[*] indicates that a confidential portion of this Agreement has been omitted and
filed separately with the Securities and Exchange Commission.
PROCESS DEVELOPMENT AND MANUFACTURING AGREEMENT
between
XOMA (US) LLC
and
ONYX PHARMACEUTICALS, INC.
January 29, 2001
TABLE OF CONTENTS
PAGE
1. Definitions.........................................................1
1.1 "Acceptance Period"........................................1
1.2 "Affiliate"................................................1
1.3 "Attainment of Commercial Scale"...........................2
1.4 "Batch"....................................................2
1.5 "BLA"......................................................2
1.6 "cGMP".....................................................2
1.7 "Commercial Scale".........................................2
1.8 "Confidential Information".................................2
1.9 "Control", "Controls" and "Controlled".....................2
1.10 "Delivery Date"............................................2
1.11 "Development Phase"........................................3
1.12 "Development Scale"........................................3
1.13 "Drug Substance"...........................................3
1.14 "Facility".................................................3
1.15 "FDA"......................................................3
1.16 "FD&C Act".................................................3
1.17 "Fully Burdened Staffing Costs"............................3
1.18 "IND"......................................................3
1.19 "Intellectual Property Rights".............................3
1.20 "Innovations"..............................................3
-i-
PAGE
1.21 "Letter Agreement".........................................4
1.22 "Manufacturing Phase"......................................4
1.23 "ONYX-015".................................................4
1.24 "ONYX-015 Derivative"......................................4
1.25 "Onyx Innovations".........................................4
1.26 "Onyx Partner".............................................4
1.27 "Party and Parties"........................................4
1.28 "Patents"..................................................4
1.29 "Project"..................................................4
1.30 "Project Innovations"......................................4
1.31 "Project Team".............................................4
1.32 "Regulatory Approval"......................................5
1.33 "Regulatory Authority".....................................5
1.34 "Shelf Life"...............................................5
1.35 "Specifications"...........................................5
1.36 "Suite"....................................................5
1.37 "Third Party"..............................................5
1.38 "Work Plan"................................................5
1.39 "XOMA Innovations".........................................5
1.40 "Yield"....................................................5
2. Overview and Governance of Manufacturing Relationship...............5
2.1 Project; Committee Resources; Schedule.....................5
-ii-
PAGE
2.2 Work Plan..................................................7
2.3 Project Team...............................................7
2.4 Senior Management Oversight and Dispute Resolution.........7
2.5 Specifications; Changes to Specifications and Work Plan....8
2.6 Onyx Representatives.......................................8
2.7 Non-Exclusive Relationship.................................9
2.8 Non-Solicitation and Non-Hire Obligations..................9
2.9 Compliance with Laws.......................................9
3. Facilities and Equipment.............................................9
3.1 Dedicated Manufacturing Suite...............................9
3.2 Additional Equipment and Facility Modifications............10
(a) Development Phase Equipment Purchases..............10
(b) Manufacturing Phase Equipment Purchases............10
(c) Suite Modifications................................10
3.3 Replacement Suite..........................................11
3.4 Compliance Audit...........................................11
4. Technology Transfer, Scale-Up, Purification and Process Development.11
4.1 Manufacturing Technology Transfer to XOMA..................11
4.2 Scale-up of Manufacture....................................12
(a) Establishment of Commercial Scale..................12
(b) Additional Registration Batches....................12
(c) Non-Attainment of [*]L Scale.......................12
-iii-
PAGE
4.3 Production at Development Scale............................13
5. Clinical and Commercial Supply; Regulatory Matters..................13
5.1 Raw Materials Services; In-Process Testing.................13
5.2 Minimum Batch Manufacture..................................14
(a) First Year.........................................14
(b) Subsequent Years...................................14
(c) Additional Batches.................................14
(d) Reductions in Minimum Batch Commitments............14
(e) Increases in Capacity for Drug Substance
Manufacture......................................15
5.3 Orders and Supply..........................................15
(a) General............................................15
(b) Purchase Orders....................................15
(c) Cancellations......................................15
(d) Rescheduling.......................................15
5.4 Commercial Supply Forecast.................................16
5.5 Delivery...................................................16
5.6 Testing, Acceptance and Rejection..........................16
5.7 Regulatory Changes.........................................17
5.8 Change in Manufacturing Process............................18
5.9 Samples....................................................18
5.10 Regulatory Matters.........................................18
-iv-
PAGE
6. Prices and Payment..................................................18
6.1 Upfront Payment............................................18
6.2 Space Fee..................................................19
6.3 Equipment and Facility Reimbursement.......................19
6.4 Personnel Costs............................................19
(a) Development Phase..................................19
(b) Manufacturing Phase................................19
(c) Regulatory Work....................................19
(d) Post-Termination or -Expiration Technology
Transfer.........................................20
6.5 Milestone Payments.........................................20
(a) Initial Commercial Scale Batch Meeting
Specifications and with Adequate Yield...........20
(b) Yield Improvements.................................20
(c) Regulatory Approval for Facility...................21
6.6 Commercial Scale Batch Payments............................21
(a) Batch Price........................................21
(b) Additional Batches.................................21
(c) Adjustments........................................22
(d) Additional Orders at Commercial Scale..............22
6.7 Payment....................................................22
6.8 Records....................................................22
6.9 Taxes Withheld.............................................23
-v-
PAGE
7. Technology and Information..........................................23
7.1 Technology Transfer........................................23
(a) Periodic Updates...................................23
(b) Expiration, Termination or Upon Request............23
7.2 Information................................................24
(a) Documentation......................................24
(b) Access.............................................24
(c) Audit of Records...................................24
7.3 Licenses...................................................24
(a) Development and Manufacturing License to XOMA......24
(b) Project Innovations License to XOMA................24
(c) XOMA Innovations License to Onyx...................25
7.4 Ownership of Innovations and Intellectual Property.........25
(a) Third Party Technology.............................25
(b) Onyx Innovations...................................25
(c) XOMA Innovations...................................25
(d) Project Innovations................................26
7.5 Patenting of Project Innovations...........................26
7.6 Infringement of Patents....................................27
8. Representations and Warranties; Disclaimers.........................27
8.1 Drug Substance Warranties and Remedy.......................27
(a) Warranties.........................................27
-vi-
PAGE
(b) Remedy.............................................27
8.2 General Representations and Warranties.....................28
(a) Corporate Existence and Power......................28
(b) Authority and Binding Agreement....................28
(c) Title..............................................28
8.3 Warranty Disclaimer........................................28
9. Indemnification; Limitation of Liability............................29
9.1 Onyx Indemnity.............................................29
9.2 XOMA Indemnity.............................................29
9.3 Separate Defenses..........................................29
9.4 Expenses...................................................30
9.5 Limitation of Liability....................................30
10. Confidentiality.....................................................30
10.1 Confidential Information; Exceptions.......................30
10.2 Authorized Disclosure......................................32
10.3 Press Releases.............................................32
10.4 Requests for Confidential Treatment........................32
10.5 Return of Confidential Information.........................33
10.6 Injunctive Relief..........................................33
10.7 Survival...................................................33
10.8 Superseding Effect.........................................33
-vii-
PAGE
11. Term and Termination................................................33
11.1 Term.......................................................33
11.2 Termination by XOMA........................................34
11.3 Termination by Onyx........................................34
(a) Delay in Performance by XOMA.......................34
(b) For Convenience Before Attainment of
Commercial Scale.................................35
(c) For Convenience After Attainment of
Commercial Scale.................................35
11.4 Breach.....................................................36
11.5 Technology Transfer........................................36
11.6 Surviving Obligations......................................37
12. Miscellaneous.......................................................37
12.1 Notice.....................................................37
12.2 Use of Names...............................................38
12.3 Formal Dispute Resolution..................................38
(a) Arbitration........................................38
(b) Intellectual Property Disputes.....................40
12.4 Rights in Bankruptcy.......................................40
12.5 Waiver.....................................................40
12.6 Assignment; Binding Effect.................................40
12.7 Independent Parties........................................41
12.8 Force Majeure..............................................41
12.9 Severability...............................................41
-viii-
PAGE
12.10 Governing Law..............................................41
12.11 Entire Agreement; Modification.............................41
12.12. Counterparts...............................................42
Exhibit A SPECIFICATIONS...................................
Exhibit B SUITE............................................
Exhibit C PRESS RELEASES...................................
-ix-
EXECUTION COPY
PROCESS DEVELOPMENT AND MANUFACTURING AGREEMENT
This Agreement (the "Agreement") is made effective as of the 29th day of
January, 2001 ("Effective Date"), by and between XOMA (US) LLC, a Delaware
limited liability company ("XOMA"), with offices at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇, and Onyx Pharmaceuticals, Inc., a Delaware
corporation ("Onyx"), with offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇. XOMA and Onyx are sometimes referred to herein individually as a
"Party" and collectively as "Parties".
Recitals
WHEREAS, Onyx, a biotechnology company engaged in the discovery and
development of novel pharmaceuticals for cancer indications, has discovered and,
together with its collaboration partner, Pfizer Inc. ("Pfizer"), is developing a
novel replicating virus, ONYX-015 (also known as CI-1042 and further defined
below), as a biopharmaceutical product now in Phase III clinical trials.
Currently, ONYX-015 is manufactured at small scale by contract manufacturers;
WHEREAS, XOMA is a company that has developed substantial expertise in
process development, scale-up, and small- and large-scale manufacturing of its
own and its partners' biopharmaceutical products, and, in addition, has invested
in biopharmaceutical manufacturing facilities; and
WHEREAS, Onyx would like to engage XOMA to scale up and improve the process
for the manufacture of ONYX-015 and to manufacture and supply ONYX-015 in bulk
form for clinical trials and for the commercial launch of the ONYX-015 product,
and XOMA would like to provide such services to Onyx.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises and covenants set forth below, Onyx and XOMA mutually agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms will have the following
meanings:
1.1 "Acceptance Period" shall have the meaning given such term in Section
5.6(a).
1.2 "Affiliate" means any person or entity that, directly or indirectly,
through one or more intermediaries, Owns, is Owned by or is under
common Ownership with, a Party, where "Own", "Owned" or "Ownership" refers to
(a) direct or indirect possession of at least fifty percent (50%) of the
outstanding voting securities of a corporation or a comparable ownership in any
other type of entity; or (b) the actual ability of an entity, person or group to
control and direct the management of the person or entity, whether by contract
or otherwise.
1.3 "Attainment of Commercial Scale" shall have the meaning given such term
in Section 4.2(b).
1.4 "Batch" means a specific quantity of Drug Substance that is intended to
have a uniform character and quality, within specified limits, and that is
produced according to a single manufacturing order during the same cycle of
manufacture.
1.5 "BLA" means a Biologics License Application filed with the FDA or other
equivalent application(s) for Regulatory Approval in a jurisdiction other than
the United States of America.
1.6 "cGMP" means the then current standards for manufacture of biologicals,
as set forth in the FD&C Act, and such standards of good manufacturing practice
as are required by the FDA or other Regulatory Authorities with jurisdiction
where ONYX-015 will be used in clinical trials or commercialized.
1.7 "Commercial Scale" means the [*]L nominal volume fermentation
bioreactor production scale for the ONYX-015 manufacturing process that will
result from scale-up work during the Development Phase, as it may be modified
pursuant to Section 4.2(c).
1.8 "Confidential Information" shall have the meaning given such term in
Section 10.1.
1.9 "Control", "Controls" and "Controlled" mean, with respect to a
particular item of information or Intellectual Property Right, that the
applicable Party owns or has a license to such item or right and has the ability
to grant to the other Party access to and a license or sublicense (as
applicable) under such item or rights as provided for herein without violating
the terms of any agreement or other arrangement with any Third Party.
1.10 "Delivery Date" shall have the meaning given such term in Section
5.3(a).
2.
1.11 "Development Phase" shall have the meaning given such term in Section
2.2.
1.12 "Development Scale" means the [*]L, [*]L or comparable nominal volume
fermentation bioreactor production scales for the Drug Substance manufacturing
process transferred to XOMA and further developed under this Agreement.
1.13 "Drug Substance" means a formulation of purified bulk ONYX-015 that
has been manufactured and processed to the stage where it is suitable for
fill-and-finish procedures yielding the ONYX-015 product suitable for release
for use in clinical trials or commercial sales.
1.14 "Facility" shall have the meaning given such term in Section 3.1.
1.15 "FDA" means the United States Food and Drug Administration, or any
successor agency.
1.16 "FD&C Act" means the United States Food, Drug and Cosmetics Act and
applicable regulations and guidances promulgated thereunder, as amended from
time to time.
1.17 "Fully Burdened Staffing Costs" shall have the meaning given such term
in Section 6.4(a).
1.18 "IND" means an Investigational New Drug application as defined in the
FD&C Act and/or its equivalent in any country other than the United States of
America, the filing of which is necessary to commence clinical testing of
pharmaceutical products in humans.
1.19 "Intellectual Property Rights" means patents, copyrights, trademarks,
service marks, trade secrets, mask works, and applications for the foregoing, in
any country, supranational organization or territory of the world.
1.20 "Innovations" means inventions, discoveries, works of authorship,
trade secrets and other know-how or developments.
3.
1.21 "Letter Agreement" shall have the meaning given such term in Section
2.1(a).
1.22 "Manufacturing Phase" shall have the meaning given such term in
Section 2.2.
1.23 "ONYX-015" means the formulation of the genetically engineered
adenovirus dl1520 described in US Patent Numbers 5,677,178 and 5,846,945,
selected by ONYX, that is currently in Phase III clinical trials.
