Exhibit 10.1

 

CONFIDENTIAL TREATMENT REQUESTED.

INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN

REQUESTED IS OMITTED AND MARKED WITH “[*******]” OR OTHERWISE

CLEARLY INDICATED. AN UNREDACTED VERSION OF THIS DOCUMENT HAS

ALSO BEEN PROVIDED TO THE SECURITIES AND EXCHANGE COMMISSION.

 

BINDING TERM SHEET

 

The intent of this term sheet (the “Term Sheet”) is for the Parties to agree on
the principal terms in relation to the license and distribution within the
Territory by L. Molteni & C. dei Fratelli Alitti Società di Esercizio S.p.A. of
Probuphine, a pharmaceutical product developed by Titan Pharmaceuticals Inc..
This Term Sheet and any attachment hereto constitutes a binding obligation on
both Parties to enter into, execute and deliver a definitive agreement
containing the essential elements set forth herein, as well as any additional
agreement necessary in relation thereto by February 15, 2018 or such later date
as may be mutually agreed in writing by the Parties.

 

1. Parties

 

L. Molteni & C. dei F.lli Alitti Società di Esercizio S.p.A., a company
organized under the laws of Italy, with registered office at Strada Statale 67,
Frazione Granatieri, Scandicci (Florence), Italy, or any of its affiliates
(“Molteni”); and Titan Pharmaceuticals, Inc., a company organized under the laws
of United States, with registered office at 400 Oyster Point Blvd., Suite 505,
South San Francisco CA 94080-1921, (“Titan” and, together with Molteni, the
“Parties”).

 

2. Definitions

In addition to the other terms defined herein, the following capitalized terms
shall have the meaning set forth below:

“Additional Services” means, in relation to the Product, the Release, the kit
assembly, the secondary packaging (including serialization) and DEA reporting;

“Braeburn License” means the License Agreement by and between Titan and Braeburn
Pharmaceuticals, Inc., dated December 14, 2012 as amended to date.

“Competitor Product” means any pharmaceutical product containing buprenorphine
for the treatment of the Initial Indication that entails continuous delivery for
more than 10 days.

“Dossier” means the complete pharmaceutical registration dossier prepared by
Titan in E.U. format suitable to obtain the Marketing Authorization(s) (as
defined below) for the Product (as defined below) for the Initial Indication (as
defined below) in the Territory (as defined below), including all scientific and
technical data and documents regarding the Product for the Initial Indication,
in all its available strengths and presentations;

“DPT Agreement” means the Manufacturing Agreement by and between DPT
Laboratories, Ltd. and Titan Pharmaceuticals, Inc. dated August 2, 2013;

“Initial Indication” means the use of the Product for the treatment of opiate or
opioid addiction.

“Key Country” shall mean any of the following: United Kingdom, Italy, Germany,
or France;

“Marketing Authorization” means the required national registration and pricing
approval for the Product for the Initial Indication issued by the relevant
regulatory authorities in the Territory;

“Net Sales” means the gross Ex-factory sales amount invoiced by Molteni and/or
its appointed distributor(s) within the Territory for the sale of the Product,
reduced by: (i) discounts actually granted and returns credited; (ii) payments
by any distributor to Molteni other than for the final sale of the Product to
the end customer; and (iii) sales taxes, value-added taxes, excise taxes,
tariffs and duties, including government compulsory deduction on sales (i.e.
payback mechanism) and other rebates and taxes directly related to the sale of
the Product in the Territory, up to a limit of 20% (twenty percent) of the gross
Ex-factory sales amount;

 

 

 

 

 

“Product” means the subdermal implant containing buprenorphine and excipient
ethylene vinyl acetate copolymer developed and/or provided by Titan (together
with the relevant applicator);

“Release” means the quality control assessment, upon receipt from Titan, and the
European release activities to be performed on the Semi-Finished Products by
Molteni as required by applicable laws and regulations in order to market the
Product for the Initial Indication within the Territory;

“Semi-Finished Products” means the Product, including all pharmaceutical
components, applicator and related technology, prior to the performance by
Molteni of the Additional Services;

“Subsequent Indication” means the use of the Product for any indication other
than the Initial Indication.

“Territory” means the European Union, Switzerland, Norway, Iceland,
Liechtenstein, Bosnia, Serbia, Montenegro, Macedonia and Albania (United Kingdom
and Northern Ireland shall continue to be deemed as Territory also in the event
they no longer belong to the European Union);

“Titan IP” means the Titan Patents, the Trademark and all other related know-how
and proprietary rights related to the Product.

