EXHIBIT 10.1
CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
COLLABORATION AGREEMENT
THIS COLLABORATION AGREEMENT dated as of December 18, 2002, between Pfizer
Inc. ("Pfizer") a corporation organized under the laws of the State of Delaware
of 235 East 42nd Street, New York, New York 10017-5755, and Neurocrine
Biosciences, Inc. ("Neurocrine") a corporation organized under the laws of the
State of Delaware, 10555 Science Center Drive, San Diego, California 92121-1102.
WHEREAS, the parties have executed a License Agreement dated as of the
date hereof (the "License Agreement") with respect to Neurocrine's compound
generically known as indiplon; and
WHEREAS, the parties would like to set forth the terms and conditions
pursuant to which the parties will collaborate in connection with the
commercialization of Products in the Territory (as both terms are defined
below), and with respect to certain other matters as described herein.
NOW, THEREFORE, the parties agree as follows:
ARTICLE 1
DEFINITIONS
Any capitalized terms used herein which are not expressly defined in this
Agreement shall have the meaning set forth in the License Agreement. For
purposes of this Agreement, the following definitions shall also be applicable:
1.1 "Act" means both the Federal Food, Drug and Cosmetic Act, as amended, and
the regulations promulgated under the foregoing.
1.2 "Affiliate" means any entity directly or indirectly controlled by,
controlling, able to control, or under common control with, a party to
this Agreement, but only for so long as such control shall continue. For
purposes of this definition, "control" (including, with correlative
meanings, "controlled by", "controlling" and "under common control with")
means possession, direct or indirect, of (a) the power to direct or cause
direction of the management and policies of an entity (whether through
ownership of securities or partnership or other ownership interests, by
contract or otherwise), or (b) at least fifty percent (50%) of the voting
securities (whether directly or pursuant to any option, warrant or other
similar arrangement) or other comparable equity interests. For the
avoidance of doubt, neither of the parties to this Agreement shall be
deemed to be an "Affiliate" of the other solely as a result of their
entering into this Agreement.
1.3 "Approval" means receipt of a final Approval Letter from FDA authorizing
marketing and sale of Products.
1.4 "Bankruptcy Code" means 11 USC Sections 101-1330, as amended.
1.5 "Baseline Threshold" is defined in Section 8.2(b).
1.6 "beneficial ownership" (and other correlative terms) means beneficial
ownership as defined in Rule 13d-3 under the United States Securities and
Exchange Act of 1934, as amended; it being understood and agreed that
"beneficial ownership" shall also include any securities: which any person
or any of such person's Affiliates has the right to acquire (whether such
right is exercisable immediately or only after the passage of time in no
event to exceed six months from any applicable date) pursuant to any
agreement, arrangement or understanding, or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise.
1.7 "Business Day" means a day that is not a Saturday, Sunday or a day on
which banking institutions in New York, New York or San Diego, California
are authorized by Law to remain closed.
1.8 "Change in Control" or "Acquisition" means an event where:
(a) any person or group of persons (as the term "group" is interpreted
pursuant to Rule 13d-5 of under the Securities Exchange Act of 1934,
as amended) acquires beneficial ownership of capital stock of
Neurocrine entitling the holder(s) thereof
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to more than fifty percent (50%) of the voting power of the then
outstanding capital stock of Neurocrine with respect to the election
of directors of Neurocrine pursuant to a tender offer for Neurocrine
securities, or
(b) Neurocrine enters into a merger, consolidation, reorganization or
similar transaction with another person (a "Business Combination
Person"), whether or not Neurocrine is the survivor in such
transaction and thereafter any of Neurocrine, the Business
Combination Person or any other resulting person that is the
surviving entity, as applicable, thereafter is (i) no longer
generally engaged in drug discovery and development or (ii) in
Pfizer's reasonable opinion, no longer able to perform its
obligations hereunder or (iii) a direct or indirect division or
subsidiary of a third party who is [***] (providing this shall not
apply to a research and development joint venture between Neurocrine
and [***] that does not otherwise fall within subparagraph (c)
below) or (v) has at least [***] of any voting class of its capital
stock beneficially owned, whether directly or indirectly (including
as part of any group of persons), by any [***] or affiliate
controlled by, controlling or under the common control of any [***]
belongs (a "Group"), where such beneficial ownership by any such
[***] or Group, as applicable, represents the largest percentage
ownership of such capital stock by any single shareholder or Group
of persons at such time; or
(c) Neurocrine or its Affiliate sells or otherwise transfers to any
person(s) that is not an Affiliate in one or more related
transactions not involving a merger, consolidation, reorganization
or similar transaction, properties or assets representing more than
fifty percent (50%) (except that with respect to any transfer that
is a license, such license must represent of all or substantially
all of
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Neurocrine's intellectual property assets) of (i) Neurocrine's
consolidated total assets as reflected on its most recent Annual
Report on Form 10-K or Quarterly Report on Form 10-Q, or (ii)
Neurocrine's consolidated operating income for the most recent
fiscal year as reflected on its most recent Annual Report on Form
10-K, or (iii) any of the Neurocrine Technical Information or
Neurocrine Patent Rights.
For purposes of this definition of "Change in Control" (or "Acquisition"),
references to Neurocrine shall be deemed to include all successors in any
merger, consolidation, reorganization or similar transaction.
1.9 "CMC" means the chemistry, manufacturing and controls section of the
Product NDA.
1.10 "Code" or "Codes" means the Code on Interactions with Healthcare
Professionals promulgated by the Pharmaceutical Research and Manufacturers
of America (PhRMA), and the American Medical Association Guidelines on
Gifts to Physicians, as either of the foregoing may be amended, from time
to time.
1.11 "Collaboration" means the collaboration between Neurocrine and Pfizer as
set forth in this Agreement and the License Agreement.
1.12 "Combination Product" means any product which contains, in addition to the
Product, one or more other therapeutically active ingredients.
1.13 "Commercialize" means directly or indirectly to market, sell, detail,
promote or distribute, but in no event shall include an out-license or
other divestiture of intellectual property to a person that markets,
sells, details or distributes.
1.14 "Commercially Reasonable Efforts" means, those efforts and resources that
Pfizer would use were it promoting and detailing its own pharmaceutical
products which are of similar market potential as the Products, taking
into account product labelling, market potential, past performance,
economic return, the regulatory environment and competitive market
conditions in the therapeutic area, all as measured by the facts and
circumstances at the
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time such efforts are due. In evaluating economic return, Pfizer shall not
consider the payments under this Agreement and the License Agreement to
Neurocrine.
1.15 "Compound" means indiplon (NBI-34060) as more specifically described as
Acetamide, N-Methyl-N-[3-[3-(2-thienylcarbonyl)_pyrazol - [1,5-a]
pyrimidin-7-yl] phenyl] in any chemical form, including without
limitation, salts, solvates, metabolites and prodrugs.
1.16 "Consensus Matter" shall be as defined in Section 3.9(b).
1.17 "Co-Promotion" or "Co-Promote" means the Detailing and Promotion of
Products and Zoloft in the United States by Neurocrine and Pfizer as set
forth in Article 6A.
1.18 "Co-Promotion Budget" is defined in Section 6A.3.
1.19 "Co-Promotion Term" means the period during which Neurocrine and Pfizer
are Co-Promoting Products, Zoloft or other Pfizer Products under the terms
and conditions set forth herein.
1.20 "Detail" means a face-to-face contact of either a Neurocrine or Pfizer
Sales Representative, as the case may be, with a medical professional with
prescribing authority (or, in the case of Sleep Specialists, medical
professionals who are certified diplomates of the American Board of Sleep
Medicine) during which scientific and/or medical information about the
Products or Zoloft (as the case may be) is discussed. A Detail does not
include a reminder or sample drop. Details shall be measured by each
party's internal recording of such activity; provided that, such
measurement shall be on the same basis as the recording party's
measurement for its sales representatives detailing of such recording
party's other products, consistently applied throughout the term of this
Agreement. When used as a verb, the term "Detailing" means to engage in
the activity of a Detail.
1.21 "Detail Report" is defined in Section 6A.4.
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1.22 "Detail Requirement" means with respect to Neurocrine's Sales
Representatives, [***].
1.23 "Development Costs" means the costs set forth in each relevant Development
Plan; provided, however, for the avoidance of doubt, Development Costs
shall in no event include any Out-of-Pocket Costs incurred or accrued by
Neurocrine in the conduct of the Registration Program prior to the year
2003 or any internal costs of Neurocrine.
1.24 "Development Plan" means collectively, the Registration Plan and the
Supplemental Plan.
1.25 "Development Program" means collectively, the Registration Program and
Supplemental Program.
1.26 "Effective Date" means the first date upon which the applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended ("HSR Act") shall have expired or been terminated with respect to
the License Agreement and this Agreement, as applicable, which in any
event may only be a date no later than the 90th day following the date of
this Agreement.
1.27 "FDA" means the United States Food and Drug Administration and any
successor agency thereto.
1.28 "First Approval" means, with respect to IR Product or MR Product, the
first Approval.
1.29 "Final Detail Requirement" is defined in Section 6A.4(b).
1.30 "GAAP" means US generally accepted accounting principles in effect from
time to time.
1.31 [***].
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1.32 "GMP" means the Good Manufacturing Practices regulations and guidance
promulgated by the FDA under the Act as of the time of manufacture of the
applicable Products.
1.33 "Governmental Authority" means any court, agency, department or other
instrumentality of any foreign, federal, state, county, city or other
political subdivision.
1.34 "Initial Five Year Period" is defined in Section 2.3.
1.35 [***].
1.36 "IR Product" means the immediate release formulation of the Compound,
characteristics as set forth in Exhibit A of the License Agreement or any
formulation with equivalent release characteristics.
1.37 "Launch" means the shipping of commercial quantities of a Product for
commercial sale to unaffiliated third parties.
1.38 "Law" or "Laws" means all laws, statutes, rules, Codes, regulations,
orders, decrees, judgments and/or ordinances of any Governmental
Authority.
1.39 "Marketing Plan" is defined in Section 6A.3(c).
1.40 "Medical and Marketing Expenses" means all Out-of-Pocket Costs, paid or
accrued by a party pursuant to the Marketing Plan and directly related to
the Co-Promotion of the Products in the US Territory, including those in
connection with:
(a) [***];
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(b) [***];
(c) [***];
(d) [***]
(e) [***].
[***]:
(1) [***]
(2) [***].
All other Out-of-Pocket Costs incurred in the Co-Promotion of the Products in
the US Territory, but not specifically identified above, but which have been
approved by the MC or provided for in the Marketing Plan, shall be accounted for
and deemed Medical and Marketing Expenses for all purposes of this Agreement.
1.41 "MR Product" means the modified release formulation of the Compound as set
forth in Exhibit A of the License Agreement or any formulation with
equivalent kinetic profile.
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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1.42 "Net Sales" means (a) gross sales of Pfizer, its Affiliates and
sublicensees of Product to unaffiliated third parties in the applicable
country, less (i) bad debts related to the Product and (ii) sales returns
and allowances, including, without limitation, trade, quantity and cash
discounts and any other adjustments, including, but not limited to, those
granted on account of price adjustments, billing errors; rejected goods,
damaged or defective goods, recalls, returns, rebates, chargeback rebates,
fees, reimbursements or similar payments granted or given to wholesalers
or other distributors, buying groups, health care insurance carriers or
other institutions, adjustments arising from consumer discount programs,
[***], customs or excise duties, sales tax, consumption tax, and other
taxes (except income taxes) or duties relating to sales, and any payment
in respect of sales to any governmental or regulatory authority in respect
of any government-subsidized program; and (b) in the case of Combination
Products, (aa) If Pfizer and/or its Affiliates separately sells in such
country during such Year when it sells such Combination Product both (x)
one or more Products as a single chemical entity and (y) other products
containing active ingredient(s) as a single entity that are also contained
in such Combination Product, the Net Sales attributable to such
Combination Product during such Year shall be calculated [***]; (bb) if
Pfizer and/or its Affiliates separately sells, in such country during such
Year when it sells such Combination Product, one or more Products as a
single chemical entity but do not separately sell, in such country, other
products containing active ingredient(s) that are also contained in such
Combination Product, the Net Sales attributable to such Combination
Product during such Year shall be calculated by [***];
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(cc) if Pfizer and/or its Affiliates do not separately sell each Products
contained in the Combination Product, the Net Sales attributable to such
Combination Product shall be calculated [***].
With respect to the determination of Net Sales of Combination Products
above and in considering the financial feasibility of Launching a
Combination Product, if one or both of the parties determines that the
formula in (aa), (bb) or (cc), as the case may be, will result in
commercialization of the Combination Product not being economically
feasible or equitable, the parties will meet and discuss in good faith
adjustments or alterations to the applicable formulas above to address the
concerns of such party(ies).
1.43 "Neurocrine Field Force" is defined in Section 6A.1(a).
1.44 "Neurocrine Sales Force" is defined in Section 6A.1(a).
1.45 "NDA" means a New Drug Application filed with the FDA with respect to each
Product.
1.46 "Not-Approvable Letter" means a letter or other official communication
from FDA providing notice that an application filed with FDA may not be
approved, as defined in FDA regulations set forth in 21 C.F.R. 314.120.
1.47 "Out-of-Pocket Costs" means costs and expenses paid or accrued to third
parties, other than Affiliates or employees, by either party after the
Effective Date.
1.48 "Pfizer Field Force" means a Pfizer field force comprised of full time
Sales Representatives in the US Territory who are trained to Detail
Products to psychiatrists and/or to Sleep Specialists.
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1.49 "Pfizer Quarter" means each of the periods ending on each of the four (4)
thirteen (13) week periods as used by Pfizer as reported in its quarterly
and annual filings with the Securities and Exchange Commission, the first
commencing on January 1 of any year.
1.50 "Position" as used in this Agreement denotes the priority position in
which a Neurocrine Sales Representative Details the products in accordance
with their established field force practices; "First Position" means that
the relevant product is Detailed with the highest priority in accordance
with their established field force practices; and "Second Position" means
that the relevant product is Detailed with the second highest priority in
accordance with their established field force practices.
1.51 "Product" means all pharmaceutical formulations and dosage forms which
contain the Compound either alone or in combination with other
therapeutically active ingredients.
1.52 "Product Studies" mean clinical, preclinical, safety, epidemiological
studies and modeling, pharmacoeconomic studies, in each case including any
ancillary or incidental development, investigation or research scheme
pertaining thereto, that are designed: (a) to support regulatory authority
or other Governmental Authority approval for marketing of Products; or (b)
to support publications, promotional and educational activities, future
labeling changes or new indications of the Compounds or the Products.
1.53 "Promote" means those activities other than Detailing undertaken by a
party to encourage sales of Products including but not limited to, journal
advertising, direct mail programs, direct-to-consumer advertising,
convention exhibits and other forms of advertising and promotion.
1.54 "Registration Plan" means the annual plan with respect to the US Territory
created by the DC for those pre-clinical and clinical studies to be
conducted as part of the Registration Program.
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1.55 "Registration Program" means the development program with respect to the
US Territory conducted by Neurocrine as set forth on Schedule 5.3(a), as
may be amended by the DC in accordance with Section 5.2.
1.56 "ROW Territory" means all countries in the world outside the US Territory.
1.57 "Sales Representative" means an individual who engages in Detailing and
other promotional efforts in the field with respect to the Products and
who has been trained and is employed by either party, and in the case of
Neurocrine, includes a member of the Neurocrine Field Force.
1.58 "Sleep Specialist" means a sleep medicine specialist who is a certified
diplomate of the American Board of Sleep Medicine.
1.59 "Specifications" means the specifications for the manufacture and
packaging of the Products.
1.60 "Supplemental Plan" means the annual plan with respect to the US Territory
created by the DC and the MC for those preclinical and clinical studies to
be conducted as part of the Supplemental Program.
1.61 "Supplemental Program" means the development program with respect to the
US Territory conducted by Pfizer described in Section 5.3(b), as may be
amended by the DC and the MC from time to time.
1.62 "Territory" means the US Territory and the ROW Territory.
1.63 "Trademarks" means any trademark associated with the Products in the
Territory, which may be selected by the MC in the US Territory and by
Pfizer in the ROW Territory.
1.64 "US Territory" means the United States of America, including its
territories, possessions and Puerto Rico.
1.65 "Year" means each calendar year during the term of this Agreement.
