EXHIBIT 10.43
COLLABORATIVE DEVELOPMENT AGREEMENT
THIS COLLABORATIVE DEVELOPMENT AGREEMENT (this "Agreement") is entered
into to be effective as of the ___ day of November, 1996 ("Effective Date") by
and between Orphan Medical, Inc., a Minnesota corporation with offices at 13911
Ridgedale Dr., Suite 475, Minnetonka, Minnesota 55305 and its Affiliates
(hereinafter "Orphan") and Medtronic, Inc., a Minnesota corporation with offices
at 7000 Central Avenue, N.E., Minneapolis, Minnesota 55432 and its Affiliates
(hereinafter "Medtronic").
WHEREAS, Orphan intends to develop a formulation or formulations of
clonidine (as defined belong "Drug") and associated know-how and data related
thereto which may haze application in the treatment of chronic pain;
WHEREAS, Medtronic has developed a proprietary drug delivery system,
including drug infusion pumps, ports, catheters, programming systems and
accessories (as defined below, the "System"), and associated know-how and data
related thereto; and
WHEREAS, Orphan and Medtronic wish to collaborate in a research and
development program using the Drug and the System and the parties wish to
further collaborate in the support and/or conduct of clinical trials in order to
obtain regulatory approval for the marketing of the Drug and the System for use
in the treatment of chronic pain.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Specific Definitions. For purposes of this Agreement, the following
definitions shall apply:
1.1.1 An "Affiliate" means any corporation or other business entity
controlled by, controlling, or under common control with Orphan or Medtronic,
respectively. For this purpose, "control" means (i) direct or indirect
beneficial ownership of more than 50 percent of the voting control, or (ii) the
power to direct or cause the direction of the management and policies of such
corporation or other business entity.
1.1.2 "CDER" shall mean Center for Drug Evaluation and Research.
1.1.3 "CDRH" shall mean Center for Device and Radiological Health.
1.1.4 "Collaborative Activities" means the parties' efforts described
herein to obtain all necessary regulatory approval(s) for the marketing of the
Drug and the System worldwide.
1.1.5 "Device Master File" shall mean a device reference source
submitted to the FDA as defined by 21 CFR 814.3.
1.1.6 "Drug" means a formulation or formulations of clonidine and all
current or future analogs, modifications and improvements of clonidine intended
for direct infusion to the intrathecal space. Drug shall also include but not be
limited to "Labeled Drug" as set forth in section 1.1.19.
1.1.7 "Drug Master File" shall mean a regulatory dossier containing
proprietary drug information.
1.1.8 "Drug-System Combination" shall mean all aspects of Drug delivery
through, and interactions with, the System.
1.1.9 "Effective Date" means the date first set forth above on this
Agreement.
1.1.10 "Efficacy" means a reasonable expectation that, in a significant
proportion of the target population, the pharmacological product, when used
under adequate direction for use and warning against unsafe use, will serve a
clinically significant function.
1.1.11 "FDA" means the United States Food and Drug Administration and,
when applied in the context of foreign agencies, those foreign agencies having
regulatory jurisdiction equivalent to the FDA.
1.1.12 "GCP" means Good Clinical Practices.
1.1.13 "GLP" means Good Laboratory Practices as defined in 21 CFR Part
58.
1.1.14 "GMP" means Good Manufacturing Practices as defined in 21 CFR
Parts 210 through 226 and Parts 600 through 680.
1.1.15 "IDE" means an Investigational Device Exemption application as
defined in 21 CFR Part 812.
1.1.16 "lND" means an Investigational New Drug application as defined
in 21 CFR Part 312.
1.1.17 "Initial Regulatory Approval" means activation by the FDA of
Orphan's IND submission covering the Drug-System Combination.
1.1.18 "Intellectual Property" means U.S. and foreign patents and
patent applications, know-how, trade secrets, inventions, discoveries and
technical information including but not limited to information embodied in
drawings, designs, copyrights, copyright applications, trademarks and trademark
applications, material specifications, processing instructions, formulas,
equipment specifications, product specifications, confidential data, computer
software, electronic files, research notebooks, invention disclosures, research
and development reports and the like related thereto and all amendments,
modifications, and improvements to any of the foregoing.
1.1.19 "Labeled Drug" means a Drug approved by applicable regulatory
authorities with labeling for the Orphan Claim.
1.1.20 "Medtronic Product Intellectual Property" means all Intellectual
property of Medtronic existing of the date of this Agreement which relates
specifically to the manufacturing, use or sale of Product.
1.1.21 "Mechanical Delivery" of the Drug means the System related
components of administering the Drug, including but not limited to the design,
operation or use of any apparatus to dispense the Drug by direct infusion to a
site within the body, the design of a pump, catheter, port or other mechanism
for delivery by direct infusion to a specific site, the operation of a device to
achieve a specific dosage regimen, or the use of a device to deliver the Drug by
a specific route of administration.
1.1.22 "Medtronic" means Medtronic, Inc. and its Affiliates.
1.1.23 "NDA" means a New Drug Application as defined in 21 CFR Part
314.
1.1.24 "Net Sales of Product" by a person for a particular period means
the amounts that such person or any Affiliate or licensee or sublicensee of such
person invoices to third parties (eliminating transactions among such person,
such Affiliates and/or such licensees or sublicensees) for sales of the Product
including, but not limited to, any prepayments made by a third party against
future sales of Product during such period, and excluding sales, use, occupation
or excise tax, freight, duty or insurance included therein, returns, discounts,
and allowances, credits or repayments due to rejections, defects or returns,
provided that if such person, Affiliate or licensee or sublicensees sells at a
single price or rate a packaged combination of products, not all of which are
Product, then "Net Sales" with respect to such sales of packaged products shall
equal the number of units of Product sold as part of packaged products (less
rejections, defects, bad debt and returns) multiplied by the respective average
net selling price during such period of Product sold individually (excluding
sales, use or excise tax, freight, duty or insurance included therein).
1.1.25 "Orphan" means Orphan Medical, Inc. and its Affiliates.
1.1.26 "PMA" means a Premarket Approval Application as defined in 21
CFR Part 814.
1.1.27 "Product" means preservative-free injectable formulation or
formulations of clonidine and all current or future analogs, modifications and
improvements of clonidine intended for use in the treatment of pain.
1.1.28 "Protocol" means, with respect to any Joint Clinical Trial, the
protocol for such Joint Clinical Trial, prepared and approved by the parties in
accordance with Section 4.2.
1.1.29 "Safety" means the relative freedom from harmful effect to
persons affected, directly or indirectly, by a product when prudently
administered, taking into consideration the character of the product in relation
to the condition of the recipient at the time. This definition of "safety" is
essentially the definition of "safety" as used in 21 CFR Part 600 and/or Part
314.
1.1.30 "Sponsor" means the company responsible for the clinical
investigation as defined in 21 CFR Part 312.3.
1.1.31 "Stage" means each of the two major divisions or portions of the
Collaborative Activities as described in Articles 3 and 4.
1.1.32 "System " means an implantable infusion mechanism for the
chronic administration of Drug, which mechanism may consist of one or more of an
implantable pump, port, catheters, programming systems, and accessories or other
implantable infusion mechanisms and all modifications and improvements thereto
conceived or developed during the term of this Agreement.
1.1.33 The following terms are defined in the following Sections:
Section Term
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2.1 R&D Outline
2.1 R&D Plan
2.2 Management Team
2.2 Project Team
4.1 Joint Clinical Trials
4.1 Medtronic Claim
4.1 Orphan Claim
4.3 Centers
4.3 Clinical Investigators
4.7 Monitoring Plan
4.8 Case Report Forms
4.9 Form
4.9 Adverse Events
4.10 Grants
7.2 Confidential Information
8.1 Medtronic Data
8.1 Orphan Data
8.2 Medtronic Intellectual Property
8.2 Orphan Intellectual Property
8.2 Joint Intellectual Property
9.3 Indemnification Claims
9.3 Indemnifying Party
9.3 Indemnified Party
1.2 General Definitional Provisions.
(a) The words "hereof," "herein," and "hereunder" and words of similar
import, when used in this Agreement, shall refer to this Agreement, including
the exhibits and schedules, as a whole and not to any particular provisions of
this Agreement.