“Titan Patents” means all patent rights in the Territory owned and/or controlled
by Titan during the term of this Agreement that claim or would be necessary for
making, having made, using, offering for sale, selling or importing of the
Products, including the patents listed on Schedule A hereto, as well as all
continuations, continuations-in-part, divisionals, extensions and foreign
equivalents thereof.

“Trademark” means the trademark Probuphine® registered in the name of Titan in
the European Union and Switzerland and any and all common law rights or other
rights to this trademark in the Territory.

 

3. Subject Matter

The Parties intend to enter into a license and distribution agreement (the
“Agreement”) pursuant to which (i) Titan shall grant Molteni an exclusive
license (even as to Titan and its affiliates), with the right to sublicense
pursuant to the terms herein, to the Titan IP (A) to import, market, promote,
distribute, offer for sale, sell or otherwise make use of the Product in the
Territory and (B) to make or have made the Product for sale, distribution and/or
use in the Territory, (ii) Titan shall transfer the Marketing Authorization
Application (the “MAA”) to Molteni effective upon approval by the European
Medicines Agency (the “EMA”) in accordance with EMA protocols, (iii) Titan shall
supply the Semi-Finished Product to Molteni, (iv) Molteni shall perform the
Additional Services and (v) Molteni shall, subject to the obligations of the
Parties and the terms set forth herein, directly and/or indirectly distribute
the Products within the Territory under the Trademark. In particular:

 

 

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(a)    Registration. Titan shall carry out all the activities necessary to
obtain approval of the MAA, including being responsible for the relevant
submission with the EMA under a centralized procedure. Prior to the transfer of
the MAA to Molteni and upon Molteni approval (the “MAA Transfer”), the relevant
registration and application costs associated with obtaining EMA approval will
be borne by Titan, with Molteni being responsible for any remaining costs. Prior
to the MAA Transfer, Molteni shall reasonably assist Titan throughout the
registration process with the EMA. It remains understood that if new clinical
trials and data (such as pre-approval and post authorizations studies) are
required to obtain regulatory approvals in the Territory (e.g. if the Dossier
results are incomplete or if the regulatory authorities claim any integration
thereof), Titan shall have no obligation to conduct or fund such trials and/or
generate these data unless such trials are performed by or on behalf of Titan,
in which case Titan shall provide such data to Molteni, and provided, however,
that Titan shall remain obligated to provide any such trials and/or data to
which Titan has rights pursuant to the Braeburn License and/or with any
subsequent licensee. Subject to the requirements set forth in this section and
Section 3(g) herein, Molteni shall have no obligation to conduct or fund trials
and/or generate data.

 

(b)    Label. The label pursued with the EMA shall permit Molteni to market the
Product in the Territory for use in a broad population of opioid dependents,
independent of their abuse history and their pre-treatment status with
buprenorphine without restrictions on retreatment or implantation site in
accordance with the draft label provided by Titan (the “Label”).

 

(c)    Dossier. Upon execution of the Agreement, Titan shall provide Molteni
with a complete copy of the Dossier. During the term of the Agreement, Titan
shall provide Molteni free of charge with any updates of the same Dossier in
e-CTD format, as soon as available to Titan. The parties agree that any changes,
updates or additions to the Dossier made pursuant to or in furtherance of this
Agreement shall belong to Molteni.

 

(d)    Clinical / Pharmacoeconomic Data. Titan shall provide Molteni with full
access to all existing and future clinical / pharmacoeconomic data and/or trials
regarding the Product directly or indirectly generated/performed by, in the
possession of, or accessible by Titan, including without limitation pursuant to
the Braeburn License and/or from any subsequent licensee, as soon as available
to it, it being understood that Titan has no obligation to conduct or fund any
future trials or generate any future data.

 

(e)    Local Medical & Public Affairs. Following the MAA Transfer, local medical
affairs and public affairs activities shall be Molteni’s responsibility. Titan
shall be regularly involved and consulted about all local clinical trials and it
retains a prohibition right for all label-modifying trials or trials that may
have an impact on other geographies possibly initiated by Molteni.