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1.66 "Zoloft" means the compound generically known as sertraline and which is
promoted or sold under the trademark Zoloft(R) as a single entity.
1.67 "Zoloft Net Sales" means (1)(a) gross sales of Pfizer, its Affiliates and
sublicensees of Zoloft to unaffiliated third parties in the US Territory
less, (b) returns and allowances, including, without limitation, trade,
quantity and cash discounts and any other adjustments, including, but not
limited to, those granted on account of price adjustments, billing errors,
rejected goods, damaged or defective goods, recalls, returns, rebates,
chargeback rebates, fees, reimbursements or similar payments granted or
given to wholesalers or other distributors, buying groups, health care
insurance carriers or other institutions, adjustments arising from
consumer discount programs, customs or excise duties, sales tax,
consumption tax, and other taxes (except income taxes) or duties relating
to sales, and any payment in respect of sales to any governmental or
regulatory authority in respect of any government-subsidized program,
multiplied by (2) [***].
1.68 "Zoloft Patent Expiration Date" means June 30, 2006, or such later date
that U.S. Patent No. 4,536,518 may expire.
1.69 "Zoloft Trademark" means the trademark Zoloft(R) and/or any other
trademark associated with Zoloft in the US Territory owned or otherwise
held by Pfizer or one of its Affiliates.
Whenever in this Agreement the term "includes" or "including" is used, unless
expressly limited such terms shall be without limitation to the enumerated or
listed items.
ARTICLE 2
GRANT OF CO-PROMOTION RIGHTS
2.1 Grant of Rights. Subject to the terms of this Agreement, Pfizer grants to
Neurocrine:
(a) the exclusive right to Promote and Detail (but not to sell) the
Product together with Pfizer in the US Territory to psychiatrists
and Sleep Specialists, as well as to such other specialists as the
parties may mutually agree; and
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(b) the non-exclusive right to Promote and Detail (but not to sell)
Zoloft to psychiatrists in the US Territory, such right commencing
on the date (in no event earlier than the filing with FDA of the NDA
for the MR Product pursuant to Section 4.3) on which members of the
Neurocrine Field Force (as defined below) successfully complete
initial training in accordance with Schedule 2.5 attached hereto
until the Zoloft Patent Expiration Date.
2.2 Compliance With Law and Codes.
(a) General. Both Pfizer and Neurocrine will Promote and Detail the
Products and Zoloft in the US Territory in accordance with
applicable Law, the terms of this Agreement and, with respect to the
Product, the then-current Marketing Plan (except upon an event
described in Section 3.5(c)). Neither party shall be required to
undertake any action or inaction (including without limitation any
Launch of any Product), or to incur expenditures in connection with
any such action or inaction under this Agreement that it believes,
in good faith, may violate any Law.
(b) Medical Education. Pfizer will in all material respects conform the
practices and procedures for educating the medical community in the
United States by Pfizer or Neurocrine representatives pursuant to
the Marketing Plan to the Accreditation Council for Continuing
Medical Education Standards for Commercial Support of Continuing
Medical Education and any applicable FDA regulations, as the same
may be amended from time to time (except with respect to grants for
independent educational events which are not accredited, but for
which the grantee certifies in writing to Pfizer or Neurocrine as to
such grantee's independence).
2.3 Detailing Obligations. The Neurocrine Field Force shall Detail Products
commencing on Launch of the first Product up to and including the end of
the fifth full year (365 day period) from Launch of the first MR Product
(such period, the "Initial Five Year Period"), in either the First
Position or Second Position. After the Initial Five Year Period, [***].
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2.4 Other Pfizer Products. Upon the Zoloft Patent Expiration Date, Pfizer and
Neurocrine may discuss from time to time additional Pfizer products for
the Neurocrine Field Force to co-promote and detail within the US
Territory, provided that neither party shall be required to undertake any
obligations with respect to such products unless mutually agreed.
2.5 Training.
(a) Pfizer shall, at its sole expense, provide initial sales and product
training for Zoloft, and "launch track" training for the Product,
for the initial two hundred (200) members of Neurocrine Sales Force
as set forth in Schedule 2.5 and in accordance with Pfizer's
existing training programs at such time. Pfizer shall not be
obligated to provide any training for any additional Neurocrine
personnel other than Neurocrine Field Force trainers. Pfizer shall
provide ongoing training relating to the Product and Zoloft for
trainers who at such time train the Neurocrine Field Force. Pfizer's
training of the Neurocrine Sales Force will be conducted in
accordance with applicable Law. The Neurocrine Sales Force will
attend, at Neurocrine's expense, the United States national Product
Launch meeting and periodic Product sales meetings along with the
Pfizer sales force and Launch meetings in the ROW Territory. Except
as provided above, the implementation of all ongoing training
programs for the Neurocrine Sales Force will be the responsibility
of Neurocrine, at its sole expense.
(b) Pfizer shall provide to Neurocrine mutually agreed upon quantities
of training materials appropriate and adequate to train the
Neurocrine Field Force for the Co-Promotion of the Products and
Zoloft and consistent with the quantities of such materials used by
Pfizer for the Pfizer Field Force. Pfizer shall at substantially
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the same time it begins use of such materials, provide to Neurocrine
such agreed upon quantities of all Pfizer training materials,
without charge to Neurocrine, relating to Products or Zoloft that
are used by the Pfizer Field Force.
(c) Neurocrine shall at its own expense, comply with any training plan
contained in the applicable Marketing Plan for post "launch track"
Neurocrine Field Force training and any Zoloft training plan
applicable to the Pfizer sales force Detailing Zoloft.
2.6 Promotional Materials. The Neurocrine Field Force and Pfizer Field Force
will only utilize promotional, advertising, communication and educational
materials (including all written, graphic, electronic, audio and video
pieces and including journal advertisements, direct mail, direct to
consumer advertising, internet postings, broadcast advertisements and
sales aids (pens, cups, note pads and the like)) relating to the Products
(collectively "Promotional Materials") and only conduct promotional
activities for the Products which, in each case, have been approved in the
Marketing Plan or otherwise by the MC (except following an event described
in Section 3.5(c)). All Promotional Materials will be subject to
regulatory review and approval by the MC (except following an event
described in Section 3.5(c)). At substantially the same time any Product
Promotional Materials and any Product related communication is sent in
hard copy, electronically or by voicemail by Pfizer to the Pfizer Field
Force, Pfizer will provide to Neurocrine with copies of all such materials
(or notify Neurocrine as to such other communication, as applicable) for
the Neurocrine Sales Force (which shall be equivalent to quantities of
such materials provided to the Pfizer Field Force). Promotional Materials
shall be allotted to Neurocrine according to Neurocrine's Detail
Requirement for the applicable year. All promotional activities conducted
by the Neurocrine Field Force and Pfizer Field Force shall be consistent
with the Promotional Materials so approved and the then-current Marketing
Plan. Pfizer shall own all rights to all Promotional Materials, including
all copyrights thereto. Unless and until Promotional Materials are
approved by the MC for publication or other general dissemination, each
party shall maintain them in confidence pursuant to the terms of Article
11. All Promotional Materials will bear the
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corporate names and logos/trademarks of Neurocrine and Pfizer in
substantially equal prominence and frequency.
2.7 Samples. Following Launch of the first Product and in support of
Neurocrine's Detailing and Promotional activities hereunder, Pfizer shall
provide Neurocrine with Product samples as required in the applicable
Marketing Plan, and Zoloft samples consistent with the allocation to the
Pfizer Field Force. Samples will be allocated fairly between the
Neurocrine Field Force and Pfizer sales force in accordance with the
number of Details the respective field forces are required to undertake as
set forth in the Marketing Plan. Pfizer shall ship such samples to a
central location designated by Neurocrine. Neurocrine and Pfizer shall use
samples strictly in accordance with the then-current Marketing Plan and
shall store and distribute samples in full compliance, and otherwise fully
comply, with all applicable Laws, including the requirements of the
Prescription Drug Marketing Act of 1987, as amended (the "PDMA"). Pfizer
and Neurocrine each will maintain those records required by the PDMA and
all other Laws with respect to the samples allocated to each of them.
Neurocrine and Pfizer shall be responsible for the filing of any necessary
reports to FDA in connection with the PDMA with respect to the samples
allocated to each of them. All costs and expenses associated with the
manufacture, shipment and distribution (to Neurocrine's central location),
warehousing and storage (until shipment to Neurocrine's central location),
of Products samples shall be borne by Pfizer. Each party will destroy any
samples not distributed by its Sales Representatives at its sole expense.
2.8 Responsibility for Medical and Marketing Expenses and Development Costs.
Pfizer shall be responsible for all Medical and Marketing Expenses for the
Products.
2.9 [Intentionally left blank].
2.10 Medical Inquiries. The MC and RC will provide the parties with information
and materials relevant or appropriate to allow the parties' medical and
sales professionals, as appropriate, to respond to those medical questions
or inquiries from the medical and paramedical professions and consumers
relating to any FDA approved use of the
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Products. Each of the parties will only use these materials, which shall
be consistent with the relevant FDA-approved Product labeling, when
answering such questions and inquiries so as to ensure that medical and
sales professionals from both parties are responding to such questions or
inquiries in the same manner. The MC and RC will provide the parties with
information, materials and instructions to allow medical professionals
from both parties to respond to medical questions or inquiries concerning
matters not consistent with FDA approved Product labelling in accordance
with applicable Pfizer procedures for responding to unsolicited medical
inquiry requests on off-label use.
2.11 Meetings and Symposia and Marketing Activities. Neurocrine will have a
role in implementing the marketing activities as set forth in the
Marketing Plan. It is generally agreed that Product presentations,
exhibits and booths at meetings and symposia will be a joint Pfizer and
Neurocrine activity under the Marketing Plan and the cost thereof will be
Medical and Marketing Expenses. To the extent not included within the
Marketing Plan, Neurocrine at its sole expense shall have the right to
make Product presentations and have its own exhibits and booths that
feature the Products; provided that any such presentations, exhibits and
booths are consistent with the Marketing Plan.
2.12 Commercially Reasonable Efforts. The parties covenant and agree to use, in
the case of Pfizer, Commercially Reasonable Efforts, and in the case of
Neurocrine, its commercially reasonable efforts, with respect to carrying
out each of their respective decisions under Articles 2, 3, 4 (except as
otherwise specified in Section 4.3(b)), 5, 6A and 6B, and their respective
obligations under this Agreement.
ARTICLE 3
MANAGEMENT OF ALLIANCE
3.1 Committees. In order to fulfill the objectives of this Agreement, the
parties agree to establish a Steering Committee, a Joint Operating
Committee ("JOC"), a Marketing Committee described in Article 6A ("MC"), a
Development Committee described in Article 5 ("DC"), a Regulatory
Committee described in Article 4 ("RC"), and a Product
18
Supply Committee described in Article 6B ("PSC"), (collectively, the
"Committees") and such other committees and subcommittees as may be
established by mutual consent of Neurocrine and Pfizer. The members of
each Committee and subcommittee, as designated by each party, shall be
functionally aligned with each other, and each Committee shall have two
co-chairpersons, one designated by each of Neurocrine and Pfizer.
3.2 Meetings. The co-chairpersons of the Steering Committee, the JOC, the MC,
the DC, the RC, the PSC, or any other committee or subcommittee, shall
call meetings quarterly (except the Steering Committee which shall meet at
least three times annually), or as otherwise mutually agreed. Meetings may
be held in person, by telephone, or by video conference call, and the
location of each meeting shall alternate between sites selected by each
co-chairperson, unless otherwise agreed. The decisions of each committee
or subcommittee shall be by a vote of the co-chairpersons, each
co-chairperson having one vote, and all decisions shall be by unanimous
consent of the co-chairpersons, except as provided in Section 3.12.
Additional participants may be invited by any representative to attend
meetings when and where appropriate. The parties shall cause their
respective representatives on the committees and subcommittees to use
diligent efforts, acting in good faith, to resolve all matters presented
to them as expeditiously as possible. In addition to the foregoing, either
party may call a special meeting of the Steering Committee two (2) times
per year, on fifteen (15) days notice to the other party. Meetings will
alternate between the offices of the parties, unless otherwise agreed.
Each party shall be responsible for expenses incurred by its employees and
its members of the Steering Committee incurred in attending or otherwise
participating in Steering Committee meetings.
3.3 Development Committee.
(a) The DC shall consist of research and development, new product
development, regulatory and marketing/medical managers and such
other relevant personnel involved in development of products (as
needed) from each of Neurocrine and Pfizer, each of which shall
confirm to the other its designees and which shall be
19
responsible for oversight of the Development Program in the US
Territory. The specific responsibilities of the DC are set forth in
Section 5.2.
(b) Upon a material breach or material default of Neurocrine, the DC
shall be disbanded and Pfizer shall have sole decision making
authority and responsibility with respect to development of the
Products, subject to Section 3.12.
(c) If the DC is unable to reach a decision on any issue within ten (10)
Business Days after presentation, the issue shall be referred for
resolution to the JOC.
3.4 Regulatory Committee.
(a) The RC shall consist of regulatory, research and development, safety
and marketing medical managers and such other relevant personnel (as
needed) from each of Neurocrine and Pfizer, each of which shall
confirm to the other its designees and which shall be responsible
for the regulatory compliance of the Development Program in the US
Territory. The specific responsibilities of the RC are set forth in
Section 4.2.
(b) If the RC is unable to reach a decision on any issue within ten (10)
Business Days after presentation, the issue shall be referred for
resolution to the JOC.
(c) Upon a material breach or material default of Neurocrine, the RC
shall be disbanded and Pfizer shall have sole decision making
authority and responsibility with respect to regulatory matters
related the Products, subject to Section 3.12.
3.5 Marketing Committee.
(a) The MC shall consist of regulatory, and sales and marketing medical
managers and such other relevant personnel (as needed) from each of
Neurocrine and Pfizer, each of which shall confirm to the other its
designees and which shall be
20
responsible for marketing activities with respect to the Product in
the US Territory. The specific responsibilities of the MC are set
forth in Section 6A.3(b).
(b) Upon a material breach or material default of Neurocrine, the MC
shall be disbanded and Pfizer shall have sole decision making
authority and responsibility with respect to marketing the Products,
subject to Section 3.12.
(c) Upon a reduction of Neurocrine's Co-Promotion activities pursuant to
Section 6A.6(b), the MC shall be disbanded and Pfizer, subject to
Steering Committee oversight with respect to marketing activities as
would otherwise be provided in Section 3.12(b), shall have sole
decision making authority and responsibility with respect to
marketing the Product.
(d) If the MC is unable to reach a decision on any issue within ten (10)
Business Days after presentation, the issue shall be referred for
resolution to the JOC.
3.6 Product Supply Committee.
(a) The PSC shall consist of regulatory, clinical development, QA/QC,
and pharmaceutical development and such other relevant personnel (as
needed) from each of Neurocrine and Pfizer, each of which shall
confirm to the other its designees and which shall be responsible
for Product manufacturing and supply matters. The specific
responsibilities of the PSC are set forth in Section 6B.1.
(b) Upon a material breach or material default of Neurocrine, the PSC
shall be disbanded and Pfizer shall have sole decision making
authority and responsibility with respect to marketing the Products,
subject to Section 3.12.
(c) Upon Launch of both the IR Product and the MR Product, the PSC will
be disbanded and Pfizer, subject to Steering Committee oversight
with respect to marketing activities as would otherwise be provided
in Section 3.12(b), will have sole decision making authority and
responsibility for decisions related to manufacturing.
21
(d) If the PSC is unable to reach a decision on any issue within ten
(10) Business Days after presentation, the issue shall be referred
for resolution to the JOC.
3.7 Joint Operating Committee.
(a) The JOC will consist of the co-chairpersons of the each of the DC,
the RC, the MC, and the PSC. The JOC shall be responsible for the
following:
(i) Oversight of the development and commercialization of Products
hereunder in the US Territory;
(ii) Review and approval of the annual Registration Plans,
Supplemental Plans, Manufacturing Plans, Regulatory Plans and
Marketing Plans, and a review of quarterly updates from each
of the Committees;
(iii) Review and discussion of the Critical Package (as defined in
Section 4.3(b)) and making all Go Decisions with respect to an
NDA Filing;
(iv) Resolution of disputes that cannot be resolved by the DC, the
RC, the MC and the PSC; and
(v) Raising disputes that cannot be resolved by the JOC to the
Steering Committee.
