definiens: means Anacor ’s costs of manufacturing and delivering the Product ( includingSamples ) for commercial use which equals : ( a ) the amount paid to Third Parties to manufacture the Product ; plus(b ) Anacor ’s reasonable direct and identifiable internal costs and out - of - pocket costs incurred or accrued ( includingany prepayments ) by Anacor in connection with inventory write - offs, variances, manufacturing process improvements, storage, insurance, transportation, freight, manufacturing scale - up, manufacturing site qualification, materials, qualityassurance and quality control ( including testing ), inspections, analytical testing, supply chain management, capitalequipment, Third Party royalties and licensee fees, similar activities included in Anacor ’s oversight of themanufacturing process of any Third Party in clause ( a ), and any value - added tax or similar tax due for amounts paidto such Third Party, in each case of ( a ) and ( b ) without mark - up