Development, Manufacturing And Supply Agreement 5/14/2004

Exhibit 10.13


THIS AGREEMENT made in duplicate as of this 14 day of June, 2004.


BETWEEN:


MDS NORDION, a division of MDS (Canada) Inc.
having a place of business at
447 March Road
Ottawa, Ontario, Canada K2K1X8


("Nordion")


AND:


MOLECULAR INSIGHT PHARMACEUTICALS, INC.
having a place of business at
160 Second Street
Cambridge Massachusetts, 02142 USA


("Molecular Insight Pharmaceuticals")


WHEREAS:


I. Molecular Insight Pharmaceuticals is the owner or licensee of a certain
compound known as BMIPP (as defined), a heart diagnostic imaging agent;


II. Nordion has expertise in the development of pharmaceutical processes and
radiolabelling of compounds;


III. Molecular Insight Pharmaceuticals has developed techniques and
demonstrated an ability to label Precursor with 1-123 to form BMIPP;


IV. Molecular Insight Pharmaceuticals desires that Nordion undertake at its
facility a development program based upon Molecular Insight
Pharmaceutical's technique which will allow Molecular Insight
Pharmaceuticals' Precursor to be labeled with 1-123 to form BMIPP;


V. Molecular Insight Pharmaceuticals desires that Nordion establish a
facility at its site in Vancouver, British Columbia, to produce and supply
BMIPP for use in support of Molecular Insight Pharmaceuticals' Phase III
Clinical Trials and in support of Molecular Insight Pharmaceuticals' drug
submission to the FDA.


NOW THEREFORE in consideration of the mutual covenants and agreements herein contained, and subject to the terms and conditions hereinafter set out, the parties hereto agree as follows:


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ARTICLE 1 - DEFINITIONS


For the purposes of this Agreement:


1.1 "Affiliate" shall mean an entity or person which controls, is controlled
by or is under common control with either party. For purposes of this
Section 1.1 control shall mean (a) in the case of corporate entities, the
direct or indirect ownership of more than one-half of the stock or
participating shares entitled to vote for the election of directors, and
(b) in the case of a partnership, the power to direct the management and
policies of such partnership.


1.2 "BMIPP" shall mean a pharmaceutical product containing 1-123 labeled
Precursor in diagnostic dosage form for cardiac imaging.


1.3 "Background Technology" shall mean all Nordion proprietary technology
existing prior to the Effective Date, including patents, copyright,
know-how, techniques, methods, processes and trade secrets which Nordion
owns or which is licensed to Nordion and, in each case, which is in
existence in the form of a writing, prototype or can otherwise be
demonstrated to be the property of Nordion prior to the Effective Date.


1.4 "Batch" shall mean a production batch of BMIPP manufactured under this
Agreement.


1.5 "Clinical Trial Batch Size" shall have the meaning attributed in Section
4.1.


1.6 "Clinical Trials" shall mean Phase III human trials for clinical
development of BMIPP in the United States.


1.7 "Commercial Phase" shall mean the period of supply of BMIPP commencing
after NDA regulatory approval has been received in the United States by
Molecular Insight Pharmaceuticals, from the FDA.


1.8 "Current Good Manufacturing Practices" or "cGMP(s)" shall mean the good
manufacturing practices required by the FDA and as set forth in the FD&C
or FDA rules and regulations for the manufacturing, testing and quality
control of pharmaceutical materials as applied to compounds, which
practices are current on the Effective Date of this Agreement and may be
supplemented, amended or modified from time to time.


1.9 "Development Phase" shall mean the period commencing from the Effective
Date until completion of the activities described in Schedule A.


1.10 "Effective Date" shall mean the date first above written.
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1.11 "FDA" shall mean the United States Food and Drug Administration.


1.12 "FD&C" shall mean the United States Federal Food, Drug and Cosmetic Act,
as amended.


1.13 "Facility" shall mean the facility to be established by Nordion at its
manufacturing site in Vancouver, British Columbia as described in Schedule
B and pursuant to cGMPs, to be used for the production of BMIPP for
diagnostic applications and purposes.


1.14 "IND" shall mean an Investigational New Drug Application as defined by the
rules and regulations promulgated under the FD&C and U.S. Public Health
Service Act and any supplements, modifications or amendments thereunder.


