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Title: |
Estradiol Development and Commercialization Agreement |
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Date: |
2004 |
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FEMPHARM PTY LTD
and
VIVUS INC.
and
ACRUX DDS PTY LTD
--------------------------------------------------------------------------------
ESTRADIOL
DEVELOPMENT AND
COMMERCIALIZATION AGREEMENT
--------------------------------------------------------------------------------
{PAGE}
TABLE OF CONTENTS
PAGE
1. DEFINITIONS AND INTERPRETATION............................................8
1.1 DEFINITIONS......................................................8
1.2 INTERPRETATION..................................................16
2. LICENSE RIGHTS...........................................................18
2.1 LICENSE GRANT...................................................18
2.2 RESERVATION OF RIGHTS...........................................19
2.3 VIVUS GRANT-BACK LICENSE AND OPTION TO LICENSE..................19
2.4 EXPANSION OF FIELD..............................................20
2.5 EXCLUSIVITY COVENANTS...........................................20
2.6 UNAUTHORIZED SALES..............................................23
2.7 RIGHT OF NEGOTIATION............................................24
3. LICENSE AND MILESTONE PAYMENTS...........................................25
3.1 LICENSE FEE.....................................................25
3.2 MILESTONE PAYMENTS..............................................25
3.3 ONE PAYMENT; LIMITATION.........................................26
4. ROYALTIES................................................................26
4.1 ROYALTY PAYMENTS................................................26
4.2 ROYALTY REDUCTION...............................................29
4.3 THIRD PARTY ROYALTIES...........................................30
4.4 ONE ROYALTY; SAMPLES AND DONATIONS..............................30
4.5 ACCRUAL AND PAYMENT OF ROYALTIES; ROYALTY TERM..................31
4.6 LATE PAYMENT OF ROYALTIES.......................................32
4.7 ROYALTY REPORT..................................................32
4.8 VERIFICATION OF ROYALTY STATEMENT...............................32
4.9 NON-DISCLOSURE BY ACCOUNTANT....................................33
4.10 STATEMENT ERRORS................................................33
4.11 CURRENCY CONVERSION.............................................34
4.12 WITHHOLDING TAXES...............................................34
5. CLINICAL DEVELOPMENT.....................................................34
5.1 OVERVIEW OF DEVELOPMENT.........................................34
2
{PAGE}
5.2 TRANSFER OF TECHNICAL INFORMATION...............................35
5.3 CONDUCT OF PHASE IIB STUDY......................................36
5.4 TRANSFER OF DEVELOPMENT RESPONSIBILITY..........................36
5.5 DEVELOPMENT RESPONSIBILITIES....................................36
5.6 DEVELOPMENT COMMITTEE...........................................36
5.7 DEVELOPMENT PLANS...............................................38
5.8 BUDGETS.........................................................39
5.9 STEERING COMMITTEE..............................................39
5.10 FINAL DECISION..................................................40
5.11 PROCEDURES OF COMMITTEES........................................40
5.12 DECISIONS OF COMMITTEES.........................................41
5.13 CHAIRPERSONS - DEVELOPMENT COMMITTEE............................41
5.14 CHAIRPERSONS - STEERING COMMITTEE...............................42
5.15 MINUTES AND REPORTS.............................................42
5.16 GLOBAL DEVELOPMENT COMMITTEE....................................42
5.17 NO OBLIGATION TO TRANSLATE......................................43
5.18 INFORMATION AND RESULTS.........................................43
5.19 PRODUCT FAILURE.................................................44
5.20 SUBCONTRACTS....................................................46
5.21 CLINICAL PRODUCT SUPPLY.........................................46
6. DILIGENCE OBLIGATIONS....................................................46
6.1 PRODUCT DEVELOPMENT DILIGENCE OBLIGATIONS.......................46
6.2 DILIGENCE PAYMENT FOR DEVELOPMENT DELAYS........................47
6.3 REVERSION FOR FAILURE OF DILIGENCE..............................48
7. REGULATORY MATTERS.......................................................49
7.1 REGULATORY MATERIALS............................................49
7.2 RELATIONSHIP WITH REGULATORY AUTHORITIES........................50
7.3 ADVERSE EVENTS AND COMPLAINTS REPORTING.........................51
8. PRODUCT COMMERCIALIZATION................................................52
8.1 OVERVIEW........................................................52
8.2 COMMERCIALIZATION OBLIGATIONS...................................52
8.3 COMMERCIALIZATION PLANS.........................................53
8.4 LAUNCH DILIGENCE................................................54
8.5 MANUFACTURE IN TERRITORY........................................54