(b) Terms defined in the singular shall have a comparable meaning when
used in the plural, and vice-versa.
(c) References to an "Exhibit" or to a "Schedule" are, unless otherwise
specified, to one of the Exhibits or Schedules attached to or referenced in this
Agreement, and references to an "Article" or a "Section" are, unless otherwise
specified, to one of the Articles or Sections of this Agreement.
(d) The term "person" includes any individual, partnership, joint
venture, corporation, trust, unincorporated organization or government or any
department or agency thereof.
ARTICLE 2
COLLABORATIVE ACTIVITIES; LIMITED EXCLUSIVITY
2.1 R&D Outline and R&D Plan. Attached as Exhibit A and incorporated
herein by reference is an outline (the "R&D Outline") summarizing the
Drug-System Combination studies to be carried out by the parties to obtain
regulatory approval in the U.S. for marketing the Drug and the System for
treatment of chronic pain. The R&D Outline shall define the requirements for
Drug stability and System compatibility, as well as state the proposed timetable
for the Drug for research and development, and manufacturing qualification. A
more detailed Research and Development Plan (the "R&D Plan") shall be created
for each Stage by the Project Team, with the exception of Stage 2, where an R&D
Plan will be created for each Joint Clinical Trial, subject to the approval of
each party he such party's discretion, prior to the initiation of any activities
or preparation for such Stage or Joint Clinical Trial. The R&D Plan for each
Stage or each Joint Clinical Trial shall specify the Collaborative Activities to
be carried out by each party in such Stage, including applicable tasks,
responsibilities, costs, milestones and timetables to achieve the Medtronic
Claim and the Orphan claim. The R&D Plan as amended from time to time by the
Project Team, with all such amendments subject to the prior approval of each
party in such party's discretion, shall be deemed incorporated herein and made a
part of this Agreement. The parties will, subject to each parties right to
terminate this Agreement pursuant to Article 10, use their commercially
reasonable efforts to perform their respective responsibilities described in the
R&D Plan pursuant to the terms of this Agreement.
2.2 Joint Teams.
(a) Project Team. Medtronic and Orphan shall establish a joint Project
Team (the "Project Team") comprised of two Medtronic employees and two Orphan
employees as the Management Team may appoint. The Project Team shall oversee the
day to day management of the Collaborative Activities. Actions by the Project
Team shall be taken at meetings (which may be in person or by means of
conference telephone) at such times and locations as are mutually agreed by the
parties. Summary minutes and action items of all Project Team meetings shall be
taken down in writing and submitted for approval at a subsequent meeting or by
written action in lieu of a meeting. Those Medtronic appointees on the Project
Team which are present at a meeting shall collectively be deemed to hold the
proxy of each other Medtronic appointee at any meeting from which such other
Medtronic appointee is absent, and those Orphan appointees on the Project Team
which are present at a meeting shall collectively be deemed to hold the proxy of
each other Orphan appointee at any meeting from which such other Orphan
appointee is absent. The presence of at least two (2) Medtronic appointees and
two (2) Orphan appointees, in person or by simultaneous participation via
conference telephone and not by proxy, shall constitute a quorum for Project
Team meetings. Actions by the Project Team must be approved at a meeting by a
majority vote of all members of the Project Team. Project Team actions may also
be taken without the holding of a meeting by written consent signed by all
Project Team members.
(b) Management Team. In addition, Medtronic and Orphan shall establish
a joint Management Team (the "Management Team") comprised of two Medtronic
designees and two Orphan designees or such greater or lesser number of Orphan
and Medtronic designees as Orphan and Medtronic shall agree. The Management Team
shall meet as necessary to oversee, coordinate and manage the Project Team and
the Collaborative Activities. Additional Orphan and Medtronic representatives
may, as appropriate, attend and participate in meetings of the Management Team
but only Management Team members may vote on Management Team decisions. Actions
by the Management Team must be approved by the unanimous vote of all members of
the Management Team. The parties will mutually appoint a Secretary for the
purpose of taking the brief minutes of Management Team meetings, and for such
other administrative functions as may be assigned mutually by the parties; with
such appointment of a Secretary to be made on a quarterly or other periodic
basis as agreed by the parties and with such position of Secretary alternately
being held in successive periods by a representative of Orphan and a
representative of Medtronic, respectively.
(c) Notwithstanding any contrary provision of this Agreement, all
decisions of the Project Team regarding the Collaborative Activities shall be
binding upon Medtronic and Orphan unless otherwise provided herein. In the event
the Project Team is unable to reach unanimous decision or either party does not
approve any Project Team action, and such inability or disapproval materially
impairs the Collaborative Activities, then either party may, by written notice
to the other party, have such dispute referred to the Management Team for
attempted resolution by good faith negotiations within forty-five (45) days
after such written notice is received. The parties shall not be required to
resolve such dispute. Any resolution reached by the parties under this Section
shall not be binding until reduced to writing and signed by the members of the
Management Team for Medtronic and Orphans When reduced to writing, such
settlement agreement shall supersede all other agreements, Written or oral, to
the extent such agreements specifically pertain to the matters so settled.
(d) No member of the Project Team and Management Team shall be liable
for any action taken or determination made in good faith in connection with the
administration of this Agreement.
2.3 Exclusivity. The parties shall perform the Collaborative Activities
on an exclusive basis to the extent provided for in, and pursuant to the terms
of this Section 2.3. During the term of this Agreement, as specified in Section
10.1 below, neither Medtronic or Orphan will seek to develop, or negotiate or
otherwise pursue development agreements with third parties for the development
of the Drug. Each party may, however, develop or pursue agreements with third
parties for the development of drugs other than the Drug for the treatment of
chronic pain and other disorders.
ARTICLE 3
PRE-CLINICAL RESEARCH STAGE
3.1 Stage 1. Stage 1 of the Collaborative Activities shall consist of
(i) toxicology and pharmacology studies and stability and compatibility studies
necessary to generate such data and information as is reasonably necessary to
seek and obtain, if practicable, Initial Regulatory Approval, and (ii)
modification of the Drug formulation and/or System design as may be necessary to
receive such Initial Regulatory Approval. The goal of Stage I shall be the
generation of such data and information as shall be reasonably necessary to
support those regulatory filings which are required by the FDA as a prerequisite
to commencing human clinical trials in connection with the Medtronic Claim and
the Orphan Claim. Stage I will be considered complete upon receipt of Initial
Regulatory Approval of the IND. The Project Team will endeavor to combine the
pre-clinical testing of the Drug with the pre-clinical testing of the System
where feasible and appropriate to more efficiently complete Stage 2. The parties
shall set forth appropriate tests, other specifications, and allocation of costs
in the R&D Plan, where not expressly provided for herein, subject to the
approval of each party in such party's discretion, prior to the commencement of
Stage 1.
(a) Orphan shall assume all costs and responsibility associated with
those toxicology and pharmacology studies that in Orphan's reasonable business
judgment will be required to support an NDA filing for the delivery of the Drug
by the System. Orphan may, in its discretion, modify the Drug formulation as
necessary based on such studies.
(b) Orphan may conduct those studies that in Orphan's reasonable
business judgment are necessary to determine the stability of the Drug in the
fluid reservoir and pathway of the System. Orphan may, in its discretion, modify
the Drug formulations as necessary based on such studies.
(c) Medtronic shall conduct those studies that in Medtronic's
reasonable business judgment are necessary to determine the compatibility of the
Drug with the fluid reservoir and pathway of the System. Medtronic may, in its
discretion, modify the System design or specifications as necessary based on
such studies to achieve such compatibility.
(d) Medtronic shall assume all costs and responsibility associated with
those studies that in Medtronic's reasonable business judgment will be required
to support regulatory filing(s) for delivery of the Drug by the System.
Medtronic may, in its discretion, modify the design of the System as necessary
based on such studies.
