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.
EXHIBIT 10.9
AEROGEN/PATHOGENESIS
PRODUCT DEVELOPMENT AND SUPPLY AGREEMENT
JANUARY 20, 2000
TABLE OF CONTENTS
PAGE
1. DEFINITIONS..............................................................................................1
2. DEVELOPMENT OF INHALER...................................................................................5
2.1 Development of Clinical Test Inhaler............................................................5
2.2 Development of Inhaler..........................................................................5
2.3 Reporting.......................................................................................5
2.4 Subcontracting..................................................................................5
2.5 Delivery........................................................................................5
2.6 Regulatory Cooperation..........................................................................5
2.7 Facilities Access...............................................................................6
2.8 License Grants..................................................................................6
2.8.1 Ampoules...............................................................................6
2.8.2 Inhaler Products and Adapters..........................................................6
2.8.3 Contingent License to Manufacture......................................................6
2.8.4 Aminoglycosides........................................................................6
2.8.5 Rights Retained by AeroGen.............................................................7
2.8.6 [*] for European Community.............................................................7
2.8.7 [*] for United States..................................................................8
2.8.8 Research Regarding Other PathoGenesis Products.........................................8
2.8.9 Further Licenses.......................................................................8
3. DEVELOPMENT OF THE INHALER...............................................................................8
3.1 Joint Development Team..........................................................................8
3.1.1 Formation; Purpose.....................................................................8
3.1.2 Membership.............................................................................8
3.1.3 Meetings...............................................................................9
3.1.4 Chairpersons...........................................................................9
3.1.5 Decision-Making........................................................................9
3.1.6 Dispute Resolution.....................................................................9
3.1.7 Limitation of Powers...................................................................9
3.2 Liaisons........................................................................................9
3.3 Payment for Development Activities..............................................................9
[*] = 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.
i.
TABLE OF CONTENTS
(CONTINUED)
PAGE
3.4 Fees in Excess of Development Cost Limit.......................................................10
3.5 Invoices.......................................................................................10
4. DEVELOPMENT AND DELIVERY OF THE DRUG PRODUCT............................................................11
4.1 Development....................................................................................11
4.2 Delivery.......................................................................................11
5. CLINICAL SUPPLY AND TESTING.............................................................................11
5.1 Delivery of Clinical Supply....................................................................11
5.2 Ampoule for Clinical Testing...................................................................11
5.3 Testing and Acceptance.........................................................................11
5.4 Ownership of Data..............................................................................11
6. REGULATORY OBLIGATIONS AND COMMERCIALIZATION............................................................12
6.1 Commercialization of the Product...............................................................12
6.2 Regulatory Filings for the Products............................................................12
7. COMMERCIAL MANUFACTURE AND SUPPLY OF THE INHALER........................................................13
7.1 Manufacturing and Delivery.....................................................................13
7.2 Quality and Acceptance.........................................................................13
7.3 Subcontracting.................................................................................13
7.4 Forecasts and Purchase Order...................................................................14
7.5 Delivery.......................................................................................14
7.6 Payments to Third Parties......................................................................14
7.7 Facilities Access and Regulatory Inspections...................................................14
7.8 Use of Trademarks on Products..................................................................15
7.9 Title and Risk of Loss.........................................................................15
7.10 Product Insurance..............................................................................15
8. PAYMENTS FOR THE MANUFACTURED INHALER PRODUCTS..........................................................15
8.1 Inhaler Transfer Price.........................................................................15
8.2 Invoicing......................................................................................16
9. ROYALTY.................................................................................................16
9.1 Royalty Payments by PathoGenesis for Products..................................................16
9.2 Minimum Royalty................................................................................16
[*] = 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.
ii.
TABLE OF CONTENTS
(CONTINUED)
PAGE
9.3 Royalty Term...................................................................................17
9.4 Royalty Reports................................................................................17
9.5 Reduction of Royalties.........................................................................17
9.6 Books and Records..............................................................................18
9.7 Inspection.....................................................................................18
9.8 Withholding Tax................................................................................18
9.9 Marking........................................................................................18
10. INTELLECTUAL PROPERTY...................................................................................19
10.1 Inhaler Ownership..............................................................................19
10.2 Drug Product Ownership.........................................................................19
10.3 Cooperation....................................................................................19
11. EQUITY PURCHASE.........................................................................................19
12. CONFIDENTIALITY.........................................................................................19
12.1 Use of Confidential Information................................................................19
12.2 Confidentiality and Non-use....................................................................20
12.3 Exclusions.....................................................................................20
12.4 Confidentiality Agreements.....................................................................20
12.5 Publicity - Results............................................................................20
12.6 Publicity - Terms of Agreement.................................................................20
12.7 Publicity - Press Releases.....................................................................21
12.8 Publicity - Use of Parties' Names..............................................................21
13. ADVERSE INFORMATION AND EVENT REPORTING.................................................................21
13.1 Notification...................................................................................21
13.2 Product Recalls................................................................................21
14. REPRESENTATIONS AND WARRANTIES..........................................................................21
14.1 AeroGen Representations and Warranties.........................................................22
14.2 PathoGenesis Representations and Warranties....................................................23
15. INDEMNIFICATION AND INSURANCE...........................................................................23
15.1 Indemnification of AeroGen.....................................................................23
15.2 Indemnification of PathoGenesis................................................................24
[*] = 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.
iii.
