*** TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4),
200.83 AND 240.24B-2
CIMA LABS INC.
DEVELOPMENT AND LICENSE OPTION AGREEMENT
WITH
IPR PHARMACEUTICALS, INC.
THIS DEVELOPMENT AND LICENSE OPTION AGREEMENT (the "Agreement") is entered
into by and between CIMA LABS INC., a Delaware corporation ("CIMA") and IPR
PHARMACEUTICALS, INC., ("IPR"), on this 10th day of September, 1997 (the
"EFFECTIVE DATE").
RECITALS
WHEREAS, CIMA owns or has rights to certain patented oral drug-delivery
technology referred to as OraSolv-Registered Trademark-, which has
applications in the field of pharmaceutical product formulation; and
WHEREAS, IPR has an exclusive license to make, have made, use and sell
[...***...] on a [...***...] and has access to substantial expertise and
experience in the development, commercialization and marketing of human
pharmaceutical products; and
WHEREAS, the parties desire to explore the possibility of entering into
future agreements regarding the development and commercialization of
OraSolv-Registered Trademark- formulations of a certain pharmaceutical product
for sale in the prescription markets worldwide; and
WHEREAS, IPR wishes to sponsor the development by CIMA of a prototype of
a certain pharmaceutical product formulation for IPR's evaluation, subject to
the granting by CIMA to IPR of an option to enter into a license agreement
with CIMA on terms further described herein.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants set forth below, the parties hereby agree as follows:
ARTICLE 1. DEFINITIONS
1.1 "AFFILIATE" means with respect to each party, any corporation or other
business entity which (a) directly or indirectly owns, is owned by or is under
common ownership with a party to this Agreement to the extent of at least fifty
percent (50%) of the equity (or such lesser percentage which is the maximum
allowed to be owned by a foreign organization in a particular jurisdiction)
having the power to vote or direct the affairs of such entity, or (b) directly
or indirectly controls, is controlled by or is under common control with such
party. As used herein, the term "control" means possession of the power to
direct, or cause the
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* CONFIDENTIAL TREATMENT REQUESTED
direction of the management and policies of a corporation or other entity
whether through the ownership of voting securities, by contract or otherwise.
1.2 "DEVELOPMENT AND SCALE-UP PLAN" shall mean the plan set forth on
Exhibit A for the development of the Prototype and its scale-up.
1.3 "FIELD" shall mean prescription pharmaceutical products
incorporating the OraSolv-Registered Trademark- Technology containing as
active ingredient in any formulation or dosage, [...***...], or any other
[...***...] compound for the treatment of [...***...], including without
limitation, the Product for sale in prescription markets [...***...].
1.4 "FINAL PROTOTYPE" shall mean the product which meets the general
specifications as set forth in Exhibit C as agreed to by the parties and any
further specifications agreed to by the parties.
1.5 "OPTION" shall have the meaning assigned thereto in Section 3.1.
1.6 "ORASOLV-Registered Trademark- TECHNOLOGY" shall mean CIMA's
effervescent, fast-dissolving, oral drug-delivery tablet technology which
includes, to the extent applicable to the formulation of a product which
meets the criteria set forth on Exhibit D, (i) the inventions disclosed in
patents and patent applications owned, controlled or licensed (with the right
to sublicense) by CIMA during the term of this Agreement, including those
listed on Exhibit B, and (ii) all know-how, technology, trade secrets, data,
processes and methods, or other information owned, controlled or licensed
(with the right to sublicense) by CIMA during the term of this Agreement.
1.7 "PRODUCT" shall mean the pharmaceutical dosage form which is
formulated using the OraSolv-Registered Trademark- Technology and which
contains [...***...] as its active ingredient, whether [...***...].
1.8 "PROTOTYPE" shall mean the prototype of the Product to be developed
by CIMA pursuant to the Development and Scale-Up Plan and in accordance with
the general specifications set forth on Exhibit C, and any further
specifications agreed to by the parties.
ARTICLE 2. PROTOTYPE DEVELOPMENT
2.1 GENERAL. In consideration for certain development fees set forth
below, CIMA will use all commercially reasonable efforts to develop and
deliver to IPR a Prototype, subject to the terms of this Agreement and in
accordance with the specifications set forth on Exhibit C (and any further
specifications agreed to by the parties) and the schedule set forth in
Section 2.2. Upon receipt of the Prototype, IPR will evaluate the Prototype
in accordance with the schedule set forth in Section 2.2. In consideration
for certain fees set forth in, and subject to the terms of, this Agreement,
CIMA shall grant to IPR the license option with respect to the
commercialization of the Product further described below.
2.2 DEVELOPMENT SCHEDULE. Following the Effective Date and receipt of the
materials from IPR delineated under Phase I of the Development and Scale-Up Plan
in such quantities as may be necessary from
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time to time to complete the Development and Scale-Up Plan, CIMA shall
initiate development of the Prototype. CIMA will develop the Final Prototype
in [...***...] to be determined by mutual agreement as described in Exhibit
C. CIMA and IPR each acknowledge and agree that Phase I of the Development
and Scale-Up Plan is expected to be completed within approximately [...***...]
from the date of initiation of Phase I of the Development and Scale-Up Plan
(which date shall be agreed upon and recorded in writing by the parties) (the
"Initiation Date"). To that end, during the implementation of Phase I of the
Development and Scale-Up Plan, IPR agrees to evaluate promptly each iteration
of the Prototype and/or report of results delivered by CIMA and use all
commercially reasonable efforts to respond to CIMA within [...***...] of
receipt thereof. IPR's response will indicate the acceptability of such
proposed Prototype and/or the need, if any, for modification of the
specifications in light of the results of IPR's evaluation. In the event of
any unanticipated changes in the regulatory environment, or extreme market
conditions or similar unforeseen events which affect the development of the
Prototype and which are beyond the parties' control (including but not
limited to IPR's failure to respond to CIMA within [...***...] of IPR's
receipt of any iteration of the Prototype or report of results), the parties
will discuss such changed circumstances, the appropriate mechanisms to
address them and their impact on the Development and Scale-Up Plan schedule.
2.2.1 TIMELINESS PAYMENTS. In addition to the Development Fees
set forth in Section 2.3 below, IPR will pay to CIMA, at the same time as the
payment due under Section 2.3.3, a bonus of $[...***...] if CIMA completes Phase
I of the Development and Scale-Up Plan in less than [...***...] after the
Initiation Date. If CIMA completes Phase I of the Development and Scale-Up Plan
after the expiration of [...***...] from the Effective Date, due solely to
circumstances within CIMA's control, IPR may deduct $[...***...] from the
payment due CIMA under Section 2.3.3 of this Agreement; PROVIDED, HOWEVER, that
if the parties determine that the Prototype must be reformulated, CIMA shall
have an additional [...***...], for a total of [...***...], to complete Phase I
of the Development and Scale Up Plan without deduction from the payment due CIMA
under Section 2.3.3. For the purposes of this Agreement, completion of Phase I
of the Development and Scale-Up Plan shall be deemed to occur when [...***...].
2.3 DEVELOPMENT FEES. In consideration for CIMA's development and
production of the Prototype in accordance with this Agreement, IPR shall make
the following non-refundable payments to CIMA:
2.3.1 [...***...] within [...***...] of the Effective Date;
2.3.2 [...***...] within [...***...] of shipment by CIMA of
[...***...] as outlined in [...***...] of Phase I of the Development and
Scale-Up Plan; and
2.3.2 [...***...] within [...***...] of completion of Phase I of
the Development and Scale-Up Plan.
2.4 DEVELOPMENT PROGRAM CONTACTS. The parties will each communicate and
cooperate with the other, through their designated contact persons, to the
extent necessary to implement the Development and Scale-Up Plan. Exhibit E sets
out the appropriate contact person at each of CIMA and IPR for the various tasks
within each phase of the Development and Scale-Up Plan, and may be amended from
time to time to reflect changes in the amending party's designated contact
persons.
