms of this Agreement independently cover: (1) the supply of the Licensed Product for Clinical Trial purposes; and (2) commercial purposes, after approval of the Licensed Product by the FDA.

 

11. In consideration of the premises and the mutual covenants and agreements contained herein, SciClone and RESprotect agree as follows, whereby in the following, capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the 2007 License Agreement.

ARTICLE I

SUBJECT MATTER – MANUFACTURE AND SUPPLY OF LICENSED PRODUCT;

PAYMENT FOR PAST SUPPLY

Section 1.1 Pursuant to the terms and conditions of this Agreement, SciClone shall purchase the Licensed Product that it has ordered from RESprotect, and RESprotect shall be obligated to manufacture or have manufactured, sell and deliver such quantities of Licensed Product as ordered by SciClone and confirmed by RESprotect as needed for Clinical Trials until acceptance by the FDA of the first NDA or abbreviated NDA for registration of the Licensed Finished Product for any indication and SciClone shall purchase the Licensed Product that it has ordered from RESprotect for commercial purposes, all as detailed herein. Other than the material needed for Phase II Clinical Trials which will be supplied in [****], the Licensed Product will be provided as the API prior to tableting.

Section 1.2 SciClone represents and warrants that it shall not use the Licensed Product for any other purposes or uses other than those set forth in the 2007 License Agreement and this Agreement.

Section 1.3 SciClone undertakes that it shall purchase the entire amount of the Licensed Product required for conducting Clinical Trials and commercial purposes from RESprotect, subject to the terms and conditions provided herein.

 


**** Certain information on this page has been omitted and filed separately with the commission. Confidential treatment has been requested with respect to the omitted portions.

 

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Section 1.4 The details of supplies, including prices for Licensed Product for Clinical Trials are set forth below. The details of supplies, including prices for Licensed Product for commercial purposes shall be agreed upon between the Parties as soon as commercially practicable after the completion of the scale-up batches as mentioned in Article 2 and in the Scale-Up Plan, unless agreed otherwise.

Section 1.5 Effective with this Agreement, SciClone will pay to RESprotect US $365,474 in consideration for [****], currently in inventory, pursuant to the [****] Invoice No. 12688 (which corresponds to RESprotect invoices designated 07/2006 and 08/2006). The payment shall be made within 30 days from the effective date of this Agreement. Furthermore, effective with this Agreement SciClone shall pay to Resistys Inc. for payment to RESprotect the amount of US$49,761.00 outstanding under invoices of RESprotect 12/2006, 1/2007 and 2/2007.

Article II

SCALE-UP

Section 2.1 Scale-Up for Supply of Licensed Product

a. Scale-Up Process . SciClone will purchase from RESprotect the Licensed Product which it requires for the manufacture of Licensed Finished Product prior to and after FDA approval of Licensed Finished Product. RESprotect has subcontracted with, among others, [****] to manufacture the Licensed Product. SciClone and RESprotect acknowledge that the manufacture of the Licensed Product by RESprotect will require a scale-up period of approximately [****] and the expenditure of considerable funds. SciClone and RESprotect agree to share [****] when such scale-up costs are incurred. The expected scale-up costs are set forth in Appendix 1 . RESprotect agrees to provide SciClone with specific manufacturing information and documents including certificates of analyses, batch records and all other documents as required for FDA filings, within thirty (30) days following a request for such specific manufacturing information by SciClone, unless RESprotect is prevented from such provision by reason of a conflicting existing provision with a contract manufacturer of RESprotect. The details of the scale-up will be set forth in a plan (“Scale-Up Plan”) which shall be determined by good faith agreement between RESprotect and SciClone. RESprotect and SciClone agree to cooperate in good faith to obtain detailed information regarding the manufacturing process and scale-up efforts by Third Party contractors of RESprotect.

b. Scale-Up Efforts . The parties further acknowledge that RESprotect’s lack of diligence in timely accomplishing the scale-up in preparation for a Clinical Trial will diminish the value of this Agreement to SciClone and RESprotect. Accordingly, RESprotect shall at all times put forth good faith commercially reasonable efforts in connection with accomplishing the

 


**** Certain information on this page has been omitted and filed separately with the commission. Confidential treatment has been requested with respect to the omitted portions.

