Exhibit 10.13
[CERTAIN INFORMATION IN THIS EXHIBIT IDENTIFIED BY [***] IS CONFIDENTIAL AND HAS BEEN EXCLUDED BECAUSE IT (I) IS NOT MATERIAL AND (II) THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS THAT INFORMATION AS PRIVATE OR CONFIDENTIAL.]
MANUFACTURING SERVICES AGREEMENT
This Manufacturing Services Agreement (this “Agreement”) is made as of September 2, 2021, (the “Effective Date”) between Lonza Houston, Inc., 14905 Kirby, Drive, Pearland, Texas 77047 (“LONZA”), and Arcellx, Inc., a Delaware corporation, having an office at 25 West Watkins Mill Road, Suite A, Gaithersburg, Maryland 20878 (“CLIENT”) (each of LONZA and CLIENT, a “Party” and, collectively, the “Parties”).
RECITALS
A. LONZA operates a multi-client production facility located at Lonza Houston, Inc., 14905 Kirby, Drive, Pearland, Texas 77047, and/or such other location as LONZA may designate in writing from time to time (the “Facility”).
B. CLIENT desires to have LONZA produce a product intended for therapeutic use in humans, and LONZA desires to produce such product.
C. CLIENT desires to have LONZA conduct work according to one or more individual Statements of Work, as further defined below.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises and covenants hereinafter set forth, LONZA and CLIENT, intending to be legally bound, hereby agree as follows:
AGREEMENT
When used in this Agreement, capitalized terms will have the meanings as defined below and throughout the Agreement.
2.5 Engineering Batches. LONZA shall manufacture Engineering Batches in accordance with the applicable Statement of Work. CLIENT shall have the right to make whatever further use of the non-cGMP Engineering Batches as it shall determine, provided that CLIENT pays for such Batches in accordance with the Statement of Work, such use is not for human use and does not violate any Applicable Laws. LONZA makes no warranty that Engineering Batches will meet cGMP or the Specifications. Regardless of whether any Engineering Batch meets cGMP or the Specifications, CLIENT shall pay to LONZA the price for such Engineering Batch as contemplated in the applicable Statement of Work.
2.6 cGMP Batches. LONZA will, in accordance with the terms of this Agreement, Statement of Work, and Quality Agreement, manufacture at the Facility and release to CLIENT, cGMP Batches that comply with the Process, cGMP and the Specifications, together with a certificate of analysis; provided, however, that cGMP manufacture shall not commence until the successful completion of a Process validation study pursuant to a Statement of Work. Prior to commencement of cGMP manufacturing, LONZA shall review the process assumptions. In the event that there is a material difference in the process assumptions as compared with the process
results demonstrated during the manufacture of Engineering Batches, the Parties shall meet to discuss in good faith a revision to the Batch price to reflect such difference.
2.7 Affiliates. An Affiliate of LONZA may, with the consent of CLIENT, execute a Statement of Work (which Statement of Work shall constitute such CLIENT consent) with CLIENT pursuant to this Agreement and submit invoices to CLIENT under such Statement of Work. In such circumstances, all references in this Agreement to LONZA shall be deemed to be to the applicable Affiliate of LONZA with respect to (i) that particular Statement of Work or (ii) the relevant portions of a Statement of Work under which the Affiliate will be performing specified Services. The Affiliate shall be entitled to enforce this Agreement with respect to such Statement of Work, or as applicable the relevant portions of such Statement of Work, in its own name as an intended third party beneficiary and the Affiliate shall be solely liable to CLIENT for any obligations and liabilities undertaken pursuant to such Statement of Work and subject to the terms of this Agreement.
2.8 Non-Exclusive Arrangement. The Parties acknowledge and agree that, pursuant to this Agreement, they are establishing a non-exclusive manufacturing arrangement. Subject to Article 10 and Article 11, nothing contained herein is intended, or shall be construed, to prohibit or otherwise restrict CLIENT from carrying out directly, or having performed by one or more Affiliates or Third Parties, the activities included within the scope of the Services hereunder (not including the Services themselves or CLIENT’s obligations under the Agreement), including by manufacturing or having manufactured Product or any product containing such Product.
2.9 LOI Services. The Parties acknowledge that they entered into the LOI prior to entering into this Agreement, pursuant to which LONZA agreed to perform certain services on behalf of CLIENT in preparation for the activities described herein. The Parties now wish to supersede the LOI and have the activities contemplated thereby, and the Parties’ respective rights and obligations with respect thereto, governed by this Agreement. Without limitation of the foregoing, Attachment B of the LOI shall hereby be incorporated into this Agreement as Schedule 1. In the event of any conflict between any term or condition of the LOI and any term or condition of this Agreement, this Agreement shall control.