1.24 "ONYX-015 Derivative" means ONYX-015 derivatized by engineering the
ONYX-015 genome to contain one or more additional transgenes that code for one
or more protein(s).
1.25 "Onyx Innovations" shall have the meaning given such term in Section
7.4(b).
1.26 "Onyx Partner" means any Third Party collaboration partner of Onyx
pursuant to a written agreement for the development and/or commercialization of
the ONYX-015 product, of which partner Onyx has given written notice to XOMA.
For clarity, Onyx's Third Party collaboration partner for such purposes as of
the Effective Date is Pfizer.
1.27 "Party" and "Parties" shall have the meanings given such terms,
respectively, in the first paragraph of this Agreement.
1.28 "Patents" means (i) United States issued patents, re-examinations,
reissues, renewals, extensions, patent term restorations, and foreign
counterparts of each of the foregoing; and (ii) pending applications for United
States patents and foreign counterparts thereof, whether issued or not.
1.29 "Project" shall have the meaning given such term in Section 2.1.
1.30 "Project Innovations" shall have the meaning given such term in
Section 7.4(d)(i).
1.31 "Project Team" shall have the meaning given such term in Section 2.3.
4.
1.32 "Regulatory Approval" means all approvals, product and/or
establishment licenses, registrations or authorizations of all supranational,
national or local regulatory agencies and other governmental entities, necessary
for the manufacture, use, storage, import, export, transport and sale of a
biological product in a jurisdiction.
1.33 "Regulatory Authority" means a supranational, national or local
regulatory agency or other governmental entity with the authority to grant a
Regulatory Approval.
1.34 "Shelf Life" means the length of time that Drug Substance can be
stored at conditions measured and documented as set forth in the Specifications,
as set forth in any BLA for ONYX-015, as it may be amended or any Regulatory
Approval for ONYX-015.
1.35 "Specifications" means the specifications and testing procedures for
Batches of Drug Substance manufactured under this Agreement, as set forth in
Exhibit A and as amended from time to time pursuant to Section 2.5.
1.36 "Suite" shall have the meaning given such term in Section 3.1.
1.37 "Third Party" means any person or entity other than the Parties or
their respective Affiliates.
1.38 "Work Plan" shall have the meaning given such term in Section 2.2.
1.39 "XOMA Innovations" shall have the meaning given such term in Section
7.4(c).
1.40 "Yield" means the percentage ratio of the number of particles of
ONYX-015 in the purified Drug Substance to the number of particles of ONYX-015
in the initial crude virus homogenate of the cells harvested from the
fermentation bioreactor batch.
2. OVERVIEW AND GOVERNANCE OF MANUFACTURING RELATIONSHIP
2.1 Project; Committee Resources; Schedule. XOMA and Onyx are entering into
a strategic manufacturing
5.
relationship (the "Project"), with the purpose of XOMA producing clinical and
commercial supplies of Drug Substance in compliance with Specifications at
Commercial Scale for Onyx. Subject to the terms and conditions of this
Agreement, XOMA will carry out the Project in accordance with this Agreement and
the Work Plan (as defined in Section 2.2) and in full compliance with cGMP. XOMA
will commit to the Project appropriate personnel (including without limitation
those with expertise in technical development, manufacturing, operations,
quality control, quality assurance and regulatory affairs) and appropriate
facilities in its biopharmaceutical manufacturing facility located in Berkeley,
California. Onyx will commit such of its personnel with appropriate expertise to
provide monitoring and, as appropriate, technical consultation for the Project.
XOMA and Onyx recognize the importance of timely execution of the Project and
accordingly each will give priority to the Project, assign adequate staffing and
other resources and use all diligent, commercially reasonable efforts to
maximize the potential of achieving successful completion of the Project
(including without limitation timely provision of all deliverables in accordance
with the Work Plan) according to the following schedule:
(a) The Parties have initiated certain aspects of the Project prior to the
Effective Date pursuant to the Letter Agreement by and between them dated
January 12, 2001 (the "Letter Agreement"). Onyx and XOMA each will give priority
to completion, as promptly as reasonably practicable, of (i) the transfer of
technology relating to the manufacture of Drug Substance from Onyx and its Third
Party manufacturers to XOMA, (ii) the planning and implementation of the
Development Phase, and (iii) the initial planning for the Manufacturing Phase.
(b) Beginning in [*], XOMA plans to initiate Development Scale production
of Drug Substance in the Suite, which shall be dedicated to the production of
Drug Substance under this Agreement. As reasonably requested by XOMA, Onyx will
provide raw materials, buffers, media, cell banks and viral banks that have been
released by Onyx quality assurance and/or quality control personnel and will
provide certificates of analysis therefor.
(c) Upon completion of manufacture of Batches of Drug Substance at
Development Scale, in approximately [*] depending on how many Batches are agreed
to by the Parties, XOMA plans to initiate development work for process
improvements that further scale up the ONYX-015 manufacturing process and
increase the Yield of ONYX-015. Onyx will make available reasonable numbers of
its scientific staff from its Process Sciences group with appropriate expertise
to participate in this work, if needed by XOMA.
(d) Upon completion of Development Phase work, XOMA plans to implement the
process improvements and expects to produce the first Commercial Scale Batch
pursuant to Section 4.2(a) in approximately [*].
6.
(e) Throughout the Development Phase, Onyx will make scientific and
technical staff available as necessary and reasonably useful to assist XOMA's
efforts.
(f) The Parties anticipate that XOMA will commence the manufacture of the
second and third registration Batches pursuant to Section 4.2(b) in
approximately [*].
2.2. "Work Plan". As soon as practicable, but in any case within 45 days
after the Effective Date, Onyx and XOMA shall develop a mutually agreed,
detailed work plan (the "Work Plan") for the technology transfer, scale-up,
purification, and process development work to be carried out pursuant to Section
4 through production of the first registration Batch at Commercial Scale
pursuant to Section 4.2(a) (the "Development Phase"), and for the Commercial
Scale manufacturing to be carried out pursuant to Section 5 beginning with the
second registration Batch pursuant to Section 4.2(b) (the "Manufacturing
Phase"). The Project Team members shall review the Work Plan and consult as to
its continuing suitability at their meetings pursuant to Section 2.3 and shall
implement any revisions thereto that are mutually acceptable to both Parties.
2.3. Project Team. Promptly after the Effective Date, the Parties will form
a Project Team ("Project Team"), with each Party designating two (2) members of
the Project Team. Each Party may replace or supplement its members on the
Project Team and will at all times ensure that its current Project Team members
have expertise appropriate to the current stage of the Project. The Project Team
will be responsible for reviewing progress of the Project under the Work Plan
and to discuss and decide on any potential revisions to the Work Plan. The
Project Team may make decisions only by the unanimous consensus of all members
thereof. If there are any matters on which the Project Team is unable to achieve
consensus, either Party's Project Team members may refer the matter to the CEOs
of both Parties as further described in Section 2.4. During the Development
Phase, the Project Team shall hold meetings as agreed by Project Team members or
as requested by either Party. During the Manufacturing Phase, the Project Team
shall hold meetings as agreed by Project Team members or as requested by either
Party to review the progress of ONYX-015 in clinical development and the status
of manufacturing of ONYX-015 for clinical and commercial supply.
2.4. Senior Management Oversight and Dispute Resolution. Members of the
senior management of Onyx and XOMA will hold meetings as agreed by such persons
or as requested by either Party at least annually to review the status of the
Project and progress under the Work Plan. In addition, if members of the Project
Team refer any matters to the CEOs of the Parties pursuant to Section 2.3, then
(i) for matters involving the definition or contents of the Work Plan or the
Specifications or re-designation of the Commercial Scale pursuant to Section
7.
4.2(c), the CEOs of the Parties will consult in good faith as to such matter,
and the Onyx CEO will determine the resolution thereof in his or her sole
discretion, subject to the provisions of Section 2.5(b), or (ii) for any other
matter, the CEOs of the Parties will attempt in good faith to resolve such
matter for thirty (30) days.
2.5 Specifications; Changes to Specifications and Work Plan.
(a) As of the Effective Date, Onyx and Pfizer have agreed upon the current
Specifications for Drug Substance, which are attached hereto as Exhibit A. Onyx
may change the Specifications from time to time, after consulting with XOMA in
advance as to such changes, and such revised Specifications shall replace the
previous Specifications and shall be deemed to be part of this Agreement as
Exhibit A. In particular, the Parties expect that Onyx will change the
Specifications as a result of process changes made during the Development Phase
under Section 4 and the data obtained from registration Batches manufactured
pursuant to Section 4.2, and that such modified Specifications will be
consistent with FDA expectations for purity, potency, and other product
characteristics. Onyx and XOMA expect that the modified Specifications will be
comparable to Specifications existing as of the Effective Date, particularly as
regards purity and potency.
(b) Onyx shall be responsible for any incremental costs incurred by XOMA as
a result of any changes to the Specifications or the Work Plan pursuant to
clause (i) of Section 2.4 or to Section 2.5(a). If such changes significantly
and adversely affect the ability of XOMA to manufacture Drug Substance in
compliance with Specifications or require significant modifications to the Suite
in order to permit XOMA to manufacture Drug Substance in accordance with the
Specifications, then at XOMA's election, the Parties will undertake, diligently
and in good faith, such of the following as is appropriate in light of the
changes in the Specifications: (i) the Parties will renegotiate the terms of
this Agreement so as to permit XOMA to perform its obligations under this
Agreement with substantially the same economic benefit for its efforts; (ii) the
Parties will agree upon an extension of the timeframes in Section 11.3(a)
pursuant to which Onyx may terminate the Agreement without penalty; and/or (iii)
the Parties will agree upon an extension of the period during which XOMA will
manufacture the guaranteed minimum number of Batches so as to permit XOMA to
recapture its economic benefits as contemplated in this Agreement.
2.6 Onyx Representatives. Onyx shall be allowed to have, at its cost, up to
two (2) representatives, escorted by XOMA personnel, with full access to the
Suite during the manufacture of ONYX-015 for the purpose of observing, reporting
on, and consulting as to such manufacturing efforts. Prior to receiving such
access, such representatives will enter into XOMA's standard form of
confidentiality
8.
agreement, which will be commercially reasonable and will permit such
representatives to disclose information learned to Onyx, Pfizer, and any other
Onyx Partner approved in writing in advance by XOMA, such approval not to be
unreasonably withheld. XOMA will reasonably cooperate in enabling such
representatives to carry out their responsibilities and will make adequate
temporary desk space and other reasonable resources available to these
representatives during the periods they are working at XOMA.
2.7 Non-Exclusive Relationship. The manufacturing relationship set forth in
this Agreement will be non-exclusive. Onyx is presently obtaining ONYX-015 from
two contract manufacturers and, subject to its compliance with the minimum
purchase requirements of this Agreement, Onyx shall have the right to establish
additional manufacturing arrangements with these parties or new arrangements
with other parties.
2.8 Non-Solicitation and Non-Hire Obligations. During the term of this
Agreement and for two (2) years after expiration or termination hereof, without
the other Party's prior written consent, neither Onyx nor XOMA shall solicit for
employment or for an independent contractor relationship, hire as an employee,
or enter into an independent contractor relationship with, any persons who are
currently employed by the other Party or who, at any time during the term of
this Agreement, are employed by the other Party; provided, however, that nothing
in this Section 2.8 shall restrict a Party from soliciting, employing or
engaging as an independent contractor any former employee of the other Party who
is at such time employed by a Third Party.
2.9. Compliance with Laws. In carrying out its obligations under this
Agreement, each Party will comply with all material laws, regulations,
requirements and orders of any and all United States federal, state and local
authorities and agencies (including without limitation all laws and regulations
of such territories applicable to the transportation, storage, use, handling and
disposal of hazardous materials) applicable to the manufacture of ONYX-015 and
the Facility. XOMA will maintain during the term of this Agreement all
government permits, including without limitation health, safety and
environmental permits, necessary for the conduct of the actions and procedures
that it undertakes pursuant to this Agreement.
3. FACILITIES AND EQUIPMENT.
3.1 Dedicated Manufacturing Suite. XOMA will dedicate, exclusively to the
Project, the manufacturing suite identified in Exhibit B (the "Suite"), and
equipment at its biopharmaceutical manufacturing facility at
9.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the "Facility"). The equipment shall
include bioreactors with [*]L, [*]L, and [*] nominal volumes and [*]L, [*]L and
[*]L approximate working volumes, respectively, dedicated cell culture,
fermentation and purification space, and all other equipment specified in the
Work Plan. The Suite will remain dedicated exclusively to the Project during the
term of this Agreement, including any extensions thereto.
3.2 Additional Equipment and Facility Modifications.
(a) Development Phase Equipment Purchases. The Parties acknowledge that
certain equipment must be obtained for the Development Phase, some of which will
be specified in the initial Work Plan and some of which will not be identifiable
when the initial Work Plan is adopted. During the Development Phase, XOMA shall
purchase for its own account and for delivery to the Facility, all equipment
that is to be dedicated to the Project during the Development Phase, as either
set forth in the Work Plan or approved in writing in advance by Onyx, which
approval shall not be unreasonably withheld. Onyx will reimburse XOMA for such
equipment purchases pursuant to Section 6.3. If such equipment is not used for
the Project or for other Onyx products, then upon the Parties' mutual agreement,
either XOMA will transfer the equipment to Onyx at [*], or XOMA will reimburse
Onyx for the equipment at its [*], but if the Parties do not reach agreement
within thirty (30) days, XOMA will transfer the equipment to Onyx at [*]. Onyx
will pay any costs of the physical transfer of such equipment to Onyx.