 

   4    CONFIDENTIAL TREATMENT

 


scale-up of Licensed Product for Clinical Trials in accordance with the Scale-Up Plan; provided, however, that the parties understand and agree that the timeline and estimated expenditures may from time to time be subject to reasonable adjustment by RESprotect in response to extenuating circumstances not in the complete control of RESprotect. Any deviation or delay in the scale-up process under the Scale-Up Plan shall require consideration by the Development Committee as set forth in the 2007 License Agreement. The final right of decision on any delay or deviation in the scale-up process under the Scale-Up Plan lies with RESprotect, except that any decision which leads to an increase of more than [****] of SciClone’s annual payment obligation pursuant to this Section 2.1b., or any delay of more than [****], which would significantly diminish the value of the opportunity to SciClone as demonstrated by SciClone, shall require SciClone’s prior written consent.

c. Scale-Up Costs. The payments to be made by SciClone to RESprotect for the scale-up shall be made on quarterly, pro rata and upfront basis as follows: SciClone shall make an upfront payment for the costs envisaged under the scale-up for the subsequent calendar quarter within 15 days after the commencement of the respective calendar quarter. At the end of each calendar year the payment shall be compared with the actual costs incurred by RESprotect during that year. Any underpayments of SciClone shall be settled by SciClone within 30 days after receipt of notice from RESprotect of such underpayment. Any excess payments of SciClone shall be used to settle SciClone upfront payment obligation for the following quarter(s) or, if there is no further quarter to come, be re-paid to SciClone.

d. Scale-up Period Production and Supply . RESprotect shall deliver to SciClone and any Sublicensee [****] of the Licensed Product derived by RESprotect under the Scale-up process (“Clinical Scale-up Batches”) [****]. The details of the supplies of the Clinical Scale-Up Batches shall be in accordance with the provisions under Article 6 below.

e. Pre- and Post Scale-up Period Production . Before the [****] of each Clinical Scale-up Batch, which is allocated to SciClone, is fully utilized, RESprotect agrees to supply SciClone or any Sublicensee of SciClone (“Sublicensee”) with additional quantities of Licensed Product and after the shares of the Clinical Scale-up Batches are allocated, RESprotect agrees to supply SciClone or any Sublicensee with quantities of Licensed Product in accordance with orders received from SciClone or its Sublicensee. All such additional quantities of Licensed Product shall be shipped to SciClone or its Sublicensee, as appropriate, in accordance with its written instructions at the expense of SciClone. The details of the supplies shall be in accordance with the provisions under Article 6 below.

 


**** Certain information on this page has been omitted and filed separately with the commission. Confidential treatment has been requested with respect to the omitted portions.

 

   5    CONFIDENTIAL TREATMENT

 


ARTICLE III

SECOND PRODUCTION SOURCE

Section 3.1 Second Production Source . RESprotect and SciClone are interested in saving costs with regard to the manufacture of the Licensed Product. However, RESprotect represents and SciClone acknowledges: (i) that the current manufacture and supply of Licensed Product is subject to Know-how of Third Parties and licensed to RESprotect and that RESprotect is contractually bound to these Third Parties; (ii) that the manufacture process of Licensed Product is covered by RESprotect Know-how and (iii) that only sources located within [****] are suitable as potential additional/alternative sources of supply of Licensed Product which sources must agree to supply exclusively (to the extent permitted by law) to RESprotect, SciClone and Sublicensees and (iv) that such supplier must comply with the quality and quantity standards required by RESprotect, SciClone and Sublicensees and be cGMP compliant. If SciClone identifies a source of supply for Licensed Product complying to the aforementioned conditions above it will provide RESprotect with written notice showing the conditions to be met, the costs of such source, the manufacture and quality standards of such source and authorizations and approvals it possesses, e.g. drug manufacture authorization. RESprotect undertakes to review such submission in good faith within 30 days after receipt of the submission, taking into consideration inter alia its obligations vis-a-vis its existing suppliers, and to provide SciClone with a written opinion detailing whether such alternative source of supply is acceptable to it in view of the above-mentioned preconditions. In any event, no contractual agreement shall be concluded with the potential alternative/additional source or any other obligation entered into with this source which is binding upon RESprotect without the written consent of RESprotect, which shall not unreasonably withheld.

Section 3.2 Cheaper Second Production Source . Notwithstanding the foregoing, in the event that a source of supply of Licensed Product identified by SciClone can supply the Licensed Product at a price documented by a written and bona fide offer that is at least [****], RESprotect shall have thirty (30) days to match the lower price or shall be deemed to have consented to SciClone’s use of that alternate production source, provided that SciClone, within thirty (30) days after such consent has been deemed to be given, enters into a legally binding agreement with such source at identical terms and conditions as reflected in the written and bona fide offer of such source. RESprotect agrees to assist SciClone in obtaining any necessary permissions to obtain Licensed Product directly from the lower priced production source, provided that to this end RESprotect is not obligated to make any payments to amend the contracts with its suppliers or to breach any of the agreements with its suppliers. Notwithstanding the foregoing, RESprotect and SciClone agree to cooperate in good faith to obtain the most cost effective source of Licensed Product. To this end, RESprotect agrees to make commercially reasonable efforts to obtain the Licensed Product in the most cost effective manner.

