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Exhibit 10.2
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
PRODUCT DEVELOPMENT AND SUPPLY AGREEMENT
THIS AGREEMENT is entered into as of the 3rd day of August, 1995, by and
between Penwest, Ltd., a Washington corporation ("Penwest"), and Mylan
Pharmaceuticals Inc., a West Virginia corporation ("Mylan").
A. Penwest has developed a controlled-release agent covered by one or
more patents, patent applications, know-how and other proprietary technology,
which agent Penwest markets under the name "TIMERx" ("TIMERx"). Penwest has
conducted initial biostudies with respect to the potential development of one or
more pharmaceutical products incorporating the active ingredient Nifedipine
("Nifedipine"), TIMERx, and one or more other excipients.
B. Mylan is interested in developing for manufacture a pharmaceutical
product incorporating Nifedipine in a solid-dosage controlled-release delivery
system for oral administration in humans.
C. The parties, under a separate agreement (the "August 1994
Agreement"), are engaging in certain activities relating to the development and
testing of a product incorporating Nifedipine and TIMERx, and designed to be
bioequivalent to the product currently being marketed in the United States under
the name "Procardia XL." The parties now desire to engage in a separate program
of research, development, and testing activities designed to determine if
Penwest's TIMERx controlled-release system can be adapted and combined with
Nifedipine to make a generic controlled-release version of Nifedipine for oral
solid-dosage administration in humans that is bioequivalent to the product
currently being marketed in the United States under the name "Adalat CC." If
such activities are successful, Mylan desires to contract for a supply of TIMERX
for use in the manufacture of such a controlled-release form of Nifedipine, and
Penwest is willing to supply the same provided that Mylan agrees to obtain all
of its requirements for controlled-release agents for Nifedipine products that
are essentially bioequivalent to "Adalat CC" in the form of TIMERx from Penwest
as provided herein.
NOW, THEREFORE, the parties hereby agree as follows:
1. DEFINITIONS.
1.1 "AFFILIATE" shall mean any individual,
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partnership, corporation, limited company, trust, or other entity of whatever
nature (hereinafter collectively referred to as "Person"), which is directly or
indirectly controlling, controlled by or under common control with another
Person, identifiable based upon the context in which the term is used. The term
"control" shall mean the possession of the power to direct or cause the
direction of the management and policies and/or the distribution of the profits
of a Person.
1.2 "APPROVAL DATE" shall mean the date on which the Designated
Product (in any dosage strength) is first approved by the U.S. Food and Drug
Administration (herein the "FDA") for commercial sale in oral solid-dosage form
for administration in humans, pursuant to an abbreviated new drug application
("ANDA").
1.3 "APPROVED GENERIC VERSION" shall mean a drug that is bioequivalent
to the product that is currently being marketed in the United States under the
name "Adalat CC", and that has been fully approved for commercial sale in oral
solid- dosage form for administration in humans by the FDA or, as applicable,
the parallel regulatory authorities in the Non-Exclusive Territory, and which is
not branded, labelled, or marketed under the names "Adalat" or "Adalat CC" and
which is not marketed by Mylan, any of its Affiliates, or under a license or
sublicense from Mylan or its Affiliate 1.4
1.4 "CERTIFICATION PERIOD" shall mean the period beginning on the
Submission Date and ending on the earlier of:
1.4.1 the Approval Date; or
1.4.2 the termination of this Agreement as provided herein.
1.5 "CONFIDENTIAL TECHNOLOGY" shall mean all technology and know-how
disclosed hereunder that is, at the relevant time hereunder, protected or
required to be protected by both parties hereto as confidential information
pursuant to Section 7 hereof.
1.6 "DESIGNATED PRODUCT" shall mean the solid-dosage form of a
controlled- release pharmaceutical for oral administration in humans that
combines Nifedipine with TIMERx and other excipients and that is bioequivalent
to the product currently (as of the Effective Date) marketed in the United
States under the name "Adalat CC," as more fully described in Exhibit 1.6
subject to modifications as Penwest and Mylan may mutually agree during the
Development Period. The parties intend that the Designated Product will be
developed in more than one dosage strength, as more fully described in Exhibit
1.6.
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1.7 "DEVELOPMENT PERIOD" shall mean the period from the Effective Date
through the Submission Date or the earlier termination of this Agreement as
provided herein.
1.8 "DEVELOPMENT STEPS" shall mean the activities specified in Exhibit
2.3 hereto to be undertaken by the parties during the Development Period.
1.9 "DMF" shall mean Drug Master File as defined in 21 CFR 300 et
seq., including amendments and supplements which will be filed by Penwest.
1.10 "EFFECTIVE DATE" shall mean the effective date of this Agreement,
which is the date first written above.
1.11 "EXCLUSIVE TERRITORY" shall mean the United States and its
territories and possessions.
1.12 "FORMULATED TIMERx" shall mean TIMERx and certain additives in a
formulation to be developed hereunder specifically for use in the Designated
Product.
1.13 "JOINT DEVELOPMENTS" shall mean any and all inventions,
improvements, modifications, alterations, or enhancements that are developed
jointly by Mylan or any of its Affiliates, on the one hand, and Penwest or any
of its Affiliates, on the other hand, during the term of this Agreement or
during any period of mutual cooperative development prior to the Effective Date,
together with all United States and foreign intellectual property and other
rights and interests of the parties and their respective Affiliates thereto and
therein, including without limitation patents, trade secrets, copyright, periods
of market exclusivity, and other related rights or interests, to the extent the
same remain protected by any such rights and interests from being used freely by
others.
1.14 "LICENSE TERM" shall mean the cumulative period covered by the
Development Period, the Certification Period, and the Marketing Period.
1.15 "MARKETING PERIOD" shall mean the period beginning on the Approval
Date and ending on the earlier of:
1.15.1 the twentieth anniversary of the Approval Date; or
1.15.2 the termination of the License Term and/or this Agreement as
provided herein.
1.16 "MYLAN IMPROVEMENTS" shall mean, except for any Joint
Developments, any and all improvements, modifications, alterations, or
enhancements to any of the inventions covered by the Penwest Patents, Penwest's
Confidential Technology, or the
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
TIMERx Production Technology, that are developed, owned, or controlled by Mylan
or any of its Affiliates or sublicensees, or in which Mylan or any of its
Affiliates or sublicensees otherwise has any rights or interests,during the term
of this Agreement (or, with respect to such sublicensees, during the term of the
respective sublicenses) or during any period of mutual cooperative development
prior to the Effective Date; together with all United States and foreign
intellectual property and other rights and interests of Mylan and its Affiliates
and sublicensees thereto and therein, including without limitation patents,
trade secrets, copyright, periods of market exclusivity, and other related
rights or interests, to the extent the same remain protected by any such rights
and interests from being used freely by others.
1.17 "MYLAN TEST AND REGULATORY DATA" shall mean any and all test data,
test designs and protocols, clinical studies and results thereof, government
licenses and applications therefor, government certifications and findings, and
related materials, information and rights (including without limitation
information regarding bioavailability and bioequivalence, and any adverse drug
reactions), developed, commissioned or otherwise obtained by Mylan or any of its
Affiliates or sublicensees during the term of this Agreement (or, with respect
to such sublicensees, during the term of the respective sublicenses) relating to
TIMERx, Mylan Improvements, the Designated Product, Penwest Patents, TIMERx
Production Technology, and/or Penwest's Confidential Technology, together with
all intellectual property and other rights and interests of Mylan and its
Affiliates or sublicensees thereto and therein, worldwide. It is understood
that:
1.17.1 To the extent any of the Mylan Test and Regulatory Data is
available for review by the public without confidentiality restrictions, it
shall be referred to herein as the "Available Portion" of the Mylan Test and
Regulatory Data; and that
1.17.2 To the extent any of the Mylan Test and Regulatory Data meets the
criteria specified in Exhibit 1.17, it shall be referred to herein as the
"Deliverable Portion" of the Mylan Test and Regulatory Data.
1.18 "NET SALES" shall************************************************
mean***************************************************************************
*******************************************************************************
********, calculated in accordance with United States Generally Accepted
Accounting Principles ("GAAP") consistently applied, which pertains to the
Designated Product. The calculation of Net Sales shall include*****************
in accordance with GAAP,*******************************************************
*******************************************************************************
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
*************************************************************Amounts to be
included in the calculation of Net Sales shall be those representing:
**********************************************
**********************************************
**********************************************
**********************************************
**********************************************
************************
************************
***********************************
**********************************************
********************************************************
******************************************
******************************************
******************************************
******************************************
******************************************
******************************************
******************************************
******************************************
1.19 "NON-EXCLUSIVE TERRITORY" shall mean Canada and Mexico and the
respective territories and possessions of each.