8.6 SUPPLY OF PRODUCT TO FEMPHARM...................................54
3
{PAGE}
9. SUB-LICENSING AND ASSIGNMENT.............................................55
9.1 SUB-LICENSE.....................................................55
9.2 VIVUS BOUND.....................................................55
9.3 ASSIGNMENT......................................................55
10. CONFIDENTIALITY..........................................................56
10.1 RESTRICTIONS ON USE.............................................56
10.2 USE OF OWN INFORMATION..........................................56
10.3 EXCEPTIONS TO CONFIDENTIALITY...................................57
10.4 EXCEPTIONS TO NON-DISCLOSURE....................................57
10.5 DISCLOSURE BY LAW...............................................58
10.6 SCOPE OF CONFIDENTIALITY........................................59
10.7 SECURITY OF INFORMATION.........................................59
10.8 PERSONNEL CONFIDENTIALITY.......................................59
10.9 RETURN OF CONFIDENTIAL INFORMATION..............................59
10.10 PUBLICATIONS....................................................60
10.11 OTHER RIGHTS....................................................60
10.12 USE OF OTHER PARTY'S NAME.......................................60
10.13 PRESS RELEASES AND OTHER DISCLOSURES............................60
11. INVENTIONS...............................................................62
11.1 DISCLOSURE OF INVENTIONS........................................62
11.2 OWNERSHIP OF INVENTIONS AND INTELLECTUAL PROPERTY RIGHTS........62
11.3 JOINT INVENTIONS AND JOINT PATENTS..............................62
11.4 COOPERATION OF EMPLOYEES........................................63
12. PATENTS AND INTELLECTUAL PROPERTY........................................63
12.1 PATENT RIGHTS...................................................63
12.2 JOINT PATENT RIGHTS.............................................64
12.3 FEMPHARM PATENT PROCEEDINGS.....................................65
12.4 INFRINGEMENT PROCEEDINGS IN THE FIELD...........................66
12.5 OTHER INFRINGEMENT PROCEEDINGS..................................68
13. REPRESENTATIONS AND WARRANTIES; DISCLAIMERS..............................68
13.1 WARRANTY........................................................68
13.2 ADDITIONAL WARRANTIES OF FEMPHARM AND THE
ACRUX CONTROLLED AFFILIATES....................................68
13.3 ADDITIONAL WARRANTIES OF VIVUS..................................72
4
{PAGE}
13.4 DISCLAIMER OF WARRANTIES........................................73
13.5 DISCLAIMER OF LIABILITY.........................................73
14. TERM AND TERMINATION.....................................................73
14.1 TERM............................................................73
14.2 TERMINATION BY FEMPHARM.........................................74
14.3 TERMINATION BY VIVUS............................................75
14.4 NO RELEASE......................................................76
14.5 CONSEQUENCES OF AGREEMENT TERMINATION...........................76
14.6 VIVUS TERMINATION OF SPECIFIC PROVISIONS FOR UNCURED BREACH.....81
14.7 LIMITATION OF TERMINATION FOR BREACH AFTER COMMERCIAL LAUNCH....82
14.8 TERMINATION FOR FAILURE TO ACHIEVE MONASH AMENDMENT.............83
14.9 REMEDIES........................................................84
15. GENERAL..................................................................85
15.1 NOTICES.........................................................85
15.2 INDEMNIFICATION.................................................86
15.3 DAMAGES FOR BREACH OF REPRESENTATIONS AND WARRANTIES............88
15.4 WAIVER..........................................................88
15.5 SEVERANCE.......................................................89
15.6 SUCCESSORS AND ASSIGNS..........................................89
15.7 CONTINUING OBLIGATIONS..........................................89
15.8 VARIATION.......................................................89
15.9 APPLICABLE LAW..................................................89
15.10 DISPUTE RESOLUTION..............................................90
15.11 DISPUTE REGARDING LICENSE NECESSITY.............................91
15.12 COUNTERPARTS....................................................92
5
{PAGE}
15.13 COSTS...........................................................92
15.14 PAYMENT.........................................................92
15.15 ENTIRE AGREEMENT................................................92
15.16 INJUNCTIVE RELIEF...............................................92
15.17 INDEPENDENT CONTRACTORS.........................................93
15.18 FORCE MAJEURE...................................................93
15.19 BANKRUPTCY......................................................93
15.20 ACRUX DDS AS A PARTY............................................94
15.21 SURVIVAL OF SUBLICENSES.........................................94
6
{PAGE}
THIS DEVELOPMENT AND COMMERCIALIZATION AGREEMENT (the "Agreement") is dated and
effective as of February 12, 2004 (the "Effective Date").
