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*Confidential treatment has been requested as to certain portions of this exhibit pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
THIS CO-PROMOTION AGREEMENT (“Agreement”), entered into as of this 7th day of January 2010, is by and between GALDERMA LABORATORIES, L.P. , a Texas limited partnership, having as its principal place of business at 14501 North Freeway, Fort Worth, Texas 76177 (“PhotoMedex”), and PHOTOMEDEX, INC ., a Delaware corporation, having as its principal place of business 147 Keystone Drive, Montgomeryville, PA 18936 (“PhotoMedex”) (each a “party”, collectively “parties”).
WHEREAS, Galderma has exclusive rights to market, sell and distribute the Product (as defined below) in the Territory (as defined below);
WHEREAS, PhotoMedex is engaged in the business of and has specialized expertise and capabilities in, among other things, the promotion of procedural products and services to physicians; and
WHEREAS, Galderma and PhotoMedex desire to work together to promote the Product upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.0 DEFINITIONS. Capitalized terms used herein without definition shall have the meanings specified in this Section 1.0 (such definitions to be equally applicable to both the singular and plural forms of the terms defined). Unless otherwise specified, all references in this Agreement to “Sections” are to Sections of this Agreement.
1.1 “Act” shall mean the United States Federal Food, Drug and Cosmetic Act, as it may be amended from time to time.
1.2 “Affiliate(s)” shall mean any person or entity directly or indirectly, controlling, controlled by or under common control and/or ownership with Galderma or PhotoMedex. Ownership or control for purposes of this Section 1.2 shall mean (a) in the case of corporate entities, direct or indirect ownership of at least fifty percent (50%) of the stock having the right to vote for the election of directors and (b) in the case of non-corporate entities, direct or indirect ownership of the equity interest necessary to direct the management and policies of such non-corporate entities. As to Galderma, as of the Effective Date, “Affiliate” shall specifically include, but is not limited to, Galderma S.A., Galderma Pharma S.A., Nestlé S.A. and L’Oréal S.A.
1.3 “Applicable Laws and Regulations” shall mean all applicable federal, state and local laws, regulations, rules or guidelines that govern the services and transactions contemplated by this Agreement, including without limitation the Act, as the same may be amended from time to time.
1.4 “Commercially Reasonable Efforts” shall mean efforts and resources normally used by a party for a product owned by it or to which it has rights, which is of similar market potential at a similar stage in its development or product life, taking into account issues of safety, efficacy, product profile, the competitiveness of the marketplace, the proprietary position of the product, the regulatory structure involved, the profitability of the applicable products, and other relevant commercial factors.
1.5 “Quarterly Report” shall mean a report, similar in substance and format to the attached Schedule 1, which sets forth PhotoMedex’s efforts in promoting and marketing the Product during the preceding calendar quarter (or any portion thereof) and includes at a minimum: (i) the number of Product Calls, the name, address, and specialty of each healthcare professional upon whom the Product Call was made, and a breakdown of First Position Details and Second Position Details made and recorded
based on data recorded by the PDT Sales Force, as defined in 3.3; (ii) such other information as may be reasonably required in the then-current Marketing Plan; (iii) sales strategies; (iv) market and sales target analysis; (v) sales force deployment; (vi) forecast vs. plan comparison; and (vii) such other information as mutually agreed upon by the parties.
1.6 “Effective Date” shall mean January 1, 2010.
1.7 “FDA” shall mean the United States Food and Drug Administration or any successor entity thereto.
1.8 “First Position Detail” shall mean a Product Call in which the promotional message involving the Product is presented first and is a principal topic of discussion during the Product Call, with an emphasis on the Product comparable to PhotoMedex’s current practices for internal and other external product(s) in the first position.
1.9 “Generic Version” shall mean a drug product that the FDA has approved under an Abbreviated New Drug Application or “505(b)(2) application” according to the provisions of the Act, or subsequently enacted amendments to such provisions, where the approved drug product was found by the FDA to be therapeutically equivalent to the Product.
