Exhibit 10.18
Portions redacted
* Certain information on this page has been
omitted and filed separately with the
Securities and Exchange Commission.
Confidential treatment has been requested
with respect to the omitted portions.
COLLABORATION AGREEMENT
THIS AGREEMENT is made as of April 30, 2001,
BETWEEN:
Transworld Pharmaceuticals Corporation Inc., a company having offices
at Sassoon House, Shirley Street, Nassau, New Providence, Bahamas, and
Toray Trading Corp. a Cyprus company
("TPh / Toray")
AND:
Dragon Pharmaceuticals Inc., a corporation having an office at 543
Granville St., Vancouver, BC. Canada V6C lX8
("Dragon")
WHEREAS:
(A) Transworld Pharmaceuticals Corporation, together with Toray, having
control and ownership of certain intellectual property, to whit: methods of
formulation of purified bulk recombinant Human erythropoietin (rHu EPO) with
recombinant Hyaluronic Acid (rHA), for the achievement of a novel slow-release
formulation of rHu EPO.
(B) TPh / Toray has agreed to grant certain rights to Dragon to
manufacture and sell the Product in a specified market, and to manufacture the
product on a fee-for-service basis for sale to TPh / Toray;
THIS AGREEMENT WITNESSES that in consideration of $1 paid and other
consideration given, by each party to each other party, the receipt and
sufficiency of which each party acknowledges, the parties severally AGREE as
follows:
PART l
DEFINITIONS AND INTERPRETATION
Definitions
1.1 In this Agreement, except as otherwise expressly provided or as the
context otherwise requires:
(a) Affiliate of a party means a corporation or entity that, directly or
indirectly, controls, is under common control with or is controlled by the
specified party;
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(b) current GMP means current good manufacturing practices as determined
by the World Health Organization;
(c) Indication means the use of the Product to treat a particular
condition as described in Schedule A;
(d) Marketing Approval has the meaning set out in ss.2.9;
(e) Product means the formulation of rHu EPO and rHA achieving a novel
slow release formulation
(f) Purchase Orders has the meaning set out in ss.4.5
Interpretation
1.2 In this Agreement, except as otherwise expressly provided or as the
context otherwise requires,
(a) "this Agreement" means this agreement as from time to time
supplemented or amended by one or more agreements entered into pursuant to
the applicable provisions of this Agreement,
(b) a reference to a Part is to a Part of this Agreement, and the symbol
ss. followed by a number or some combination of numbers and letters refers
to the section, paragraph, subparagraph, clause or subclause of this
Agreement so designated,
(c) headings are solely for convenience of reference and are not intended
to be complete or accurate descriptions of content or to be guides to
interpretation of this Agreement or any part of it,
(d) the word "including", when following a general statement or term, is
not to be construed as limiting the general statement or term to any
specific item or matter set forth or to similar items or matters. but
rather as permitting the general statement or term to refer also to all
other items or matters that could reasonably fall within is broadest
possible scope,
(e) an accounting term not otherwise defined herein has the meaning
assigned to it, and every calculation to be made hereunder is to be made,
in accordance with accounting principles generally accepted in the United
States applied on a consistent basis,
(f) a reference to currency means United States currency,
(g) a reference to a statute includes all regulations made thereunder, all
amendments to the statute or regulations in force from time to time, and
every statute or regulation that supplements or supersedes such statute or
regulations,
(h) a reference to an entity includes any successor to that entity,
(i) a word importing the masculine gender includes the feminine and
neuter, a word in the singular includes the plural, a word importing a
corporate entity includes an individual, and vice versa,
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(j) and a reference to "approval", "authorization" or "consent" means
written approval, authorization or consent.
PART 2
GRANT OF LICENSE
License
2.1 Subject to the terms of this Agreement, TPh / Toray hereby grants to
Dragon an exclusive license to manufacture and sell the Products in the Market
Area for treatment of the Indications. Additionally, Dragon is to be the sole
manufacturer of the product for markets both within its territory, as well as
for territories in which TPh / Toray market the product.
