This Agreement is made the 21st day of July 1997
BY AND BETWEEN
ELAN CORPORATION, plc
An Irish company, having its registered office at Lincoln House,
Lincoln Place, Dublin 2, Ireland.
AND
TARGON CORPORATION
A Delaware corporation, having an office at 307 College Road, East
Princeton, New Jersey 08540, United States of America.
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WHEREAS
- -------
- - ELAN is beneficially entitled to the use of various patents, including the
ELAN PATENT RIGHTS, which have been granted or are pending under the
International Convention in relation to the development and production of
drug specific dosage forms for pharmaceutical products and process, and
- - ELAN is knowledgeable in the development of drug specific dosage forms and
has developed a unique range of delivery systems designed to provide newer
and better formulations of medicaments, and
- - TARGON is desirous of entering into a licensing agreement with ELAN by
virtue of which it will be free to have manufactured in accordance with the
terms of this Agreement and to market the PRODUCT in the TERRITORY without
infringing any of the ELAN INTELLECTUAL PROPERTY rights held by ELAN, and
- - ELAN is prepared to license the ELAN PATENT RIGHTS in the TERRITORY to
TARGON and ELAN is prepared to supply the PRODUCT to TARGON.
NOW IT IS HEREBY AGREED AS FOLLOWS:
ARTICLE I : DEFINITIONS
- --------- -----------
In the present Agreement and any further agreements based thereon between
the Parties hereto, the following definitions shall prevail:
1. AFFILIATE shall mean any corporation or entity controlling, controlled
by or under the common control of ELAN or TARGON as the case may be.
For the purpose of this paragraph, "control" shall mean the direct or
indirect ownership of at least twenty five per cent (25%) of the
outstanding shares or other voting rights of the subject entity to
elect directors, or if not meeting the preceding criteria, any entity
owned or controlled by or owning or controlling at the maximum control
or ownership right permitted in the country where such entity exists.
2. Agreement shall mean this agreement.
3. cGCP, cGLP and cGMP shall mean current Good Clinical Practises,
current Good Laboratory Practises and current Good Manufacturing
Practises respectively.
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4. CMC SECTION shall mean the chemistry, manufacturing, and controls
section of an NDA as defined in 21 CFR Section 314.50 (1) and its
equivalent in the IRF.
5. CONFIDENTIAL INFORMATION shall mean information, material or data
relating to the PRODUCT not generally known to the public.
CONFIDENTIAL INFORMATION in tangible form disclosed hereunder shall be
marked as "Confidential" at the time it is delivered to the receiving
Party. CONFIDENTIAL INFORMATION disclosed orally shall be identified
as confidential or proprietary when disclosed and such disclosure of
CONFIDENTIAL INFORMATION shall be confirmed in writing within thirty
(30) days by the disclosing Party.
6. CYTOGEN shall mean Cytogen Corporation and any of its AFFILIATES
(excluding Targon Corporation).
7. DMF shall have the meaning set forth in Article VI Paragraph 5.
8. EFFECTIVE DATE shall mean the 30th day of June 1997.
9. ELAN shall mean Elan Corporation plc and any of its AFFILIATES
(excluding Targon Corporation).
10. ELAN INTELLECTUAL PROPERTY shall mean the ELAN PATENT RIGHTS and/or
the ELAN KNOW-HOW and shall include the [Information omitted and filed
separately with the Commission under Rule 24b-2].
11. ELAN KNOW-HOW shall mean all scientific or technical knowledge,
information or expertise developed, produced, created or acquired by
or on behalf of ELAN which is not generally known to the public, or to
be developed by ELAN during the TERM, relating to the PRODUCT, whether
or not covered by any patent, copyright, design, trademark or other
industrial or intellectual property rights.
12. ELAN PATENT RIGHTS shall mean all granted patents and pending patent
applications owned by, or licensed by ELAN which would be infringed by
the manufacture, use or sale of the PRODUCT, the current status of
which shall be attached as Appendix A prior to 30th September 1997.
ELAN PATENT RIGHTS shall also include all continuations,
continuations-in-part, divisionals re-issues and re-examinations of
such patents and patent applications and any patents issuing thereon
and extensions of any patents licensed hereunder and all foreign
counterparts within the TERRITORY.
ELAN PATENT RIGHTS shall further include any patents or patent
applications covering any improved methods of making or using the
PRODUCT invented or
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acquired by ELAN during the TERM and under which ELAN has a right to
grant a licence hereunder.
13. ELAN TRADEMARK shall mean SODAS(R).
14. EX WORKS shall have the meaning as such term is defined in the ICC
Incoterms, 1990, International Rules for the Interpretation of Trade
Terms, ICC Publication No. 460.
15. FDA shall mean the United States Food and Drug Administration or any
other successor agency, whose approval is necessary to market the
PRODUCTS in the United States of America.
16. IND shall mean the investigational new drug application to be filed by
TARGON with the FDA.
17. IN MARKET shall mean the sale of the PRODUCT, by TARGON (or where
applicable by TARGON's sublicensee) to an unaffiliated third party
such as a wholesaler, distributor, managed care organisation, hospital
or pharmacy and shall exclude the transfer pricing of the PRODUCT by
TARGON to an AFFILIATE.
18. IRF shall mean the application(s) to be filed by TARGON, including any
supplements or amendments thereto, which TARGON may file, for the
PRODUCT with the one or more REGULATORY AUTHORITIES.
19. LAUNCH STOCKS shall have the meaning set forth in Article IV Paragraph
4.1.
20. MANUFACTURING COST shall mean the costs described in Appendix B.
21. NDA shall mean the New Drug Application to be filed by TARGON,
including any supplements or amendments thereto, which TARGON may
file, for the PRODUCT with the FDA.
22. NDA APPROVAL shall mean the final approval to market the PRODUCT in
the United States of America as defined under the NDA.
23. NET REVENUES shall mean the [Information omitted and filed separately
with the Commission under Rule 24b-2
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].
24. NSP shall that [Information omitted and filed separately with the
Commission under Rule 24b-2
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].
25. PRODUCT shall mean the encapsulated SODAS(R) drug specific dosage
forms in not more than [Information omitted and filed separately with
the Commission under Rule 24b-2] to be selected by TARGON not later
than 30th September 1997, which ELAN shall further develop
containing morphine, or its salts, as its sole pharmaceutical active
ingredient for prescription use to be described in the NDA and such
additional dosage strengths that TARGON calls upon ELAN to develop on
ELAN's normal commercial terms.
26. PROJECT shall mean all activity as agreed by TARGON and ELAN in order
to develop and obtain NDA APPROVAL and REGULATORY APPROVAL for the
PRODUCT.
27. PROJECT TEAM shall mean the group to be established pursuant to
Article IX.
28. REGULATORY AUTHORITY(IES) shall mean one or more regulatory
authorities whose approval is necessary to market the PRODUCT in
countries of the TERRITORY outside the United States of America where
TARGON intends to obtain regulatory approval.
29. REGULATORY APPROVAL(S) shall mean the approval for sale and marketing
of the PRODUCT by the REGULATORY AUTHORITY(IES) in countries of the
TERRITORY outside the United States of America.
30. RESEARCH AND DEVELOPMENT [Information omitted and filed separately
with the Commission under Rule 24b-2]. The Parties shall agree upon a
more detailed definition on or before 30th September 1997 which
shall be added to this Agreement as Appendix C.
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31. SPECIFICATIONS shall mean the specifications as approved by the FDA
and the REGULATORY AUTHORITIES and which shall be attached to
Appendix D, as well as such other specifications which may be agreed
upon by the Parties in writing and which are based upon the
specifications approved by the FDA and the REGULATORY AUTHORITIES.
32. SUBSIDIARY shall mean any corporation or entity of which at least a
majority of the voting interest is at the time held, directly or
indirectly, by TARGON.
33. TARGON shall mean Targon Corporation and its SUBSIDIARIES.
34. TARGON KNOW-HOW shall mean [Information omitted and filed separately
with the Commission under Rule 24b-2
].
35. TARGON PATENT RIGHTS shall mean all patents and patent applications
owned or to be owned by, or licensed or to be licensed by TARGON
which would be infringed by the manufacture, use or sale of the
PRODUCT. TARGON PATENT RIGHTS shall also include all continuations,
continuations-in-part, divisionals and re-issues of such patents and
patent applications and any patents issuing thereon and extensions
of any patents licensed hereunder.
36. TERM shall have the meaning set forth in Article XI Paragraph 1.
37. TERRITORY shall mean all of the countries of the world.
38. TRADEMARK shall mean the trademark(s) as may be selected by TARGON
or its sub-licensee which has been or may be registered by TARGON in
one or more countries of the TERRITORY.
39. $ shall mean United States Dollars.
1.2 In this Agreement
1.2.1 the singular includes the plural and vice versa, the masculine
includes the feminine and vice versa and references to natural
persons include corporate bodies, partnerships and vice versa.
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1.2.2 any reference to a Article or Schedule shall, unless otherwise
specifically provided, be to a Article or Schedule of this
Agreement.
1.2.3 the headings of this Agreement are for ease of reference only and
shall not affect its construction or interpretation.
ARTICLE II: THE LICENCE
- ---------- -----------
1.1. ELAN shall remain proprietor of all the ELAN INTELLECTUAL PROPERTY
relating to the PRODUCT and the ELAN TRADEMARK, but shall grant to
TARGON for the term of the Agreement an exclusive licence, with the
right to grant sublicenses, for the TERRITORY to clinically test,
register, have manufactured in accordance with the terms of this
Agreement, to package, use, promote, distribute and sell the PRODUCT
as a prescription medicine under the terms and conditions set out
herein.
1.2. Subject to the provisions of the following sentence, TARGON hereby
accepts such licence and confirms that TARGON and its AFFILIATES
will not market in the TERRITORY any [Information omitted and filed
separately with the Commission under Rule 24b-2] during the TERM and
for [Information omitted and filed separately with the Commission
under Rule 24b-2] thereafter.
In the countries of the European Union and in the European Economic
Area, ELAN reserves the right to [Information omitted and filed
separately with the Commission under Rule 24b-2
].
1.3. TARGON shall grant a right of first negotiation to ELAN and its
joint venture partners in such countries of the TERRITORY where ELAN
is a shareholder in a marketing joint venture, or has a direct
marketing presence through an AFFILIATE (being as of the EFFECTIVE
DATE, the United Kingdom of Great Britain and Northern Ireland,
Ireland, Spain, Sweden, Taiwan and the Philippines); provided that
the provisions of this Paragraph shall not apply to (I) the United
States of America, (II) in countries where TARGON is a shareholder
in a marketing joint venture, and (III) in countries which are the
subject of a multinational sublicence agreement. ELAN shall advise
TARGON of any additional countries of the
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TERRITORY where ELAN becomes a shareholder in a marketing joint
venture, or acquires or develops a direct marketing presence through
an AFFILIATE. TARGON undertakes that it will not enter into a
binding option or sub-license agreement with any third party for the
PRODUCT for one or more of the foregoing countries of the TERRITORY
without first approaching ELAN to establish whether ELAN wishes to
acquire marketing rights for the PRODUCT in one or more of the
foregoing countries of the TERRITORY. ELAN shall revert to TARGON
within fifteen days (15) to indicate whether or not it wishes to
proceed with negotiations to acquire marketing rights for the
PRODUCT in the country or countries concerned. In the alternative,
ELAN may approach TARGON to signify ELAN's wish to acquire marketing
rights for the PRODUCT in one or more of the foregoing countries of
the TERRITORY. In either event the Parties shall negotiate the terms
of an agreement in good faith for a period not exceeding forty five
(45) days. In the event that TARGON and ELAN or the marketing joint
venture do not enter into a binding commercial agreement with ELAN
within the said forty five (45)day period, then TARGON shall be free
to enter unencumbered into binding agreements with one or more third
parties and the rights of first negotiation granted to ELAN and the
marketing joint venture hereunder shall cease for the applicable
country or countries of the TERRITORY.