1.15 "Isotope" or "I-123" shall mean Iodine 123.


1.16 "Master Validation Plan" shall mean the program mutually agreed to by the
parties by which documented evidence provides assurance that the Process
will consistently produce BMIPP that meets Specifications.


1.17 "NDA" shall mean a new drug application as defined in the rules and
regulations promulgated under the FD&C and U.S. Public Health Service Act,
as supplemented, modified or amended from time to time.


1.18 "Precursor" shall mean (beta)-methyl-p-iodophenyl-pentadecanoic acid
specified in Schedule C and produced pursuant to cGMPs.


1.19 "Process" shall mean the method of formulation, dispensing, and testing of
the BMIPP developed under this Agreement and in compliance with cGMPS.


1.20 "Reference Standards" shall mean the cGMP compliant compounds as specified
in Schedule D.


1.21 "Specification(s)" shall mean those final specifications for BMIPP as set
out in Schedule E, as amended by mutual agreement of the parties from time
to time.


ARTICLE 2 - PURPOSE


2.1 Scope and Object


The scope and object of this Agreement is to carry out the development of
the Process in accordance with the responsibilities and obligations
attributed to each of the parties as set out in this Agreement. In
addition,


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this Agreement shall provide for the establishment of a Facility to be
utilized, amongst other purposes, in the production and supply of BMIPP as
required in support of Molecular Insight Pharmaceuticals' BMIPP Phase III
Clinical Trial and NDA submission to the FDA.


ARTICLE 3 - DEVELOPMENT PHASE


3.1 Development Activities


During the Development Phase, Nordion and Molecular Insight
Pharmaceuticals shall carry out their respective obligations described and
attributed in Schedule A, it being understood that some activities may be
reasonably delayed to the extent that such activity is premised on the
work or provision of data, information or technology by the other party.
It is understood and acknowledged that due to the developmental nature of
the activities to be carried out during the Development Phase, the time
for completion and sequence for carrying out the activities as set out in
Schedule A shall serve as a guide. Each party shall use their commercially
reasonable best efforts in order to carry out, in a timely manner, their
respective obligations and responsibilities set out in Schedule A.


If either party, acting in good faith, materially fails to satisfy any
milestone or is unable to meet such milestone in accordance with the
timing set out in Schedule A, such party shall provide written notice
thereof to the other party and the parties shall determine a reasonable
corrective action plan and revised milestone schedule. If the parties are
unable to determine a reasonable corrective action plan and revised
milestone schedule, the parties may submit such matter to binding
arbitration in Vancouver, British Columbia, pursuant to and conducted
under the International Commercial Arbitration Act of British Columbia,
which arbitration shall be conducted before a single arbitrator possessing
appropriate industry experience as selected by the parties. If the parties
cannot agree on a single arbitrator, the arbitrator shall be appointed in
accordance with the International Commercial Arbitration Act of British
Columbia. The decision of the arbitrators shall be final and binding.


The parties acknowledge and agree that Schedule A may be amended during
the course of the Development Phase to accommodate unforeseen events and
results. All such changes to Schedule A shall be made by written agreement
of the parties. If any change to Schedule A materially impacts the scope
of work to be provided by Nordion, Nordion will provide a written estimate
of the increase in hours of work at the rates set forth in Section 6.3,
which must be approved in advance by Molecular Insight Pharmaceuticals. No
work on such scope change shall be carried out by


[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


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Nordion prior to Nordion's receipt of Molecular Insight Pharmaceuticals'
written approval of such change.


The parties, upon signing this Agreement, shall each designate a program
manager, who shall be responsible for coordinating communication and
monitoring performance under this Agreement. The program managers shall
meet monthly, in person or by telephone, for the purpose of reviewing the
status of the project, assessing progress against the milestones and
activities set forth in Schedule A, and determining the percentage of each
milestone completed and the payments earned, if any, in connection with
each milestone. Minutes of meetings shall be prepared, maintained and
provided to each of the parties.


3.2 Development Phase Work


In consideration of Nordion performing the Development Phase services,
Molecular Insight Pharmaceuticals shall pay Nordion in accordance with the
rates set out in Schedule F, which schedule includes amounts payable upon
achievement of milestones as well as amounts payable for each Batch
produced and supplied by Nordion hereunder. All amounts due Nordion shall
be paid by Molecular Insight Pharmaceuticals within thirty (30) days of
the date appearing on Nordion's invoice. Such invoice shall, unless
otherwise agreed, be payable in United States dollars.


