Exhibit 10.3

New Collaboration Compound Supplement to the Collaboration Agreement

by and between

EPIRUS SWITZERLAND GmbH

and

LIVZON MABPHARM INC.

This New Collaboration Compound Supplement (this “Supplement”), dated as of
September 24th , 2015 (the “Supplement Effective Date”), to the Collaboration
Agreement (as defined below), by and between EPIRUS SWITZERLAND GmbH, a Swiss
corporation, having its principal place of business at General Guisan-Strasse 6,
6303, Zug, Switzerland (“Epirus”), and LIVZON MABPHARM INC., a company organized
and existed under the laws of China with legal address at No. 38 Chuangye North
Road, Jinwan,  Zhuhai, Guangdong, China 519090 (“Livzon”).  Epirus and Livzon
are sometimes referred to herein individually as a “Party” and collectively as
the “Parties.”

RECITALS 

WHEREAS, Epirus and Livzon are parties to the Exclusive License and
Collaboration Agreement dated September 24, 2014 (the “Collaboration Agreement”;
capitalized terms defined in the Collaboration Agreement shall have the same
meanings when used in this Supplement), pursuant to which Epirus and Livzon have
agreed to jointly develop and commercialize up to five (5) Collaboration
Compounds, to be jointly selected, on the terms and conditions stated therein.

WHEREAS, the Parties desire to add Epirus’ proprietary product, BOW070
(tocilizumab), a biosimilar version of ActemraTM, an immunosuppressive drug for
the treatment of rheumatoid arthritis, polyarticular arthritis and systemic
juvenile idiopathic arthritis (“BOW070”), as a New Collaboration Compound to the
Collaboration Agreement, on the terms and conditions herein set forth.

NOW THEREFORE, in consideration of the foregoing premises, the mutual promises
and covenants of the Parties hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties, intending to be legally bound, do hereby agree as follows:

1. Addition of New Collaboration Compound.    Effective as of the Supplement
Effective Date, the Parties hereby designate BOW070 to be a New Collaboration
Compound under the Collaboration Agreement, as supplemented by the terms and
conditions specified in this Supplement.

 

2. Development and Commercialization Terms and Conditions for BOW070.

 

a. Initial Product Development Plan.  The initial Product Development Plan for
BOW070 through Pre-Clinical Development is attached hereto as Exhibit A, with
the allocation of specific responsibilities between the Parties as indicated
thereon.  The Parties, through their respective designees on the JSC, shall
update the Product Development Plan to address the allocation of key activities,
additional responsibilities of each Party and timelines for the further
Development of BOW070 in accordance with the terms and conditions set forth in
the Collaboration Agreement.  The JSC may also determine the [***], as described
in Section 4.5.2(a) of the Collaboration Agreement. For clarity, as part of its
responsibility in carrying out the Pre-Clinical Development under the initial
Product Development Plan, Livzon shall be solely responsible for initiating the
Product Development Plan and in addition shall be solely responsible

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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for the innovator analysis, drug substance process development, characterization
work, bioassay, formulation development, [***], and one batch of GMP drug
substance material suitable for global Clinical Trial therein.  Notwithstanding
the foregoing, tasks associated with analytical method validation (except for
those agreed upon in the Product Development Plan) and process validation are
explicitly excluded from this Product Development Plan.  If, following the
Supplement Effective Date, any such activities are required for Development of
the New Collaboration Compound, both Parties shall negotiate to determine the
timing and cost responsibilities in respect thereof.

 

b. Clinical/Commercial Responsibility.  Clinical and Commercial responsibilities
shall follow the terms of the Collaboration Agreement, with each Party being
responsible at its sole expense for conducting all Clinical Development,
Regulatory Filings, Regulatory Approvals and all Commercialization of the New
Collaboration Compound in its respective Territory.

 

3.

Manufacturing Terms and Conditions for BOW070 

 

a. Preferred Supplier.  As per the Collaboration Agreement, Livzon may be a
Preferred Supplier of the New Collaboration Compound of clinical and commercial
supply subject to meeting quality requirements set forth in product
specifications, and cGMP compliance of the destination countries. If Livzon
satisfies the above mentioned requirements for the New Collaboration Compound,
then the following terms shall be included in the related Commercial Supply
Agreement:

 

i.Commercial Supply Price:  [***]; and

 

ii.Minimum Supply Commitment:  [***];.