2.2 Nothing in this Agreement confers on Dragon any interest, licence or
right in respect of Products other than as set out herein, and the Products will
remain the exclusive property of TPh / Toray and its Affiliates. Sales outside
of the Market Area are prohibited, unless granted in writing to Dragon by TPh /
Toray. New Drug Licenses and production permits for the product within China are
to be owned by Dragon.
2.3 Dragon will forthwith disclose to TPh / Toray every improvement to or
further development of the Products, including the results of any research,
testing or clinical trials conducted by or on behalf of Dragon. The results of
such research, testing, trials and improvements will be immediately disclosed to
TPh / Toray and will be jointly owned by TPh / Toray and Dragon, without any
obligation of Dragon, with respect to the ownership or use of such information
or the payment of any compensation.
Dragon's Regulatory Obligations
2.4 Dragon will be responsible for obtaining, at its expense, all
registrations from applicable regulatory authorities in order to permit the
manufacture and sale of the product in the Market Area (the "Marketing
Approval"). In particular, Dragon will
(a) Complete any and all actions required to register the product with the
State Drug Administration of the People's Republic of China in order to
obtain a new drug license and manufacturing permit for the product.
2.5 TPh / Toray will use reasonable efforts to assist Dragon in obtaining
the new drug license and manufacturing permit, including providing to Dragon
(a) Results of any and all technical research, to include full results of
pre-clinical, phase I and phase II human studies, and
(b) TPh / Toray will work to achieve optimum formulation methods using
purified bulk EPO provided at no cost by Dragon, and will provide
documentation of same.
(c) Additionally, TPh / Toray will provide hands-on technical assistance
to Dragon affiliates in China and North America during the initial period
of collaboration.
(d) Costs to be borne by either side during the development phase of this
collaboration are as described in Schedule A.
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2.6 All registrations made in order to obtain the Marketing Approval in
China will be made by Dragon on its own behalf and in its own name.
Sublicenses
2.7 Dragon may not grant sublicenses to sell the Products in the Market
Area, except as authorised in writing by TPh / Toray.
PART 3
MARKETING
Marketing Plan
3.1 Dragon, TPh /Toray and their Affiliates will jointly develop a
marketing plan (the "Marketing Plan") for the sale of the products in the Market
Area, which will include targets for reasonable minimum Product sales by Dragon.
The marketing plan will be prepared by September 1 of each year and will cover
the following 12-month period from January 1 to December 31. The Marketing Plan
will be reviewed quarterly by representatives of Dragon and TPh / Toray.
Branding
3.2 Dragon and TPh / Toray will jointly determine a name under which the
Products will be so1d in the Market Area. At Dragon's option, the name
"Transworld Pharma Corp." and any related trademarks will be included in, or
linked and used with, the name selected. TPh / Toray and Dragon will jointly own
the brand name developed.
Market Area Packaging
3.3 Dragon will work with TPh / Toray to develop distinctive packaging
materials suitable to the Market Area. All packaging will be subject to the
approval of TPh / Toray and will include, at the option of TPh / Toray, such
trademark or logos of TPh / Toray or its Affiliates as determined by TPh /
Toray. Dragon will be responsible for the costs of all packaging.
PART 4
PRICING, ORDERS AND PAYMENT
Price
4.1 TPh / Toray will receive from Dragon royalties from net sales of
product at rates set out in Schedule A, such rates to be in effect until
December 31 of each year.
4.2 Notwithstanding any change in the royalty rates set out in Schedule A,
no price change will effect the price of any Products for which a Purchase Order
has been received and accepted by Dragon.
4.3 Dragon's price to TPh / Toray for the finished product manufactured by
Dragon is set our in Schedule A.
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Resale Prices
4.4 Subject to all applicable laws and the approval of TPh / Toray, which
will not be unreasonably withheld, Dragon will determine the prices at which the
Products will be sold in the Market Area. In reviewing the resale price for the
Products, TPh / Toray and Dragon will take into account considerations of
consumer affordability and maintaining appropriate price advantages over
competitors.
Delivery Times
4.5 Dragon will promptly fill all purchase Orders received from TPh /
Toray in accordance with the terms of each Purchase Order and will ensure,
unless a longer delivery time is specified in a Purchase Order, a 60-day
delivery time for each such Purchase Order. If Dragon is able to deliver the
Products in a shorter period of time than specified in the Purchase Order, it
will notify TPh / Toray of such earlier delivery date.