 

(f)     Premarketing and Marketing Responsibilities. Molteni will manage, in its
discretion and in line with the industry standard within the Territory, all
local marketing and sales activities. Molteni will set local prices in each
country within the Territory according to the market conditions. Titan will
reasonably assist Molteni in all premarketing activities regarding the Product,
including initial training, KOLs advisory board management, and scientific
presentations at main congresses, with the possible participation of US based
KOLs. The documented third-party costs of such activities shall be borne by
Molteni. Molteni shall be responsible for the conduct and cost of any Health
Technology Assessment or other studies required for pricing and reimbursement
purposes.

 

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(g)    Commercial Launch. Molteni shall (i) commence the submission process for
obtaining Marketing Authorization in at least one of the Key Countries within 60
days and the remaining Key Countries within 180 days after receipt of the MAA
and use its commercially reasonable efforts to obtain such Marketing
Authorizations as soon as practicable thereafter and (ii) shall use commercially
reasonable efforts to effect the commercial launch of the Product for the
Initial Indication in the each Key Country within four months following the date
of release of the relevant Marketing Authorization.

 

4. Manufacturing and Supply

(a)          Price. Titan will manufacture and deliver the Semi-Finished
Products to Molteni and Molteni will purchase the Semi-Finished Products
exclusively from Titan subject to the terms herein. As consideration for the
supply of the Semi-Finished Product in the Territory, Molteni shall pay to Titan
the price specified in Schedule B hereto (the “Purchase Price”). The Purchase
Price shall remain fixed and binding through December 31, 2019. Thereafter, any
variation of the Purchase Price shall be adequately documented by Titan and
provided to Molteni and, in any event, cannot exceed the annual cost increases
incurred by Titan (i) under the DPT Agreement and (ii) associated with the
acquisition of the API.

 

(b)          Delivery. Titan shall deliver the Semi-Finished Products at Titan’s
manufacturing facility to the custody of the carrier provided by Molteni, Free
Carrier (FCA) (Incoterms 2010). Costs for the delivery of the Semi-Finished
Products from Titan to Molteni shall be borne by Molteni.

 

(c)          Analytical Methods. In order to facilitate the Release of the
Product in the Territory, Titan shall provide to Molteni all analytical methods
regarding the quality assessment of the Product (including the specification of
the relevant laboratory equipment), as requested by applicable European
regulators or as reasonably requested by Molteni to facilitate the Release.

 

(d)          Inspections and Defects. Either prior to delivery from Titan’s
manufacturing facilities, or once the Semi-Finished Products are delivered to
Molteni’s warehouse in Scandicci - Florence, at Molteni’s discretion, Molteni
will perform a visual incoming inspection, as well as any other quality control
activities necessary to Release the Product. Molteni shall have the right to
reject any batch containing defective Product or parts thereof.

 

(e)          Regulatory Support and Audits. Titan is committed to meeting the EU
requirements for commercialization of the Product in the Territory and shall use
all commercially reasonable efforts to provide Molteni and/or any competent
authorities full access to documents and information regarding the manufacturing
of the Product and it shall allow inspections of all facilities involved in the
manufacturing process of the Product and/or the API and to aid Molteni in
obtaining all necessary licensing and regulatory approval. 

 

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(f)          Third-Party Manufacturing. Molteni shall be entitled, in its sole
discretion, to include into the Dossier and register Molteni itself or another
European contract manufacturing organization as an additional manufacturing site
for the Product at any time: (i) following the fifth anniversary of the
execution of the Agreement, (ii) if Titan fails to meet its obligations to
timely or completely fill at least 90% of Molteni’s purchase orders for a period
of 90 days, or (iii) if the Purchase Price increases by more than maximum
increase allowed as calculated pursuant to Section 2.7(c) of the DPT Agreement,
then, in each case, Molteni shall be released from any exclusivity obligation to
order Product from Titan. For the sake of clarity, Titan shall be obligated to
provide Semi-Finished Product to Molteni at Molteni’s request for the term of
this Agreement.

 

5. Steering Committee

The Parties shall set up a special committee (the “Steering Committee”) composed
of qualified individuals from both companies. The Steering Committee shall meet
on a quarterly basis prior to the registration of the Product and on a six month
basis following such registration. The Steering Committee shall meet to (i)
share all the clinical information relating to the Products, including those
related to the pharmacovigilance activities, and any new planned or ongoing
clinical trial relating to the Product, (ii) review sales performance, (iii)
exchange best practices among the different geographic areas, (iv) share annual
sales targets, (v) review/approve publication strategies, press releases and
conference participations by Key Opinion Leaders, and (vi) share plans for
additional launches within the Territory within six months following execution
of the Agreement, which plans will be subject to change in Molteni’s reasonable
discretion. Molteni may, at its discretion, invite Product licensees to
participate as non-members of the Steering Committee.

