Confidential Materials omitted and
filed separately with the
Securities and Exchange Commission. Asterisks denote
omissions.
DEVELOPMENT AND LICENSE
AGREEMENT
DEVELOPMENT AND LICENSE
AGREEMENT
THIS DEVELOPMENT
AND LICENSE AGREEMENT (this “ Agreement ”),
dated September 19, 2008 (“ Execution Date
”), is entered into by and between Durect Corporation, a
corporation organized and existing under the laws of the State of
Delaware, U.S.A. with a place of business at 2 Results Way,
Cupertino, CA 95014 (“ Durect ”), and Alpharma
Ireland Limited, a corporation organized and existing under the
laws of Ireland, having its registered office at Arthur Cox
Building, Earlsfort Terrace, Dublin 2, Ireland (“
Alpharma ”).
A. Durect is
the owner of a proprietary product for pain treatment consisting of
a bupivacaine transdermal patch as described below and certain
patents and know-how relating thereto;
B. Durect
desires to have such product further developed and commercialized
in the territory specified below;
C. Alpharma
has capabilities in the development, manufacture, promotion,
marketing and sales of pharmaceutical products in the field of pain
treatment in the specified territory; and
D. Durect
desires to grant certain exclusive rights to Alpharma in respect of
such product in the specified territory and related matters upon
the terms and conditions hereinafter set forth.
NOW THEREFORE, in
consideration of the mutual covenants and agreements provided
herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties,
intending to be legally bound, hereby agree as follows:
As used in this
Agreement, the following terms shall have the meanings set forth in
this Section 1:
1
1.1 “
ANDA ” means an abbreviated new drug application
pursuant to Section 505(j) of the FDC Act.
1.2 “
Affiliate ” means, with respect to a Person, any
Person that controls, is controlled by or is under common control
with such first Person. For purposes of this definition only,
“control” means (a) to possess, directly or
indirectly, the power to direct the management or policies of a
Person, whether through ownership of voting securities, by contract
relating to voting rights or corporate governance, or (b) to
own, directly or indirectly, fifty percent (50%) or more of the
outstanding voting securities or other ownership interest of such
Person. An entity will be an Affiliate for purposes of this
Agreement only so long as it satisfies the definition set forth
herein.
1.3 “
Applicable Laws ” means the applicable laws, rules and
regulations, including any rules, regulations, guidelines or other
requirements of the Health Authorities, that may be in effect from
time to time.
1.5 “
Bupivacaine ” means 1-butyl-N-(2,6-dimethylphenyl)
piperidine-2-carboxamide, including any and all pharmaceutically
acceptable salts, solvates, prodrugs, esters, free base forms,
enantiomers (and racemic or other mixtures of said enantiomers)
thereof.
1.6 “
cGMP ” means current Good Manufacturing Practice for
medicinal products for human use as set forth in U.S. Code of
Federal Regulations 21 CFR Part 210, 211 et seq. ,
Commission Directive 2003/94/EC the EU Good Manufacturing Practice
guideline, Volume 4 for medicinal products for Human and Veterinary
Use, the European Pharmacopoeia, and equivalent thereof, as
applicable, each as amended from time to time.
1.7 “
Change of Control ” means, as to Alpharma or Durect,
the occurrence of a tender offer, stock purchase, other stock
acquisition, merger, consolidation, recapitalization, reverse
split, sale or transfer of assets or other transaction, or series
of transactions, as a result of which any person, entity or group,
other than an Affiliate of Alpharma or Durect, as the case may be,
prior to the occurrence of such event (a) becomes the
beneficial owner, directly or indirectly, of
2
securities of
Alpharma or Durect, as the case may be, representing more than 50%
of the ordinary shares of Alpharma or Durect, as the case may be,
or representing more than 50% of the combined voting power with
respect to the election of directors of Alpharma or Durect, as the
case may be, (b) obtains the ability to appoint a majority of
the board of directors of Alpharma or Durect, as the case may be,
or (c) obtains the ability to direct the operations or
management of Alpharma or Durect, as the case may be.
1.8 “
Clinical Trial ” means an investigation in human
subjects and/or patients intended to discover or verify the
clinical, pharmacological and/or other pharmacodynamic effects of
an investigational product(s), and/or to identify any adverse
reactions to an investigational product(s), and/or to study
absorption, distribution, metabolism, and/or excretion of an
investigational product(s) with the objective of ascertaining its
safety, activity and/or efficacy.
1.9 “
Collaboration Inventions ” means all Know-How (whether
or not patentable) conceived and/or reduced to practice by or for a
Party, or any Affiliate, subcontractor, agent, or sublicensee
thereof, or jointly by any of the foregoing, arising out of or in
connection with performing the activities under this Agreement,
including the Development Plan. For clarity, and notwithstanding
the foregoing, the definition of “Collaboration
Inventions” shall not be construed to cover Development
Data.