Sublicences
-----------
2.1. TARGON may sub-license one or more third parties (each a sub-
licensee) to clinically test, register, package, use, promote,
distribute and sell the PRODUCT in one or more other countries of
the TERRITORY.
[Information omitted and filed separately with the Commission under
Rule 24b-2]. TARGON shall use its reasonable endeavours to ELAN that
ELAN shall be furnished with a copy of the executed sub-licence, or
failing the foregoing to furnish the applicable terms of such
agreement.
2.2. Any sub-licence permitted by this Paragraph shall be to the extent
appropriate in the same terms mutatis mutandis as the terms of this
Agreement, provided that no sublicence granted by TARGON pursuant to
this Article II Paragraph 2 shall authorise or permit the
sublicensee to grant further sublicences, or contain a production
licence. TARGON shall use its reasonable endeavours to ensure that
ELAN shall have the same rights of audit and inspection vis a vis
the sublicensee as ELAN has pursuant to this Agreement concerning
TARGON.
2.3. Insofar as the obligations owed by TARGON to ELAN are concerned,
TARGON shall use reasonable endeavours to ensure compliance by the
sub-licensee, including where applicable terminating the sub-
licence. Any sub-licence permitted by Paragraph 2.1. above shall
automatically and immediately terminate if the country
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or countries for which the sublicensee has rights are affected by
the termination of this Agreement (so that a sub-licence shall only
terminate if the Agreement has been terminated for the country or
countries concerned).
3. Notwithstanding the provisions of Article XII Paragraph 1, ELAN
may use the ELAN INTELLECTUAL PROPERTY and all technical and
clinical data or improvements generated by ELAN pursuant to this
Agreement in connection with ELAN's other commercial arrangements
outside the TERRITORY, within the TERRITORY in the event of the
termination of this Agreement or, within the TERRITORY in connection
with products other than the PRODUCT. In consideration for the
licences granted by ELAN pursuant to this Agreement, [Information
omitted and filed separately with the Commission under Rule 24b-2
].
4. ELAN shall, if requested, advise TARGON in any technical matters as
may become necessary for the proper utilisation of TARGON's licence.
5. For the duration of the Agreement, ELAN shall not itself or through
a third party develop or sell in the TERRITORY, nor shall ELAN
license another party in the TERRITORY to develop or sell,
[Information omitted and filed separately with the Commission under
Rule 24b-2
]. ELAN shall possess all rights including, without
limitation, the right to research, develop, experiment with,
manufacture, sell, license or otherwise market the PRODUCT in such
country or countries which cease to be part of the TERRITORY.
6. When packaged, and to the extent permitted by law, a product label
shall include an acknowledgement that the PRODUCT is made under
licence from ELAN. Such acknowledgement shall take into
consideration regulatory requirements and TARGON's commercial
requirements. TARGON shall wherever possible give due
acknowledgement and recognition to ELAN in all printed scientific
publications, promotional and other material regarding the PRODUCT
such as stating that the PRODUCT is developed by, under license
from, and
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manufactured by, ELAN and that the SODAS(R) technology has been
applied to the PRODUCT.
Trademarks
----------
7. TARGON shall market the PRODUCT in the TERRITORY under a TRADEMARK,
whether during the INITIAL PERIOD or thereafter, which TRADEMARK
will be owned by TARGON.
8.1. ELAN hereby grants to TARGON a non-exclusive royalty free licence,
with the right to grant sublicenses, in the TERRITORY for the TERM
to use the ELAN TRADEMARK upon or in relation to the PRODUCT on the
terms set forth in Paragraph 8. TARGON shall not be obliged to use
the ELAN TRADEMARK to identify the PRODUCT but at ELAN's request and
to the extent permitted by law shall be obliged to use the ELAN
TRADEMARK to identify the applicable ELAN technology embodied in the
PRODUCT.
8.2. Except as set forth in this Paragraph 8, nothing contained in this
Agreement shall grant to TARGON any right, title, or interest in or
to the ELAN TRADEMARK, whether or not specifically recognised or
perfected under applicable laws. At no time during or after the TERM
of this Agreement shall TARGON challenge or assist others to
challenge the ELAN TRADEMARK, or the registration thereof or attempt
to register any trademarks, marks, or trade names confusingly
similar to the ELAN TRADEMARK. All representations of the ELAN
TRADEMARK that TARGON intends to use shall first be submitted to
ELAN for approval (which shall not be unreasonably withheld) of
design, colour, and other details, or shall be exact copies of those
used by ELAN. In addition, TARGON shall fully comply with all
reasonable guidelines, if any, communicated by ELAN concerning the
use of the ELAN TRADEMARK.
8.3. TARGON shall as soon as it becomes aware of any infringement give to
ELAN in writing full particulars of any use or proposed use by any
other person, firm or company of a trade name or trademark or mode
or promotion or advertising which amounts to or might amount either
to infringement of ELAN's rights in relation to the ELAN TRADEMARK,
trade dress violations or passing off.
8.4. If TARGON becomes aware that any other person, firm or company
alleges that the ELAN TRADEMARK is invalid or that the use of the
ELAN TRADEMARK infringes any rights of another Party or that the
trademark is otherwise attacked or attackable, TARGON shall
immediately give to ELAN full particulars in writing thereof and
shall make no comment or admission to any third party in respect
thereof.
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8.5. ELAN shall have the right to conduct all proceedings relating to the
ELAN TRADEMARK and shall in its sole discretion decide what action,
if any, to take in respect of any infringement or alleged
infringement of the ELAN TRADEMARK or passing-off or any other claim
or counter-claim brought or threatened in respect of the use or
registration of the ELAN TRADEMARK. TARGON shall reasonably co-
operate with ELAN in its efforts to terminate any trademark
infringement, trade dress violation or passing off violations,
including but not limited to providing documentary and testimonial
evidence. Any such proceedings shall be conducted at ELAN's expense
and for its own benefit. ELAN shall not settle or otherwise
compromise such proceedings without due consultation for TARGON's
interests.
9. Performance by TARGON
---------------------
9.1.1. TARGON will use commercially reasonable efforts to file and
prosecute to approval all registrations applications, obtain NDA
APPROVAL in the United States of America, and REGULATORY APPROVAL in
the [Information omitted and filed separately with the Commission
under Rule 24b-2] as soon as practicable. Specifically, TARGON shall
file the NDA no later than [Information omitted and filed separately
with the Commission under Rule 24b-2]. TARGON or its sub-licensees
shall file the IRF in the [Information omitted and filed separately
with the Commission under Rule 24b-2] within [Information omitted
and filed separately with the Commission under Rule 24b-2]. In the
event of any failure by ELAN to diligently pursue any submission in
any application for regulatory approval in any country which results
in TARGON's failure to file the NDA or IRF, or to obtain NDA
APPROVAL or REGULATORY APPROVAL, the Parties through the PROJECT
TEAM shall make reasonable and appropriate adjustments to the period
within which TARGON shall have to obtain NDA APPROVAL or the
applicable REGULATORY APPROVALS.
9.1.2. TARGON will use its commercially reasonable efforts to obtain
regulatory approval to commercialise the PRODUCT in the other
countries of the TERRITORY that it selects, having regard to the
effort and expenditure required to obtain regulatory approval for
the PRODUCT and the commercial opportunities for the PRODUCT in such
other countries of the TERRITORY.
9.2. TARGON shall effect
9.2.1. a national commercial launch of the PRODUCT in the United States of
America [Information omitted and filed separately with the
Commission under Rule 24b-2] of NDA APPROVAL,
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9.2.2. a national commercial launch of the PRODUCT in the [Information
omitted and filed separately with the Commission under Rule 24b-2]
TARGON will effect within [Information omitted and filed separately
with the Commission under Rule 24b-2] and
9.2.3. a national commercial launch of the PRODUCT in the other countries
of the TERRITORY as selected by TARGON pursuant to Paragraph 9.1.2.
above
provided that TARGON shall have the freedom to market the PRODUCT (in that
it shall have received the agreed quantities of LAUNCH STOCKS ordered
pursuant to firm purchase orders pursuant to Article IV at least sixty (60)
days in advance of the launch date, where applicable shall have obtained
reimbursement or pricing approval, and there are no other constraints
outside the control of TARGON preventing launch, such as material patent
litigation). TARGON shall be entitled to defer the commercial launch of the
PRODUCT in one or more countries of the TERRITORY should TARGON in its good
faith determine, after due discussion with ELAN, that it is not in the best
commercial interest of TARGON to commence marketing the PRODUCT in the
particular country or countries of the TERRITORY within the timetable
imposed this by Paragraph and that such launch should be deferred for the
appropriate period.
9.3. If (x) TARGON fails to obtain REGULATORY APPROVAL as required by
Paragraph 9.1. above or (y) TARGON indicates to ELAN that it does
not intend to obtain registration approval and commercialise the
PRODUCT in a particular country or countries of the TERRITORY, or
(z) TARGON fails to commence commercialisation in any country as
required by Paragraph 9.2. above then, in such event, the licences
granted to TARGON hereunder shall [Information omitted and filed
separately with the Commission under Rule 24b-2] from ELAN terminate
in the applicable country or countries of the TERRITORY. In such
event, TARGON shall, at the option of ELAN, grant an exclusive
licence to the TARGON PATENT RIGHTS and the TARGON KNOW-HOW to
commercialise the PRODUCT on the terms set out in this Paragraph,
and to the TRADEMARK on the terms set out in Article II Paragraph 8
applied mutatis mutandis, and make available and transfer to ELAN
all of TARGON's data, information, applications, approvals and
filings to permit ELAN to commercialise the PRODUCT in the
applicable country or countries of the TERRITORY. In such event
TARGON shall be entitled to a royalty of [Information omitted and
filed separately with the Commission under Rule 24b-2] of the
PRODUCT by ELAN (for which purpose the definition of [Information
omitted and filed separately with the Commission under Rule 24b-2]
as set out in Article I shall apply mutatis mutandis to sales by
ELAN to an unaffiliated third party such as a sublicensee appointed
by ELAN), provided that where ELAN is selling IN MARKET (for which
purpose the definition of IN MARKET as set out in Article I shall
apply mutatis mutandis), ELAN shall pay a royalty of [Information
omitted and filed separately with the Commission under Rule 24b-2
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] as set out in Article I shall apply mutatis mutandis).
In such event, the Parties shall enter into a further written
licence agreement which shall include customary and reasonable terms
relating to, inter alia, the timing of royalty payments to TARGON,
reporting obligations regarding net sales, audit rights of TARGON
with respect to books and records relating to net sales, and
indemnity provisions, which obligations shall, unless otherwise
agreed by the Parties, be substantially similar to those in this
-------
Agreement with respect to commercialisation of the PRODUCTS by
TARGON.
9.4. Notwithstanding the above, in the event that the Parties disagree
whether or not TARGON has satisfied its obligations under this
Paragraph 9 with regard to one or more of such other countries of
the TERRITORY, the matter may be submitted to arbitration by either
Party pursuant to Article XII Paragraph 12, and TARGON's rights and
licenses shall remain in effect until and unless the arbitrator
makes a decision that TARGON's right and license in such country
should terminate.
10. Each Party shall both prior to and subsequent to the launch of the
PRODUCT communicate and consult with the other regarding its
objectives for and performance of the PRODUCT in the United States
of America and in the other countries of the TERRITORY, and the
promotional activities and materials associated therewith, including
marketing approaches, promotional and advertising materials and
campaigns (including direct to customer advertising), sales plans
and results, performance against competitors etc.