 

6. New Therapeutics Indications

 

In the event that the Product is approved for a Subsequent Indication in any
part of the Territory, Molteni shall make the milestone payment to Titan set
forth below and shall have the ability to market and promote the Product for
such Subsequent Indication in relevant part of the Territory under the same
terms and conditions set forth in the Agreement, including pursuant to the same
exclusive licenses set forth herein.

 

7. Exclusivity/Non Competition

For the five year period following issuance of the MAA, Molteni shall not market
any Competitor Product in the Territory. Thereafter, if Molteni markets any
Competitor Products in the Territory, it shall pay Titan the royalties set forth
below. During the term of the Agreement, Titan shall not enter into any
additional arrangements relating to and shall not, directly or indirectly,
commercialize the Product in the Territory. For the sake of clarity, Titan shall
not market or offer for sale, directly or indirectly, any Competitor Product in
the Territory during the term of this Agreement.

 

8. Consideration

 

As consideration for the granting of the license of the Product in the
Territory, Molteni shall pay to Titan the following amounts:

 

 

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(a)         Milestones Payments.

 

(i)€ 2,000,000.00 (Euros two million) non-refundable, upon signing of the
Agreement;

(ii)€ 1,000,000.00 (Euros one million) upon release of a written positive
scientific advise by the Committee for Medicinal Products for Human Use (CHMP)
on the Product for the Initial Indication with the desired Label;

(iii)€ 1,000,000.00 (Euros one million) upon issuance by the EMA of the
Marketing Authorization;

(iv)€ [*************************] upon approval of the reimbursement price in
each of the following countries: Italy, German, United Kingdom and France for an
aggregate of € 2,000,000.00 (Euros two million);

(v)€ [*************************] upon issuance by the EMA of a Marketing
Authorization of the Product for each Subsequent Indication, provided that
marketing the Product for the Subsequent Indication would, in the absence of the
license set forth herein, infringe valid claims of the Titan Patents. For the
sake of clarity, such milestone payment shall be due and payable by Molteni one
time for each Subsequent Indication.

 

If the Marketing Authorization under section (c) is not obtained on or prior to
September 30, 2019, then the milestone payments provided under sections (c) and
(d) shall be reduced by 50% (fifty percent).

 

(b)       Royalty Payments.

Molteni shall pay to Titan the following annual royalties on Net Sales of
Product in the Territory or Additional Territory, as applicable in each tier
(e.g., € [************] total Net Sale of Product in the Territory shall be
subject to royalty payments equal to [*************************]):

 

 

    From (€)     To (€)     Royalty (%) on Net Sales   TIER 1     [************]
  [************] [************]   TIER 2 [************] [************]
[************]   TIER 3 [************] [************] [************]   TIER 4
[************] [************] [************]     TIER 5 [************]
[************] [************]     TIER 6 [************] [************]
[************]

 

 

Molteni shall pay Titan a royalty of 3% on Net Sales of any Competitor Product
sold by or on behalf of Molteni in the Territory or Additional Territory, as
applicable.

If the patent currently existing for the Product and/or any of the material
claims therein ceases to be valid as a result of litigation on an alleged
infringement of applicable IP, then Molteni shall cease to pay any royalties.

 

9. Sublicensing

Titan shall have the right to approve any sublicense by Molteni other than to an
affiliate, which approval shall not be unreasonably withheld. 

 

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10. Other territories

 

 

Molteni shall have the right, exercisable at any time on or prior to June 30,
2019, to extend the Territory to the following additional groups of countries
(which, upon exercise of this right, will each be an “Additional Territory”):

GROUP A: Middle East / North Africa;

GROUP B: Former CIS (Russia, Ukraine, Belarus, Armenia, Georgia, Azerbaijan,
Kazakhstan, Kyrgyzstan, Moldova, Tajikistan and Uzbekistan), under the same
terms and conditions set forth in relation to the Territory by paying to Titan
an additional milestone of € 1,000,000.00 (Euros one million) per group. For the
sake of clarity, no additional milestone payments would be due as to any
Additional Territory should Molteni exercise its right in this section.