1.10 “
CMC ” means chemistry, manufacturing and
controls.
1.11 “
CMC Data ” means CMC data generated with respect to
the Product that is Controlled at any time during the Term of this
Agreement by a Party, or any Affiliate, subcontractor, agent,
sublicensee thereof, or jointly by any of the foregoing.
1.12 “
CMO ” means a Third Party contract manufacturing
organization.
1.13 “
Committee ” means any of the Joint Executive Committee
(JEC) or the Joint Development Committee (JDC), and when used
in the plural, shall mean all of them or more than one of them, as
the case may be.
1.14 “
Commercialization ” or “ Commercialize
” means the ongoing process and activities generally engaged
in by a company marketing human pharmaceutical therapeutic products
to establish and maintain a presence for such product in a given
territory, including
3
offering for
sale, selling, marketing, promoting, distributing, importing and
exporting such product.
1.15 “
Commercially Reasonable Efforts ” with respect to any
activity means the efforts and resources that would be used by a
specialty pharmaceutical company of comparable size and resources
as Alpharma in the development, registration, Reimbursement
authorization, market launch and/or manufacturing, with regard to a
product at a similar stage in its product life taking into account
the following factors to the extent reasonable and relevant: issues
of safety and efficacy, product profile, market potential,
difficulty in manufacturing the product, difficulty in establishing
an appropriate clinical protocol for applicable indications,
competitive market conditions, the patent, duration of regulatory
exclusivity or other proprietary position of the product, the
regulatory structure involved and the potential profitability and
economic return of the product [**], all as measured by the facts
and circumstances at the time such efforts are due. Where this
Agreement requires Alpharma to use Commercially Reasonable Efforts,
such efforts and resources that are used by Alpharma’s
Affiliates and sublicensees shall also be attributed to
Alpharma.
1.16 “
Competitive Product ” means any formulation containing
Bupivacaine, either alone or in combination with one or more other
active ingredients, for transdermal delivery from a patch for use
in the Field, other than the Product.
1.17 “
Control ” or “ Controlled ” means
possession by a Party or its Affiliate of the right to grant to the
other Party a license, sublicense or other right to use, of the
scope provided for in this Agreement, to Intellectual Property
Rights (including patent rights, Know-How, trade secrets), data and
rights to access or cross-reference regulatory filings without
violating the terms of any Applicable Law, agreement or other
arrangement with any Third Party existing at the time such Party or
such Affiliate would be first required hereunder to grant the other
Party such license, sublicense or other right.
1.20 “
Cost ” means all internal and external costs,
expenses, cost of labor and materials associated with an
activity.
4
1.21 “
Development Data ” means all Preclinical, Non-Clinical
and Clinical data and all CMC Data, including pharmacological,
pharmacokinetic and toxicological data generated with respect to
the Product that is Controlled at any time during the Term of this
Agreement by a Party, or any Affiliate, subcontractor, agent,
sublicensee thereof, or jointly by any of the foregoing.
1.22 “
Dollars ” means U.S. Dollars, the lawful currency of
the United States.
1.23 “
Dosage Form Development ” means any
pharmaceutical development activities for the Product that are
necessary to design or modify a pharmaceutical formulation or
dosage form to meet the desired clinical or commercial product
profile, including in vitro studies on solubility,
stability, physical and chemical characteristics, denaturation,
particle formation, crystallization, micronization,
excipient/material selection, compounding, mixing, casting,
converting, drying, and similar activities.
1.24 “
Durect Development Costs ” shall mean the Costs
incurred by Durect in performing the Durect Development
Responsibilities as calculated in accordance with
Schedule 1.24.
1.25 “
Durect Trademark ” means the trademark rights to the
mark ELADUR™ and similar rights under the laws of any
Governmental Entity, including all goodwill associated therewith,
and all applications, registrations, extensions and renewals
relating thereto.
1.26 “
EMEA ” means the European Medicines Agency, and where
and if applicable, the European Commission, the Council of the
European Union and the Committee for Medicinal Products for Human
Use or any successors thereto.
1.27 “
EU ” shall mean the European Union, including each of
the member states as modified from time to time.
5
1.32 “
FDA ” means the Food and Drug Administration of the
United States Department of Health and Human Services or any
successor agency thereof performing similar functions.
1.33 “
FDC Act ” means the United States Federal Food, Drug,
and Cosmetic Act and any successor acts thereto, as amended from
time to time.
1.34 “
Field ” means all pharmaceutical applications
(including the treatment of pain) for human health.
1.35 “
First Commercial Sale ” means: (i) with respect
to a Jurisdiction, the first sale for use, consumption or resale of
Product by Alpharma or an Affiliate or Sublicensee thereof to a
Third Party in a bona fide arms’-length transaction in such
Jurisdiction and (ii) with respect to the Territory, the First
Commercial Sale in any Jurisdiction. A sale to an Affiliate shall
not constitute a First Commercial Sale unless the Affiliate is the
end-user of the Product.