11. In addition to meetings of the PROJECT TEAM, the Parties shall meet
on a quarterly basis for the first year following the initial launch
of the PRODUCT in the United States of America, on a semi-annual
basis for the second and third year and on an annual basis
thereafter. At such meetings, TARGON shall report on the ongoing
sales performance of the PRODUCT in the TERRITORY, including
marketing approaches, promotional and advertising materials and
campaigns (including direct-to-consumer advertising), sales plans
and results, performance against competitors etc.
12. TARGON shall provide ELAN with detailed [Information omitted and
filed separately with the Commission under Rule 24b-2] sales reports
outlining the status of the PRODUCT in the TERRITORY, including a
report on the competitive position of the PRODUCT in its relevant
market segment(s). Such reports shall be furnished to ELAN within
[Information omitted and filed separately with the Commission under
Rule 24b-2] days following the availability of the relevant data to
TARGON.
13.1. In the event that either Party is interested in [Information omitted
and filed separately with the Commission under Rule 24b-2
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] such Party will inform the other Party thereof and both
Parties will [Information omitted and filed separately with the
Commission under Rule 24b-2]. Prior to commencing any such
programme, the Parties will [Information omitted and filed
separately with the Commission under Rule 24b-2].
13.2. In the event that [Information omitted and filed separately with the
Commission under Rule 24b-2] TARGON with a view to [Information
omitted and filed separately with the Commission under Rule 24b-2]
TARGON undertakes that it [Information omitted and filed separately
with the Commission under Rule 24b-2]. ELAN shall be [Information
omitted and filed separately with the Commission under Rule 24b-2].
Should ELAN [Information omitted and filed separately with the
Commission under Rule 24b-2] then ELAN and TARGON shall [Information
omitted and filed separately with the Commission under Rule 24b-2].
In the event that ELAN [Information omitted and filed separately
with the Commission under Rule 24b-2] then TARGON shall [Information
omitted and filed separately with the Commission under Rule 24b-2].
ELAN shall [Information omitted and filed separately with the
Commission under Rule 24b-2]. The provisions of this Paragraph 13.2.
shall not apply where the relevant formulation is to contain that
[Information omitted and filed separately with the Commission under
Rule 24b-2] patented compound.
13.3. In the event that [Information omitted and filed separately with the
Commission under Rule 24b-2] ELAN with a view to [Information
omitted and filed separately with the Commission under Rule 24b-2]
ELAN undertakes that it [Information omitted and filed separately
with the Commission under Rule 24b-2]. TARGON shall [Information
omitted and filed separately with the Commission under Rule 24b-2].
Should TARGON [Information omitted and filed separately with the
Commission under Rule 24b-2] then TARGON and ELAN shall [Information
omitted and filed separately with the Commission under Rule 24b-2].
In the event that TARGON [Information omitted and filed separately
with the Commission under Rule 24b-2] then ELAN shall [Information
omitted and filed separately with the Commission under Rule 24b-2
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Page 15 of 54
]. TARGON shall [Information omitted and filed separately
with the Commission under Rule 24b-2]. The provisions of this
Paragraph 13.3. shall not apply where the relevant formulation is to
contain that [Information omitted and filed separately with the
Commission under Rule 24b-2] patented compound, or the combination
is the subject of a patent application or patent.
ARTICLE III: PRODUCT AND CLINICAL DEVELOPMENT
- ------------ --------------------------------
1. Subject to the provisions of this Article III, TARGON shall use its
reasonable efforts, as would be deemed commensurate with the
achievement of its own business aims for a similar product of its
own to conduct such part of the PROJECT as shall be conducted by
TARGON. Subject to the provisions of this Article III, ELAN shall
use its reasonable efforts, as would be deemed commensurate with the
achievement of its own business aims for a similar product of its
own, to conduct such part of the PROJECT as shall be conducted by
ELAN. ELAN shall be primarily responsible for the further
development of the formulations of the PRODUCT as well as the
manufacturing scale up and validation. In addition ELAN shall be
responsible for conducting such other activities as TARGON requests
and ELAN agrees to conduct. TARGON shall, inter alia, be responsible
for the Phase II and Phase III clinical development of the PRODUCT,
including if necessary the generation of data to support the
clinical pharmacology/pre-clinical section of the labelling for the
PRODUCT.
2. For the avoidance of doubt, the Parties hereby confirm that a
primary objective of the product and clinical development is to
generate the NDA and secure NDA APPROVAL for the PRODUCT. The
Parties also anticipate that the CMC SECTION to be generated by ELAN
shall be applicable to the equivalent sections of the IRF for the
countries of the TERRITORY outside the United States of America. If
additional data or work such as [Information omitted and filed
separately with the Commission under Rule 24b-2] is required
[Information omitted and filed separately with the Commission under
Rule 24b-2]. Additional work required of ELAN such as [Information
omitted and filed separately with the Commission under Rule 24b-2
] on
the basis set out in Article V Paragraph 6.
As of the date of this Agreement, it is the Parties' expectation
that the body of data so generated will also support such
applications for regulatory approval that TARGON shall make in the
other countries of the TERRITORY. In the event however that such
expectation proves unfounded or incorrect and further data is
required to obtain such other approvals as are pursued by TARGON in
the other
- --------------------------------------------------------------------------------
Page 16 of 54
countries of the TERRITORY, TARGON shall determine the viability of
proceeding further with the regulatory application and generation of
the further data requirements. In the event that TARGON elects to
continue, the Parties shall agree on the programme of work to be
undertaken to generate such additional data and the apportioning of
tasks and costs therefor (other than work which ELAN is already
obliged to conduct for no additional consideration as set out
above). [Information omitted and filed separately with the
Commission under Rule 24b-2] on the basis set out in Article V
Paragraph 6. In the event that in the reasonable business judgement
of TARGON the estimate furnished by ELAN as to the likely costs are
excessive, TARGON shall be entitled to have the work conducted by a
third party at lesser cost provided that this does not require the
disclosure of the ELAN INTELLECTUAL PROPERTY to a third party. If
such work requires the disclosure of the ELAN INTELLECTUAL PROPERTY
to a third party and further if ELAN refuses to consent to the third
party conducting such work, ELAN shall not be entitled to terminate
the Agreement with respect to the applicable country or countries of
the TERRITORY.
3. [Information omitted and filed separately with the Commission under
Rule 24b-2
].
4. The Parties hereby confirm that each shall undertake the PROJECT as
a collaborative effort and that the provisions of this Agreement
requires that each party diligently carries out those tasks assigned
to it and as otherwise agreed. Each party shall co-operate with the
other in good faith particularly with respect to unknown problems or
contingencies and shall perform its obligations in good faith and in
a commercially reasonable, diligent and workmanlike manner. The
Parties shall report to each other on their respective development
efforts at meetings of the PROJECT TEAM and otherwise as may be
agreed.
PRODUCT Development
-------------------
5. ELAN shall perform its tasks in the development of the PRODUCT in
accordance with the guidelines laid down where applicable under
cGLP, cGCP and cGMP and with specific reference to standards
acceptable to the FDA. ELAN shall use reasonable efforts to carry
out and complete the development of the PRODUCT to the objectives
and within the timeframes which are agreed with TARGON.
- --------------------------------------------------------------------------------
Page 17 of 54
6. In the event that TARGON requests changes in the design or
specifications for the PRODUCTS which would add significant cost in
terms of product development undertaken by ELAN, then the Parties
shall agree on appropriate development royalties to be paid to ELAN
for such.
7. In the event that TARGON decides not to proceed further with the
development programme, the PRODUCT shall cease to be a PRODUCT for
the purpose of this Agreement. ELAN shall thereafter be entitled to
research, develop and commercialise the PRODUCT in the TERRITORY
provided that ELAN shall only be entitled to use the TARGON KNOW-HOW
and the TARGON PATENT RIGHTS and the TRADEMARK in accordance with
the provisions of Article II Paragraph 9.3. In the event that the
Agreement is terminated by TARGON due to a breach by ELAN, ELAN
shall not be entitled to a licence to the TARGON PATENT RIGHTS, the
TARGON KNOW-HOW or the TRADEMARK pursuant to the provisions of
Article II Paragraph 9.3. [Information omitted and filed separately
with the Commission under Rule 24b-2].
Clinical Development
--------------------
8.1. ELAN shall be responsible for all Phase I pharmacokinetic testing
and modelling and associated analysis in animal and human
volunteers. During the development of the PRODUCT and preparation of
the NDA and other registration dossiers, TARGON will establish the
Phase I testing which is required and will agree with ELAN on the
design, cost and timeframe for such testing (testing conducted by
ELAN in animals shall be at ELAN's cost). ELAN will provide full
bio-analytical, statistical and reporting services for such Phase I
testing. ELAN will provide TARGON with full reports on all such
testing it conducts for the PRODUCT. ELAN undertakes to conduct all
such testing on the PRODUCT in accordance with prevailing cGCP and
cCLP and with specific reference to standards acceptable to the FDA.
The Parties agree that ELAN's charges to TARGON for such work will
be on the basis of [Information omitted and filed separately with
the Commission under Rule 24b-2] basis.
8.2. Prior to the commencement of the pivotal Phase I programme required
for registration of the PRODUCT, TARGON shall use its reasonable
endeavours to meet and discuss the proposed Phase I programme with
the FDA and, subject to the views of the FDA, ELAN shall be
represented as appropriate at such meetings. TARGON and ELAN agree
that the Phase I programme will be conducted substantially in
compliance with any requirements or guidelines communicated by FDA
or otherwise deemed generally acceptable to the FDA.
- --------------------------------------------------------------------------------
Page 18 of 54
Any proposed deviation from such FDA requirements or guidelines
shall be first discussed between the Parties.
8.3. All payments to ELAN by TARGON for such testing shall be made on
completion of the work and submission of the relevant report to
TARGON.
9.1. TARGON shall be responsible for all Phase I pharmacokinetic studies
and associated analytical testing for the PRODUCT in human patients.
ELAN shall be informed in advance of the design and timeframe for
such studies. TARGON shall bear the costs of all such studies. For
the avoidance of doubt, ELAN shall be obligated to provide all
bioanalytical and other testing procedures it utilises and develops
pursuant to Paragraph 8.1. above and shall provide such to TARGON
for no additional consideration.
9.2. TARGON will provide or have provided full bioanalytical, statistical
and reporting services for such Phase I patient studies. TARGON will
provide ELAN with full reports on all such studies it conducts for
the PRODUCT. TARGON undertakes to conduct or have conducted all such
studies on the PRODUCT in accordance with prevailing cGCP and cCLP
and with specific reference to standards acceptable to the FDA. For
the avoidance of doubt all reports and data provided by TARGON to
ELAN pursuant to this paragraph shall constitute TARGON KNOW HOW.
9.3. TARGON shall be responsible for all Phase II and Phase III clinical
trials for the PRODUCT in human patients. ELAN shall be informed in
advance of the design and timeframe for such trials. TARGON shall
bear the costs of all such trials.
10. Prior to the commencement of the pivotal regulatory clinical trials
for the PRODUCT, TARGON shall use its reasonable endeavours to meet
and discuss its proposed programme with the FDA and other REGULATORY
AUTHORITIES and, subject to the views of the FDA, ELAN shall be
represented as appropriate at such meetings. TARGON agrees that it
will conduct its pivotal programme substantially in compliance with
any requirements or guidelines communicated by FDA and other
REGULATORY AUTHORITIES.
Any proposed deviation from such FDA and other REGULATORY
AUTHORITIES requirements or guidelines shall be first discussed with
ELAN.