 

11. IP Protection

Titan shall be responsible for the initiation and prosecution of any legal
action in connection with any infringement of applicable IP laws relating to the
Product and the Trademark. Titan shall manage any litigation and bear any
relevant cost. Under no circumstance shall Molteni be held liable for damages
payable by Titan to any third party in relation thereto and Titan shall
indemnify and hold Molteni harmless with respect thereto. Titan shall, at its
expense, diligently prosecute the Titan IP, including the Titan Patents in the
Territory.

 

12. Third Party Rights

 

Should Molteni, in its reasonable discretion, determine that it reasonably
requires third party rights in order to exercise its rights and/or meet its
obligations pursuant to this Agreement, the parties agree to discuss in good
faith a reduction of royalty fees to account for such third party license fees
as may be due and payable by Molteni.

 

13. Pharmacovigilance and Drug Safety

Following the MAA Transfer, all activities related to local drug safety and
pharmacovigilance in the Territory shall be Molteni’s responsibility and subject
to applicable law. Molteni shall report all material and adverse events to Titan
to ensure global coordination of adverse events. All activities connected to
global drug safety, pharmacovigilance and global safety labeling are within
Titan’s responsibility. In this respect, prior to the MAA Transfer, the Parties
shall execute a separate pharmacovigilance agreement in compliance with
applicable European laws and regulations. In addition, the Parties shall
exchange any information relating to alerts, batch recall or manufacturing
deficiencies as soon as they became aware of such, in each case, subject to
applicable law.

 

14. Term and Termination

The Agreement shall remain effective until the later of (i) termination of any
applicable data exclusivity period, (ii) expiration of the last valid claim of
patent rights covering the Product in the Territory and (iii) fifteen (15) years
from the execution of the Agreement, provided that clause (iii) shall terminate
when any third party substantially similar product enters the market. To the
extent Molteni enters into any Additional Territories pursuant to the terms
herein, this Agreement shall remain in effect for fifteen (15) years from the
written notice of such extension, provided that such term for the Additional
Territories shall terminate when any third party substantially similar product
enters the relevant market. The parties agree that entering in to any Additional
Territories shall not affect the term of this Agreement as to the original
Territory. Thereafter the term of any Territory or Additional Territory, Molteni
shall have a fully paid up, perpetual, exclusive (even as to Titan and its
affiliates) and sublicensable license to continue to use the Titan IP subject to
the license rights set forth herein by making a one-time payment to Titan of €
100.000 (Euros one hundred thousand), and Molteni will no longer be liable for
any royalty or milestone payments.

 

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In addition to standard termination clauses and to the other termination clauses
provided herein, each Party shall be entitled to immediately terminate the
Agreement in cases of (i) withdrawal of the Product from the market by any
regulatory authorities within the Territory; and (ii) if the Marketing
Authorization is not obtained on or prior to March 31, 2020.

 

15. Governing Law and Jurisdiction

This Term Sheet and the Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of laws and any dispute arising out of, or in connection with, this
Term Sheet or the Agreement, shall be subject to the exclusive jurisdiction of
any New York State or federal court located in the City of New York, County of
Manhattan.

 

16. Press Release

 

The parties will agree on the content of any press release relating to this Term
Sheet and the proposed subsequent Agreement, and neither party shall make public
the parties’ relationship, the existence of the Term Sheet or any of the terms
herein except as required by applicable securities or regulatory laws without
the prior written consent of the other party.

 

17. Binding Effect

 

This Term Sheet and any attachment hereto constitutes a binding obligation of
the Parties to enter into, execute and deliver the Agreement containing all the
essential elements contained in this Term Sheet. 

 

The undersigned have executed this Term Sheet as of the 27th day of November,
2017.

 

L. MOLTENI & C. DEI F.LLI ALITTI

SOCIETÀ DI ESERCIZIO S.P.A.

 

By:       Name: Giovanni Seghi     Title: President  

 

TITAN PHARMACEUTICALS, INC.

 

By:       Name: Sunil Bhonsle     Title:  Chief Executive Officer  

 

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Schedule A

 

European Patent Application No. 12193435.0

Publication No. EP 2561860A

“Implantable Polymeric Device for Sustained Release of Buprenorphine”

Inventors: Rajesh A. PATEL and Louis R. BUCALO

 

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Schedule B

 

[************]

 

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