3.1 Drafting of Project Documentation. Based on the information provided by CLIENT and including process definition or changes developed by LONZA pursuant to any applicable Statement of Work, LONZA will prepare the Project Documentation for the Process in accordance with the Statement of Work. CLIENT will inform LONZA of any specific requirements CLIENT may have relating to the Project Documentation, including any information or procedures CLIENT wishes to have incorporated therein. If LONZA intends to either (i) include in the Project Documentation the use of any assay, medium, or other technology that is not commercially available or (ii) incorporate any LONZA Background Intellectual Property into the Process or Product such that use of LONZA Background Intellectual Property is necessary to make or have made the Product in accordance with the Process, LONZA will inform CLIENT of such intention and the Parties will meet to discuss and attempt to agree in good faith on the terms of use of such non-commercially available materials, technology, or LONZA Background Intellectual
Property in the Process or Product, as applicable. The applicable Project Documentation, as set forth in the SOW, shall be completed and delivered by LONZA.
3.2 Review of Project Documentation. CLIENT will cooperate with LONZA to provide reasonable assistance to LONZA to develop the Project Documentation and Process, including, without limitation, by providing LONZA with additional information and procedures as specified in Section 2.3. LONZA will deliver a draft version of the applicable portions of the Project Documentation to CLIENT for its review and approval in accordance with the schedule set forth in the Statement of Work. CLIENT will notify LONZA in writing of any objections it has to the draft Project Documentation, and upon such notification, representatives of LONZA and CLIENT will meet promptly to resolve such objections. CLIENT shall use commercially reasonable efforts to review the draft Project Documentation and provide any objections or comments within [***] following receipt of such draft Project Documentation by CLIENT. Upon CLIENT’s written acceptance of the draft Project Documentation, such draft shall become the Project Documentation for the applicable Statement of Work. LONZA shall be excused from its obligations to perform Services hereunder to the extent that CLIENT's failure to provide such comments or objections within such [***] period prevents LONZA from performing the affected Services, and CLIENT shall be responsible for any reasonable and documented costs actually incurred by LONZA as a direct result of such delay by CLIENT in accordance with the applicable SOW.
3.3 Equipment.
3.3.1 The Parties anticipate that CLIENT will provide, or LONZA will need to purchase, the equipment expressly described in each SOW as being provided by CLIENT (the “Special Equipment”) in order to perform the manufacture of the Product. CLIENT shall pay the cost of Special Equipment, and pay the reasonable costs of installation and validation of such Special Equipment as described below. This Section 3.3 shall not apply to any replacement equipment (other than replacements for Special Equipment) purchased by LONZA because of obsolescence (technical or otherwise). LONZA must receive written approval from CLIENT prior to any purchase of Special Equipment not set forth in the applicable SOW. LONZA shall purchase such Special Equipment and promptly invoice CLIENT for all amounts LONZA owes for such Special Equipment and the reasonable installation and equipment validation costs after LONZA installs the Special Equipment, in each case in accordance with the budget therefor agreed in writing by the Parties in advance.
3.3.2 Except as otherwise indicated in the applicable SOW, CLIENT shall own any Special Equipment upon the date it makes full payment to LONZA for such Special Equipment. Thereafter, title to and risk of loss of such Special Equipment shall be retained by CLIENT; provided, however, that LONZA shall be responsible for replacing any Special Equipment that is destroyed due to LONZA’s negligence or willful misconduct. LONZA shall execute such forms, documents and instruments evidencing CLIENT’s ownership of such Special Equipment as CLIENT reasonably shall request from time to time during the Term, including financing statements under the Uniform Commercial Code. LONZA shall take no action that is inconsistent with the right, title and interest of CLIENT in and to the Special Equipment owned by CLIENT, and any attempt by LONZA to sell, or to grant or create a lien on or security interest in, such Special Equipment shall be void ab initio.
3.3.3 LONZA shall be responsible for routine and non-routine maintenance and servicing of Special Equipment, which costs shall be borne by CLIENT. To the extent spare or replacement parts are necessary for the operation of the Special Equipment, the purchase of such spare or replacement parts shall be facilitated by LONZA and the costs shall be borne by CLIENT. LONZA shall notify CLIENT prior to the performance of any non-routine maintenance or servicing.
3.3.4 Special Equipment shall be used exclusively for manufacturing Product hereunder unless otherwise permitted in advance by CLIENT in writing. If CLIENT authorizes and LONZA agrees to the use of the Special Equipment for any products other than the Product, LONZA and CLIENT shall mutually agree upon a credit for CLIENT in the [***].