1.20 "PENWEST PATENTS" shall mean:
1.20.1 those United States patents and foreign equivalents in the
Non-Exclusive Territory and United States and foreign patent applications listed
in Exhibit 1.20 and
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
all divisions, continuations, reissues, or extensions thereof, any periods of
marketing exclusivity relating thereto, and any letters patent that issue
thereon; and
1.20.2 Penwest's rights under United States patents and foreign patents
in the Non-Exclusive Territory, if any, obtained and in force during the License
Term covering any of Penwest's improvements, modifications, alterations, or
enhancements to any of the inventions covered by the Penwest Patents.
1.21 "PENWEST TEST AND REGULATORY DATA" shall mean any and all test
data, test designs and protocols, clinical studies and results thereof,
government licenses and applications therefor, government certifications and
findings, and related materials, information and rights (including without
limitation information regarding bioavailability and bioequivalence, and any
adverse drug reactions), developed, commissioned or otherwise obtained by
Penwest or any of its Affiliates during the term of this Agreement relating to
TIMERx, Penwest Patents, TIMERx Production Technology, and/or Penwest's
Confidential Technology, together with all intellectual property and other
rights and interests of Penwest and its Affiliates thereto and therein in the
Territory.
1.22 "PERCENTAGE MARKET SHARE" shall mean the share of the total United
States market for the aggregate of all Approved Generic Versions, the product
currently being marketed under the name "Adalat CC," and the Designated Product
which is represented by unit sales of the Designated Product, stated as a
percentage of such total market. The unit sales of such products shall be
determined through the publicly available reports of IMS or an alternate public
source mutually approved by the parties hereto.
1.23 "PRODUCTION ROYALTIES" shall mean****************************
************************************************* Mylan pursuant to Section 5.8.
1.24 "PROJECT CONTACT(S)" shall mean the persons appointed by each
party to serve as contact person between the parties during the Development
Period and the Certification Period. The initial Project Contact for Penwest is
Dr. Paul K. Wotton and the initial Project Contact for Mylan is J. Gregory Ford.
Each party shall promptly notify the other party of any substitution of other
personnel as its Project Contact. Each party may select and supervise its other
project staff as needed.
1.25 "ROYALTIES" (or "Royalty") shall mean the royalties payable to
Penwest pursuant to Section 4.3 hereof.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
1.26 "SPECIFICATIONS" shall mean such standards and analytical methods
established in writing by Penwest and Mylan as are reasonably necessary or
appropriate to assure the identity, strength, quality and purity of the TIMERx
and Formulated TIMERx, and any such other standards or methods as may be
required or approved by the FDA. It is understood and agreed that the
Specifications for Formulated TIMERx for use in Designated Product to be sold in
the Non-Exclusive Territory shall be the same as those for Formulated TIMERx for
use in Designated Product to be sold in the Exclusive Territory, and in no event
will Mylan permit the Designated Product to be certified for sale in the
Non-Exclusive Territory on any other basis.
1.27 "SUBMISSION DATE" shall mean the date on which Mylan submits to
the FDA an ANDA for the Designated Product (in any dosage strength), as approved
by the parties at the end of the Development Period.
1.28 "TERRITORY" shall mean the Exclusive Territory and the
Non-Exclusive Territory.
1.29 "TIMERx PRODUCTION TECHNOLOGY" shall mean Penwest's rights under
the Penwest Patents and any and all other patents, patent applications, and
other technology and know-how belonging to Penwest from time to time during the
term of this Agreement that directly relate to, and are necessary for the
production of, Formulated TIMERx for use in the Designated Product.
1.30 "UNIT PRICE" shall mean ************************ of Formulated
TIMERx, subject to adjustment ******************************* to reflect any
percentage increases or decreases in the United States Department of Labor,
Bureau of Labor Statistics Consumer Price Index for All Urban Consumers for the
New York City Metropolitan Area, "All Items" (1982-84 = 100) (the "Index") over
the base period Index. The Index, which may be a monthly, quarterly or other
fiscal period Index **********************************************************,
shall be considered the "base period" Index. If at any time publication of the
Consumer Price Index is discontinued, Penwest shall, with the consent of Mylan
(which consent shall not be unreasonably withheld), substitute any other index
published by the Bureau of Labor Statistics, or successor or similar
governmental agency or quasi-governmental or private entity providing similar
information as may then be in existence and shall be most nearly equivalent
thereto.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
2. DEVELOPMENT PERIOD.
2.1 In consideration of Penwest's entering into this Agreement, Mylan
shall pay Penwest upon the Effective Date a nonrefundable initial fee of
************. Upon receipt of such sum, Penwest shall conduct a pilot bio-study,
the results of which will be supplied to Mylan within 180 days of payment.
2.2 As additional inducement to Penwest to enter into this Agreement,
Mylan hereby affirms that, other than confidentiality agreements not binding
either party to any further agreement, it currently has no agreement or
arrangement with any Person other than Penwest for or including the development,
design, testing, certification, manufacture or marketing by it or such other
Person (or the Affiliate(s) of either) of any controlled-release Nifedipine
product that is intended to be essentially bioequivalent to "Adalat CC," and
agrees that it will refrain from entering into any such agreement or arrangement
(other than such confidentiality agreements) throughout the duration of the
Development Period or the period of eighteen months following the date hereof,
whichever expires later.
2.3 During the Development Period, each of Penwest and Mylan will
exert its continuing best efforts to perform their respective tasks specified in
Exhibit 2.3, within the estimated time periods there stated, in order to create
and produce the Designated Product, and each will cooperate with the other in
such efforts. Each party will, promptly and throughout the Development Period,
provide to the other all necessary information in or coming into its possession
or reasonably available to it for such purposes. Notwithstanding anything else
to the contrary contained herein, nothing shall require either party to disclose
confidential information for which such party has an obligation of
confidentiality to a third party. Each party understands and agrees that the
other does not warrant or commit that the Designated Product will be
successfully developed, and neither party shall have any liability or
responsibility to the other or to third parties for any such failure of the
development process hereunder, except to the extent such failure results from
said party's intentional misconduct, negligence, or breach of its duties or
obligations as set forth herein.
2.4 Mylan shall be responsible for, and hereby agrees to conduct or
arrange for, at Mylan's expense, all testing and studies during the Development
Period, including as to bioavailability and bioequivalence, in connection with
the development, licensing, manufacture and marketing of the Designated Product,
and for substantial compliance with all material and relevant governmental
requirements imposed in the Territory with respect to the manufacture, use, and
sale of the
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
Designated Product. In consideration of Penwest's entering into this Agreement,
Mylan agrees to pay Penwest:
2.4.1 a first milestone fee of *****************, payable
*******************************************************************************
********************************************************************* (but only
with respect to the ****************************************************, where
******************** are ****************************************************.
2.5 Mylan shall be primarily responsible for the preparation, at its
expense, of an ANDA for the Designated Product, to be filed with the FDA at the
end of the Development Period.
2.6 Each party's Project Contact will provide written reports to the
other party's Project Contact at least monthly throughout the Development
Period, stating in detail all efforts made and in process, and all significant
progress achieved and difficulties encountered in the development effort since
the last such report. Each party's Project Contact will also be available
throughout the Development Period to answer any reasonable questions from the
other party's Project Contact. The parties will cooperate reasonably during the
Development Period such that the sites for meetings among their respective
personnel shall be alternated among the parties, facilities to the extent
practicable.
2.7 During the Development Period, Mylan will supply, at its own
expense, all Nifedipine reasonably required to support the development effort,
and Penwest shall provide at its own expense all TIMERx reasonably required for
such effort. Each party shall bear its own expenses for all activities during
the Development Period, except as otherwise stated in Exhibit 2.3.
2.8 Either party may terminate this Agreement before completion of the
Development Period by delivery of 90 days' written notice to the other if such
party reasonably determines that, due to unfavorable or inconclusive results to
that time, no further Development Steps are likely to lead to the successful
development of the target Designated Product listed in Exhibit 1.6.
