Exhibit 10.1
AMENDMENT NO. 1 TO THE
ENBREL(R) SUPPLY AGREEMENT
[*] Certain information in this Exhibit has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a confidential treatment
request.
AMENDMENT NO. 1 TO THE
ENBREL(R) SUPPLY AGREEMENT
This Amendment No. 1 ("Amendment No. 1") is made this 27th day of June,
2000 (the "Amendment Effective Date") by and among IMMUNEX CORPORATION, a
corporation of the State of Washington, having its principal place of business
at ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, U.S.A., together with its
Affiliates ("Immunex"), AMERICAN HOME PRODUCTS CORPORATION, a corporation of the
State of Delaware having its corporate headquarters at Five ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇. ("AHPC"), acting through its Wyeth-Ayerst
Laboratories division, having offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇. ("Wyeth"), and BOEHRINGER INGELHEIM PHARMA KG, a
German corporation having a place of business at ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ an der Riss, Federal Republic of Germany ("BIP"), and amends the Enbrel
Supply Agreement effective as of November 5, 1998, by and among Immunex, Wyeth,
and BIP (the "Agreement").
WHEREAS, Immunex, Wyeth and BIP have entered into a certain Agreement for
BIP's supply of Enbrel(R) (etanercept) to Immunex and Wyeth;
WHEREAS, Immunex and Wyeth desire to have BIP manufacture additional
quantities of Enbrel, and accordingly, on January 20, 2000, the Parties signed a
certain Summary Term Sheet specifying terms and conditions under which BIP would
receive certain incentives to enhance the yield from BIP's current production
capacity for Enbrel and to perform good faith outsourcing activities with the
goal of providing additional near-term bulk drug substance runs for Enbrel;
WHEREAS, pursuant to Section 23.9 of the Agreement, the Agreement may only
be amended and supplemented by a written instrument signed by the Parties;
NOW THEREFORE, in consideration of the mutual covenants contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereto, each intending to be legally
bound, hereby agree as follows:
1. Capitalized Terms. All initially capitalized terms used herein and not
defined shall have the meanings set forth in the Agreement.
2. New Definitions. Section 1.66 of the Agreement shall be amended to add
the following new definitions:
Section
"Accepted Subsequent Additional Runs" 24.1(d)(2)
"Adjusted Annual Minimum" 5.10(c)
"Annual Minimum" 5.10(b)
"Attempted Original Additional Run" 24.1(a)(2)
"Binding Production Schedule" 24.1(a)(1)(i)
"Confirmed Outsourcing Costs" 24.1(a)
"Outsourcing Activities" 24.1(a)
"Original Additional Run" 24.1(a)(1)
"ROFR" 24.1(d)(2)
"Subsequent Additional Runs" 24.1(c)(3)
"Successful Outsourcing Activities" 24.3
"Unsuccessful Outsourcing Activities" 24.2
3. Semi-Exclusive Rights. In consideration of the mutual covenants set
forth in this Amendment No. 1, a new Section 3.4 shall be added to the Agreement
as follows:
3.4 Semi-Exclusive Rights. Subject to Section 5.10(c) hereof, BIP's
rights to manufacture Bulk Drug Substance and Drug Product for Immunex and Wyeth
hereunder shall be converted from exclusive (subject to the provisions of
Section 3.2 and 3.3 hereof) to semi-exclusive with Immunex and Wyeth. Thus, in
addition to the Firm Orders for Bulk Drug Substance and Drug Product placed by
the Buyer with BIP in accordance with the terms of this Agreement, Immunex and
Wyeth shall also have the right to (a) manufacture any quantities of Bulk Drug
Substance in Wyeth's West Greenwich, Rhode Island manufacturing facility or in
such other manufacturing facility, including but not limited to, Wyeth's
proposed manufacturing facility in Ireland, that is at least [*] percent ([*]%)
owned by Immunex or Wyeth or by an Affiliate of either Immunex or Wyeth and (b)
determine where the Bulk Drug Substance produced from any such Immunex or Wyeth-
owned manufacturing facility would be converted into drug product (unlabeled
vials), it being understood that any facility converting such Bulk Drug
Substance to drug product for Immunex or Wyeth could be owned by Immunex, Wyeth,
by an Affiliate of either Immunex or Wyeth, or by a Third Party.