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ARTICLE 3. OPTION, EXCLUSIVITY, LICENSE
3.1 OPTION. Effective upon delivery of the Option Fee described in
Section 3.3 below, CIMA hereby grants to IPR an option to enter into an
exclusive license agreement to utilize the OraSolv-Registered Trademark-
Technology for the development, marketing, distribution and sale of the
Product [...***...] (the "Option"). The term of such Option shall extend
from the Effective Date until the earlier of (i) [...***...] after completion
of data analysis from the pilot bio-study of the Final Prototype developed
pursuant to Section 2.2, or (ii) [...***...], unless otherwise agreed by the
parties or unless the U.S. Food and Drug Administration requests or requires
the parties to perform efficacy and/or stability studies in addition to, or
instead of, those activities provided in the Development and Scale-Up Plan,
in which case the parties shall establish a mutually acceptable extension of
the Option term. IPR may exercise the Option by (i) providing CIMA with
written notice thereof, and (ii) negotiating and entering into a license
agreement with CIMA in accordance with the terms set forth in Section 3.4
below (the "License Agreement") prior to the end of the Option term. In the
event that the parties fail to negotiate and enter into the License Agreement
by the end of the Option term, CIMA's obligations under Section 3.2 hereof
shall terminate and CIMA shall be free to enter into any license agreement
with respect to the Field with any third-party, on any terms CIMA may, in its
sole discretion, deem appropriate.
3.2 EXCLUSIVITY.
3.2.1 CIMA. In consideration for the Option Fee, CIMA hereby
agrees that from the Effective Date until the expiration or termination of
the Option term set forth in Section 3.1, CIMA shall not enter into any
negotiations or agreements with any third party relating to the development
or commercialization of products containing as an active ingredient
[...***...] compound in the Field.
3.2.2 IPR. In consideration for the Option granted hereunder,
IPR hereby agrees that from the Effective Date until the expiration or
termination of the Option term set forth in Section 3.1, IPR shall not
develop or commercialize, or enter into any negotiations or agreements with
any third party relating to the development or commercialization of,
[...***...] compound that disintegrates or dissolves in the mouth [...***...]
by either placing on the tongue or by chewing.
3.3 OPTION FEE. In consideration for the exclusivity obligations set
forth in Section 3.2 and the Option granted in Section 3.1, IPR shall pay to
CIMA the sum of [...***...] (the "Option Fee"). CIMA acknowledges that
[...***...], creditable against the Option Fee, has been paid by IPR to CIMA
as of the Effective Date. IPR shall pay the balance due on the Option Fee,
[...***...] within [...***...] of the Effective Date. The total Option Fee
payable hereunder shall be creditable against the upfront license fee payable
to CIMA upon execution of the License Agreement as set forth on Exhibit F.
3.4 TERMS OF LICENSE. The terms of the proposed License Agreement shall
include, but not be limited to, the terms set forth on Exhibit F.
3.5 SUPPLY AGREEMENT. Simultaneously (unless otherwise agreed by the
parties) with the execution of the License Agreement, the parties shall enter
into a commercialization and supply agreement pursuant to which CIMA shall be
the exclusive supplier of IPR's commercial requirements of the Product with
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* CONFIDENTIAL TREATMENT REQUESTED
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the exception that IPR may negotiate manufacturing rights to the Product.
Such agreement shall include, but not be limited to, the terms set forth on
Exhibit G and shall also set forth the obligations of CIMA with respect to
finalization of development, scale-up and validation of the Product.
Scale-up and commercialization costs shall be paid by IPR and are delineated
in Exhibit H.
3.6 FACILITIES VISITS. During the term of this Agreement, CIMA shall
allow personnel of IPR and/or Zeneca Limited, at IPR's expense, to visit the
manufacturing and research facilities of CIMA and to consult with CIMA
personnel, at mutually agreeable times and upon reasonable notice, to discuss
and review the development of the Product, PROVIDED, HOWEVER, that such
personnel shall not be permitted to visit any area of the manufacturing and
research facilities of CIMA which contain confidential information or
materials of a third party which cannot be removed or protected from such
personnel's view. However, CIMA acknowledges that infrequently for
regulatory or similar compliance reasons, all areas of the manufacturing and
research facilities of CIMA may need to be visited and inspected by such
personnel and CIMA shall use all reasonable commercial efforts to manage its
manufacturing and site arrangements to permit such "all areas" visits and
inspections, but CIMA shall not be required by virtue of this provision or
otherwise to breach any confidentiality or other provisions in its agreements
with any third party.
ARTICLE 4. GENERAL PROVISION
4.1 LIMITATIONS ON USE. IPR and CIMA agree that each shall use the
Prototype and the Confidential Information (as defined in Section 4.3.1) of
the other solely for the purposes specified in this Agreement and for no
other purpose, including without limitation, use of the Prototype or
Confidential Information relating to [...***...] in any research or
commercial activities other than those which relate directly to the purposes
specified herein. Each party's permitted use of [...***...] and the
Prototype shall be in compliance with all applicable laws and regulations.
Unless the parties enter into the License Agreement, upon expiration or
termination of the Agreement, each party shall return or destroy, all
Confidential Information of the other party, as directed by said other party,
including all unused quantities of the Prototype or samples of [...***...],
and also including information related to [...***...]and copies of any and
all information, data and results obtained from conduct of evaluations under
this Agreement or relating to the use of the Prototype (the "Results").
However, one copy of the other party's Confidential Information may be
retained by each party solely for the purpose of determining its continuing
obligations under this Agreement. Neither party shall sell, transfer,
disclose or otherwise provide access to Confidential Information concerning
[...***...], the Prototype or the Results, any method or process relating
thereto or any material that could not have been made but for access to the
foregoing, to any person or entity without the prior expressed written
consent of the party owning the Confidential Information, except that either
party may allow access to the Confidential Information to employees,
subcontractors or agents during the term of, and solely for purposes
consistent with, this Agreement. Each party will make diligent efforts to
ensure that such employees, agents and subcontractors will use the
Confidential Information in a manner consistent with the terms of this
Agreement.
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* CONFIDENTIAL TREATMENT REQUESTED
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4.2 TERM AND TERMINATION.
4.2.1 TERM. Unless sooner terminated in accordance with Section
4.2.2 or 4.2.3 below, this Agreement shall expire upon the expiration or
termination of the Option.
4.2.2 TERMINATION FOR BREACH. Either party may terminate this
Agreement upon [...***...] written notice to the other in the event the other
commits a material breach of a provision of this Agreement and fails to cure
such breach prior to the end of such [...***...] period.
4.2.3 TERMINATION BY IPR. IPR shall have the right to terminate
this Agreement prior to exercise of the Option upon [...***...] written notice
to CIMA.
4.2.4 EFFECT OF TERMINATION. Upon termination or expiration of
this Agreement pursuant to Sections 4.2.1 or 4.2.3 above, or termination by CIMA
pursuant to Section 4.2.2 above, IPR shall [...***...]. Upon termination by IPR
pursuant to Section 4.2.2, CIMA shall [...***...] pursuant to Section 3.3.
Nothing in this Agreement shall be construed to relieve either party of any
obligations incurred by it hereunder prior to the effective date of termination
hereof. This Article 4 shall survive any termination or expiration of this
Agreement.