1.10 “Good Manufacturing Practices” shall mean the current standards for manufacture, as set forth in the Act and applicable regulations and guidelines promulgated thereunder or successors thereto, as shall be in effect from time to time during the Term.
1.11 “Improvement” shall mean any other strengths or regimens of Metvixia ® (methyl aminolevulinate) Cream, 16.8% that has at least one indication for the treatment of non-hyperkeratotic actinic keratoses and developed by Galderma or a third party, which is not covered by the regulatory filings in the Territory.
1.12 “Ineligible Person” means a person who is currently excluded, debarred, suspended or otherwise ineligible to participate in the U.S. federal health care programs or in a U.S. federal procurement or non-procurement programs, or has been convicted of a criminal offense that falls within the ambit of 42 U.S.C. 1320a-7(a), but has not yet been excluded, debarred, suspended or otherwise declared ineligible.
1.13 “Marketing Materials” shall have the meaning ascribed to it in Section 4.3.
1.14 “Marketing Plan” shall mean PhotoMedex’s annual calendar plan, similar in substance and format to the attached Schedule 2, for the promotion, marketing and sale of the Product. The Marketing Plan shall set forth the manner in which the Product is to be promoted and marketed during the period to which the Marketing Plan relates and shall include, at a minimum: (a) the number of estimated annual Product Calls and First and Second Position Details to be provided by PhotoMedex, which shall meet or exceed the requirements set forth in Section 3.5; (b) any training programs to be conducted; and (c) such other information relating to the marketing of the Product as deemed advisable by the Steering Committee or otherwise agreed upon by the parties.
1.15 “Net Sales” shall mean the gross sales invoiced by Galderma for Sales of the Product in the Territory, less the following: (a) customary quantity, trade, and/or early payment discount, allowances, chargebacks, rebates, and price adjustments or reductions allowed or given; (b) actual credits, rebates, or Product returned or destroyed by customers; and (c) sales and other excise taxes and duties directly related to the sale, to the extent included in the gross invoiced amount and separately itemized on the invoice, all applied in accordance with IFRS. For purposes of clarity, any Product delivered to a third party without charge or any Product used in any new clinical or marketing-initiated trial supported by Galderma without charge to the user shall not be included in Net Sales. See Schedule 3 for Net Sales formula.
1.16 “Non-Serious Adverse Event” shall mean any adverse drug experience associated with the use of the Product in humans, whether or not considered drug-related, which is not a Serious Adverse Event.
1.17 “Product” shall mean any and all presentations of Galderma’s Metvixia ® (methyl aminolevulinate) Cream, 16.8% (“Metvixia”), and Aktilite ® CL128 lamp including all Improvements as defined in Section 1.11, as packaged and labeled in accordance with Applicable Laws and Regulations and New Drug Application #021415 (“NDA”).
1.18 “Product Calls” shall mean face-to-face contacts by the PhotoMedex Sales Force with the Target Group during which time the promotional message involving the Product is presented in the first or second position and is a principal topic of discussion and, in each case, the promotional message is substantially completed.
1.19 “Renewal Term” shall have the meaning ascribed to it in Section 6.0.
1.20 “Sales” shall mean the total of all sales of the Product to third parties by Galderma and/or its Affiliate(s) in the Territory at list price, not reduced by discounts, allowances, rebates, returns or other adjustments.
1.21 “Second Position Detail” shall mean Product Calls in which the promotional message involving the Product is presented second, with an emphasis on the Product comparable to PhotoMedex’s current practices for internal or other external product(s) in the second position.
1.22 “Serious Adverse Event” shall mean any serious and unexpected adverse drug experience, as defined by FDA in 21 C.F.R. Section 314.80, Section 312.32, or any successor regulation(s) associated with the use of the Product in humans, whether or not considered drug-related.
1.23 “Target Group” shall mean certain healthcare professionals (including but not limited to dermatologists, plastic surgeons, cosmetic surgeons, and general practitioners) practicing Photodynamic Therapy in the Territory as identified by Galderma and PhotoMedex on an ongoing basis.