4. Maximum Request and Annual Minimum. In consideration of BIP's consent
to convert its exclusive manufacturing rights to semi-exclusive manufacturing
rights described in Paragraph 3 of this Amendment No. 1 and BIP's good faith
outsourcing efforts, the Agreement shall be amended to add the following new
Section 5.10, as follows:
5.10 Maximum Request; Annual Minimum.
(a) Maximum Request. Subject to Section 5.10(c) below,
beginning on [*] and continuing through [*], the annual
Maximum Request in the Agreement shall be equal to the
Annual Minimum as defined in Section 5.10(b) below.
Beginning [*], or as otherwise set forth in Section
5.10(c) below, the Maximum Request shall revert to the
terms in the original Agreement. Immunex and Wyeth shall
waive their ability to reduce the Maximum Request below
the Annual Minimum under Section 5.1(b) hereof until an
effective date of [*] at the earliest, except to the
extent otherwise permitted in Section 5.10(c) below.
Subject to Section 5.10(c) below, beginning on [*] and
continuing through the
[*] Confidential Treatment Requested
2
end of the Supply Term, Immunex and Wyeth shall be
entitled to reduce the Maximum Request (unless otherwise
agreed in writing among the Parties, to be calculated by
using the original Maximum Request herein) by no more
than [*] percent ([*]%) per Calendar Year by providing at
least the required [*] ([*]) months' prior written notice
to BIP (e.g., notice by [*] for a potential reduction in
the Maximum Request effective as of [*], etc.).
It is understood by the Parties that the Maximum Request
valid through [*] shall not constitute a guaranty by BIP
to reserve permanent capacity through [*] exceeding the
original Maximum Request of [*] Bulk Drug Substance Runs.
However, to carry out the Parties' intentions, to the
extent that BIP acquires any Original Additional Run or
Subsequent Additional Run as a result of its Outsourcing
Activities, (1) all such Original Additional Runs shall
be reserved for Buyer through [*] and (2) Buyer shall
have a ROFR for any Subsequent Additional Run during
Calendar Years [*] and [*], and such ROFR shall be
exercised according to Section 24.1(d)(2) hereof.
Moreover, the absolute minimum of the Maximum Request
after permitted reductions under Section 5.1(b) of the
original Agreement shall always be the required capacity
for [*] kg of Bulk Drug Substance calculated in
accordance with the original Production Assumptions
herein.
(b) Annual Minimum. Buyer shall guarantee BIP an annual
minimum of [*] Bulk Drug Substance Runs (the "Annual
Minimum") through [*], subject to the terms of this
Agreement. The [*] Bulk Drug Substance Runs is believed
to be equivalent to the capacity [*] BIP [*] L
fermenters. Subject to Section 5.10(c) below, beginning
on [*] and continuing through the end of the Supply Term,
Immunex and Wyeth shall have the same ability to reduce
the Annual Minimum as they have to reduce the Maximum
Request as provided in Section 5.10(a) above and Section
5.10(c) below.