(b) Prior to each meeting of the JOC, the parties will distribute to
each other written copies of all materials intended to be submitted
at the JOC meeting plus, to the extent not set forth in the JOC
materials, a written report from the Committees summarizing any
other material data and information arising out of the development
and marketing of Products. In the event that after receipt of any
such report, either party shall request additional data or
information, the party to whom such request is made shall promptly
provide to the other party such data or information.
22
(c) Either party may call a special meeting of the JOC two (2) times per
year, on fifteen (15) Business Days notice to the other party.
Meetings will alternate between the offices of the parties, unless
otherwise agreed. Each party shall be responsible for expenses
incurred by its employees and its members of the JOC incurred in
attending or otherwise participating in JOC meetings.
(d) Upon a material breach or material default of Neurocrine, the JOC
shall be disbanded and Pfizer shall have sole decision making
authority and responsibility with respect to manufacturing
activities of the Products, subject to Section 3.12.
(e) If the JOC is unable to reach a decision on any issue within ten
(10) Business Days after presentation, the issue shall be referred
for resolution to the Steering Committee.
3.8 Steering Committee. The Steering Committee shall consist of an equal
number of representatives from both Neurocrine and Pfizer with
decision-making authority within their respective organizations.
Neurocrine and Pfizer shall confirm to the other its designees. The
Steering Committee shall address all of the significant and strategic
issues within the purview of the various Committees, and shall be
responsible for resolving any issues referred by the JOC. The Steering
Committee will be presented with updates on the activities and
achievements of the Committees and otherwise as provided below. Except as
otherwise provided in Section 3.12, all decisions of the Steering
Committee will be by unanimous vote of the co-chairpersons. Prior to each
meeting of the Steering Committee, the parties will distribute to each
other written copies of all materials intended to be submitted at the
Steering Committee meeting plus, to the extent not set forth in the
Steering Committee materials, a written report from the JOC summarizing
any other material data and information arising out of the development and
marketing of Products. In the event that after receipt of any such report,
either party shall request additional data or information, the party to
whom such request is made shall promptly provide to the other party such
data or information. If the Steering Committee
23
is unable to resolve any issue within thirty (30) days after presentation,
the issue shall be referred for resolution pursuant to Section 3.9.
3.9 Final Decision Making Authority. If for any reason the Steering Committee
cannot resolve any matter properly referred to it, the matter shall be
referred to a senior pharmaceutical executive of Neurocrine and a senior
pharmaceutical executive of Pfizer for resolution. Neither of such senior
pharmaceutical executives shall at the time of determination be a member
of any Committee or subcommittee, and at such time shall be senior to
Committee or subcommittee members appointed by such party. If such senior
pharmaceutical executives after discussing the matter in good faith and
attempting to find a mutually satisfactory resolution to the issue, fail
to come to consensus, the final decision-making authority shall be
allocated as follows:
(a) The senior pharmaceutical executive of Neurocrine will have the
final decision-making authority for decisions regarding:
(i) [***];
(ii) [***];
(iii) [***]
(iv) [***].
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
24
provided, however, that Neurocrine's final decision-making authority with
respect to the above-mentioned items shall terminate, and Pfizer shall
thereafter assume final decision-making authority, with respect to each of
the IR Product and the MR Product on the earlier of [***].
(b) The following matters will be matters with respect to which
consensus decision making by the parties will be required
("Consensus Matters"). Consensus Matters must be by unanimous
decision of the parties and neither party will have final decision
making authority with respect to these matters. The following
matters are Consensus Matters:
(i) [***];
(ii) [***]
(iii) [***];
(iv) [***].
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
25
(c) The senior pharmaceutical representative of Pfizer shall have the
final decision-making authority with respect to the following:
(i) [***];
(ii) [***];
(iii) [***];
(iv) [***]
(v) [***].
(d) If a committee or subcommittee has made a decision with respect to a
matter without referral to the senior pharmaceutical executives as
provided in this Section 3.9, a party cannot be deemed to have
breached Section 2.12 of this Agreement with respect to such
decision.
3.10 Decision-Making Authority. Notwithstanding anything to the contrary, none
of the Committees or subcommittees contemplated by this Article 3, no
senior executive of Neurocrine nor any senior pharmaceutical executive of
Pfizer shall have authority to determine any of the matters for which (a)
one or more of the parties is allocated decision-making authority
elsewhere in this Agreement, (b) the Agreement provides is explicitly a
Consensus Matter or for the mutual or joint agreement of the parties or
(c) is in violation of any express provision of this Agreement or the
License Agreement.
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
26
3.11 Alliance Managers. In addition to the Committees set forth above,
Neurocrine and Pfizer each acknowledge and agree that it would be
beneficial to the Collaboration for each to have a senior representative
with a general understanding of the clinical, regulatory, manufacturing
and commercial issues relating to Products to act as an alliance manager
("Alliance Manager"), and will appoint such a person to the extent each
party in its sole discretion determines it is practical. It is envisioned
that the Alliance Managers will serve as a single point of contact within
each party with responsibility for facilitating communication and
collaboration between the parties. The Alliance Managers may attend
Committee meetings as appropriate and will be provided access to decision
making representatives of both parties. Once appointed, each
co-chairperson of each Committee will report any Committee issues,
potential or pending disagreements and critical Committee decisions to its
Alliance Manager. The Alliance Managers will work together to resolve such
issues or potential disputes, and to enable the Committees to reach
unanimous decisions with the intent of averting the escalation of such
issues or potential disputes.
3.12 Committee Structure upon Neurocrine Material Default or Material Breach.
Upon a material default or material breach of Neurocrine following the
election of Pfizer under Section 13.3(c)(i) or (ii):
(a) Each of the MC (if not previously disbanded in accordance with
Section 3.5), the PSC (if not previously disbanded in accordance
with Section 3.6), the DC, the RC and the JOC will be disbanded, and
each provision in this Agreement that refers to a decision,
oversight or consultation with of any of the foregoing Committees,
or requiring compliance or consistency with a Development Plan,
Regulatory Plan, a Marketing Plan or a Manufacturing Plan, shall be
deemed inoperative;
(b) The Steering Committee will remain in place. Pfizer will report to
the Steering Committee prior to each scheduled meeting on the items
set forth in Schedule 3.12 and the Steering Committee will make any
decisions with respect to such matters reported requiring any
decisions; provided, however, that if the co-
27
chairpersons of the Steering Committee are unable to reach a
decision on any issue within ten (10) Business Days after
presentation, the Pfizer co-chairperson shall make the final
decision;
(c) Pfizer shall make all decisions regarding the matters in Section
3.9(a) and (b);
(d) Article 4, Article 5 and Article 6B shall be deemed amended such
that Pfizer shall have sole responsibility and authority with
respect to the matters described herein as being the responsibility
of and/or under the authority of Neurocrine; and
(e) All other obligations of Pfizer under this Agreement, except as
otherwise provided herein, shall survive until termination of this
Agreement.
ARTICLE 4
CLINICAL AND REGULATORY MATTERS
4.1 Clinical and Regulatory Matters in the U.S. Territory Prior to First
Approval of Products. This Section 4.1 shall apply to clinical and
regulatory matters prior to termination of Neurocrine's final
decision-making authority pursuant to Section 3.9(a); and Neurocrine's
activities hereunder will be under the guidance of the RC, whose
activities are further described in Section 4.2 (and the JOC with respect
to the matters in Section 4.3).
(a) Subject to the provisions of this Article 4, Neurocrine will retain
all responsibilities as the sponsor of the Product IND until
Approval, including, but not limited to, correspondence, reports and
filings with FDA, responsibility for all clinical trials and data
generated therefrom. Neurocrine will maintain the integrated
database of all Product clinical trial data. All regulatory filings
within the US Territory relating to the Products prior to First
Approval of the IR Product and the MR Product shall be the property
of Neurocrine and held in Neurocrine's or its Affiliate's name.
28
(b) Neurocrine will establish the timeline for and will prepare and file
the NDA for IR Product and MR Product with the FDA (subject to
Section 4.3).
(c) Notwithstanding anything in this Agreement to the contrary, in the
event there is an Advisory Committee meeting with respect to the
Product NDA, all preparations, strategies and actions with respect
thereto will be a Consensus Matter.
(d) Notwithstanding anything in this Agreement to the contrary, all
negotiations with FDA regarding Product labelling, including all
pre-filing meetings and other meetings, teleconferences or other
interactions with FDA concerning Product labelling, and all
decisions regarding the proposed and final labelling included in the
NDA filings will be a Consensus Matter.
(e) Notwithstanding anything in this Agreement to the contrary, the
organization and strategies for responses to FDA inquiries with
respect to the Registration Program and first NDA filing for IR
Product and MR Product will be a Consensus Matter.
(f) Following NDA approval by the FDA, Pfizer will be responsible for
communicating with the FDA regarding all NDA post-Approval
requirements, activities and issues.
(g) Pfizer will be the sponsor of all filings with Governmental
Authorities outside the US Territory; and within the US Territory
with respect to the IR Product and the MR Product after First
Approval of the IR Product and MR Product, respectively, and/or
after Neurocrine's decision making shall have terminated in
accordance with Section 3.9(a).
4.2 Regulatory Committee. The RC will operate within the framework of the
governance structure set forth in Article 3. The responsibilities of the
RC include, but are not limited to, the following:
29
(a) Overseeing the implementation of the plan for the registration and
regulatory strategy (the "Regulatory Plan") for first NDA filing for
IR Product and MR Product- in the US Territory as set forth on
Schedule 4.2(a);
(b) Overseeing, monitoring and coordinating all regulatory (FDA) aspects
of the (i) Registration Program and (ii) the Supplemental Program,
including with respect to each, all regulatory actions,
communications and filings (including matters pertaining to Product
labelling) and submissions, including filings and submissions of
supplements and amendments to FDA with respect to the Products;
(c) Facilitating the exchange of all US regulatory information and data
between the parties;
(d) Establishing the schedule and implementation strategy for all FDA
filings based on the Registration Program;
(e) Establishing the schedule and implementation strategy for all FDA
filings based on the Supplemental Program;
(f) Providing updates on its activities and achievements to the JOC.
4.3 NDA Filing Decision.
(a) Neurocrine will make available to the JOC, and the JOC will track
the completion of, each Registration Program clinical trial and will
review all safety and efficacy data therefrom promptly following
such data becoming available. The JOC will make all data available
to representatives of Pfizer and Neurocrine senior management.
Within thirty (30) days following such data availability from each
Registration Program clinical trial, Pfizer and Neurocrine through
their representatives on the JOC, will each report to the other any
issues arising from the study that may require additional work. If
any additional work is required as a result of such data, the JOC as
a Consensus Matter will identify mutually agreed
30
upon changes to the Registration Program to support the NDA filing,
and such changes will be implemented by Neurocrine at Pfizer's cost.
(b) [***].
(c) Neurocrine shall not file an NDA with respect to any Product unless
the parties have made a Go Decision in 4.3(b) above. Following any
Go Decision, Neurocrine will have responsibility for preparing the
complete and final NDA filing for the IR Product and/or MR Product
as set forth in this Section 4.3(c) (the "NDA Package"). [***].
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
31
(d) [***].
(e) Subject to Section 4.3(d), Pfizer shall have the obligation to
Launch such Product within ninety (90) days of such Approval;
provided, however, that Pfizer's obligation to Launch within such
time period will be delayed to the extent its failure to Launch is
related to [***].
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
32
(f) In the event either party shall make a No Go Recommendation, the
party making such recommendation will outline with specificity the
basis for such recommendation and what data such party in good faith
believes will be required to be added to the Registration Program to
support an acceptable NDA filing. The Parties will mutually agree as
a Consensus Matter on a clinical plan describing the supportive
clinical program ("the Supportive Clinical Program") that will be
required to support a Go Decision by the parties, Neurocrine will
conduct and Pfizer will bear the costs of the Supportive Clinical
Program under the same terms and conditions agreed for conduct of
the Registration Program, and the Supportive Clinical Program will
be deemed to be part of the Registration Program as set forth
herein. Following completion of the Supportive Clinical Program, the
procedure set forth in Section 4.3(b) above shall be repeated,
unless Pfizer elects to terminate this Agreement in accordance with
Section 13.3(a).
4.4 Additional FDA Requirements and Responses to FDA Inquiries Prior to First
Approval. Prior to First Approval, as soon as practicable but in any event
within four (4) Business Days of receipt by Neurocrine, Neurocrine will
provide notice to Pfizer of any additional FDA requirements which FDA may
impose with respect to the First Approval (including without limitation,
additional clinical studies), and of all FDA inquiries requiring a
response. This includes written, oral, electronic or any other requests
received from FDA. Pfizer and Neurocrine shall mutually agree as a
Consensus Matter upon any response to FDA. Promptly after receipt of any
inquiry or the knowledge of a requirement, as the case may be, Neurocrine
will provide Pfizer with copies of all
33
correspondence from FDA. If such correspondence is an inquiry, the RC will
discuss the FDA inquiry and outline the strategy for response. Neurocrine
will draft the response to all inquiries promptly (the amount of time to
generate the response will depend on the nature of the inquiry) and
provide a draft to Pfizer. Pfizer will have ten (10) days in which to
review and comment on the Neurocrine draft response. Neurocrine will
review the Pfizer comments. If Neurocrine agrees with the Pfizer comments,
Neurocrine will incorporate the comments and submit the response to the
FDA. Neurocrine will contact the RC within three (3) days in the event
Neurocrine disagrees with any Pfizer comment. If the members of the RC
cannot agree on the matter it will be submitted to the JOC as a Consensus
Matter. Immediately after filing any response with the FDA, and after
producing contact reports with FDA, Neurocrine will provide copies of the
same to Pfizer.
4.5 Labelling. Product labelling will bear Neurocrine's and Pfizer's trade
dress and logo in substantially equal prominence and frequency, except as
required by law. The parties will mutually agree upon any subsequent
decisions prior to the First Approval with respect to the Product
labelling for the first IR Product and the first MR Product as a Consensus
Matter. Upon First Approval of each of the IR Product and MR Product,
respectively, Pfizer shall have the sole responsibility for revising
Product labelling for the approved Products, as needed, in consultation
with the RC, as required by Law and shall notify Neurocrine in writing of
the approval of any such labelling changes by FDA or any other
Governmental Authority.
4.6 FDA Meetings. Neurocrine shall provide Pfizer with notice of all meetings,
conferences, and discussions (including without limitation, Advisory
Committee meetings or any other meeting of experts convened by regulatory
authorities concerning any topic relevant to the Products) scheduled with
FDA concerning any pending NDA or other regulatory matters relating to the
Products within forty-eight (48) hours after the scheduling of such
meeting, conference, or discussion. Pfizer shall be entitled to have an
equal number of representatives present at all such meetings. Neurocrine
and Pfizer, through the RC, shall use all reasonable efforts to agree in
advance on the scheduling of such meetings and on
34
the objectives to be accomplished at such meetings, conferences, and
discussions and the agenda for the meetings, conferences, and discussions
with FDA and other Governmental Authorities, and with respect to Advisory
Committee Meetings, such items will agreed by the parties as a Consensus
Matter as set forth in Section 4.1(c).
4.7 Data. To the extent not provided in Section 4.3 above, each party shall
provide to the other party, through the RC, on a timely basis copies of
all material pre-clinical and clinical data compiled in support of an NDA
or other regulatory filings with respect to the Products.
4.8 Assignment of NDA. Subject to Section 3.4 and this Article 4, Neurocrine
will submit an NDA to FDA for the first IR Product and the first MR
Product under its name. Upon the First Approval for each of the IR Product
and the MR Product, Neurocrine will promptly transfer the NDA and IND for
such Product to Pfizer in accordance with all applicable FDA regulations,
and thereafter, Pfizer will have full ownership, control of and
responsibility for such NDA, the IND and for all subsequent FDA and other
regulatory filings in the US Territory. Such transfer of ownership shall
be commenced promptly following receipt of the respective Approval. Each
of the parties shall take all reasonable steps to ensure an orderly
transfer of each NDA following Approval.
4.9 ROW Regulatory Matters. After the Effective Date, Pfizer will assume sole
ownership, control of and responsibility for all regulatory filings in the
ROW Territory.