PARTIES:
FEMPHARM PTY LTD (ABN 35 088 778 018) of 103-113 Stanley Street, West Melbourne,
Victoria, Australia ("FemPharm")
and
VIVUS INC. of 1172 Castro Street, Mountain View, California, United States of
America ("Vivus")
and
ACRUX DDS PTY LTD
RECITALS
A. FemPharm, formerly known as Female HRT Pty Ltd., Australian Company
Number 088 778 018, is a wholly owned subsidiary of Acrux Limited of
103-113 Stanley Street, West Melbourne, Victoria, Australia ("Acrux
Limited"). Acrux DDS Pty Limited ("Acrux DDS Pty Limited"), formerly
known as Drug Delivery Solutions Pty Ltd., Australian company number
088 778 009, is also a wholly owned subsidiary of Acrux Limited.
B. Acrux DDS Pty Limited holds an exclusive global license from Monash
University of Wellington Road, Clayton, Victoria, Australia ("Monash")
in respect of certain patents and patent applications owned by Monash
University covering the metered dose transdermal system described
therein.
C. FemPharm holds an exclusive sublicense from Acrux DDS Pty Limited in
respect of the intellectual property described in the license referred
to in recital B for the fields of female hormone replacement therapy
and human female contraception.
7
{PAGE}
D. FemPharm and Vivus wish to enter into this agreement pursuant to which
FemPharm will exclusively license metered dose transdermal systems to
Vivus for the delivery of estradiol monotherapy to human females on the
terms set out in this Agreement.
AGREEMENT
1. DEFINITIONS AND INTERPRETATION
--------------------------------------------------------------------------------
1.1 DEFINITIONS
In this Agreement, the following capitalized terms have the following
meanings:
"Acrux DDS License" shall mean the "Licence Agreement" between Female
HRT Party Limited (now known as FemPharm) and Drug Delivery Solutions
Party Limited (now known as Acrux DDS Pty Limited), dated November 30,
1999, as amended by the Deed of Amendment between Female HRT Party
Limited and Drug Delivery Solutions Party Limited dated June 30, 2000,
and as such agreement may be subsequently amended by the parties
thereto.
"Acrux Penetration Enhancer" shall mean one of the following, whichever
is used in the Product being developed or commercialized by or under
authority of Vivus under this Agreement, as used in such Product (i)
(**), (ii) a different dermal penetration enhancer which is disclosed
in the FemPharm Patents, or (iii) the combination of (**) with another
dermal penetration enhancer(s) disclosed in the FemPharm Patents.
"Additional Partner" shall mean each third party who is granted by
FemPharm or an Acrux Controlled Affiliate, directly or indirectly, a
right to market or commercialize a Product in the Field in any part of
the world, other than the Territory.
"Affiliate" means, with respect to any Party, any corporation or other
legal entity that controls, is controlled by or is in common control
with such Party. For purposes of this definition, the term "controls"
means (with correlative meanings for the terms "controlled by" and "in
common control with"):
8
{PAGE}
(a) ownership, directly or indirectly, of more than 50% of the voting
securities of the applicable party; or
(b) possession of actual power to direct unilaterally the business
and affairs of the applicable party, whether through contract,
ownership rights or otherwise.
"Business Day" means a day upon which banks are open for general
banking business in the United States other than a Saturday or Sunday.