11. In the event that TARGON is not in a position to itself or through
CYTOGEN conduct the Phase I, Phase II or Phase III pharmacokinetic
or clinical studies envisaged in this Article III and instead
intends to contract out such studies to a clinical research
organisation or equivalent third party ("CRO"), TARGON shall
contract with ELAN if ELAN can match the terms proposed by the CRO
and provided that ELAN is technically proficient to conduct such
studies. The
- --------------------------------------------------------------------------------
Page 19 of 54
obligations set forth in this Paragraph shall not bind any
sublicensee appointed by TARGON.
12. Validation and stability
12.1 ELAN undertakes to scale-up and validate the manufacturing and
assembly processes for the PRODUCT in accordance with cGMP
requirements and with specific reference to FDA standards therefor.
ELAN shall generate supporting stability performance data for the
PRODUCT as indicated below:
12.1.1. At least two (2) years' shelf-life for bulk hard gelatin
capsules.
12.1.2. At least two (2) years' shelf-life for each of the four (4)
capsule strengths above in one market pack configuration.
12.2 With regard to finished market pack supporting stability performance
data for the PRODUCT other than as allowed for above, TARGON and its
sub-licensees will inform ELAN of such requirements for each of its
market territories and ELAN shall undertake such work at a cost to
be agreed with TARGON and/or its sub-licensees.
ARTICLE IV : SUPPLY OF THE PRODUCT
- ------------ ---------------------
1. Except as otherwise herein provided, ELAN shall produce and supply
to TARGON its entire requirements of the PRODUCT. ELAN will be the
sole and exclusive supplier of the PRODUCT to TARGON in the
TERRITORY and TARGON will purchase exclusively from ELAN the PRODUCT
in the TERRITORY.
2. The PRODUCT to be supplied to TARGON by ELAN shall be in the form of
bulk two-piece hard gelatin capsules containing microparticulate
SODAS(R) particles, or subject to further agreement between ELAN and
TARGON in final market pack form, and in each case complying with
the SPECIFICATIONS. ELAN shall deliver the PRODUCT to TARGON and/or
any party designated by TARGON, in proper packaging so as to permit
safe storage and transport. Where ELAN supplies the PRODUCT in bulk
form, TARGON shall be responsible for the packaging of the PRODUCT
into final market packaging.
3. As a consequence of the restrictions currently imposed upon the
importation, use and distribution of controlled and scheduled
substances into the countries of the TERRITORY, the Parties
currently envisage that the PRODUCT shall be manufactured by ELAN or
a third party manufacturer appointed by ELAN (I) in the United
States of America for supply in the United States of America and
Canada, and (II) in Europe for supply in the rest of the TERRITORY.
In the event that the relevant authorities in one or more countries
of the TERRITORY
- --------------------------------------------------------------------------------
Page 20 of 54
prohibit the importation of the PRODUCT from the foregoing sites of
manufacture, the Parties shall review what alternative acceptable
arrangements can be put in place having regard to such expenditure
as is justified having regard to the commercial opportunities
available in the country or countries concerned. In the event that
ELAN appoints a third party manufacturer, then ELAN shall be solely
responsible and liable to TARGON for the performance of the said
manufacturer and ELAN shall ensure that the said manufacturer's
facility is an FDA approved facility and that such facility complies
with all relevant FDA and other relevant governmental and regulatory
requirements and that all accepted practises of GMP are adhered to.
4.1. The Parties acknowledge that it is in their mutual interest that
launch of the PRODUCT shall be effected as soon as possible
following NDA APPROVAL (and where applicable REGULATORY APPROVAL)
for which purpose the parties shall in advance of the NDA APPROVAL
(and where applicable REGULATORY APPROVAL) discuss the timing,
scheduling and volume for the manufacture and purchase of specific
quantities of launch stocks of the PRODUCT to be ordered by TARGON
("LAUNCH STOCKS") including the lead time required for manufacturing
and supplying same. For the avoidance of doubt, the Parties hereby
confirm that ELAN's manufacturing obligations shall only arise on
receipt of firm purchase orders for the LAUNCH STOCKS.
4.2. Prior to filing the NDA, TARGON will provide ELAN with a forecast of
TARGON's requirements for the PRODUCT [Information omitted and filed
separately with the Commission under Rule 24b-2]. The said forecast
will be updated [Information omitted and filed separately with the
Commission under Rule 24b-2] until NDA APPROVAL of the PRODUCT.
Except as otherwise provided herein, all forecasts made hereunder
shall be made to assist ELAN in planning its production and TARGON
in planning marketing and sales. Such forecasts shall not be binding
purchase orders, and shall be without prejudice to TARGON's
subsequent firm orders for the PRODUCT in accordance with the terms
of this Agreement.
5. [Information omitted and filed separately with the Commission under
Rule 24b-2] TARGON will provide a [Information omitted and filed
separately with the Commission under Rule 24b-2
].
- --------------------------------------------------------------------------------
Page 21 of 54
6. Subject to the agreement of ELAN, [Information omitted and filed
separately with the Commission under Rule 24b-2] in terms of volume of
PRODUCT ordered. ELAN will use its reasonable efforts to fulfil
TARGON's requirements in excess of forecasted amounts, but shall not
be obliged to meet such requirements if it is not reasonably
practicable to do so and particularly where ELAN cannot obtain
sufficient quantities of the active ingredient.
7. Within ninety (90) days of filing the NDA with the FDA, ELAN shall
impart to TARGON all test and assay procedures for the PRODUCT
necessary for TARGON to verify the quality of and conformity with
SPECIFICATIONS of the PRODUCT it purchases pursuant to this Agreement,
and shall notify TARGON promptly thereafter of any and all changes to
the said procedures. Prior to the filing of the NDA, the Parties shall
negotiate in good faith to conclude a technical agreement regulating
the Parties' respective obligations from a technical and quality
perspective for the supply of the PRODUCT by ELAN to TARGON. Such an
agreement shall be attached to this Agreement as Appendix E.
8. ELAN shall not be obliged to accept orders for the PRODUCT unless and
until the NDA has been accepted for filing by the FDA in the United
States of America.
9. The Parties shall agree prior to the filing of the NDA and IRF upon a
minimum economic order quantity for the manufacture and supply of the
PRODUCT for the United States of America, the countries of the
European Union and such other countries of the TERRITORY as may be
agreed.
10. All quantities of the PRODUCT delivered by ELAN hereunder shall
conform to the SPECIFICATIONS and all prevailing legislative and
regulatory requirements of the TERRITORY in the country where the
PRODUCT is manufactured and to be marketed and sold.
11. All claims for failure of any shipment of the PRODUCT to conform to
SPECIFICATIONS must be made by TARGON to ELAN in writing within forty-
five (45) days following delivery. Failure to make timely claims in
the manner prescribed shall constitute acceptance of the shipment.
PRODUCT which has been delivered and which has been shown within the
designated period not to conform to SPECIFICATIONS shall be replaced
at ELAN's cost within ninety (90) days of the receipt by ELAN of the
failed PRODUCT.
12. In the event that the PRODUCT supplied by ELAN is not in compliance
with the SPECIFICATIONS, or is otherwise adulterated, misbranded or
defective, TARGON shall immediately notify ELAN and shall follow all
reasonable
- --------------------------------------------------------------------------------
Page 22 of 54
instructions of ELAN regarding, and be responsible, at the sole cost
and expense of ELAN, for re-analysis, sampling, processing, return,
disposal or destruction, including certification of destruction, of
such non-conforming PRODUCT.
13. In the event of an unresolved dispute as to conformity with
SPECIFICATIONS of the PRODUCT, the Parties shall nominate an
independent first class laboratory to undertake the relevant testing.
Its findings shall be conclusive and binding upon the Parties. All
costs relating to this process shall be borne exclusively by the
unsuccessful party.
14. Save as otherwise agreed between the Parties, delivery of consignments
of PRODUCT shall be effected by ELAN EX WORKS the manufacturing
facility designated by ELAN pursuant to Article IV Paragraph 3. All
risks in such PRODUCT shall pass to TARGON when each such consignment
of the PRODUCT is loaded onto the vehicle of TARGON's agent on which
it is to be despatched from ELAN's designated facility. TARGON shall
fully insure or procure the insurance of all consignments of the
PRODUCT when risk passes as aforesaid and shall produce such insurance
documentation supporting same as and when requested by ELAN.
15. In the event that ELAN fails to supply PRODUCT which has been ordered
by TARGON for a period exceeding [Information omitted and filed
separately with the Commission under Rule 24b-2] or there are repeated
and serious failures, inability or delay in filling orders, (unless
such failure, inability or delay in filling orders is caused by the
supplier of the active ingredient or other raw material, or due to the
applicable governmental imposed quota system for the active
ingredient) ELAN shall for so long as the conditions set out in this
paragraph exist:
15.1. grant to TARGON a production licence in the applicable country
or countries of the TERRITORY so that TARGON may manufacture
the relevant PRODUCT without infringing any of ELAN's patent
and/or any other industrial property rights. Any such licence
shall apply only in regard to the relevant PRODUCT as well as
to the applications of technology derived from the ELAN PATENT
RIGHTS related to its use with such PRODUCT. For the avoidance
of doubt, the Parties confirm that the provisions of Article V
Paragraph 2.1.2. shall apply to the sale of PRODUCT
manufactured by TARGON;
15.2. provide TARGON with any technical data necessary for the
carrying of this into effect. To this end, ELAN shall impart to
TARGON the documentation constituting the required material
support, more particularly practical performance advice, shop
practice, specifications as to materials to be used and control
methods; and
- --------------------------------------------------------------------------------
Page 23 of 54
15.3. assist TARGON for the working up and use of the technology
necessary to manufacture the relevant PRODUCT as well as for
the training of TARGON's personnel. For this purpose, ELAN
shall receive TARGON's scientific staff in its premises for
periods the term of which shall be decided by common consent.
When ELAN has remedied the situation that prevented ELAN from
satisfying TARGON's requirements and is once again able to fulfil its
obligations to supply the PRODUCT as provided for in this Agreement,
TARGON shall cease manufacturing the PRODUCT and shall resume
purchasing the PRODUCT from ELAN pursuant to the terms of this
Agreement; provided that TARGON shall be entitled to manufacture the
PRODUCT for the period necessary so as to enable TARGON to recoup its
[Information omitted and filed separately with the Commission under
Rule 24b-2] (for which purpose the definition of [Information omitted
and filed separately with the Commission under Rule 24b-2] set out in
Article I shall be defined mutatis mutandis) plus [Information omitted
and filed separately with the Commission under Rule 24b-2] involved in
the transfer of production.
16. ELAN, its AFFILIATES or subcontractors shall be responsible for all
process and equipment validation required by the U.S. Federal Food,
Drug and Cosmetic Act and the regulations thereunder and shall take
all steps reasonably necessary to pass government inspection by the
FDA or other REGULATORY AUTHORITY.
17. ELAN shall make (and where relevant shall procure that ELAN's
subcontractor shall make) that portion of its manufacturing facility
where PRODUCT is manufactured, including all record and reference
samples relating to the PRODUCT available for inspection by TARGON's
duly qualified person or by the FDA or other relevant REGULATORY
AUTHORITY. The investigation shall be limited to determining whether
there is compliance with cGMP and other requirements of applicable
law.