4.3 CONFIDENTIALITY. Each of the parties shall be bound by the following
terms and conditions:
4.3.1 Subject to the limitations set forth in Section 4.3.2
below, all information disclosed to the other party and identified by the
disclosing party as confidential shall be deemed "Confidential Information"
of the disclosing party. In particular, Confidential Information shall be
deemed to include, but not be limited to, the Prototype and any documentation
relating thereto, information related to [...***...], the Results, any
patent application or drawing or potential patent claim the subject matter of
which is directly or indirectly derived from information disclosed hereunder,
any trade secret, information, invention, idea, samples, process, method,
procedures, formulations, packaging designs and materials, test data relating
to any research project, work in process, future development, engineering,
manufacturing, regulatory, marketing, servicing, financing, or personnel
matter relating to the disclosing party, its present or future products,
sales, suppliers, clients, customers, employees, investors or business,
whether in oral, written, graphic or electronic form.
4.3.2 The term "Confidential Information" shall not be deemed to
include information which (i) is now, or hereafter becomes, through no act or
failure to act on the part of the receiving party, generally known or
available; (ii) is known by the receiving party at the time of receiving such
information, as evidenced by its records except where the same was previously
disclosed by the disclosing party to the receiving party or its Affiliates
under the terms of a Confidentiality Agreement; (iii) is hereafter furnished
to the receiving party by a third party, as a matter of right and without
restriction on disclosure; (iv) is independently developed by the receiving
party without use of Confidential Information of the other party; (v) is the
subject of a written permission to disclose provided by the disclosing party
(vi) is required to be disclosed by law; or (vii) is required to be disclosed
to establish rights or enforce obligations under this Agreement, but only to
the extent such disclosure is necessary.
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4.3.3 During the term of this Agreement and for a period of
[...***...] after termination hereof [...***...] with respect to information
pertaining to manufacturing processes and know-how), each party shall
maintain all Confidential Information in trust and confidence and shall not
disclose any Confidential Information to any third party or use any
Confidential Information for any unauthorized purpose. Each party may use
such Confidential Information only to the extent required to accomplish the
purposes of this Agreement. Confidential Information shall not be used for
any purpose or in any manner that would constitute a violation of any laws or
regulations, including without limitation the export control laws of the
United States. Each party hereby agrees that it will not in any way attempt
to obtain, either directly or indirectly, any information regarding any
Confidential Information from any third party who has been employed by,
provided consulting services to, or received in confidence information from,
the other party.
4.3.4 The parties under this Agreement shall advise their
employees who might have access to Confidential Information of the
confidential nature thereof and agree that their employees and agents shall
be bound by the terms of this Agreement. No Confidential Information shall
be disclosed to any employee who does not have a need for such information.
Each party may disclose Confidential Information to its Affiliates to the
extent required to accomplish the purposes of this Agreement.
4.4 OWNERSHIP. Title and ownership rights in the OraSolv Technology and
other Confidential Information of CIMA shall remain at all times with CIMA.
IPR acknowledges that the OraSolv Technology and such Confidential
Information shall remain the sole property of CIMA and IPR will acquire no
title thereto as a result of this Agreement. Title and ownership rights in
IPR's Confidential Information shall remain at all times with IPR. CIMA
acknowledges that the Confidential Information of IPR shall remain the sole
property of IPR and CIMA will acquire no title thereto as a result of this
Agreement. Nothing in this Agreement shall be construed as conferring on
either party an expressed or implied license or option to license any
disclosed Confidential Information, technology, or any patent or patent
application except as expressly provided herein.
4.4.1 INVENTIONS. CIMA shall solely own all right, title and
interest in and to any technology invented during the course of the
development work for IPR under this Agreement, whether patentable or not,
that is necessary or useful to the manufacture or distribution of the Product
("New Technology"). Any such New Technology shall be included in the OraSolv
Technology (except to the extent that such New Technology would otherwise be
excluded from the definition of Orasolv Technology pursuant to the Product
Criteria set forth in Exhibit D), and as such shall be subject to the terms
of the License Agreement. CIMA may, in its sole discretion and at its sole
expense, file and prosecute patent applications on New Technology and obtain
and enforce patents issuing from such applications. CIMA shall solely own all
such patent applications and patents. If CIMA files and prosecutes patent
applications on any New Technology relating to [...***...], it will consult
with IPR regarding the content of any filings made with the United States
Patent and Trademark Office (or any foreign equivalent thereof) with respect
to such applications and shall keep IPR informed of the progress of such
patent prosecution efforts and related proceedings. IPR agrees to execute
such documents and render such assistance to CIMA as may be necessary or
appropriate to enable CIMA to obtain and maintain title to any New Technology
and to any patent application or patent on such New Technology, and to
enforce any such patents.
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4.5 Representations and Warranties.
4.5.1 CIMA WARRANTS THAT DEVELOPMENT AND PILOT-SCALE MANUFACTURE
BY CIMA OF THE PROTOTYPE SHALL BE CONDUCTED IN A WORKMANLIKE MANNER USING
REASONABLE SKILL AND CARE AND IN ACCORDANCE WITH CURRENT GOOD MANUFACTURING
PRACTICES PROMULGATED BY THE U.S. FDA. EXCEPT AS SET FORTH ABOVE, THE
PROTOTYPE IS BEING SUPPLIED TO IPR WITH NO WARRANTIES OF ANY KIND, EXPRESSED
OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR THAT IT IS FREE FROM THE RIGHTFUL CLAIM OF ANY THIRD
PARTY, BY WAY OF INFRINGEMENT OR THE LIKE, OF ANY PATENT OR OTHER PROPRIETARY
RIGHTS OF SUCH PARTY. TO THE BEST OF CIMA'S KNOWLEDGE WITHOUT INVESTIGATION,
CIMA HAS NOT BEEN SERVED WITH OR NOTIFIED OF ANY CLAIM OR POTENTIAL CLAIM OF
ANY THIRD PARTY THAT THE ORASOLV TECHNOLOGY INFRINGES ANY PATENT OR OTHER
PROPRIETARY RIGHTS OF SUCH PARTY AND NEITHER IS IT AWARE OF ANY PATENT OR
OTHER PROPERTY OF ANY THIRD PARTY WHICH INFRINGES THE ORASOLV TECHNOLOGY.
4.5.2 CIMA represents and warrants that:
(i) CIMA is a corporation duly organized, existing and in good
standing under the laws of the State of Delaware, with full right, power and
authority to enter into and perform this Agreement and to grant all of the
rights, powers and authorities herein granted.
(ii) The execution, delivery and performance of this Agreement do
not conflict with, violate or breach any agreement to which CIMA is a party, or
CIMA's Certificate of Incorporation or Bylaws.
(iii) This Agreement has been duly executed and delivered by
CIMA and is a legal, valid and binding obligation enforceable against CIMA in
accordance with its terms.
4.5.3 IPR represents and warrants that:
(i) IPR is a corporation duly organized, existing and in good
standing under the laws of Puerto Rico, with full right, power and authority to
enter into and perform this Agreement and to grant all of the rights, powers and
authorities herein granted.
(ii) The execution, delivery and performance of this Agreement do
not conflict with, violate or breach any agreement to which IPR is a party, or
IPR's Certificate of Incorporation or Bylaws.
(iii) This Agreement has been duly executed and delivered by
IPR, and is a legal, valid and binding obligation enforceable against IPR in
accordance with its terms.
4.6 INDEMNITY.
4.6.1 CIMA agrees to and hereby does indemnify and hold IPR and
its Affiliates harmless from and against all claims, suits and proceedings,
and all damages, losses, costs, recoveries and expenses,
8
including reasonable legal expenses and costs (including attorneys' fees),
which IPR or its Affiliates may incur, arising out of any third party claim
of property damages or personal injury or death arising from CIMA's
application of the OraSolv Technology to [...***...] or CIMA's negligent or
willful misconduct in its performance of this Agreement or any breach of a
representation or warranty given herein by CIMA; PROVIDED, HOWEVER, that in
no event shall CIMA be liable for any such claims, damages, losses, costs or
expenses to the extent arising out of or resulting from materials supplied by
IPR to CIMA, or IPR's negligence or willful misconduct.