3. CERTIFICATION PERIOD.
3.1 During the Certification Period, Mylan will exert its continuing
best efforts, at its expense, to prosecute the ANDA(s) for the Designated
Product (in all the contemplated dosage strengths) filed hereunder successfully
to the granting of an
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
FDA approval to market the Designated Product. Penwest will, promptly and
throughout the Certification Period, provide to Mylan all necessary information
in or coming into Penwest's possession or reasonably available to it for such
purpose. Each party understands and agrees that the other does not warrant or
commit that the Designated Product will be successfully licensed or certified
for marketing by the FDA, and neither party shall have any liability or
responsibility to the other or to third parties for any such failure of the
certification process hereunder, except to the extent such failure results from
said party's intentional misconduct, negligence, or breach of its duties or
obligations as set forth herein.
3.2 Either party may terminate this Agreement before completion of the
Certification Period by delivery of 90 days' written notice to the other if such
party reasonably determines that, due to unfavorable action by the FDA, the ANDA
is not likely to be approved by the FDA, regardless of any further steps or
submissions that could be made.
3.3 Mylan's Project Contact will provide written reports to Penwest's
Project Contact at least quarterly throughout the Certification Period, stating
in detail all efforts made and in process, and all significant progress achieved
and difficulties encountered in the certification effort since the last such
report. Mylan's Project Contact will also be available throughout the
Certification Period to answer any reasonable questions from Penwest's Project
Contact.
3.4 During the Certification Period, Mylan shall provide at its own
expense all Nifedipine and other materials and manufacturing and testing
services reasonably required to support the testing and certification effort,
and Penwest shall provide at its own expense all TIMERx reasonably required for
such effort. Each party will bear its own expenses during the Certification
Period.
3.5 In consideration of Penwest's entering into this Agreement, Mylan
agrees to pay Penwest a second milestone fee of $1,000,000, payable within
********************************************* (but only with respect to the
*********************************, where ********************* are
**************************************************************. Mylan shall
notify Penwest of the occurrence of the Approval Date no later than the next
business day following Mylan's learning of such occurrence.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
4. MARKETING PERIOD.
4.1 Subject to the granting of all necessary governmental approvals or
concurrences to sell the Designated Product, Mylan hereby agrees, during the
Marketing Period, to use its continuing best efforts to market, promote and sell
the Designated Product throughout the Territory.
4.2 Mylan hereby agrees to pay to Penwest Royalties as follows:
4.2.1 with respect to all Net Sales with respect to Designated Product
sold in a nation during a quarter in which there is ***************************
on the market in such nation, the Royalty rate shall be *************** of such
Net Sales;
4.2.2 with respect to all Net Sales with respect to Designated Product
sold in a nation during a quarter in which there is ***************************
on the market in such nation, the Royalty rate shall be ***********************
of such Net Sales;
4.2.3 with respect to all Net Sales with respect to Designated Product
sold in a nation during a quarter in which there are *************************
on the market in such nation, the Royalty rate shall be **********************
of such Net Sales;
provided, however, that such Royalties shall be********************************
************************************************** with respect to Net Sales of
the Designated Product as to which no license to Penwest Patents hereunder is
applicable to the manufacture, sale or use of the Designated Product (it being
understood that a Penwest Patent shall not be considered applicable to the
manufacture of the Designated Product solely by virtue of its applicability to
the manufacture and/or sale of the Formulated TIMERx to be provided by Penwest
to Mylan for such purpose hereunder, unless such Penwest Patent is also
otherwise applicable to the manufacture, sale or use of the Designated Product).
For purposes of the foregoing, to be "sold in a nation" refers to the nation in
which such Designated Product will be initially placed into actual commercial
distribution, regardless of the FOB point or where the agreement for such sale
may have been struck. If an Approved Generic Version (other than the Designated
Product) is first put on the market in a nation during the first half of a
calendar quarter, it will be deemed for purposes of this Section to have been on
the market in such nation from the first day of such quarter, and if it is first
put on the market in a nation during the second half of a calendar quarter, it
will be deemed for purposes of this Section not to have been on the market in
such nation until the first day of the following quarter.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
4.3 All Royalties payable pursuant to this Agreement shall be due
quarterly ************************ following the end of each calendar quarter
for Net Sales in such calendar quarter. Each such payment shall be accompanied
by a statement of Net Sales for the quarter and the calculation of Royalties
payable hereunder. All Royalties and all other amounts which are overdue under
this Agreement will bear interest at the rate of 1 1/2% per month from the date
due through the date of payment. Mylan shall keep and shall cause its Affiliates
and its and their sublicensees to keep complete, true and accurate records for
the purpose of showing the derivation of all Royalties payable to Penwest under
this Agreement. Penwest's duly accredited representatives (which representatives
are approved for such purpose by Mylan, which approval shall not be unreasonably
withheld nor shall it be revocable by Mylan following the start of any
inspection hereunder) shall have the right to inspect, copy, and audit such
records at any time during reasonable business hours upon reasonable prior
notice to Mylan or any of its Affiliates or sublicensees, respectively, but such
right will not be exercised more often than annually (it being understood that a
single exercise of such right may include a series of related or continuing
inspections, copying and audits). Any such audit shall be at the expense of
Penwest, unless the audit reveals that, with respect to the period under audit,
less than 97% of the Royalties due to Penwest hereunder have been reported, in
which event Mylan shall pay or reimburse Penwest for the reasonable expenses of
such audit, in addition to Penwest's other remedies for such underpayment.
4.4 All monies due hereunder shall be paid in United States Dollars to
Penwest in Patterson, New York, USA. Said payment may be made at Mylan's option
by check or wire transfer.
5. SUPPLY OF FORMULATED TIMERx.
5.1 Except as provided in Section 5.8, and subject to the other
provisions hereof, Penwest will supply Mylan and its Affiliates and sublicensees
with sufficient quantities of Formulated TIMERx to meet their reasonable
requirements for manufacturing of the Designated Product during the Marketing
Period, and Mylan shall purchase all of its and its Affiliates, and
sublicensees, requirements for controlled-release agents for Nifedipine products
that are essentially bioequivalent to "Adalat CC" in the form of TIMERx from
Penwest during such period.
5.2 The price for all Formulated TIMERx sold hereunder shall equal the
Unit Price multiplied by the applicable units purchased. All sales**************
********************************************, and Mylan shall bear all
transportation, insurance, taxes, duties, and other costs and risks of loss,
spoilage and damage
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associated with the shipping and delivery of Formulated TIMERx to Mylan or its
Affiliates or sublicensees.
5.3 Penwest warrants that it will not change or modify its DMF, the
Specifications, or its method of manufacture for Formulated TIMERx without prior
written consent from Mylan, which consent shall not be unreasonably withheld.
5.4 Penwest shall perform quality control tests with respect to all
Formulated TIMERx as required by the FDA as set forth in the DMF. In addition,
Penwest may perform such other tests as Penwest deems necessary in accordance
with its applicable policies. No other or special tests by Penwest with respect
to the raw materials or Formulated TIMERx will be required, unless and to the
extent that Mylan establishes that the same are required in order to obtain or
maintain an FDA approval to market the Designated Product in the Exclusive
Territory. Penwest shall promptly, upon completion of each lot or batch of
Formulated TIMERx, deliver to Mylan a copy of the record of such test performed
on said lot or batch.
5.5 Each shipment of the TIMERx or Formulated TIMERx shall:
i) be accompanied by a Certificate of Analysis and a
certificate of Origin;
ii) meet all present, FDA, Compendial, and the applicable
Specifications; and
iii) be manufactured, packaged, stored and shipped in
conformance with the applicable Specifications, and Current
Good Manufacturing Practices ("cGMPs").
5.6 Within a reasonable period but not more than thirty (30) days
after receipt, Mylan will analyze each shipment of the Formulated TIMERx. If
Mylan considers any such shipment not to conform to the applicable
Specifications, Mylan shall notify Penwest immediately and provide Penwest with
the relevant analysis. If Penwest does not agree, the parties shall submit such
disagreement to the arbitration of one mutually accepted neutral analytical
laboratory. If Penwest or the neutral laboratory agree with Mylan, Penwest shall
not have any obligation to Mylan other than to accomplish at Mylan's option any
of the following:
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
i) at its own expense accept return of any shipment not
accepted; or
ii) reimburse Mylan for the cost of disposal or destruction;
and
iii) use commercially reasonable efforts to replace the non-
conforming shipment with conforming Formulated TIMERx.