3.3 Facility Program


In consideration of Nordion establishing the Facility, Molecular Insight
Pharmaceuticals will pay to Nordion a non-reimbursable facility fee of
[**********************] United States dollars (US $[********]) upon
execution of this Agreement.


After the Facility is completed, Nordion shall, in consultation with
Molecular Insight Pharmaceuticals, develop and implement a Master
Validation Plan for the Facility that will allow the production of BMIPP
under cGMPs in the volumes required by Molecular Insight Pharmaceuticals
for Phase III clinical supply as described in Section 4.1. The costs of
preparation, development and implementation of the Master Validation Plan
will be borne by Nordion. Prior to implementation, both parties shall in
writing approve the Master Validation Plan. Nordion shall ensure that the
Facility is available for the production of BMIPP for supply to Molecular
Insight Pharmaceuticals on a priority basis at least three days per week
to be mutually agreed between the parties.


3.4 Repairs and Maintenance


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After the Facility is established, Nordion shall maintain such Facility in
satisfactory operating condition as required by the Specifications,
Process and cGMPs, and all other applicable laws, regulations, rules or
orders. The cost of repairs, preventive maintenance and service contracts
for the Facility shall be borne by Nordion.


3.5 Commercial Phase Negotiations


Within thirty (30) days after completion of Milestone 2 under the
Development Phase, the parties shall for a period of at least sixty (60)
days enter into good faith negotiations for the supply of BMIPP to
Molecular Insight Pharmaceuticals, during the Commercial Phase.


ARTICLE 4 - BATCH SIZE IN SUPPORT OF NDA SUBMISSION


4.1 Clinical Supply Batch Size


The Batch size for Clinical Trial supply shall be thirty (30) doses of
BMIPP. The maximum number of vials available for shipment from any Batch
will be twenty (20) doses with the remainder being retained by Nordion for
archival and quality assurance testing. BMIPP will be shipped in an
appropriate lead shield, which will be provided at Nordion's expense. All
necessary labels for shipment will be provided by Molecular Insight
Pharmaceuticals and shall meet all applicable regulatory requirements.


ARTICLE 5 - GENERAL MANUFACTURE AND
SUPPLY OBLIGATIONS OF NORDION


5.1 BMIPP Supply


Nordion agrees to (i) use the Process to produce Batches of BMIPP that
meet the Specifications and are manufactured in conformance with cGMPs and
(ii) ship BMIPP to customers as directed by Molecular Insight
Pharmaceuticals. Nordion reserves the right to withhold from shipment any
Batch which does not conform to Specifications. The price of any Batch
required by Molecular Insight Pharmaceuticals during the term of this
Agreement shall be as set out in Schedule F. The parties agree that
Molecular Insight Pharmaceuticals will provide BMIPP at its expense and
Nordion will supply isotopes and other supplies at its expense.


5.2 Compliance with Law; Handling of BMIPP


While Precursor, Isotope and BMIPP are in its possession or under its
control, Nordion shall be responsible for compliance with applicable
statutory and regulatory requirements in the United States and Canada
regarding the development, manufacture, handling, storage, labeling,


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packaging, transportation and shipment of the Precursor, Isotope and
BMIPP.


5.3 Testing and Documentation


Nordion shall maintain accurate and complete production records with
respect to the Process, Batches and shipments and Molecular Insight
Pharmaceuticals shall have access to such records in order to determine
that each Batch was produced and tested in compliance with the
Specifications and cGMP requirements.


The tests and analyses provided in the Specifications as well as the
nature and form of records may be amended by Nordion from time to time,
subject to the consent of Molecular Insight Pharmaceuticals, which shall
not be unreasonably withheld after Nordion shall have delivered to
Molecular Insight Pharmaceuticals, in writing, an explanation of such
changes and why they are necessary or advisable.