"Clinical Trial" shall mean a clinical trial involving the
administration of a therapeutic to a human subject after filing an IND,
or the equivalent (if necessary) outside the United States, for the
purpose of evaluating the safety, efficacy, performance or other
characteristic of such therapeutic, including a phase I, phase II
and/or phase III trial.
"Committee" means the Development Committee and/or the Steering
Committee.
"Confidential Information" of a Party means all information disclosed
by such Party to the other pursuant to this Agreement, which may
include any of the following to the extent disclosed by such Party:
(a) Intellectual Property, technical information, specifications,
data, software, marketing procedures, pricing information,
customer and client records, business and corporate or trade
information of a Party relating to or arising out of the Licensed
Intellectual Property or its use or application;
(b) information relating directly or indirectly to the Product
including, without limitation, the identity and composition of
compounds for producing or manufacturing the Product, formulae
for the Product, methods of producing or manufacturing the
Product, costs of manufacturing the Product, information relating
to the packaging, selling and marketing of the Product including
the cost thereof and pricing information; and
(c) communications between the Parties or information of whatever
kind whether recorded or not and, if recorded, in whatever
medium, relating to the Licensed Intellectual Property, the
Product, this Agreement, or otherwise, whether disclosed prior to
or after the Effective Date.
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{PAGE}
"Commercial Launch Plan" means the plan for launching and initial
marketing and promotion of the Product in the Territory as provided in
Section 8.3.
"Controlled" means, with respect to any Intellectual Property, that the
applicable Party owns or has a license to such Intellectual Property,
and has the authority to grant to the other Party access, a license, or
a sublicense to such Intellectual Property as provided for in this
Agreement without violating an agreement with a non-Affiliate third
party in effect at the time such Intellectual Property was first
acquired or created by the Party granting or authorizing the license or
sublicense herein.
"Controlled Affiliate" means (i) in the case of Vivus; an Affiliate
that is controlled by Vivus; and (ii) in the case of FemPharm; Acrux
Limited, Acrux DDS Pty Limited or an Affiliate that is controlled by
FemPharm, controlled by Acrux DDS Pty Limited, or controlled by Acrux
Limited (each of such Affiliates, Acrux DDS Pty Limited and Acrux
Limited, an "Acrux Controlled Affiliate"); in each case as "control" is
defined in the Affiliate definition in this Section 1.1 above.
"Development Committee" means the committee referred to in Section 5.4.
"Development Plan" means the plan appended to this Agreement as
annexure A in accordance with Section 5.5, as such plan may be amended
pursuant to Section 5.
"Effective Date" means the date of this Agreement, as set forth on page
one.
"Estradiol" means the compound with the chemical structure shown in
Annexure E to this Agreement.
"Estrogen" means (a) any of the naturally occurring estrogens,
progestins with estrogenic activity that are used for estrogen
replacement therapy for the treatment of menopausal symptoms, or any
derivative of such estrogens or progestins, including the estrogens
that are approved by the FDA in any form (oral, transdermal, or
injectable) for hormone
10
{PAGE}
replacement therapy or the treatment of menopausal symptoms in human
females, or (b) any SERM. Notwithstanding sub-paragraph (b) of this
paragraph, if Vivus or any Controlled Affiliate of Vivus, or a
sublicensee of Vivus that has rights under the Licensed Intellectual
Property to market, sell, offer to sell, and import the Products in the
Field in the Territory, commences Clinical Trials, or marketing or
sales, in the Territory of any product that orally delivers a SERM to
treat female menopausal symptoms, then except for SERMs that have been
added to the Field, no SERM shall be considered to be an Estrogen for
purposes of Section 2.5. For clarity, Androgen (as such term is defined
in the Testosterone Agreement, but excluding tibolone), is not or shall
not be deemed to be an Estrogen for purposes of this Agreement.
"Excluded Applications" shall have the meaning set forth in annexure F.