5.7 In case Penwest cannot supply Mylan the requested quantities of
the Formulated TIMERx, the shipments may be made by an alternate supplier
designated by Penwest with Mylan's consent, which consent shall not be
unreasonably withheld. Penwest will qualify (in Penwest's reasonable judgment)
at least one such alternate supplier and notify Mylan thereof at least ninety
(90) days prior to submission of the ANDA. If Mylan has any objections to such
supplier, it shall so notify Penwest within fifteen days following Penwest's
notice of such qualification, or else Mylan will be deemed to have consented to
such qualification and the designation of such supplier. Such shipment by the
alternate supplier shall be made under the same agreed terms and conditions as
those set forth herein, except that an additional 60 days shall be added to the
order lead time stated in any then-outstanding order for Formulated TIMERx
hereunder to reflect the transition time required to shift to such alternate
supplier. Notwithstanding anything to the contrary set forth herein, Penwest
will be responsible for enforcing all relevant terms and conditions set forth
herein against such alternate supplier and remain liable to Mylan for any breach
of such terms and conditions by such supplier.
5.8 If for any reason Penwest (or the alternate supplier) fails to
supply Mylan with its and its Affiliates, and sublicensees, requirements of
Formulated TIMERx during the Marketing Period as agreed hereunder, Penwest shall
grant Mylan a nonexclusive license to manufacture Formulated TIMERx under the
TIMERx Production Technology and make knowledgeable personnel reasonably
available to consult with Mylan, all to the extent necessary to enable Mylan to
produce Formulated TIMERx that would otherwise have been supplied by Penwest or
an alternate supplier hereunder for Mylan and its Affiliates and sublicensees in
connection with the production of the Designated Product pursuant to this
Agreement.
5.8.1 In such event Mylan shall pay to Penwest, in addition to the
Royalties under Section 4.3, Production Royalties equal to *******************,
if any, of the then-current Unit Price for each kilogram of Formulated TIMERx
produced by Mylan hereunder, ***************************************************
************************. Such Production Royalties shall be payable and
reported and accounted for as stated in
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
Sections 4.4 and 4.5, except that the Production Royalties will be payable
******************** after the end of the calendar quarter in which the
applicable kilogram of Formulated TIMERx was produced.
5.8.2 Mylan shall maintain all information and technology delivered to
Mylan pursuant to this Section, whether orally or in writing, in confidence in
accordance with Section 7 (to the extent the same is Confidential Technology)
and shall use such information and technology only for the purpose of producing
Formulated TIMERx for its own use and the use of its Affiliates and sublicensees
in connection with this Agreement.
5.8.3 Mylan acknowledges that, in doing the foregoing, Penwest will not
be providing a "turnkey" operation. Rather, Penwest will only be required to
make reasonably available to Mylan the best standard of knowledge and
information then available to Penwest and directly used in its or its
Affiliate's manufacture of Formulated TIMERx. If any professional licenses,
visas, or other permits are required for any of the consulting to be provided by
Penwest's or its Affiliates, or licensees, personnel, Mylan shall so inform
Penwest and Mylan shall bear the costs of obtaining the same.
5.8.4 Neither Penwest nor its Affiliates or licensees will be
responsible for any failure of Mylan or its personnel to understand or properly
to implement such knowledge and information or for any materials made by any
party other than Penwest or such respective Affiliate or licensee using such
knowledge and information.
5.8.5 If Penwest's non-delivery of Formulated TIMERx resulted in whole
or in part from a temporary inability to produce and deliver the same, Penwest
may, at its option and on at least 120 days, prior written notice to Mylan,
terminate the license to produce Formulated TIMERx hereunder once Penwest or its
alternative supplier is again able and willing to supply Formulated TIMERx
hereunder.
5.9 Penwest shall, after receipt of reasonable prior notice, give duly
accredited representatives of Mylan access at all reasonable times during
regular business hours to inspect, copy, and audit any relevant records of
Penwest's or its Affiliate's plant in which the Formulated TIMERx is being
produced.
5.10 Mylan shall deliver to Penwest a firm written order stating its
(and/or its Affiliates, and sublicensees') requirements for Formulated TIMERx to
be used for production of the Designated Product for commercial use or sale
***************
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
******************************************************** therefor. Mylan shall,
within one month following the filing by Mylan of an ANDA with the FDA for the
Designated Product, submit to Penwest Mylan's first such order for Formulated
TIMERx under this Agreement, for an amount equal to the quantity necessary to
reach the Percentage Market Share *************** for the Designated Product in
the dosage strengths) submitted in such ANDA filings **************************
*******************************************************, inclusive, following
the submission of such order.
5.11 At least ********************* before Mylan and/or its Affiliates
or sublicensees begin production of the Designated Product for commercial use or
sale (and in any event not later than concurrently with the submission of the
first order described in Section 5.10), Mylan shall deliver to Penwest a
written, non-binding estimate of all requirements of Formulated TIMERx therefor.
Mylan will deliver to Penwest updates to such estimates on or before the first
day of each January, April, July and October thereafter during the Marketing
Period, which updates may revise estimates previously submitted and will add
estimates for additional months so that each such estimate covers the
****************** following the end of the firm-order period (that is, the
************************ after the month in which such estimates are made).
Penwest shall not be obligated to supply Mylan with quantities of Formulated
TIMERx during any quarter in excess of ************************ of the
quantities estimated in Mylan's written estimate applicable to that quarter,
which estimate was given to Penwest ************ prior to such quarter (the
"************** Prior Estimate" as to that quarter). Mylan shall be responsible
for purchasing from Penwest in each quarter at least *************** of the
quantities of Formulated TIMERx estimated in the *********** Prior Estimate as
to such quarter.
5.12 No order for Formulated TIMERx hereunder may be cancelled or
deferred by Mylan except by written notice delivered to Penwest **************
to the scheduled delivery date. No orders may be cancelled or deferred
*************************** without Penwest's approval if such cancellation or
deferral would reduce Mylan's purchases for the applicable quarter to less than
the ********* level referred to in Section 5.11.
5.13 Each party shall promptly notify the other of any fact,
circumstance, condition or knowledge dealing with TIMERx or the Designated
Product of which the Party becomes aware that bears upon the safety or efficacy
of TIMERx or the Designated Product. Each party shall immediately notify the
other of any inspection or audit relating to TIMERx, Formulated TIMERx, or the
Designated Product by any governmental regulatory authority in the Territory. If
a representative of the
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governmental authority takes samples in connection with such audit or
inspection, the parties shall immediately provide each other, as appropriate,
samples from the same batch. The party in receipt of such notice will provide
the other party within 72 hours, with copies of all relevant documents,
including FDA Forms 482, 483, warning letters and other correspondence and
notifications as such other party may reasonably request. Penwest and Mylan
agree to cooperate with each other during any inspection, investigation or other
inquiry by the FDA or other governmental entity, including providing information
and/or documentation, as requested by the FDA, or other governmental entity. To
the extent permissible, Penwest and Mylan also agree to discuss any responses to
observations or notifications received and to give the other party an
opportunity to comment on any proposed response before it is made. In the event
of disagreement concerning the content or form of such response, Mylan shall be
responsible for deciding the appropriate form and content of any response with
respect to any,of its cited activities and Penwest shall be responsible for
deciding the appropriate form and content of any response with respect to any of
its cited activities. Each party shall inform the other of all comments and
conclusions received from the governmental authority.
6. OWNERSHIP AND LICENSES.
6.1 Except as otherwise explicitly licensed or transferred as provided
herein, each party will, as between it and the other party hereto, retain
ownership of any and all inventions, copyrights, trade secrets, know-how, patent
rights and other technology and rights to the extent conceived or developed by
its personnel or contractors (other than the other party hereto). Neither party
makes any grant of rights by implication.
6.2 Except as otherwise provided herein, each party shall be
responsible, as it shall determine, for the filing and prosecution of any and
all patent applications with respect, in whole or in part, to its own
intellectual property and for the ,maintenance of any available patent
protection with respect thereto; provided however, that neither party commits
that any such patent protection will be available or continuous hereunder. If
one party believes that an application for a patent in the Territory should be
filed with,respect to any invention of the other party hereunder related to the
Designated Product, it may so notify such other party, and the parties will
cooperate in the investigation of the propriety of such an application, taking
into account the respective interests of the parties and the anticipated costs
and benefits of such patent protection.