4.10 Clinical and Regulatory Matters after First Approval of Products.
Following the First Approval of each of the IR Product and the MR Product:
(a) Subject to the oversight of the RC, Pfizer shall have exclusive
responsibility and final authority for all matters relating to the
nature and content of any NDA or supplemental NDAs submitted to the
FDA for such Product.
35
(b) The IND, NDA and any other regulatory approval within the US
Territory relating to Products shall be deemed the property of
Pfizer and held in Pfizer's or its Affiliate's name.
(c) Pfizer shall have the sole responsibility for communicating with FDA
about the Products, subject to the oversight of the RC.
(d) Pfizer, through the RC, will have final authority with regard to
labelling discussions with FDA with respect to Products; and
(e) Pfizer, through the RC, shall provide Neurocrine with copies of all
filings and submissions to and correspondence with Governmental
Authorities relating to Products within ten (10) days of receipt,
filing or submission by Pfizer.
4.11 Adverse Drug Experience Reports and Product Complaints Prior to First
Approval.
(a) Neurocrine, as IND holder, shall be responsible for the
surveillance, receipt, evaluation and reporting of product
complaints and reports of Adverse Drug Experiences (as defined in 21
CFR 314.80 or 312.23) until the First Approval for IR Product and MR
Product. During such period preceding such First Approval,
Neurocrine shall promptly investigate product complaints and reports
of Adverse Drug Experiences associated with use of the Product.
Prior to the First Approval of IR Product and MR Product, Neurocrine
shall submit reports of all Adverse Drug Experiences associated with
the use of the unapproved Products and other required safety
information to the FDA and other Governmental Authorities, in
accordance with applicable Law. Neurocrine shall provide a copy of
each such report to Pfizer contemporaneously with its submission of
the report to FDA or other Governmental Authorities.
(b) Registration Program. Neurocrine will notify Pfizer of all Serious
Adverse Drug Experiences (as defined in 21 CFR 314.80 or 312.32)
occurring in any Product study conducted, sponsored or monitored by
Neurocrine as part of the
36
Registration Program within two (2) Business Days of the time such
Serious Adverse Drug Experience becomes known to Neurocrine; and of
all other Adverse Drug Experiences occurring in any Product study
conducted, sponsored or monitored by Neurocrine within seven (7)
days of the time such Adverse Drug Experience Report becomes known
to the Neurocrine. All follow-up investigations concerning Adverse
Drug Experiences and Serious Adverse Drug Experiences occurring in
any Product study conducted, sponsored or monitored by Neurocrine as
part of the Registration Program shall be conducted by Neurocrine
and the results of such follow-up investigations will be delivered
to Pfizer within two (2) Business Days of the time such follow-up
information is obtained by Neurocrine.
(c) Supplemental Program. In the event Pfizer shall conduct, sponsor or
monitor any Product clinical trials pursuant to the Supplemental
Plan prior to assignment of the Product IND to Pfizer, Pfizer will
notify Neurocrine, ACY and DOV, of all Serious Adverse Drug
Experiences arising out of any such clinical trial within two (2)
Business Days of the time such Serious Adverse Drug Experience
becomes known to Pfizer; and of all Adverse Drug Experience arising
out of any such clinical trial within five (5) days of the time such
Adverse Drug Experience Report becomes known to Pfizer. Following
assignment of the IND and NDA to Pfizer, Pfizer will notify
Neurocrine, ACY and DOV of all Serious Adverse Drug Experiences
within two (2) Business Days of the time such experiences becomes
known to Pfizer, and of all other Adverse Drug Experience within
five (5) days of the time such experiences becomes known to Pfizer.
All follow-up investigations concerning Adverse Drug Experiences and
Serious Adverse Drug Experiences occurring in any study conducted,
sponsored or monitored by Pfizer shall be conducted by Pfizer and
the results of such follow-up investigations will be delivered to
Neurocrine within seven (7) days of the time such follow-up
information is obtained by Pfizer.
37
4.12 Adverse Events and Product Complaints After First Approval.
(a) After First Approvals, Pfizer shall be responsible for the
surveillance, receipt, evaluation, and reporting of product
complaints and reports of Adverse Drug Experiences, worldwide,
associated with the Products. To enable Pfizer to meet its reporting
obligations to FDA, Neurocrine shall provide Pfizer, upon First FDA
Approval, with all adverse event information in a mutually
agreed-upon format.
(b) Upon and following the First Approval of each of the IR Product and
MR Product, all Product complaints and reports of Adverse Drug
Experiences associated with the use of the Products, shall be
directed by Neurocrine, its Affiliates, employees, and agents, to
Pfizer. Such complaints and reports shall be provided to Pfizer
within two (2) Business Days of their receipt by Neurocrine, its
affiliate, employee, or agent, provided that any complaints received
by the Neurocrine Field Force will be reported in accordance with
such procedures used by the Pfizer Field Force. Neurocrine shall
also provide Pfizer with notice of other material safety information
about one or both Products that Neurocrine may become aware of.
(c) Pfizer shall submit reports of all Adverse Drug Experiences
associated with the use of the approved Product(s) and other
required safety information (including periodic safety update
reports (PSUR's) and Annual Safety Reports) to the FDA and other
Governmental Authorities, in accordance with applicable legal
requirements. Pfizer shall submit a copy of each such report to
Neurocrine, contemporaneously with its submission of the report to
FDA or other Governmental Authorities.
(d) For purposes of this Agreement, it is contemplated that following
the First Approval for either the IR or MR Product, all Adverse Drug
Experiences associated with the use of any Product will be filed by
Pfizer as part of the NDA for the approved Product. Further, it is
contemplated that Neurocrine's reports of Adverse Drug Experiences
associated with the use of unapproved Product will
38
reference the safety information filed by Pfizer as part of the NDA
for the approved Product. Neurocrine shall submit a copy of each
such report to Pfizer, contemporaneously with its submission of the
report to FDA or other Governmental Authorities.
(e) The parties will develop additional written procedures for the
surveillance, receipt, evaluation, and reporting of Product
complaints and Adverse Drug Experiences, in accordance with these
provisions and subject to the oversight of the RC.
4.13 Construction of Terms related to Separate Filings. The provisions of this
Article may be alternatively construed to reflect the fact that the INDs
and NDAs may be maintained or filed with respect to the IR Product and MR
Product either separately or together, and that as of the date hereof, no
such final decisions have been made. Accordingly, the parties agree that
to the extent that the language set forth herein does not work as a
practical and logistical matter with respect to the filing or maintenance
of the INDs or NDAs (as the case may be), the parties will meet in good
faith to discuss changes to allocations of responsibilities in order to
effectuate the intent of the provisions set forth in this Article 4 or to
otherwise comply with applicable Law.
ARTICLE 5
PRODUCT DEVELOPMENT
5.1 Development Program and Budget. Products in the US Territory will be
developed pursuant to Development Program. Pfizer shall pay all
Development Costs, subject to Section 5.3(a) below. The Development
Program will consist of a Registration Program conducted by Neurocrine as
described in Section 5.3(a) below, and a Supplemental Program conducted by
Pfizer as described in Section 5.3(b) below. Each of the parties
respective obligations for the Registration Program and the Supplemental
Program will be carried out under the guidance of the DC as described in
Section 5.2 below.
39
5.2 Development Committee. The DC will operate within the framework of the
governance structure set forth in Article 3. The responsibilities of the
DC include, but are not limited to, the following:
(a) Developing the Supplemental Program in coordination with the MC;
(b) Preparing annual Registration Plans and Supplemental Plans, each of
which shall include a budget, for submission to the JOC consistent
with the terms of the Registration Program and Supplemental Program,
for approval each Year from the Effective Date until the
Co-Promotion Term for the Products ends;
(c) Overseeing and monitoring the conduct of the annual Supplemental
Plan by Pfizer as specified in Section 5.3(b);
(d) Overseeing and monitoring the conduct of the annual Registration
Plan, together with the JOC, by Neurocrine as specified in Section
5.3(a);
(e) Facilitating the exchange of all development information and data
relating to all Product Studies;
(f) Review and approval of protocols and selection of clinical study
sites for all Registration Program Product Studies other than those
listed in Schedule 5.3(a) and for all Supplemental Program Product
Studies, and for revising any Investigator's Brochure(s) based on
results of the Registration Program and Supplemental Program Product
Studies or any additional FDA requirements;
(g) Implementation of Phase IIIb Product Studies; and
(h) Providing updates on its activities and achievements to the JOC.
Neither party shall make any material change to any annual Developmental Plan,
or any of the Developmental Program Product Studies, without the prior approval
of the DC, and all Development Plans and Development Costs provided therein
shall be consistent with the terms of this Agreement.
40
5.3 Development Programs for the US Territory. Product development activities
in the US Territory will consist of the following Development Programs,
each of which will be prepared and overseen by the DC, the RC and the MC,
as set forth and consistent with the provisions set forth below:
(a) Registration Program. The Phase III development with respect to the
US Territory for IR Product and MR Product each will be conducted
under the Registration Program. [***]. The Registration Program will
consist of the clinical and other activities for the NDA filings as
are set forth on Schedule 5.3(a), and will be carried out pursuant
to the annual Registration Plan. Neurocrine will have responsibility
and authority for conducting and completing the Registration
Program, subject to input of the DC, in coordination with the RC,
the MC and the JOC. Pfizer shall pay all Development Costs for the
Registration Program, except that Neurocrine shall be liable for
payment of $15 million in 2003 payable quarterly in equal
instalments of $3.75 Million each payable on the last day of March,
June, September and December of 2003. [***]. The Registration
Program will terminate with respect to each of the IR Product and MR
Product upon First Approval of the IR Product and MR Product,
respectively.
(b) Supplemental Program. Phase IIIb and IV development and Product
Studies in the US Territory will be conducted under the Supplemental
Program. [***].
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
41
The Supplemental Program activities will be conducted by Pfizer
under the direction of the MC, in coordination with the DC and RC.
An initial summary of the Supplemental Program is attached hereto as
Schedule 5.3(b), subject to change by the MC (in coordination with
RC and the DC) to take into account product positioning, product
labelling and marketing strategies, feasibility of study design, or
as otherwise required or advisable under applicable Law or in
response to acts or requests by Governmental Authorities. The DC
will consider in good faith whether Neurocrine, to the extent
feasible and appropriate, shall undertake responsibility for
execution of certain studies conducted under the Supplemental
Program.
5.4 ROW Program. Pfizer will have the sole authority with respect to
development and registration for IR Product and MR Product outside the US
Territory ("ROW Program").
ARTICLE 6 A
FIELD FORCE, LAUNCH, CO-PROMOTION AND DETAILING
6A.1 Neurocrine Sales Force.
(a) (i) Neurocrine shall have a sales force of two hundred (200) full
time employees in the US Territory comprised of Sales
Representatives who will specialize in Detailing to
psychiatrists and to Sleep Specialists ("Neurocrine Field
Force") and such sales professionals as Neurocrine
42
shall hire in its sole discretion (collectively, the
Neurocrine Field Force and other sales professionals, the
"Neurocrine Sales Force").
(ii) Except as specifically provided herein, Neurocrine shall have
exclusive control over the Neurocrine Sales Force. Nothing in
this Agreement shall be construed to conclude that any agents
or employees of Neurocrine are agents or employees of Pfizer
or subject to Pfizer's direction and control. Neurocrine shall
have sole authority over the terms and conditions of its
agents' and employees' employment, and shall select, engage,
and discharge its agents and employees.
(iii) Neurocrine will be solely responsible for compensating its
agents and employees whom it assigns to perform services under
this Agreement, including paying salaries and expenses;
providing benefits; deducting federal, state and local payroll
taxes, FICA contributions, FUI, SUI and any similar taxes; and
paying Workers' Compensation premiums, unemployment insurance
contributions and any other payments required by federal,
state or local law to be made on behalf of employees.
(b) Subject to section 6A.1(c), Pfizer will begin paying an Allowance
Fee (as defined below) with respect to the Neurocrine Sales Force
commencing on the filing of the NDA Package, twenty (20) days after
receipt of notice from Neurocrine that it has commenced hiring of
the Neurocrine Sales Force, Pfizer will pay the first quarterly
installment of the Allowance Fee for the first Allowance Year
("Allowance Year 1") as set forth in Section 6A.1(d) and based on
the amounts set forth in Schedule 6A.1(b) (the "Hiring Schedule").
Pfizer shall pay Neurocrine any subsequent quarterly installments on
each subsequent ninetieth (90th) day after receipt of such notice.
(c) In the event that the First Approval of MR Product is not received
by [***], and Neurocrine is still in the process of hiring members
of the Neurocrine Sales Force, Neurocrine shall suspend all further
hiring of the Neurocrine Sales
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
43
Force until receipt of such First Approval (such period, the
"Suspension Period"). During the Suspension Period, Pfizer shall
continue to be responsible for payment of the Allowance Fee with
respect to the actual members of the Neurocrine Sales Force hired
prior to the commencement of the Suspension Period (the
"Proportional Allowance"). Pfizer shall be entitled to a credit
against future Allowances for the portion of the Proportional
Allowance paid by Pfizer for the Suspension Period that is greater
than the portion of Zoloft Net Sales in excess of the Baseline
Threshold (as defined below), if any. If during the Suspension
Period, Zoloft Net Sales in excess of the Baseline Threshold exceed
the Proportional Allowance paid by Pfizer, Neurocrine will be
entitled to payment as set out in Section 8.2(b) below. If the First
Approval has not been received prior to the time Zoloft is no longer
being Co-Promoted, Pfizer will receive a credit against future
Allowances on a pro rata basis in respect of periods where neither
Zoloft nor the Products are being Co-Promoted.
(d) Pfizer shall, for the duration of this Agreement, compensate
Neurocrine for the Neurocrine Sales Force by paying to Neurocrine
[***] (an "Allowance") each Allowance Year (as defined below),
except that for the Allowance Year(s) in which hiring of the
Neurocrine Sales Force commenced, such Allowance will be determined
pro rata in accordance with such Hiring Schedule (the amount of the
Allowance actually paid annually shall be referred to as an
"Allowance Fee"). From the beginning of Allowance Year 1 until end
of the Allowance Year in which Launch of the first Product occurs
Pfizer will pay the Allowance Fee in quarterly installments. With
respect to each Allowance Year after Launch of the first Product,
Pfizer will pay the Allowance Fee beginning on each anniversary of
Allowance Year 1. For each Allowance Year after Allowance Year 1,
the Allowance Fee shall be increased [***]. Each three hundred and
sixty-five (365) day period beginning when hiring of the Neurocrine
Sales Force has commenced shall be referred to as an "Allowance
Year".
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
44
(e) Subject to Section 6A.1(f) below, for each Allowance Year
beginning in Allowance Year 1, Pfizer will pay a fee equal to
the following percentages of the Allowance Fee:
YEAR ALLOWANCE FEE (%)
---- -----------------
[***] [***]
- --------------------------------------------------------------------------------
[***] [***]
- --------------------------------------------------------------------------------
[***] [***]
- --------------------------------------------------------------------------------
[***] [***]
- --------------------------------------------------------------------------------
(f) In respect of the Allowance Fee for each quarterly installment
paid prior to an Allowance Year that begins after Launch,
Pfizer shall be entitled to a pro-rata credit against the
Allowance Fee in the following quarter, to the extent that
Neurocrine fails to hire the Neurocrine Sales Force that meets
or exceeds the quarterly goals set forth in the Hiring
Schedule in Schedule 6A.1(b).
(g) For the term of the Suspension Period, the reduction in
Allowance Fee based on Allowance Years as set forth in Section
6A.1(e) will be tolled such that no portion of the Suspension
Period will be counted toward Allowance Years as used to
determine Neurocrine's Allowance Fee hereunder.
6A.2 Product Sales. Pfizer shall be responsible for the distribution and
sales of the Products in the Territory and shall book all sales for the
Products. Pfizer shall have sole responsibility and authority in the US
Territory for all decisions regarding the pricing of Products, and for
all pricing and reimbursement approvals, subject to MC oversight.
Pfizer shall have sole responsibility and authority in the ROW
Territory for all decisions regarding the pricing of Products, and for
all pricing and reimbursement approvals.
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
45
6A.3 Co-Promotion.
a) (i) Marketing Activities. The parties shall Co-Promote
the Products in the US Territory during the
Co-Promotion Term in accordance with the terms of
this Agreement and the applicable Marketing Plan, and
in compliance with all Laws. In conducting
Co-Promotion activities, Pfizer shall use
Commercially Reasonable Efforts and Neurocrine shall
use its commercially reasonable efforts to promote
the sale of the Products in the US Territory.