ARTICLE 6 - GENERAL
MOLECULAR INSIGHT PHARMACEUTICALS OBLIGATIONS


6.1 Precursor and Reference Standards


Molecular Insight Pharmaceuticals or, at Molecular Insight
Pharmaceuticals' discretion its designee, shall provide Precursor and
Reference Standards to Nordion at no charge, which meets the
specifications in Schedules C and D in sufficient quantities to permit
Nordion to meet its obligations hereunder. Nordion shall only use
Precursor and Reference Standards for the manufacture of BMIPP pursuant to
this Agreement. Nordion shall store Precursor and Reference Standards in
accordance with its applicable specifications set out in Schedule C and D
respectively. Molecular Insight Pharmaceuticals shall at all times retain
title in and to such materials in Nordion's possession.


6.2 Unavailability or Scarcity of Precursor or Reference Standards


Molecular Insight Pharmaceuticals will notify Nordion upon Molecular
Insight Pharmaceuticals becoming aware of a shortage of supply of
Precursor or Reference Standards, if such shortage will impact the
manufacture of the BMIPP. Except as set out below, Molecular Insight
Pharmaceuticals shall not be liable for any delays or shortages in the
supply of Precursor or Reference Standards, provided however, that any
such shortages or delays in Precursor or Reference Standards supply will
excuse Nordion's performance of activities related to such Batch of BMIPP
only to the extent that Nordion's non-performance was caused by the


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Precursor or Reference Standards supply delay or shortage and only for a
period of time equal to the delay.


6.3 Additional Compensation to Nordion


In addition to the amounts set forth in Schedule F, Molecular Insight
Pharmaceuticals will compensate Nordion based on the rate of one hundred
and twenty-five United States dollars (US$125.00) per person per hour for
the time spent by Nordion on the following activities only and upon
Molecular Insight Pharmaceuticals prior written request:


(i) preparing and hosting Facility audits requested by Molecular Insight
Pharmaceuticals including FDA preaudit inspections;


(ii) preparing responses to FDA inquiries and preparation by Nordion of
information requested by Molecular Insight Pharmaceuticals in
support of Molecular Insight Pharmaceuticals' BMIPP NDA submission;
and


(iii) attending meetings with the FDA.


Molecular Insight Pharmaceuticals shall reimburse Nordion for all costs
incurred for travel and accommodation in carrying out the foregoing
activities. Nordion shall provide an estimate of all such activities to
Molecular Insight Pharmaceuticals prior to incurring the expenditure.


ARTICLE 7 - BMIPP SHIPMENTS


7.1 Orders and Shipments


During the term of this Agreement, Molecular Insight Pharmaceuticals will
forward orders to Nordion at its Kanata, Ontario facility by facsimile.
Each order will set forth the quantity to be produced and shipped, the
identity of the recipient, delivery destination protocol number, IND
number, applicable USNRC materials license number and IRS number. Delivery
of BMIPP to Molecular Insight Pharmaceuticals or as otherwise directed by
Molecular Insight Pharmaceuticals shall be FOB transport vehicle at
Nordion's facility in Vancouver, British Columbia. Risk of loss of BMIPP
shall pass to Molecular Insight Pharmaceuticals at point of delivery.


During the term of this Agreement Nordion shall use commercially
reasonable best efforts to meet Molecular Insight Pharmaceuticals' orders
and delivery requirements. Prior to the first shipment of BMIPP to any
third party site, Molecular Insight Pharmaceuticals shall obtain from such
third party and provide to Nordion such third party's license evidencing
proper legal authority for the receipt and possession of the BMIPP by such
third party. Molecular Insight Pharmaceuticals shall obtain all approvals,
licenses and permits required to import BMIPP into the United States.


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Nordion shall make shipping arrangements with AirNet Express or such other
carrier designated by Nordion and reasonably approved by Molecular Insight
Pharmaceuticals. All shipping costs incurred to deliver BMIPP shall be
borne by Molecular Insight Pharmaceuticals.


Molecular Insight Pharmaceuticals shall be entitled to cancel any Batch
ordered from Nordion by providing to Nordion at least two (2) business
days written notice of cancellation prior to the later of commencement of
production or the scheduled production date. The failure to give notice
hereunder shall result in Molecular Insight Pharmaceuticals being required
to pay the full purchase price of such Batch to Nordion. All orders for
BMIPP shall be forwarded by Molecular Insight Pharmaceuticals and received
by Nordion by the Friday Noon (Eastern time) prior to the week in which
BMIPP is to be manufactured.