6.3 Penwest hereby grants to Mylan and its Affiliates a license under
the Penwest Patents, the Joint Developments, and Penwest's Confidential
Technology disclosed to Mylan hereunder to make, have made, use and sell the
Designated Product in the Territory during the License Term. Such license shall
be exclusive for such purposes as to the Penwest Patents listed in Exhibit 1.20
within the Exclusive
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Territory and shall be nonexclusive in the Non-Exclusive Territory. Such license
does not extend to the making of TIMERx or Formulated TIMERx, but does cover the
incorporation of the same into the Designated Product. Mylan shall have no right
to grant sublicenses hereunder without the prior written consent of Penwest,
which consent may be withheld in Penwest's discretion as to sublicenses in the
Exclusive Territory, but will not be unreasonably withheld as to sublicenses in
the NonExclusive Territory. Penwest will, throughout the License Term, promptly
notify Mylan of all Penwest Patents referred to in Subsection 1.20.2 and provide
Mylan with access to all of the same, solely for use within the scope of the
license stated in this section.
6.4 Mylan hereby grants to Penwest and its Affiliates a nonexclusive,
paid-up, worldwide license,,with right to sublicense, under any and all patents,
patent applications, trade secrets, copyrights, and other intellectual property
rights of any sort owned or controlled by Mylan or its Affiliates or
sublicensees, to make, have made, use and sell Formulated TIMERx during the
License Term, if and to the extent such license is necessary for Penwest to do
so as agreed hereunder. Penwest and its Affiliates shall have the right to grant
sublicenses of its rights hereunder to an alternate supplier as and for the
purposes described in Section 5.7, but shall otherwise have no right to grant
sublicenses hereunder without the prior written consent of Mylan, which consent
shall not be unreasonably withheld.
6.5 Subject to and conditional upon the failure of Penwest (or the
alternate supplier) to meet Mylan's and its Affiliates' and sublicensees,
requirements as provided in Section 5.8, Penwest grants to Mylan a nonexclusive,
worldwide license under the TIMERx Production Technology to make and have made
Formulated TIMERx solely for use in the Designated Product for sale in the
Territory during the License Term. Mylan shall have no right to grant
sublicenses of its rights hereunder (whether to Affiliate(s) or otherwise)
without the prior written consent of Penwest, which consent shall not be
unreasonably withheld.
6.6 Mylan acknowledges that Penwest and its Affiliates, for itself and
for others, applies, and will seek to apply, TIMERx to products other than the
Designated Product. No provision hereof, and no exclusivity hereunder, shall
prevent Penwest from so applying TIMERx or Formulated TIMERx, so long as the end
product is not the Designated Product hereunder, it being understood that the
August 1994 Agreement will continue to govern on this point as to the products
covered by it.
6.7 Mylan hereby grants to Penwest and its Affiliates a nonexclusive,
worldwide license, with right to sublicense, under any and all Mylan
Improvements, to make, have made, use and sell any products or services using or
based upon TIMERx or related technology, other than: (i) Designated Products in
the Territory during the License Term, and (ii), to the extent so provided in
the August 1994
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
Agreement, the "Designated Products" defined in that agreement. Such license
shall require the payment of a reasonable royalty to Mylan if any commercial
sales are made under such license. Penwest shall notify Mylan at least
*********** prior to granting any sublicense to the rights under this section
(other than to a Penwest Affiliate), and shall consult with Mylan as to the
propriety of such sublicense if Mylan, within such ********* period, notifies
Penwest of Mylan's belief, on reasonable grounds stated in such notice, that
such a sublicense would have a substantial adverse effect on Mylan or its
business. Mylan will, throughout the License Term, promptly notify Penwest of
all Mylan Improvements and provide Penwest with access to all of the same,
solely for use within the scope of the license stated in this section.
6.8 In recognition of the parties' cooperative efforts with respect to
the Joint Developments, it is agreed that each party and its Affiliates shall
have the nonexclusive, worldwide right and license, with right to sublicense,
under the Joint Developments, to make, have made, use and sell any products or
services (other than the Designated Product by Penwest or its Affiliates in the
Exclusive Territory during the License Term, or, to the extent so provided in
the August 1994 Agreement, the "Designated Products" defined in that agreement);
provided, ********************* however,***************************************
*******************************************************************************
Each party shall promptly notify the other of any such licenses or sublicenses
of any Joint Developments. Each party will, throughout the License Term,
promptly notify the other of all Joint Developments and provide such other party
with access to all of the same.
6.9 Mylan hereby grants Penwest and its Affiliates a nonexclusive
license under all rights of Mylan and its Affiliates and sublicensees in and to
that portion of the Mylan Test and Regulatory Data that is disclosed or provided
to Penwest hereunder, to use the same for purposes of complying with
governmental requirements of any country, other than with respect to the
Designated Product for marketing or use in the Territory. Such license shall be
on a paid-up, royalty-free basis as to Penwest and its Affiliates, and as to any
of the Available Portion of the Mylan Test and Regulatory Data (whether as to
Penwest or others), but shall********************************************** if
any but the Available Portion is used by any other party under a sublicense from
Penwest or its Affiliate. Penwest shall notify Mylan at least *****************
prior to granting any sublicense to the rights under this section (other than to
a Penwest Affiliate or as to the Available Portion), and shall consult with
Mylan as to the propriety of such sublicense if Mylan, within such ************
period, notifies Penwest of Mylan's belief, on reasonable grounds stated in
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
such notice, that such a sublicense would have a substantial adverse effect on
Mylan or its business. Mylan hereby consents to Penwest's and its Affiliates'
and sublicensees' cross-referencing, in any filings that are essentially the
equivalent of the sorts of filings that are termed "ANDA" or "NDA" filings if
made with the FDA, made by them within the scope of such license, any ANDA or
NDA filing made or FDA master file created by Mylan or its Affiliates or
sublicensees relating to or containing any of the Mylan Test and Regulatory
Data. The license under this section shall survive any termination or expiration
of the term of this Agreement, except a termination under Section 10.7 due to an
uncured breach by Penwest. Mylan will, throughout the License Term and solely
for use within the scope of the license stated in this section, promptly provide
to Penwest copies of all of the Deliverable Portion of the Mylan Test and
Regulatory Data in or coming into Mylan's possession or otherwise reasonably
available to it.
6.10 Penwest hereby grants Mylan and its Affiliates (with right to
sublicense only to sublicensees under Section 6.3, as approved by Penwest) a
nonexclusive, paid-up license under all rights of Penwest and its Affiliates in
and to the Penwest Test and Regulatory Data to use the same for purposes of
complying with governmental requirements, but solely with respect to the
Designated Product for marketing or use in the Territory, it being understood
that the August 1994 Agreement will continue to govern on this point as to the
products covered by it. Penwest hereby consents to Mylan's and its Affiliates'
and such sublicensees, cross-referencing, in any ANDA or NDA filings made by
them within the scope of such license, any ANDA or NDA filing made or FDA master
file created by Penwest or its Affiliates relating to or containing any of the
Penwest Test and Regulatory Data. The license and rights under this section
shall survive any termination or expiration of the term of this Agreement,
except a termination under Section 10.7 due to an uncured breach by Mylan.
Penwest will, throughout the License Term and solely for use within the scope of
the license stated in this section, promptly provide to Mylan copies of all of
the Penwest Test and Regulatory Data in or coming into Penwest's possession or
otherwise reasonably available to it.
6.11 Each party agrees to mark and to have marked by its Affiliates and
sublicensees (if any) every product manufactured, used or sold by it or its
Affiliates or sublicensees in accordance with the laws of the United States or
other applicable nation relating to the marking of patented articles with
notices of patent.
6.12 Any dispute concerning *******************************************
*******************************************************************************
************************************************************* Each party hereto
shall afford,
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to the extent permissible under its agreements with the third parties, the other
party hereto the same audit rights that such party obtains from its licensees or
sublicensees with respect to any of the rights described in such sections.
7. CONFIDENTIALITY.
7.1 In the course of performance under this Agreement, a party may
disclose to the other confidential information belonging to such party in
writing, orally or by demonstration or sample, which information is marked or
stated in writing at or within 30 days after its disclosure to be "confidential"
or "trade secret" information. All such confidential information of a party
shall be maintained in confidence by the other and will not be used by the other
party for any purpose except as authorized hereunder. Each party shall exercise,
and shall cause its Affiliates, sublicensees and consultants to exercise, a
reasonable degree of care and at least the same degree of care as it uses to
protect its own confidential information of similar nature to preserve the
confidentiality of such information of the other party. Each party shall
safeguard such information against disclosure to third parties, including
without limitation employees and persons working or consulting for such party
that do not have an established, current need to know such information for
purposes authorized under this Agreement. This obligation of confidentiality
does not apply to information and material that:
7.1.1 were properly in the possession of the receiving party, without
any restriction on use or disclosure, prior to receipt from the other party;
7.1.2 are at the time of disclosure hereunder in the public domain by
public use, publication, or general knowledge;
7.1.3 become general or public knowledge through no fault of the
receiving party or its Affiliates or sublicensees following disclosure
hereunder;
7.1.4 are properly obtained by the receiving party from a third party
not under a confidentiality obligation to the disclosing party hereto;
7.1.5 are independently developed by or on behalf of the receiving party
without the use or assistance of the confidential information of the other
party;
7.1.6 consist merely of an idea or conception for the combination of one
or more active drug ingredients with a controlled-release agent such as TIMERx;
or
7.1.7 are required to be disclosed by order of any court or governmental
authority;
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provided, however, that the exceptions stated in Sections 7.1.3, 7.1.4, 7.1.5
and 7.1.7 shall not affect the continuing obligation of Mylan as the receiving
party to pay any Royalties pursuant to the terms hereof with respect to the use
of such information or materials that have not, as of the relevant time, been
placed into the public domain by the act of Penwest or its Affiliates.