3.2 Disclosure of Results.
(a) Orphan will disclose to Medtronic all data and information
collected or generated by or on behalf of Orphan during Stage I regarding the
System or the Drug-System Combination that reasonably relates to the design,
manufacture, use, operation, or performance of the System or the Mechanical
Delivery of the Drug, or that the FDA shall require for regulatory filings. All
such information disclosed by Orphan shall be considered confidential
information of Orphan.
(b) Medtronic will disclose to Orphan all data and information
collected or generated by or on behalf of Medtronic during Stage I regarding the
Drug or the Drug-System Combination that reasonably relates to the use,
therapeutic delivery, dosage, stability, formulation, or therapeutic effects of
the Drug or that the FDA shall require for regulatory filings. All such
information disclosed by Medtronic shall be considered confidential information
of Medtronic.
3.3 Technical Support. Each party shall provide such reasonable levels-
of technical assistance and support to the other party as such other party may
reasonably request.
3.4 Costs. Each party shall be responsible for all costs and expenses
incurred by such party in Stage 1. The Project Team shall define in the R&D Plan
prepared prior to the initiation of Stage I such amounts of Drug and Systems
required to complete such Stage. Medtronic shall provide Systems to Orphan free
of charge for use by Orphan in Stage 1. Orphan shall provide the Drug to
Medtronic free of charge for use by Medtronic in Stage 1. When appropriate,
preclinical studies may be performed in collaboration to study both the Drug and
the System.
ARTICLE 4
CLINICAL RESEARCH STAGE
4.1 Stage 2. At any time during the term of this Agreement, either
party may propose to the other party that human clinical trials necessary to
obtain regulatory approvals for full clinical development and market approval of
the Drug and System be conducted jointly by the parties under the terms of this
Agreement ("Joint Clinical Trials"). Such clinical trials shall be conducted
jointly by the parties with respect to the Drug and the System. Orphan and
Medtronic agree to support a clinical strategy which will achieve a Medtronic
labeling claim in form satisfactory to Medtronic for the use of the System to
deliver the Drug into the intrathecal space at selected sites (the "Medtronic
Claim") and a Orphan labeling claim in form satisfactory to Orphan for the
delivery of the Drug into the intrathecal space at selected sites (the "Orphan
Claim"). In the event the R & D Plan for the Joint Clinical Trial must be
amended to achieve the Orphan Claim and the Medtronic Claim as previously
defined in such R & D Plan, Orphan and Medtronic agree to amend the R & D Plan
as is reasonably necessary to achieve such claims. Notwithstanding the
foregoing, neither Medtronic nor Orphan shall be obligated to conduct any Joint
Clinical Trial proposed by the other party if either Medtronic or Orphan, in its
sole business judgment, determines that such Joint Clinical Trial would not be
advantageous to the development of the System or Drug, respectively, or would
not otherwise be commercially reasonable.
4.2 Protocols. The preparation of the Protocols for the Joint Clinical
Trials will be coordinated by the Project Team and final Protocols will be
submitted to the parties for approval by the parties and must be approved by
each of the parries prior to implementation. Medtronic shall be responsible for
preparing those portions of the Protocols relating to the System, after
reasonably taking into account such input as Orphan may provide. Orphan shall be
responsible for preparing those portions of the Protocols relating to the Drug,
after reasonably taking into account such input as Medtronic may provide, and
shall have overall responsibility for the Protocol.
4.3 Center Selection. The Project Team shall determine (i) the
appropriate number and identity of the investigational sites ("Centers") at
which the Joint Clinical Trials shall be conducted and the clinical
investigators ("Clinical Investigators") who shall conduct the Joint Clinical
Trials, and (ii) the appropriate number of patients enrolled in the Joint
Clinical Trials to be implanted with the System. Such determinations shall be
made in accordance with accepted statistical practices and taking into account
that personnel at each Center will require substantial training relating to the
implantation and monitoring of the System and its use with the Drug. The Centers
for the Joint Clinical Trials shall be Centers in the United States, Canada,
Europe, and/or such other countries or regions in which each of Medtronic and
Orphan has previously established, or elects to establish, the infrastructure
necessary to provide appropriate technical support to the Joint Clinical Trials.
4.4 Clinical Agreements. Orphan shall enter into an investigational
agreement with the Clinical Investigator and/or the Center relating to the Drug
in the Joint Clinical Trials. Medtronic shall enter into an investigational
agreement with the Clinical Investigator and/or the Center relating to the
System in the Joint Clinical Trials.
4.5 Investigator's Brochures. The preparation of the investigator's
brochure on the Drug and the System for use in the Joint Clinical Trials will be
coordinated by the Project Team and the final investigator's brochure will be
submitted to the parties for approval by the parties and must be approved by
each of the parties prior to use. Medtronic shall be responsible for preparing
those sections of the investigator's brochure which relate to the System, after
reasonably taking into account such input as Orphan may provide, and Orphan
shall be responsible for preparing all other sections of the investigator's
brochure, after reasonably taking into account such input as Medtronic may
provide. Orphan will issue the investigator's brochure.
4.6 Training. Medtronic will provide to the Clinical Investigators and,
as appropriate, Orphan personnel such instruction and training as is reasonably
necessary in the use of the System, including System implantation techniques,
refill methods, and programmer parameters to achieve dosage regimens. Orphan
will provide to the Clinical Investigators and, as appropriate, Medtronic
personnel such instruction and training as is reasonably necessary in the use of
the Drug, including Drug dosage, potential adverse effects, and other relevant
Drug parameters.
4.7 Monitoring
(a) Orphan will monitor the performance of the Drug in the Joint
Clinical Trials in accordance with applicable FDA regulations. Medtronic will
monitor the performance of the System in the Joint Clinical Trials in accordance
with applicable FDA regulations, including overseeing the use of the System in
the Joint Clinical Trials, ensuring compliance with the System portion of the
Protocol, training investigators in the use of the System and evaluating and
responding to System related adverse events. The Project Team shall be
responsible for coordinating the management of Joint Clinical Trials by the
parties including a monitoring plan (the "Monitoring Plan") that is consistent
with Section 5.6 and is approved by the Project Team.
(b) The parties will make every reasonable effort to adhere to the
Monitoring Plan adopted by the Project Team.
(c) The parties acknowledge that certain Clinical Investigators may act
as advisors, consultants, or investigators for Medtronic or Orphan with respect
to development activities other than the Joint Clinical Trials. Nothing in this
Agreement shall require Medtronic or Orphan to disclose any confidential
discussions with, or confidential information provided by, such advisors,
consultants, or investigators that do not directly relate to the Joint Clinical
Trials, or to the Collaborative Activities.
4.8 Data Collection and Analysis
(a) The Project Team will be responsible for coordinating the design by
Orphan and Medtronic of the case report forms ("CRF") to be contained in the
Joint Clinical Trial data book for the Joint Clinical Trials and for final
design of the data book. Orphan will be responsible for those CRFs which record
Drug related data. Medtronic will be responsible for those CRFs which record
System related data.
(b) Orphan will be responsible for collecting all Joint Clinical Trial
data. All Joint Clinical Trial data and information which constitutes Medtronic
Data will be conveyed by Orphan to Medtronic at such times and in such form as
shall be determined by the Project Team.
(c) Orphan will be responsible for all data analysis relating to Drug
and will make such reports to the FDA relating to the Drug as shall be required
by applicable regulations. Medtronic will be responsible for all data analysis
relating to the System and will make such reports to the FDA relating to the
System as shall be required by applicable regulations. The Project Team will
coordinate data analysis relating to the Drug-System Combination and each party
will make such reports to the FDA relating to the Drug-System Combination as
shall be required by applicable regulations.
4.9 Notice of Adverse Events.
(a) All adverse and other reportable events, as deEmed by the FDA and
applicable laws and regulations, with respect to the Drug or the System (;
Adverse Events-'), shall be reported to the FDA by Orphan or Medtronic,
respectively, he a manner consistent with applicable FDA regulations and
guidelines. There shall be full and complete cooperation by the parties to
assure that all FDA requirements regarding patient safety and Adverse Event
reporting are complied with in a timely manner.