(b) Manufacturing Phase Equipment Purchases. Before production of the first
batch of ONYX-015 at Commercial Scale in accordance with Section 4.2(a), it may
be necessary to obtain additional equipment dedicated to the Project for
manufacture of clinical and commercial supplies of ONYX-015 at Commercial Scale
(e.g. replacement columns). XOMA will purchase for its own account and for
delivery to the Facility any such additional dedicated equipment for the Project
during the Manufacturing Phase, as either set forth in the Work Plan or as
approved in advance in writing by Onyx, which approval shall not be unreasonably
withheld. Onyx will reimburse XOMA for such equipment purchases pursuant to
Section 6.3.
(c) Suite Modifications. As set forth in the Work Plan or upon prior
approval of Onyx, XOMA will make modifications to the Suite required for the
Project, and Onyx will reimburse XOMA for the costs thereof pursuant to Section
6.3. XOMA shall exclusively own all such modifications to the Suite.
10.
3.3 Replacement Suite. On a one-time basis, XOMA may elect to give written
notice to Onyx that XOMA wishes to use the Suite for another product of XOMA or
a Third Party, and in the notice XOMA will in good faith represent that a bona
fide conflict exists for XOMA's manufacturing capacity. Within thirty (30) days
of receipt of such notice, Onyx may elect, at its sole option, to provide XOMA
with a one-time fee of [*], which is intended to defray some of the costs
associated with the construction of a suite reasonably comparable to the Suite
and suitable for cGMP manufacturing within the Facility for the purpose of
accommodating a XOMA or Third Party product. If Onyx provides such a fee to
XOMA, then either (i) XOMA will, within [*] of receipt of such fee, select the
site for such suite and prepare drawings for such suite that are approved by
responsible management and are suitable for preparation of schematics for such
suite, and will otherwise complete such additional suite as quickly as
reasonably practicable, or (ii) XOMA will promptly refund the [*] fee to Onyx.
If Onyx does not elect to provide XOMA with the one-time [*] fee within the
above-referenced thirty (30) day period, XOMA may terminate this Agreement upon
at least [*] months prior written notice pursuant to Section 11.2(b).
3.4 Compliance Audit. XOMA acknowledges that, promptly following the
Effective Date, Pfizer representatives will perform a regulatory compliance
audit of the Suite and the Facility for purposes of this Agreement, and XOMA
will provide access during reasonable business hours to Pfizer and Onyx
representatives for such purpose and will otherwise reasonably cooperate with
such audit. If Pfizer identifies any deficiencies in either the Facility or XOMA
manufacturing processes, XOMA will take any corrective measures reasonably
requested by Pfizer and approved by Onyx, at Onyx's cost. XOMA will similarly
cooperate with a reasonable number of future regulatory compliance audits by
Onyx or Onyx Partners at a reasonable frequency; provided, however, that if XOMA
does not approve of such Onyx Partner in writing in advance (such approval not
to be unreasonably withheld), a mutually agreed Third Party shall conduct such
audit. Prior to any audit under this Section 3.4, the applicable representatives
will enter into XOMA's standard form of confidentiality agreement, which will be
commercially reasonable and will permit such representatives to disclose the
audit results to Onyx and the applicable Onyx Partner.
4. TECHNOLOGY TRANSFER, SCALE-UP, PURIFICATION AND PROCESS DEVELOPMENT.
4.1 Manufacturing Technology Transfer to XOMA. The Parties have initiated
under the Letter Agreement, and will continue and complete as quickly as
practicable, the transfer of all relevant technology for the manufacture of
ONYX-015 at Development Scale from Onyx and its Third Party manufacturers to
XOMA.
11.
4.2 Scale-up of Manufacture.
(a) Establishment of Commercial Scale. In accordance with the Work Plan and
as quickly as reasonably practicable, XOMA will scale up the manufacturing scale
for Drug Substance to Commercial Scale, including, without limitation,
performing process development work to improve the manufacturing process for
Drug Substance that is transferred to XOMA pursuant to Section 4.1, increasing
of the Drug Substance Yield, and addressing FDA expectations for quality (i.e.,
purity and potency). The goal of such efforts will be the production of the
first Batch at Commercial Scale of Drug Substance that meets Specifications and
that results in an overall Drug Substance Yield of at least [*] (which Yield
level will not be deemed pursuant to this Section 4.2(a) to be a Specification).
This minimum Yield percentage of [*] is an estimate based on production at the
[*]L fermentation bioreactor scale, and it is subject to confirmation and
mutually agreed good faith adjustment by the Parties based upon initial
manufacturing runs at Development Scale.
(b) Additional Registration Batches. In accordance with the Work Plan and
as quickly as reasonably practicable after production of the initial Batch at
Commercial Scale pursuant to Section 4.2(a), XOMA will (i) manufacture a minimum
of an additional [*] Batches at Commercial Scale with a Yield of at least [*]
(as such Yield level may be adjusted pursuant to Section 4.2(a), and which Yield
level will not be deemed pursuant to this Section 4.2(b) to be a Specification)
that meet then-current Specifications in compliance with cGMP, as required to
support the preparation and filing of appropriate documentation with FDA and
other Regulatory Authorities to permit the use of these Batches and additional
Batches manufactured at Commercial Scale for human clinical trials, and (ii)
lock-down such scaled-up manufacturing process for Drug Substance for purposes
of filing a BLA for ONYX-015 product. Successful manufacture of such [*] Batches
at Commercial Scale and the related lock-down set forth in Sections 4.2(a) and
4.2(b)(i) and (ii) collectively shall constitute "Attainment of Commercial
Scale". Onyx, in consultation with XOMA, will use data from at least [*]
Commercial Scale Batches to finalize the Specifications consistent with FDA
expectations for purity, potency and other ONYX-015 product characteristics.
(c) Non-Attainment of [*]L Scale. If either Party believes that it will not
be commercially feasible to attain and implement the [*]L nominal volume
fermentation bioreactor production scale for the ONYX-015 manufacturing process,
the Parties will consult in good faith as to the feasibility of attaining such
manufacturing scale. If Onyx, acting in good faith, determines that it is not
commercially feasible to attain such [*]L scale, it may select the [*]L
Development Scale as the Commercial Scale for the ONYX-015 manufacturing process
for purposes of the filing of
12.
the BLA for ONYX-015, and the Parties will agree in good faith on an equitable
adjustment of the price to be paid by Onyx for each Batch at such revised
Commercial Scale. Furthermore, XOMA will have no obligation to produce more than
[*] Batches per calendar year at such [*]L Commercial Scale, but the Parties
will negotiate in good faith if Onyx desires Batches in excess of the [*]
Batches per calendar year to be provided pursuant to this Section 4.2(c).
4.3 Production at Development Scale. Concurrent with scale-up work pursuant
to Section 4.2 and as quickly as reasonably practicable, XOMA will manufacture
according to cGMP [*] Batches of Drug Substance at Development Scale that meet
Specifications, in accordance with the Work Plan. XOMA will retain a portion of
such Batches agreed to by the Parties for scale-up work pursuant to Section 4.2,
and Onyx will receive at least half of each such Batch for purposes of (i)
satisfying Onyx and Pfizer's projected needs for a working supply bank of active
ONYX-015 virus and for ONYX-015 supplies for critical clinical trials, (ii)
supporting the preparation and filing of appropriate documentation (e.g. a Drug
Master File or any new or amended INDs for ONYX-015 that Onyx or an Onyx Partner
may file), and/or (iii) supporting any BLA that Onyx or Pfizer may file for
ONYX-015. The Parties will consult as to Onyx's additional needs for Development
Scale Batches, based on its needs for the purposes set forth in this Section
4.3, and XOMA will consider in good faith any requests by Onyx for such
additional production of Drug Substance at Development Scale, with any
production to be included in the Work Plan only upon the Parties' mutual
agreement. If XOMA produces any additional Development Scale Batch pursuant to
this Section 4.3, then: (i) the Parties will agree upon an extension of the
timeframes in Section 11.3(a) pursuant to which Onyx may terminate this
Agreement without penalty; and/or (ii) the Parties will agree upon an extension
of the period during which XOMA will manufacture the guaranteed minimum number
of Batches so as to permit XOMA to recapture its economic benefits as
contemplated in this Agreement.
5. CLINICAL AND COMMERCIAL SUPPLY; REGULATORY MATTERS.
5.1 Raw Materials Services; In-Process Testing. After production of the
first Commercial Scale Batch of Drug Substance in accordance with Section
4.2(a), XOMA will provide in accordance with the Work Plan and cGMP, all
ordering, testing, inventorying and releasing services for all raw materials
used in the manufacture of Drug Substance under this Agreement and full
in-process testing for continued manufacture of Drug Substance under this
Agreement. Except for banks of ONYX-015 and host cells reasonably required by
XOMA, XOMA shall obtain all raw materials (e.g. resins, buffers, media, etc.)
for manufacture of Drug Substance un-
13.
der this Section 5, and Onyx shall not be responsible for the purchase of any
such raw materials.
5.2 Minimum Batch Manufacture. Following Attainment of Commercial Scale,
XOMA will manufacture additional Batches of Drug Substance that comply with the
warranties in Section 8.1(a) as follows, subject to Section 4.2(c).
(a) First Year. Subject to Sections 5.2(c) and (d), during the first twelve
(12) months following Attainment of Commercial Scale, in addition to the [*]
registration Batches described in Section 4.2, XOMA will manufacture and supply
to Onyx, and Onyx will order and purchase, a guaranteed minimum of [*] Batches
at Commercial Scale.
(b) Subsequent Years. Subject to Sections 5.2(c) and (d), XOMA will
manufacture and supply to Onyx, and Onyx will order and purchase, a guaranteed
minimum of [*] Batches at Commercial Scale during each twelve (12) month period
during the term of this Agreement (including without limitation any term
extensions pursuant to Section 11.1), commencing on an anniversary of the
Attainment of Commercial Scale, or, for any period of less than twelve (12)
months at the end of such term, a number of Batches equal to [*] multiplied by a
fraction equal to the number of months in such remaining period divided by 12,
with any fraction to be rounded up or down to the nearest whole number and
fractions of 0.5 to be rounded up to the next whole number.
(c) Additional Batches. XOMA will fulfill purchase orders submitted by Onyx
in accordance with Section 5.3 for Batches in excess of Onyx's minimum
commitments pursuant to this Section 5.2, up to a maximum of the normal and
commercially reasonable capacity of the Suite (which the Parties agree is at
least [*] Batches per year).
(d) Reductions in Minimum Batch Commitments. Onyx shall have the right
during the term of the Agreement, as it may be extended pursuant to Section
11.1, upon at least six (6) months written notice and upon payment of a fee of
[*] of the per-Batch charge as calculated pursuant to Section 6.6, to reduce the
minimum Batch commitment under Section 5.2(a) by up to [*] Batches, and to
reduce the minimum Batch commitment under Sections 5.2(b) by up to [*] Batches
per year; provided, however, that Onyx may not cancel any firm order except
pursuant to Section 5.3(c).
14.
(e) Increases in Capacity for Drug Substance Manufacture. If Onyx
determines that the Suite has insufficient capacity for the manufacture of Drug
Substance at Commercial Scale, in light of Onyx and any Onyx Partner's needs for
ONYX-015 product, and Onyx desires that XOMA supply such additional needs, it
will so notify XOMA, and the Parties will negotiate in good faith to attempt to
reach an agreement, the purpose of which would be for XOMA to manufacture Drug
Substance to fulfill Onyx's needs for additional Drug Substance.
5.3 Orders and Supply.
(a) General. During the term of this Agreement, for each Batch of Drug
Substance that XOMA is to supply to Onyx, Onyx will provide XOMA with a firm,
non-cancelable (except as permitted in Section 5.3(c)) purchase order for each
Batch at least nine (9) months before the exact date it wishes such Batch to be
delivered by XOMA (the "Delivery Date"), which Delivery Date shall be specified
in the purchase order.
(b) Purchase Orders. Any purchase order for Drug Substance that Onyx
submits shall reference this Agreement and shall be governed exclusively by the
terms contained in this Agreement. Any term or condition in any order,
confirmation or other document furnished by Onyx or XOMA which is in any way
inconsistent with the terms and conditions of this Agreement is hereby expressly
rejected.
(c) Cancellations. Subject to Onyx's minimum order and purchase obligations
under Section 5.2, Onyx may cancel any purchase order for Drug Substance before
XOMA begins manufacture of such Batch by providing XOMA written notice. For any
purchase order in excess of Onyx's minimum obligations under Section 5.2, if
Onyx cancels any order for Drug Substance, Onyx shall pay to XOMA as a
cancellation fee [*] (i) of the costs of the raw materials acquired or used in
contemplation of fulfilling such order, and (ii) of other costs reasonably
incurred by XOMA that would have been included in the standard manufacturing
cost therefor had such manufacture been completed, in each case that are
incurred up to the time of receipt of such notice. Onyx may change, by up to two
(2) weeks, the Delivery Date for a Batch for which manufacture has commenced.
(d) Rescheduling. Subject to Onyx's minimum order and purchase obligations
under Section 5.2, for any Batch for which XOMA has not commenced manufacture,
Onyx may reschedule a Delivery Date by written
15.
notice to XOMA. For any Batch for which XOMA has commenced manufacture, Onyx may
reschedule a Delivery Date by up to two (2) weeks by written notice to XOMA.