ARTICLE V: FINANCIAL PROVISIONS
- --------- --------------------
1. Licence Royalties
-----------------
1. In consideration of the rights and licence granted to TARGON to the
ELAN PATENT RIGHTS by virtue of this Agreement, TARGON shall pay to
ELAN amounts as follows:
1.1. US$7.5 million upon the date of execution of this Agreement;
1.2. [Information omitted and filed separately with the
Commission under Rule 24b-2] on provision by [Information
omitted and filed separately with the Commission under Rule
24b-2
- --------------------------------------------------------------------------------
Page 24 of 54
];
1.3. [Information omitted and filed separately with the Commission
under Rule 24b-2] on receipt of the [Information omitted and
filed separately with the Commission under Rule 24b-2];
1.4. [Information omitted and filed separately with the Commission
under Rule 24b-2] upon [Information omitted and filed
separately with the Commission under Rule 24b-2];
1.5. [Information omitted and filed separately with the Commission
under Rule 24b-2] on the [Information omitted and filed
separately with the Commission under Rule 24b-2];
1.6. [Information omitted and filed separately with the Commission
under Rule 24b-2] on [Information omitted and filed separately
with the Commission under Rule 24b-2];
1.7. [Information omitted and filed separately with the Commission
under Rule 24b-2] on the [Information omitted and filed
separately with the Commission under Rule 24b-2];
All such payments are due upon achievement of the milestone event and
are payable by TARGON within thirty (30) days following the
occurrence of the milestone, of which event TARGON will promptly
notify ELAN and ELAN will send an invoice to TARGON for the
corresponding milestone payment. The foregoing licence royalties
shall be non-recoverable by TARGON.
2. Royalty on NET REVENUES
-----------------------
2.1. In consideration of the license of the ELAN PATENT RIGHTS to TARGON,
the royalty payable by TARGON to ELAN shall be as follows:
2.1.1. Where the PRODUCT is not being sold IN MARKET by TARGON (such
as to a sub-licensee), TARGON shall pay to ELAN [Information
omitted and filed separately with the Commission under Rule
24b-2];
2.1.2. Where the PRODUCT is being sold IN MARKET by TARGON, TARGON
shall pay to ELAN [Information omitted and filed separately
with the Commission under Rule 24b-2] in the United States of
America, and in [Information omitted and filed separately
with the Commission under Rule 24b-2].
- --------------------------------------------------------------------------------
Page 25 of 54
2.2. Within forty five (45) days of the end of each quarter, TARGON shall
notify ELAN of the [Information omitted and filed separately with the
Commission under Rule 24b-2] of PRODUCT for that preceding quarter.
Payments shown by each calendar quarter report to have accrued but
have not yet been paid are payable shall be due on the date such
report is due.
2.3. Payment of royalties shall be made quarterly within forty five (45)
days after the expiry of the quarter.
2.4. All payments due hereunder shall be made in United States Dollars.
2.5. For the avoidance of doubt the Parties confirm that ELAN has no
entitlement to a royalty pursuant to the terms of this Agreement in
relation to licence fees received by TARGON from one or more
sublicensees.
3. Price of PRODUCT where TARGON is not selling IN MARKET
------------------------------------------------------
3.1. The provisions of this Paragraph 3 shall apply in determining the
price of the PRODUCT to be supplied by ELAN to TARGON where TARGON is
not selling the PRODUCT IN MARKET. The price of the PRODUCT to be
charged to TARGON, which price shall apply to bulk tablets of PRODUCT
supplied EX WORKS ELAN's manufacturing facility to TARGON, shall be
equivalent to the [Information omitted and filed separately with the
Commission under Rule 24b-2] as determined by the provisions of this
Article V Paragraph 3, and [Information omitted and filed separately
with the Commission under Rule 24b-2]. In the event that ELAN
supplies the PRODUCT in final market packaging, the price of the
PRODUCT to be charged to TARGON, which price shall apply to PRODUCT
supplied EX WORKS ELAN's manufacturing facility to TARGON shall be
equivalent to the [Information omitted and filed separately with the
Commission under Rule 24b-2] as determined by the provisions of this
Article V Paragraph 3, and [Information omitted and filed separately
with the Commission under Rule 24b-2].
3.2. [Information omitted and filed separately with the Commission under
Rule 24b-2
].
3.3. [Information omitted and filed separately with the Commission under
Rule 24b-2
- --------------------------------------------------------------------------------
Page 26 of 54
].
3.4. Upon receipt by ELAN of firm purchase orders for the LAUNCH STOCKS of
the PRODUCT, TARGON shall confirm the intended NSP of the sublicensee
for the purpose of calculating the supply price to be charged for
said LAUNCH STOCKS. ELAN shall invoice TARGON at a price equivalent
to [Information omitted and filed separately with the Commission
under Rule 24b-2]. At the commencement of sales of the PRODUCT,
TARGON shall re-confirm the NSP to ELAN, which NSP shall thereafter
govern the calculation of the supply price to be paid to ELAN. In the
event that the intended NSP used for the supply of the LAUNCH STOCKS
should differ from the NSP prevailing as at the date of sale of the
LAUNCH STOCKS, the Parties shall adjust their account in accordance
with the mechanism set forth at Paragraph 3.6. below.
3.5. ELAN shall render an invoice in respect of the quantities of PRODUCT
delivered to TARGON during that quarter for a sum calculated by
reference to [Information omitted and filed separately with the
Commission under Rule 24b-2]. For the avoidance of doubt the Parties
agree that if for whatever reason the PRODUCT supplied by ELAN to
TARGON is not sold by TARGON or its sublicensee, payment to ELAN for
such PRODUCT shall nonetheless be effected and the price of the
PRODUCT shall be determined by reference to the NSP calculated
pursuant to the provisions of Article V Paragraph 3.6.
3.6. Within forty five (45) days of the end of each calendar quarter,
TARGON shall notify ELAN of the prevailing NSP for the PRODUCT sold
in the previous quarter, whereupon the Parties shall [Information
omitted and filed separately with the Commission under Rule 24b-2]:
3.6.1. [Information omitted and filed separately with the Commission
under Rule 24b-2
], or
3.6.2. [Information omitted and filed separately with the Commission
under Rule 24b-2
].
3.7. Following launch of the PRODUCT, TARGON shall inform ELAN quarterly
of the prevailing NSP and promptly inform ELAN of any change in the
NSP. In addition
- --------------------------------------------------------------------------------
Page 27 of 54
TARGON shall notify ELAN on a quarterly basis of the prevailing NSP
in the other countries of the TERRITORY.
3.8. Payment for all PRODUCT supplied to TARGON shall be effected in $
within thirty (30) days of the date of the relevant invoice.
4. Price of PRODUCT where TARGON is selling IN MARKET
--------------------------------------------------
4.1. The provisions of this Paragraph 4 shall apply in determining the
price of the PRODUCT to be supplied by ELAN to TARGON where TARGON is
selling the PRODUCT IN MARKET.
The price of the PRODUCT shall be equivalent to [Information omitted
and filed separately with the Commission under Rule 24b-2] which
price shall apply to bulk tablets of PRODUCT supplied EX WORKS ELAN's
facility to TARGON. In the event that ELAN supplies the PRODUCT in
final market packaging, the price of the PRODUCT shall be equivalent
to [Information omitted and filed separately with the Commission
under Rule 24b-2] which price shall apply to the PRODUCT supplied in
final market packaging EX WORKS ELAN's manufacturing facility to
TARGON.
4.2. Upon receipt by ELAN of firm purchase orders for the LAUNCH STOCKS of
the PRODUCT, TARGON shall confirm its intended NSP for the purpose of
calculating the supply price to be charged for said LAUNCH STOCKS.
ELAN shall invoice TARGON at a price equivalent to [Information
omitted and filed separately with the Commission under Rule 24b-2].
At the commencement of sales of the PRODUCT, TARGON shall re-confirm
the NSP to ELAN, which NSP shall thereafter govern the calculation of
the supply price to be paid to ELAN. [Information omitted and filed
separately with the Commission under Rule 24b-2].
4.3. ELAN shall render an invoice in respect of the quantities of PRODUCT
delivered to TARGON during that quarter for a sum calculated by
reference to [Information omitted and filed separately with the
Commission under Rule 24b-2]. For the avoidance of doubt the Parties
agree that if for whatever reason the PRODUCT supplied by ELAN to
TARGON is not sold by TARGON, payment to ELAN for such PRODUCT shall
nonetheless be effected and the price of the PRODUCT shall be
determined by reference to the NSP calculated pursuant to the
provisions of Article V Paragraph 4.4.
4.4. Within forty five (45) days of the end of each calendar quarter,
TARGON shall notify ELAN of the prevailing NSP for the PRODUCT sold
in the previous quarter whereupon the Parties shall [Information
omitted and filed separately with the Commission under Rule 24b-2]
- --------------------------------------------------------------------------------
Page 28 of 54
4.4.1. [Information omitted and filed separately with the Commission
under Rule 24b-2], or
4.4.2. [Information omitted and filed separately with the Commission
under Rule 24b-2].
4.5. In the event that ELAN is likely to be in a position of supplying
PRODUCT to TARGON pursuant to this Paragraph 4 at [Information
omitted and filed separately with the Commission under Rule 24b-2],
the Parties shall review the position in good faith, including the
granting by ELAN of a production licence to TARGON for the applicable
country or countries of the TERRITORY and shall agree upon the
applicable modifications to the provisions of Article V.
4.6. Following launch of the PRODUCT, TARGON shall inform ELAN quarterly
of the prevailing NSP and promptly inform ELAN of any change in the
NSP. In addition TARGON shall notify ELAN on a quarterly basis of the
prevailing NSP in the other countries of the TERRITORY.
4.7. Payment for all PRODUCT supplied to TARGON shall be effected in $
within thirty (30) days of the date of the relevant invoice.
5. Minimum Royalties and Purchases
-------------------------------
5. ELAN and TARGON shall agree on minimum performance criteria for the
PRODUCT, including the market and sales performance in the United
States of America, [Information omitted and filed separately with the
Commission under Rule 24b-2] following launch. Specifically in the
case of the United States of America market, minimum sales targets
shall be agreed for the initial five (5) years following launch of
the PRODUCT and TARGON undertakes to make such targets the subject of
its sub-licensing arrangements, if any, for the United States of
America. The Parties will also agree on a staggered pan-European
sales target plan and an independent sales target plan for Japan,
which targets shall be the subject of its sub-licensing arrangements,
if any for the countries concerned.
6. Additional Expenses
-------------------
- --------------------------------------------------------------------------------
Page 29 of 54
6. TARGON shall reimburse ELAN for the following expenses within thirty
(30) days of the date of invoicing of the expense.
6.1. Cost of any additional development or registration work on the
PRODUCT carried out by ELAN at the specific request of TARGON
other than work for which ELAN is responsible to conduct for no
additional consideration pursuant to Article III, including but
not limited to, pharmacokinetic studies and related assays,
stability data generation, clinical studies and compilation and
submission of dossiers required for registration purposes, and
all market pack stability studies. ELAN's charges for such work
shall be [Information omitted and filed separately with the
Commission under Rule 24b-2].
6.2. Cost of any technical assistance requested by TARGON at ELAN's
normal commercial terms, provided that ELAN is not obliged to
provide such assistance pursuant to the terms of the Agreement.
ELAN's charges for such work shall be [Information omitted and
filed separately with the Commission under Rule 24b-2].
7. Payments, Reports and Records
-----------------------------
7.1. TARGON shall keep, and shall use its reasonable endeavours to cause
its sublicensees to keep, true and accurate records of [Information
omitted and filed separately with the Commission under Rule 24b-2] and
the royalties payable to ELAN under Article V hereof. TARGON shall
deliver to ELAN a written statement thereof within forty five (45)
days following the end of each calendar quarter (or any part thereof
in the first or last calendar quarter of this Agreement) for such
calendar quarter.