TABLE OF CONTENTS
(CONTINUED)
PAGE
15.3 Insurance......................................................................................24
15.4 Limitation of Damages..........................................................................24
15.5 AeroGen's Right to Prosecute Infringements.....................................................25
15.6 PathoGenesis' Option to Prosecute Infringements................................................25
16. DISPUTE RESOLUTION......................................................................................26
16.1 Negotiation....................................................................................26
16.2 Mediation......................................................................................26
16.3 Arbitration....................................................................................26
16.4 Injunctive Relief..............................................................................27
17. TERM AND TERMINATION....................................................................................27
17.1 Term...........................................................................................27
17.2 Termination for Breach.........................................................................27
17.3 Termination for Cause..........................................................................27
17.4 Termination Without Cause......................................................................27
17.5 Effects of Termination.........................................................................27
17.5.1 Sales After Termination...............................................................27
17.5.2 Noncancellable Costs..................................................................28
17.6 Survival.......................................................................................28
17.7 Rights in Bankruptcy...........................................................................28
18. MISCELLANEOUS...........................................................................................28
18.1 Entire Agreement...............................................................................28
18.2 Notices........................................................................................28
18.3 Governing Law..................................................................................29
18.4 Assignability..................................................................................29
18.5 Waivers and Amendments.........................................................................29
18.6 Severability...................................................................................29
18.7 Section Headings...............................................................................30
18.8 Counterparts...................................................................................30
18.9 Further Assurances.............................................................................30
18.10 Force Majeure..................................................................................30
[*] = 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.
iv.
TABLE OF CONTENTS
(CONTINUED)
PAGE
18.11 Compliance of Law..............................................................................30
18.12 Confidentiality of Terms of Agreement..........................................................30
18.13 Relationship of the Parties....................................................................30
18.14 Binding Agreement..............................................................................30
18.15 Books and Records..............................................................................30
Exhibit A Specification for Inhaler
Exhibit B Schedule
Exhibit C AeroGen Patent Rights
Schedule 14.1(h)
[*] = 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.
v.
AEROGEN/PATHOGENESIS
PRODUCT DEVELOPMENT AND SUPPLY AGREEMENT
THIS PRODUCT DEVELOPMENT AND SUPPLY AGREEMENT ("Agreement") is entered into and effective as of January 20, 2000 (the "Effective Date"), between AEROGEN, INC. a Delaware corporation with a principal place of business at 1310 Orleans Drive, Sunnyvale, California 94089 ("AeroGen"), and PATHOGENESIS CORPORATION, a Delaware corporation with a principal place of business at 201 Elliott Avenue West, Suite 150, Seattle, Washington 98119 ("PathoGenesis").
RECITALS
WHEREAS, PathoGenesis has the expertise and experience to undertake the development, manufacture and commercialization of antiinfective drugs and has developed and is selling tobramycin, an antiinfective in the aminoglycoside class.
WHEREAS, AeroGen has in development, and has the expertise and experience to undertake further development, manufacture and supply of, a drug delivery inhaler for the delivery of a liquid containing drug molecules; and
WHEREAS, PathoGenesis and AeroGen desire to initially develop and commercialize such new drug delivery inhaler for the delivery of tobramycin, on the terms and conditions set forth herein.
AGREEMENT
In consideration of the recitals set forth above, the mutual covenants, terms and conditions set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, AeroGen and PathoGenesis agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the following meanings:
"ADAPTER" means one or more customized components which enable the Ampoule to interfit or co-act with the Dispenser, as described in Exhibit A.
"AEROGEN INHALER" means that mechanism, which aerosolizes liquids containing drug molecules for inhalation delivery to the human respiratory tract, under development by AeroGen as of the Effective Date, for commercialization by AeroGen and use in conjunction with the delivery of certain drugs outside the Field.
"AEROGEN'S INHALATION INTELLECTUAL PROPERTY" means AeroGen's Patent Rights, AeroGen's Copyrights, AeroGen's Trade Dress Rights and AeroGen's Know-How owned, licensed or controlled by AeroGen and relating to, covering or claiming inhalation devices, apparatus, products, systems, methods, processes and technology, whether created before or after the Effective Date, where such terms have the following meanings, respectively:
[*] = 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.