 


**** Certain information on this page has been omitted and filed separately with the commission. Confidential treatment has been requested with respect to the omitted portions.

 

   6    CONFIDENTIAL TREATMENT

 


Section 3.3 Second Production Source upon Failure to Meet Scale-up Plan.

a. If RESprotect fails to substantially adhere to its obligations under the Scale-up process for Clinical Trial material as provided for in Article II, then SciClone shall give written notice thereof to RESprotect stating in reasonable detail the particular failure(s). RESprotect shall have a period of thirty (30) days from the receipt of such notice to meet with SciClone to discuss the activities that are being pursued to address the failure of diligence and to initiate a program to address the failure of diligence. Following such 30-day period RESprotect shall have a period of ninety (90) days to cure the lack of diligence or, at its discretion, to find a second production source that is reasonably acceptable to SciClone and RESprotect and that complies with the requirements set forth in Section 3.1.

b. If RESprotect does not cure the failure within the aforementioned 90-day period and does not present a second production source to SciClone reasonably acceptable to SciClone and complying with the conditions of Section 3.1(iii), SciClone shall have the right to request from RESprotect to enter into an agreement with a second production source for the Licensed Product, which is identified by SciClone and satisfies the conditions of Section 3.1(iii). RESprotect agrees and acknowledges that a sublicense of the RESprotect manufacturing IP and know-how and those of its suppliers to SciClone is essential for transferring the production of the Licensed Product to the second source and RESprotect agrees to assist SciClone in obtaining any necessary permissions, licenses or sublicenses required for SciClone to obtain the Licensed Product from a second production source alone or together with RESprotect, provided that to this end RESprotect is not obligated to make any payments or to breach any of the agreements with its suppliers. RESprotect shall only be allowed to reject the second source presented by SciClone on the following grounds: (i) it is not ensured that the second production source complies with the quality standards requested by the FDA and necessary to fulfill the product specifications for the Licensed Product established by RESprotect or does not possess the necessary manufacture authorizations, (ii) exclusivity of supply (to the extent legally permissible) to RESprotect, its other licensees, SciClone and its Sublicensees is not ensured; (iii) the second source is not located in the [****] (iv) the second source does not, at the reasonable determination of RESprotect, possess sufficient reputation in the market or technical capabilities, (v) it is not ensured that also RESprotect has access to the second source and the second source will supply RESprotect and its other licensees (if RESprotect so requests), provided that in case of shortages of supply where a supply to both RESprotect and SciClone is not possible, the available supply shall be allocated between the parties at a ratio reflecting the actual or projected sales of Licensed Finished Product by each party, further provided that in case the second source at the beginning of the scale up phase, for a maximum period of [****], is not able to produce sufficient supply of Licensed Product to satisfy both RESprotect and SciClone needs, SciClone will have the prior right to satisfy its demand and thereupon RESprotect shall be supplied with the remaining (if any) stock, or (vi) entering into an agreement with the second production source would violate any obligations of RESprotect vis-a-vis its current production source, especially in relation to the intellectual property rights of this production source.

 


**** Certain information on this page has been omitted and filed separately with the commission. Confidential treatment has been requested with respect to the omitted portions.

 

   7    CONFIDENTIAL TREATMENT

 


c. In case the second production source fails to satisfy the need for supply of Licensed Product for both RESprotect and SciClone for a period exceeding the aforementioned [****] period then RESprotect shall be free to independently identify an alternative production source to satisfy its need for supply of Licensed Product at its cost and SciClone shall resume all responsibility for the supply agreement with the second production source.

d. The costs of the second production source under this section 3.3 (i.e. the costs of setting up the manufacture process and the costs of manufacture) shall either (i) be solely borne by SciClone and shall be credited against the requirement for Milestone Payments pursuant to Section 3.1 and Royalties pursuant to Section 3.3 of the 2007 License Agreement, provided that the Milestone Payments or Royalties are due at the time the costs are incurred and shall be credited or (ii) be borne by SciClone and RESprotect in proportion to the amount of Licensed Product actually supplied by the second production source to SciClone and RESprotect. For the avoidance of doubt, if the second source within the first [****] of the scale up phase does not supply to RESprotect any amount of Licensed Product the cost of the second source shall be borne by SciClone as outlined in (i) above.

Section 3.4 Confidentiality; Cooperation by RESprotect . Any alternate produc


 
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