1.24 “Technical Complaint” shall mean any complaint that questions the purity, identity, potency or quality of the Product, its packaging or labeling or the compliance of any batch of the Product with Applicable Laws and Regulations and current Good Manufacturing Practices; any complaint that concerns any incident that causes the Product or its labeling to be mistaken for, or applied to, another article; any bacteriological contamination or significant chemical, physical or other change or deterioration in the Product; any failure of one or more batches of the Product to meet the specifications therefore in the NDA; or any complaint or evidence of tampering with the Product.
1.25 “Term” shall have the meaning ascribed to it in Section 6.0.
1.26 “Territory” shall mean the United States of America, including the District of Columbia, its possessions and territories.
1.27 “PhotoMedex Promotional Activities” shall have the meaning ascribed to it in Section 3.1.
1.28 “PhotoMedex Sales Force” or “PDT Sales Force” shall mean the sales representatives employed or contracted by PhotoMedex to promote the Product to the Target Group in the Territory throughout the Term and any Renewal Term.
2.0 GRANTS OF RIGHTS. Galderma hereby grants to PhotoMedex, on a co-exclusive basis (together with Galderma and its Affiliates), the right to promote the Product in the Territory during the Term and any Renewal Term (or any part thereof) upon and subject to the terms and conditions set forth in this Agreement.
3.0 RESPONSIBILITIES OF PHOTOMEDEX.
3.1 Product Promotion. PhotoMedex shall use Commercially Reasonable Efforts to market and promote the Product in the Territory to the Target Group and other healthcare professionals (the “PhotoMedex Promotional Activities”) in accordance with the then-current Marketing Plan and the other terms and conditions set forth in this Agreement.
3.3 Minimum Sales Force. PhotoMedex agrees that from and after the Effective Date it will maintain in the Territory a well-trained sales force, consisting of full-time sales representatives focused on promoting the Product in accordance with the then current Marketing Plan to the Target Group (“PDT Sales Force”). Throughout the remainder of the Term or Renewal Term(s), PhotoMedex shall use Commercially Reasonable Efforts to ensure that the number of sales representatives comprising the PDT Sales Force meets the requirements necessary to meet the minimum Product Calls. Before initiating any Product Calls, PhotoMedex will have a well-trained sales force consisting of not less than 30 full-time sales representatives, 5 full-time managers, 2 full-time field trainers, and 5 tele-marketing representatives. PhotoMedex will expand the sales force as necessary to meet market demand based upon the initial market acceptance of the Product and the Steering Committee’s mutually agreeable recommendation.
3.5 Minimum Requirements.
3.6 Data Collection and Reporting Systems. As soon as practicable, PhotoMedex will, at no expense to Galderma, establish and maintain during the Term and any Renewal Term, true and
accurate data collection and reporting systems for Product Calls, the name, address, and specialty of each healthcare professional upon whom the Product Call was made with First Position Details, Second Position Details, and Product samples distributed to the Target Group.
3.7 Quarterly Report. PhotoMedex shall provide Galderma with a Quarterly Report within thirty (30) calendar days after the end of each calendar quarter (or any portion thereof) during the Term and any Renewal Term. Each such Quarterly Report shall measure compliance with the minimum requirements set forth in Section 3.5 above and be provided to Galderma in a format similar to the attached Schedule 1.
3.8 Marketing Plan. On January 1 of each calendar year, PhotoMedex shall provide to Galderma during the Term and any Renewal Term a Marketing Plan as defined in Section 1.15.
3.9 Sales Projection Report. PhotoMedex shall provide to Galderma a twelve (12) month rolling sales forecast for the Product updated on a quarterly basis. This Sales Projection Report shall be due with the Quarterly Report.
3.10 Compliance with Laws. In connection with the PhotoMedex Promotional Activities and Product Calls and all other activities under this Agreement, PhotoMedex will