1
(i) "AEROGEN'S PATENT RIGHTS" means AeroGen's inventions, proposed inventions, patents, patent applications, provisional patent applications, divisional applications, continuation applications, continuation-in-part applications, continued prosecution applications, renewals, reissues, reexaminations, extensions, and substitutions thereof, and counterparts for other countries, and any and all patents issuing therefrom, including, without limitation, the patents and patent applications set forth in Exhibit C.
(ii) "AEROGEN'S COPYRIGHTS" means AeroGen's copyrights in works, including, without limitation, drawings, product literature, manuals, brochures, catalogues, advertisements, software, and other written or graphic material and all derivative works arising therefrom, whether or not such copyrights are registered.
(iii) "AEROGEN'S TRADE DRESS RIGHTS" means AeroGen's statutory and common law rights in trade dress and the associated good will, including, without limitation, rights in product shape, color, packaging, and overall image.
(iv) "AEROGEN'S KNOW-HOW" means AeroGen's confidential or proprietary information, knowledge, data and trade secrets, including, without limitation, inventions, discoveries, product designs, models, prototypes, engineering drawings, schematics, manufacturing processes, methods, equipment and systems, vendor information, and other product manufacturing and product marketing information.
An "AFFILIATE" of a party means any person or entity that directly or indirectly owns or controls, is owned or controlled by or is under common ownership or control with such party. "Control" of a party shall mean beneficial ownership, directly or indirectly, of 50% or more of the outstanding voting shares or securities or the ability otherwise to elect a majority of the board of directors or other managing authority of the party.
"AMINOGLYCOSIDE" means compounds consisting of a [*]. This includes, but is not limited to, [*].
"AMPOULE" means an ampoule or canister for storing an Antiinfective Drug, which coacts with or is received by the Adapter, and which is adapted to be housed or received in the Dispenser, as described in Exhibit A.
"ANTIINFECTIVE DRUG" means any chemical or biological agent used for the treatment or prophylaxis of infectious disease.
"cGMP" means current Good Manufacturing Practices regulations and Quality System regulations, as promulgated by the FDA.
"CLINICAL TEST INHALER" means an inhalation device based in part upon the AeroGen Inhaler, which is fully operable without an Adapter or Ampoule, as described in Exhibit A.
"DEVELOPMENT ACTIVITIES" means the development, reporting, supply and delivery of the Clinical Test Inhalers and the Inhalers in accordance with Sections 2 and 3 of this Agreement and as described in Exhibit A and Exhibit B.
[*] = 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.
2.
"DEVELOPMENT COSTS" means the fully burdened costs and expenses incurred by AeroGen and specifically identifiable to the Development Activities including the clinical supply of the Clinical Test Inhalers and the Inhalers pursuant to this Agreement, all to the extent consistent with U.S. generally accepted accounting principles, consistently applied. Development Costs include, without limitation, FTE Costs and the direct costs of materials, all as specified in the budgets developed by the Joint Development Team, as provided in Section 3.3.
"DISPENSER" means a component of an Inhaler which houses an inspiration sensor, an aerosol generator, which interfits or interacts with the Adapter and Ampoule, and which includes a mouth piece, as described in Exhibit A.
"ELECTRONIC COMPONENT" means the component of an Inhaler which houses a power supply such as one or more batteries and other electronics, and which is removably connected to the Dispenser, as described in Exhibit A.
"FDA" means the United States Food and Drug Administration or any successor to that agency.
"FIELD" means the treatment or prophylaxis of infectious disease.
"FTE" shall mean a full time scientific/technical employee of AeroGen for one year (or, in the case of less than a full-time dedicated scientific/technical person, a full time equivalent scientific/technical employee), dedicated to the Development Activities, including development and clinical supply of the Inhaler and the Clinical Test Inhaler.
"FTE COSTS" shall mean the annual fully-burdened costs of an FTE, which has been determined by the parties as of the Effective Date to equal [*] per FTE.
"INHALER" means the AeroGen Inhaler as further developed and refined in accordance with Section 2.2 of this Agreement, and including without limitation: (i) a Dispenser, and (ii) an Electronic Component, as described in Exhibit A.
"INHALER MARKUP" has the meaning set forth in Section 8.1 of this Agreement.
"INHALER TRANSFER PRICE" has the meaning set forth in Section 8.1 of this Agreement.
"JOINT DEVELOPMENT TEAM" or "JDT" means the joint development team described in Section 3.1 that shall oversee the Development Activities.
"NET SALES" means the amount invoiced by PathoGenesis, its Affiliates or sublicensees for sales of the Product less the following deductions: (a) discounts, returns, allowances, commissions and wholesaler chargebacks; (b) import, export, excise, sales or use taxes, value added taxes, and other taxes, tariffs and dutie ...
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