The said written statements shall set forth on a country-by-country
basis, the calculation of the NET REVENUES and NSP from gross revenues
during that calendar quarter, the applicable percentage rate, and a
computation of the sums due to ELAN ("the Statement"). The Parties'
financial officers shall agree upon the precise format of the
Statement.
7.2. Payments due on [Information omitted and filed separately with the
Commission under Rule 24b-2] based on sales amounts in a currency
other than United States Dollars shall first be calculated in the
foreign currency and then converted to United States Dollars on the
basis of the exchange rate in effect for the purchase of United States
Dollars with such foreign currency quoted in the Wall Street Journal
(or comparable publication if not quoted in the Wall Street Journal)
with respect to the sale of currency of the country of origin of such
payment for the date on which the payment giving rise to [Information
omitted and filed separately with the Commission under Rule 24b-2] has
been received by TARGON, or on such other basis as is agreed in good
faith between the Parties (such as where the provisions of Article V
Paragraph 3.5. or Article V Paragraph 4.3. are applicable.
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7.3. Any income or other taxes which TARGON is required by law to pay or
withhold on behalf of ELAN with respect to royalties and any other
monies payable to ELAN under this Agreement shall be deducted from the
amount of such NSP payments, royalties and other monies due. TARGON
shall furnish ELAN with proof of such payments. Any such tax required
to be paid or withheld shall be an expense of and borne solely by
ELAN. TARGON shall promptly provide ELAN with a certificate or other
documentary evidence to enable ELAN to support a claim for a refund or
a foreign tax credit with respect to any such tax so withheld or
deducted by TARGON. Both Parties will reasonably cooperate in
completing and filing documents required under the provisions of any
applicable tax treaty or under any other applicable law, in order to
enable TARGON to make such payments to ELAN without any deduction or
withholding.
7.4. All payments due hereunder shall be made in $ to the designated bank
account of ELAN in accordance with such timely written instructions as
ELAN shall from time to time provide.
7.5. ELAN and TARGON will provide each other's independent certified
accountants (reasonably acceptable to the other Party) with access,
during regular business hours and upon reasonable prior request and
subject to the confidentiality provisions as contained in this
Agreement, to such Party's books and records relating to the PRODUCT
(and in the case of TARGON, TARGON shall use its reasonable endeavours
to cause its sublicensees to provide such access) solely for the
purpose of verifying the accuracy and reasonable composition of the
calculations hereunder for the current financial year and the two
preceding financial years, including in the case of ELAN the sums
payable by TARGON to ELAN pursuant to Article V.
7.6. Any adjustment required by such inspection shall be made within
thirty (30) days of the agreement of the Parties or, if not agreed,
upon the determination of an arbitrator to whom any dispute under this
Paragraph shall be submitted to arbitration pursuant to Article XII
Paragraph 12. If the adjustment payable to ELAN is greater than five
per cent (5%) of the amount paid for the relevant period, then the
cost to ELAN for the inspection, and if applicable the arbitration
shall be paid by TARGON. In addition, TARGON shall pay interest to
ELAN at the rate publicly announced by Morgan Guaranty Trust Company
of New York at its principal office at its prime or best rate plus one
per cent (applicable as of the date on which payment should have been
made pursuant to the applicable provision of Article V), from the date
on which payment should have been made pursuant to the applicable
provision of Article V until the date of payment.
7.7. TARGON shall pay interest to ELAN at the rate publicly announced
by Morgan Guaranty Trust Company of New York at its principal office
at its prime or best rate plus one per cent (applicable as of the date
on which payment should have
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been made pursuant to the applicable provisions of this Agreement)
from the date on which payment should have been made pursuant to the
applicable provision until the date of payment.
ARTICLE VI: REGISTRATION OF THE PRODUCT
- ----------- ---------------------------
1. TARGON shall be responsible for the compilation, preparation,
submission and prosecution to approval of the NDA and of all
international registration applications for marketing approval.
TARGON shall itself file the NDA and may at its option have its sub-
licensees file one or more of the IRF. TARGON will use its reasonable
efforts in prosecuting the NDA and the IRF to approval. TARGON shall
thereafter maintain at its own cost the NDA and the REGULATORY
APPROVALS for the TERM. The NDA and the IRF shall remain the property
of TARGON, provided that TARGON shall allow ELAN access thereto to
enable ELAN to fulfil its obligations and exercise its rights
hereunder.
2. TARGON shall consult with ELAN on the preparation of the NDA and
the IRF and shall supply ELAN with a copy thereof prior to submission.
TARGON will also supply ELAN with copies of the IRF should ELAN
request a copy or extracts thereof. Where a sub-licensee undertakes
such registration activity on behalf of TARGON outside the United
States of America, TARGON shall use reasonable efforts to ensure that
its sub-licensee provides ELAN with a copy of the application dossier,
should ELAN so request.
TARGON shall copy ELAN on all correspondence with FDA concerning the
NDA and undertakes to keep ELAN fully informed of progress with the
IRF. TARGON shall immediately notify ELAN of the NDA APPROVAL and of
all REGULATORY APPROVALS in the international territory as soon as
possible after such is known to it.
3. TARGON and/or its sub-licensees shall undertake to maintain in force
all registration approvals for the PRODUCT at its/their cost,
including the filing of all reports required or requested by the
regulatory authorities, such as adverse event reporting.
4. All such regulatory activity shall be undertaken at the cost of TARGON
and/or its sub-licensees.
5. ELAN shall at its option file Drug Master File(s) ("DMF") for the
PRODUCT in its own name and shall be responsible for all interaction
with FDA, and where applicable other REGULATORY AUTHORITIES,
concerning the DMF.
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6. TARGON shall undertake to protect the confidentiality of ELAN's
formulation, engineering and manufacturing processes for the PRODUCT
in its dealings with sub-licensees and shall where possible refrain
from transmitting such information within the relevant CMC SECTION of
registration dossiers to sub-licensees. TARGON undertakes that the CMC
SECTION of the NDA shall not be transmitted, or access thereto given
to its sub-licensees without the prior written consent of ELAN.
Unless required by law, TARGON undertakes that the CMC SECTION of the
IRF shall not be transmitted, or access thereto given to its sub-
licensees without the prior written consent of ELAN.
7. TARGON shall indemnify and hold harmless ELAN, its agents and
employees from and against all claims, damages, losses, liabilities
and expenses to which ELAN, its agents, and employees may become
subject related to or arising out of TARGON's bad faith, gross
negligence or intentional misconduct in connection with the filing or
maintenance or failure to file or maintain or prosecute the NDA. ELAN
shall indemnify and hold harmless TARGON, its agents and employees
from and against all claims, damages, losses, liabilities and expenses
to which TARGON, its agents, and employees may become subject related
to or arising out of ELAN's bad faith, gross negligence or intentional
misconduct in connection with the filing or maintenance or failure to
file or maintain or prosecute the NDA.
8. It is hereby acknowledged that there are inherent uncertainties
involved in the development and registration of pharmaceutical
products with the FDA or any other REGULATORY AUTHORITIES insofar as
obtaining approval is concerned and such uncertainties form part of
the business risk involved in undertaking the form of commercial
collaboration as set forth in this Agreement. Therefore, save for
using its reasonable efforts, neither Party shall have any liability
to the other solely as a result of any failure of the PRODUCT to
achieve the approval of the FDA or the other REGULATORY AUTHORITIES.
9. Save as otherwise outlined in this Agreement, the costs and expenses
of any filings and proceedings made by TARGON to the FDA, including
post approval studies required by the FDA or any other Governmental
Authority in respect of the PRODUCT, and to maintain the FDA approval
hereunder shall be paid by TARGON. TARGON may elect to conduct post
approval studies whether or not mandated by the FDA provided that
TARGON shall bear all costs associated with such studies.
10. TARGON shall not conduct any technical analysis, study or test on the
formulations of the PRODUCT without the prior agreement of ELAN, save
for the routine quality tests required to verify conformance with the
SPECIFICATIONS. In the event that TARGON does conduct such analysis,
study or test, then such data and information shall be transmitted to
ELAN, who shall own said data and information which shall thereafter
form part of the KNOW-HOW.
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ARTICLE VII: WARRANTY AND INDEMNITY.
- ------------ -----------------------
1. ELAN represents and warrants that it has the sole, exclusive and
unencumbered right to grant the licences and rights herein granted to
TARGON, and that it has not granted any option, licence, right or
interest in or to the ELAN PATENT RIGHTS or PRODUCT to any third party
which would conflict with the rights granted pursuant to this
Agreement. ELAN agrees to hold TARGON harmless from any and all
costs, expenses and damages (including reasonable attorneys' fees)
incurred or sustained by TARGON as the result of any third party's
challenges to ELAN's right to grant the rights and licences herein
granted to TARGON.
2. ELAN represents and warrants that to the best of its knowledge, the
true inventors of the subject matter claimed are named in the ELAN
PATENT RIGHTS and all such inventors have irrevocably assigned all
their rights and interests therein to ELAN.
3. ELAN represents and warrants that the execution of this Agreement and
the full performance and enjoyment of the rights of TARGON under this
Agreement will not breach or in any way be inconsistent with the terms
and conditions of any licence, contract, understanding or agreement,
whether express, implied, written or oral between ELAN and any third
party.
4. ELAN represents and warrants that the PRODUCT supplied to TARGON by
ELAN under this Agreement shall conform to the SPECIFICATIONS and in
accordance with all regulations and requirements of the FDA including
the cGMP regulations which apply to the manufacture and supply of the
PRODUCT. ELAN represents and warrants that the PRODUCT supplied to
TARGON shall not be adulterated or mis-branded as defined by the
Federal Food, Drug and Cosmetic Act, and shall not be a product which
would violate any section of such Act if introduced in interstate
commerce.
5. Except as expressly stated in this Article VII, all other warranties,
conditions and representations, express or implied, statutory or
otherwise, including a warranty as to the quality or fitness for any
particular purpose of the PRODUCT are hereby excluded, and ELAN shall
not be liable in contract, tort or otherwise for any loss, damage,
expense or injury of any kind whatsoever, consequential, incidental or
otherwise, arising out of or in connection with the PRODUCT or any
defect in the PRODUCT or from any other cause.
6. ELAN is fully cognisant of all applicable statutes, ordinances and
regulations of the TERRITORY with respect to the manufacture of the
PRODUCT including, but not limited to, the U.S. Federal Food, Drug and
Cosmetic Act and regulations
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thereunder, cGLP and cGMP. ELAN shall manufacture or procure the
manufacture the PRODUCT in conformity with the SPECIFICATIONS and the
DMF and in a manner which fully complies with such statutes,
ordinances, regulations and practices.
7. ELAN shall indemnify, defend and hold harmless TARGON from all
actions, losses, claims, demands, damages, costs and liabilities
(including reasonable attorneys' fees) to which TARGON is or may
become subject insofar as they arise out of or are alleged or claimed
to arise out of any breach by ELAN of any of its obligations under
this Agreement or warranties of ELAN.
8. TARGON shall assume the sole and entire responsibility and shall
indemnify and save harmless ELAN from any and all claims, liabilities,
expenses, including reasonable attorney's fees, responsibilities and
damages by reason of any claim, proceedings, action, liability or
injury arising out of any faults of the PRODUCT resulting from the
transport, packaging, storage, handling, distribution, marketing or
sale of the PRODUCT by TARGON, to the extent that it was caused by the
negligence or wrongful acts or omissions on the part of TARGON.
9. As a condition of obtaining an indemnity in the circumstances set out
above, the Party seeking an indemnity shall:
9.1. fully and promptly notify the other Party of any claim or
proceeding, or threatened claim or proceeding;
9.2. permit the indemnifying Party to take full care and control of
such claim or proceeding;
9.3. assist in the investigation and defence of such claim or
proceeding;
9.4. not compromise or otherwise settle any such claim or proceeding
without the prior written consent of the other Party, which
consent shall not be unreasonably withheld; and
9.5. take all reasonable steps to mitigate any loss or liability in
respect of any such claim or proceeding.