4.6 Notwithstanding ss.4.7, if Dragon for any reason can not meet the
delivery times in a Purchase Order, it will notify TPh / Toray of the expected
delivery date when it confirms the Purchase Order under ss.4.6. Upon receipt of
Dragon's notice of the expected delivery date, TPh / Toray may, on notice
delivered to Dragon within five business days of Dragon's receipt of TPh /
Toray's confirmation of the Purchase Order, withdraw the Purchase Order. If the
Purchase Order is not withdrawn, the delivery times in ss.4.7 will be deemed to
be amended to the time set out in Dragon's confirmation of the Purchase Order.
Payment
4.7 TPh / Toray will make full payment to Dragon for Products shipped to
it on a date after the date of shipment agreed on a case by case basis provided
that before the expiry of the payment period, Dragon has received from TPh /
Toray the following documents:
(a) Dragon's detailed invoice;
(b) customs' invoice;
(c) air waybill;
(d) packing list; and
(e) pharmaceutical certificate of analysis, quality assurance and
quality control documents and batch certificates.
Letter of Credit
4.8 TPh / Toray will, at the request of Dragon, at any time during the
term of this Agreement, provide a standby letter of credit to Dragon, which
letter of credit may be drawn by Dragon upon default by TPh / Toray of payment
in collection with any Products as provided in ss.4.7. Notwithstanding any other
provision of this Agreement, if it has requested a letter of credit Dragon will
not be obligated to manufacture or deliver any Product until it has received the
letter of credit.
4.9 The value of the standby letter of credit need not exceed the value of
the Purchase Order for which Dragon has requested the letter of credit.
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Audit Right
4.10 Dragon will keep clear and accurate books and records of all sales of
Products in the Market Area. Up to twice a year, at the request and expense of
TPh / Toray, and upon at least five days prior written notice, Dragon will
permit TPh / Toray to review the books and records during regular business
hours.
Additional Procedures
4.11 The parties recognize that additional procedures related to the
purchase and shipment of Products may be necessary from time to time during the
term of this Agreement and each will cooperate with the other to formulate and
implement new policies and procedures.
PART 5
MANUFACTURING
Specifications
5.1 Dragon will produce, or will arrange for the production of, all
Products to its best technical standards and in accordance with current GMP in
effect at the time of manufacture.
Shipping
5.2 Dragon will ensure that each shipment conforms to the Purchase Order
and all Products will be packaged and shipped in accordance with recognized
standards for guaranteeing maintenance of the "cold" chain from the Products'
manufacturing facility to Dragon's facility, through a mutually agreed upon air
courier service. To permit the proper tracking of a Product, the air waybill
number will be transmitted to Dragon as soon as practicable after shipment of
the Product.
Storage and Inspection
5.3 TPh / Toray will promptly store all Products immediately upon receipt
in a storage facility described in ss.2.12(b) and will, as soon as practicable
after receipt of any Product, inspect the shipment and advise Dragon of
conformity with the Purchase Order.
Testing of Product
5.4 TPh / Toray may arrange for: the Product to be tested at an
independent third party facility including government ministry-operated
laboratories in Sweden or Portugal, to determine whether the efficacy or purity
of the Product is within manufacturing specifications as provided for in the
Marketing Approval. TPh / Toray will promptly notify Dragon of such test results
once received.
5.5 If the testing conducted under ss.5.4 determines that the Product
fails to meet the standards of efficacy or purity required under the terms of
the Marketing Approval, TPh / Toray will be entitled to receive, at the option
of Dragon, a refund of the purchase price as specified in the Purchase Order or
a replacement shipment of the Product. Notwithstanding the foregoing, Dragon
may, before providing a refund or replacement Product, conduct testing at an
independent third party facility of the Product shipment. If the results of
Dragon's testing indicate that the Product does meet the standards set out in
the Marketing Approval, TPh / Toray and Dragon will use good faith efforts to
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resolve the discrepancy in the test results and make a determination as to the
suitability of the shipment for sale.