 

;  provided that such Preferred Supplier status will not extend beyond the
Minimum Supply Commitment unless the Parties agree on Livzon’s satisfaction of
all of the Preferred Supplier requirements set forth in Section 5.2 of the
Collaboration Agreement.

 

b. Quality Audits.  Within 90 days of the Supplement Effective Date, an initial
GMP audit shall be conducted by an auditor with EU / FDA experience to determine
the current GMP status of Livzon’s facilities under Global Standards.  Livzon,
at its sole expense, shall follow any gap analysis as a result of the audit to
achieve such GMP standards in the timeline agreed by the Parties.  Prior to GMP
manufacturing of the New Collaboration Compound, a second GMP audit shall be
conducted to confirm Livzon’s reasonable satisfaction of such cGMP standards at
its facilities.  Qualified auditors shall be mutually selected by both Parties.
The cost for the GMP audits shall be split 2/3 (Epirus) : 1/3 (Livzon).

 

4.

Financial Terms for BOW070

 

a. Product Development Payment.    Epirus shall pay Livzon an aggregate of
US$4,500,000 as full consideration to carry out the following activities,
inclusive of materials (except sufficient lots of innovator’s reference product,
[***]) (the “Pre-Clinical Development Expenses”): the innovator analysis, drug
substance process development, characterization work, bioassay, formulation
development, [***], and one batch of GMP drug substance material suitable for
global Clinical Trial, as further set forth in the Product Development
Plan.  Epirus shall not be obligated to pay for additional Clinical Supply cost
beyond what is already included in the US$4,500,000 payment referred to
above.  The Pre-Clinical Development Expenses shall be paid by Epirus to Livzon
in the following milestone payments within ten (10) days after the date of
achievement of the relevant milestones as set forth in the table below:

2

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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Milestone

Payment

Execution of this Supplement

$1,500,000

[***]

$1,000,000

[***]

$1,000,000

[***]

$1,000,000

 

b. Royalty payments.  Royalties payable by each Party in its respective
Territory shall be based on “Gross Margin” (as defined below) in the following
amounts:

 

i.For Livzon, a 4% royalty against Gross Margin, payable to Epirus; and

 

ii.For Epirus, a 2% royalty against Gross Margin, payable to Livzon if Epirus
elects to have Livzon manufacture Commercial supply, 3%, if Epirus does not
elect to have Livzon manufacture Commercial supply.

As used herein, “Gross Margin” shall mean Net Sales minus the Product supply
price.  Notwithstanding the foregoing, royalty obligations will not commence
until the Product has Commercially launched in each Party’s Territory.

5. Further Assurances; Full Effect of Collaboration Agreement. Each Party shall
perform all further acts and execute and deliver such further documents as may
be necessary or as the other Party may reasonably require to implement or give
effect to this Supplement. With the exception of those sections of the
Collaboration Agreement that are supplemented by this Supplement, the remainder
of the Collaboration Agreement shall remain in full force and effect as provided
therein, and shall apply to BOW070 as a New Collaboration Compound for all
purposes thereunder.

 

6. Counterparts; Facsimile Execution. This Supplement may be executed in two (2)
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Supplement may
be executed by facsimile signatures and such signatures shall be deemed to bind
each Party as if they were original signatures.

 

7. Language.  The official text of this Agreement is in the English language.
Without limiting the foregoing, in the event of any conflict or inconsistency
between the English text of this Agreement and any text or version of this
Agreement in another language, the English text of this Agreement will prevail.

 

[Signature Page Follows] 

3

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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In Witness Whereof, the Parties have as of the Supplement Effective Date duly
executed this Supplement.

 

 

 

 

 

 

Epirus Switzerland GmbH 

Livzon Mabpharm Inc.

 

 

 

 

By:

 /s/ Amit Munshi

 

By:

/s/ Daotian Fu

Name:

      Amit Munshi

 

Name:

     Daotian Fu

Title:

      Managing Director

 

Title:

     General Manager

 

4

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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EXHIBIT A

CMC Development Plan

For Biosimilar Tocilizumab (BOW 070/LZM 008)

 

Summary

 

[***]

 

 

 

5

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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