5.4 Commercial Supply Forecast. On or before [*], Onyx will provide XOMA
with a non-binding written [*] year forecast by calendar quarter of Onyx's or
any Onyx Partner's anticipated orders for Drug Substance, based upon demand for
clinical trials and commercial sales and upon reasonably anticipated dates for
issuance of Regulatory Approvals for the ONYX-015 product and launch dates
therefor. This forecast shall be for facility planning purposes only and shall
not constitute an order. Onyx will update this forecast on a calendar quarterly
basis.
5.5 Delivery. Unless otherwise agreed by the parties in writing, on or
prior to the applicable Delivery Date XOMA will deliver each Batch of Drug
Substance FCA free carrier the Facility (Incoterms 2000), along with quality
control samples and copies of Batch production records. XOMA will ship each such
Batch to a destination for further fill-and-finish manufacturing and will
provide such samples and copies of Batch production records to Onyx or its
designee, in each case as specified by Onyx in the applicable purchase order.
XOMA will test each Batch of Drug Substance pursuant to Specifications and will
include with each Batch shipped a certificate of analysis confirming that such
Batch meets Specifications. XOMA will package and ship each Batch in accordance
with XOMA's customary practices for pharmaceutical compounds, unless otherwise
specified in the applicable purchase order.
5.6 Testing, Acceptance and Rejection.
(a) Onyx or its designee may test each Batch of Drug Substance within
thirty (30) days of receipt (the "Acceptance Period") for compliance with XOMA's
warranties in Section 8.1(a). By the end of the Acceptance Period, Onyx will
either accept such Batch or reject it for non-compliance with XOMA's warranties
in Section 8.1(a). Any such notice of rejection shall be in writing and shall
indicate the reasons for such rejection. If XOMA does not receive a notice of
rejection by the end of the Acceptance Period, Onyx shall be deemed to have
accepted such Batch. Once Onyx accepts a Batch, Onyx shall have no recourse
against XOMA if the product is subsequently deemed unsuitable for use for any
reason, except as provided in Sections 5.6(b) and (c) and 9.2.
(b) If, after accepting a Batch, Onyx subsequently discovers or learns of a
nonconformity with Specifications that could not reasonably be detected through
the inspection pursuant to Section 5.6(a) or a latent nonconformity arising
after inspection other than those caused by improper shipping, handling or
storage after delivery by XOMA, Onyx may
16.
revoke its acceptance of such Batch by giving written notice to XOMA of the
nonconformity within ten (10) days of discovering it.
(c) After Onyx gives a notice of rejection under Section 5.6(a) or
revocation of acceptance under Section 5.6(b), the Parties will cooperate to
determine whether rejection or revocation of acceptance was necessary or
justified. XOMA will evaluate process issues and other reasons for such
potential non-compliance. XOMA will notify Onyx as promptly as reasonably
possible whether it accepts Onyx's basis for any rejection or revocation of
acceptance. If the Parties disagree whether the Batch did not comply with the
warranties in Section 8.1(a), the Parties will submit a sample of such Batch and
applicable documentation to a mutually acceptable independent Third Party
laboratory, which shall make a final and binding determination as to whether
such Batch conforms with the warranties in Section 8.1(a) and thereby as to
whether Onyx's rejection or revocation of acceptance of such Batch was
justified. The Party against whom the Third Party laboratory rules shall bear
all costs of the Third Party testing.
(d) If at the time of Onyx's rejection or revocation of acceptance of a
Batch pursuant to this Section 5.6 the Parties do not agree whether such
rejection or revocation of acceptance was justified under this Section 5.6, XOMA
will use commercially reasonable efforts at Onyx's request to replace such Batch
under appropriate lead times, or, if approved by Onyx, to rework such Batch so
as to comply with the warranties in Section 8.1(a). If the Third Party
laboratory rules pursuant to Section 5.6(c) that a rejected Batch complied with
the warranties in Section 8.1(a), Onyx will purchase the Batch and any
replacement Batch at the price set in this Agreement.
(e) Onyx shall maintain any Batch that it has rejected or for which it has
revoked acceptance until a final determination as to whether there is a
non-conformity with the warranties in Sections 8.1(a), as agreed by the Parties
or as shown by a written notice to that effect from a Third Party laboratory
pursuant to Section 5.6(c). At XOMA's written request, Onyx shall either destroy
any finally-rejected Batch promptly at XOMA's cost and provide XOMA with
certification of such destruction, or promptly return said Batch to XOMA, at
XOMA's cost.
5.7 Regulatory Changes. The Parties will promptly notify each other of any
material revisions or amendments of or additions to cGMP and will confer with
each other with respect to the best means to comply with such requirements. The
Parties will allocate any costs of implementing any such agreed changes on an
equitable basis, with Onyx being responsible for costs of implementation of
changes required as a direct result of ONYX-015 being manufactured at the
Facility and XOMA being responsible for costs of implementation of changes
required generally for cGMP manufacture
17.
at the Facility irrespective of the manufacture of ONYX-015, with appropriate
adjustments for any benefits received by the Party not responsible for such
costs.
5.8 Change in Manufacturing Process. XOMA shall obtain Onyx's prior written
approval before it implements any change in the materials, equipment, process or
procedures used to manufacture Drug Substance that would constitute a major
change under cGMP.
5.9 Samples. XOMA shall retain samples of Drug Substance for each Batch for
a period of one (1) year after the expiration date for such Batch. The sample
size shall be twice the size necessary to conduct quality control testing. Upon
Onyx's written request, XOMA shall provide Onyx with up to one-half the original
amount of the retained samples.
5.10 Regulatory Matters. Upon Onyx's or an Onyx Partner's decision to file
a BLA for ONYX-015 with the FDA or Regulatory Authorities in other countries,
and upon Onyx's request, XOMA will, in accordance with the applicable regulatory
requirements, conduct the following activities with respect to the manufacture
by XOMA of Drug Substance at the Suite: (i) conduct process validation work in
support of such BLA(s), (ii) prepare the appropriate portions of such BLA(s)
relating to manufacture of Drug Substance (e.g. the CMC section) and other
appropriate documentation (e.g., an FDA Drug Master File), (iii) provide Onyx
with necessary or reasonably useful rights of reference to such filings, (iv) in
coordination with Onyx, take appropriate responsibility for the filing and
ongoing support of such portions of the BLA(s), including without limitation
regulatory compliance audits and facilities inspections by Onyx (e.g., mock
audits and inspections) and by the FDA and other Regulatory Authorities, and (v)
provide all other reasonable assistance to Onyx in obtaining Regulatory
Approvals for ONYX-015 Products. XOMA will be compensated for such efforts
pursuant to Section 6.4(c). In addition, upon Onyx's request, XOMA will consider
in good faith providing Onyx with additional assistance for regulatory filings
for ONYX-015 with respect to the manufacture of ONYX-015 at other facilities,
subject to its available resources and commitments, provided that in no event
will XOMA be obligated to provide such assistance. Onyx shall be responsible for
all other filings necessary for issuance of Regulatory Approvals for ONYX-015
products.
6. PRICES AND PAYMENT.
6.1 Upfront Payment. Onyx shall pay XOMA [*] within ten (10) days of the
Effective Date by wire transfer of immediately available funds to an account
designated by XOMA.
18.
6.2 Space Fee. Beginning with the calendar quarter commencing [*] and until
production of the first registration Batch at Commercial Scale pursuant to
Section 4.2(a), Onyx shall pay XOMA a dedicated space fee for the Suite of [*]
per calendar quarter, payable on a calendar quarterly basis in advance by wire
transfer of immediately available funds to an account designated by XOMA. After
the calendar quarter in which such first registration Batch is supplied to Onyx,
no further dedicated space fee shall be payable.
6.3 Equipment and Facility Reimbursement. Onyx will reimburse XOMA [*] of
the cost of equipment purchased pursuant to Sections 3.2(a) or (b) and of
facility modifications made pursuant to Section 3.2(c) after receipt of each
invoice for such costs.
6.4 Personnel Costs.
(a) Development Phase. For work performed under this Agreement by XOMA
staff (including technical development, manufacturing, operations, quality
control, quality assurance, regulatory affairs, and other appropriate staff)
during the Development Phase, through the completion of the first registration
Batch pursuant to Section 4.2(a) but not beyond, and for any technology transfer
work pursuant to Section 7.1(a), Onyx shall pay [*] of XOMA's fully burdened
staffing costs, [*] (collectively, "Fully Burdened Staffing Costs"). Onyx will
pay such costs on a calendar quarterly basis in arrears upon presentation of an
invoice from XOMA with a summary of supporting information from XOMA's project
cost system.
(b) Manufacturing Phase. After completion of the first registration Batch
pursuant to Section 4.2(a), XOMA will cover all costs for ongoing manufacture of
Drug Substance by the per-Batch charge (as calculated in Section 6.6) for
Batches of Drug Substance meeting the Specifications produced at Commercial
Scale.
(c) Regulatory Work. For work performed under this Agreement by XOMA
personnel to (a) prepare and submit regulatory filings to enable Drug Substance
manufactured and supplied by XOMA to Onyx to be used in human clinical trials,
(b) carry out process validation work in connection with any potential or actual
BLA filing for ONYX-015 products, (c) prepare BLAs and other documentation
appropriate for obtaining Regulatory Approvals for ONYX-015 products, and (d)
cooperate with Onyx in the filing and ongoing support of such BLAs, Onyx shall
pay [*] of XOMA's Fully Burdened Staffing Costs. Onyx will pay such costs on a
calendar quarterly basis in arrears
19.
upon presentation of an invoice with a summary of supporting information from
XOMA's project cost system.
(d) Post-Termination or -Expiration Technology Transfer. Onyx shall pay [*]
of XOMA's Fully Burdened Staffing Costs for technology transfer work pursuant to
Section 7.1(b).
6.5 Milestone Payments. Within thirty (30) days of the achievement of each
milestone set forth in this Section 6.5, Onyx will pay to XOMA the applicable
milestone payment by wire transfer of immediately available funds to an account
designated by XOMA. Other than milestones for additional Yield improvements
pursuant to Section 6.5(b), no milestone payment will be payable more than once.
(a) Initial Commercial Scale Batch Meeting Specifications and with Adequate
Yield. Upon production of the initial Batch at the [*]L Commercial Scale in
compliance with Specifications and cGMP with the required minimum Yield pursuant
to Section 4.2(a), Onyx will pay to XOMA a milestone payment of [*].
(b) Yield Improvements. For each increase of [*] percentage points in
manufacturing Yield in excess of [*] Yield (as such Yield level may be adjusted
pursuant to Section 4.2(a)), as calculated at the completion of the first [*]
Batches of Drug Substance at [*]L Commercial Scale that comply with the
warranties in Section 8.1(a) pursuant to Sections 4.2(a) and (b), Onyx will pay
to XOMA a milestone payment of [*]. Increases in Yield must be evidenced by the
average Yield of the [*] Batches of Drug Substance (or, if the Yield for one
Batch differs by at least [*] percentage points from the average Yield of the
other [*] Batches, the average Yield of such [*] Batches and the next Batch at
Commercial Scale that complies with the warranties in Section 8.1(a)) at or in
excess of [*] Yield (as so adjusted).
For purposes of example:
If [*] consecutive Batches result in Yields of [*], respectively, XOMA will
have earned an aggregate milestone payment of [*], as there has been a
demonstrated Yield improvement of [*] percentage points, which is equal to [*]
increments of [*] percentage points so that XOMA would receive [*] milestone
payments of [*].
If [*] consecutive Batches result in Yields of [*], respectively, and a [*]
Batch results in a Yield of [*], the [*] Batch would be disregarded, and XOMA
will have earned an aggre-
20.
gate milestone payment of [*] based upon the other [*] Batches, as there has
been a demonstrated Yield improvement of [*] percentage points, which is equal
to [*] increments of [*] percentage points so that XOMA would receive [*]
milestone payments of [*].
Milestone payments for Yield improvements under this Section 6.5(b) shall
be payable only once for each [*] percentage points of Yield improvement.
(c) Regulatory Approval for Facility. Upon licensure by the FDA of ONYX-015
for manufacture of Drug Substance by XOMA at the Facility, Onyx will pay to XOMA
a milestone payment of [*].
6.6 Commercial Scale Batch Payments.
(a) Batch Price. For each Batch produced pursuant to Sections 4.2(b),
5.2(a) or 5.2(b), Onyx will pay to XOMA an amount equal to [*]. For clarity,
Onyx shall not be obligated under this Section 6.6(a) to pay for the Batch of
Drug Substance produced by XOMA pursuant to Section 4.2(a), as Onyx will
compensate XOMA for its facilities, materials and labor costs for that Batch
during the Development Phase pursuant to Sections 6.2 and 6.4.
(b) Additional Batches. If Onyx requests pursuant to Section 5.2(c) that
XOMA manufacture additional Batches of Drug Substance in addition to the minimum
annual Batch commitment in Sections 5.2(b), XOMA will charge Onyx for these
additional Batches at [*] of XOMA's standard manufacturing cost therefor, plus
an amount equal to [*] of the difference between [*] and [*] of such standard
manufacturing costs (provided that such number is equal to or less than [*]),
but in no event will XOMA charge Onyx, or Onyx be obligated to pay, any amounts
for such Batches in excess of the per-Batch charge to Onyx set forth in this
Section 6.6(b), as adjusted pursuant to Section 6.6(c).