10. Notwithstanding anything to the contrary in this Agreement, ELAN and
TARGON shall not be liable to the other by reason of any
representation or warranty, condition or other term or any duty of
common law, or under the express terms of this Agreement, for any
consequential or incidental loss or damage (whether for loss of profit
or otherwise) and whether occasioned by the negligence of the
respective Parties, their employees or agents or otherwise For the
avoidance of doubt, the Parties agree that TARGON's liability for
damages awarded to an
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individual third party consumer in respect of a product liability type
claim shall not of itself constitute consequential or incidental loss
or damage.
11. ELAN represents and warrants that Elan Corporation plc will provide
Elan Pharma Limited, Elan Pharma Inc. or any other subsidiaries with a
licence and the rights to manufacture the PRODUCT in accordance with
the terms of this Agreement.
ARTICLE VIII : CUSTOMER COMPLAINTS; PRODUCT RECALL
- ------------ -----------------------------------
1. TARGON shall notify ELAN promptly of any complaints reported to TARGON
which relate to the manufacture or packaging of the PRODUCT. In
addition, TARGON shall notify ELAN promptly of any serious or
unexpected adverse events resulting from the use of the PRODUCT. ELAN
agrees to notify TARGON promptly of any complaints reported by third
parties in relation to the PRODUCT to ELAN and any serious or
unexpected adverse events reported to ELAN in relation to the PRODUCT.
TARGON and ELAN shall establish a procedure for complaint handling and
formal adverse event handling and reporting. As part of their
regulatory obligations, it is envisaged that TARGON shall be
responsible for furnishing post-marketing reports, IND safety reports,
as well as periodic reports (where appropriate) to the FDA and any
other REGULATORY AUTHORITY. TARGON and ELAN shall keep each other
informed regarding adverse event reporting in relation to the PRODUCT,
with each Party copying the other with all such communications with
regulatory authorities.
2. In the event of any recall of the PRODUCT, as requested by any
governmental authority, TARGON shall perform the recall of the PRODUCT
in the TERRITORY. If the recall arises from ELAN's acts or omissions,
such as in the design, manufacturing or delivery of the PRODUCT, the
recall costs shall be borne by ELAN. In all other events the recall
costs shall be borne by TARGON.
3. TARGON and ELAN shall establish a procedure for formal complaint
handling and reporting in accordance with the requirements of the FDA
and the REGULATORY AUTHORITIES. TARGON and ELAN shall keep each other
informed and shall copy the other Party with all communications with
the FDA and the REGULATORY AUTHORITY.
ARTICLE IX: PROJECT TEAM, MEETINGS
- ----------- -----------------------
1. It is recognised by the Parties hereto that a significant resource
shall be required from each Party to accomplish a successful NDA
APPROVAL and launch of the PRODUCT, particularly in the co-ordination
of logistics, finalisation of various
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specifications, methodologies transfer, supply and packaging
configurations, shipping and handling procedures etc.
Accordingly following execution of this agreement, a PROJECT TEAM
shall be appointed with representation from TARGON, ELAN and CYTOGEN.
TARGON shall be responsible for the planning and day to day activities
of the development programmes. In the event TARGON wishes to effect
any significant changes to the development programmes, it shall first
inform ELAN and CYTOGEN thereof.
2. Unless both Parties agree otherwise, the PROJECT TEAM shall meet at
least once each calendar quarter, whether in person or by video
conference, such meetings to continue until the time of launch or some
such later time thereafter as may be agreed. The PROJECT TEAM shall
be chaired by a TARGON designee. The PROJECT TEAM shall review
progress of the development programmes and shall report thereon to the
management of TARGON, ELAN and CYTOGEN. The PROJECT TEAM shall
prepare for the launch of the PRODUCT and finalising all joint
preparations therefor. The PROJECT TEAM shall review the regulatory
and commercialisation strategy for the PRODUCT on an ongoing basis.
At and between meetings of the PROJECT TEAM, each Party shall keep the
other fully and regularly informed as to its progress with its
respective obligations.
3. The PROJECT TEAM shall not be empowered to alter the terms of this
Agreement.
ARTICLE X PATENTS
- --------- -------
1. ELAN and TARGON will [Information omitted and filed separately with
the Commission under Rule 24b-2].
2. [Information omitted and filed separately with the Commission under
Rule 24b-2].
3. With respect to the ELAN INTELLECTUAL PROPERTY, ELAN shall have the
right to apply for patent protection in its own name and at its own
expense. Should it however be doubtful whether a patent may be
obtained, then ELAN may at its sole discretion decide not to apply for
a patent in one or more countries of the TERRITORY.
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If such a patent is obtained, such a patent shall constitute ELAN
PATENT RIGHTS and TARGON shall have for the duration of this Agreement
a right thereunder to have manufactured pursuant to the terms of this
Agreement, to prepare, use and sell the PRODUCT as specified in
Article II Paragraph 1.
4. TARGON and ELAN shall promptly inform the other in writing of any
alleged infringement of which it shall become aware by a third party
of any patents within the ELAN PATENT RIGHTS and provide such other
with any available evidence of infringement.
5. TARGON and ELAN shall promptly inform the other in writing of any
alleged infringement of which it shall become aware by a third party
of any patents within the ELAN PATENT RIGHTS and provide such other
with any available evidence of infringement. TARGON and ELAN shall
promptly inform the other in writing of any alleged infringement of
which it shall become aware by a third party of any patents within the
TARGON PATENT RIGHTS and provide such other with any available
evidence of infringement.
6. In the event that a [Information omitted and filed separately with the
Commission under Rule 24b-2
].
ARTICLE XI: TERM AND TERMINATION
- ---------- --------------------
1. This Agreement is concluded for a period commencing as of the date of
this Agreement and shall expire on a country by country basis fifteen
(15) years starting from the EFFECTIVE DATE, or for the life of the
last to expire patent included in the ELAN PATENT RIGHTS, whichever is
longer ("the TERM"). At the end of the TERM, the Agreement shall
continue automatically for an additional period or periods of two (2)
years, unless the Agreement has been terminated by TARGON or ELAN on
serving one (1) year's written notice on the other prior to the end of
the TERM or any additional two (2) year period.
2.1. In addition to the rights of early or premature termination provided
for elsewhere in this Agreement, in the event that any of the terms or
provisions hereof are incurably breached by either Party, the non-
breaching Party may immediately terminate this Agreement by written
notice.
An incurable breach shall be committed when either Party is dissolved,
liquidated, discontinued, becomes insolvent, or when any proceeding is
filed or commenced by
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either Party under bankruptcy, insolvency or debtor relief laws (and
not dismissed within ninety (90) days. For the purposes of this
Agreement, an "incurable" breach shall be committed when a company
with a directly competing product to the PRODUCT acquires twenty (20%)
per cent or more of TARGON's voting stock, or where TARGON acquires a
technological competitor of ELAN or a company with a directly
competing product to the PRODUCT.
Subject to the other provisions of this Agreement, in the event of any
other material breach, the non-breaching Party may terminate this
Agreement by the giving of written notice to the breaching Party that
this Agreement will terminate on the [Information omitted and filed
separately with the Commission under Rule 24b-2] from notice unless
cure is sooner effected. If the breaching Party has proposed a course
of action to rectify the breach and is acting in good faith to rectify
same but has not cured the breach by the [Information omitted and
filed separately with the Commission under Rule 24b-2], the said
period shall be extended by such period as is reasonably necessary to
permit the breach to be rectified.
2.2. Subject to the determination in an arbitration that TARGON has
breached the applicable provisions, ELAN may terminate the Agreement
for the applicable region(s) or country or countries of the TERRITORY
if TARGON breaches the provisions of Article II Paragraph 9, or TARGON
indicates to ELAN pursuant to Article II Paragraph 9.3, that it does
not intend to obtain registration approval and commercialise the
PRODUCT, and ELAN does not exercise its option to take a licence to
the TARGON PATENT RIGHTS and the TARGON KNOW-HOW and the TRADEMARK in
accordance with Article II Paragraph 9.3.
3. Upon termination of the Agreement:
3.1. any sums that were due from TARGON to ELAN prior to the exercise
of the right to terminate this Agreement, shall be paid in full
within sixty (60) days of termination of this Agreement;
3.2. all confidentiality provisions (other than the obligations set
out in Article XII Paragraph 1.1. as they effect ELAN in the
event of termination of this Agreement by ELAN pursuant to
Article XI Paragraph 2 due to the breach by TARGON) set out in
this Agreement shall remain in full force and effect for a period
of five (5) years;
3.3. all representations and warranties shall insofar are appropriate
remain in full force and effect;
3.4. the rights of inspection and audit shall continue in force for
the period referred to in the relevant provisions of this
Agreement;
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3.5. termination of this Agreement for any reason shall not release
any Party hereto from any liability which, at the time of such
termination, has already accrued to the other Party or which is
attributable to a period prior to such termination nor preclude
either Party from pursuing all rights and remedies it may have
hereunder or at law or in equity with respect to any breach of
this Agreement;
3.6. save and except as is necessary to enable ELAN to exercise the
licenses granted by TARGON to ELAN pursuant to Article II
Paragraph 9.3. TARGON and ELAN shall promptly return to the
other Party all CONFIDENTIAL INFORMATION received from the other
Party (except one copy of which may be retained for archival
purposes);
3.7. in the event this Agreement is terminated by ELAN or TARGON
pursuant to Article XI Paragraph 2, TARGON and its sublicensees
shall have the right for a period of six (6) months from
termination to sell or otherwise dispose of the stock of any
PRODUCTS then on hand, which such sale shall be subject to
Article V and the other applicable terms of this Agreement;
3.8. the licences granted by ELAN to TARGON shall terminate and ELAN
shall thenceforth be entitled to exploit the ELAN INTELLECTUAL
PROPERTY together with any improvements made by TARGON to the
ELAN INTELLECTUAL PROPERTY; and
3.10. Articles I, Article II Paragraph 3, Article II Paragraph 9.3,
Article V Paragraph 7, Article VII, Article VIII, Article XI and
Article XII shall survive the termination or expiration of this
Agreement for any reason.
ARTICLE XII: SUNDRY CLAUSES
- ----------- --------------
1. Secrecy
-------
1.1. Any CONFIDENTIAL INFORMATION pertaining to the PRODUCT that has been
or will be communicated or delivered by ELAN to TARGON, and any
information from time to time communicated or delivered by TARGON to
ELAN, including, without limitation, trade secrets, business methods,
and cost, supplier, manufacturing and customer information, shall be
treated by TARGON and ELAN, respectively, as information, and shall
not be disclosed or revealed to any third party whatsoever or used in
any manner except as expressly provided for herein; provided, however,
that such CONFIDENTIAL INFORMATION shall not be subject to the
restrictions and prohibitions set forth in this section to
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the extent that such CONFIDENTIAL INFORMATION, and shall not be
disclosed or revealed to any third party whatsoever or used in any
manner except as expressly provided for herein; provided, however,
that such CONFIDENTIAL INFORMATION shall not be subject to the
restrictions and prohibitions set forth in this section to the extent
that such CONFIDENTIAL INFORMATION:
1.1.1. is available to the public in public literature or otherwise,
or after disclosure by one Party to the other becomes public
knowledge through no default of the Party receiving such
information; or
1.1.2. was known to the Party receiving such information prior to the
receipt of such information by such Party, whether received
before or after the date of this Agreement; or
1.1.3. is obtained by the Party receiving such information from a
third party not subject to a requirement of confidentiality
with respect to such information; or
1.1.4. is required to be disclosed pursuant to: (A) any order of a
court having jurisdiction and power to order such information
to be released or made public; or (B) other requirement of
law; provided that if the receiving Party becomes legally
required to disclose any CONFIDENTIAL INFORMATION, the
receiving Party shall give the disclosing Party prompt notice
of such fact so that, to the extent permitted by law, the
disclosing Party may obtain a protective order or other
appropriate remedy concerning any such disclosure.