(b) The Project Team will design an Adverse Event report form approved
by each of the parties (the "Form") for the Joint Clinical Trials. The Form will
be designed to capture all Adverse Event information relating to the Drug and
the System which is required for FDA reporting or which is otherwise useful to
either party. The Project Team will appoint one representative of each party to
serve as members of a Safety Committee. All Centers and Clinical Investigators
will be instructed to report serious or unexpected Adverse Events to Orphan and
Medtronic. Upon Orphan's or Medtronic's receipt of a Form or other knowledge of
a serious or unexpected Adverse Event, Orphan or Medtronic will promptly notify
the other party of such matter and information related thereto, will make the
report required by law, and provide each member of the Safety Committee with
copies of such Form or a detailed description of the knowledge acquired. The
Safety Committee will co-ordinate the investigation, reporting and follow up
evaluation of all Adverse Events consistent with applicable legal requirements
and the guidelines set forth in subsection (c).
(c) Medtronic will investigate all Adverse Events for relationship to
System function and Orphan will investigate all Adverse Events for relationship
to Drug dosage and administration. Medtronic will be responsible for all
follow-up evaluation reports for Adverse Events attributed to the System and
Orphan will be responsible for all follow-up evaluation reports attributable to
the Drug. The Safety Committee will establish, subject to the approval of each
of the parties, a procedure for the investigation of, and the preparation and
submission of follow-up evaluation reports for, Adverse Events which are not
clearly attributable to either the Drug or the System. Where time permits,
notification to the other party will occur prior to filing reports with the FDA,
unless otherwise required by the Fl)A. Adverse Drug reactions and adverse System
events will be reviewed by the Safety Committee at regular intervals.
4.10 Costs. Each party shall be responsible for its own internal costs
and expenses incurred in the conduct of the Joint Clinical Trials including the
costs associated with supply, monitoring, data collection and management and
Adverse Event reporting by such party and its representatives. Medtronic will be
responsible for System related costs in the Trials. Orphan will be responsible
for Drug related costs in the Trials. Orphan and Medtronic agree to the
following allocation of all external and per patient costs associated with a
Joint Clinical Trial: It is understood that costs allocated to Medtronic will be
paid by Medtronic through standard grant agreements ("Grants") between Medtronic
and each Center to defer System related study costs. Medtronic will provide ***
per patient in clinical trials to cover System related study costs. The Grants
will provide for compensation for a defined number of patients enrolled in the
Joint Clinical Trials and will commit the provision of Systems at no charge for
indigent patients. Medtronic will provide such funding and no charge Systems on
a Joint Clinical Trial by Joint Clinical Trial basis for a predetermined number
of patients as set forth in the R&D Plan for each Joint Clinical Trial. In
accordance with applicable law, third party reimbursement may be pursued for
Systems and use of Systems, including surgical implant fees, its Joint Clinical
Trials which are not supplied for indigent patients pursuant to the R & D Plan.
Orphan will provide Grants to each center to defer Drug related study costs.
Orphan will supply free of charge such quantities of the Drug as shall be
necessary to conduct the Joint Clinical Trials. All payments made by Orphan and
Medtronic to the Centers shall be in compliance with applicable law.
4.11 International Studies. Without limitation of Section 5.3 hereof,
if the parties agree to collaborate in the conduct of international clinical
studies, the Project Team shall determine when, where and how such international
studies shall be conducted, and how the costs of such studies shall be
reasonably allocated between the parties subject to the approval of each party
in such party's discretion prior to the commencement of each such international
study.
4.12 Completion of Clinical Studies. Stage 2 will be considered
complete upon FDA approval of the NDA for the Orphan Claim and the PMA for the
Medtronic Claim.
ARTICLE 5
REGULATORY REQUIREMENTS
5.1 Regulatory Approvals. In the event the parties agree to conduct
Joint Clinical Trials, Orphan and Medtronic agree to support a regulatory
strategy which will achieve a Medtronic Claim and a Orphan Claim. It is assumed
that the FDA will designate the use of the Drug with the System, a combination
product with CDER designated as the lead center. As such, CDER will be
responsible for reviewing the Safety and Efficacy of the Drug delivered via the
System. The FDA will determine the System review jurisdiction based upon
intercenter agreements between CDER and CDRH and other internal FDA policies and
procedures.
5.2 Preparation and Prosecution. Each party will prepare and determine
the content of its own regulatory filings, be responsible for the cost of such
filings, including FDA user fees, and control the prosecution of its own
regulatory submissions; provided that, Medtronic shall be entitled to give
Orphan appropriate input and advice regarding those portions of Orphan's
regulatory filings which relate to the System and Orphan shall be entitled to
give Medtronic appropriate input and advice regarding those portions of
Medtronic's regulatory filings which relate to the Drug. Reasonable effort will
be made to have Medtronic and Orphan co-participate in discussions with the FDA
involving Drug-System Combination aspects of clinical trial design, interaction
between the Drug and System, or Mechanical Delivery of the Drug. Neither party
will discuss the other party's product with the FDA without the other party
present.
*** DENOTES CONFIDENTIAL INFORMATION THAT HAS BEEN OMITTED FROM THE EXHIBIT
AND FILED SEPARATELY, ACCOMPANIED BY A CONFIDENTIAL TREATMENT REQUEST,
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF
THE SECURITIES EXCHANGE ACT OF 1934.
Upon request, each party agrees to support the other party, as may be
reasonably necessary to expeditiously advance the Collaborative Activities, in
any discussions with the FDA or Clinical Investigators directly related to the
Drug-System Combination or Joint Clinical Trials. Discussions with the FDA with
respect to the Drug alone or the System alone will be handled solely by the
responsible party, unless such responsible party requests the support of the
other party.
5.3 Reference to Other Party's Filings. Subject to Article 7, each of
Medtronic and Orphan will grant the other the right of reference to its
regulatory files with the FDA or other appropriate government agencies as
necessary or helpful for support of its regulatory submissions with respect to
the Drug or System, respectively. Subject to Article 7, each party will have
access to the other party's regulatory submission regarding the Collaborative
Activities as relevant to enable such party to fulfill such party's
responsibilities under the Collaborative Activities and under applicable law.
Medtronic will file a Device Master File with the FDA for the System which will
contain all relevant device data related to the use of the System with the Drug.
Orphan will file a Drug Master File with the FDA for the Drug, if it is
necessary to facilitate review or minimize the required regulatory filings of
the parties. Principles similar to those set forth in this Article 5 will apply
to any international submissions.
5.4 Ownership. Medtronic will own the PMA and any and all other
regulatory filings and approvals for the System, and Orphan will own the IND and
NDA for the Drug and any other regulatory filings or approvals for the Drug. It
is understood by the parties, however, that Orphan shall have no ownership
interest in any Medtronic Data or other data or information generated by or for
Medtronic related to the System which is included in the IND and NDA or any
Medtronic regulatory filings cross referenced ha the IND and NDA. Similarly, it
is understood by the parties that Medtronic shall have no ownership interest in
any Orphan Data or other data or information generated by or for Orphan related
to the Drug which is included in the PMA or any Orphan regulatory filings cross
referenced in the PMA.
5.5 Compliance with Laws. Each party will be responsible for ensuring
that its respective responsibilities concerning studies performed under the
Collaborative Activities are performed in compliance with applicable GMP, GLP
and GCP requirements and all regulatory requirements for the filing and
prosecution of the Initial Regulatory Approval and subsequent approvals. Both
parties will, as reasonably necessary to assure safety and regulatory
compliance, put into place and maintain in cooperation with each other
appropriate safety and regulatory compliance procedures. If the parties agree to
conduct international clinical studies or to collaborate in the pursuit of
international regulatory approvals for the Drug and System, each party will be
responsible for ensuring that its respective responsibilities are performed in
compliance with all applicable regulatory requirements.
5.6 International Regulatory Approvals. Without limitation of Section
5.4 hereof, if the parties agree to collaborate in the conduct of international
regulatory approvals for the marketing approval of the Drug and System, the
parties shall jointly determine when, where and how the international dossiers
will be prepared and submitted, subject to the approval of each party in such
party's discretion prior to the commencement of international clinical studies.