(c) Potential Adjustment to the Maximum Request and Annual
Minimum. Notwithstanding anything herein to the contrary,
if Immunex and Wyeth reasonably determine in good faith
that the yearly worldwide market requirements for Bulk
Drug Substance will fall below the Annual Minimum for a
particular Calendar Year (such calculation to be based on
the prior year's Production Assumptions and the basic
success rate laid down in Section 5.1(a)(1) of the
original Agreement), and Immunex and Wyeth provide
written notice thereof to BIP, including a certification
[*] Confidential Treatment Requested
3
signed by an officer of Immunex and Wyeth that verifies
their forecast for worldwide market requirements for Bulk
Drug Substance for the respective Calendar Year, then the
terms set forth in Section 5.1(b) of the original
Agreement regarding downward adjustments in the Maximum
Request shall apply and shall supersede the provisions in
Section 5.10(a) above regarding revisions to the Maximum
Request and the provisions in Section 5.10(b) above
regarding revisions to the Annual Minimum. Thereafter,
and for so long during the Supply Term that the yearly
worldwide market requirements for Bulk Drug Substance
remain below the Annual Minimum, and except as otherwise
agreed among the Parties, Buyer shall guarantee BIP an
adjusted annual minimum (the "Adjusted Annual Minimum")
that shall supersede the Annual Minimum. The Adjusted
Annual Minimum shall be the greater of (1) [*] contained
in the [*] provided to BIP by Immunex and Wyeth for [*]
or (2) [*], as such [*] by Immunex and Wyeth pursuant to
[*]. If the [*] are higher than the [*] thereof provided
by Immunex and Wyeth to BIP [*]shall be adjusted [*].
If the [*] is applicable, then [*]. Immunex and Wyeth
shall [*] for [*] greater than either (i) [*] or (ii)
[*]. Immunex and Wyeth shall in a timely manner inform
BIP in writing of [*],
[*] Confidential Treatment Requested
4
and BIP shall within thirty (30) days after receipt of
such notice provide its own written notice to Immunex and
Wyeth of which option BIP has selected (i.e., either (i)
or (ii) in the immediately preceding sentence).
By way of example only, if [*]
5. Extension of Supply Term of Agreement. In consideration of BIP's
consent to convert its exclusive manufacturing rights to semi-exclusive
manufacturing rights as described in Paragraph 3 of this Amendment No. 1,
Section 19.1 of the Agreement shall be amended and restated as follows:
19.1 Term; Renewal.
Unless sooner terminated pursuant to the terms of this
Agreement, the term of this Agreement shall commence upon the
Effective Date and shall continue thereafter until at least [*]
(the "Supply Term"). This Agreement and the Supply Term shall
automatically continue from Calendar Year-to-Calendar Year
thereafter unless terminated by either Party by providing at
least [*] years' prior
[*] Confidential Treatment Requested
5
written notice to the other Party, provided that neither Party
may provide such notice prior to the end of the [*] Contract
Year, i.e., [*]. For purposes of this Section 19.1, Immunex and
Wyeth shall be deemed the same Party.
6. New Article 24. The Agreement shall be amended to add the following
new provision, Article 24, as follows:
ARTICLE 24. CONTRACTUAL INCENTIVES TO BIP FOR
OUTSOURCING ACTIVITIES
24.1 Costs of Outsourcing; Ordering Additional Runs; [*] Pricing for Additional
Runs; ROFR; Drug Product and Finished Product Capacity.
(a) Costs of Outsourcing. Buyer shall pay [*] percent ([*]%) of the costs
of BIP's Outsourcing Activities (as defined below), not to exceed DM
[*] ([*]Deutsche ▇▇▇▇), that are directly related to BIP providing the
additional Bulk Drug Substance Runs for the Product, as described
below. These outsourcing costs, which BIP shall further demonstrate
for Buyer by having BIP's outside auditor provide Buyer prior to any
payments according to Section 24.1(a)(1) below a letter confirming
that the DM [*] ([*] Deutsche ▇▇▇▇) figure, or any other amount not to
exceed such figure (the "Confirmed Outsourcing Costs"), is a fair
calculation of BIP's costs for Outsourcing Activities, are in the
order of DM [*] ([*] Deutsche ▇▇▇▇) for technology transfer and DM [*]
([*] Deutsche ▇▇▇▇) in loss of profitability.