1.36 “
GAAP ” means generally accepted accounting principles
in the United States, consistently applied by the Party at
issue.
1.37 “
Generic Product ” means a generic pharmaceutical
Bupivacaine transdermal patch that is approved for the same labeled
indication as the Product under an ANDA pursuant to the FDC Act,
Article 10 of the EU Directive 2001/83/EC or other equivalent
registration process under the Applicable Laws of the relevant
Jurisdiction in which the Product is cited as the reference listed
drug.
1.38 “
Governmental Entity ” means any regional, central,
federal, state, provincial or local court, commission or
governmental, regulatory or administrative body, board, bureau,
agency, instrumentality, authority or tribunal or any subdivision
thereof.
1.39 “
HSR ” means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
1.40 “
ICH Guidelines ” means the then-current guidelines
applicable to pharmaceutical products adopted by the International
Conference on Harmonization.
1.41 “
IND ” means an investigational new drug application
(together with all subsequent submissions, supplements and
amendments thereto, and any materials, documents or information
referred to or relied upon thereby) filed with a Regulatory
Authority in conformance
6
with applicable
laws and regulations, and the equivalent thereof (or other right to
commence Clinical Trials), as applicable, in Jurisdictions outside
the United States.
1.42 “
Intellectual Property Rights ” means patents,
copyrights, trade secrets, database rights, proprietary know-how
and similar rights of any type (excluding trademarks) under the
laws of any Governmental Entity, including all applications,
registrations, extensions and renewals relating to any of the
foregoing.
1.43 “
Jurisdiction ” means a country within the
Territory.
1.44 “
Know-How ” means all technical information and other
technical subject matter, proprietary methods, ideas, concepts,
formulations, discoveries, inventions, devices, technology, trade
secrets, compositions, designs, formulae, know-how, show-how,
specifications, drawings, techniques, results, processes, methods,
procedures and/or designs, whether or not patentable.
1.45 “
Knowledge ” means the actual knowledge of a
Party’s executive officers.
1.46 “
Manufacturing Technology ” means all Know-How
Controlled by a Party or any of its Affiliates that pertains to the
manufacture, finishing, or packaging of the Product, including any
analytical methods and other quality control and assurance methods
(including all processes, procedures, and techniques).
1.47 “
MAA ” means a “Marketing Authorization
Application” or other application for approval to market the
Product in a Jurisdiction in the EU submitted to the Governmental
Entity of such Jurisdiction, including any Marketing Authorization,
as amended or supplemented from time to time.
1.48 “
Marketing Authorization ” or “ MA ”
means any registrations or authorizations issued under Directive
2001/83/EC (as amended by Directive 2004/27) or local legislation
deriving thereof, Council Regulation 726/04 and any amendments
or replacements thereof or any national equivalents in relation to
the Product.
1.49 “
Marketing Exclusivity Right ” means a marketing or
data exclusivity right conferred as a result of
(a) designation as a drug for rare diseases or conditions
under Sections 525 et seq. of the FDC Act, (b) an
exclusive right to sell under an NDA pursuant to Section
505(j)(5)(F)(ii), (iii) and (iv) or 505(c)(3)(E)(ii),
(iii) and (iv) of the FDC Act or any relevant subsequent
legislation, rules or regulations, (c) the exclusive right
granted by the FDA upon
7
completion of
pediatric studies requested by the FDA under Section 505A(a)
of the FDC Act, (d) Article 10 of EU Directive 2001/83/EC
and/or Article 3(3) of EU Regulation 726/2004/EC or
(e) EU Regulations 141/2000/EC and/or 847/2000/E, as
applicable, or any equivalent or similar rights in the Territory or
Jurisdiction, successor legislations of any of the foregoing or
subsequent legislation that has the effect of extending marketing
or data exclusivity right to a pharmaceutical product.
1.50 “
NDA ” means a “New Drug Application,” or
other application for Regulatory Approval to market a product in
the U.S. submitted to the FDA as amended or supplemented from time
to time.
1.51 “
Non-Clinical ” when used with respect to studies or
data refers to safety, toxicology and other studies undertaken in
non-human animals in support of Clinical Trials or otherwise
required for Regulatory Approval.