7.2 Warranty/Recall


Nordion warrants the BMIPP will meet the Specifications and be
manufactured in accordance with cGMP's and be free from defects in
material and workmanship for the period from the date of manufacture to
the expiry date set out on each vial of BMIPP.


If either party discovers that a Batch of BMIPP does not meet the
Specifications, then the discovering party shall promptly communicate with
the other party. If Molecular Insight Pharmaceuticals determines that the
failure to meet Specifications results from an act, failure to act or
other fault of Nordion, or agent of Nordion, Nordion will promptly:


(i) repair or replace such batch of BMIPP; and


(ii) pay for shipping costs of replacement of BMIPP.


In the event that Nordion disputes Molecular Insight Pharmaceuticals'
determination that the fault id due to Nordion and/or its agent, the
parties will select a mutually acceptable outside consulting firm which
will be instructed to review the applicable information and data and
confirm or dissent from Molecular Insight Pharmaceuticals' determination.
If the consulting firm confirms Molecular Insight Pharmaceuticals'
determination, Nordion will have the obligations set out in this Section
and Nordion will pay the fees of such consulting firm. If the consulting
firm dissents from Molecular Insight Pharmaceuticals' determination or
determines that the failure to meet Specifications was due to products,
information or services supplied by Molecular Insight Pharmaceuticals,
Nordion will not have the obligations set out in this Section with respect
to the disputed Batch and Molecular Insight Pharmaceuticals will pay the
fees for such consulting firm.


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ARTICLE 8 - LICENSE


8.1 Royalty-Free License


Molecular Insight Pharmaceuticals hereby provides to Nordion a
nonexclusive, nontransferable, royalty-free license during the term of
this Agreement to use the patents, data, information and technology
provided by Molecular Insight Pharmaceuticals relating to BMIPP and the
radiolabelling of 1-123 with Precursor for the sole purpose of assisting
Nordion in carrying out its obligations set out in this Agreement.
Molecular Insight Pharmaceuticals represents and warrants that the
technology provided by Molecular Insight Pharmaceuticals relating to BMIPP
allows for BMIPP to be terminally sterilized while still meeting the
specifications set out in Schedule E.


ARTICLE 9 - MOLECULAR INSIGHT PHARMACEUTICALS
REPRESENTATIONS AND WARRANTIES


9.1 Molecular Insight Pharmaceuticals' Representations and Warranties


Molecular Insight Pharmaceuticals represents, warrants and covenants that:


(i) it has full right, power and authority to enter into this Agreement;


(ii) it is the owner or has the right of use of the patents, data,
information and technology supplied to Nordion by Molecular Insight
Pharmaceuticals to assist Nordion in manufacturing BMIPP and in
carrying out its obligations hereunder;


(iii) to Molecular Insight Pharmaceuticals' knowledge, there is no action
or proceeding pending or threatened against Molecular Insight
Pharmaceuticals before any court, administrative agency or other
tribunal which might have an adverse material effect on its ability
to perform its obligations hereunder;


(iv) it has the right to grant the license in section 8.1 and right to
permit Nordion to use the patents, technology and know how provided
to the extent required to assist Nordion in carrying out its
obligations under this Agreement;


(v) it has not received any notice of adverse claim or infringement of
any patent, copyright, or misappropriation of trade secrets in
connection with the use and exploitation of the Precursor, Reference
Standard or BMIPP;


(vi) to Molecular Insight Pharmaceuticals' best information and belief,
use or sale of Precursor, Reference Standards and BMIPP and the
data, information, technology and know how used in the Process and
manufacture of BMIPP contributed by Molecular Insight
Pharmaceuticals do not infringe any valid third party patent,


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pending published patent application or other intellectual property
right.


ARTICLE 10 - NORDION'S REPRESENTATIONS AND WARRANTIES


10.1 Representations and Warranties


Nordion represents, warrants and covenants that:


(i) it has full right and authority to enter into this Agreement;


(ii) it is the owner or has the right to use the data, information and
technology contributed by it with respect to the Background
Technology and other proprietary technology contributed by Nordion
during the Agreement;


(iii) the Background Technology contributed by Nordion does not, to
Nordion's best information and belief, infringe any patents,
copyright or other industrial or intellectual property rights of
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