For purposes hereof, "Outsourcing Activities" shall mean that BIP has
and shall forthwith act in good faith and use commercially reasonable
efforts to diligently and in a timely manner pursue the outsourcing of
such products that BIP reasonably has determined to be and forthwith
reasonably determines would be necessary to free-up the [*] Original
Additional Runs (as defined below) within the [*]month period from [*]
to [*], which activities shall include BIP's efforts and commitment of
financial resources (in the order of DM [*] for technology transfer)
and personnel resources commensurate to those efforts and resources
that would be employed by BIP to make additional near-term production
capacity available for a product having similar market potential as
the Product, it being understood that BIP is not promising the success
of these efforts nor guaranteeing that it will be able to make
available the Original Additional Runs.
(1) [*] percent ([*]%) of the Confirmed Outsourcing Costs shall be
paid by Buyer to BIP according to the following schedule:
(i) [*] percent ([*]%) of the Confirmed Outsourcing Costs
shall be paid when BIP provides a written, binding
production schedule (the "Binding Production Schedule")
to Buyer that
[*] Confidential Treatment Requested
6
indicates a total of at least [*] Bulk Drug Substance
Runs (comprised of [*] Bulk Drug Substance Runs at the
beginning of 2000 carried over from 1999 + [*] Bulk Drug
Substance Runs from 2000 + [*] Bulk Drug Substance Runs
in the first [*] months of 2001 + at least [*] additional
Bulk Drug Substance Runs) over the [*]-month period from
[*] to [*], and also indicates a total of at least [*]
Bulk Drug Substance Runs (comprised of the [*] carryover
Bulk Drug Substance Runs + [*] Bulk Drug Substance Runs
in 2000 + [*] Bulk Drug Substance Runs in 2001 + at least
[*] additional Bulk Drug Substance Runs) over the [*]-
month period from [*] to [*]. Such amount shall be
nonrefundable when paid.
(ii) [*] percent ([*]%) of the Confirmed Outsourcing Costs
shall be paid when BIP provides a Binding Production
Schedule to Buyer that indicates a total of at least [*]
Bulk Drug Substance Runs (comprised of [*] Bulk Drug
Substance Runs at the beginning of 2000 carried over from
1999 + [*] Bulk Drug Substance Runs from 2000 + [*] Bulk
Drug Substance Runs in the first [*] months of 2001 + at
least [*] additional Bulk Drug Substance Runs) over the
[*]-month period from [*] to [*], and also indicates a
total of at least [*] Bulk Drug Substance Runs (comprised
of the [*] carryover Bulk Drug Substance Runs + [*] Bulk
Drug Substance Runs in 2000 + [*] Bulk Drug Substance
Runs in 2001 + at least [*] additional Bulk Drug
Substance Runs) over the [*]-month period from [*] to
[*]. Such amount shall be nonrefundable when paid.
(iii) [*] percent ([*]%) of the Confirmed Outsourcing Costs
shall be paid when BIP provides a Binding Production
Schedule to Buyer that indicates a total of [*] Bulk Drug
Substance Runs (comprised of [*] Bulk Drug Substance Runs
at the beginning of 2000 carried over from 1999 + [*]
Bulk Drug Substance Runs from 2000 + [*] Bulk Drug
Substance Runs in the first [*] months of 2001 + [*]
additional Bulk Drug Substance Runs) over the [*]-month
period from [*] to [*], and also indicates a total of [*]
Bulk Drug Substance Runs (comprised of the [*] carryover
Bulk Drug Substance Runs + [*] Bulk Drug Substance Runs
in 2000 + [*] Bulk Drug Substance Runs in 2001 + [*]
additional Bulk Drug Substance Runs) over the [*]-month
period from [*] to [*]. Such amount shall be
nonrefundable when paid.