ARTICLE 6
MARKETING RIGHTS; LICENSE
6.1 Marketing Rights. Medtronic will have sole marketing rights to the
System and Orphan Medical will have sole marketing rights to the Drug, except
Medtronic will have the exclusive marketing rights to sell the Drug as part of
System refill or injection kits within the United States. Prior to NDA and PMA
approval, the Project Team will prepare a list of acceptable statements,
including FDA approved claims, which may be used by the other party for ongoing
promotion prior to commercial release of the Drug and the System. The list of
acceptable statements shall be reviewed and approved by the Management Team. Any
mention of the other's product outside of the list of acceptable statements in
Drug or System promotional materials will be subject to the prior written
consent of the other party. Distribution rights outside the United States remain
outside the scope of this Agreement.
6.2 Sales Price. Medtronic shall be solely responsible for determining
and setting the price for its System refill or injection kits, and System and
for paying any applicable statutory rebates. Orphan shall be solely responsible
for determining the price of the Drug and for paying any statutory rebates.
6.3 Grant of License. Medtronic hereby grants to Orphan an exclusive
worldwide license, with tile right to sub-license, under Medtronic Product
Intellectual Property (including patents filed jointly with the University of
Texas) to make, have made, sell, or have sold, and otherwise commercialize,
market and distribute the Product throughout the world subject to Section 6.4
below. In the event this Agreement is terminated for any reason pursuant to
Article 10 of this Agreement, the license rights granted in this Section 6.3
will thereafter terminate at Medtronic's election upon written notice to Orphan.
6.4 Royalty Payments to Medtronic
(a) With respect to Net Sales of Product, should Medtronic receive a
United States patent with one or more claims reading on the Product, Orphan
agrees to pay Medtronic a royalty of *** on all such Net Sales of Product which
are made to Medtronic or its Affiliates, and a royalty of *** on all other
worldwide Net Sales of Product which are made to any person other than Medtronic
or its Affiliates. If Medtronic has not received a United States patent with one
or more claims reading on the Product, Orphan shall pay to Medtronic a royalty
of *** on all such Net Sales of Product which are made to Medtronic or its
Affiliates, and a royalty of *** on all other worldwide Net Sales of Product
which are made to any person other than Medtronic or its Affiliates. While the
foregoing royalty payment obligations are in effect, Orphan shall provide to
Medtronic within 45 days after the end of each calendar quarter a written report
indicating the amount of Net Sales of Product sold during such quarter and the
amount of royalties due to Medtronic for such quarter. Simultaneously with
making such report, Orphan shall pay to Medtronic the amount of royalties then
due. The foregoing royalty payment obligations shall continue until the later of
(a) such time as no claim of a Medtronic patent covers any Net Sales of Product,
or (b) the twenty year anniversary of the Effective Date.
(b) Orphan shall keep, and shall cause its Affiliates and licensees and
sublicensees to keep accurate, written records sufficient in detail to enable
the royalties payable under this Agreement by Orphan to be determined and
verified. Such records for a particular quarter shall be retained by Orphan, its
Affiliates, and licensees and sublicensees, for a period of not less than five
(5) years after tile end of such quarter. Upon reasonable notice and during
regular business hours, Orphan shall, upon Medtronic's request, not more
frequently than once per year, make available in one location the records
referred to in this subsection for audit by Medtronic or its representatives, to
verify the accuracy of the reports provided to Medtronic pursuant to subsection
(a) and (b) above. The fees and expenses of Medtronic and its representatives in
performing each such audit shall be borne by Medtronic; provided, however, if
any such audit reveals underpayment of royalties by more than five percent (5%)
for any quarter, then Orphan shall promptly pay for the full cost of such audit,
including all salaries, fees, expenses and travel of Medtronic personnel and
representatives incurred in connection therewith, as well as promptly pay the
royalty deficiency.
ARTICLE 7
CONFIDENTIALITY AND NON-USE
7.1 Procedures in Place. Each party represents to the other that it
maintains policies and procedures designed to prevent unauthorized disclosure of
its own proprietary data and Formation. Each party agrees to treat Confidential
Information received from the other party With the same degree of care to avoid
disclosure and misuse as the receiving party employs with respect to its own
confidential information of like importance. All employees, consultants, agents
and subcontractors of a party performing work under this Agreement shall be
advised of and instructed to comply with the confidentiality and non-use
provisions of this Agreement prohibiting the disclosure or
*** DENOTES CONFIDENTIAL INFORMATION THAT HAS BEEN OMITTED FROM THE EXHIBIT
AND FILED SEPARATELY, ACCOMPANIED BY A CONFIDENTIAL TREATMENT REQUEST,
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF
THE SECURITIES EXCHANGE ACT OF 1934.
use of Confidential Information of Orphan or Medtronic provided by one party to
any other party or generated under this Agreement except on terms permitted
under this Agreements The party receiving Confidential Information of the
disclosing party shall be responsible for such receiving party's employees',
affiliates', consultants', agents' and subcontractors' failure to observe the
terms and provisions of this Article 7.
7.2 Confidential Information Generated Hereunder. Any written
information disclosed hereunder which the disclosing party desires to have
treated as Confidential Information shall, insofar as practicable, bear a
conspicuous legend as "Confidential," "Proprietary" or words of similar import.
Any information disclosed other than in writing shall, insofar as practicable,
be preceded by an oral statement to the effect that such information is
confidential or proprietary and shall promptly be followed by a written notice
identifying such information as confidential or proprietary. Such designated
information or material shall be referred to as "Confidential Information" and
shall be subject to the policies and procedures described in this Article 7.
7.3 Not Disclose or Use. No party shall disclose any Confidential
Information disclosed by another party except to employees of the parties, its
Affiliates, consultants, agents or subcontractors who need to know the
Confidential Information in order to perform work under this Agreement. No party
shall use any Confidential Information disclosed by another party for any
purpose other than in accordance with the terms of this Agreement.
7.4 Exceptions. The confidentiality and non-use obligations under this
Agreement shall not apply to (a) information that at the time of disclosure is
in the public domain; or (b) information that is now or later becomes public
knowledge other than by breach of this Agreement; or (c) information the
receiving party can establish by reasonable proof was in its possession on a
nonconfidential basis at the time of disclosure or was subsequently and
independently developed by the receiving party without use of Confidential
Information of the disclosing party; or (d) information that the receiving party
shall receive from a third party who, to the best of the receiving party's
knowledge, has the right to disclose such information; or (e) information that
is required by law to be disclosed.
7.5 Expiration. Each party's obligations of confidentiality shall be in
force during the term of this Agreement and shall extend thereafter for five (5)
years, except (a) as may be otherwise agreed to in writing by Orphan and
Medtronic, or (b) as otherwise provided in Section 7.4.
7.6 Publication. Publication of results obtained as part of work
performed under this Agreement shall be permitted, subject to a reasonable time
for review by Orphan and Medtronic prior to submission for publication. Prior to
public disclosure or submission for publication of a manuscript describing the
results of work performed under this Agreement, the party proposing disclosure
shall send the other party, by express mail or other reputable express delivery
service, a copy of the manuscript to be submitted and shall allow the receiving
party a period of thirty (30) days from the date of mailing in which to
determine whether the manuscript discloses confidential information or
patentable inventions or discoveries owned by the other party or owned jointly
by both parties. If no notification is received during the thirty (30) day
period, the disclosing party shall be free to submit the manuscript for
publication and to publish or otherwise disclose the results described therein.
If the receiving party believes the manuscript contains confidential information
or patentable inventions or discoveries owned by the receiving party or owned
jointly by both parties, the receiving party shall so notify the disclosing
party who shall then prevent public disclosure of confidential information owned
by the receiving party or owned jointly by both parties, unless such
confidential information includes patentable inventions or disclosures in which
case the disclosing party shall then delay public disclosure of patentable
inventions or discoveries owned by the receiving party or owned jointly by both
parties disclosed in such manuscript for an additional sixty (60) days to permit
the preparation and filing of a patent application on the disclosed subject
matter by the receiving party.