For purposes of example:
If XOMA's standard manufacturing costs for an additional Batch were [*],
then Onyx would pay [*] for such Batch, calculated as follows:
[*];
and
21.
if XOMA's standard manufacturing costs for an additional Batch were [*],
then Onyx would pay [*] for such Batch, because [*], which exceeds [*].
(c) Adjustments. The per-Batch fee of [*], as adjusted pursuant to this
Section 6.6(c), may be increased annually beginning in calendar year 2001 by the
percentage increase in XOMA's costs for materials, salaries and operations
relating to manufacture of Drug Substance, relative to such costs in effect for
December 31, 2000, as shown by reasonably acceptable documentation, up to a
maximum of [*] in any one calendar year.
(d) Additional Orders at Commercial Scale. After Attainment of Commercial
Scale, for each Batch of Drug Substance manufactured by XOMA at Commercial Scale
pursuant to Section 5.2 that, by the Parties' agreement or by determination
pursuant to Section 5.6(c), does not comply with XOMA's warranties in Section
8.1(a), at Onyx's election the Parties will negotiate in good faith to attempt
to reach agreement on a price at which XOMA will sell such Batch to Onyx for
purposes other than use in humans.
6.7 Payment. All payments to be made under this Agreement shall be made in
United States dollars in the United States to a bank account designated by the
party to be paid. Invoices shall be due and payable upon receipt, and all
properly invoiced amounts not paid within thirty (30) days of receipt of the
invoice shall accrue interest at a rate equal to the lesser of prime rate as
posted by Citibank, N.A., plus two percent (2%), or the highest interest rate
permitted under applicable law.
6.8 Records. XOMA will keep accurate books and accounts of record in
connection with the manufacture, use and/or sale by it of Drug Substance
hereunder in sufficient detail to permit accurate determination of all figures
necessary for verification of payment obligations set forth in this Section 6.
Such records shall be maintained for a period of three (3) years (or for a
particular year upon notice from Onyx prior to the end of such 3 year period,
four (4) years) from the end of each year in which sales occurred or expenses
were incurred. Onyx, at its expense, through a certified public accountant,
shall have the right to access such books and records for the sole purpose of
verifying the reports regarding amounts due; such access shall be conducted
after reasonable prior notice by Onyx during XOMA's normal business hours and
shall not be more frequent than once during each calendar year. Said accountant
shall not disclose to Onyx or any other party any information except that which
should properly be contained in an expense report required under this Agreement.
If such accounting determines that XOMA's error resulted in Onyx paying more
than properly due in respect of any Batch or calendar quarter, then XOMA will
promptly reimburse such amount, and if the amount of such excess payment was at
least five percent
22.
(5%) of the amount properly due, XOMA will promptly reimburse Onyx for the costs
of such accounting (including the fees and expenses of the certified public
accountant). If such accounting determines that XOMA's error resulted in Onyx
paying less than properly due in respect of any Batch or calendar quarter, then
Onyx will promptly pay the amount of underpayment.
6.9 Taxes Withheld. Any income or other tax that one Party hereunder, its
Affiliates or sublicensees is required to withhold (the "Withholding Party") and
pay on behalf of the other Party hereunder (the "Withheld Party") with respect
to amounts payable under this Agreement shall be deducted from and offset
against said amounts prior to remittance to the Withheld Party; provided,
however, that in regard to any tax so deducted, the Withholding Party shall give
or cause to be given to the Withheld Party such assistance as may reasonably be
necessary to enable the Withheld Party to claim exemption therefrom or credit
therefor, and in each case shall furnish the Withheld Party proper evidence of
the taxes paid on its behalf. The Withholding Party shall comply with reasonable
requests of the Withheld Party to take any proper actions that may minimize such
withholding obligation.
7. TECHNOLOGY AND INFORMATION.
7.1 Technology Transfer.
(a) Periodic Updates. On a calendar quarterly basis, each Party will
provide to the other Party written copies of all Project Innovations known to
the first Party not previously disclosed to the other Party. Onyx will reimburse
XOMA for the costs of XOMA representatives for such technology transfer work
pursuant to Section 6.4(a). Onyx shall be entitled to maintain and use such
documents within the scope of its license in Section 7.3(c) for itself, its
Affiliates, or Third Parties.
(b) Expiration, Termination or Upon Request. Upon expiration or termination
of this Agreement, or at any other time, at Onyx's request XOMA will carry out
the technical transfer to Onyx and/or Third Parties designated by Onyx of the
process and technology used to manufacture and test Drug Substance under this
Agreement. In connection with such technical transfer, upon reasonable notice
XOMA will permit reasonable access to the Suite during normal business hours to
representatives of Onyx or its Third Party designees reasonably acceptable to
XOMA to learn about the relevant process and technology. Prior to obtaining
access, such representatives will enter into XOMA's standard form of
confidentiality agreement, which will be commercially reasonable and will permit
such representatives to disclose infor-
23.
mation learned to Onyx and such Third Party. Onyx will reimburse XOMA for the
costs of XOMA personnel for such technology transfer work pursuant to Section
6.4(d).
7.2 Information.
(a) Documentation. Each Party shall maintain, in accordance with and for
the period required under cGMP and all other applicable laws, rules and
regulations, complete and adequate records pertaining to the methods and
facilities used for the cGMP manufacture, processing, testing, packing,
labeling, holding and distribution of Drug Substance so that the ONYX-015
products may be used in humans.
(b) Access. Onyx shall have unrestricted access during normal business
hours to copies of Batch records and any other documentation relating to
manufacture of Drug Substance by XOMA under this Agreement and shall be free,
subject to Section 10, to copy and use such documentation as reasonably required
for any normal regulatory or business use relating to ONYX-015 or ONYX-015
Derivatives.
(c) Audit of Records. No more than once per six (6) months, unless
otherwise required under applicable governmental law, rule, regulation or order,
upon at least thirty (30) days' advance request and during normal business
hours, Onyx shall have the right to inspect XOMA's records relating to the
manufacture of Drug Substance, including without limitation manufacturing,
quality control/quality assurance, and cost and financial records.
7.3 Licenses.
(a) Development and Manufacturing License to XOMA. Onyx hereby grants to
XOMA a non-exclusive, royalty-free, paid-up, non-transferable, non-sublicensable
license to practice Onyx Innovations, in each case solely to perform its
obligations under this Agreement, under all Intellectual Property Rights that
Onyx Controls that, but for the grant of the license in this Section 7.3(a),
would be infringed or misappropriated by XOMA's performance of such obligations.
(b) Project Innovations License to XOMA. Subject to the terms and
conditions of this Agreement, Onyx hereby grants to XOMA a non-exclusive,
worldwide, royalty-free, paid-up, non-transferable (except for sublicenses
permitted under this Section 7.3(b)) license, which shall be sublicensable only
to Third Parties (i) who are XOMA's collaboration partners (pursuant to a
24.
written agreement) for the development and/or commercialization of products and
(ii) the identity of whom XOMA has given prior written notice to Onyx, to
practice all Project Innovations at all XOMA facilities and the facilities of
such Third Parties for any purpose other than the research, development,
manufacture, or commercialization of any adenoviruses, under all Intellectual
Property Rights that Onyx Controls that, but for the grant of the license in
this Section 7.3(b), would be infringed or misappropriated by the practice of
Project Innovations in accordance with this Section 7.3(b).
(c) XOMA Innovations License to Onyx. Subject to the terms and conditions
of this Agreement, XOMA hereby grants to Onyx a non-exclusive, worldwide,
royalty-free, paid-up, non-transferable (except for assignments pursuant to
Section 12.6 and sublicenses permitted under this Section 7.3(c)) license, which
shall be sublicensable only to Onyx Partners, to make, have made, use, import,
offer for sale, sell and otherwise practice all XOMA Innovations used in the
manufacture of ONYX-015 under this Agreement, only for the purposes of
researching, developing, manufacturing and commercializing ONYX-015 and ONYX-015
Derivatives and products incorporating them, under all Intellectual Property
Rights that XOMA Controls that, but for the grant of the license in this Section
7.3(c), would be infringed or misappropriated by the manufacture, use, import,
offer for sale, sale or other practice of such XOMA Innovations in accordance
with this Section 7.3(c).
7.4 Ownership of Innovations and Intellectual Property.
(a) Third Party Technology. Prior to the application to the manufacturing
process for Drug Substance of any Innovation that, to the knowledge of any XOMA
Project Team member, is proprietary to any Third Party, XOMA will notify Onyx.
If Onyx objects to the use of any such Innovation, XOMA shall not apply it to
such process.
(b) Onyx Innovations. Subject only to the licenses in Section 7.3, Onyx
shall retain all right, title and interest in and to all Innovations that Onyx
either Controls as of the Effective Date or gains Control of independently of
activities under this Agreement (collectively, "Onyx Innovations"), and all
Intellectual Property Rights arising therefrom.
(c) XOMA Innovations. Subject only to the licenses in Section 7.3, XOMA
shall retain all right, title and interest in and to all Innovations that XOMA
either Controls as of the Effective Date or gains Control of
25.
independently of activities under this Agreement, and all Intellectual Property
Rights arising therefrom ("XOMA Innovations").
(d) Project Innovations.
(i) All Innovations made, conceived, reduced to practice, authored, or
otherwise generated or developed in whole or in part in the course of activities
under this Agreement shall be "Project Innovations". Inventorship of discoveries
or inventions included within Project Innovations and authorship of works of
authorship included within Project Innovations shall be determined in accordance
with the patent and copyright laws of the United States of America,
respectively.
(ii) Without further payment to XOMA, Onyx shall own all right, title and
interest in and to all Project Innovations, whether made, conceived, reduced to
practice, authored, or otherwise generated or developed solely by XOMA
personnel, solely by Onyx personnel, or jointly by XOMA and Onyx personnel, and
all Intellectual Property Rights arising therefrom. XOMA will, and hereby does,
assign to Onyx all of its right, title and interest in and to Project
Innovations and Intellectual Property Rights arising therefrom. XOMA will
provide reasonable assistance to Onyx, at Onyx's expense, in obtaining and
enforcing and defending Onyx's ownership of the Project Innovations and
appurtenant Intellectual Property Rights, including without limitation and as
applicable, the assignment to Onyx of all their right, title and interest of its
employees or independent contractors in and to such Project Innovations and
appurtenant Intellectual Property Rights.
7.5 Patenting of Project Innovations. Onyx will have first right, but not
the obligation, to control the preparation, filing and prosecution of Patents
claiming Project Innovations and of maintenance of Patents issuing thereon. Onyx
will promptly provide XOMA with copies of Patents filed with any governmental
entity. With respect to any Project Innovation that is potentially patentable,
XOMA may request in writing that Onyx take specific, reasonable actions to (i)
prepare, file or prosecute Patents claiming such Project Innovation, in a
particular country, (ii) maintain any Patents issued that claim a Project
Innovation, and/or (iii) protect against abandonment of a Patent that claims a
Project Innovation. If such actions are not undertaken within sixty (60) days of
Onyx's receipt of such written request (or if sooner, such time as applicable
patent rights would be lost due to passage of time) and timely pursued
thereafter, Onyx will permit, and XOMA at its option and expense may undertake,
such actions. The Party not undertaking such actions shall reasonably cooperate
with the other Party at such other Party's cost and shall provide to the other
Party whatever assignments and other documents that may be needed in connection
therewith. The Party undertaking such actions will be fully responsible for the
costs and expenses of such actions.
26.
7.6 Infringement of Patents.
(a) Each Party shall promptly notify the other Party of any infringement,
misappropriation or other unauthorized use of an Intellectual Property Right
licensed under this Agreement in the field of the development, manufacture, use
and/or sale of adenoviruses that comes to such Party's attention. The notice
shall set forth the facts of such infringement in reasonable detail. Onyx shall
have the sole right, but not the obligation, to institute, prosecute, and
control, at its expense, any action or proceeding against the Third Party
infringer of a Patent claiming a Project Innovation. If Onyx institutes an
action against such infringer, XOMA will give Onyx reasonable assistance and
authority to control, file, and prosecute the suit as necessary at Onyx's
expense. Onyx shall retain any damages or other monetary awards that it recovers
in pursuing any action under this Section 7.6(a).
(b) Each Party has the sole right to enforce any Intellectual Property
Rights that it Controls.
8. REPRESENTATIONS AND WARRANTIES; DISCLAIMERS.
8.1 Drug Substance Warranties and Remedy.
(a) Warranties. XOMA warrants that for any Batch of Drug Substance
delivered pursuant to Section 5.5: (i) XOMA will manufacture the Batch in
accordance with cGMP and other applicable laws and FDA and Regulatory Authority
rules and regulations; (ii) the Batch will conform to the Specifications at the
time of delivery pursuant to Section 5.5, (iii) such Batch will not be
adulterated or misbranded within the meaning of the FD&C Act, and (iv) it is
providing title to such Batch to Onyx free and clear of any encumbrances. Onyx's
sole remedies and XOMA's entire liability with respect to this warranty are set
forth in Sections 5.6, 8.1(b), and 9.2. The warranties in this Section 8.1(a)
are the only warranties made by XOMA with respect to Batches delivered under
this Agreement and may only be modified or amended by a written instrument
signed by a duly authorized officer of XOMA and accepted by Onyx.