[*] Confidential Treatment Requested
7
The additional Bulk Drug Substance Runs to be performed
by BIP for Buyer over the [*]-month period from [*] to
[*] (each of these additional Bulk Drug Substance Runs
shall be referred to as an "Original Additional Run," and
collectively, as the "Original Additional Runs") shall be
incremental to the [*] Bulk Drug Substance Runs for the
Product in 2000 (comprised of the [*] carryover Bulk Drug
Substance Runs + [*] Bulk Drug Substance Runs) and the
[*] Bulk Drug Substance Runs for the Product in 2001. On
each Binding Production Schedule, BIP shall clearly
identify to Buyer by asterisk or otherwise which Bulk
Drug Substance Runs are the Original Additional Runs. Any
subsequent revisions to a Binding Production Schedule
must be agreed upon in writing by the Parties.
(2) Regardless of whether or not BIP has provided a Binding
Production Schedule to Buyer under Section 24.1(a)(1) above, [*]
percent ([*]%) of the Confirmed Outsourcing Costs shall be paid
by Buyer to BIP on an incremental basis, i.e., Buyer shall pay
[*] percent ([*]%) of the Confirmed Outsourcing Costs to BIP for
each Attempted Original Additional Run prior to [*]. For
purposes hereof, an "Attempted Original Additional Run" shall
mean that BIP in good faith attempted a Bulk Drug Substance Run
that advanced to at least [*].
(b) Firm Order for the Original Additional Runs. Buyer hereby issues a
Firm Order for all of the Original Additional Runs made available
during the period from [*] through [*]. Such Firm Order shall
constitute a binding order for every Original Additional Run that BIP
makes available as set forth in the Binding Production Schedule or as
otherwise agreed upon in writing by the Parties, not to exceed [*]
Original Additional Runs without Buyer's prior written approval. As
the Parties are of the common opinion that any Original Additional Run
would be the result of BIP's good faith outsourcing activities with
the goal of providing additional near-term Bulk Drug Substance Runs
for the Product, BIP shall in no way be liable to Buyer or anybody
else for the non-fulfillment of such Firm Orders for the Original
Additional Runs.
(c) [*] Pricing. The Bulk Drug Substance price shall be set at a total of
DM [*]/gram for each Bulk Drug Substance Run greater than
(1) [*] Bulk Drug Substance Runs (comprised of the [*] carryover Bulk
Drug Substance Runs + [*] Bulk Drug Substance Runs in 2000 + [*]
Bulk Drug Substance Runs in the first [*] months of 2001) that is
performed over the [*]-month period from [*]to [*],
(2) [*] Bulk Drug Substance Runs (comprised of the [*] carryover Bulk
Drug Substance Runs + [*] Bulk Drug Substance
[*] Confidential Treatment Requested
8
Runs in 2000 + [*] Bulk Drug Substance Runs in 2001) that is
performed over the [*]-month period from [*]to [*], provided,
however, that any Bulk Drug Substance Run eligible for [*]
pricing under Section 24.1(c)(1) above shall not be eligible for
[*] pricing under this Section 24.1(c)(2), and
(3) [*] Bulk Drug Substance Runs that is performed per year for
Calendar Years [*] (for each of these [*] Calendar Years, the
additional Bulk Drug Substance Runs made available by BIP to
Buyer in the particular Calendar Year shall be referred to as the
"Subsequent Additional Runs"), provided, however, that the number
of Bulk Drug Substance Runs that are performed in each of [*]
(for the last [*] months of [*]) [*] that are eligible for the
[*] pricing shall not exceed the difference between the number of
actual Bulk Drug Substance Runs that are performed between [*]to
[*] and [*] Bulk Drug Substance Runs (comprised of the [*]
carryover Bulk Drug Substance Runs + [*] Bulk Drug Substance Runs
in 2000 + [*] Bulk Drug Substance Runs in 2001).
[*]
(d) BIP Written Notice of Subsequent Additional Runs; ROFR for Subsequent
Additional Runs.