"FemPharm Patents" means: (a) the Patents set out in annexure B, which
shall include all existing Patents licensed under the Monash License or
the Acrux DDS License, (b) all continuing patent applications in the
Territory based on any Patent in clause (a) above (including any
divisionals, continuations, and continuations-in-part); (c) all Patents
that issue based on any Patent in clause (a) or (b) above, and
including all re-issues, extensions, substitutions, confirmations,
re-registrations, re-validations, patents of addition, and
supplementary certificates (or equivalents thereof) of any such Patent;
and (d) all additional Patents in the Territory that are Controlled by
FemPharm, Acrux DDS Pty Limited, an Acrux Controlled Affiliate, or any
other Affiliate of FemPharm at any time during the term of this
Agreement and that claim or cover an MDTS product, or any portion
thereof, or the manufacture or use of an MDTS product or portion
thereof, in the Field. For purposes of this definition, Patents that
meet, at some time during the term of the Agreement, the requirement of
subclause (d) above shall not be excluded from this definition simply
because a particular Acrux Controlled Affiliate (that Controlled such
Patent) no longer is an Affiliate of Acrux Ltd., and including
continuing patent applications in the Territory based on such Patents
in clause (d) above (including any divisionals, continuations, and
continuations-in-part).
11
{PAGE}
"Field" means delivery of Estradiol (and/or any other Estrogen that is
added to the Field pursuant to Section 2.4 or included pursuant to
Section 5.17) in Monotherapy to human females using an MDTS, excluding
only the Excluded Applications.
"First Commercial Sale" means the first commercial sale or transfer of
the Product for use in the Territory (other than for evaluation,
research, testing or clinical trial purposes), that occurs after the
Product has been approved for marketing in the Territory, by Vivus or
Vivus' Affiliate or sublicensee to an independent non-Affiliate third
party in exchange for cash or some equivalent to which value can be
assigned.
"FDA" means the United States Food & Drug Administration.
"Intellectual Property" means all industrial and intellectual property
rights, whether protectable by statute, at common law or in equity,
including, without limitation, any rights of copyright, trade secrets,
confidential information, know-how, trade mark, invention, Patent,
circuit layout and any rights to registration of such rights,
irrespective of whether such rights are created before, on or after the
Effective Date.
"Improvement" means an Invention to the extent made by Vivus or its
Affiliate in the course of developing or commercializing the Product
under this Agreement, which Invention is an improvement of or
modification to the Product itself, in the form provided by FemPharm,
and is not substantially based upon or derived from other technology or
Know-How of Vivus, its Affiliate, or their third party licensor or
contractor.
"Improvement Blocking Patent Rights" means any Patent to the extent
that it: (i) claims and is specifically directed to an Improvement,
(ii) is Controlled by Vivus or its Affiliate at any time during the
term of this Agreement, and (iii) is reasonably necessary to make, use,
sell, or offer to sell an MDTS product. As used in this paragraph,
"reasonably necessary" means there is no commercially reasonable
alternative to practicing the subject matter in the applicable claim in
such Patent, in order for FemPharm, or its Controlled Affiliate or
licensee, to make, use or sell the MDTS products.
12
{PAGE}
"Invention" means any information, idea, invention, know-how, data or
results made pursuant to work conducted under this Agreement.
"Joint Patent" means a Patent claiming an Invention invented jointly by
the Parties, as provided in Section 11.3.
"Know-How" shall mean all data, inventions (whether or not patentable),
discoveries, methods, information (including Confidential Information),
reports, analyses, documents, descriptions, procedures, formulae,
formulations, expert opinions, knowledge, know-how, experience,
marketing, and other information and materials (including physical
samples), and the trade secret rights to the foregoing. As used herein,
Know-How shall not include Patents.
"Licensed Intellectual Property" means the (i) FemPharm Patents, and
(ii) the Licensed Know-How.
"Licensed Know-How" means the Know-How that is Controlled by FemPharm
or any Acrux Controlled Affiliate and relates to or is useful for MDTS
products in the Field.
"MDTS" means the Acrux metered dose transdermal spray system as
described in Annexure C, and including all improvements, derivatives
and modifications of such system developed by or under authority of
FemPharm or its Affiliate. For clarity, it is understood that
"improvements," as used under this paragraph, would include modified or
improved versions of the Acrux metered dose transdermal spray system,
and novel enhancers, formulations, methods, and mechanical components
relating to or useful for the MDTS system, that are not used in the
MDTS as of the Effective Date, but that would improve the safety,
effectiveness, or other qualities of such a spray system for use in
delivery of Estradiol, or any other Estrogen added to the Field
pursuant to Section 2.4 or 5.17.