(b) Remedy. If any Batch delivered by XOMA pursuant to Section 5.5 is not
in compliance with the warranties in Section 8.1(a) and Onyx properly rejects or
revokes acceptance for such Batch pursuant to Section 5.6, XOMA will, at Onyx's
sole option, either (i) replace or rework such Batch as promptly as reasonably
practicable with no additional cost to Onyx, or, (ii) if XOMA has acknowledged
in writing that it is technically unable to produce Drug Substance in conformity
with then-current Speci-
27.
fications, XOMA will refund any sums actually paid therefor by Onyx. The remedy
of replacement or refund is available only if such nonconformance was not caused
by Onyx's neglect, improper testing or improper storage, including without
limitation storage at inappropriate temperatures, transportation, use beyond any
dating provided, by accident, fire or other hazard.
8.2 General Representations and Warranties. Each Party hereby represents
and warrants to the other Party that:
(a) Corporate Existence and Power. It is a corporation (in the case of
Onyx) or a limited liability company (in the case of XOMA) duly organized,
validly existing and in good standing under the laws of the state in which it is
incorporated or organized, as applicable, and has full corporate or company
power and authority and the legal right to own and operate its property and
assets and to carry on its business as it is now being conducted and as
contemplated in this Agreement, including, without limitation, the right to
grant the licenses granted hereunder.
(b) Authority and Binding Agreement. As of the Effective Date, (i) it has
the corporate or company power and authority and the legal right to enter into
this Agreement and perform its obligations hereunder; (ii) it has taken all
necessary corporate or company action on its part required to authorize the
execution and delivery of the Agreement and the performance of its obligations
hereunder; and (iii) the Agreement has been duly executed and delivered on
behalf of such Party, and constitutes a legal, valid and binding obligation of
such Party and is enforceable against it in accordance with its terms.
(c) Title. As of the Effective Date, it has sufficient legal and/or
beneficial title under its Intellectual Property Rights necessary to perform
activities contemplated under this Agreement and to grant the licenses that it
is obligated to grant under this Agreement.
8.3 Warranty Disclaimer. THE REPRESENTATIONS AND WARRANTIES IN SECTIONS
8.1(a) AND 8.2 ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS, IMPLIED, OR
STATUTORY, AND EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL OTHER WARRANTIES,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, NON-INFRINGEMENT, TITLE, CUSTOM OR TRADE.
28.
9. INDEMNIFICATION; LIMITATION OF LIABILITY.
9.1 Onyx Indemnity. Onyx will indemnify, hold harmless and defend XOMA and
its Affiliates and their respective directors, officers, employees and agents
(the "XOMA Indemnitees") from and against any and all losses, claims, suits,
losses, damages, costs, fees and expenses (including without limitation
reasonable attorneys' fees) (collectively, "Losses") resulting from any Third
Party claim, demand, suit, action or proceeding ("Third Party Claim") to the
extent arising out of (a) any breach of Onyx's representations or warranties in
Section 8.2; (b) the Specifications; (c) the use (including without limitation
in human clinical trials), further manufacture or modification, transport,
storage, handling, possession, distribution, marketing, or disposal of the Drug
Substance after delivery by XOMA pursuant to Section 5.5, except for Drug
Substance that Onyx properly rejects or for which it properly revokes acceptance
pursuant to Section 5.6; (d) any infringement or misappropriation of Third Party
Intellectual Property Rights that is a result of the use or practice in
accordance with this Agreement of the manufacturing process for ONYX-015 as
transferred to XOMA pursuant to Section 4.1; or (e) any willful misconduct by
any Onyx Indemnitee with respect to Onyx's activities under this Agreement; in
each foregoing case provided both that XOMA provides Onyx with prompt notice of
any such Third Party Claim and the exclusive ability to defend (with the
reasonable cooperation of XOMA) or settle any such Third Party Claim and that
XOMA reasonably cooperates in the defense and/or settlement of such Third Party
Claim at Onyx's expense and request.
9.2 XOMA Indemnity. XOMA agrees to indemnify, hold harmless and defend Onyx
and its Affiliates and their respective directors, officers, employees and
agents (the "Onyx Indemnitees") from and against any and all Losses resulting
from any Third Party Claim to the extent arising out of (a) any breach of XOMA's
representations or warranties in Sections 8.1(a) or 8.2; (b) XOMA's
transportation, storage, use, handling or disposal of hazardous materials used
in or generated by XOMA's activities under this Agreement (excluding the Drug
Substance); (c) any personal injury arising from performance of this Agreement
by XOMA; or (d) any willful misconduct by any XOMA Indemnitee with respect to
XOMA's activities under this Agreement; in each foregoing case provided both
that Onyx provides XOMA with prompt notice of any such Third Party Claim and the
exclusive ability to defend (with the reasonable cooperation of Onyx) or settle
any such Third Party Claim and that Onyx reasonably cooperates in the defense
and/or settlement of such Third Party Claim at XOMA's expense and request.
9.3 Separate Defenses. If the Parties cannot agree as to the application of
Sections 9.1 and 9.2 to a particular Loss or Third Party Claim, the Parties may
conduct separate defenses of the relevant Third Party Claim. Each Party further
reserves the right to claim indemnity from the other Party in accordance with
29.
Sections 9.1 and 9.2 upon resolution of the underlying Third Party Claim,
notwithstanding the provisions of Sections 9.1 and 9.2 requiring the indemnified
party to tender to the indemnifying Party the exclusive ability to defend such
Third Party Claim.
9.4 Expenses. Neither Party shall be required to pay over to another party
amounts called for under this Section 9 until the final resolution of the Third
Party Claim from which the right to such payment arose, except that litigation
costs, fees, and expenses will be paid in arrears on a calendar quarterly basis,
subject to reimbursement upon the agreement of the Parties or a final
determination by a court of competent jurisdiction that the indemnity under this
Section 9 did not apply to the Third Party Claim giving rise to such costs, fees
and expenses.
9.5 Limitation of Liability.
(a) IN NO EVENT SHALL EITHER PARTY OR ITS RESPECTIVE AFFILIATES BE LIABLE
FOR SPECIAL, EXEMPLARY, OR CONSEQUENTIAL OR PUNITIVE DAMAGES, WHETHER IN
CONTRACT, WARRANTY, TORT, STRICT LIABILITY, OR OTHERWISE, EXCEPT FOR A WILLFUL
FAILURE BY A PARTY OR ITS SUCCESSOR TO PERFORM IN ACCORDANCE WITH THIS
AGREEMENT, INCLUDING WITHOUT LIMITATION FOLLOWING ANY CHANGE OF CONTROL OF SUCH
PARTY.
(b) THE LIMITATIONS OF LIABILITY IN SECTION 9.5(a) ARE INTENDED TO LIMIT
THE LIABILITY OF THE APPLICABLE PARTY OR PARTIES AND SHALL APPLY NOTWITHSTANDING
ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY OR WARRANTY. THE PARTIES
HERETO ACKNOWLEDGE THAT THE TERMS OF THIS SECTION 9.5 REFLECT THE ALLOCATION OF
RISK SET FORTH IN THIS AGREEMENT AND THAT THE PARTIES WOULD NOT ENTER INTO THIS
AGREEMENT WITHOUT THESE LIMITATIONS OF LIABILITY. THE LIMITATIONS OF LIABILITIES
UNDER THIS SECTION 9.5 SHALL NOT APPLY TO THE EXTENT PROHIBITED BY APPLICABLE
LAW.
10. CONFIDENTIALITY.
10.1 Confidential Information; Exceptions. Each Party will, and will use
commercially reasonable efforts to ensure that its employees will: (a) maintain
all Confidential Information of the other Party in trust and confidence; (b) not
disclose any Confidential Information of the other Party to any Third Party
(except that a Party may disclose such Confidential Information to those of its
employees, agents, independent contractors, Affiliates, or sublicensees who
require such information in order to perform under this Agreement and who are
subject to binding obligations of confidentiality and limited use at least as
restrictive as those of this Section 10);
30.
(c) not disclose or use any Confidential Information of the other Party for any
purposes other than those necessary or permitted for performance under this
Agreement; (d) not use any Confidential Information of the other Party for any
purpose or in any manner that would constitute a violation of any applicable
governmental laws, rules, regulations, or orders, including without limitation
the export control laws of the United States; and (e) not reproduce any
Confidential Information of the other Party in any form except as required to
perform in accordance with this Agreement. Each Party will use at least the same
standard of care as it uses to protect its own Confidential Information of a
similar nature to prevent unauthorized disclosures or uses of Confidential
Information of the other Party, but in any event each Party will use no less
than commercially reasonable care to achieve such objectives. Each Party will
promptly notify the other Party upon discovery of any unauthorized use or
disclosure of the Confidential Information of the other Party.
"Confidential Information" of a Party shall include all confidential or
proprietary information of such Party that the other Party receives or learns
under this Agreement. Confidential Information shall include without limitation
the manufacturing processes transferred to, used by or improved by XOMA under
this Agreement.
Confidential Information shall not include any information to the extent
that it:
(a) is now, or hereafter becomes, through no act or failure to act on the
part of the receiving Party in breach of this Section 10, generally known or
available;
(b) is known by the receiving Party at the time of receiving such
information, as shown by written records predating such receipt;
(c) is furnished after the Effective Date to the receiving Party by a Third
Party, without breach of and not subject to any obligation of confidentiality;
or
(d) is independently developed by the receiving Party without use of or
reference to Confidential Information of the other Party, as shown by
independent written records contemporaneous with such development.
The Parties agree that the material financial, commercial, scientific and
technical terms of the Agreement will be considered Confidential Information of
both Parties. Notwithstanding the foregoing, either Party may disclose such
terms to bona fide potential corporate partners, potential investors or merger
or acquisition partners, and to financial underwriters and legal and financial
advisors, provided that all such disclosures shall be made only to such Parties
under commercially reasonable obligations of confidentiality equivalent to the
obligations set forth in this Section 10.
31.
10.2 Authorized Disclosure. Notwithstanding any other provision of this
Agreement, each Party may disclose Confidential Information of the other Party:
(a) to the extent and to the persons and entities required by an applicable
governmental law, rule, regulation or order; provided, however, that the
receiving Party shall first have given prompt notice to the other Party hereto
as soon as reasonably practicable to enable it to seek any available exemptions
from or limitations on such disclosure requirement and shall reasonably
cooperate in such efforts by the other Party;
(b) to the extent and to the persons and entities required by rules of the
National Association of Securities Dealers;
(c) as necessary to file or prosecute patent applications, prosecute or
defend litigation or otherwise establish rights or enforce obligations under
this Agreement, but only to the extent that any such disclosure is necessary;
(d) to permitted sublicensees under this Agreement; or
(e) to Regulatory Authorities, for the purpose of obtaining Regulatory
Approval for ONYX-015; and
(f) to identified Third Parties with the prior, express, specific, written
permission of the disclosing Party.
10.3 Press Releases. Promptly after entering into this Agreement, each
Party will issue its own press release in the respective form attached hereto as
Exhibit C. Neither Party will issue any other publicity release or announcement
containing additional information beyond that in Exhibit C without the advance
written consent of the other Party, except as such release or announcement may
be required by law, in which case the Party making the release or announcement
shall, before making any such release or announcement, afford the other Party a
reasonable opportunity to review and comment upon such release or announcement
to the extent practicable.
10.4 Requests for Confidential Treatment. The Parties acknowledge that the
rules and regulations promulgated by the U.S. Securities and Exchange Commission
("SEC") will require that each Party disclose the non-confidential material
terms of this Agreement and file a copy hereof with the SEC. The Parties will
use commercially reasonable efforts to secure confidential treatment under
applicable laws, rules and regulations for financial, commercial and scientific
and tech-
32.
nical terms that are trade secrets of either Party, will agree, prior to
submission to the SEC of a confidential treatment request (without delaying the
timeliness of such submission), upon the terms for which each Party will seek
confidential treatment, and will coordinate in good faith with respect to any
such requests and any responses to any SEC comments on or responses to such
requests, provided, however, that after using such efforts each Party will be
free to make disclosures that it reasonably believes are required by applicable
law, rule or regulation or that the SEC will otherwise require.
10.5 Return of Confidential Information. Upon any expiration or termination
of this Agreement, each Party will use diligent efforts (including without
limitation a diligent search of files and computer storage devices) to return or
destroy all Confidential Information of the other Party and all copies,
summaries, compilations, extracts or other derivatives thereof, except to the
extent such Confidential Information is necessary to exercise any license or
other right surviving termination of this Agreement. Additionally, each Party
will be allowed to keep one archival copy of any Confidential Information of the
other Party for record keeping purposes only.
10.6 Injunctive Relief. The Parties expressly acknowledge and agree that
any breach or threatened breach of this Section 10 may cause immediate and
irreparable harm to the Party whose Confidential Information is at issue, which
harm may not be adequately compensated by damages. Each Party therefore agrees
that in the event of such breach or threatened breach and in addition to any
remedies available at law, the Party whose Confidential Information is at issue
shall have the right to secure equitable and injunctive relief, without bond, in
connection with such a breach or threatened breach.
10.7 Survival. The terms of this Section 10 shall survive for the longer of
(i) seven (7) years after expiration or termination of this Agreement or (ii)
ten (10) years from the Effective Date.
10.8 Superseding Effect. The provisions of this Section 10 supersede the
existing Confidentiality Agreement between the Parties dated as of October 19,
2000, and any information disclosed thereunder shall be deemed "Confidential
Information" under this Agreement.
11. TERM AND TERMINATION.
11.1 Term. The initial term of this Agreement will commence on the
Effective Date and shall expire upon the fifth anniversary thereof. At its sole
option, Onyx may extend the term of this Agreement for successive three (3) year
pe-
33.
riods upon at least [*] written notice (e.g., by notice given on or before the
[*] anniversary of the Effective Date, Onyx may extend the term of this
Agreement until the eighth anniversary of the Effective Date), provided,
however, that Onyx may not extend the term beyond the effective date of any
termination by XOMA pursuant to Section 11.2.