(1) By [*], BIP shall provide written notice to Buyer of the number
of Subsequent Additional Runs that are available in [*].By [*],
BIP shall provide written notice to Buyer of the number of
Subsequent Additional Runs that are available in [*].
(2) Buyer shall have the right of first refusal as to any Third
Parties (the "ROFR") to order any or all of such Subsequent
Additional Runs in [*] and [*] to the extent provided in this
paragraph, in either Calendar Year not to exceed [*] Subsequent
Additional Runs without Buyer's prior written approval. This
ROFR for Subsequent Additional Runs with respect to [*] and [*],
respectively, shall be exercised by Buyer, if at all, by
providing written notice to BIP, within [*] days after BIP's
written notice to Buyer of the number of Subsequent Additional
Runs that BIP would make available in [*] or [*], as applicable,
of that number of such Subsequent Additional Runs for which Buyer
thereby issues a Firm Order (the "Accepted Subsequent Additional
Runs"). Upon receipt of any such notice from Buyer, such Firm
Orders shall constitute binding orders, and BIP shall dedicate
all of such Accepted Subsequent Additional Runs for the
production of Bulk
[*] Confidential Treatment Requested
9
Drug Substance.
(e) Potential Refund of Confirmed Outsourcing Costs. If BIP does not
attempt at least [*] Accepted Subsequent Additional Runs in [*], then
no later than [*], BIP shall refund to Buyer a total of [*] percent
([*]%) of the Confirmed Outsourcing Costs previously paid by Buyer for
the Original Additional Runs under Section [*] above.
(f) Drug Product and Finished Product Capacity. BIP hereby undertakes to
maintain sufficient manufacturing capacity and a sufficient number of
employees with such expertise and experience as is necessary or
appropriate to convert the Bulk Drug Substance Lots resulting from the
Original Additional Runs and the Accepted Subsequent Additional Runs
into Drug Product and, if ordered, Finished Product, in accordance
with the terms hereof, including without limitation, Section 4.3
hereof.
24.2 Additional Contractual Incentives for Unsuccessful Outsourcing Activities.
Instead of, and not in addition to, the contractual incentives and other
terms provided to BIP in Section 24.3 below for Successful Outsourcing
Activities (as defined below), BIP shall receive the following contractual
incentives and be subject to the following terms set forth in this Section
24.2 as a result of Unsuccessful Outsourcing Activities, or alternatively,
under the conditions specified in Section 24.3(e) below. For purposes
hereof, "Unsuccessful Outsourcing Activities" shall mean that despite BIP's
Outsourcing Activities, BIP has been unable to provide Buyer at least [*]
successful harvests (i.e., Bulk Drug Substance Runs resulting in vialed and
released Drug Product within customary timeframes after each harvest) by
[*].
(a) Bulk Drug Substance Cost. The cost of Bulk Drug Substance shall be
fixed at DM [*]/gram, except for (1) Bulk Drug Substance that is [*]
priced at DM [*]/gram under Section 24.1(c) above, (2) the potential
annual price adjustments resulting from the [*] yield sharing between
BIP and Buyer beginning [*] as described in Section 24.2(b) below and
(3) the price adjustments permitted under Sections 5.6(a), 5.6(b) and
5.6(c) hereof.
(b) Yield Enhancement. BIP and Buyer shall share the benefit of all
accrued yield increases from production of Bulk Drug Substance Lots on
a [*] basis (i.e., accrued yield increases shall be measured from the
Production Assumptions that were in effect on the Effective Date of
the Agreement through the Production Assumptions calculated with
respect to production through [*]), to be computed annually pursuant
to Section 5.3(b) hereof beginning with the first potential annual
price adjustment effective [*], provided, however, that the formula
and example set forth in Section 5.3(b) hereof shall be adjusted to
reflect such [*] sharing of any price adjustments.