3.3.5 Except as provided in this Section 3.3 with respect to Special Equipment, CLIENT shall not have any obligation in connection with the Services or this Agreement to provide, or reimburse LONZA for, any equipment, or otherwise make payments to LONZA for an capital expenditures, including with respect to any facility.
5.2.3 Notwithstanding anything to the contrary, CLIENT shall have the further right to reject quantities of Product accepted pursuant to Section 5.2.1 or Section 5.2.2 if it [***], provided such non-conformance could not have [***] been discoverable upon the inspection and testing by LONZA and CLIENT that would have been expected in the ordinary course of Product release and disposition, but is discovered at a later time and [***] (a “Latent Defect”) and CLIENT provides a Disapproval Notice related thereto. Any Disapproval Notice for a Latent Defect shall be provided within [***] of the discovery of any such Latent Defect, but in no event later than [***] after delivery of the applicable Product to CLIENT. If a Disapproval Notice is received by LONZA during such period, then LONZA and CLIENT will provide one another with all related paperwork and records (including, but not limited to, quality control tests) relating to both the production of the Product and the Disapproval Notice.
In addition to the foregoing, CLIENT and/or its representatives shall have the right to perform “For Cause” audits at any time upon reasonable advance notice and during regular business hours. If a For Cause audit confirms that LONZA did not comply with its obligations
under the Agreement, the audit shall not be charged by LONZA; in all other cases LONZA’s standard hourly rates apply. Notwithstanding the foregoing, a For Cause audit shall also be at no cost for CLIENT if [***]. For the avoidance of doubt, any and all costs related to deviations and or modifications to the Facility requested and/or approved by CLIENT (outside of those related to material breaches of the Agreement attributable to LONZA which costs shall be the sole responsibility of LONZA) related to the manufacturing of Product will be priced in a quote from LONZA and shall only be implemented upon CLIENT acceptance of such costs.
Mailing address for wire transfer payments:
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10.7 Publications. Subject to the other provisions of this Article 10, neither Party shall make a press release or other public announcement regarding this Agreement, the terms hereof or the transactions contemplated hereby without the prior written approval of the other Party, except for any such press release or other public announcement that is required by Applicable Law or the rules of a stock exchange on which the securities of the Party making such press release or announcement are listed (or to which an application for listing has been submitted), in which case such Party shall provide the other Party with the proposed text of any such press release or public announcement for review and approval (which approval shall not be unreasonably withheld, conditioned or delayed) as early as possible, but in no event less than [***] in advance of the publication, communication or dissemination thereof; provided, however, that such other Party shall be deemed to have approved any such press release or public announcement if it fails to notify the proposing Party in writing of any objections to such press release or public announcement within [***] of receipt by such other Party of the text of such press release or public announcement. For general business development purposes, LONZA may announce on its website or in press releases the general nature of work performed for CLIENT under any given Statement of Work upon receiving permission from CLIENT.
10.8 CLIENT Permitted Disclosures. Notwithstanding anything else in this Agreement, CLIENT or its Affiliates or licensees may disclose LONZA Confidential Information (i) in connection with the performance of CLIENT’s obligations or exercise of its rights as contemplated by this Agreement, (ii) to existing or prospective collaborators, partners, joint ventures or investors, (iii) in connection with a merger, consolidation or similar transaction of such entity or the sale of all or substantially all of the assets of CLIENT to which this Agreement relates, or (iv) as may be necessary or useful to file, prosecute or maintain patents rights with respect to the Product or the Process subject to Article 11.
If to LONZA:
Lonza Houston, Inc..
Attn: Business Head
14905 Kirby, Drive
Pearland, Texas 77047
With a copy to:
Assistant General Counsel
Lonza America, Inc.
412 Mount Kemble Avenue
Morristown, NJ 07960
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If to CLIENT:
Arcellx, Inc.
Attn: Sr. Director of Contracts
25 West Watkins Mill, Suite A
Gaithersburg, MD 20878
Either Party may change its address for notice by giving notice thereof in the manner set forth in this Section 17.4.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.
ARCELLX, INC.
9/3/21______________________ By: /s/ Brian Murphy
Date Name: Brian Murphy
Title: VP Cell Process Sciences
LONZA HOUSTON, INC.
Sept 2nd, 2021_________________ By: /s/ Thomas Fellner
Date Name: Thomas Fellner
Title: VP, Sales & Program Mgmt
Schedule 1
LOI Attachment B
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Appendix 1
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