ARTICLE 8
INTELLECTUAL PROPERTY AND AUTHORITY
8.1 Ownership of Data. All confidential data and information collected
by the parties which arise under this Agreement and which specifically relate to
the System, including the design, manufacture, use, Mechanical Delivery or
operation and performance thereof, shall be owned by and considered confidential
information belonging to Medtronic ("Medtronic Data"). All confidential data and
information collected by the parties which arise under this Agreement and which
specifically relate to the Drug, including the dosage, stability, or
formulation, shall be owned by and considered confidential information belonging
to Orphan ("Orphan Data"). In the event that certain information and data
developed under this Agreement cannot reasonably be categorized as above as
either Medtronic Data or Orphan Data, such information and data shall be jointly
owned by the parties and considered confidential information of both parties.
8.2 Ownership of Intellectual Property.
(a) Any Intellectual Property arising out of the Collaborative
Activities developed by Medtronic employees, or for Medtronic by its
consultants, without the use of Orphan Data ("Medtronic Intellectual Property")
shall be owned by Medtronic and Orphan hereby assigns to Medtronic all of
Orphan's right, title and interest in such Medtronic Intellectual Property.
(b) Any Intellectual Property arising out of the Collaborative
Activities developed by Orphan employees, or for Orphan by its consultants,
without the use of Medtronic Data ("Orphan Intellectual Property") shall be
owned by Orphan and Medtronic hereby assigns to Orphan all of Medtronic's right,
title and interest in such Orphan Intellectual Property.
(c) Any Intellectual Property arising out of the Collaborative
Activities which are neither Medtronic Intellectual Property nor Orphan
Intellectual Property shall be jointly owned ("Joint Intellectual Property");
provided that (i) Orphan shall assign to Medtronic all of Orphan's right, title
and interest in all Joint Intellectual Property specifically relating to design,
manufacture, use, Mechanical Delivery or operation and performance of the
System, and (ii) Medtronic shall assign to Orphan all of Medtronic's right,
title and interest in all Joint Intellectual Property specifically relating to
the dosage, stability, or formulation of the Drug.
(d) Each party shall have full right to use all Joint Intellectual
Property not assigned pursuant to subsection (c) above, and except as otherwise
provided in Article 8 above, provided, however, that neither party shall license
or sublicense such Joint Intellectual Property to a non-Affiliate without the
prior written consent of the other party.
8.3 Prosecute Patent Applications. Responsibility for filing and
prosecuting patent applications on inventions and discoveries shall be With the
owner of the invention or discovery. In the event either of Orphan or Medtronic
intends to file a patent application in any jurisdiction for any Joint
Intellectual Property, it shall give the other party prior written notice of
such intention including therewith a copy of the proposed filing, and the
opportunity to jointly cooperate in the preparation, filing and prosecution of
such patent application. The party receiving such notice shall have forty five
(45) days from the receipt thereof to indicate in writing to the notifying party
that the receiving party desires to jointly cooperate in the preparation, filing
and prosecution of such patent application. The notice procedure and any such
joint patent preparation, filing and prosecution shall be conducted in good
faith by such parties. In any such joint patent preparation, filing and
prosecution, each of Orphan and Medtronic shall pay fifty percent (50%) of all
costs and expenses of obtaining and maintaining such patent, and in the event
either such party fails to pay such fifty percent portion, the failing party
shall forthwith assign its title to such patent to the other party without
obligation of payment by the assignee for such assignment. If a party does not
elect to jointly cooperate and participate in the preparation, filing and
prosecution of a particular patent application, it shall have no right to so
participate and shall have no responsibility for paying any portion of the costs
and expenses of obtaining and maintaining such patent.
8.4 Notice of Infringement. Orphan and Medtronic agree to notify the
other in writing of infringement by any third party of patents claiming the Drug
or the System or combinations thereof, no later than thirty (30) days after it
obtains knowledge of such infringement.
8.5 Disclaimer. Except as set forth in Sections 8.6 and 8.7 below,
nothing in this Agreement shall be construed as a representation or warranty
that patents claiming the Drug or System or combinations thereof, respectively,
are valid or enforceable or that their exercise does not infringe the patent
rights of a third party.
8.6 Representations and Warranties of Orphan. Orphan represents and
warrants to Medtronic as follows:
(a) Orphan has full power and authority to enter into this Agreement
and to perform its obligations hereunder.
(b) This Agreement has been duly authorized, executed and delivered by
Orphan and constitutes a legal, valid and binding agreement of Orphan
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(c) Orphan is not aware of and has not received any communications
challenging the ownership, validity or effectiveness of any of its patents,
patent applications, trade secrets or other Intellectual Property required for
the performance by Orphan of its obligations under this Agreement.
(d) There are no orphan drug restrictions that prevent Orphan from
performing its respective obligations under this Agreement.
(e) Neither the execution and delivery of this Agreement nor compliance
by Orphan with this Agreement's terms and provisions will violate (i) any
provisions of the articles of incorporation or bylaws of Orphan, (ii) any
material contract, license, franchise or permit to which Orphan is a party or by
which it is bound, or (iii) to the knowledge of Orphan, any law, stable,
regulation, injunction, order or decree of any government agency or authority or
court to which Orphan is subject.
8.7 Representations and Warranties of Medtronic. Medtronic represents
and warrants to Orphan as follows:
(a) Medtronic has full corporate power and authority to enter into this
Agreement and to perform its respective obligations hereunder.
(b) This Agreement has been duly authorized, executed and delivered by
Medtronic and constitutes a legal, valid and binding agreement of said party
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(c) Medtronic is not aware of and has not received any communications
challenging the ownership, validity or effectiveness of any of its patents,
patent applications, trade secrets or other intellectual property required for
the performance by Orphan of its obligations under this Agreement.
(d) Neither the execution and delivery of this Agreement nor compliance
by Medtronic with this Agreement's terms and provisions will violate (i) any
provisions of the articles of incorporation or bylaws of Medtronic, (ii) any
material contract, license, franchise or permit to which Medtronic is a party or
by which it is bound, or (iii) to the knowledge of Medtronic, any law, statute,
regulation, injunction, order or decree of any government agency or authority or
court to which Medtronic is subject.
8.8 Access to Improvements. Improvements, future generations, and
modifications to the Drug or System made by Orphan or Medtronic will be promptly
communicated by the developing party and, at the other party's request, will be
made available for use in the Collaborative Activities by the developing party,
provided the use of such improved Drug or System does not significantly delay
the Collaborative Activities.
ARTICLE 9
INDEMNIFICATION
9.1 Limitation on Indemnification. Neither Medtronic nor Orphan shall
by reason of this Agreement be obligated to defend, assume the cost of defense,
hold harmless, or indemnify the other from any liability to third parties for
loss or damage to property, death or bodily injury arising out of or connected
with their respective use or sale of Drug or System, except as set forth herein.
9.2 Joint Defense of Third Party Claims. Notwithstanding Section 9.1,
and except as otherwise provided in Section 9.3, any loss, claim, damage,
expense or liability arising out of activities conducted pursuant to this
Agreement and brought against both Medtronic and Orphan under a claim of shared
liability shall be defended by such parties with each party handling its own
defense and any such loss, claim, damage, expense or liability incurred by it
(including attorney's fees, settlements and cost of litigation) until such time
as the extent and degree of each party's liability vis-a-vis the other party's
liability has been established amongst the parties. The parties agree to
indemnify each other to the extent that a party incurs such liability or costs
in excess of its established share.