(ii) Pfizer will provide the Sales Representatives from each field
force with target lists for Details. The district managers of
Pfizer and Neurocrine will agree upon call schedules for the
Neurocrine Field Force and the Pfizer Field Force, consistent
with the Marketing Plan and with Section 6A.3(a)(iii) below.
(iii) It is understood that the Neurocrine Field Force and Pfizer
Field Force are intended, to the extent practical, to have
overlapping territories and target lists. The Neurocrine Field
Force target lists will contain a distribution of medical
professionals with prescribing authority with roughly similar
prescribing habits as those provided to the Pfizer Field Force.
The target lists will contain the names and contact information
for medical professionals with prescribing authority (or
non-prescribing Sleep Specialists). The Neurocrine Field Force
and the Pfizer Field Force will Detail the Products to such
medical professionals in accordance with such target list.
(b) Marketing Committee. The Marketing Committee will operate
within the framework of the governance structure set forth in
Article 3 and will be responsible for promotional activities
in the US Territory. The responsibilities of the Marketing
Committee include, but are not limited to, the following:
46
(i) Preparing annually all aspects of the Marketing Plan and
Co-Promotion Budget as described in Section 6A.3(c) below for
submission to the JOC for approval, except following an event
described in Section 3.5(c);
(ii) Monitoring compliance with the Marketing Plan;
(iii) Developing the Supplemental Program, in coordination with the
DC;
(iv) Coordinating with the DC with respect to future Product
development activities to be undertaken pursuant to the
Development Programs;
(v) Coordinating with the RC with regard to regulatory issues;
(vi) Developing positioning and market strategies consistent with
the Marketing Plan, including decisions to seek or include any
new indication for the Product;
(vii) Developing advertising material and strategies and promotional
materials for the Pfizer Sales Representatives and the
Neurocrine Field Force for the Product, designing, packaging
the Product, and planning and overseeing educational and
professional symposia, and speaker and activity programs for
the Products in the US Territory;
(viii) Developing and implementing, together with the DC, a
publications strategy for the Product;
(ix) Allocating responsibilities for making Product presentations
and creating Product exhibits and booths at significant
medical meetings and promotional events;
(x) Scheduling periodic joint meetings for the Pfizer Field Force
and Neurocrine Sales Force;
(xi) Overseeing and implementing Phase IV Product Studies;
47
(xii) Reviewing and adjusting the target lists previously provided
pursuant to Section 6A.12 prior to Launch; and
(xiii) Providing updates on the MC's activities and achievements to
the JOC.
For the sake of clarity, it is understood and agreed that the MC will not
address the promotion or Detailing of Zoloft or any other Pfizer products.
(c) Marketing Plan and Budget. The MC shall develop a Marketing Plan (a
"Marketing Plan") and a marketing budget (a "Co-Promotion Budget") for
each Year during the Co-Promotion Term consistent with the terms of
this Agreement, except following an event described in Section 3.5(c).
The Co-Promotion Budget will include all Out-of-Pocket Costs of each
party arising out of the conduct of the Marketing Plan and all such
costs will be borne by Pfizer. Neurocrine shall not engage in any
Co-Promotion activities except as provided in the Marketing Plan and/or
approved by the MC. The Marketing Plan and the Co-Promotion Budget will
describe the plan for commercialization of the Products in the US
Territory, including: (a) general strategies for the Detailing and
marketing of the Products and allocation of responsibilities for
marketing activities; (b) each party's training, Detail Requirement and
sampling activities, if any; (c) market and sales forecasts; (d)
pricing and discounting analysis; (e) advertising, public relations,
disease management programs and other promotional programs, including
professional symposia and speaker and activity programs to be used in
the Co-Promotion of the Products; (f) Phase III(b) and IV Product
Studies and (g) budgeted Medical and Marketing Expenses for each of the
foregoing. The Marketing Plan shall not address sales force incentives
or compensation, and, each party shall have sole authority and
responsibility for designing and executing any such program for its
sales force. The Marketing Plan and the Co-Promotion Budget may be
updated throughout the Year as deemed appropriate by the MC.
48
6A.4 Reports.
(a) Each party shall also provide the other party and the MC with a
report as soon as practicable but in no event later than forty-five
(45) days following the end of each calendar month during the
Co-Promotion Term setting forth, in such detail and form as the
parties shall agree, the number of Product Details made and the
amount of samples distributed by such party's respective Sales
Representatives in the US Territory during such month (the
"Detailing Report"), provided, however, that the Detailing Report
for the twelfth (12th) such calendar month in each Year shall be
cumulative and reflect the number of Product Details made and
samples distributed by such party's respective Sales Representatives
in the US Territory during such Year. Neurocrine covenants that it
shall develop an internal system for the purpose of reporting the
number of Details of its Sales Representatives, and that it shall
have such system fully implemented by the time it begins Detailing
the Products.
(b) In addition, no earlier than forty-five (45) days and no later than
sixty (60) days of the end of each Year during which Neurocrine is
Detailing the Products in either a First Position or Second
Position, Neurocrine may request from Pfizer and Pfizer shall
provide within thirty (30) days, the average number of Product
Details (excluding any Combination Products) per Sales
Representative in the Pfizer Field Force who Detailed Products
(excluding any Combination Products) to psychiatrists and Sleep
Specialists during such Year. For purposes of Section 6A.7 below,
the actual Neurocrine Detail Requirement during such Year (the
"Final Detail Requirement") shall equal the lesser of (i) [***],
multiplied by [***], and (ii) [***].
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
49
(c) As the Year of Launch and the last Year during the Initial Five Year
Period (each of the first and last Years, a "Partial Year") may not
be full years, for purposes of calculating the Final Detail
Requirement during the relevant period in each Partial Year (a
"Detail Priority Period"), (i) Neurocrine shall also report in its
cumulative Year - end report referred to in Section 6A.4(a) the
number of Details performed during the such Detail Priority Period,
and such number (as may be verified pursuant to Section 9.2) will be
used in such Partial Year for purposes of calculating the number of
reported Details in Section 6A.7(a), (ii) Pfizer shall report to
Neurocrine upon its request in Section 6A.4(b) [***] number of
Details in Section 6A.4(b)(i), (iii) the number in Section
6A.4(b)(i) above shall equal [***], and (iv) the number in Section
6A.4(b)(ii) above shall equal [***].
6A.5 Detailing. Neurocrine shall be responsible for performing its Detail
Requirements with respect to the Products. During the Initial [***] Year
Period, the Neurocrine Field Force will perform at least [***] of the
Final Detail Requirement to be performed in respect of the Products, in a
[***].
6A.6 Detail Priority.
(a) In the event a product other than Zoloft, a Pfizer Product and the
Products is being Detailed by the Neurocrine Sales Force with [***],
the Allowance Fee will be reduced by [***].
(b) In the event that neither Zoloft, a Pfizer Product nor a Product is
being Detailed by the Neurocrine Field Force with [***], the
Allowance Fee will be reduced to [***]. In addition, the Allowance
Fee will be reduced to [***] in the event the Neurocrine Field Force
markets a Competitive Product under Section 14.2(b)(ii). At the end
of [***],
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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Neurocrine may reduce its Detail commitment with respect to Products to a
level that is below [***] on notice to take effect to Pfizer at least (i)
[***] prior to reduction if the reduction is to take effect when the
Allowance is [***], and (ii) [***] prior to such reduction if the
reduction is to take effect when the Allowance is [***] or less.
6A.7 Detail Shortfalls.
(a) In the event that Neurocrine fails to perform during the [***] at
least [***] of its Final Detail Requirement with respect to the
Products in a [***] (in the event of such failure, Neurocrine will
be a "Shortfall Party") in any Year as reported pursuant to Section
6A.4 and verified pursuant to Section 9.2, Neurocrine shall pay to
Pfizer as liquidated damages, an amount equal to (i) [***] (the
"Detail Cost"), multiplied by (ii) [***]; provided, however, that
the Detail Shortfall Payment Amount shall not exceed the Detail
Cost, multiplied by [***]. To the extent Neurocrine's Details are
[***] of the Final Detail Requirement during the [***], in addition
to the Detail Shortfall Payment Amount, Neurocrine's Commission
Payment with respect to such Detail shortfall shall be reduced
pursuant to Section 8.2(a)(ii).
(b) Pfizer shall give notice to Neurocrine that (i) Neurocrine is a
Shortfall Party; or (ii) Pfizer wishes to verify Details pursuant to
Section 9.2, in each case within one hundred and twenty (120) days
of receipt of the last cumulative annual Detailing Report set forth
in Section 6A.4(a) delivered after the end of each respective Year.
Neurocrine shall pay the Detail Shortfall Payment Amount within
thirty (30) days of notice and verification that it is a Shortfall
Party, or within thirty (30)
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
51
days of the report by an independent accountant pursuant to Section
6A.9, as applicable.
(c) The parties understand and agree that any Detail Shortfall Payment
Amount or any reduction in the Commission Payment pursuant to
Section 8.2(a)(ii) below shall be paid as liquidated damages and not
as a penalty and that such sum represents a genuine pre-estimate of
the loss the parties believe would be suffered as a result of such
Detail shortfalls. Pfizer' right to receive payment of the Detail
Shortfall Payment Amount under Section 6A.7(a) and any reduction in
the Commission Payment pursuant to Section 8.2(a)(ii) shall be in
lieu of any other compensation or remedy that Pfizer may have for
such a shortfall, including for claim of breach of this Agreement on
account of such Detail shortfall. In addition, reduction in the
Commission Payment pursuant to Section 8.2(a)(ii) shall not survive
termination of this Agreement, except in the event that at the time
of such termination, Neurocrine's Commission Payment would already
have or has already been permanently reduced pursuant to Section
8.2(a)(ii)(B).
6A.8 Cost of Detailing/Sales Promotion. Subject to Section 6A.1, each party
shall be solely responsible for its own costs and expenses incurred in
providing the personnel necessary to provide the services described in
this Article 6A.
6A.9 Audit. The number of Details shall be subject to external audit as
provided in Article 9.
6A.10 Medical Claims. Neither party shall make any medical claim for the
Products beyond the scope of the relevant regulatory approval(s) then in
effect for the Products; provided that, both parties may distribute
information concerning the Products or its use, including but not limited
to scientific articles, reference publications, and healthcare economic
information, to the extent such materials have been approved under a
Marketing Plan.
6A.11 Third Party Reports. From time to time during the term hereof the MC shall
agree upon the third party reports (such as those from IMS), to the extent
permitted by such third party, which the parties wish to receive in
connection with the Co-Promotion (and the
52
determinations to be made under Section 6A.3(b) with respect to the
Marketing Plan and Co-Promotion Budgets), and Neurocrine and Pfizer shall
have equal access to such reports (to the extent permitted). The expenses
of such reports shall be Medical and Marketing Expenses. Pfizer will
provide to Neurocrine all Product market data, therapeutic segment data
relevant to the Product that it is permitted to share by a third party
provider through the MC (including IMS information and market research).
6A.12 Zoloft Co-Promotion.
(a) Upon the successful completion of training of the Neurocrine Sales
Force (and as such Sales Representatives are successfully trained on
a rolling basis) in accordance with Schedule 2.5, such Sales
Representatives shall begin Detailing Zoloft in the US Territory
until the earlier of (i) the Zoloft Patent Expiration Date and (ii)
termination of this Agreement. Pfizer will provide Neurocrine with
target lists for such Details. The target lists will contain the
names and contact information for medical professionals with
prescribing authority, and Neurocrine will be required to Detail
Zoloft only to such professionals, unless Neurocrine obtains consent
from Pfizer.
(b) Pfizer will also provide Neurocrine with all promotional materials
and samples for Zoloft that it provides to its own Sales
Representatives that Details Zoloft to psychiatrists with respect to
Zoloft.
(c) Contract Sales Forces. Without the consent of Pfizer, Neurocrine may
not use any contract sales force to Co-Promote or Detail Zoloft.
ARTICLE 6B
MANUFACTURING
6B.1 Product Supply Committee.
(a) Manufacturing activities prior to First Approval of IR Product and
MR Product will occur under the supervision of the PSC, which shall
be responsible for all
53
Product pharmaceutical manufacturing and supply issues with respect
to each of the IR Product and MR Product prior to First Approval of
IR Product and First Approval of the MR Product, respectively,
including, but not limited to, the following:
(i) Overseeing manufacturing activities under way as of the date
of signing, including formulation development, product
characterization studies, stability studies, and management of
clinical supplies of IR Product and MR Product as set forth in
the Manufacturing Plan attached hereto as Schedule 6B.1;
(ii) Overseeing the manufacturing of registration batches of
Product;
(iii) Preparation and review of the CMC section of the NDA for each
of the IR Product and MR Product;
(iv) Overseeing manufacture of the Products for Launch;
(v) Establishing Specifications for purposes of the IR Product and
MR Product NDAs and for Launch of such Products;
(vi) Product manufacturing process validation and any pre-approval
inspection of the Product manufacturing subcontractors;
(vii) Commencing and overseeing any new development activities and
manufacturing activities other than activities relating to (i)
through (vi) above;
(viii) Coordinating with the RC and DC as appropriate;
(ix) amending the Manufacturing Plan on a periodic basis to reflect
the foregoing development activities of the parties; and
(x) Providing updates on the PSC's activities and achievements to
the JOC.
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(b) Through the PSC, Neurocrine shall continue its work related to
formulation development, product characterization studies,
stability studies, clinical studies and registration batches
and other amounts of Products required by the CMC section of
the Product NDA and approved as part of the Manufacturing
Plan. All Out-of-Pocket Costs (other than Out-Of-Pocket Costs
incurred by Neurocrine prior to January 1, 2003) incurred in
the performance of the Manufacturing Plan will be borne by
Pfizer.
(c) Following First Approval, Pfizer, subject to Steering
Committee oversight, shall have final decision-making
authority with respect to the manufacture, supply, packaging
and distribution of Products, at its sole cost.
(d) Through the PSC prior to First Approval, the establishment of
Product specifications, new development and manufacturing
activities, including preparation of any materials for Launch,
Product manufacturing process validation prior to receipt of
NDA approval and any pre-approval inspection of the Product
manufacturing subcontractors will be decided as a Consensus
Matter. The "lock-down date" for CMC data is [***].
(e) Through the PSC, all decisions with respect to the regulated
starting materials and commercial manufacturing locations for
the Launch of the Product, will be decided as Consensus
Matters, provided that in the event such mutual agreement,
would delay filing of an NDA, Neurocrine shall have final
decision making authority consistent with the Manufacturing
Plan set forth on Schedule 6B.1.
(f) Neurocrine agrees that it will not amend, modify, supplement
or terminate any of its agreements with manufacturing
subcontractors, or enter into any agreements with
manufacturing subcontractors with respect to the Product,
without the consent of Pfizer.
6B.2 Assignment of Contracts. Promptly following the "lock-down date",
Neurocrine will assign to Pfizer, and Pfizer will accept assignment of,
all contracts between Neurocrine
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and the manufacturing subcontractors set forth in the Product NDA.
Pfizer may request prior to the "lock-down date" to be joined as a
party to any contracts between Neurocrine and the manufacturing
subcontractors. Thereafter, Pfizer will be responsible for all
performance under those contracts (except to the extent Neurocrine
is still a party to such agreements) and will make all decisions
(except to the extent such decision is a Neurocrine decision
pursuant to Section 3.9(a)) regarding those contracts and any future
contracts Pfizer elects.
6B.3 Recalls, Market Withdrawals or Corrections. Each party will promptly
notify the other if any batch or lot of Product is alleged or proved to be
the subject of a recall, market withdrawal or correction in any country
and the parties shall cooperate in the handling and disposition of such
event. However, in the event of a disagreement as to any matters relating
to such recall, market withdrawal or correction, Pfizer shall have the
final authority, which shall be exercised reasonably and in good faith.
Pfizer will bear all costs and expenses arising out of any recall, market
withdrawal or correction, unless such recall, market withdrawal or
correction arises or results directly and primarily from Neurocrine's
Detailing and Promotion of the Products, in which case Neurocrine will
bear such costs and expenses.
ARTICLE 7
PAYMENT PROVISIONS
7.1 Payment Currency. All amounts due under this Agreement shall be paid to
the designated party in United States dollars.