7.2 Neither party shall make any public announcement or other
publication regarding this Agreement (whether as to the existence or terms
hereof) or the development work or project hereunder or the results thereof
without the prior, written consent of the other party, which consent shall not
be unreasonably withheld; provided that the foregoing shall not prohibit any
disclosure which, in the opinion of counsel to the disclosing party, is required
by any applicable law or by any competent governmental authority. In no event
shall either party make any disclosure of any such results before a patent
application has been filed with respect thereto, except upon the prior written
approval of the other party.
8. INFRINGEMENT.
8.1 Penwest shall promptly inform Mylan of any suspected infringement
of any of the Penwest Patents or the infringement or misappropriation of the
TIMERx Production Technology by a third party, to the extent such infringement
involves the manufacture, use or sale of the Designated Product in the Territory
("Covered Infringement"). Mylan shall promptly inform Penwest of any suspected
infringement of any of the Penwest Patents or infringement or misappropriation
of the TIMERx Production Technology, whether or not the same involves a Covered
Infringement.
8.2 If the suspected infringement or misappropriation does not involve
a Covered Infringement, Penwest may take, or refrain from taking, any action it
chooses, with or without notice to Mylan, and Mylan shall have no right to take
any action with respect to such suspected infringement or misappropriation, nor
to any recoveries with respect thereto. If the suspected infringement or
misappropriation involves a Covered Infringement, Penwest shall, within 30 days
of the first notice referred to in Section 8.1, inform Mylan whether or not
Penwest intends to institute suit against such third party with respect to a
Covered Infringement. Mylan will not take any steps toward instituting suit
against any third party involving a Covered Infringement until Penwest has
informed Mylan of its intention pursuant to the previous sentence.
8.3 If Penwest notifies Mylan that it intends to institute suit
against a third party with respect to a Covered Infringement, and Mylan does not
agree to join in such suit as provided in Section 8.4, Penwest may bring such
suit on its own and shall in such event bear all costs of, and shall exercise
all control over, such suit. Penwest may, at its expense, bring such action in
the name of Mylan and/or cause
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Mylan to be joined in the suit as a plaintiff. Recoveries, if any, whether by
judgment, award, decree or settlement, shall belong solely to Penwest.
8.4 If Penwest notifies Mylan that it desires to institute suit
against such third party with respect to a Covered Infringement, and Mylan
notifies Penwest within 30 days after receipt of such notice that Mylan desires
to institute suit jointly, the suit shall be brought jointly in the names of
both parties and all costs thereof shall be borne equally. Recoveries, if any,
whether by judgment, award, decree or settlement, shall, after the reimbursement
of each of Penwest and Mylan for its share of the joint costs in such action, be
shared between Penwest and Mylan equally; provided however that, any portion of
such net recoveries which constitutes the equivalent of, or damages or payments
in lieu of, a royalty measured by the defendant's Net Sales shall not be shared
equally, but shall be shared between Penwest and Mylan in accordance with
Section 4.3 as if they were Mylan's Net Sales.
8.5 If Penwest notifies Mylan that it does not intend to institute
suit against such third party with respect to a Covered Infringement, Mylan may
institute suit on its own. Mylan shall bear all costs of, and shall exercise all
control over, such suit. Recoveries, if any, whether by judgment, award, decree
or settlement, shall belong solely to Mylan; provided however that, after
reimbursement of Mylan for its costs in such action, any portion of such net
recoveries which constitutes the equivalent of, or damages or payments in lieu
of, a royalty measured by the defendant's Net Sales shall be shared between
Penwest and Mylan in accordance with Section 4.3 as if they were Mylan's Net
Sales.
8.6 Should either Penwest or Mylan commence a suit under the
provisions of this Section 8 and thereafter elect to abandon the same, it shall
give timely notice to the other party, who may, if it so desires, be joined as a
plaintiff in the suit (or continue as such if it is already one) and continue
prosecution of such suit. The sharing of expenses and any recovery of such suit
shall be as reasonably agreed between Penwest and Mylan.
9. REPRESENTATIONS, WARRANTIES AND INDEMNITIES.
9.1 Each party represents and warrants to the other that, to the best
of its current knowledge, it has the full right and authority to enter into this
Agreement and to grant the licenses granted herein. Each party believes, to the
best of its current knowledge, that any existing patents licensed by it to the
other party under this Agreement ate valid.
9.2 Penwest represents and warrants that any Formulated TIMERx
supplied by it to Mylan hereunder for use in the Designated Product, at the
point of delivery:
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9.2.1 will conform to the product Specifications that Penwest and Mylan
have agreed in writing are to apply to such delivery of TIMERx; and
9.2.2 to the best of Penwest's current knowledge, will not infringe upon
an article patent of any third party.
PENWEST MAKES NO REPRESENTATIONS OR WARRANTIES AS TO ANY TIMERx OR FORMULATED
TIMERx SUPPLIED BY IT TO MYLAN EXCEPT AS ARE EXPLICITLY STATED HEREIN.
9.3 Each party represents and warrants to the other party that it has
obtained and will at all times during the term of this Agreement, hold and
comply with all licenses, permits and authorizations necessary to perform this
Agreement and to test, manufacture, market, export, and import the products and
assistance to be provided by it hereunder, as now or hereafter required under
any applicable statutes, laws, ordinances, rules and regulations of the United
States and any applicable foreign, state, and local governments and governmental
entities.
9.4 Mylan warrants that any Designated Product manufactured, marketed
or distributed by Mylan or its Affiliates or sublicensees shall meet and be
manufactured, packaged, labeled, sold, and promoted in accordance with all
applicable regulatory requirements within the Territory.
9.5 Penwest shall indemnify, defend and hold harmless Mylan and its
Affiliates and sublicensees from any claim, action or damages arising out of any
alleged infringement by reason of the manufacture, use or sale by Mylan of the
Designated Product to the extent such infringement would apply as well to the
manufacture, sale or distribution of TIMERx alone. If Mylan or its Affiliate or
sublicensee, by reason of its manufacture, sale or distribution of Designated
Product, is accused of infringing the patent of a third party, and such claim of
infringement, as framed by the claimant, would apply as well to the manufacture,
sale or distribution of TIMERx alone, Mylan shall immediately so notify Penwest
and provide Penwest all available information, and the parties shall consult
reasonably as to the proper course of action. If Penwest and Mylan jointly
determine that such claim is likely to prevail, or if an arbitrator hereunder or
a court of competent jurisdiction so determines, Mylan shall be entitled to
offset against any Royalties payable to Penwest hereunder any third party
royalties for which Mylan or its Affiliate or sublicensee becomes liable.
9.6 Penwest shall indemnify, defend and hold Mylan and its Affiliates
and sublicensees harmless from any and all third-party claims to the extent
arising from, in connection with, based upon, by reason of, or relating in any
way to:
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
9.6.1 the *************************************************************
TIMERx in the Designated Product;
9.6.2 Penwest's *******************************************************
and the Specifications therefor hereunder;
9.6.3 any failure of the Formulated TIMERx manufactured by Penwest or
its alternate supplier (but not by Mylan under Section 5.8), as delivered to
Mylan hereunder for use in the Designated Product, to conform to the
Specifications; or
9.6.4 any failure of Penwest to comply with its obligation under Section
5.13 to notify Mylan of any information coming into Penwest's possession and
************************************************* Product,and not arising from
any other aspect of the Designated Product or its formulation, development,
supply, production, manufacture, sale, delivery, distribution or use, nor from
any act or omission of Mylan with respect to the Formulated TIMERx following its
delivery to Mylan hereunder.