9.3 Indemnification.
(a) Notwithstanding Section 9.1 and Section 9.2, any loss, claim,
damage, expense or liability incurred by Orphan (or its officers, directors,
employees or agents) or Medtronic (or its officers, directors, employees or
agents), respectively, as well as attorney's fees, settlements and costs of
litigation and defense of the indemnified party (referred to collectively as
"Indemnification Claims",) resulting from any of the following causes shall be
borne by the party or parties causing or otherwise giving rise to such
Indemnification Claim (the "Indemnifying Party"), and such Indemnifying Party
shall indemnify and hold harmless the other party or parties to this Agreement
(including officers, directors, employees or agents of the other party or
parties) (the "Indemnified Parts ") from and against any such Indemnification
Claim:
(i) the Indemnifying Party's negligence or willful misconduct in
improperly using, instruction for use, implanting, administering or
manufacturing the Drug or the System or an ingredient or component
thereof;
(ii) the Indemnifying Party's failure to properly manufacture the Drug
or the System in accordance with the applicable specifications or other
breach of warranty pertaining thereto;
(iii) the Indemnifying Party's negligence or willful misconduct in
marketing, storing, shipping, handling or distributing the Drug or the
System;
(iv) the Indemnifying Party's failure to comply with applicable law or
regulations in connection with the Drug or the System;
(v) a fraudulent or misleading statement contained in printed material
published by the Indemnifying Party or supplied by the Indemnifying
Party to the Indemnified Party expressly for publication;
(vi) an advertisement, promotional claim, or other statement made by
the Indemnifying Party concerning the Drug or the System;
(vii) the Indemnifying Party's breach of a representation, warranty or
covenant made by it in this Agreement; or
(viii) any other cause or matter for which the Indemnifying Parts has
assumed an indemnification obligation under this Agreement.
(b) In addition to the events for which the parties may seek
indemnification pursuant to subsection (a) above, (i) Orphan will indemnify
Medtronic and its officers, directors, employees and agents against any loss,
damage, expense or liability arising out of or in connection with personal
injury or property damage caused by the use of Drug in accordance with any
Protocol and (ii) Medtronic will indemnify Orphan and its officers, directors,
employees and agents against any loss, damage, expense or liability arising out
of or in connection with personal injury or property damage caused by the use of
System in accordance with any Protocol.
(c) Infringement Defense and Indemnity In the event any third party
patent rights and/or orphan drug restrictions shall be asserted against
Medtronic with respect to the Drug, Orphan shall assume the defense of such
assertion and indemnify and hold harmless Medtronic (and its officers,
directors, employees and agents) with respect thereto and Orphan shall bear all
related expenses, costs, settlements and judgments. In the event any third party
patent rights shall be asserted against Orphan with respect to the System,
Medtronic shall assume the defense of such assertion and indemnify and hold
harmless Orphan (and its officers, directors, employees and agents) with respect
thereto and Medtronic shall bear all related expenses, costs, settlements and
judgments.
9.4 Procedure for Indemnification. The obligations and liabilities of
each Indemnifying Patty hereunder with respect to claims resulting from the
assertion of liability by the other party or third parties shall be subject to
the following terms and conditions:
(a) The Indemnified Party shall give prompt written notice to the
Indemnifying Party of any Indemnification Claim by the Indemnified Party against
the Indemnifying Party based on the indemnity agreement contained in this
Article 9, stating the nature and basis of said Indemnification Claim and the
amount thereof, to the extent known.
(b) The Indemnified Party shall have the right to employ its own
counsel in any such case. The reasonable fees and expenses of such counsel shall
be considered costs subject to indemnification. The Indemnified Party shall be
kept fully informed of such action, suit or proceeding at all phases thereof
whether or not it is so represented.
(c) The Indemnified Party shall make available to the Indemnifying
Party and its attorneys all books and records of the Indemnified Party
reasonably relating to such proceedings or litigation, and the parties agree to
render to each other such assistance (excluding the retention of counsel) as
they may reasonably require of each other in order to ensure the proper and
adequate defense of any such action, suit or proceeding, including making
individuals available for giving testimony (including depositions).
Out-of-pocket costs (but not salaries or overhead attributable to individuals
then employed by a party) shall be considered costs subject to indemnification.
(d) The Indemnified Party shall not make any settlement of any
Indemnification Claim without the written consent of the Indemnifying Party. The
written consent of both parties shall be required for settlement of any
Indemnification Claim subject to the provisions of this Article 10 or otherwise
where there is contribution or shared liability.
ARTICLE 10
TERM AND TERMINATION
10.1 Term. This Agreement shall become effective on the Effective Date
and shall remain in effect unless terminated pursuant to this Article 10. The
parties respective obligations pursuant to the Collaborative Activities
hereunder shall expire upon the earlier of (i) receipt of FDA approval of the
PLA (Product License Agreement) or NDA for the Drug and the PMA for the System;
or (ii) termination of this Agreement pursuant to Section 10.2 below.
10.2 Termination. This Agreement may be terminated as follows:
(a) by written notice from either party specifying such breach,
effective 90 days thereafter, if the other party has materially breached this
Agreement and such breach has not been cured within such 90-day period; or
(b) by written notice from either party, effective immediately, if such
party reasonably believes that data reveals significant safety concerns as
defined in 21 CFR, Part 600; or
(c) by the Management Team at any time if, after considering Safety,
Efficacy, reimbursement, market factors and other relevant commercial
information and exercising prudent scientific and business judgment, the
Management Team determines that it cannot justify the continuation of the
Collaborative Activities; or
(d) by the Management Team at any time it determines that substantial
design modifications are required in the fluid pathway of the pump or catheter,
or substantial modifications are required in the R & D Outline; or
(e) by the Management Team at any time if the IND and IDE have not been
approved by a date which is outlined in the R & D Outline plus one (I) year; or
(f) by the Management Team at any time if the NDA and PMA have not been
approved by a date which is stated in the R & D Outline plus three (3) years.
10.3 Termination of this Agreement pursuant to Section 10.2 shall not
terminate any Joint Clinical Trial which is in progress. A Joint Clinical Trial
will be considered in progress for the purposes of this Section 10.3, from the
date of the first human implant herein until the earlier of (i) completion of
all Protocol-specified treatments for all patients enrolled in such Joint
Clinical Trial and collection and analysis of all data collected in connection
therewith; and (ii) termination of such Joint Clinical Trial in accordance with
Section 10.4.
10.4 Termination of Joint Clinical Trials. A Joint Clinical Trial may
be terminated by either party upon written notice to the other party in the
event:
(a) the other party or the other party's representatives have used in
an unauthorized manner the Drug or Systems supplied by such terminating party to
the Joint Clinical Trials; or
(b) information has come to such party's attention which gives such
party reason to believe there exists a significant safety concern for the
participants in the Joint Clinical Trials; or
(c) the FDA or other regulatory authority requires that the Joint
Clinical Trials be terminated.
Termination of any Joint Clinical Trial pursuant to this Section 10.4
shall not, in and of itself, serve to terminate this Agreement. Upon the
termination of a Joint Clinical Trial pursuant to this Section 10.4, Medtronic
and Orphan will take all actions as are necessary to ensure the safety of all
patients enrolled in such terminated trial. In the event the parties agree to
Joint Clinical Trials for any other indications, the provisions of this Article
10 shall apply on an indication-by-indication basis.
10.5 Survival. Notwithstanding the foregoing sections of this Article
10, the parties' respective ongoing rights and obligations under Sections 2.3,
Section 4.9, Section 4.10, Article 6, Article 7, Article 8, Article 9 and
Article 11 shall survive termination of this Agreement or a Joint Clinical Trial
hereunder. Termination of this Agreement or a Joint Clinical Trial hereunder for
any cause shall not release a party from any liability which at the time of
termination has already accrued to the other party or which thereafter may
accrue in respect to any act or omission prior to such termination.
ARTICLE 11
TRADEMARKS; TRADE NAMES
11.1 Separate Trademarks. Each party shall be responsible for selecting
and registering any trademark for its own product and shall have sole ownership
of such trademark.
11.2 No Transfer. No party shall acquire any right, title or interest
in the trade names, trademarks, or copyrights of any other party by reason of a
party's performance of under this Agreement.
11.3 Branded Products. The parties agree that the Drug and the System
will be identified as branded products. The System will be identified with
Medtronic's label and labeler code. The Drug will be identified with Orphan's
label and labeler code.