7.2 Payments. All payments under this Agreement shall be made on or before the
due date by electronic transfer in immediately available funds to the
respective account designated in writing by each party at least five (5)
Business Days before the payment is due. Pfizer shall notify Neurocrine's
Chief Financial Officer, or such other party as Neurocrine's Chief
Financial Officer shall designate in writing, by facsimile transmission as
to the date and amount of any payment that Pfizer shall make at least two
(2) Business Days prior to such transfer. Neurocrine shall notify Pfizer's
treasurer, or such other party as Pfizer's
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treasurer shall designate in writing, by facsimile transmission as to the
date and amount of any payment that Neurocrine shall make at least two (2)
Business Days prior to such transfer. All payments under this Agreement
shall bear interest from the date due until paid at a rate equal to the
prime rate of Citibank, NA as announced on the date such payment was due
plus [***].
ARTICLE 8
ZOLOFT AND PRODUCT CO-PROMOTION PAYMENTS
8.1 Net Sales Report.
(a) Pfizer shall deliver electronically to Neurocrine the monthly and
Year-to-date gross sales for the Products and Net Sales of the
Products in the US Territory on a calendar monthly basis, within
fifteen (15) days following the end of each calendar month following
the Launch during the term of this Agreement. In addition, within
twenty (20) days following the end of each Pfizer Quarter following
the Launch during the term of this Agreement, Pfizer shall deliver
to Neurocrine a report setting forth (i) the gross sales and Net
Sales (including specific deductions used at arriving at Net Sales)
of the Products during said Pfizer Quarter by dosage form and unit
size, the amount of Product Commission Payments and the deductions
contained in the definition of "Net Sales" the DOV Sublicense, (ii)
adjustments (including reimbursements, recoupment of prior
deductions, if any, to Net Sales reported for any previous Pfizer
Quarter and (iii) any reduction in Commission Payments pursuant to
Section 8.2(a)(ii), if any, with respect to any previous Pfizer
Quarter. Within thirty (30) days following the end of each Pfizer
Quarter, Pfizer shall pay to Neurocrine the amounts set forth in
Section 8.2(a) below:
(b) Zoloft Net Sales Report. Within twenty (20) days following the end
of each Pfizer Quarter following the commencement of Zoloft
Detailing by Neurocrine, Pfizer shall deliver to Neurocrine a report
setting forth (i) Zoloft Net Sales during
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omitted portions.
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said Pfizer Quarter by dosage form and unit size, and the amount of
Zoloft Commission Payments (as defined in Schedule 8.2), and (ii)
any adjustments (including reimbursements or recoupments of prior
deductions), if any, to Zoloft Net Sales reported for the previous
Pfizer Quarter. Within thirty (30) days after the end of each Pfizer
Quarter, Pfizer shall pay the amounts set forth in Section 8.2(b)
below.
8.2 Commission Payment. For each Year during the term of this Agreement,
Pfizer shall pay to Neurocrine, on a Pfizer Quarterly basis in accordance
with Section 7.2, the amounts set forth in Section 8.2(a) and 8.2(b)
(together the "Commission Payments").
(a) In respect of the Products, (i) the Commission Payment will be
calculated, except as provided in clause (ii) below, based on a
percentage of the Net Sales of the Products in the US Territory in
each full Year from Launch during the term of this Agreement, as
follows:
Percentage of Net Sales to be a
Sales Year Commission Payment
---------- -------------------------------
Year 1-2 [***]
Year 3 [***]
Year 4 to end of Term [***]
(ii) Notwithstanding clause (i) above, (A) with respect to any Year
during the Initial Five Year Period that Neurocrine has
performed less than [***] of its Final Detail Requirement, the
Commission Payment shall be reduced during such Year as
follows:
If the Percentage of Final Detail Percentage of Net Sales to be a
Sales Year Requirement is: Commission Payment:
---------- --------------------------------- -------------------------------
[***] [***] [***]
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omitted portions.
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[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
provided that the reduction set forth in this clause (ii) shall not apply if
during the Initial Five Year Period, this Agreement terminates as a result of
Section 13.5 or upon a Change in Control.
and,
(B) If during the Initial Five Year Period, Neurocrine has
performed Details equal to less than [***] of its cumulative
Final Detail Requirement during the Initial Five Year Period,
the Commission Payment for the remainder of the Co-Promotion
Term shall be reduced as follows:
Percentage of Net Sales to be a
If the Percentage of Final Detail Requirement is: Commission Payment:
- -------------------------------------------------- -------------------------------
[***] [***]
[***] [***]
[***] [***]
[***] [***]
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omitted portions.
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[***] [***]
(1) Notwithstanding this Clause (B), if Neurocrine fails to
perform at least [***] of its cumulative Final Detail
Requirement during the Initial Five Year Period, the reduction
in this Clause (B) shall not apply if (x) after 6 (six) full
years after US Launch, Neurocrine has averaged at least [***]
of its cumulative Final Detail Requirement, plus any Details
it performs pursuant to the Marketing Plan in the sixth (6th)
full year after US Launch.
(2) Any reduction pursuant to this clause (ii) shall be paid as an
adjustment to payments pursuant to Section 8.1(a) above.
(3) If during the Initial Five Year Period, Neurocrine has failed
to perform at least [***] of the Final Detail Requirement in
any Year but has averaged over the Initial Five Year Period at
least [***] of its cumulative Final Detail Requirement, Pfizer
shall repay to Neurocrine, as an adjustment, any amounts it
had previously been credited as an adjustment as a result of a
reduction pursuant to Section 8.2(b)(ii)(A).
(b) [***].
For the avoidance of doubt, Pfizer shall have no obligation to pay
the Zoloft Commission Payment to Neurocrine if Zoloft Net Sales in
the US Territory fail to reach the Baseline Threshold nor shall
Pfizer be permitted to credit, any shortfall against Zoloft
Commission Payments payable to Neurocrine with respect to Zoloft Net
Sales in the US Territory in future Years.
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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8.3 Development Costs and Medical and Marketing Expense Payments. Beginning
with the first quarter of 2003, Neurocrine shall, within twenty (20) days
following the end of each calendar quarter, prepare and deliver to Pfizer
a statement of Development Costs, manufacturing costs and Medical and
Marketing Expenses for such calendar quarter, which statement shall set
forth the Development Costs and Medical and Marketing Expenses incurred or
accrued during the calendar quarter and the amounts due from Pfizer to
Neurocrine. Pfizer will pay Neurocrine such amounts owed within thirty
(30) days from the end of the applicable Pfizer Quarter.
8.4 Milestone Payments and Co-Promote Fees. Subject to the terms and
conditions of this Agreement, Pfizer shall pay to Neurocrine the
following:
EVENT [***] [***]
- --------------------------------------------------------------------------------
(a) Signing of this Agreement, subject $50,000,000
to Section 3.03 of the
License Agreement.
- --------------------------------------------------------------------------------
(b) FDA Acceptance [***] [***] [***]
- --------------------------------------------------------------------------------
(c) FDA Approval [***] [***] [***]
- --------------------------------------------------------------------------------
The parties understand and agree that each of the payments referenced
in this Section 8.4 shall only be made once, and is subject to the following
terms and conditions:
(i) With respect to the events and payments referenced in Section
8.4(b), mutual agreement on [***] in Section 4.3(c) (except to
the extent that neither party may object to such filing as
provided therein), is a condition to payment of such
milestone.
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omitted portions.
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(ii) With respect to the events and payments referenced in Section
8.4(c) mutual agreement on [***] in Section 4.3(d) [***], is a
condition to payment of such milestone.
8.5 All amounts payable by either party pursuant to any section under this
Agreement shall be paid without offset against any amounts due such party
under those sections, provided that in the event that Pfizer makes any
direct payments [***], the amount of any sums due pursuant to Section
8.4(b) and (c) shall be reduced by the amount of any such direct payments
by Pfizer.
8.6 In consideration for Pfizer lending or causing one or more of its
Affiliates to loan proceeds and make other advances of credit pursuant to
the Secured Loan Agreement, dated as of the date hereof, (the "Loan
Agreement") by and between Neurocrine and Pfizer, Neurocrine hereby
acknowledges and agrees that Pfizer shall, in the event of default (as
defined in the Loan Agreement) shall have occurred and is continuing after
any applicable cure period, be entitled, in its absolute and sole
discretion, to offset, in part or in full, from time to time, any and all
amounts due and unpaid by Pfizer under this Agreement against any and all
amounts due and unpaid under the Loan Agreement.
ARTICLE 9
ACCOUNTING AND REPORTS
9.1 Books and Records. Each party shall keep comprehensive books and records
relating to this Agreement on a full accrual basis of accounting in
accordance with GAAP. Such books and records shall document all Detailing
Reports and Net Sales, authorized expenses incurred or paid and any other
costs incurred (including Medical and Marketing Expenses and Development
Costs) or revenues earned relating to this Agreement and include all
information subject to audit pursuant to Section 9.2. All such books and
records shall be maintained for five (5) Years following the relevant Year
or such longer period as is required by Law.
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omitted portions.
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9.2 Audits. These audit and adjustment provisions apply with respect to all
payments due from one party to another pursuant to this Agreement,
including amounts payable pursuant to Sections 2.8, 5.3(a), 6A.1(c) and
8.2; the credits described in Sections 6A.1(c) or 6A.1(f); and number of
Details performed under Section 6A.5 and, 6A.7. Each party, and DOV and
ACY shall have the right to have the applicable books and records of the
other party audited by an independent certified public accountant that is
nationally recognized as having expertise in the pharmaceutical industry,
selected by a party (as to which firm the other party has no reasonable
objection), under appropriate confidentiality provisions, for the sole
purpose of verifying the accuracy of all financial, accounting and
numerical information and calculations under this Agreement. Any such
audit shall be conducted no more than once each Year by each of Pfizer or,
Neurocrine during the term of this Agreement, and upon at least thirty
(30) days' advance notice during normal business hours and in a manner
that does not interfere unreasonably with the business of the audited
entity. The results of any such audit shall be delivered in writing to
each party and shall be final and binding upon the parties, other than in
the case of manifest error, with respect to the matters set forth therein.
Any underpayment or overbilling determined by such audit shall promptly be
paid or refunded by the audited party. If the audited party has underpaid
or overbilled an amount due under this Agreement by more than five percent
(5%), the audited party shall also reimburse the other party for the cost
of such audit (with the cost of the audit to be paid by the auditing party
in all other cases), plus interest at the interest rate set forth in
Section 7.2, from the date of any such underpayment or overpayment. If the
audited party is shown to be a Shortfall Party, the provisions of Section
6A.7 of this Agreement shall control. Except as ACY may require under the
ACY License, such accountants shall not reveal to the party seeking
verification the details of its review, except insofar as is necessary to
describe the underpayment, overbilling or level of Details.
9.3 Sales Force Efforts. For two (2) Years following each Year, each party
shall keep records relating to Details made by its Sales Representatives,
and Detailing Reports, during such Year, including sampling of the
Products. Such records shall be available for
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inspection and audit in accordance with Section 9.2 above to determine
compliance with the terms hereof.
ARTICLE 10
INTELLECTUAL PROPERTY RIGHTS AND LABELING
10.1 Trademark and Corporate Logos.
(a) Subject to the provisions of this Section 10.1, each party shall
retain all right, title and interest in and to its respective
corporate name and logo.
(b) The Products. For the term of this Agreement and the License
Agreement, Products shall be promoted and sold worldwide solely
under the Trademarks and shall use Pfizer's and Neurocrine's trade
dress and logo with substantially equal prominence and frequency, to
the extent legally permissible in the relevant jurisdiction. For the
Co-Promotion Term, Pfizer grants to Neurocrine the non-exclusive
right, free of charge, to use the Trademarks and the Pfizer logo in
the Territory solely for the purpose of Neurocrine's Co-Promotion of
the Products in accordance with the terms of this Agreement.
Neurocrine grants to Pfizer the nonexclusive right, right free of
charge, to use Neurocrine's logo in the Territory solely for
purposes contemplated by this Agreement and the License Agreement.
Pfizer shall remain the owner of the Trademarks and the Pfizer logo
and the goodwill pertaining thereto, and Pfizer shall be solely
responsible for registering and maintaining the Trademarks in the
Territory. Neurocrine shall remain the owner of the Neurocrine logo
and the goodwill pertaining thereto. Except as contemplated herein,
Neurocrine shall have no rights in or to the Pfizer logo or the
goodwill pertaining thereto. Except as contemplated herein, Pfizer
shall have no rights in or to the Neurocrine logo or the goodwill
pertaining thereto. Neurocrine shall utilize the Trademarks only for
Promotional Materials or Products-related materials approved by
Pfizer or for internal use within Neurocrine, and in each case only
for the purposes contemplated herein. Neurocrine agrees that upon
termination or expiration of this Agreement it will,
64
except as set forth in Section 9.05 of the License Agreement,
discontinue forthwith all use of the Trademarks.
(c) Zoloft. Zoloft shall be promoted and sold solely under the Zoloft
Trademark and shall use Pfizer's trade dress and logo. During such
portion of the Co-Promotion Term that Neurocrine is co-promoting
Zoloft, Pfizer grants to Neurocrine the non-exclusive right, free of
charge, to use the Zoloft Trademark and the Pfizer logo in the US
Territory solely for the purpose of Neurocrine's Co-Promotion of
Zoloft in accordance with the terms of this Agreement. Pfizer shall
remain the owner of the Zoloft Trademark and the Pfizer logo and the
goodwill pertaining thereto, and Pfizer shall be solely responsible
for registering and maintaining the Zoloft Trademark in the US
Territory. Except as contemplated herein, Neurocrine shall have no
rights in or to the Zoloft Trademark or to the Pfizer logo or the
goodwill pertaining thereto. Neurocrine shall utilize the Zoloft
Trademark only for Promotional Materials or Zoloft-related materials
approved by Pfizer or for internal use within Neurocrine, and in
each case only for the purposes contemplated herein. Neurocrine
agrees that upon the earlier of termination of this Agreement or the
Zoloft Patent Expiration Date, it will discontinue forthwith all use
of the Zoloft Trademark.
(d) Other Pfizer Products. Any other Pfizer products promoted under this
Agreement ("Pfizer Products") shall be promoted and sold solely
under the applicable trademarks for such Pfizer Product and shall
use Pfizer's trade dress and logo. During such portion of the
Co-Promotion Term that Neurocrine is co-promoting or detailing such
Pfizer Product, Pfizer grants to Neurocrine the non-exclusive right,
free of charge, to use the applicable trademarks and the Pfizer logo
in the US Territory solely for the purpose of Neurocrine's
Co-Promotion of such Pfizer Product in accordance with the terms of
this Agreement. Pfizer shall remain the owner of any applicable
trademark and the Pfizer logo and the goodwill pertaining thereto,
and Pfizer shall be solely responsible for registering and
maintaining such trademarks in the US Territory. Except as
contemplated herein,
65
Neurocrine shall have no rights in or to trademark for the Pfizer
Products or to the Pfizer logo or the goodwill pertaining thereto.
Neurocrine shall utilize the trademarks for the Pfizer Products only
for Promotional Materials or related materials approved by Pfizer or
for internal use within Neurocrine, and in each case only for the
purposes contemplated herein. Neurocrine agrees that upon the
earlier of termination of this Agreement or termination of such
co-promotion or detailing activities, it will discontinue forthwith
all use of such trademarks.
(e) Neurocrine shall inform Pfizer promptly of any infringement of or
challenge to the Trademarks, Zoloft Trademarks or Pfizer Product
trademarks in the US Territory, in each case whether actual or
threatened, which comes to the notice of Neurocrine. Pfizer shall
have the exclusive right, at its sole cost and expense, to take
action in respect of the registration, defense, infringement and
maintenance of the Trademarks, Zoloft Trademarks or Pfizer Product
trademarks, and Neurocrine shall provide reasonable assistance and
co-operation as Pfizer may reasonably request, at Pfizer's sole cost
and expense.
(f) Copyrights and Proprietary Programs. Pfizer shall own all copyrights
and trademarks relating to Promotional Materials, and regarding all
sales training, patient education and disease management programs
related to the Products, as well as any modifications developed in
the future which are not specific to the Products.