1.52 “
Net Sales ” means the gross amount invoiced by
Alpharma, and/or its Affiliates and Sublicensees for sale or other
commercial disposition of the Product (in its final, finished form
for use by the end-user) to an unrelated Third Party in
arms’-length transactions, less the following deductions
which are actually incurred, allowed, accrued or specifically
allocated in their normal and customary amounts: (i) credits,
price adjustments (including co-pay reduction programs) or
allowances for damaged products, returns or rejections of Product;
(ii) trade, cash and quantity discounts, allowances and
credits (including with respect to marketing programs such as
coupon programs); (iii) chargeback payments, fees and rebates
(or the equivalent thereof) granted to group purchasing
organizations, managed health care organizations, wholesalers,
pharmacy benefit management (PBM) or other similar
organizations or to federal, state/provincial, local and other
governments, including their agencies, or to trade customers;
(iv) any invoiced freight, postage, shipping, insurance and
other transportation charges; (v) reasonable provisions for
allowance for uncollectible amounts; and (vi) sales,
value-added, and excise taxes, tariffs and duties, and other taxes
directly related to the sale (but not including taxes assessed
against the income derived from such sale).
For clarity, Net
Sales shall be determined in accordance with GAAP and a sale or
transfer by Alpharma to its Affiliates and/or Sublicensees for
resale by such Affiliate and/or Sublicensee shall not be considered
a sale for the purpose of this provision but the resale by such
Affiliate
8
and/or
Sublicensee to a Third Party shall be a sale for such purposes.
Transfer for Preclinical trials and Clinical Trials, testing or
market research or promotional purposes shall not be a sale for the
purpose of calculating Net Sales.
1.53 “
Orphan Indication ” means a disease or condition which
qualifies as a “rare disease or condition” under the
Orphan Drug Act (21 U.S.C. 360aa et seq .) and regulations
relating thereto (21 CFR Part 316), including amendments and
successor laws and regulations thereto.
1.54 “
PHN ” means persistent pain associated with
post-herpetic neuralgia.
1.55 “
Party ” means Durect or Alpharma, as the case may be,
and, when used in the plural, shall mean Durect and
Alpharma.
1.56 “
Patent ” and “ Patents ” mean
issued patents and patent applications, including any and all
provisionals, continuations, divisionals, continuation-in-part
applications, foreign counterparts, substitutions, reissues,
renewals, re-examinations, supplementary protection certificates,
patent term extensions, adjustments or restoration rights,
registrations, confirmations, successor protective rights or
subsequently issued protective rights of similar nature of any of
the above.
1.57 “
Person ” means an individual or a corporation,
partnership, association, trust, or any other entity or
organization, including a government or political subdivision or an
agency or instrumentality thereof.
1.58 “
Preclinical ” when used with respect to studies or
data refers to preliminary pharmacological studies undertaken in
non-human animals, but not necessarily for purposes of submission
in support of Regulatory Approval.
1.59 “
Pricing ” or “ Pricing Approval ”
means any approval or authorization of a Governmental Entity,
establishing a pricing scheme for Product in a
Jurisdiction.
1.60 “
Product ” means the product under development by
Durect currently known as ELADUR™, consisting of a
transdermal patch containing Bupivacaine as the sole active
pharmaceutical ingredient for use in the Field which incorporates
Product Know-How and/or is covered by Product Patent Rights,
including all dosage strengths thereof, as described in
Schedule 1.60 hereto. Product shall include any improvements,
reformulations and line
9
extensions
thereof, in each case consisting of a transdermal patch containing
Bupivacaine as the sole active pharmaceutical ingredient for use in
the Field which incorporates Product Know-How and/or is covered by
Product Patent Rights (hereinafter “ Line Extension(s)
”).
1.61 “
Product Know-How ” means Know-How related to the
Product that is (a) Controlled by Durect or any of its
Affiliates during the Term of this Agreement and (b) useful
for a Party, or its Affiliates and/or licensees to develop, make,
have made, use, Commercialize and/or register the
Product.
1.62 “
Product Patents Rights ” means (i) those Patents
in the Territory Controlled by Durect or any of its Affiliates
during the Term which relate to the Product, excluding the [**] and
(ii) those Patents in the Territory Controlled by Durect or
any of its Affiliates during the Term which cover Product
Collaboration Inventions. Schedule 1.62 set forth a list of
Product Patent Rights, as such list may be updated from time to
time.
1.64 “
Regulatory Approval ” means, with respect to one or
more Jurisdictions, final approval of the Regulatory Approval
Application (including, with respect to any Jurisdiction(s) other
than the U.S., any Pricing Approvals and/or Reimbursement Approvals
that Alpharma reasonably determines, consistent with the exercise
of Commercially Reasonable Efforts, are commercially necessary
prior to commercial sale of the Product in such Jurisdiction(s))
for the Product filed in such Jurisdiction(s), including an
approved NDA in the U.S., Marketing Authorization in the EU, or
equivalent local final approvals in Jurisdictions.