ARTICLE 12
AVAILABILITY OF COMMERCIAL PRODUCT
12.1 Availability of System. Upon FDA approval of the PMA for the
System for the Medtronic Claim, for a period of six (6) years following the
first commercial release of System in the United States, Medtronic will make
Systems available for commercial sale in quantities sufficient to satisfy market
demand as determined by sale of the Drug for use with the System in the
treatment of chronic pain.
12.2 Availability of Drum Upon FDA approval of the NDA for the Orphan
Claim, for a period of six (6) years following first commercial release of Drug
in the United States, Orphan will make the Drug available for commercial sale in
quantities sufficient to satisfy market demand as determined by sale of Systems
for use with the Drug. Alternatively, Orphan may grant to Medtronic or its
nominee an exclusive license, bearing a reasonable royalty to Orphan, under all
patents, patent applications, trade secrets and know-how necessary to make, use
and sell the Drug for use with the System.
12.3 Indemnification. In the event a license is granted by one party to
the other party or its designee under this Article 12, then the other party
shall indemnify and hold harmless the licensor in accordance with the provisions
of Article 9 hereof against any Claims made against the licensor relating to the
license granted and the exercise by the other party or its designee of rights
under such license.
ARTICLE 13
MISCELLANEOUS
13.1 Successors and Assigns. The rights or obligations of the parties
hereto may not be assigned without the prior written consent of the other party;
provided that the rights of either party may be assigned by it to a wholly owned
subsidiary of such party or to such business organization which shall succeed to
substantially all the assets and business of such party or such subsidiary or
business to which this Agreement relates. Subject to the foregoing, the
provisions of this Agreement shall inure to the benefit of, and be binding upon,
the permitted successors and assigns of the parties hereto.
13.2 Notices. All notices or other communications to a party required
or permitted hereunder shall be in writing and shall be given by hand delivery,
courier service (with acknowledgment of receipt), telecopy (with confirmation of
transmission), or by certified mail, postage prepaid with return receipt
requested, to the following person at the following address:
If to Orphan:
President
Orphan Medical, Inc.
12911 Ridgedale Drive, Suite 475
Minnetonka, MN 55305
If to Medtronic:
Medtronic, Inc.
7000 Central Avenue, N.E.
Minneapolis, MN 55432
Attn: Vice President, Corporate Development and
Associate General Counsel
FAX: (612) 572-5404
With a copy to:
Medtronic, Inc.
Neurological Division
800-53rd Avenue N.E.
Minneapolis, MN 55421
Attn: Drug Delivery Business Development Department
FAX: (612) 572-5681
Any party may change the above-specified recipient and/or mailing address by
notice to all other parties given in the manner herein prescribed. All notices
shall be deemed given on the day when actually delivered as provided above (if
delivered personally or by telecopy) or on the day shown on the return receipt
(if delivered by mail).
13.3 Force Majeure. No liability to any party shall result from any
delay in performance or nonperformance directly or indirectly caused by
circumstances beyond the control of the party affected, including, but not
limited to, acts of God, fire, explosion, flood, earthquake, war, civil
commotion, destruction of production facilities, labor disturbances, or failure
of public utilities or common carrier, so long as the affected party shall use
all reasonable efforts to correct or mitigate the circumstances causing such
delay in performance or such nonperformance.
13.4 Waiver. The failure of a party to enforce, at any time, any of the
provisions of this Agreement, or to require at any time performance by the other
parties of any of the provisions hereof, shall in no way be construed to be a
waiver of such provisions, nor in any way to affect the validity of this
Agreement or any part thereof, or the right of a party to thereafter enforce
each and every such provision.
13.5 Severability. If any provision of this Agreement is held to be
unenforceable or illegal, the other provisions of this Agreement shall not be
affected by any such holding and shall remain in full force and effect. In such
event the parties shall use all reasonable efforts to replace any such
unenforceable or illegal provision with a provision reflecting as nearly as
possible the intent, purpose and economic effect of such provision.
13.6 Independent Contractor. Each party shall act solely as an
independent contractor. Nothing in this Agreement shall be construed to give
either party the power or authority to act for, bind, or commit the other party.
13.7 Headings and Numbering. The headings and numbering are inserted
and INCLUDED solely for convenience and reference and shall not be considered or
given any effect in construing this Agreement or any part hereof. This Agreement
shall be interpreted without regard to any rule or presumption favoring
interpretation hereof against the party causing this Agreement to be drafted.
13.8 Entire Agreement. This Agreement represents the entire agreements
between the parties and supersedes all prior or contemporaneous oral or written
agreements of the parties with respect to the subject mater hereof. This
Agreement may be modified, amended or changed only by a written instrument
signed by the parties.
13.9 Survival. All of the representations, warranties, and
indemnifications made in this Agreement, and all terms and provisions hereof
intended to be observed and performed by the parties after the termination
hereof, shall survive such termination and continue thereafter in full force and
effect, subject to applicable statute of limitations.
13.10 Governing Law. The legality, validity, enforceability and
interpretation of this Agreement shall be governed by the laws of the State of
Minnesota, without giving effect to the principles of conflict of laws.
13.11 Expenses. Except as expressly provided herein, Medtronic and
Orphan shall each bear its own expenses incurred on its behalf with respect to
this Agreement and the transactions contemplated herein and therein.
13.12 Benefit. Nothing in this Agreement or the agreements referred to
herein, expressed or implied, shall confer on any person other than the parties
hereto or thereto, or their respective permitted successors or assigns, any
rights remedies, obligations or liabilities under or by reason of this
Agreement, the agreements referred to herein, or the transactions contemplated
herein or therein.
13.13 Announcements. Neither party shall publicly or privately disclose
the terms, provisions or existence of this Agreement or the transactions
contemplated hereby, except as required by law or applicable stock exchange
rules and except to such party's employees and representatives. In the event
that either party proposes to issue a press release or otherwise publicly or
privately disclose the tends, provisions or existence of this Agreement or the
transactions contemplated hereby, such party shall submit its proposed
disclosure to the other and the parties shall thereafter use their reasonable
efforts to cause a mutually agreeable disclosure to be issued.
13.14 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall be considered one and the same instrument.
ARTICLE 14
EXECUTION
14.1 In winless whereof the parties have executed this Agreement in
duplicate originals by their proper officers as of the date and year first
written above.
MEDTRONIC, INC. ORPHAN MEDICAL, INC.
By: /s/ John A. Meslow By: /s/ Bert Spilker
-------------------------------- ------------------------------
John A. Meslow
President Name: Bert Spilker
Medtronic, Inc.
Neurological Division Title: President
Date: 11/27/96 Date: December 5, 1996
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ATTACHMENTS:
Appendix A
EXHIBIT A
R&D OUTLINE
A detailed R&D Plan will be adopted by the Management Team prior to entering
each of the following generally described stages.
Development Stage 1: Pre-Clinical Research
Definition: The stage of development during which the Drug formulation is
developed and tested for stability within the system. The compatibility of the
Drug with the fluid pathway of the functioning system will be demonstrated
during this stage. Toxicology and pharmacology tests necessary to file an IND
will be completed. An IND will be filed for the Drug/System combination.
Requirements to complete Stage 1:
* Demonstration of sufficient stability of the formulated Drug (12 weeks)
within the System at 37(degree)C.
* Demonstration that the formulated Drug does not adversely affect the
functioning life of the system for 16 weeks at 37(degree) C.
* Acceptance by the FDA of an IND for the use of the Drug delivered into
the intrathecal space from the implanted System for the treatment of
chronic pain.
Time line to complete Stage 1: Stage 1 will be completed within 12 months of the
Agreement date.
Development Stage 2:
Definition: The stage of development during which Joint Clinical Trials will be
conducted demonstrating the long-term safety and efficacy of the Drug-Device
combination.
Requirements to Complete Stage 2
* Completion of adequate controlled clinical safety/efficacy trials to
enable the approval of the NDA and PMA by the FDA.
* Demonstration that the formulated Drug does not adversely affect the
functioning life of the Device.
* Filing of the NDA.
* Approval of the NDA and PMA by the FDA.
Timeline to complete Stage 2: Stage 2 will be completed within 24 months of the
completion of Stage 1.