4.6.2 IPR agrees to and hereby does indemnify and hold CIMA and
its Affiliates harmless from and against all claims, suits and proceedings,
and all damages, losses, costs, recoveries and expenses, including reasonable
legal expenses and costs (including attorneys' fees) which CIMA or its
Affiliates may incur, arising out of any third party claim relating to the
Prototype developed by CIMA for IPR hereunder or any aspect of IPR's
performance of this Agreement, to the extent such liability results from the
negligence or willful misconduct of IPR, or any breach of a representation or
warranty given herein by IPR, PROVIDED, HOWEVER, that in no event shall IPR
be liable for any such claims, damages, losses, costs or expenses to the
extent arising out of or resulting from materials supplied by CIMA to IPR, or
CIMA's negligence or willful misconduct.
4.7 INDEPENDENT CONTRACTORS. The parties shall perform their
obligations under this Agreement as independent contractors and nothing
contained in this Agreement shall be construed to be inconsistent with such
relationship or status. This agreement shall not constitute, create or in
any way be interpreted as a joint venture or partnership of any kind.
4.8 PUBLICITY. Any public disclosure of this Agreement or of the
activities or rights hereunder, including but not limited to press releases,
shall be reviewed and consented to by each party prior to such disclosure;
PROVIDED, HOWEVER, that the foregoing shall not apply to make such
disclosures (a) as may be required by law (including securities laws),
provided that the party subject to such law shall seek confidential treatment
of key commercial and scientific terms to the extent such treatment is
available under law; (b) made in connection with an assertion of its rights
under this Agreement; (c) made under a binder of confidentiality to any
person or entity who may be interested in investing in or acquiring all or
substantially all of the assets or securities of such party, or (d) made to
its financial advisors provided that such party has used its best efforts in
good faith to obtain a binder of confidentiality. Any consent required
hereunder shall not be untimely or unreasonably withheld by either party.
Notwithstanding the foregoing, the parties consent to a press release
announcing this Agreement, in the form attached hereto as Exhibit J.
4.9 FINAL AGREEMENT; AMENDMENTS. This Agreement sets forth the complete
and final agreement of the parties and supersedes all prior and
contemporaneous negotiations, understandings and agreements with respect to
the subject matter hereof. No subsequent amendment or modification to this
Agreement shall be binding upon the parties hereto unless reduced to writing
and signed by the respective officers of the parties hereto.
4.10 ASSIGNMENT. Except as otherwise provided herein, neither this
Agreement nor any interest hereunder will be assignable in part or in whole
by any party without the prior written consent of the other; PROVIDED,
HOWEVER, that either party may assign or transfer its rights and obligations
under this Agreement to an Affiliate or a purchaser of all or substantially
all of the stock or assets of such party or to an entity into
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which such party is merged, without such consent. This Agreement will be
binding upon the successors and permitted assigns of the parties and the name
of a party appearing herein will be deemed to include the names of such
party's successors and permitted assigns to the extent necessary to carry out
the intent of this Agreement. Any assignment which is not in accordance with
this Section 4.10 will be void.
4.11 MISCELLANEOUS. This Agreement shall be governed by the laws of the
State of Delaware. If any provision of this Agreement is found by a proper
authority to be unenforceable, that provision shall be severed and the
remainder of this Agreement will continue in full force and effect. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original.
4.12 NOTICES. Any notices required or permitted hereunder shall be given
in writing to the appropriate party at the address specified below or at such
other address as the party shall specify in writing.
4.13 SUBCONTRACTING. CIMA acknowledges that IPR and Zeneca Limited have
entered into certain agreements regarding the performance of development
activities (the "Zeneca/IPR Agreements") relevant to IPR's obligations under
this Agreement, and that IPR may subcontract certain development activities
set forth in the Development and Scale-Up Plan to Zeneca Limited pursuant to
the Zeneca/IPR Agreements upon prior notice of such subcontracting to CIMA.
IN WITNESS WHEREOF, the parties have by duly authorized persons, executed
this Agreement, as of the date first written above.
CIMA LABS INC. IPR PHARMACEUTICALS, INC.
10000 Valley View Road P.O. Box 1967
Eden Prairie, Minnesota 55344 Carolina
USA Puerto Rico 00984
Tel: (612) 947-8700 Tel: (809) 750-5353
Fax: (612) 947-8770 Fax: (809) 750-5332
By:/s/ Jack Khattar By:/s/ B.J. Thorpe
-------------------------- ----------------------
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Title: V.P. Business Development Title: Chairman
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EXHIBIT A
PROTOTYPE DEVELOPMENT AND SCALE-UP PLAN
PHASE I
A. CIMA to develop and scale-up a [...***...] using [...***...]. CIMA will
validate the coating process and place a [...***...] batch and [...***...]
(see attached [...***...]).
IPR to provide CIMA, at no cost to CIMA, an [...***...] for the initial
development of the coating process. Additional material, [...***...], will
be provided to CIMA, at no cost to CIMA, for the scale-up and validation of
the coating process and manufacture of batches in part E of this plan. IPR
will provide [...***...] drug substance.
CIMA will validate the coated drug substance analytical testing methods.
IPR will supply reference standards for [...***...] and key degradents or
impurities. [...***...] based on taste characteristics described to CIMA by
IPR. If [...***...] is required time and cost estimates will have to be
determined.
B. CIMA to manufacture [...***...] formulations of OraSolv Tablet Formulations
containing [...***..] selected by IPR. CIMA will provide [...***...] for
IPR to conduct consumer testing. IPR will complete the consumer testing and
select [...***...] to be carried forward in development. If IPR does not
complete the evaluation in the time allotted [...***...] the Development
and scale-up timeline will be extended accordingly.
CIMA to develop [...***...] OraSolv Tablet formulations. [...***...]
formulations containing [...***...] drug substance (developed in part A of
this plan) and [...***...] formulations containing [...***...] drug
substance. CIMA will develop and validate both cleaning verification and
final product testing analytical methods. CIMA will validate the final
product testing microbial test methods. IPR will provide CIMA current
analytical testing methods and validation documents for cleaning
verification and product release of [...***...].
CIMA will perform excipient compatibility experiments between [...***...].
No other excipient compatibility work will be conducted.
D. CIMA to manufacture and release [...***...] of the [...***...] developed in
part C of this plan ([...***...]). CIMA will place these [...***...] on
[...***...]. IPR will evaluate the [...***...] batches within [...***...]
after receiving [...***...] and make a final [...***...] selection. If IPR
does not complete the evaluation in the time allotted the Development and
Scale-up timeline will be extended accordingly. The stability studies for
the [...***...] will be carried forward. The [...***...] will be
discontinued [...***...]. Of the [...***...] will be [...***...]. This
decision will be made before the [...***...] time point of the [...***...]
is reached.
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*CONFIDENTIAL TREATMENT REQUESTED
1
Up to [...***...] may be undertaken if necessary in the judgment of IPR.
If a [...***...] is initiated, [...***...] will be added to the development
schedule. [...***...] can not be initiated based on a request for a
[...***...] selected in Part B of this development plan. [...***...] may
be undertaken only under terms to be mutually agreed by the parties.
E1. CIMA will scale-up the tablet manufacturing process for the [...***...]
selected in Part D of this plan up to a scale representing [...***...] of
the eventual production size batch or [...***...], whichever is greater. A
production size batch is expected to be [...***...]. CIMA will manufacture
[...***...] or [...***...], whichever is greater, of each formulation
selected in Part D of this agreement for use in a bioequivalence study.