1.65 “
Regulatory Approval Application ” means a new drug
application, health registration, marketing authorization
application, common technical document, regulatory submission,
notice of compliance or equivalent application (excluding local and
general business licenses and permits) required to be approved
before commercial sale or use of the Product as a pharmaceutical or
medicinal product in a Jurisdiction (including, with respect to any
Jurisdiction other than the U.S., any Pricing Approvals and/or
Reimbursement Approvals that Alpharma reasonably determines,
consistent with the exercise of Commercially Reasonable Efforts,
are commercially necessary prior to commercial sale of the Product
in such Jurisdiction), together with all subsequent submissions,
supplements and amendments thereto, including an NDA in the U.S.,
MAA in the EU or local approvals in the Jurisdictions as
applicable.
10
1.66 “
Regulatory Authority ” means the FDA, EMEA and any
health regulatory authorities in the Territory or Jurisdiction that
hold responsibility for the regulation of and/or the Reimbursement
of medicinal products intended for human use.
1.67 “
Regulatory Documentation ” means all submissions to
Regulatory Authorities and other Governmental Entities, including
for Clinical Trials, tests, and biostudies, relating to the
Product, including all INDs and NDAs, as well as all correspondence
with Governmental Entities (registration and licenses, Pricing and
Reimbursement correspondence, regulatory drug lists, advertising
and promotion documents), adverse event files, complaint files,
manufacturing records and inspection reports.
1.68 “
Reimbursement ” or “ Reimbursement
Approval ” means the official decision by the relevant
Governmental Entity in any Jurisdiction responsible for
establishing a reimbursement scheme to cover the costs related to
the treatment of patients with the Product.
1.69 “
Royalty Term ” means, with respect to the Product in
each Jurisdiction of the Territory on a
Jurisdiction-by-Jurisdiction basis, the period of time commencing
on the First Commercial Sale of the Product in such Jurisdiction
and ending on the later of: (a) fifteen (15) years from the
date of the First Commercial Sale of the Product in such
Jurisdiction and (b) the end of the Patent Royalty Term in
such Jurisdiction.
1.71 “
Specifications ” means the specifications for the
Product, considering the applicable regulatory requirements in the
Territory, as may be amended from time to time.
1.72 “
Sublicense ” means the sublicense by Alpharma of
Commercialization rights to the Product to any Third Party in the
Territory such that the Third Party has the right to record sales
for its own account in lieu of Alpharma (such Third Party grantee
shall be deemed a “ Sublicensee ”).
1.73 “
Sublicense Fees ” means any upfront payments,
milestone payments and other license payments (including the fair
market value of debt or equity securities or other consideration)
received by Alpharma or any Affiliate thereof as consideration for
a Sublicense. For clarity, and notwithstanding the foregoing,
Sublicense Fees shall not include any royalties based on Product
sales received by Alpharma or its Affiliates, any bona fide
research and
11
development
funding paid to Alpharma and its Affiliates for research and
development activities performed by Alpharma or any of its
Affiliates with respect to the Product, or the fair market value
purchase price paid to Alpharma or any of its Affiliates by a
Sublicensee for the purchase of any debt or equity securities of
Alpharma or any of its Affiliates.
1.74 “
Subterritory ” means each one of the
following:
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Subterritory A — The United
States of America (including territories and protectorates
thereof)
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Subterritory B — EU
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Subterritory C —
Japan
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Subterritory D — All
Jurisdictions of the Territory excluding Jurisdictions in
Subterritories A, B and C
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1.75 “
Terminated Countries ” means those Jurisdictions in
the Territory for which Alpharma’s rights to develop and
Commercialize the Product have been terminated in accordance with
Sections 4.2(c) or 4.3(d).
1.76 “
Territory ” means all the countries in the world
excluding Terminated Countries, if any.
1.77 “
Third Party ” means any Person who or which is neither
a Party nor an Affiliate of a Party.
1.79 “
Valid Claim ” means, with respect to Product in a
particular Jurisdiction, any claim of a Patent that
either:
(a)
with respect to a granted and unexpired Patent in such
Jurisdiction, that (i) has not been held permanently revoked,
unenforceable or invalid by a decision of a court or other
Governmental Entity of competent jurisdiction, which decision is
unappealable or unappealed within the time allowed for appeal, and
(ii) has not been abandoned, disclaimed, denied or admitted to
be invalid or unenforceable through reissue or disclaimer or
otherwise; or
(b)
with respect to a pending Patent application, that was filed and is
being prosecuted in good faith and has not been abandoned or
finally disallowed without the possibility of appeal or re-filing
of the application; provided, however, that such claim is
not
12
pending more
than [**] years after the filing of the earliest patent application
from which such pending claim claims priority.
Each of the
following terms is defined in the Section set forth opposite such
term below:
“ AAA
” – Section 14.12(b)
“ Adverse
Event ” – Section 4.9
“
Alliance Manager ” –Section 2.6.