9.7 Mylan shall indemnify, defend and hold Penwest harmless from any
and all third-party claims to the extent arising from, in connection with, based
upon, by reason of, or relating in any way to, the formulation, development,
supply, production, manufacture, sale, delivery, distribution or use of the
Designated Product, ***********************************************************
9.8 Notwithstanding anything to the contrary set forth elsewhere
herein, neither Mylan nor Penwest shall be obligated to indemnify the other
party for claims or liabilities to the extent arising from such other party's,
or its Affiliates', sublicensees' or assigns', negligence, intentional
misconduct, or breach of its duties, obligations, warranties or representations
set forth herein.
9.9 Whenever indemnification is provided for a party under this
Agreement, such right of indemnification shall extend also to the indemnified
party's Affiliates, officers, directors, shareholders, successors, assigns,
agents, employees, and insurers to the extent the same become subject to such
claim in such capacity. The party seeking indemnification shall provide the
indemnifying party with written notice of any claim or action within ten (10)
days of its receipt thereof, and shall afford the indemnifying party the right
to control the defense and settlement of such claim or action. The party seeking
indemnification shall provide reasonable assistance to the indemnifying party in
the defense of such claim or action. If the defendants in any such action
include both Mylan and Penwest and either party
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concludes that there may be legal defenses available to it which are different
from, additional to, or inconsistent with, those available to the other, that
party shall have the right to select separate counsel to participate in the
defense of such action on its behalf, and such party shall thereafter bear the
cost and expense of such separate defense. Should the indemnifying party
determine not to defend such claim or action, the other party shall have the
right to maintain the defense of such claim or action and the indemnifying party
agrees to provide reasonable assistance to it in the defense of such claim or
action. Neither party shall settle any such claim or action in a way that
prejudices or adversely impacts the other party to this Agreement without the
prior approval of such other party (which approval shall not be unreasonably
withheld) .
9.10 Any dispute concerning indemnification will be determined by
arbitration in accordance with Section 11.10 of this Agreement.
9.11 THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES,
EXPRESS, IMPLIED OR ARISING BY LAW, INCLUDING WITHOUT LIMITATION ANY IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. NOTHING IN
THIS AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION OR WARRANTY (i) BY PENWEST
AS TO THE PATENTABILITY, VALIDITY (EXCEPT AS STATED IN SECTION 9.1), OR SCOPE OF
ANY PENWEST PATENTS, PENWEST'S CONFIDENTIAL TECHNOLOGY, TIMERx PRODUCTION
TECHNOLOGY, JOINT DEVELOPMENTS, OR PENWEST TEST AND REGULATORY DATA; OR (ii) BY
MYLAN AS TO THE PATENTABILITY, VALIDITY (EXCEPT AS STATED IN SECTION 9.1), OR
SCOPE OF ANY MYLAN IMPROVEMENTS, JOINT DEVELOPMENTS, OR MYLAN TEST AND
REGULATORY DATA.
9.12 NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN (OTHER
THAN THE INDEMNITIES STATED IN THIS SECTION 9), NEITHER PARTY SHALL UNDER ANY
CIRCUMSTANCES BE LIABLE FOR ANY THIRD PARTY CLAIMS OR FOR ANY INCIDENTAL,
CONSEQUENTIAL, INDIRECT OR SPECIAL DAMAGES, INCLUDING ANY LOST PROFITS OR
SAVINGS, ARISING FROM ANY BREACH OF WARRANTY OR THE PERFORMANCE OR BREACH OF ANY
OTHER PROVISION OF THIS AGREEMENT OR THE USE OR INABILITY TO USE TIMERx, THE
DESIGNATED PRODUCT, PENWEST PATENTS, PENWEST'S CONFIDENTIAL TECHNOLOGY, TIMERx
PRODUCTION TECHNOLOGY, PENWEST TEST AND REGULATORY DATA, MYLAN IMPROVEMENTS, OR
MYLAN TEST AND REGULATORY DATA, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
9.13 Each party shall, at its own cost and expense, obtain and maintain
from a qualified insurance company comprehensive general liability and products
liability insurance coverage during the term of this Agreement (and any
subsequent period of sale or distribution pursuant to Section 10.8). Such
insurance shall be in an amount no less than **********************************
combined single limit for each occurrence for bodily injury and/or property
damage. Each party agrees to provide the other party with a certificate of
insurance evidencing such insurance within thirty (30) days after the execution
of this Agreement and again thereafter from time to time as reasonably requested
by such other party.
10. TERM AND TERMINATION.
10.1 The term of this Agreement shall begin on the date set forth above
and shall, unless earlier terminated as provided herein, continue until the end
of the License Term.
10.2 Subject to Sections 10.3 and 10.4, Penwest may at its option
terminate this Agreement following the Approval Date if Mylan and its Affiliates
and sublicensees, in the aggregate, fail to sell, in Royalty-bearing
transactions triggering "Net Sales" hereunder, Designated Product *************
*******************************************************************************
******************************************** determined under Section 10.2.1.
10.2.1 The minimum percentage market shares described above shall be as
follows:
(i) For Year 1, the minimum Percentage Market Share for
purposes of this Section 10.2 shall be ************.
(ii) For Year 2, the minimum Percentage Market Share for
purposes of this Section 10.2 shall be *******************.
(iii) For Year 3 and each year thereafter during the License
Term, the minimum Percentage Market Share for purposes of
this Section 10.2 shall be ******************* .
10.3 If there is any period during which Mylan's ability to sell the
Designated Product is materially retarded due to:
10.3.1 events beyond its reasonable control as described in Section 11.8
or
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
10.3.2 a failure of Penwest and its alternate supplier to supply
Formulated TIMERx as described in Section 5.8,
then an additional period of the lesser of the duration of such event (or
failure) or one year shall be added at that point to the schedule described in
Section 10.2.
10.4 If, at the Approval Date, there are in the United States
********************************************, the minimum amounts stated in
Section 10.2 shall ************************** to be reasonably agreed between
Mylan and Penwest in good faith negotiations during the ninety (90) days
following the Approval Date.
10.5 Mylan may at its option terminate this Agreement following the
Approval Date, provided that any such elective termination shall require that
Mylan pay an early termination fee to Penwest *********************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
during the period in which such termination occurs ****************************
*******************************************************************************
*******************************************************************************,
and such termination fee shall be paid to Penwest on or before the effective
date of such termination.
10.6 Following any expiration or termination of the License Term (but
subject to Section 10.10), the licenses to Penwest under Sections 6.7, 6.8, and
6.9 shall be extended to include (in addition to their coverage as stated in
such sections) making, using and selling the Designated Product in the Territory
and the use of Mylan Test and Regulatory Data for purposes of complying with
governmental requirements with respect to the Designated Product for marketing
or use in the Territory, and otherwise shall continue to be governed by the
terms stated in such sections.
10.7 In the event that either party materially breaches any of the
terms, conditions or agreements contained in this Agreement to be kept, observed
or performed by it, then the other party may terminate this Agreement, at its
option and without prejudice to any of its other legal or equitable rights or
remedies, by giving the party who committed the breach (i) in the case of breach
of obligations other than the payment of money, 90 days' notice in writing,
unless the notified party within such 90-day period shall have cured the breach,
and (ii) in the case of breach of an obligation for the payment of money, 30
days' notice in writing, unless the notified
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party within such 30-day period shall have cured the breach, including any
required payment of interest on previously unpaid amounts as set forth herein;
provided, however, that:
10.7.1 no termination of this Agreement under this Section shall become
effective during the pendency of a good faith dispute between the parties as to
the existence of grounds for such a termination, provided that the parties are
complying with the process in Section 11.10 in good faith in order to resolve
such dispute, and that such termination shall become effective immediately upon
any binding determination that such grounds did exist at the time the notice of
termination was given; and
10.7.2 if a notice of termination is given pursuant to this Section and
it is subsequently determined that grounds for such a notice did not exist, the
giving of such notice shall not itself constitute a repudiation or default under
this Agreement, so long as such notice was given in the good faith belief that
such grounds did exist.
10.8 In the event of any termination of this Agreement, Mylan shall be
entitled to sell and distribute reasonable inventories of Designated Product
remaining on hand as of the effective date of termination, provided that such
sales and distribution are otherwise in conformance with this Agreement. Mylan
may continue to make, use or sell such Designated Product only until Mylan has
exhausted remaining raw materials in its possession at the time of termination
of the license. Net Sales of the Designated Product pursuant to this Section
shall be subject to the Royalties pursuant to Section 4.3.