10.2 Third Party Agreements. Neurocrine covenants and agrees with Pfizer that
Neurocrine:
(a) shall not execute or otherwise permit, and shall cause its
Affiliates to refrain from executing or otherwise permitting, any
amendment, modification or waiver to any of the licenses and
agreements listed on Schedule 10.2 ("Third Party Agreements") which
would have a material adverse effect on the Co-Promotion of the
Products, without the prior written consent of Pfizer,
66
(b) shall not make any election or exercise any right or option (or omit
to take any action which would), and shall cause its Affiliates to
refrain from making any election or exercising any right or option
(or omitting to take any action which would), terminate or
relinquish in whole or in part any Third Party Agreements, if such
election or exercise would have a material adverse effect on the
Co-Promotion of the Products,
(c) shall comply, and shall cause its Affiliates to comply, with all of
its or its Affiliates' obligations under the Third Party Agreements
in all material respects,
(d) shall take, and shall cause its Affiliates to take, such reasonable
actions as shall be necessary to keep in full force and effect the
Third Party Agreements,
(e) shall give prompt notice to Pfizer, together with a review of
outstanding issues if Pfizer so requests and subject to any
obligations of confidentiality owed by Neurocrine or its Affiliates
to the other party to such Third Party Agreements, of any actual or
alleged defaults, breaches, violations, proposed amendments or
proposed modifications of, or any proposed waivers under, any Third
Party Agreement; and
(f) shall give prompt notice to Pfizer, together with a review of
outstanding issues if Pfizer so requests and subject to any
obligations of confidentiality owed by Neurocrine or its Affiliates
to the other party to such Third Party Agreements, of any proposed
amendments or proposed modifications of the Third Party Agreements
which would conflict with Pfizer's rights hereunder.
ARTICLE 11
CONFIDENTIAL INFORMATION
11.1 Treatment of Confidential Information. Until the earlier of (a) expiration
of this Agreement or (b) if this Agreement is terminated prior to
expiration, [***] following such termination, each party shall maintain
Confidential Information (as
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67
defined in Section 11.2) of the other party in confidence, and shall not
disclose, divulge or otherwise communicate such Confidential Information
to others, or use it for any purpose other than as permitted under this
Agreement or in connection with the development, manufacture, marketing,
promotion, distribution or sale of the Products pursuant to this Agreement
or the License Agreement, and each party agrees to exercise its reasonable
efforts to prevent and restrain the unauthorized disclosure of such
Confidential Information by any of its directors, officers, employees,
consultants, subcontractors, licensees or agents.
11.2 Confidential Information. "Confidential Information" means all materials,
trade secrets or other information, including without limitation, any
data, proprietary information and materials (whether or not patentable, or
protectable as a trade secret) regarding a party's technology, Products,
business information or objectives, which is disclosed in writing by a
party to the other party and which is designated as confidential by the
disclosing party. All information disclosed prior to the Effective Date by
Neurocrine to Pfizer under or pursuant to the confidentiality agreement
between the parties dated February 24, 2002, as amended, shall be deemed
"Confidential Information" of Neurocrine. There should be excluded from
the foregoing definition of Confidential Information such information or
data which:
(a) was known by the receiving party prior to its date of disclosure to
the receiving party as shown by the receiving party's written
records; or
(b) either before or after the date of the disclosure to the receiving
party is lawfully disclosed to the receiving party by third parties
not in violation of any obligation to the other party; or
(c) either before or after the date of the disclosure to the receiving
party becomes published or generally known to the public through no
fault or omission on the part of the receiving party or its
Affiliates; or
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(d) is independently developed by or for the receiving party without
reference to or reliance upon the Confidential Information; or
(e) is required to be disclosed by the receiving party to comply with
applicable Laws, to defend or prosecute litigation or to comply with
governmental regulations, provided that the receiving party provides
prior notice of such disclosure to the other party and takes
reasonable and lawful actions to avoid and/or minimize the degree of
such disclosure.
11.3 Publications. During the course of this Agreement, each party will submit
to the DC and MC for review and approval all peer-reviewed academic,
scientific and medical publications relating to the Development Program
and/or Products for review. The DC will have primary responsibility and,
subject to Neurocrine's final decision-making authority in Section 3.9(a),
will have final authority to approve all such publications as they
primarily relate to the Registration Program, provided that the decision
whether and how to publish as well as the timing of such publication shall
be consistent with the publications strategy of the MC. With respect to
all other such publications, MC will have primary responsibility and,
subject to Pfizer's final decision-making authority in Section 3.9(c),
will have final authority to approve all publications. The DC and MC shall
each have no less than thirty (30) days to review each proposed
publication. The review period may be extended for an additional thirty
(30) days in the event the non-publishing party can demonstrate to the DC
and MC a reasonable need for such extension including, but not limited to,
the preparation and filing of patent applications. Such period may be
further extended by the JOC. Pfizer and Neurocrine will each comply with
standard academic practice regarding authorship of scientific publications
and recognition of contribution of other parties in any publications
relating to Development Programs and/or Products. Notwithstanding the
foregoing, the parties shall endeavor as far as possible, for ease and
convenience, to agree on a universal basis joint authorship in respect of
such publications.
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ARTICLE 12
REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION
12.1 Neurocrine's Representations. Neurocrine hereby represents and warrants as
of the date hereof as follows:
(a) Neurocrine has the corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder, and
the execution, delivery and performance of this Agreement has been
duly and validly authorized and approved by proper corporate action
on the part of Neurocrine, and Neurocrine has taken all other action
required by law, its certificate of incorporation or by-laws or any
agreement to which it is a party or to which it may be subject
required to authorize such execution, delivery and performance
(other than compliance with all applicable requirements of the HSR
Act). Assuming due authorization, execution and delivery on the part
of Pfizer, this Agreement constitutes a legal, valid and binding
obligation of Neurocrine, enforceable against Neurocrine, in
accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and
similar laws relating to or affecting creditors generally or by
general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(b) The representations and warranties of Neurocrine contained in the
License Agreement are true and correct in all respects.
(c) All manufacturing operations conducted by Neurocrine and its
Affiliates (or by third parties on their behalf) relating to the
manufacturing of the Products are, to Neurocrine's knowledge (after
reasonable due inquiry), being conducted in material compliance with
GMP and other applicable requirements and standards of any
Governmental Authority in which such manufacturing is being
conducted, except where any failure to do so will not have a
material adverse effect on the Registration Program.
70
(d) As of the date hereof, Neurocrine has disclosed to Pfizer all
material information known to Neurocrine or its Affiliates relating
to (i) the drug quality, including stability, variability,
impurities and delivery performance in each case relating to the
Compound, and (ii) changes made by Neurocrine or its Affiliates
after the initiation of Phase III clinical trials for the Products
relating to formulation, packaging and method of manufacture and
formulation and to processing parameters, and (iii) the status of
discussions with FDA or any Governmental Authorities directly
relating thereto.
12.2 Pfizer's Representations. Pfizer hereby represents and warrants as of the
date hereof as follows:
(a) Pfizer has the corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder, and the
execution, delivery and performance of this Agreement has been duly
and validly authorized and approved by proper corporate action on
the part of Pfizer, and Pfizer has taken all other action required
by law, its certificate of incorporation or by-laws or any agreement
to which it is a party or to which it may be subject required to
authorize such execution and delivery (other than compliance with
all applicable requirements of the HSR Act). Assuming due
authorization, execution and delivery on the part of Neurocrine,
this Agreement constitutes a legal, valid and binding obligation of
Pfizer, enforceable against Pfizer in accordance with its terms,
except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws relating to
or affecting creditors generally or by general equitable principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(b) The representations and warranties of Pfizer contained in the
License Agreement are true and correct in all respects.
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12.3 Limitation of Damages/Sole Remedy.
This Agreement is subject to the terms and conditions of Article 10 of the
License Agreement.
ARTICLE 13
TERM AND TERMINATION
13.1 Term.
(a) Notwithstanding to the contrary any of the provisions of this
Agreement but subject to Section 13.1(b) below, this Agreement shall
only become effective upon the Effective Date, and prior to the
Effective Date neither Neurocrine nor Pfizer shall have any rights
or obligations hereunder. Subject to Section 13.1 as of the
Effective Date, this Agreement shall commence and continue in force
until the later of (i) fifteen (15) years following Launch or (ii)
expiration of the last to expire of the Neurocrine Patent Rights
with Valid Claims in the US Territory, unless sooner terminated as
provided herein.
(b) Effective immediately as of the date first written above, Neurocrine
covenants and agrees that it will not negotiate, engage in or
otherwise enter into any one or more transactions involving (i) any
sale or grant of any rights to any Neurocrine Patent Rights or
Neurocrine Technical Information (including without limitation any
licenses or sublicenses), or (ii) any joint venture, co-promotion or
similar relationship involving any Neurocrine Patent Rights or
Neurocrine Technical Information. Effective immediately as of the
date first written above, each of Pfizer and Neurocrine covenant and
agree that Article 15 shall be in full force and effect. The parties
understand and agree that the obligations set forth in this Section
13.1(b) shall terminate on the 90th day following the date of this
Agreement if, but only, if the Effective Date has not occurred on or
before such 90th day (other than with respect to liability for any
breaches of this Section 13.1(b) prior to such 90th day (which shall
survive such termination)).
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13.2 Termination for Breach.
(a) If Pfizer materially breaches or materially defaults in the
performance or observance of any of the provisions of this Agreement
or the License Agreement, and such material breach or material
default is not cured within ninety (90) days or, in the case of
failure to pay any amounts due hereunder sixty (60) days after the
giving of notice by Neurocrine specifying such breach or default,
Neurocrine shall have the right to terminate this Agreement in full
upon a further thirty (30) days' notice.
(b) If Pfizer terminates all of its development activities for a period
of six (6) months or longer in the US Territory at any time after it
has the final decision making authority with respect to the
Development Program (other than for regulatory restraints), [***].
If Pfizer terminates the Development Program with respect to any
country in the ROW Territory or otherwise fails to conduct any
development activities directed to any such country, [***], Pfizer
will thereafter have six (6) months to present [***]. If Pfizer
fails within thirty (30) days to notify Neurocrine [***], Neurocrine
shall have the right to terminate this Agreement with respect to
such country effective upon thirty (30) days notice.
(c) For purposes of this Agreement, materiality in all cases shall be
considered in the context of this Agreement and the License
Agreement taken as a whole; provided, however, no party shall be
deemed to be in material breach or material default if its actions
or omissions primarily resulted from: (i) compliance with any
specific unanimous decision of a committee or subcommittee under
this Agreement, or (ii) compliance with any directive by the
non-defaulting party for a matter in which
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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the non-defaulting party or any of its designees, representatives or
employees have exercised sole or final decision making authority
under this Agreement, or (iii) compliance with the express terms of
this Agreement or the License Agreement, or (iv) to the extent
Pfizer uses efforts in substantial conformity with Commercially
Reasonable Efforts or Neurocrine uses efforts in substantial
conformity with commercially reasonable efforts consistent with
Section 2.12. A material breach or material default in the
performance of any of the provisions of this Agreement shall include
a material inaccuracy in any representation or warranty contained
herein.
(d) Upon the giving of any notice of default under Section 13.2(a), the
parties will in good faith meet to see if a plan to remedy the
alleged breach or default can be mutually agreed.
13.3 Other Termination:
(a) Discretionary. Upon one hundred and eighty (180) days prior notice
to Neurocrine, Pfizer shall have the right at any time, without
cause at Pfizer's sole discretion, to terminate this Agreement,
whereupon this Agreement, together with the License Agreement, shall
terminate one hundred and eighty (180) days after the date of such
notice.
(b) Termination of License Agreement. This Agreement shall terminate
following any termination by Pfizer of the License Agreement.
(c) Neurocrine. Subject to the terms hereof (including without
limitation Section 13.3(a) above), upon the occurrence of any
material default by Neurocrine:
(i) which material default or material breach relates to any of
the covenants and agreements of Neurocrine in Article 2 and 6A
(provided that, for the avoidance of doubt, the foregoing
shall exclude any breach of Neurocrine's obligations under
Section 6A.7(a) (such covenants and
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agreements, the "Co-Promotion Covenants")), Pfizer may, upon
ninety (90) days prior notice, elect to terminate Neurocrine's
Co-Promotion rights with respect to Zoloft and any Pfizer
Products other than the Products, whereupon neither party
shall have any further rights or obligations with respect to
Zoloft or any Pfizer Products (other than Products), including
obligations under Article 2, Article 6A, Article 8, Article
10, Section 8.2(b) and Section 14.3, except for any
obligations that have accrued prior to such date of
termination, and in addition, the provisions of Section 3.12
will apply; and
(ii) which material default or material breach relates to any of
the covenants and agreements of Neurocrine under this
Agreement other than the Co-Promotion Covenants or under the
License Agreement, Pfizer may, upon ninety (90) days prior
written notice, elect that the provisions of Section 3.12 will
apply.
All other terms and conditions of this Agreement, except as provided
herein, shall remain in full force and effect. It is acknowledged and
agreed by Pfizer that Pfizer shall not be entitled to terminate this
Agreement for a material default covered by this Section 13.3(c), but
Pfizer shall be entitled to indemnification and the right to obtain
specific performance and other injunctive relief as provided in this
Agreement.
(d) Upon sixty (60) days prior notice to Neurocrine, Pfizer shall have
the right to terminate this Agreement upon an event described in
Sections 13.5 or 13.7 hereunder, or upon a Change of Control. Upon
termination of this Agreement pursuant to this Section 13.3, the
provisions of Section 13.8 shall apply.
13.4 Bankruptcy. Each party may, in addition to any other remedies available to
it by law or in equity, exercise the rights set forth below by written
notice to the other party (the "Insolvent Party"), in the event the
Insolvent Party shall have become insolvent or bankrupt, or shall have
made a general assignment for the benefit of its creditors, or there shall
have been appointed a trustee or receiver of the Insolvent Party or for
all or a
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substantial part of its property, or any case or proceeding shall have
been commenced or other action taken by or against the Insolvent Party in
bankruptcy or seeking reorganization, liquidation, dissolution, winding-up
arrangement, composition or readjustment of its debts or any other relief
under any bankruptcy, insolvency, reorganization or other similar act or
law of any jurisdiction now or hereafter in effect, and any such event
shall have continued for sixty (60) days undismissed, unbonded and
undischarged. All rights and licenses granted under or pursuant to this
Agreement by Neurocrine and Pfizer are, and shall otherwise be deemed to
be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses
of rights to "intellectual property" as defined under Section 101 of the
U.S. Bankruptcy Code. The parties agree that the parties as licensees of
such rights under this Agreement shall retain and may fully exercise all
of their rights and elections under the U.S. Bankruptcy Code. The parties
further agree that, in the event of the commencement of a bankruptcy
proceeding by or against either party under the U.S. Bankruptcy Code, the
other party shall be entitled to a complete duplicate of (or complete
access to, as appropriate) any such intellectual property and all
embodiments of such intellectual property, and same, if not already in
their possession, shall be promptly delivered to it (i) upon any such
commencement of a bankruptcy proceeding upon its written request
therefore, unless the party subject to such proceeding elects to continue
to perform all of its obligations under this Agreement or (ii) if not
delivered under (i) above, upon the rejection of this Agreement by or on
behalf of the party subject to such proceeding upon written request
therefore by the other party.
13.5 Neurocrine. In the event Neurocrine shall be an Insolvent Party, Pfizer
may terminate this Agreement subject to Neurocrine's rights and Pfizer's
obligations under Section 13.8.
13.6 Divestiture by Pfizer.
(a) If in connection with any proposed acquisition or merger or inquiry
of Governmental Authority, Pfizer determines that in order to
facilitate clearance or obtain approval from any Governmental
Authority with responsibility for
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enforcing antitrust or competition Laws regarding such acquisition
or merger or inquiry, it would be advisable, in Pfizer's business
judgement, to assign or sublicense or otherwise transfer (any such
assignment, sublicense or transfer, a "Divestiture Transaction")
Pfizer's rights and obligations under this Agreement and the License
Agreement to any third party, Pfizer shall notify Neurocrine thereof
("Notice of Divestiture"). The Notice of Divestiture shall not be
required to disclose any details of any such proposed Divestiture
Transaction.
(b) [***].
13.7 [***].