CIMA will place these batches on [...***...]. CIMA will write the required
CMC documents, in IPR's required format, for the submission of an IND. IPR
will supply to CIMA sample documents, templates or documentation to enable
CIMA to write the CMC documents in IPR's preferred format. IPR will
conduct the bioequivalence study and report the results back to CIMA within
[...***...] of receiving released material. Tablet specification for
[...***...] will be established based on formulation and process
capabilities. For a minimum of Phase I, data will be collected for
information only on [...***...].
[...***...] will attempt to match the current [...***...], if possible
[...***...]. Only [...***...] will be supplied in the final product. This
evaluation will be performed before the manufacture of the definitive
stability batches. Some additional capital expense may be incurred for
tablet tooling. Specifics will be discussed with IPR before any
expenditures are made and will be billed to IPR separately.
E2. CIMA will manufacture an additional [...***...] batches or [...***...]
batches, whichever is greater, of each formulation and place them on
stability at the agreed upon conditions. The [...***...] referred to in
Part E1 and E2 will be initiated at the same time, estimated to be
[...***...]. The batches will be packaged [...***...]. The tablet layout
will likely be [...***...] for development batches, even though the
commercial format will be [...***...]. CIMA will completely package (in
unlabeled [...***...]) at least [...***...] of each formulation for use in
clinical studies in [...***...].
F. CIMA will manufacture and package in unlabeled [...***...] to deliver at
least [...***...] for use in clinical studies during [...***...].
Once the bioequivalence results are known, IPR will select [...***...].
The [...***...] for the selected formulation will be carried out to
completion (see attached [...***...]), the other [...***...] will be
discontinued. This selection of a formulation for final scale-up will be
made prior to the [...***...] for the relevant [...***...] studies is
reached.
[...***...] has been estimated for completion up to but not including
Part E2 of Phase I of this development plan. If an [...***...], an
additional [...***...] will be added to the schedule or [...***...] will be
required to complete up to but not including Part E2 of Phase I. The work
outlined in Part E2 may require [...***...] and will be completed while IPR
is conducting bioequivalence testing. Any time delays in receiving
required drug substance supplies or decisions ([...***...]
- ----------
*CONFIDENTIAL TREATMENT REQUESTED
2
selection, prototype evaluation etc.) from IPR will increase the time
allotted to CIMA to complete the development program.
PHASE II
CIMA will scale up the formulation selected in Part E of this plan by
manufacturing [...***...] batches. A full scale GMP batch will be manufactured
and placed on [...***...] (see attached [...***...]). The full scale GMP batch
will be sampled and tested according to the agreed process validation protocol.
A full scale batch is expected to be approximately [...***...]. CIMA will write
the required CMC documents in the appropriate IPR format. The stability plan
will include [...***...] on [...***...] and [...***...] on [...***...] (see
attached [...***...]). The batch will be packaged in the exact components as
the intended commercial product. The tablet layout will likely be [...***...]
for development batches, even though the commercial format will be [...***...].
If IPR elects to proceed forward with a [...***...], CIMA will place an
additional [...***...] batches [...***...] on bulk drug stability (see attached
[...***...]).
Process validation batches are not included in Phase II of the development plan.
Process validation batches will be manufactured at IPR's request and will be
billed separately. The cost of the validation batches will be negotiated based
on the agreed upon validation protocol. The validation protocol will be
negotiated and agreed upon prior to regulatory submission in order to have the
signed protocol available at the time of a PAI. Validation batches will not be
manufactured prior to a PAI and are expected to be manufactured just prior to or
just after the first regulatory approval ([...***...]). The first commercial
manufacturing campaign will consist of at [...***...], IPR will order this
minimal quantity even if this represents a quantity in excess of the first years
commercial requirements.
MONITORING
CIMA will issue update reports within [...***...] of key milestone events. A
series of key milestone events will be mutually agreed to between the CIMA and
IPR. At the end of Phase I, a full development report(s) will be written within
[...***...] of initiating the last definitive stability study.
Two key dates have been identified for meetings in Minneapolis:
- - [...***...] (after [...***...] and prior to [...***...]).
- - [...***...] and prior to [...***...].
Scheduled visits of IPR personnel to CIMA Labs:
- - [...***...]
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*CONFIDENTIAL TREATMENT REQUESTED
3
- - Monitor of GMP batch manufacture
- - Additional visits will be scheduled as needs arise
A minimum of [...***...] will be made by CIMA to IPR based upon a mutually
agreed to [...***...] schedule.
[...***...]
[...***...]
[...***...]
[...***...]
- ----------
*CONFIDENTIAL TREATMENT REQUESTED
4
EXHIBIT B
PATENTS AND PATENT APPLICATIONS
COUNTRY PATENT/APPLICATION NO. FILING/ISSUE DATE
------- ---------------------- -----------------
United States [...***...] [...***...]
United States [...***...] [...***...]
United States [...***...] [...***...]
United States [...***...] [...***...]
[...***...] [...***...] [...***...]
[...***...] [...***...] [...***...]
[...***...] [...***...] [...***...]
[...***...] [...***...] [...***...]
________________________
1 Issued Patents
2 Pending Patent Applications
* Licensed Technology
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*CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT C
GENERAL SPECIFICATIONS
- - Dose
----
[...***...]
- - Tablet Size/Shape
-----------------
[...***...]
- - Flavor
------
[...***...] to be determined [...***...].
- - Color
-----
[...***...]
- - Tablet disintegration
---------------------
[...***...]
- - Packaging
---------
[...***...]
- - Stability
---------
Sufficient to give a [...***...].
- - Bioavailability
---------------
Bioequivalent to conventional [...***...]. Variability in [...***...]
within ranges acceptable to the regulatory authorities [...***...].
- ----------
*CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT D
PRODUCT CRITERIA
(FOR PURPOSES OF SECTION 1.6)
- - Tablets contain [...***...] compound for the treatment of [...***...].
- - Tablets that disintegrate or dissolve in the mouth in [...***...] by either
placing on the tongue or by chewing, such disintegration or dissolution
time to be measured in accordance with the in vitro test specification set
out below.
- - Tablets that include either a [...***...].
OraSolv Technology will not include any CIMA technology that is specifically
designed to increase or enhance the rate and/or the extent of absorption of
active drug substances [...***...], regardless of the in-vitro or in-vivo
disintegration/dissolution time. This exclusion also extends to enhanced
absorption in the oral cavity (sublingual or buccal) or upon ingestion
throughout the GI tract (stomach, intestines and colon).
[...***...]
- ----------
*CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT E
CONTACT PERSONS
AREA OF RESPONSIBILITY CIMA ZENECA (ON BEHALF OF IPR)
---------------------- ---- -------------------------
Business Development Jack Khattar Bob Nolan
Research and Development John Hontz John Shatwell
Mfg. and Packaging Brian Jones John Thornton
Accounting and Finance Keith Salenger Katrina Starkie
Regulatory John Kosewick Frances Duffy-Warren
EXHIBIT F
PRINCIPAL LICENSE TERMS
1. DEFINITIONS. The License Agreement shall include those definitions from
the Development and Option Agreement which are applicable to the License
Agreement and such other definitions as are appropriate.
1.1 IMPROVEMENTS. The definition of OraSolv-Registered Trademark-
Technology will include improvements thereto to the extent the improvement is
necessary or useful to the manufacture of the Product.
2. LICENSES.
2.1 LICENSE GRANT. CIMA will grant to IPR an exclusive (even as to
CIMA), [...***...], royalty-bearing license (with the right to sublicense) in
the Field to utilize the OraSolv-Registered Trademark- Technology for the
development, marketing, distribution and sale of the Product.
2.2 TERM OF LICENSE. The term of the license granted under Section 2.1
shall expire on a country-by-country basis on the later of (i) the last to
expire of the licensed patents or (ii) [...***...] after the effective date of
the License Agreement. The parties shall jointly consider ways of extending the
term of such license to the extent permitted by applicable law or regulation.