“
Alpharma Post-Registration Study
”—Section 5.2
“
Alpharma Related Party
”—Section 12.1
“ Annual
Net Sales Period ” – Section 6.2(a)
“ Audited
Party ” – Section 7.5
“
Auditing Party ” – Section 7.5
“
Confidential Information ” –
Section 10.4
“ CRO
” – Section 13.7(c)
“
Damages ” – Section 12.1
“
Designated Executives ” –
Section 2.1(d)
“
Development Plan ” – Section 4.2
“
Development Plan Budget ” –
Section 4.2
“
Development Program ” –
Section 4.1
“
Dispute” – Section 14.12(b)
“ Durect
Development Responsibilities ” –
Section 4.6
“ Durect
Related Party ” – Section 12.2
“
Effective Date ”
–Section 13.2(a)
“
Execution Date ” – Preamble
13
“ First
Major Market Jurisdiction
”—Section 4.3(b)
“ First
Refusal Notice ”—Section 3.6
“ Force
Majeure ”– Section 14.14
“
Indemnified Party ”
–Section 12.4
“
Indemnifying Party ”
–Section 12.4
“ Joint
Development Committee ” or “ JDC
”– Section 2.2(a)
“ Joint
Executive Committee ” or “ JEC ”
— Section 2.1(a)
“ Joint
Invention ”—Section 9.1(d)
“ Joint
Patent Rights ”—Section 9.2(b)
“
Know-How Royalty Term ” —
Section 6.2(b)
“ Line
Extensions ”—Section 1.60
“ Major
Market Jurisdiction ”—Section 4.3
“
Negotiation Period ”—Section 3.6
“
One-Time Payment ”—Section 6.1
“ Patent
Litigation Losses ”—Section 9.6(c)
“ Patent
Royalty Term ” —Section 6.2(a)
“ Patent
Term Extensions ” —Section 9.7
“ Product
Collaboration Inventions
”—Section 9.1(b)
“ Product
Material ”—Section 13.7(b)
“ Product
Trademarks ”—Section 3.5(a)
“
Resolution Period ” –
Section 2.1(d)
“
Royalties ” –Section 6.2
“
Rules ” – Section 14.12(b)
“ Second
Major Market Jurisdiction
”—Section 4.3(b)
“ Serious
Adverse Drug Experience
”—Section 13.3(b)
“
Sublicensee ” – Section 1.72
“
Technology Transfer Plan
”—Section 8.2
“ Third
Party License Fees ”—Section 9.6(e)
14
(a)
Whenever any provision of this Agreement uses the term
“including” (or “includes”), such term
shall be deemed to mean “including without limitation”
and “including but not limited to” (or “includes
without limitations” and “includes but is not limited
to”) regardless of whether the words “without
limitation” or “but not limited to” actually
follow the term “including” (or
“includes”);
(b)
“Herein”, “hereby”,
“hereunder”, “hereof” and other equivalent
words shall refer to this Agreement in its entirety and not solely
to the particular portion of this Agreement in which any such word
is used;
(c)
All definitions set forth herein shall be deemed applicable whether
the words defined are used herein in the singular or the
plural;
(d)
Wherever used herein, any pronoun or pronouns shall be deemed to
include both the singular and plural and to cover all
genders;
(e)
The recitals set forth at the start of this Agreement, along with
the Exhibits and Schedules to this Agreement, and the terms and
conditions incorporated in such recital, Exhibits and Schedules
shall be deemed integral parts of this Agreement and all references
in this Agreement to this Agreement shall encompass such recitals,
Exhibits and Schedules and the terms and conditions incorporated in
such recitals, Exhibits and Schedules, provided , that in
the event of any conflict between the terms and conditions of this
Agreement and any terms and conditions set forth in the Exhibits
and Schedules, the terms of this Agreement shall
control;
(f)
In the event of any conflict between the terms and conditions of
this Agreement and any terms and conditions that may be set forth
on any order, invoice, verbal agreement or otherwise, the terms and
conditions of this Agreement shall govern;
(g)
The Agreement shall be construed as if both Parties drafted it
jointly, and shall not be construed against either Party as
principal drafter;
(h)
Unless otherwise provided, all references to Sections, Schedules
and Exhibits in this Agreement are to Sections, Schedules and
Exhibits of and to this Agreement;
(i)
All references to days, months, quarters or years are references to
calendar days, calendar months, calendar quarters or calendar years
unless otherwise expressly
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provided;
references to a “business day” herein shall mean a day
when both Alpharma and Durect corporate headquarters are open
during regular business hours for the conduct of normal business
operations.
(j)
Any reference to any federal, national, state, local or foreign
statute or law shall be deemed to also refer to all rules and
regulations promulgated thereunder, unless the context requires
otherwise;
(k)
Any requirements of notice or notification by one Party to another
shall be construed to mean written notice in accordance with
Section 14.5; and
(l)
Wherever used, the word “shall” and the word
“will” are each understood to be imperative or
mandatory in nature and are interchangeable with one
another.
2.1 Joint
Executive Committee .