(c) Risk Sharing. Beginning with respect to Calendar Year [*], BIP and
Buyer
[*] Confidential Treatment Requested
10
shall each Calendar Year share on a [*] basis the costs of Bulk Drug
Substance Runs that do not meet the Bulk Drug Substance Specifications
(calculated on the basis of the Product Price and original Production
Assumptions hereunder less [*]% for profit), but only to the extent
that those failed Bulk Drug Substance Runs represent a failure rate
greater than [*] percent ([*]%) of all the Bulk Drug Substance Runs
performed during that Calendar Year [*]. Buyer's payment obligations
for such Bulk Drug Substance Runs as set forth above shall only apply
to the extent that a Bulk Drug Substance Run failed at the [*] in the
Process. BIP shall accept the risk of the first [*] percent ([*]%) of
Bulk Drug Substance Runs each Calendar Year that fail at the [*] in
the Process. Buyer's payment obligations under this Section 24.2(c)
shall be deemed to satisfy any payment obligations of Buyer under the
provisions of Section 6.3 hereof to the extent any such provisions
could be construed to require Buyer to pay any portion of the cost of
Bulk Drug Substance Runs that do not meet the Bulk Drug Substance
Specifications.
24.3 Contractual Incentives for Successful Outsourcing Activities. Instead of,
and not in addition to, the contractual incentives and other terms provided
to BIP in Section 24.2 above for Unsuccessful Outsourcing Activities, BIP
shall receive the following contractual incentives and be subject to the
following terms set forth in this Section 24.3 in the event that BIP's
efforts have resulted in Successful Outsourcing Activities, except as
otherwise set forth in Section 24.3(e) below. For purposes hereof,
"Successful Outsourcing Activities" shall mean that as a result of BIP's
Outsourcing Activities, BIP has achieved at least [*] successful harvests
(i.e., Bulk Drug Substance Runs resulting in vialed and released Drug
Product within customary timeframes after each harvest) by [*]:
(a) Bulk Drug Substance Cost. The cost of Bulk Drug Substance shall be
fixed at DM [*]/gram, except for (1) Bulk Drug Substance that is [*]
priced at DM [*]/gram under Section 24.1(c) above, (2) the potential
annual price adjustments resulting from the [*] yield sharing between
BIP and Buyer [*] as described in Section 24.3(b) below and (3) the
price adjustments permitted under Sections 5.6(a), 5.6(b) and 5.6(c)
hereof.
(b) Yield Enhancement. BIP shall [*]. Thereafter, BIP and Buyer shall
share the benefit of all accrued yield increases from production of
Bulk Drug Substance Lots on a [*] basis (i.e., accrued yield increases
shall be measured from the Production Assumptions that were in effect
on the Effective Date of the Agreement through the Production
Assumptions calculated with respect to production through [*]), to be
computed annually pursuant to Section 5.3(b) hereof beginning with the
first potential annual price
[*] Confidential Treatment Requested
11
adjustment effective [*], provided, however, that the formula and
example set forth in Section 5.3(b) hereof shall be adjusted to
reflect such [*] sharing of any price adjustments.
(c) Risk Sharing. Beginning with respect to Calendar Year [*] and
continuing with Calendar Years [*], BIP shall accept [*] percent
([*]%) of the risk that Bulk Drug Substance Runs do not meet the Bulk
Drug Substance Specifications. In Calendar Year [*] and then beginning
again with respect to Calendar Year [*] and thereafter for subsequent
Calendar Years through the end of the Supply Term, BIP and Buyer shall
each Calendar Year share on a [*] basis the costs of Bulk Drug
Substance Runs that do not meet the Bulk Drug Substance Specifications
(calculated on the basis of the Product Price and original Production
Assumptions hereunder less [*]% for profit), but only to the extent
that those failed Bulk Drug Substance Runs represent a failure rate
greater than [*] percent ([*]%) of all the Bulk Drug Substance Runs
performed during that Calendar Year. Buyer's payment obligations for
such Bulk Drug Substance Runs as set forth above shall only apply to
the extent that a Bulk Drug Substance Run failed at the [*] in the
Process. BIP shall accept the risk of the first [*] percent ([*]%) of
Bulk Drug Substance Runs each Calendar Year that fail at the [*] in
the Process. Buyer's payment obligations under this Section 24.3(c)
shall be deemed to satisfy any payment obligations of Buyer under the
provisions of Section 6.3 hereof to the extent any such provisions
could be construed to require Buyer to pay any portion of the cost of
Bulk Drug Substance Runs that do not meet the Bulk Drug Substance
Specifications.