PART 6
CONFIDENTIALITY AND NON-COMPETITION
Confidentiality
6.1 In order to protect all confidential or proprietary information that
may be shared between the parties during the term of this Agreement, concurrent
with, or as soon as practicable after, the execution of this Agreement, the
parties will enter into a non-disclosure agreement.
6.2 The non-disclosure agreement referred to in ss.6.1 will, with the
necessary changes, be substantially in the form of the agreement dated October
19th, 2000 between TPh and Dragon.
Non-Competition
6.3 During the term of this Agreement, and for a period of three years
thereafter, Dragon will not, directly or indirectly,
(a) in sole proprietorship,
(b) in any partnership,
(c) as the owner then more than 10% of the shares of any class of any
corporation engaged in the manufacture, sale or distribution of the
Product, or
(d) in a business which competes with the TPh / Toray or its
Affiliates or partners,
engage in or carry on the business of manufacturing, distributing, marketing or
selling, the Product in and outside of the Market Area, including seeking to,
either directly or indirectly, obtain a licence or any other right or authority
from any party to manufacture, distribute, market or sell a product which
competes with the Product.
6.4 Dragon agrees and acknowledges that all the restrictions in this
Agreement are reasonable for the protection of the legitimate business interests
and proprietary rights of TPh / Toray and its Affiliates and hereby waives all
defences to the strict enforcement thereof.
PART 7
DISPUTE RESOLUTION
Disputes
7.1 If at any time there is a dispute among the parties with respect to
any matter relating to this Agreement, any party that wishes the issue to be
considered further will give notice to the other of that it requires the dispute
to be decided under the terms of this Agreement.
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Referral to Senior Officers
7.2 If a notice is given under ss.7.1, a senior officer designated by each
party will undertake discussions for the purpose of settling the dispute. A
decision reached by these officers and communicated in writing to the parties
will be determinative of the dispute and will be binding on each party.
Arbitration
7.3 If no decision is reached under ss.7.2 within 30 days of the dispute
being sent for consideration, either party may, by notice to the other party
given at any time before a decision is rendered under ss.7.2, submit the dispute
for determination by a single arbitrator acting under the Rules of the British
Columbia Commercial Arbitration Centre.
7.4 If the parties can not agree on a single arbitrator, the arbitrator
will be appointed by the British Columbia International Commercial Arbitration
Centre.
7.5 The arbitration will take place in Vancouver, British Columbia and
will be administered by the British Columbia International Arbitration Centre
and conducted in accordance with the procedures of the Centre.
PART 8
TERM AND TERMINATION
Term
8.1 This Agreement will be in effect for a 10 year period from the date of
signing and will be renewed automatically for successive three years terms
unless otherwise terminated in accordance with the terms hereof (the "Term").
Termination by Either Party
8.2 Either party may terminate this Agreement
(a) upon notice given at least 180 days before the end of the current
Term, such termination to come into effect at the end of that Term, or
(b) immediately upon written notice if the other party
(i) is in breach or violates any of the terms and conditions of or
fails to perform any of its obligations under this Agreement and,
after receiving notice from the other party, does not cure such
default within 60 days, or
(ii) becomes insolvent, bankrupt, makes an assignment for the benefit
of its creditors or has a receiver, receiver/manager, trustee or
liquidator appointed in respect of its business or its assets.
Termination by TPh / Toray:
8.3 Notwithstanding any other provision of this Agreement, TPh / Toray may
terminate this Agreement immediately upon written notice to Dragon if
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(a) TPh / Toray and Dragon have not agreed to a revised pricing
schedule as provided for in ss.4.1,
(b) TPh / Toray determines, acting reasonably, that Dragon has failed
to satisfy any material provision of the current Marketing Plan,
including a failure to meet any minimum purchase volume specified in
the Marketing Plan, or;
(c) there is a breach of the non-disclosure agreement executed under
ss.6.l.
Loss of Exclusivity
8.4 If TPh / Toray has the right to terminate the Agreement under ss.8.3,
it may by notice to Dragon make the license granted under ss.2.1 non-exclusive.
The exercising of this right does not affect the ability of TPh / Toray to
terminate this Agreement under ss.8.3 on a further occurrence of the matters set
out in that section.