10.9 Any sublicenses granted by Mylan or its Affiliates under this
Agreement shall provide for termination or assignment to Penwest, at the option
of Penwest, of Mylan's or its Affiliate's interest therein upon termination of
this Agreement.
10.10 Mylan's obligations regarding payment of Royalties (and Production
Royalties, if any) accrued as of the date of termination and as provided under
Section 10.8; Penwest's rights under Sections 6.7, 6.8, and 6.9, as modified by
Section 10.6 (except if this Agreement is terminated due to an uncured breach on
the part of Penwest); and Mylan's rights under Section 6.10 (except if this
Agreement is terminated due to an uncured breach on the part of Mylan); and the
provisions of Sections 7, 9, and 11, hereof shall survive any expiration or
termination of this Agreement.
11. MISCELLANEOUS.
11.1 Each of Penwest and Mylan agrees to duly execute and deliver, or
cause to be duly executed and delivered, such further instruments and do and
cause to be done such further acts and things as are reasonably within its
control and,its
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responsibilities under this Agreement, including, without limitation, the filing
of such additional assignments, agreements, documents and instruments, that may
be necessary or as the other party hereto may from time to time reasonably
request in connection with this Agreement to carry out more effectively the
provisions and purposes of this Agreement.
11.2 This Agreement constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, between the parties
hereto with respect to the subject matter hereof, it being understood that the
August 1994 Agreement is not superseded by or merged into this Agreement, but,
rather, shall continue in effect as to its subject matter and in accordance with
its terms.
11.3 This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their Affiliates, successors and permitted assigns;
provided, however, that except for assignments or delegations to Affiliates of a
party (which shall not release such party from any of its rights or
responsibilities hereunder), or as part of the transfer of all or substantially
all assets to a single buyer or pursuant to a merger or other corporate
reorganization, or as otherwise specifically permitted hereunder, neither party
shall assign or delegate any of its rights or obligations hereunder at any time
without the prior written consent of the other party hereto, which consent shall
not be unreasonably withheld.
11.4 All notices, requests or other communication provided for or
permitted hereunder shall be given in writing and shall be hand delivered or
sent by facsimile, reputable courier or by registered or certified mail, postage
prepaid, return receipt requested, to the address set forth on the signature
page of this Agreement, or to such other address as either party may inform the
other of in writing. Notices will be deemed delivered on the earliest of
transmission by facsimile, actual receipt or three days after mailing as set
forth herein.
11.5 No change, modification, extension, termination or waiver of any
obligation, term or provision contained herein shall be valid or enforceable
unless same is reduced to writing and signed by a duly authorized representative
of each of the parties to be bound hereby. No waiver of any right in any one
instance shall constitute a waiver of that right or of any other right in other
instances under this Agreement.
11.6 If any provision of this Agreement shall be held invalid, illegal
or unenforceable, such provision shall be enforced to the maximum extent
permitted by law and the parties, fundamental intentions hereunder, and the
remaining provisions shall not be affected or impaired.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
11.7 Nothing herein contained ****************************************
or constitute either party as the partner, principal or agent of the other, this
being an Agreement between independent contracting entities. Neither party shall
have the authority to bind the other in any respect whatsoever. Except as
provided herein, nothing contained in this Agreement shall be construed as
conferring any right on either party to use any name, trade name, trademark or
other designation of the other party hereto, unless the express, written
permission of such other party has been obtained.
11.8 In the event that either party hereto is prevented from carrying
out its obligations under this Agreement by events beyond its reasonable
control, including without limitation acts or omissions of the other party, acts
of God or government, natural disasters or storms, fire, political strife, labor
disputes, failure or delay of transportation, default by suppliers or
unavailability of parts, then such party's performance of its obligations
hereunder shall be excused during the period of such event and for a reasonable
period of recovery thereafter, and the time for performance of such obligations
shall be automatically extended for a period of time equal to the duration of
such event or events.
11.9 This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York without regard to its
conflict of laws rules.
11.10 Should the parties to this Agreement fail to resolve any
controversy or claim arising out of or relating to the interpretation or
application of any term or provision set forth herein, or the alleged breach
thereof, such controversy or claim shall be resolved by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. Judgment upon any award rendered pursuant to the terms set forth
herein may be entered in any court having jurisdiction of the party against whom
the award is rendered. Any award rendered pursuant to the terms and conditions
set forth herein shall be final and binding upon the parties and their
Affiliates. Any arbitration held pursuant to this Agreement shall be held in
Washington, D.C., or such other site as the parties may mutually agree. All
costs and expenses including reasonable attorney's fees and the fees and
expenses of the arbitrators and the AAA, incurred in the enforcement of this
Agreement shall be paid to the prevailing party by the non-prevailing party,
provided that the same may be apportioned between the parties by the arbitrators
if they determine that each party has prevailed in part. Notwithstanding the
foregoing, either party may, on good cause shown, seek a temporary restraining
order and/or a preliminary injunction
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from a court of competent jurisdiction, to be effective pending the institution
of the arbitration process and the deliberation and award of the arbitration
panel.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and acknowledge this Agreement as of the Effective Date.
This Agreement may be executed in one or more counterparts, each of which will
be an original instrument, but all of which together shall constitute a single
agreement creating one set of rights and obligations.
Mylan Pharmaceuticals Inc. Penwest, Ltd.
By /s/ Roderick P. Jackson By /s/ John V. Talley
----------------------------- -------------------------------
Roderick P. Jackson John V. Talley
Senior Vice President Vice President
Address: Address:
781 Chestnut Ridge Road 2981 Route 22
Morgantown, W.V. 26504 Patterson, N.Y. 12563
FAX: (304) 598-5409 FAX: (914) 878-3420
Attn: J. Gregory Ford Attn: Dr. Paul K. Wotton
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EXHIBIT 1.6
Target Designated Product
Solid-dosage forms of a controlled-release pharmaceutical for oral
administration in humans that combine Nifedipine with TIMERx and other
excipients and that are bioequivalent to the product currently (as of the
Effective Date) marketed in the United States under the name "Adalat CC," in the
following tablet dosage strengths: 30 mg, 60 mg, 90 mg, and that are eligible
for approval by the FDA under an ANDA.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT 1.17
Deliverable Portion of the Mylan Test and Regulatory Data
All material under or directly related to the following headings (or their
substantive equivalents) ****************************************************
***********************************************
***********************************************
***********************************************
***********************************************
***********************************************
***********************************************
Test Procedures under the heading "Controls for the Finished Dosage Form"
(except for any Assay information that is proprietary to Mylan)
Finished Product Specifications and Test Data under the heading "Controls
for the Finished Dosage Form"
Drug Substance under the heading "Analytical Methods" (except for Mylan's
Certificate of Analysis)
Analytical Procedures ****************************************************
*******************************************************************************
**********************************************
**************************************
Such other information and data as is reasonably necessary or facilitative for
Penwest's performance of its obligations hereunder to *************************
*******************************************************************************
*********************************************************
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EXHIBIT 1.20
Penwest Patents
UNITED STATES:
1) U.S. Patent No. 4,994,276, entitled "Directly Compressible Slow Release
Granulation," issued February 19, 1991.
2) U.S. Patent No. 5,128,143, entitled "Sustained Release Excipient and
Tablet Formulation," issued July 7, 1992.
3) U.S. Patent No. 5,135,757, entitled "Compressible Sustained Release
Dosage Forms," issued August 4, 1992.
4) U.S. Application Serial No. 08\118,924, entitled "Sustained Release
Hetero-Disperse Hydrogel Systems for Insoluble Drugs," filed September 9, 1993.
CANADA:
5) Canadian Patent Application No. 611,700, filed September 18, 1989
(corresponding to items 1), 2) and 3) above).
6) Canadian Patent Application to be filed corresponding to item 4) above.
MEXICO:
7) Mexican Patent Application to be filed corresponding to item 4) above.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT 2.3:
Development Steps
EXPECTED
DATES ACTIVITY RESPONSIBILITY
----- -------- --------------
******************** * Penwest
******************* * Penwest
******************** * Mylan
*******************
***************
Analytical methodology Penwest
transfer
TIMERx-A bulk Penwest
********************
********************
Bio-batch production Mylan
nifedipine C.R. tablets
********************* ** Mylan
Pilot bio-study Mylan
Pivotal bio-studies Mylan
(fasted, fed,
steady state)
Stability studies Mylan
ANDA Filing Mylan
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