11.2 Termination by XOMA.
(a) XOMA may terminate this Agreement at will effective upon the earlier of
(i) at least [*] months' prior written notice, or (ii) the time, occurring after
issuance by the FDA of a Regulatory Approval for the ONYX-015 product, at which
XOMA has completed the manufacture and supply to Onyx, in accordance with this
Agreement, of a number of Batches that is equal to the minimum number of Batches
that XOMA would be required to supply under Section 5.2(b) during the portion of
the term of this Agreement that remains after the issuance of such Regulatory
Approval (including any term extensions pursuant to Section 11.1) or such
greater number as the Parties agree, provided that such supplied Batches have a
Shelf Life that is commercially reasonable.
(b) XOMA may terminate this Agreement upon at least [*] months' prior
written notice if, within thirty (30) days of notice given by XOMA pursuant to
Section 3.3 hereof of its desire to use the Suite for another product, Onyx does
not elect to pay to XOMA the specified [*] fee.
11.3 Termination by Onyx.
(a) Delay in Performance by XOMA. If Onyx has not materially breached its
obligations to assist XOMA or enable XOMA's performance under this Agreement,
then Onyx may terminate this Agreement without penalty or further obligation to
XOMA (except as otherwise stated in this Section 11.3) upon at least ninety (90)
days prior written notice if:
(i) XOMA has not initiated manufacture of Drug Substance (defined as
thawing a vial of cells in preparation for manufacturing a Batch of Drug
Substance) in the Suite by [*];
(ii) XOMA has not manufactured and supplied to Onyx or its designee a Batch
of Drug Substance meeting the Specifications (as in existence on the Effective
Date) at the [*]L Development Scale (or greater scale) by [*], provided that
Onyx has not significantly delayed the timelines for the Project due to Onyx's
decisions based on changed needs for ONYX-015 for clinical trials or on
implementation of process changes;
34.
(iii) XOMA has not manufactured and supplied to Onyx or its designee a
Batch of Drug Substance at [*]L Commercial Scale meeting the then-current
Specifications by [*], provided that Onyx has not significantly delayed the
timelines for the Project due to Onyx's decisions based on changed needs for
ONYX-015 for clinical trials on implementation of process changes; or
(iv) after the Attainment of Commercial Scale, XOMA fails to successfully
manufacture the number of Batches of Drug Substance ordered by Onyx in
compliance with its guaranteed minimum annual number of Batches in any
applicable twelve (12) month period under Section 5.2.
If Onyx's actions, inactions (e.g. Onyx's failure to provide raw materials,
etc., pursuant to Section 2.1(b)) or decisions cause a delay in achievement of
the target dates in this Section 11.3(a), Onyx and XOMA will in good faith agree
upon an extension of the target dates. If Onyx terminates this Agreement
pursuant to this Section 11.3(a), Onyx will reimburse XOMA for all appropriate
costs under this Agreement incurred by XOMA to the date of notice of termination
by Onyx for services performed, for commitments that cannot be canceled, and for
resources that cannot be reallocated, and for all other costs that XOMA incurs
in transferring the technology to Onyx or a Third Party at Onyx's request
pursuant to Section 7.1(b). XOMA will use diligent, commercially reasonable
efforts to minimize any costs or obligations that cannot be canceled and to
reallocate any resources that were dedicated to the Project.
(b) For Convenience Before Attainment of Commercial Scale. Prior to
Attainment of Commercial Scale, Onyx may terminate this Agreement by giving XOMA
at least one-hundred twenty (120) days' prior notice and making a payment to
XOMA of [*]. In addition, Onyx will reimburse XOMA for all appropriate costs
under this Agreement incurred by XOMA to the effective date of termination for
services performed, for commitments that cannot be canceled, and for resources
and materials on hand that cannot be reallocated, and for all other costs that
XOMA incurs in transferring the technology to Onyx or a Third Party at Onyx's
request pursuant to Section 7.1(b).
(c) For Convenience After Attainment of Commercial Scale.
(i) Onyx may terminate this Agreement for convenience upon written notice
at any time after the Attainment of Commercial Scale. If termination is not then
permitted under either Sections 11.3(a)(iv) or 11.4, then any such termination
by Onyx after Attainment of Commercial Scale shall be a termination under this
section 11.3(c).
35.
(ii) With its termination notice under Section 11.3(c)(i), Onyx may propose
to XOMA the substitution of another product for the ONYX-015 product, and in
this event the Parties agree to negotiate diligently and in good faith to revise
this Agreement so that XOMA would manufacture and supply the bulk form of the
alternate product instead of Drug Substance, in such as way as to provide
comparable economic benefit to XOMA as would have been derived by XOMA in the
initial Agreement.
(iii) If the Parties are unable to reach a revised Agreement pursuant to
Section 11.3(c)(ii) within one-hundred twenty (120) days of Onyx's initial
notice, this Agreement shall terminate and Onyx shall pay to XOMA a termination
fee of [*] of the cost for commercial Batches as calculated pursuant to Section
6.6, for the guaranteed minimum number of Batches that Onyx would have been
obligated to order pursuant to Section 5.2 during the fifteen (15) months
following the date of the notice of termination, based on remaining order
obligations during the current twelve (12) month period during which termination
occurs and order obligations calculated on a pro rata basis for the portion of
the fifteen (15) month period following such current twelve (12) month period.
For purposes of example, if Onyx were to terminate 18 months after the
Attainment of Commercial Scale after having ordered [*] Batches during the 12
month period following the first anniversary of the Attainment of Commercial
Scale, then during the ensuing 15 months, Onyx would have been obligated to
order [*] Batches during the remaining 6 months of the current 12 month period
and during the first 9 months of the ensuing 12 month period, Onyx's pro rata
Batch order obligation would be equal to (9 months/12 months) x ([*] Batch
minimum obligation for 12 month period), or [*] batches. Based on an order
obligation of [*] total Batches and a Batch price of [*], under Section
11.3(c)(iii) Onyx would be obligated to pay XOMA [*], which represents [*] of
the payments for the [*] Batches at Commercial Scale.
11.4 Breach. If a Party materially breaches this Agreement, (i) and such
breach is reasonably curable within thirty (30) days, then the other Party may
terminate this Agreement upon thirty (30) days prior written notice to the first
Party specifying such breach if the breaching Party fails to cure the breach
within such thirty (30) day period, or (ii) and such breach is not reasonably
curable within thirty (30) days, the other Party may give the breaching Party
written notice specifying such breach and may then terminate this Agreement upon
an additional twenty (20) days written notice if the breaching Party either
fails to provide by the end of the initial thirty (30) day period a reasonable
written plan to cure such breach as promptly as reasonably practicable or fails
to carry out such plan diligently and cure such breach.
11.5 Technology Transfer. Upon any expiration or termination of this
Agreement, upon Onyx's request XOMA will, pursuant
36.
to Section 7.1(b), transfer the technology used to manufacture and test ONYX-015
under this Agreement to Onyx and/or Third Parties designated by Onyx at Onyx's
cost, as set forth in Section 6.4(d).
11.6 Surviving Obligations. Termination or expiration of this Agreement
shall not affect any rights or obligations of either Party which may have
accrued up to the effective date of such termination or expiration. The
provisions of Sections 2.8, 3.2(a) (solely with respect to the last sentence in
such section), 5.9, 6.7, 6.8, 6.9, 7.1(b), 7.3(b), 7.3(c), 7.4(b), 7.4(c),
7.4(d), 7.5, 7.6 (solely with respect to the final three sentences in such
section), 8.1, 8.3, 9, 10, 11.5, 11.6 and 12 shall survive the termination or
expiration of this Agreement.
12. MISCELLANEOUS.
12.1 Notice. All notices hereunder shall be in writing and shall be deemed
given upon (i) personal delivery, (ii) facsimile transmission with electronic
confirmation of transmission, if sent during the recipient's normal business
hours, or otherwise on the recipient's next normal business day, (iii) receipt
after delivery by nationally-recognized bonded courier when sent for next
business day delivery, or (iv) receipt after sending by certified or registered
mail, postage prepaid and return receipt requested personally, to the following
addresses or fax numbers of the respective Parties:
37.
If to XOMA: With a copy to:
XOMA (US) LLC ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Eighty Pine Street
Berkeley, CA 94710 ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Legal Department Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇ Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Onyx: With a copy to:
Onyx Pharmaceuticals, Inc. ▇▇▇▇▇▇ Godward LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
Attention: CEO ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇ Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
A Party may change its address or fax number for notice by giving notice
under this Section 12.1.
12.2 Use of Names. Neither Party shall use the name, trade name, trademark,
or other designation of the other Party (including contraction, abbreviation or
simulation of any of the foregoing) in advertising, publicity, or other
promotional activities. Under no circumstances shall either Party state or imply
in any promotional material, publication or other published announcement that
the other Party has tested or approved any product.
12.3 Formal Dispute Resolution.
(a) Arbitration.
(i) Upon failure to resolve any claim, dispute, or controversy of whatever
nature arising out of or relating to this Agreement, including, without
limitation, any action or claim based on tort, contract, or statute (including
any claims of breach or violation of statutory or common law protections from
discrimination, harassment and hostile working environment), or concerning the
interpretation, effect, termination, validity, performance and/or breach of this
Agreement ("Claim"), using the dispute resolution procedure described
38.
in Section 2.4, such Claim (other than one relating to the validity,
enforceability, infringement or misappropriation of an Intellectual Property
Rights) shall be resolved by final and binding arbitration ("Arbitration")
before a single arbitrator (or, at the election of either or both Parties, a
panel of three (3) arbitrators) ("Arbitrator") selected and administered by JAMS
("Administrator") in accordance with its then existing arbitration rules or
procedures regarding commercial or business disputes. Such arbitration shall
take place in San Francisco, California in the English language.
(ii) The provisions of California Code of Civil Procedure sections 1283.05
and 1283.1 or their successor sections are incorporated in and made a part of
this Agreement. Depositions may be taken and full discovery may be obtained in
any arbitration commenced under this Section 12.3(a).
(iii) The Arbitrator shall, within fifteen (15) calendar days after the
conclusion of the Arbitration hearing, issue a written award and statement of
decision describing the essential findings and conclusions on which the award is
based, including the calculation of any damages awarded. The Arbitrator shall be
authorized to award compensatory damages, but shall NOT be authorized (i) to
award non-economic damages, such as for emotional distress, pain and suffering
or loss of consortium, (ii) to award punitive damages, or (iii) to reform,
modify or materially change this Agreement or any other agreements contemplated
hereunder; provided, however, that the damage limitations described in parts (i)
and (ii) of this sentence will not apply if such damages are statutorily
imposed. The Arbitrator also shall be authorized to grant any temporary,
preliminary or permanent equitable remedy or relief he or she deems just and
equitable and within the scope of this Agreement, including, without limitation,
an injunction or order for specific performance.
(iv) Each Party shall bear its own attorneys' fees, costs, and
disbursements arising out of the arbitration, and shall pay an equal share of
the fees and costs of the Administrator and the Arbitrator; provided, however,
the Arbitrator shall be authorized to, and must use best efforts to designate
one Party as the prevailing party, and upon any such designation, must award to
that prevailing Party reimbursement for its reasonable attorneys' fees, costs
and disbursements (including, for example, expert witness fees and expenses,
photocopy charges, travel expenses, etc.), and/or the fees and costs of the
Administrator and the Arbitrator. Absent the filing of an application to correct
or vacate the arbitration award under California Code of Civil Procedure
sections 1285 through 1288.8, each Party shall fully perform and satisfy the
arbitration award within fifteen (15) days of the service of the award.
(v) BY AGREEING TO THIS BINDING ARBITRATION PROVISION, THE PARTIES
UNDERSTAND THAT THEY ARE WAIVING CERTAIN RIGHTS AND PROTECTIONS WHICH MAY
OTHERWISE BE AVAILABLE IF A CLAIM BETWEEN THE PARTIES WERE DETERMINED BY
39.
LITIGATION IN COURT, INCLUDING, WITHOUT LIMITATION, THE RIGHT TO SEEK OR OBTAIN
CERTAIN TYPES OF DAMAGES PRECLUDED BY THIS PROVISION, THE RIGHT TO A JURY TRIAL,
CERTAIN RIGHTS OF APPEAL, AND A RIGHT TO INVOKE FORMAL RULES OF PROCEDURE AND
EVIDENCE.
(b) Intellectual Property Disputes. The Parties will submit any Claim,
relating to the validity, enforceability, infringement, or misappropriation of
any Intellectual Property Right that has not been resolved pursuant to Section
2.4 to a court of competent jurisdiction.
12.4 Rights in Bankruptcy. All rights and licenses granted under or
pursuant to this Agreement are, and shall otherwise be deemed to be, for
purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to
"intellectual property" as defined under Section 101 of the U.S. Bankruptcy
Code. The Parties agree that Onyx, as a licensee under Section 7.3(c) and a
transferee under Sections 7.1 and 7.4(d) of such intellectual property rights
under this Agreement, and XOMA, as a licensee under Section 7.3(b), each shall
retain and may fully exercise all of its rights and elections under the U.S.