Liabilities
8.5 Upon termination of this Agreement, Dragon will be required to
complete any and all existing Purchase Orders as at the date of termination and
Dragon will be required to receive and pay for all Products shipped in
connection with such Purchase Orders.
PART 9
LIABILITIES AND INDEMNIFICATION
Limitation of Liability
9.1 TPh / Toray will not be liable to Dragon or any of its Affiliates for
any incidental, special, or consequential damages resulting from exercise of the
rights granted herein or the use of the Product. The maximum amount of any
liability of TPh / Toray to Dragon for damages will be the amount of the
Purchase Order in respect of the Product delivered which caused, or resulted in
the allegation of, damages.
Indemnification
9.2 Dragon will indemnity, hold harmless, and defend TPh / Toray and its
Affiliates, its officers, employees, and agents against any and all claims,
suits, losses, damage, costs, fees, and expenses resulting from or arising out
of exercise of the rights granted under this Agreement and the sale of the
Product. This indemnification will include, but will not be limited to, any
product liability.
Insurance
9.3 Dragon, at its sole cost and expense, will insure its activities in
connection with the work under this Agreement and obtain, keep in force, and
maintain insurance or an equivalent program of self insurance.
Notice of Claim
9.4 TPh / Toray will promptly notify Dragon in writing of any claim or
suit brought against TPh / Toray in respect of which Dragon intends to invoke
the provisions of this Part. Dragon will keep TPh / Toray informed on a current
basis of its defense of any claims pursuant to this Part.
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PART 10
GENERAL PROVISIONS
Entire Agreement
10.1 This Agreement constitutes the entire agreement between the parties
and supersedes every previous agreement, communication, negotiation,
representation or understanding, whether oral or written, expressed or implied,
between the parties with respect to the subject matter of this Agreement.
10.2 No director, officer, employee or agent of any party has any authority
to make any representation or commitment not contained in this Agreement and
each party has executed this Agreement without reliance upon any such
representation or commitment.
Force Majeure
10.3 No party will be liable for its failure to perform any of its '
obligations under this Agreement as a result of Acts of God (including all
natural disasters), strikes, lockouts, civil disturbances, government or court
ordered interruptions or delays, acts of war and riots, but that either party to
this Agreement may elect to terminate it upon three months written notice to the
other if force majeure cannot or is not remedied within three months after its
occurrence.
Severability
10.4 If any provision of this Agreement is at any time unenforceable or
invalid for any reason it will be severable from the remainder of this Agreement
and this Agreement will be construed as though such provision was not contained
herein and the remainder will continue in full force and effect and be construed
as if this Agreement had been executed without the invalid or unenforceable
provision.
Amendments
10.5 This Agreement may not be amended except in writing signed by both
parties.
Assignment
10.6 Neither party will be entitled to assign this Agreement without the
written consent of the other party, which consent may be unreasonably withheld.
Notwithstanding the foregoing, TPh / Toray may assign this Agreement to an
Affiliate.
Governing Law
10.7 This Agreement is and will be deemed to have been made in Province of
British Columbia, for all purposes will be governed exclusively by and construed
and enforced in accordance with the laws prevailing in the British Columbia, and
the rights and remedies of the parties will be determined in accordance with
those laws.
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Attornment
10.8 Each of the parties irrevocably attorns to the jurisdiction of the
courts of the British Columbia and all courts having appellate jurisdiction
thereover.
Notice
10.9 To be effective, a notice, request, demand or direction (each for the
purposes of this provision a. "notice") to be given pursuant to this Agreement
by one party to another party must be in writing and must be
(a) delivered by hand or by mail, or
(b) received by telecopier transmission or other similar from of
written communication by electronic means.
in each case addressed as applicable as follows;
If to TPh / Toray at:
Rua Americo Durao 12, 6.DR. 1900 Lisbon, Portugal
Telecopier: +35121 847 1346
Attention: Dr. J. Transmontano.
with a copy to such other offices of TPh / Toray as may be
specified by TPh / Toray to Dragon:
If to Dragon at:
1200, 543 Granville Street
Vancouver. BC, Canada V6C 1X8
Attention: Dr. Longbin Liu
Fax: ++1-604-669 4243
or to such other address or fax number as is specified by the addressee by
notice to the other party.