2.3 EXCLUSIVITY. In consideration for the license granted under Section
2.1, IPR will not, from the Effective Date until the expiration or termination
of the License Agreement, develop or commercialize, either internally or through
its Affiliates, or enter into any negotiations or agreements with any third
party relating to the development or commercialization of, a formulation of
[...***...] compound that disintegrates or dissolves in the mouth in [...***...]
by either placing on the tongue or by chewing. This provision shall be subject
to IPR's right to self-supply as described in Exhibit G of this Agreement.
3. COMMERCIALIZATION AND MARKETING.
3.1 COMMERCIALIZATION DILIGENCE. IPR will file its application for FDA
approval to market the Product in the United States and [...***...] (such
countries together with the United States hereafter called "Major Countries")
within [...***...] of final stability data for the Product being available to
IPR. Such filing timetable is based upon the following assumptions: that
regulatory authorities will approve the Product on the basis of a successful
bioequivalence study only, and that an efficacy study is not required; and that
the following stability data will be sufficient for regulatory approval:
[...***...]
[...***...]
[...***...]
- -------------------
*CONFIDENTIAL TREATMENT REQUESTED 1
If either clinical efficacy data or additional stability data is
required, IPR's filing timetable will be amended to be not more than [...***...]
after the last required data becomes available to IPR. IPR will launch the
Product in each Major Country in which it receives regulatory and pricing
approval to market the Product within [...***...] of receiving the later
received approval.
3.1.1 FAILURE OF IPR TO MEET COMMERCIALIZATION DILIGENCE
OBLIGATIONS. In the event IPR fails to meet any of the commercialization
diligence milestones set forth in Section 3.1, CIMA may, [...***...]. If CIMA
elects to terminate the license, CIMA shall give IPR [...***...] notice of
termination, during which period the parties shall discuss the circumstances
which caused IPR to fail to meet the relevant milestone and IPR may propose
appropriate strategies to cure its failure. CIMA may, in its discretion, elect
to permit IPR to implement its proposed strategy for such time as the parties
may agree. If at the end of such agreed upon period IPR still has not met the
relevant milestone, CIMA may terminate the license in the relevant Major Country
upon [...***...] written notice to IPR.
3.1.2 REGULATORY ASSISTANCE. CIMA will provide, such assistance
to IPR in connection with IPR's application for approval to market the Product
in any country as may reasonably be necessary to assist IPR in obtaining such
approval. CIMA will provide [...***...] of assistance per annum at CIMA's
expense, with any further assistance to be provided at IPR's expense.
3.2 MARKETING DILIGENCE. IPR will use commercially reasonable efforts to
market the Product consistent with IPR's usual practice in commercializing and
marketing products of similar market potential.
3.3 MINIMUM SALES. Commencing on the [...***...] of the later of (i)
[...***...] of the Product in [...***...] or (ii) [...***...] of the Product in
[...***...], IPR will meet an annual minimum sales target of [...***...] of its
projected sales for the Product as set forth on Exhibit K. The minimum sales
targets form the basis for calculating a material component of CIMA's
compensation under this Agreement; as such, they will not be amended except by
mutual agreement of the parties. In any event, Exhibit K shall not be subject
to revision or amendment by virtue of the forecasting and ordering procedures
set out in any Supply Agreement which the parties may enter. In the event that
IPR fails to gain marketing and/or price approval for the Product in one or more
Major Countries, the parties will meet to agree a fair and reasonable adjustment
to the projected sales for the Product as set forth on Exhibit K to take account
of such non-approval.
3.3.1 FAILURE TO MEET MINIMUM SALES REQUIREMENTS. In the event
IPR fails to meet the minimum sales target in any year in which such minimum
sales target applies set forth above (i) the [...***...], and (ii) CIMA will be
free to license the OraSolv Technology in the Field to third parties. CIMA will
have no financial or accounting obligations to IPR as a result of any license by
CIMA of the OraSolv Technology to third parties under Section 3.3.1(ii). Prior
to exercising any of the rights set out in parts (i) and (ii) of this Section
3.3.1, CIMA shall [...***...], and if IPR elects to make such payment, the
License Agreement shall continue on an exclusive basis in full force and effect.
3.4 ADDITIONAL LANGUAGE. The License Agreement will contain such
additional language as is appropriate to govern the parties' respective
commercialization, marketing and diligence obligations.
- -------------------
*CONFIDENTIAL TREATMENT REQUESTED 2
4. PAYMENTS AND ROYALTIES.
4.1 LICENSE FEE. In consideration for the license granted under the
License Agreement, IPR will pay to CIMA within [...***...] of the effective date
of the License Agreement a one-time fee of [...***...] PROVIDED, HOWEVER, that
the License Option Fee of [...***...] paid pursuant to the Development and
License Option Agreement shall be credited against the License Fee due under
this Section 4.1.
4.2 MILESTONE PAYMENTS. Subject to the terms and conditions of the
License Agreement, IPR will pay to CIMA the following milestone payments:
4.2.1 [...***...] within [...***...] of successful [...***...];
4.2.2 [...***...] within [...***...] of successful [...***...] of
the Product;
4.2.3 [...***...] within [...***...] of [...***...] of the
Product, of which [...***...] shall be creditable against earned royalties on
net sales of the Product, PROVIDED, HOWEVER,, that IPR may not take as a credit
an amount in excess of [...***...] and any excess credit shall be carried over
to the next royalty period until all such credit is exhausted;
4.2.4 [...***...] within [...***...] days of the earlier of (i)
[...***...] the Product, or (ii) the [...***...] the Product [...***...] in the
Territory.
4.3 ROYALTIES. IPR shall pay to CIMA royalties on worldwide annual net
sales of the Product at the marginal royalty rates set forth below:
ANNUAL NET SALES RATE
(i) [...***...] [...***...]
(ii) [...***...] [...***...]
(iii) [...***...] [...***...]
The net sales amounts set forth above shall be subject to annual
increases as provided herein. Within [...***...] after the end of each calendar
year in which IPR sells the Product pursuant to this Agreement, IPR shall report
to CIMA the percentages of worldwide net sales of the Product during that
calendar year resulting from the sale of the Product both within and outside of
the United States. The sales levels marked by * and ** above ("Trigger Point I"
and "Trigger Point II", respectively) shall be increased for the purpose of
calculating royalties payable to CIMA during the following calendar, as follows:
First, the applicable percentage increase in the Trigger Points shall
be calculated:
C = [...***...], where
A = [...***...];
- -------------------
*CONFIDENTIAL TREATMENT REQUESTED 3
B = [...***...];
C = [...***...].
Then, the Trigger Points shall be increased for the following calendar
year according to the following formulae:
Trigger Point I = [...***...]
Trigger Point II = [...***...].
For example, if during the first calendar year of Product sales the
net sales of the Product within the United States equal [...***...] of the
Product during that calendar year, then the percentage increase for each of the
Trigger Points for the following calendar year shall equal [...***...]. Trigger
Point I for the second calendar year of sales would therefore equal [...***...],
and Trigger Point II for the second calendar year of sales would therefore equal
[...***...]. If during the second calendar year of Product sales the net sales
of the Product within the United States equal [...***...] of the Product during
that calendar year, then the percentage increase for each of the Trigger Points
for the following calendar year shall equal [...***...]. Trigger Point I for
the third calendar year of sales would therefore equal [...***...], and Trigger
Point II for the third year of sales would therefore equal [...***...].
In the event that IPR has to pay a license fee to any third party to
enable IPR to continue to use the OraSolv Technology, the amounts payable to
CIMA under this Section 4.3 shall be correspondingly reduced such that
[...***...], provided however, that such reduction shall not exceed [...***...]
and that any unused credit may be carried forward and applied in accordance
herewith.