(d) Reconciliation. While the Parties will not know if BIP has achieved
Successful Outsourcing Activities until [*], the yield enhancement
provisions under Section 24.2(b) above contemplate shared savings from
yield enhancements beginning on [*]. Therefore, if BIP has achieved
Successful Outsourcing Activities, then within a reasonable time after
[*], the Parties shall reconcile any shared savings during the first
[*] months of [*] with the applicable yield enhancement provisions
under Section 24.3(b) above.
(e) Reversion to Terms in Section 24.2. If BIP either provides written
notice to Buyer under Section 24.1(d) above that BIP will not make
available at least [*] Subsequent Additional Runs in [*] or [*], or if
BIP in fact does not attempt at least [*] Subsequent Additional Runs
in [*] or [*], then from [*] of either [*] or [*], as the case may be
depending on which is the first Calendar Year for which BIP provides
notice that it will not make available at least [*] Subsequent
Additional Runs or does not in fact attempt such [*] Subsequent
Additional Runs, and through the remainder of the Supply Term, the
terms and conditions in Section 24.3(a) - (c) applicable to Successful
Outsourcing Activities shall
[*] Confidential Treatment Requested
12
revert to and be superseded by the terms and conditions in Section
24.2(a) - (c) applicable to Unsuccessful Outsourcing Activities,
provided, however, that upon such reversion, in no event shall (1) BIP
have any obligation to refund to Buyer any benefits which had accrued
to BIP from yield enhancement in earlier Calendar Years under Section
24.3(b) above, or (2) Buyer have any additional obligation to BIP for
risk sharing costs in earlier Calendar Years under Section 24.2(c)
above.
7. Rhode Island Manufacturing Facility. BIP shall provide the assistance
to Immunex and Wyeth in the transfer of technology related to manufacture of the
Product to Wyeth's manufacturing facility in West Greenwich, Rhode Island in a
separate agreement of even date herewith, in which the Parties have agreed upon
the requested activities, timelines, manpower and financial terms.
8. Effect of Amendment No. 1 on Agreement. Except as otherwise set forth
in this Amendment No. 1, all other terms and provisions of the Agreement shall
remain in full force and effect. In the event of any conflict between the terms
and conditions of the Agreement and the terms and conditions of this Amendment
No. 1, the terms and conditions of this Amendment No. 1 shall control.
9. Counterparts. This Amendment No. 1 may be executed in counterparts,
each of which shall be deemed an original and all of which shall constitute
together one and the same instrument.
IN WITNESS WHEREOF, the Parties have, by their duly authorized persons,
executed this Amendment No. 1 as of the Amendment Effective Date.
IMMUNEX CORPORATION AMERICAN HOME PRODUCTS
CORPORATION, acting through its
Wyeth-Ayerst Laboratories division
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------- ---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------- -------------------------------
Title: Executive VP & COO Title: Sr. Vice President & Chief
---------------------------- ------------------------------
Financial Officer
------------------------------
Date: 6/27/00 Date: 6/27/00
----------------------------- -------------------------------
BOEHRINGER INGELHEIM PHARMA KG
ppa. ppa.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------- ---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇▇
----------------------------- -------------------------------
Title: Head of Aidpharm Manuf. Title: CD Biopharmaceuticals
---------------------------- ------------------------------
Date: 30.06.00 Date: 30.06.00
----------------------------- -------------------------------
13