Bankruptcy Code; however, nothing herein shall be deemed to constitute a present
exercise of such rights and elections. The Parties further agree that, in the
event of the commencement of a bankruptcy proceeding by or against a Party under
the U.S. Bankruptcy Code, the other Party shall be entitled to a complete
duplicate of (or complete access to, as appropriate) any such intellectual
property as to which it is a licensee or transferee and all embodiments of such
intellectual property, and same, if not already in its possession, shall be
promptly delivered to such other Party (a) upon any such commencement of a
bankruptcy proceeding upon such other Party's written request therefore, unless
the first Party elects to continue to perform all of its obligations under this
Agreement, or (b) if not delivered under (a) above, upon rejection of this
Agreement by or on behalf of the first Party upon written request therefor by
the other Party.
12.5 Waiver. The failure on the part of Onyx or XOMA to exercise or enforce
any rights conferred upon it hereunder shall not be deemed to be a waiver of any
such rights nor operate to bar the exercise or enforcement thereof at any time
or times hereafter.
12.6 Assignment; Binding Effect. Neither Party will assign its rights or
duties under this Agreement to another without the prior express written consent
of the other Party, which shall not be unreasonably withheld; provided, however,
that
40.
(a) either Party may assign this Agreement to a successor by merger,
acquisition, or sale of all or substantially all of such Party's business assets
in the field to which this Agreement relates, without the other Party's consent,
provided that such successor will expressly assume in writing the obligation to
perform in accordance with the terms and conditions of this Agreement; and
(b) Onyx shall have the right to assign this Agreement in its entirety (i)
to Pfizer without the consent of XOMA or (ii) to any other Onyx Partner with the
prior written consent of XOMA, not to be unreasonably withheld.
Any purported assignment not in compliance with this Section 12.5 shall be
void. This Agreement shall be binding upon each Party's successors and permitted
assignees.
12.7 Independent Parties. Neither Party is an employee or a legal
representative of the other Party for any purpose. Neither Party shall have the
authority to enter into any contracts in the name of or on behalf of the other
Party.
12.8 Force Majeure. Neither Party shall be liable to the other for its
failure to perform any of its obligations under this Agreement, except for
payment obligations, during any period in which such performance is delayed
because rendered impracticable or impossible due to circumstances beyond its
reasonable control, including without limitation earthquakes, governmental
regulation, fire, flood, labor difficulties, interruption of supply of key raw
materials, civil disorder, and acts of God, provided that the Party experiencing
the delay promptly notifies the other Party of the delay and uses and continues
to use commercially reasonable efforts to overcome such delay.
12.9 Severability. If any item or provision of this Agreement shall to any
extent be invalid or unenforceable, it shall be severed from this Agreement, and
the remainder of this Agreement shall not be affected thereby, and each term and
provision of this Agreement shall be valid and shall be enforced to the fullest
extent permitted by law.
12.10 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of California, except for its principles
of choice of law.
12.11 Entire Agreement; Modification. This Agreement, including all
Exhibits referenced herein, constitutes the entire agreement and understanding
of the parties and supersedes any prior agreements or
41.
understandings relating to the subject matter hereof, except that with respect
to the Letter Agreement, the payment provisions shall remain in effect but the
term sheet attached thereto is hereby superseded. Any modification of this
Agreement shall be effective only to the extent it is reduced to writing and
signed by all parties.
12.12 Counterparts. This Agreement may be executed in counterparts with the
same force and effect as if each of the signatories had executed the same
instrument.
42.
IN WITNESS WHEREOF, each Party hereto has caused this Agreement to be
signed and delivered by its duly authorized officer or representative as of the
Effective Date.
ONYX PHARMACEUTICALS, INC. XOMA (US) LLC
By: By:
-------------------------------- -----------------------------------
Name: Hollings C. Renton Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer Title: Senior Vice President,
Operations
EXHIBIT A
[*]
A-1
EXHIBIT B
[*]
B-1
EXECUTION COPY
EXHIBIT C
PRESS RELEASES
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XOMA Contacts Investor Relations Contacts Media Contacts
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▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇▇ & Associates ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇@▇▇▇▇.▇▇▇)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ (▇▇▇▇▇@▇▇▇▇.▇▇▇) ▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (▇▇▇▇▇▇@▇▇▇▇.▇▇▇)
▇▇▇.▇▇▇▇.▇▇▇ (▇▇▇▇▇▇@▇▇▇▇.▇▇▇) (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇.▇▇▇▇.▇▇▇
ONYX AND XOMA ESTABLISH STRATEGIC PROCESS DEVELOPMENT AND MANUFACTURING
RELATIONSHIP
Berkeley, CA -- January 29, 2001 - Onyx Pharmaceuticals, Inc. (Nasdaq: ONXX) and
XOMA Ltd. (Nasdaq: XOMA) today announced that they have agreed to a strategic
process development and manufacturing relationship under which XOMA will
scale-up production to commercial volume and manufacture Onyx's CI-1042 (also
known as ONYX-015), a therapeutic product to treat cancer. CI-1042, which is
being developed in collaboration with Pfizer Inc., is currently in Phase III
testing for head and neck cancer.
The initial term of the agreement will be for five years, with options to extend
for additional three-year periods. XOMA will produce material for use in
clinical testing as well as for commercial sales upon approval. As part of its
development commitment XOMA will increase the fermentation volume to commercial
scale, improve the purification process, and seek FDA licensure of its
manufacturing facility for CI-1042. While dependent on the pace and outcome of
clinical trials, regulatory approvals, sales volume and other factors, the
financial scope of the agreement during the initial five-year period is
projected to exceed $35 million.
"I'm pleased to be embarking upon this relationship with Onyx," said ▇▇▇▇
▇▇▇▇▇▇▇▇, Chairman, President, and CEO of XOMA. "It allows XOMA to further
leverage the core manufacturing and development competencies that attracted the
anti-CD11a collaboration with Genentech, and gives us an economic interest in a
promising late-stage cancer therapeutic. Our objective is to have a financially
attractive relationship from XOMA's perspective while at the same time
delivering substantial value to Onyx. This agreement further validates our
development and manufacturing strategy by showing a need for our expertise
within the biotechnology industry."
"We believe that XOMA can move quickly to scale-up production of CI-1042 to
increase the supply of CI-1042 for our various clinical trials as well as for
commercial launch of the product," said Hollings C. Renton, Chairman of the
Board, President and Chief Executive Officer
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of Onyx, "XOMA's manufacturing and development support will enable us to focus
our resources on accelerating the clinical development program for this
product."
Onyx Pharmaceuticals is engaged in the discovery and development of novel
targeted, highly selective cancer therapies. Based on its proprietary virus
technologies, the company is developing CI-1042 as its lead product. CI-1042 is
a therapeutic tumor-selective, modified adenovirus (similar to the common cold
virus) that has been genetically engineered to replicate in and lyse (burst)
cancer cells that have abnormal p53 pathway function while sparing normal cells
that have functioning p53. Derangements in the p53 protein pathway are the most
common genetic abnormalities in human cancer. CI-1042 is currently in a Phase
III clinical trial for head and neck cancer and in Phase I and II clinical
trials for a number of additional cancer indications.
XOMA develops and manufactures antibody and other protein biopharmaceuticals for
disease targets that include immunological and inflammatory disorders,
infectious diseases and cancer. Late-stage programs include a collaboration with
Genentech, Inc. to develop the anti-CD11a antibody product for psoriasis (Phase
III) and kidney transplant rejection (Phase I/II), and an agreement with the
▇▇▇▇▇▇ Immuno Division of ▇▇▇▇▇▇ Healthcare Corporation to develop NEUPREX(R) (a
systemic formulation of rBPI-21) for multiple indications. Earlier stage
products include: ING-1, a Human Engineered(TM) antibody in Phase I studies for
cancer; Genimune(TM), a HUman Engineered(TM) antibody-based immunofusion product
in preclinical development for autoimmune diseases and immunological cancers;
Mycoprex(TM), a compound in preclinical development for the treatment of fungal
infections; and antiangiogenic compounds for retinal disorders. For more
information about XOMA's pipeline and activities, please visit XOMA's web site
at ▇▇▇.▇▇▇▇.▇▇▇.
Statements made in this news release related to collaborative agreements and
current plans for product development, or that otherwise relate to future
periods, are forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
These statements are based on assumptions that may not prove accurate. Actual
results could differ materially from those anticipated due to certain risks
inherent in the biotechnology industry and for companies engaged in the
development of new products in a regulated market. These risks, including those
related to changes in the status of the Company's collaborative relationships,
the timing or results of pending or future clinical trials, market demand for
products, and marketing obligations of the collaborators and other partners,
actions by the Food and Drug Administration or the U.S. Patent and Trademark
Office, and uncertainties regarding the status of biotechnology patents, are
discussed in the Company's most recent annual report on Form 10-K and in other
SEC filings. Consider such risks carefully in evaluating XOMA's prospects.
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[LOGO OF
ONYX PHARMACEUTICALS]
Contacts: ▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇
Onyx Pharmaceuticals, Inc. WeissComm
▇▇▇-▇▇▇-▇▇▇▇ ▇▇▇-▇▇▇-▇▇▇▇
FOR IMMEDIATE RELEASE
ONYX AND XOMA ANNOUNCE STRATEGIC PROCESS DEVELOPMENT AND MANUFACTURING AGREEMENT
RICHMOND, CALIF. (January 29, 2001) -- Onyx Pharmaceuticals, Inc. (Nasdaq: ONXX)
today announced that it has entered into a strategic process development and
manufacturing relationship with XOMA (US) LLC (Nasdaq: XOMA) of Berkeley,
California. Under the terms of the multi-year agreement, XOMA will develop a
large-scale process and will manufacture CI-1042 (ONYX-015) for clinical trials
and large-scale production. In return, Onyx will provide XOMA with an upfront
payment; support for development efforts on the process scale up and production
of bulk drug materials; and milestone payments associated with attainment of
large-scale production.
"We are delighted to have the opportunity to work with XOMA, one of the most
experienced companies in process development and large scale manufacturing of
biopharmaceuticals," said Hollings C. Renton, Chairman of the Board, President
and Chief Executive Officer of Onyx Pharmaceuticals, Inc. "The agreement allows
us to increase the supply of CI-1042 for our various clinical trials and for
commercial launch of CI-1042 under our collaboration with Pfizer. XOMA will
develop a large-scale manufacturing process for CI-1042 based on our current
process".
"We are looking forward to this opportunity to work with Onyx on their
innovative viral therapy for cancer," said ▇▇▇▇ ▇▇▇▇▇▇▇▇, Chairman of the Board,
President and CEO of XOMA. "With XOMA's experience and infrastructure, we
believe we can move quickly to scale-up production of CI-1042, to enhance the
manufacturability, and cost structure of the product."
CI-1042 is a tumor-selective, modified adenovirus (a type of virus that can
cause a common cold) that has been genetically engineered to replicate in and
lyse (burst) cancer cells that have abnormal p53 pathway while sparing normal
cells which have (functioning) p53 protein. P53, a protein that protects the
cell from developing into a tumor cell, is the most commonly altered gene in
human cancer. CI-1042 is being
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jointly developed by Onyx Pharmaceuticals and Pfizer Inc. under an agreement
signed in October 1999.
CI-1042, now in a Phase III clinical trial and various Phase I/II trials, is
currently being manufactured using a small-scale process. Due to the limitation
of the scale and the ability to produce less than sufficient quantities of
materials for multiple clinical trials, Onyx and Pfizer have had to prioritize
which clinical trials receive materials. The Phase II clinical trials where the
drug is administered intravenously received a preferential supply of materials
over the Phase III clinical trial. As a result, the accrual of clinical sites
and the enrollment of patients in the Phase III study in recurrent Head and Neck
cancer had been slowed. To date, drug supplies have been available to two
clinical sites. Currently, there are 10 clinical sites open for patient
enrollment.
"Our current contract manufacturers have implemented plans to increase the
supplies of CI-1042, " said Hollings C. Renton. "With these actions and the new
support from XOMA, we believe that we can increase the accrual of the clinical
trials in an attempt to minimize any potential delay in timelines to launch."
Onyx Pharmaceuticals is engaged in the discovery and development of novel cancer
therapies. Based on our proprietary virus technologies, we are developing our
lead product, CI-1042. CI-1042 is currently in a Phase III clinical trial for
head and neck cancer and in Phase I and II clinical trials for a number of
additional cancer indications. For more information about CI-1042 and Onyx's
pipeline and activities, visit Onyx Web site at ▇▇▇.▇▇▇▇-▇▇▇▇▇.▇▇▇.
XOMA develops and manufactures antibody and other protein biopharmaceuticals for
disease targets that include immunological and inflammatory disorders,
infectious diseases and cancer. Late-stage programs include collaboration with
Genentech, Inc. to develop the anti-CD11a antibody product for psoriasis (Phase
III) and kidney transplant rejection (Phase I/II), and an agreement with the
▇▇▇▇▇▇ Immuno Division of ▇▇▇▇▇▇ Healthcare Corporation to develop NEUPREX(R) (a
systemic formulation of rBPI21) for multiple indications. Earlier stage products
include ING-1, Genimune (TM), Mycoprex (TM), and antiangiogenic compounds. For
more information About XOMA's pipeline and activities, visit XOMA's web site at
▇▇▇.▇▇▇▇.▇▇▇.
This press release contains certain forward-looking statements regarding the
development of potential human therapeutic products that involve a number of
risks and uncertainties. Actual events may differ from the company's
expectations. In addition to the matters described in this press release, the
timeline for clinical activity, results of pending or future clinical trials,
and changes in the status of the company's collaborative relationships, as well
as the risk factors listed from time to time in the
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company's periodic reports with the Securities and Exchange Commission,
including but not limited to its Annual Report on Form 10-K, may affect the
actual results achieved by the company.
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