(a)
Members; Officers . The Parties hereby establish a joint
executive committee (the “ Joint Executive Committee
” or “ JEC ”), which shall consist of up
to [**] members with an equal number of members nominated by each
of Durect and Alpharma. The initial members of the JEC are set
forth on Schedule 2.1, as may be amended by the designating
Party from time to time. Representatives of the JEC shall be
employees of the respective Party or its Affiliates. Each of Durect
and Alpharma may replace any or all of its representatives on the
JEC at any time upon written notice to the other Party. Any member
of the JEC may designate a substitute with due authority to
temporarily attend and perform the functions of that member at any
meeting of the JEC. Durect and Alpharma each may, in its
discretion, invite non-member representatives that are employees of
such Party (or such Party’s Affiliates) and, with the other
Party’s consent, consultants to attend meetings of the JEC.
The JEC shall be chaired by a representative of Alpharma (or its
Affiliates), as such representative may be changed by Alpharma at
any time. The chairperson shall appoint a secretary of the JEC, and
such secretary shall serve for such term as designated by the
chairperson. The initial chairperson is designated on
Schedule 2.1.
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(b)
Responsibilities . The JEC shall perform the following
functions:
(i)
manage and oversee the interactions and performance of the Parties
pursuant to the terms of this Agreement (including the development
and Regulatory Approval process of the Product in the
Territory);
(ii)
review and approve any modifications or amendments to the
Development Plan and Development Plan Budget;
(iii)
review and advise Alpharma regarding final label indications for
the Product in Subterritory A and Major Market
Jurisdictions;
(iv)
at each meeting, as applicable, review the Product development
status and expenditures with the activities, timelines and budget
set forth in the Development Plan as well as discuss any deviations
from the Development Plan;
(v)
recommend further development activities after Regulatory Approval
of the Product in each Jurisdiction, including Phase 4
studies;
(vi)
review and evaluate the progress of the JDC;
(vii)
in accordance with the procedures established in
Section 2.1(d), resolve disputes, disagreements and deadlocks
unresolved by the JDC;
(viii)
review and advise Alpharma regarding Alpharma’s publication
strategy for scientific publications relating to the Product other
than medical education and marketing publications;
(ix)
consider and approve the development of any Line Extensions to the
Product in the Territory;
(x)
establish trademark usage and quality standards in accordance with
Section 9.8; and
(xi)
have such other responsibilities as may be assigned to the JEC
pursuant to this Agreement or as may be mutually agreed upon by the
Parties from time to time.
(c)
Meetings . The JEC shall meet in person, by video
teleconference or by telephone initially at least [**] prior to the
first Regulatory Approval of a Product in
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Subterritory A
and thereafter at least [**], and more frequently as Durect and
Alpharma deem appropriate or as required to resolve disputes,
disagreements or deadlocks in the JDC, on such dates, and at such
places and times, as the Parties shall agree. From time to time,
each Party may request a JEC meeting upon notice to the other Party
specifying the subject matters to be discussed, and the Parties
shall convene such JEC meeting within [**] of the date of the
notice. Meetings of the JEC that are held in person shall alternate
between the offices of Durect and Alpharma (or the offices of their
Affiliates designated by such Parties), or such other place as the
Parties may agree. The members of the JEC also may convene or be
polled or consulted from time to time by means of
telecommunications, video conferences, electronic mail or
correspondence, as deemed necessary or appropriate.
(d)
Decision-making . The JEC may make decisions with respect to
any subject matter that is subject to the JEC’s
decision-making authority and functions as set forth in Section
2.1(b). All decisions of the JEC shall be made by unanimous vote or
written consent, with Durect and Alpharma each having,
collectively, one vote in all decisions. The JEC shall use good
faith and reasonable efforts to resolve the matters within its
roles and functions or otherwise referred to it. With respect to
all matters that are subject to the JEC’s decision-making
authority, if the JEC cannot reach consensus within [**] after it
has met and attempted to reach such consensus, including
discussions between the Alliance Managers, the matter shall be
referred on the [**] to the designated executive officers (“
Designated Executives ”) of Alpharma and Durect who
shall meet as soon as practicable, but no later than [**] after
such referral, to attempt in good faith to resolve the dispute. If
the dispute related to the matter is not resolved by the Designated
Executives by mutual agreement within [**] after a meeting to
discuss the dispute (such [**] period after the meeting of the
Designated Executives shall be referred to as the “
Resolution Period ”), [**].
2.2 Joint
Development Committee .