If at any time during the term of the License Agreement the
manufacture, use, sale, offer for sale or import of the Product in a Major
Country would, but for the license granted to IPR pursuant to the License
Agreement, infringe a patent included in the OraSolv Technology, and if all
claims of such patents in such country subsequently become invalid, then the
royalty rates set out above in this Section 4.3 on net sales of the Product in
such Major Country shall be reduced by [...***...] for so long as the
manufacture, use, sale, offer for sale or import of the Product in such Major
Country would not, but for the licenses granted pursuant to this Agreement,
infringe a patent included in the Orasolv Technology.
4.4 TERM OF ROYALTY OBLIGATION. The royalties set forth in Section 4.3
above shall be effective as of the date of [...***...] and shall continue on a
country-by-country basis until the later of (i) the expiration of the last to
expire of the licensed patents in such country, or (ii) [...***...] of the
Product in such country.
5. INTELLECTUAL PROPERTY
5.1 OWNERSHIP. Title and ownership rights in the OraSolv Technology and
other Confidential Information of CIMA shall remain at all times with CIMA. IPR
acknowledges that the OraSolv Technology and such Confidential Information shall
remain the sole property of CIMA and IPR will acquire no title thereto
- -------------------
*CONFIDENTIAL TREATMENT REQUESTED 4
as a result of this Agreement. Title and ownership rights in IPR's
Confidential Information shall remain at all times with IPR. CIMA
acknowledges that the Confidential Information of IPR shall remain the sole
property of IPR and CIMA will acquire no title thereto as a result of this
Agreement. Nothing in this Agreement shall be construed as conferring on
either party an expressed or implied license or option to license any
disclosed Confidential Information, technology, or any patent or patent
application except as expressly provided herein.
5.2 NEW INVENTIONS. CIMA shall solely own all right, title and interest
in and to any technology invented during the course of the development work for
IPR under this Agreement, whether patentable or not, that is necessary or useful
to the manufacture or distribution of the Product ("New Technology"). Any such
New Technology shall be included in the OraSolv Technology (except to the extent
that such New Technology would otherwise be excluded from the definition of
Orasolv Technology pursuant to the Product Criteria set forth in Exhibit D), and
as such shall be subject to the terms of the License Agreement. CIMA may, in
its sole discretion and at its sole expense, file and prosecute patent
applications on New Technology and obtain and enforce patents issuing from such
applications. CIMA shall solely own all such patent applications and patents.
If CIMA files and prosecutes patent applications on any New Technology relating
to [...***...], it will consult with IPR regarding the content of any filings
made with the United States Patent and Trademark Office (or any foreign
equivalent thereof) with respect to such applications and shall keep IPR
informed of the progress of such patent prosecution efforts and related
proceedings. IPR agrees to execute such documents and render such assistance to
CIMA as may be necessary or appropriate to enable CIMA to obtain and maintain
title to any New Technology and to any patent application or patent on such New
Technology, and to enforce any such patents.
5.3 PROSECUTION OF PATENTS. The License Agreement shall provide that CIMA
will have the right, but not the obligation, to prosecute all patents
encompassed by the OraSolv Technology and the New Technology, and that if CIMA
elects to abandon or otherwise not prosecute such patents, IPR may assume
prosecution of such patents.
5.4 ENFORCEMENT AND DEFENSE OF PATENTS. The License Agreement will
contain appropriate provisions for the enforcement of the OraSolv Technology and
New Technology (at CIMA's cost and expense) against infringement and for the
defense of third party claims that the OraSolv Technology or the New Technology
infringes such third party's intellectual property rights.
6. TERMINATION. The License Agreement shall provide that in the event of
termination by IPR for any reason (other than because of CIMA's breach of the
License Agreement), or by CIMA because of IPR's breach of the License Agreement,
IPR shall pay to CIMA a termination fee in an amount equal to (i) [...***...]
plus (ii) [...***...] in order to perform its obligations under the License
Agreement or the Supply Agreement.
7. ADDITIONAL PROVISIONS. The License Agreement shall contain such additional
provisions as are customary, including without limitation, provisions relating
to royalty reports, audit rights, maintenance of royalty records,
confidentiality, publicity, representations and warranties of each party,
indemnification, dispute resolution, assignment, governing law, export control,
force majeure and notices.
5
EXHIBIT G
PRINCIPAL SUPPLY TERMS
1. SUPPLY OF PRODUCT. CIMA shall manufacture and supply to IPR, and IPR shall
purchase from CIMA, IPR's Requirements of the Product. As used herein, the term
"Requirements" shall mean all quantities of the Product required by IPR, its
Affiliates and sublicensees for clinical trial materials and for distribution,
marketing and sale of the Product during the term of the Supply Agreement.
1.1 CIMA will grant to IPR an option to manufacture or have
manufactured up to one hundred percent (100%) of its requirements of the
Product for distribution, marketing and sale by IPR, its Affiliates and
sublicensees ("Self-Supply") commencing at any time after the [...***...]
after commercial launch of the Product, except as provided in Section 1.2.
IPR may exercise such option by so notifying CIMA in writing at least
[...***...] before IPR requires the Technology Transfer to begin that IPR
intends to Self-Supply. If IPR exercises its option to Self-Supply, IPR
shall pay an Option fee (the "Self-Supply Option Fee") equal to [...***...]
of which amount shall be paid to CIMA within [...***...] after IPR notifies
CIMA that it will Self-Supply and the remaining [...***...] of which amount
shall be paid to CIMA within [...***...] after the facility at which IPR will
manufacture or have manufactured the Product receives the necessary
regulatory approval(s) by the U.S. Food and Drug Administration (or
equivalent regulatory agency, if applicable).
1.2 If CIMA is unable to supply IPR with IPR's requirements of the Product
for any reason other than force majeure of a duration less than [...***...], IPR
may elect to manufacture the Product or have it manufactured by its Affiliates
and sublicensees. In such situation, if IPR has already elected to Self-Supply
at the time CIMA becomes unable to supply the balance of IPR's requirements, IPR
will receive a refund of any portion of the Self-Supply Option Fee that IPR has
paid to CIMA. However, IPR shall in such circumstances continue to be obligated
to pay to CIMA the per tablet fee referred to in Section 1.3 below.
If CIMA subsequently becomes able to again supply IPR with IPR's
requirements of the Product and IPR elects to purchase any portion of its
requirements of the Product from CIMA or elects to have CIMA reserve
manufacturing capacity for manufacture of any portion of IPR's requirements of
the Product, IPR shall repay to CIMA that portion of the Self-Supply Option fee
refunded to IPR under this Section 1.2.
1.3 If IPR elects to Self-Supply or to manufacture under Section 1.2, in
addition to the technology transfer fee, IPR shall pay to CIMA either
(i) [...***...] manufactured by IPR, if at the time IPR elects to self-supply
CIMA is supplying finished packaged Product to IPR, or (ii) [...***...]
manufactured by IPR, if at the time IPR elects to Self-Supply CIMA is supplying
[...***...] to IPR.
1.4 If IPR elects to Self-Supply or to manufacture, under Section 1.2, IPR
will have [...***...] without CIMA's written consent, may not use or permit its
Affiliates or sublicensees to use the technology for any purpose other than to
manufacture the Product, and may not permit its Affiliates or sublicensees to
further transfer the technology. If IPR ceases to utilize the manufacturing
technology to manufacture the Product, the manufacturing license will
automatically terminate and revert to CIMA.
- -------------------
*CONFIDENTIAL TREATMENT REQUESTED 1
1.5 If IPR elects to Self-Supply or to manufacture under Section 1.2, CIMA
will provide to IPR, its Affiliates and/or sublicensees, at IPR's sole expense,
technical support and assistance to ensure the smooth and satisfactory
establishment of the OraSolv Technology at the new manufacturing site.