10.10 A notice delivered or sent in accordance with ss.10.9 will be deemed
to be given and received
(a) at 8.00 a.m. on the day of delivery or receipt at the place of
delivery or receipt if that day is a Business Day at that place and
the delivery or receipt is before that time on that day.
(b) at the time of delivery or receipt if received on or after 8.00
a.m. and before 4.00 p.m. at the place of delivery or receipt on a day
that is a Business Day at that place, and
(c) at 8.00 a.m. at the place of deliver or receipt on the next day
that is a Business Day at that place, if delivered or received on a
day that is not a Business Day at that place or at or after 4.00 p.m.
at that place.
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No Partnership
10.11 Nothing in this Agreement will constitute, by any means, a partnership
between the parties.
Binding Effect
10.12 This Agreement will enure to the benefit of and be binding upon the
respective successors and permitted assigns of the parties.
Further Assurances
10.13 Each party will, at such party's own expense and without expense to
the other party, execute and deliver such further agreements and other documents
and do such further acts and things as the other party reasonably requests to
evidence, carry out or give full force and effect to the intent of this
Agreement.
Counterparts
10.14 This Agreement may be executed in any number of counterparts with the
same effect as if all parties to this Agreement had signed the same document,
and all counterparts will be construed together and constitute one and the same
instrument.
IN WITNESS WHEREOF this Agreement was executed by the parties as of the day and
year first above written.
TPh / Toray Inc.
Per: /s/ Dr. Joao Transmontano
----------------------------------------
Dr. Joao Transmontano
Per: /s/ Dr. Bo G. Danielson
------------------------------------------
Dr. Bo G. Danielson
Dragon Pharmaceuticals, Inc.
Per: /s/ Dr. Longbin Liu
---------------------------------------------
Dr. Longbin Liu
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Witnessed for Dragon Pharmaceuticals Inc. by:
Per: /s/ Robert K. Walsh
---------------------------------------------
Robert K. Walsh
Witnessed for TPh/Toray by:
Per: /s/ Dr. Jabour de Alvarenga
------------------------------------------
Dr. Jabour de Alvarenga
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SCHEDULE A
Products, Indications and Pricing
- --------------------------------------------------------------------------------------------------------------------
Slow Release Formulation Net Sales Royalty percentage - In effect until December 31, 2002
- --------------------------------------------------------------------------------------------------------------------
-All indications for product as approved by me 5% of net sales for Chinese Domestic Sales
State Drug Administration of the People's
Republic of China. 7% of net sales for remainder of market area
- --------------------------------------------------------------------------------------------------------------------
Slow release formulation price to TPh / Toray
- --------------------------------------------------------------------------------------------------------------------
Per pre-filled injector/syringe Dragon's reasonable manufacturing cost* + US $ * * *
- --------------------------------------------------------------------------------------------------------------------
*Manufacturing cost comprises materials, depreciation on equipment, labour as
mutually agreed prior to the launch of the product in the People's Republic of
China; Dragon's reference price per 1000IU of purified bulk EPO is understood to
be USD $* * *.
Market Area
The People's Republic of China, the ASEAN member nations, Taiwan, Korea, and
Japan
Costs
- --------------------------------------------------------------------------------
Purified bulk erythropoietin to Dr. Danielson Dragon
- --------------------------------------------------------------------------------
Cost of technology (know-how) transfer to Dragon TPh / Toray
- --------------------------------------------------------------------------------
Cost of travel & lodging, TPh / Toray key personnel to Dragon
Nanjing, China. US DOS rates
- --------------------------------------------------------------------------------
Cost of Travel & Lodging, Dragon personnel to Upsalla, TPh / Toray
Sweden. US DOS rates
- --------------------------------------------------------------------------------
Cost of any & all materials used for formulation Dragon
during China-side development
- --------------------------------------------------------------------------------
Cost of registration in China to include phase II-III Dragon
clinical studies
- --------------------------------------------------------------------------------
* * * CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED
WITH THE COMMISSION
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