(a)
Members; Officers . The Parties hereby establish a joint
development committee (the “ Joint Development
Committee ” or “ JDC ”), which shall
consist of up to [**] members with an equal number of members
nominated by each of Durect and Alpharma, one of whom shall be
designated by Alpharma as chairman. The initial representatives on
the JDC are set forth on Schedule 2.2, as may be amended by
the designating Party from time to time. Each
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of Durect and
Alpharma may replace any or all of its representatives on the JDC
at any time upon notice to the other Party. Such representatives
shall be employees of each such Party or its Affiliates, and those
representatives of each such Party shall, individually or
collectively, have expertise in pharmaceutical drug development,
regulatory matters, manufacturing, Clinical Trials, Non-Clinical
studies and/or other expertise to the extent relevant. Any member
of the JDC may designate a substitute with due authority to
temporarily attend and perform the functions of that member at any
meeting of the JDC. Durect and Alpharma each may invite non-member
representatives that are employees of Alpharma or Durect (or their
Affiliates) or external consultants of a Party to attend meetings
of the JDC, provided that such external consultants have signed
customary confidentiality agreements. The secretary of the JDC
shall initially be designated by Alpharma and thereafter alternate
between a representative of Durect and a representative of
Alpharma.
(b)
Responsibilities . The JDC shall perform the following
functions:
(i)
review and monitor the progress of the Development Program in
accordance with the Development Plan;
(ii)
monitor the progress of regulatory filings and submissions for the
Product in the Territory;
(iii)
facilitate the exchange of information and coordinate between the
Parties as necessary or useful for development of the Product in
the Territory;
(iv)
review a comparison of actual development costs of the Development
Program to the Development Plan Budget for the year-to-date on a
quarterly basis, such comparison to be as current as practicable as
of the date of the meeting at which the review occurs, which
comparison will be used as a basis for evaluating proposed changes
to the Development Plan and the Development Plan Budget;
and
(v)
have such other responsibilities as may be assigned to the JDC
pursuant to this Agreement or as may be mutually agreed upon by the
Parties from time to time.
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(c)
Meetings . The JDC shall meet in person, by video
teleconference or by telephone initially at least [**], and more or
less frequently as Durect and Alpharma deem appropriate or as
reasonably requested by either such Party, on such dates, and at
such places and times, as such Parties shall agree. From time to
time, each Party may request a JDC meeting upon written notice to
the other Party specifying the subject matters to be discussed, and
the Parties shall convene such JDC meeting within [**] of the date
of the notice. Meetings of the JDC that are held in person shall
alternate between the offices of Durect and Alpharma, or such other
place as such Parties may agree. The members of the JDC also may
convene or be polled or consulted from time to time by means of
telecommunications, video conferences, electronic mail or
correspondence, as deemed necessary or appropriate.
(d)
Decision-making . The JDC may make decisions with respect to
any subject matter that is subject to the JDC’s
decision-making authority and functions as set forth in Section
2.2(b). All decisions of the JDC shall be made by unanimous vote or
written consent, with Durect and Alpharma each having,
collectively, one vote in all decisions. If, with respect to any
matter that is subject to the JDC’s decision-making
authority, after all reasonable efforts to reach consensus have
been exhausted, including discussions between the Alliance
Managers, the JDC cannot reach consensus within [**] after it has
first met and attempted to reach such consensus, the matter shall
be referred on the [**] to the JEC for resolution. For all purposes
under this Agreement, any decision made pursuant to this
Section 2.2(d) shall be deemed to be the decision of the JDC.
[**].
2.3 Minutes of
JEC and JDC Meetings .
(a)
Definitive minutes of all JEC and JDC meetings shall be finalized
no later than [**] after the meeting to which the minutes pertain,
as follows:
(i)
Within [**] after a JEC or a JDC meeting, the secretary of such JEC
or JDC shall prepare and distribute to all members of such JEC or
JDC draft minutes of the meeting. Such minutes shall provide a list
of any actions, decisions or determinations approved by such JEC or
JDC and a list of any issues yet to be resolved (listing
responsible persons and target completion dates), either within
such JEC or JDC, or through the relevant escalation
process.
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(ii)
The secretary of such JEC or JDC shall have [**] after distribution
of the draft minutes to discuss each JEC or JDC member’s
comments and finalize the minutes. The secretary and chairperson(s)
of such JEC and JDC shall each sign and date the final minutes. The
signature of such chairperson(s) and secretary upon the final
minutes shall indicate each Party’s assent to the
minutes.
(b)
If at any time during the preparation and finalization of JEC or
JDC meeting minutes, the JEC and JDC members do not agree on any
issue with respect to the minutes, such issue shall be resolved as
provided in Section 2.1(d) or 2.2(d), as the case may be. The
decision resulting from the foregoing process shall be recorded by
the secretary in amended finalized minutes for said meeting. All
other issues in the minutes that are not subject to the foregoing
process shall be finalized within the [**] period as provided in
Section 2.3(a).
2.4 Duration of
Committees . The JEC shall exist until the termination of this
Agreement, unless [**], and the Parties shall thereafter agree to
alternative ways to cover the responsibilities and duties of the
JEC. The JDC shall exist until [**], and the Parties shall
thereafter discuss al
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