2. SUPPLY PRICE. The supply price will be calculated consistent with Exhibit
I. Such price shall not in any event exceed [...***...] during the life of the
Supply Agreement, based on IPR taking delivery of [...***...] Product. If IPR
elects to take delivery of [...***...] of the Product from CIMA, CIMA shall
adjust such [...***...] to [...***...] for the term of the Supply Agreement.
The parties acknowledge that for the purposes of the Supply Agreement, the
[...***...] will nonetheless contain certain variable data (such as
[...***...]). The definitive Supply Agreement will contain language appropriate
to address these requirements.
3. PACKAGING. CIMA shall supply [...***...] or [...***...] of the Product to
IPR, whichever IPR in its sole discretion elects to purchase. The Supply
Agreement will contain appropriate terms concerning packaging and labeling the
Product. IPR will provide all approved and final art and copy for the Product
packaging and labeling.
4. ADDITIONAL PROVISIONS. The Supply Agreement will have additional customary
terms and provisions, including without limitation, provisions relating to
forecasting and firm orders, manufacturing requirements, regulatory
requirements, risk of loss, rejection of Product, warranties, compliance with
specifications and law, records, quality control, term and termination,
inability to supply and indemnification, audits, manufacturing change control
mechanism, performance criteria and measurement. In addition, the parties will
enter a quality assurance agreement in substantially the form attached hereto as
Exhibit L.
- -------------------
*CONFIDENTIAL TREATMENT REQUESTED 2
EXHIBIT H
DEVELOPMENT, SCALE-UP AND COMMERCIALIZATION COSTS
[...***...] (REVISED 8/18/97)
PHASE I. DEVELOPMENT AND SCALE-UP [...***...]
A. Develop [...***...] $ [...***...]
[...***...] [...***...]
[...***...] [...***...]
--------------------
Cost of [...***...] [...***...]
B. Cost to [...***...] [...***...]
([...***...] tablets per [...***...])
C. Product Development Costs [...***...]
Analytical Support [...***...]
Method Validation(1) [...***...]
--------------------
COST OF FORMULA AND METHOD DEVELOPMENT $ [...***...]
D. [...***...] $ [...***...]
Micro Testing [...***...]
Prototype Stability Costs(2) [...***...]
--------------------
COST OF [...***...] AND STABILITY $ [...***...]
E. Initial Formulation(s) Scale-up $ [...***...]
Preparation of CMC Docs [...***...]
[...***...] [...***...]
Micro Testing [...***...]
Definitive Stability Cost(3) [...***...]
--------------------
COST OF SCALE-UP AND BIO BATCH(S) $ [...***...]
F. Cost to [...***...] $ [...***...]
([...***...] Tablets)
TOTAL PHASE I [...***...]
--------------------
--------------------
PHASE II
Shipping Study [...***...](4) $ TBD
[...***...] Stability [...***...]*
Final Scale-up Batches [...***...]
[...***...] [...***...]
Micro Testing [...***...]
Stability Costs [...***...]
Preparation of CMC Docs [...***...]
--------------------
TOTAL PHASE II $ [...***...]
--------------------
--------------------
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*CONFIDENTIAL TREATMENT REQUESTED
(1)Includes validation of analytical and microbial testing methods.
(2)Price discount based on [...***...] initiated at the same time.
(3)Price discounted based on [...***...] initiated at the same time.
(4)Conditions, etc.
* If required.
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*CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT I
[...***...]
PRELIMINARY COST OF GOODS ESTIMATE
6/26/97
MAXIMUM COST PER TABLET: [...***...]
[...***...]
KEY ASSUMPTIONS:
- - Pricing assumes shipments to be FOB point of manufacture.
- - A Product supplied by CIMA will be in the configuration of [...***...].
- - Quality Control procedures normal to CIMA, which include:
- testing and release of raw material, packaging components, and
finished product.
- in-process sampling and testing.
- - Released finished product not to be stored at CIMA for more than
[...***...]
- - Costs incurred by CIMA as mandated by regulatory revisions (i.e. plate and
die charges due to label changes and product identification requirements,
etc.) shall be additional and paid for by IPR.
- - Pricing does not include [...***...].
- - Costs of Goods based on CIMA manufacturing 100% of IPR's production
requirements.
- - IPR provides raw drug substance, [...***...], at no cost to CIMA.
*[...***...] shall be subject to the provisions of Section 2 of Exhibit G.
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*CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT J
FOR IMMEDIATE RELEASE: Contact: JOHN M. SIEBERT, PH.D.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CIMA LABS INC.
(612) 947-8700
KEITH P. SALENGER
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
CIMA LABS INC.
(612) 947-8731
CIMA LABS AND ZENECA ANNOUNCE
DEVELOPMENT AND LICENSE OPTION AGREEMENT
ZENECA'S PRESCRIPTION PRODUCT TO BE COMBINED WITH ORASOLV-Registered Trademark-
Eden Prairie, MN, __/__/97 - CIMA LABS INC. (NASDAQ: CIMA) AND ZENECA.
(NYSE:ZEN) today announced the signing of an exclusive development and
license option agreement pertaining to one of Zeneca's currently marketed
prescription products. This represents CIMA's second collaboration on
developing a fast-dissolve formulation of a prescription product. In
exchange for its development work and license option, CIMA will receive an
option fee and development fees.
"Our partnership with Zeneca to combine one of their major prescription drugs
with our fast-melt technology is a significant milestone for CIMA LABS,"
commented John M. Siebert, Ph.D., President and Chief Executive Officer of
CIMA LABS INC. "We are pleased to announce that as a result of market
research and consumer testing, the outstanding acceptance of our
OraSolv-Registered Trademark- formulation was a key factor in Zeneca's
decision to team up with CIMA."
"Providing value-added proprietary delivery of medication to our patients is
a primary concern," commented Robert Nolan, Ph.D., of Product Licensing at
ZENECA. "We believe OraSolv-Registered Trademark- offers us a superior drug
delivery vector for our product."
OraSolv-Registered Trademark- is patented oral dosage form which incorporates
microencapsulated drug ingredients into tablets that dissolve quickly in the
mouth. OraSolv-Registered Trademark- is designed to improve taste
acceptance, address difficulty of swallowing traditional tablets and
capsules, while offering a convenient oral dosage form that can be taken
anywhere and anytime, therefore increasing compliance.
CIMA LABS INC. is a drug delivery company that develops and manufactures
products based upon its OraSolv-Registered Trademark- technology for
marketing by multinational pharmaceutical companies to improve patient
compliance and drug efficacy. CIMA was founded in 1986 and has been publicly
held since July 1994. The Company's corporate headquarters and manufacturing
facility is located in Eden Prairie, MN, and its Research and Development
facility is located in Brooklyn Park, MN.
Zeneca is a broadly-based, bioscience group comprising international
pharmaceuticals, agrochemicals and specialties businesses. All three
businesses invent, develop, manufacture and market products designed to meet
human needs around the world. Zeneca had total sales of GBP5.4bn in 1996.
In pharmaceuticals, the main therapeutic areas of interest are
cardiovascular, cancer, anti-infection, central nervous system disorders,
anesthetics and respiratory disease, with an annual Research and Development
expenditure of around GBP390m. In 1996, sales in pharmaceuticals amounted to
GBP2.4bn.
1
EXHIBIT K
ORASOLV-Registered Trademark- FAST MELT VOLUME PROJECTIONS
FOR MINIMUM SALES TARGET CALCULATIONS
[...***...]
YEAR TABLETS [...***...]
[...***...] [...***...]
[...***...] [...***...]
[...***...] [...***...]
[...***...] [...***...]
[...***...] [...***...]
The parties will agree on a mutually acceptable method for converting the
above volume targets and, where necessary, related agreement provisions to a
calendar year basis to avoid unnecessary accounting effort.
- -----------
*CONFIDENTIAL TREATMENT REQUESTED