The receiving Party shall fully cooperate with the disclosing
Party in connection with the disclosing Party's efforts to
obtain any such order or other remedy. If any such order or
other remedy does not fully preclude disclosure, the receiving
Party shall make such disclosure only to the extent that such
disclosure is legally required; or
1.1.5. is independently developed by or for the Party by persons not
having access to the CONFIDENTIAL INFORMATION of the other
Party.
1.3. Each Party shall take all such precautions as it normally takes with
its own CONFIDENTIAL INFORMATION to prevent any improper disclosure of
such CONFIDENTIAL INFORMATION to any third party; provided, however,
that such CONFIDENTIAL INFORMATION may be disclosed within the limits
required to obtain any authorisation from the REGULATORY AUTHORITY or,
with the prior written consent of the other Party, which shall not be
unreasonably withheld, or as may otherwise be required in connection
with the purposes of this Agreement.
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1.4. TARGON agrees that it will not use, directly or indirectly, any ELAN
INTELLECTUAL PROPERTY, or other CONFIDENTIAL INFORMATION disclosed to
TARGON or obtained from ELAN pursuant to this Agreement, other than as
expressly provided herein.
ELAN agrees that it will not use, directly or indirectly, any TARGON
KNOW-HOW, TARGON PATENT RIGHTS or other CONFIDENTIAL INFORMATION
disclosed to ELAN or obtained from TARGON pursuant to this Agreement,
other than as expressly provided herein.
1.5. TARGON and ELAN will not publicise the existence of this Agreement in
any way without the prior written consent of the other subject to the
disclosure requirements of applicable laws and regulations. In the
event that either Party wishes to make an announcement concerning the
Agreement, that Party will seek the consent of the other Party. The
terms of any such announcement shall be agreed in good faith.
1.6. Each Party may make such disclosure to its directors, officers and
agents and, in the case of TARGON, its potential and actual
sublicensees and other Third Parties to whom such disclosure is
appropriate to enable TARGON to conduct its regular business (each of
whom shall be bound by TARGON's customary confidential disclosure
agreements), who shall be informed of such confidentiality obligation
and for whose breach the disclosing Party shall be responsible.
1.7. Except as required by law, each Party agrees that it shall not
publish or present the results of studies carried out pursuant to the
Agreement without the opportunity for prior review by the other Party
where the intellectual property of the other Party is incorporated in
such study. Each Party shall provide to the other the opportunity for
review any proposed extracts, manuscripts or presentations (including
information to be presented verbally) which relate to the PRODUCT at
least sixty (60) days prior to their intended submission for
publication and such submitting Party agrees, upon written request
from the other Party, not to submit such abstract or manuscript for
publication or to make such presentation until the other Party is
given a reasonable period of time to seek patent protection for any
material in such publication or presentation which it believes to be
patentable. Each Party shall be entitled to require that a proposed
publication or presentation be delayed or withheld until significantly
more data has been developed if it reasonably believes that the
disclosure will seriously limit the patent protection available.
2. Assignments/ Sub-contracting
----------------------------
This Agreement may not be assigned by either Party without the prior
written consent of the other Party not to be unreasonably withheld or
delayed. Consent
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shall be not be deemed to be unreasonably withheld if the Party whose
consent is required would be subject to a higher net tax on payments
made hereunder after taking into account any applicable tax treaty and
available tax credits, than the said Party was subject to before the
proposed assignment.
Notwithstanding the foregoing provisions, ELAN and TARGON shall be
entitled to assign its rights and obligations to an AFFILIATE provided
that such assignment shall not have an adverse tax effect on the other
party. ELAN shall have the right to subcontract all or any portion of
its duties, including the manufacture of the PRODUCT by a third party,
provided that in the event that ELAN proposes to sub-contract all or
part of the manufacture of the PRODUCT, TARGON has consented to the
identity of the sub-contractor, which consent shall not be
unreasonably withheld. Subject to the applicable provisions of this
Agreement including Article II Paragraph 11 and Article VI Paragraph
1, TARGON shall have the right to subcontract all or any portion of
its duties, provided that in the event that ELAN has consented to the
identity of the sub-contractor, which consent shall not be
unreasonably withheld.
3. Parties bound
-------------
This Agreement shall be binding upon and enure for the benefit of
Parties hereto, their successors and permitted assigns.
4. Severability
------------
If any provision in this Agreement is agreed by the Parties to be, or
is deemed to be, or becomes invalid, illegal, void or unenforceable
under any law that is applicable hereto, (i) such provision will be
deemed amended to conform to applicable laws so as to be valid and
enforceable or, if it cannot be so amended without materially altering
the intention of the Parties, it will be deleted, with effect from the
date of such agreement or such earlier date as the Parties may agree,
and (ii) the validity, legality and enforceability of the remaining
provisions of this Agreement shall not be impaired or affected in any
way.
5. Force Majeure
-------------
Neither Party to this Agreement shall be liable for delay in the
performance of any of its obligations hereunder if such delay results
from causes beyond its reasonable control, including, without
limitation, acts of God, fires, strikes, acts of war, or intervention
of a relevant government authority, non availability of raw materials,
but any such delay or failure shall be remedied by such Party as soon
as practicable.
6. Relationship of the Parties
---------------------------
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Nothing contained in this Agreement is intended or is to be construed
to constitute ELAN and TARGON as partners or joint venturers or either
Party as an employee of the other.
Neither Party hereto shall have any express or implied right or
authority to assume or create any obligations on behalf of or in the
name of the other Party or to bind the other Party to any contract,
agreement or undertaking with any third party.
7. Amendments
----------
No amendment, modification or addition hereto shall be effective or
binding on either Party unless set forth in writing and executed by a
duly authorised representative of both Parties.
8. Waiver
------
No waiver of any right under this Agreement shall be deemed effective
unless contained in a written document signed by the Party charged
with such waiver, and no waiver of any breach or failure to perform
shall be deemed to be a waiver of any future breach or failure to
perform or of any other right arising under this Agreement.
9. Headings
--------
The section headings contained in this Agreement are included for
convenience only and form no part of the agreement between the
Parties. Save as otherwise provided herein, references to articles,
paragraphs, clauses and appendices are to those contained in this
Agreement.
10. No effect on other agreements
-----------------------------
No provision of this Agreement shall be construed so as to negate,
modify or affect in any way the provisions of any other agreement
between the Parties unless specifically referred to, and solely to the
extent provided, in any such other agreement.
11. Applicable Law
--------------
This Agreement is construed under and ruled by the laws of the State
of New York. For the purpose of this Agreement the Parties submit to
the exclusive jurisdiction of the United States District Court for the
District of New York.
12. Arbitration
-----------
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Any dispute under this Agreement which is not settled by mutual
consent and which is the subject of an arbitration clause shall be
finally settled by binding arbitration, conducted in accordance with
the Commercial Arbitration Rules of the American Arbitration
Association by an arbitrator appointed in accordance with said rules.
The arbitration shall be held in New York, New York and the arbitrator
shall be to the extent practicable experienced as to the subject
matter of the dispute such as an independent expert in pharmaceutical
product development and marketing (including clinical development and
regulatory affairs) or an independent patent attorney as the case may
be.
The arbitrator shall determine what discovery will be permitted,
consistent with the goal of limiting the cost and time which the
Parties must expend for discovery; provided the arbitrator shall
permit such discovery as he deems necessary to permit an equitable
resolution of the dispute. Any written evidence originally in a
language other than English shall be submitted in English translation
accompanied by the original or a true copy thereof. The costs of the
arbitration, including administrative and arbitrator's fees, shall be
shared equally by the Parties and each Party shall bear its own costs
and attorneys' and witness' fees incurred in connection with the
arbitration; provided that the prevailing Party may be awarded the
reasonable costs and fees incurred in connection with the arbitration
at the discretion of the arbitrator.
A disputed performance or suspended performances pending the
resolution of the arbitration must be completed within thirty (30)
days following the final decision of the arbitrators or such other
reasonable period as the arbitrators determine in a written opinion.
Any arbitration subject to this Paragraph 12 shall be completed within
one (1) year from the filing of notice of a request for such
arbitration. The arbitration proceedings and the decision shall not
be made public without the joint consent of the Parties and each Party
shall maintain the confidentiality of such proceedings and decision
unless (a) otherwise permitted by the other Party or (b) otherwise
required by the applicable law in which case the provisions of Article
XII Paragraph 1.1.4. shall be applicable. The Parties agree that the
decision shall be the sole, exclusive and binding remedy between them
regarding any and all disputes, controversies, claims and
counterclaims presented to the arbitrators. Application may be made
to any court having jurisdiction over the Party (or its assets)
against whom the decision is rendered for a judicial recognition of
the decision and an order of enforcement.
13. Notice
------
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13.1. Any notice to be given under this Agreement shall be sent in writing
in English by registered airmail or telecopied to:
- ELAN at
Elan Corporation plc.
Lincoln House,
Lincoln Place
Dublin 2
Ireland.
Attention: Vice President and General Counsel, Elan
Pharmaceutical Technologies, a division of Elan
Corporation, plc
Telephone: 353 1 709 4000
Telefax : 353 1 6624960
- TARGON at
600 College Road East
CN 5308
Princeton, New Jersey 08540-5308
United States of America
Attention: President
Telephone: 1 609 419 4105
Telefax 1 609 419 1999
with a copy to
- Cytogen Corporation at
600 College Road East
CN 5308
Princeton, New Jersey 08540-5308
United States of America
Attention: General Counsel and Corporate Secretary
Telephone: 1 609 520 3063
Telefax 1 609 952 9298
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or to such other address(es) and telecopier numbers as may from
time to time be notified by either Party to the other hereunder.
13.2. Any notice sent by mail shall be deemed to have been delivered
within seven (7) working days after despatch and any notice sent by
telex or telecopy shall be deemed to have been delivered within
twenty four (24) hours of the time of the despatch. Notice of change
of address shall be effective upon receipt.
IN WITNESS THEREOF the Parties hereto have executed this Agreement in duplicate.
Executed by TARGON on 21st July, 1997
By : /s/ Michael Sember
----------------------------
Name: Michael Sember
----------------------------
Title: Chairman and CEO
----------------------------
Executed by ELAN 21st July, 1997
By : /s/ Kevin Insley
----------------------------
Name: Kevin Insley
----------------------------
Title: President and CFO, Elan International Services, Ltd.,
-----------------------------------------------------
Subsidiary of Elan Corporation
------------------------------
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APPENDIX A
ELAN PATENT RIGHTS
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APPENDIX B
MANUFACTURING COST
[Information omitted and filed separately with the Commission under Rule
24b-2
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].
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APPENDIX C
RESEARCH AND DEVELOPMENT COST
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APPENDIX D
SPECIFICATIONS
Once-daily oral morphine capsules, containing SODAS(R) beads in up to
[Information omitted and filed separately with the Commission under Rule 24b-2].
Formulation as per Lot No. PD 14625.
The SPECIFICATIONS are considered to be in draft format and any further changes
or amendments thereto shall be effected within ninety (90) days of the EFFECTIVE
DATE.
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APPENDIX E
TECHNICAL AGREEMENT
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