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13.8 Survival of Obligations. Notwithstanding any termination of this
Agreement, (a) neither party shall be relieved of any obligations incurred
prior to such termination, including the payment obligations, and (b) the
obligations of the parties with respect to (I) the protection and
nondisclosure of Confidential Information (Article 11) shall survive
termination of this Agreement, and (II) each other Section or Schedule of
this Agreement which is expressed to survive termination or which is
required to give effect to such termination or the consequences of such
termination shall survive termination, and (III) subject to Section
10.04(c)(vi) and Section 10.06 of the License Agreement, termination of
this Agreement shall not release either party from any obligation or
liability which shall have accrued at the time of termination or preclude
either party from pursuing all rights at law and in equity with respect to
any default under this agreement, (c) unless this Agreement expressly
provides that termination shall be the sole and exclusive remedy for a
particular breach hereof, either party's right to commence an action, suit
or other proceeding claiming breach of this Agreement by the other party
shall survive termination, and (d) Pfizer's obligations under Sections
2.2, 2.12, Article 7, Section 8.2(a), Article 9, Section 10.1(b), Article
11, Section 15.4 and Section 15.9 shall survive until such time as the
License Agreement shall terminate. Notwithstanding anything in this
Agreement to the contrary, in the event this Agreement is terminated prior
to termination of the License Agreement, Neurocrine shall be entitled to
receive 100% of the amounts it would have otherwise received pursuant to
Section 8.2(a), until such time as the License Agreement is terminated or
expires. Upon a termination of this
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Agreement by Pfizer, Neurocrine shall promptly return to Pfizer all
written Confidential Information previously disclosed by Pfizer, and all
copies thereof, and Neurocrine shall have no further right with respect
to, and shall cease all activities related to Co-Promotion of the Products
and Zoloft. Upon any other termination of this Agreement and the License
Agreement, each party shall promptly return to the other party all written
Confidential Information, and all copies thereof, of such other party,
except as specifically provided in this Agreement and the License
Agreement.
ARTICLE 14
NON-COMPETITION
14.1 Pfizer Non-Competition. If during the term of this Agreement Pfizer or any
of its Affiliates intends to Commercialize a prescription pharmaceutical
product having an Insomnia Indication in the Territory (a "Competitive
Product"):
(a) if such Competitive Product's [***]:
(i) [***]
(ii) [***].
(b) if such Competitive Product's [***]:
(i) [***]
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(ii) [***].
[***].
(c) If Pfizer Launches any Competitive Product defined in Section
14.1(b)(ii) ("Section 14.1(b)(ii) Product"), then neither Pfizer or
its Affiliates shall:
(i) Engage in "negative promotional activities", [***].
(ii) [***].
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
80
(iii) [***].
(iv) [***].
(d) Notwithstanding to the contrary any provisions of this Agreement or
the License Agreement, in no event shall Pfizer be required under
this Agreement or under the License Agreement to engage in any
activity regarding a Product which Pfizer is prohibited from
undertaking under Section 14.1(c) with respect to a Section
14.1(b)(ii) Product, and Section 14.1(c) shall be applicable, on the
same basis (mutatis mutandis), to promotional activities regarding
the Product vis-a-vis any Competitive Product of Pfizer.
(e) In the event that [***] shall be deemed to be a Competitive Product,
in addition to
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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Pfizer's obligations with respect to such Product in Section 14.1(b)
above, Neurocrine will have the rights in the US Territory as set
forth in Section 14.3 below.
14.2 Neurocrine Non-Competition. If, during the term of this Agreement,
Neurocrine or any of its Affiliates proposes to Commercialize a
Competitive Product in any country of the Territory other than a country
in the EU, Neurocrine or such Affiliate shall:
(a) if such Competitive Product's primary mechanism of action is through
binding with [***], divest such Competitive Product;
(b) if such Competitive Product's primary mechanism of action is other
than through binding with [***], at its sole discretion either:
(i) divest (by license, sale or similar transaction) such
Competitive Product; or
(ii) only if such commercialization would begin after the [***],
Commercialize such Competitive Product and terminate its right
to Co-Promote Products hereunder pursuant to Section 13.8.
14.3 [***].
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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14.4 Conflicts. For so long as this Agreement is in effect, in the event of any
conflict between the provisions this Article 18 of this Agreement and
Article 11 of the License Agreement, the provisions of Article 14 of this
Agreement shall control.
ARTICLE 15
MISCELLANEOUS
15.1 Governing Law. This Agreement shall be governed by and interpreted in
accordance with the internal laws of the State of New York, without regard
to its conflicts of laws rules.
15.2 Jurisdiction. With respect to any suit, action or proceeding relating to
this Agreement (each, a "Proceeding"), each party hereto irrevocably (i)
subject to the final sentence of this Section 15.2, agrees and consents to
be subject to (A) in the case of any Proceeding commenced by Pfizer, the
exclusive jurisdiction of the United States District Court for the
Southern District of California or any California state court sitting in
San Diego, California, United States of America (any such court, the
"California Court"), and (B) in the case of any Proceeding commenced by
Neurocrine, the exclusive jurisdiction of the United States District Court
for the Southern District of New York or any New York state court sitting
in New York, New York, United States of America (any such court, the "New
York Court") and (ii) waives any objection which it may have at any time
to the laying of venue of any Proceeding brought in any such California
Court or New York Court (collectively, the "Courts") as provided in this
Section 15.2, waives any claim that such Proceeding has been brought in an
inconvenient forum and further waives the right to object, with respect to
such Proceeding, that such Court does not have any jurisdiction over such
party. Notwithstanding the foregoing: (a) if the Court adjudicating such
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Proceeding refuses for any reason to exercise jurisdiction over the
dispute, either party shall be free to bring such Proceeding in any other
Court in such state as provided above and, in the event such other Courts
refuse for any reason to exercise jurisdiction over the dispute, either
party shall be free to bring such Proceeding in any other court, and (b)
if any party (the "initiating party") commences a Proceeding in any Court,
the other party (the "defendant party") shall possess and retain the right
to assert in that same Proceeding all claims and defenses that the
defendant party may have against the initiating party, including without
limitation all counterclaims and setoffs, and (c) in the case of any suits
for specific performance or other injunctive relief, the parties will seek
to bring such actions in the Courts as provided in the first sentence of
this Section 15.2, except where the applicable Courts as a result of
jurisdictional requirements cannot issue the specific performance
requested in a timely manner.
15.3 Waiver. Any term or condition of this Agreement may be waived at any time
by the party that is entitled to the benefit thereof, but no such waiver
shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party or parties waiving such term or condition.
Neither the waiver by any party of any term or condition of this Agreement
nor the failure on the part of any party, on one or more instances, to
enforce any of the provisions of this Agreement or to exercise any right
or privilege, shall be deemed or construed to be a waiver of such term or
condition for any similar instance in the future or of any subsequent
breach hereof. All rights, remedies, undertakings, obligations and
agreements contained in this Agreement shall be cumulative and none of
them shall be a limitation of any other remedy, right, undertaking,
obligation or agreement.
15.4 Notices. All notices, instructions and other communications hereunder or
in connection herewith shall be in writing, shall be sent to the address
below and shall be: (a) delivered personally; (b) sent by registered or
certified mail, return receipt requested, postage prepaid; (c) sent via a
reputable nationwide overnight courier service; or (d) sent by facsimile
transmission. Any such notice, instruction or communication shall be
deemed to have been delivered upon receipt if delivered by hand, three (3)
Business Days after it is sent by registered or certified mail, return
receipt requested, postage prepaid, one (1)
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Business Day after it is sent via a reputable nationwide overnight courier
service, or when transmitted with electronic confirmation of receipt, if
transmitted by facsimile (if such transmission is on a Business Day;
otherwise, on the next Business Day following such transmission).
Notices to Pfizer shall be addressed to:
PFIZER INC.
235 East 42nd Street
New York, New York 10017-5755
Attention: President, Pfizer Pharmaceutical Group
Fax: 212-808-8652
with a copy to: Senior Vice President and General Counsel
Fax: 212-808-8924
Notices to Neurocrine shall be addressed to:
NEUROCRINE BIOSCIENCES, INC.
10555 Science Center Drive
San Diego, California 92121-1102
Attention: Chief Executive Officer and President
Fax: 858-658-7605
with a copy to: General Counsel
Either party may change its address by giving notice to the other party in the
manner provided above.
15.5 Entire Agreement. This Agreement (including Schedules), together with the
License Agreement, contains the complete understanding of the parties with
respect to the subject matter hereof and supersedes all prior
understandings and writings relating to the Co-Promotion of the Products.
None of the terms or this Agreement shall be amended, supplemented or
modified except in writing signed by the parties hereto.
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15.6 Headings. Headings in this Agreement are for convenience of reference only
and shall not be considered in construing this Agreement. References to
Sections and Schedules are to Sections and Schedules of this Agreement
unless otherwise specified.
15.7 Severability. If and solely to the extent that any provision of this
Agreement shall be invalid or unenforceable, or shall render this entire
Agreement to be unenforceable or invalid, such offending provision shall
be of no effect and shall not effect the validity of the remainder of this
Agreement or any of its provisions; provided, however, the parties shall
use their respective reasonable efforts to renegotiate the offending
provisions to best accomplish the original intentions of the parties.
15.8 Registration and Filing of the Agreement. To the extent, if any, that a
party concludes in good faith that it is required under applicable Laws to
file or register this Agreement or a notification thereof with any
Governmental Authority, including without limitation the US Securities and
Exchange Commission, or the US Federal Trade Commission, in accordance
with applicable Laws, such party may do so and shall provide the other
party to this Agreement with a written copy of all proposed filings or
registrations to allow for a reasonably sufficient time for review and
comment by the other party. The other party shall cooperate in such filing
or notification and shall execute all documents reasonably required in
connection therewith. In such situation, the parties will request
confidential treatment of sensitive provisions of the Agreement, to the
extent permitted by Law. The parties shall promptly inform each other as
to the activities or inquiries of any such Governmental Authority relating
to this Agreement, and shall cooperate to respond to any request for
further information therefrom.
15.9 Assignment. This Agreement and all rights and obligations granted
hereunder shall not be assignable by any party without the prior consent
of the other, except that (a) Pfizer may assign this Agreement in
connection with a Divestiture Transaction, and (b) Pfizer may assign this
Agreement (and after all amounts under the Loan Agreement have been paid
in full and terminated, Neurocrine may assign this Agreement), in whole or
in part, to any Affiliate of such party or to any successor to
substantially all of such party's business or assets; provided, however,
in the case of Pfizer and Neurocrine, the assigning
86
party shall remain responsible for all obligations hereunder if its
Affiliate shall fail to perform hereunder.
15.10 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and
permitted assigns.
15.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when executed, shall be deemed an original
and all of which together shall constitute one and the same instrument.
15.12 Force Majeure. In the event of strikes, lock-outs or other industrial
disturbances, rebellions, mutinies, epidemics, landslides, lightning,
earthquakes, fires, storms, floods, sinking, drought, civil disturbances,
explosions, acts or decisions of duly constituted municipal, state or
national Governmental Authorities or of courts of law, as well as
impossibility to obtain equipment, supplies, fuel or other required
materials, in spite of having acted with reasonable diligence, or by
reason of any other causes, which are not under the control of the party
requesting the abatement of performance, or causes due to unexpected
circumstances which may not be possible to eliminate or overcome with due
diligence by such party ("Force Majeure"), the parties agree that, if
either of them find themselves wholly or partially unable to fulfill their
respective obligations in this Agreement by reasons of Force Majeure, the
party affected will advise the other party in writing of its inability to
perform giving a detailed explanation of the occurrence of the event which
excuses performance as soon as possible after the cause or event has
occurred. If said notice is given, the performance of the party giving the
notification, except for the payment of funds and except as otherwise
expressly provided in this Agreement, shall be abated, and any time
deadlines shall be extended, for so long as performance may be prevented
by such event of Force Majeure. Except as otherwise expressly provided in
this Agreement and except for the payment of funds that are due and
payable, neither party shall be required to make up any performance that
was prevented by Force Majeure.
15.13 Non-Solicitation of Employees. During the Co-Promotion Term, neither party
shall, directly or indirectly, recruit, or solicit any employee of the
other party with whom such
87
party has come into contact or interacted for the purposes of performing
this Agreement, without the prior consent of the other party, except
pursuant to general solicitations not targeted at such employees.
15.14 Press Releases.
(a) Coordination. The parties agree on the importance of coordinating
their public announcements respecting this Agreement and the subject
matter hereof. Neurocrine and Pfizer will, from time to time, and at
the request of the other party discuss and agree on the general
information content relating to this Agreement and the License
Agreement which may be publicly disclosed.
(b) Announcements. The joint press release announcing the signing of the
transactions contemplated by this Agreement and the License
Agreement is attached hereto as Schedule 15.14 and will be promptly
disseminated following signing.
(c) In addition, Pfizer acknowledges that certain events related to the
progress of the Collaboration may be material to Neurocrine and
therefore, the parties agree to make public disclosures, whether by
press release or publication, regarding the fact of the completion
of Phase III Product Studies and top line data therefrom, the filing
of an NDA, the First Approval with respect to the IR Product and the
MR Product and the occurrence of any serious adverse events. The
above-referenced releases may be Neurocrine releases or joint
Neurocrine/ Pfizer releases at Pfizer's option, and the parties
agree to jointly draft and agree on the content of such disclosure.
Except as otherwise provided in this Section 15.14, neither party
will make any public announcement regarding the fact of execution of
this Agreement by the parties hereof, the terms of or events related
this Agreement, and/or the collaboration (other than the
peer-reviewed publications which are subject to the publication
provisions set forth in Section 11.3) without the prior consent of
the other. Notwithstanding the foregoing, a party may make any
disclosure where in a party's reasonable legal opinion it is
required by applicable Law or applicable stock exchange regulation
or order or other ruling of
88
a competent court, provided that prior to such disclosure, the
disclosing party shall use reasonable efforts to notify the other
party prior to making such disclosure, and will provide the other
party with an opportunity to review and comment prior to release,
provided the disclosing party shall not be required to delay such
disclosures by more than forty-eight (48) hours to receive and
discuss such comments, so long as the disclosing party has provided
to the other party as much advance notice as is reasonably
practicable under the circumstances. Each party agrees that it shall
reasonably cooperate with the other with respect to all disclosures
regarding this Agreement to the Securities Exchange Commission and
any other governmental or regulatory agencies, including requests
for confidential treatment of proprietary information of either
party included in any such disclosure.
15.15 Third Party Beneficiaries. None of the provisions of this Agreement shall
be for the benefit of or enforceable by any third party, including,
without limitation, any creditor of either party hereto. No such third
party shall obtain any right under any provision of this Agreement or
shall by reason of any such provision make any claim in respect of any
debt, liability or obligation (or otherwise) against either party hereto.
15.16 Relationship of the Parties. Each party shall bear its own costs incurred
in the performance of its obligations hereunder without charge or expense
to the other except as expressly provided in this Agreement. Neither party
shall have any responsibility for the hiring, termination or compensation
of the other party's employees or for any employee compensation or
benefits of the other party's employees. No employee or representative of
a party shall have any authority to bind or obligate the other party to
this Agreement for any sum or in any manner whatsoever, or to create or
impose any contractual or other liability on the other party without said
party's approval. For all purposes, and notwithstanding any other
provision of this Agreement to the contrary, Neurocrine's legal
relationship under this Agreement to Pfizer shall be that of independent
contractor. Nothing in this Agreement nor the License Agreement shall be
construed to establish a relationship of partners or joint venturers
between the parties.
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15.17 Further Assurances. Following the date hereof, Neurocrine and Pfizer
shall, and shall cause each of their respective Affiliates to, from time
to time, execute and deliver such additional instruments, documents,
conveyances or assurances and take such other actions as shall be
necessary or otherwise reasonably requested by Pfizer or Neurocrine, to
confirm and assure the rights and obligations provided for in this
Agreement, and render effective the consummation of the transactions
contemplated thereby provided however that neither party will be required
under this Section 15.17 to deliver instruments, documents, conveyances or
assurances of any third party.
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date first written above.
PFIZER INC. NEUROCRINE BIOSCIENCES, INC.
By: /s/ Henry A. McKinnell By: /s/ Gary A. Lyons
---------------------------------- ----------------------------------
Name: Henry A. McKinnell Name: Gary A. Lyons
-------------------------------- --------------------------------
Title: Chairman of the Board Title: President and Chief
and Chief Executive Officer Executive Officer
------------------------------- -------------------------------
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