"Monash License" means the "Technology Agreement" between Monash and
Acrux Limited, dated June 7, 1999, and transferred by Acrux Limited to
Acrux DDS Pty Limited in the "Deed of Assignment" dated November 22,
1999, as amended by the Deed of Variation between Monash and Acrux
Limited dated November 22, 1999 and the Deed of Variation between
Monash and Acrux DDS Pty Limited., executed October, 2002.
13
{PAGE}
"Monotherapy" means the delivery of Estradiol (or any other Estrogen
added to the Field) using an MDTS, without delivering any other active
ingredient using the MDTS. For clarity, delivery of Estradiol (or any
other Estrogen added to the Field) using an MDTS, without delivering
any other active ingredient using the MDTS, shall be considered
Monotherapy notwithstanding any concurrent use or delivery of another
active ingredient by a method other than spray delivery by the MDTS.
For example, oral delivery of a progestin concurrently with delivery of
Estradiol using the MDTS shall be considered Monotherapy.
"Net Sales" means any amounts invoiced by Vivus, or an Affiliate or
sublicensee of Vivus, for the sale or other commercial disposition of
the Product, less the following amounts to the extent actually accrued,
taken or allowed with respect to such sale or disposition:
(d) trade, cash or quantity discounts or rebates from the invoiced
price;
(e) refunds, credits, charge backs or allowances actually granted
upon recalls, rejections, returns, or the like;
(f) freight charges, insurance and packing charges paid for delivery;
and
(g) amounts actually written off for uncollectable accounts
determined in accordance with GAAP, PROVIDED THAT if any such
amounts are subsequently collected, such amounts would be
included in Net Sales for the quarter collected;
(h) taxes (other than income tax, but including value added and sales
taxes), duties, or other governmental charges levied on or
measured by the disposition or the invoiced amount, whether
absorbed by the billing or the billed party.
Notwithstanding the foregoing, if Vivus sells Product for use outside
the Field or outside the Territory pursuant to an authorization by
FemPharm or an Acrux Controlled Affiliate
14
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(such as sales to FemPharm for use in Australia or New Zealand) Net
Sales shall not include any amounts invoiced on such sales, whether the
sale is to FemPharm, an Acrux Controlled Affiliate, or any other Person
(e.g. another licensee of FemPharm).
"Patents" means all rights under all patents (including all re-issues,
extensions, substitutions, confirmations, re-registrations,
re-validations, patents of addition, supplementary certificates, other
governmental grants for the protection of inventions or industrial
designs, or equivalents thereof) and under all patent applications
(including any divisionals, continuations, continuations-in-part,
continued prosecution applications, and divisionals).
"Party" means either of FemPharm or Vivus, and "Parties" means both of
them.
"Person" includes a natural person, company, corporation, partnership,
trust, estate, joint venture, sole proprietorship, government
(including any branch or subdivision thereof), governmental or
municipal agency, association, co-operative and any other entity or
person whatsoever.
"Product" means any MDTS product containing Estradiol, or any other
Estrogen included in the Field pursuant to Section 2.4 or as a result
of Section 5.17, as the sole active ingredient in such product, and
intended for use in the Field.
"Regulatory Materials" means regulatory applications, submissions,
notifications, registrations, regulatory approvals and/or other filings
made and correspondence to or with the FDA or other regulatory
authority that are necessary or reasonably desirable in order to, or in
connection with efforts to, develop, manufacture, market, sell or
otherwise commercialize a Product in a particular country, territory or
possession. Regulatory Materials include INDs, MAAs, and NDAs.
"Restricted Estrogens" means any of: (**).
"Royalty Period" means a period of three consecutive months ending on
31 March, 30 June, 30 September or 31 December, provided that the first
Royalty Period will be the
15
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period from the date of First Commercial Sale until the first to occur
of 31 March, 30 June, 30 September or 31 December thereafter.
"SERM" means a generic compound (i.e., the composition of the compound
is not covered by a patent in the Territory) that is a selective
estrogen receptor modulator.
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