Exhibit 10.44

[*]=CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.

 

FIRST ADDENDUM TO THE TERMS & CONDITIONS DATED FEBRUARY 17, 2004

THERAVANCE, INC. AND BEN VENUE LABORATORIES, INC.

 

This First Addendum (the “Addendum”) to the Terms & Conditions Agreement dated
on or about February 17, 2004 between Ben Venue Laboratories, Inc., with its
office at 300 Northfield Road, Bedford, Ohio 44146 (“BVL”) and Theravance, Inc.,
901 Gateway Blvd., South San Francisco, CA 94080 (“Theravance”).  BVL and
Theravance may be referenced herein individually as a “Party” and jointly and
the “Parties.”

 

1.     RECITALS

 

                WHEREAS, on or about February 17, 2004, the Parties entered into
a certain Terms & Conditions Agreement relating to BVL’s manufacturing of
TD-6424, a copy of which is attached and incorporated by reference as Exhibit
“A” (the “Agreement”); and

 

WHEREAS, the Parties mutually desire to amend the Agreement to include a quality
agreement, a copy of which is attached and incorporated by reference as
Attachment “A” (the “Quality Agreement”).

 

NOW THEREFORE, for good and valuable consideration, the receipt and legal
sufficiency of which is hereby acknowledged, the Parties agree as follows:

 

1.               Additional Section

 

1.1.           A new Section 23.3 shall be added to the Agreement which shall
state:

 

 

23.3.  Quality Agreement. Certain quality matters relating to Product are
included in the Quality Agreement which is attached and incorporated herein by
reference as Attachment “A” (the “Quality Agreement”).  If any provision of the
Quality Agreement is irreconcilably inconsistent with the terms of this
Agreement, the terms of this Agreement shall prevail.  Unless defined to the
contrary within the Quality Agreement, the terms defined in this Agreement shall
have the same meaning in the Quality Agreement.

 

1.2.           All other terms and conditions of the Agreement shall remain in
full force and effect.

 

 

2.               Execution

 

FOR:      BEN VENUE LABORATORIES, INC.

 

 

 

Signature:

/s/[*]

Date: September 19, 2007

 

[*]

 

 

Vice President, Contract Manufacturing Services

 

 

 

 

FOR:      THERAVANCE, INC.

 

 

 

Signature:

/s/ A.L. Campbell

Date: September 21, 2007

 

Name: Arthur Campbell

 

 

Title:Senior Vice President, Technical Operations, Process R&D

 

 

--------------------------------------------------------------------------------

CONFIDENTIAL

[COPY]

 

Terms and Conditions for the Manufacture of Products by Ben Venue Laboratories,
Inc

 

This signed agreement is required to provide services and manufacture your
Product, TD-6424, at Ben Venue Laboratories, Inc. This agreement covers all
Products & services for the development and manufacture of TD-6424 for
Theravance, Inc. at Ben Venue and remains in place until superceded by a formal
supply agreement.

 

By:

 

Ben Venue Laboratories, Inc.

300 Northfield Road

Bedford, Ohio 44146

 

Hereinafter referred to as BVL, and

 

Theravance, Inc.

901 Gateway Blvd.

South San Francisco, CA 94080

 

Hereinafter referred to as Customer,

 

agree to the following terms and conditions in reference to the development and
manufacture of Customer’s Products at BVL.

 

1. Facilities

 

1.1 BVL will provide manufacturing facilities that conform to current Good
Manufacturing Practices established by the FDA and will perform its obligations
hereunder and supply Product in accordance with all applicable laws and
regulations and in accordance with written documentation provided to Customer.

 

1.2 All services will be performed at BVL facilities unless otherwise agreed to
in writing by BVL and Customer.

 

2. Audits

 

2.1 Customer and any third-party consultant appointed by Customer shall have
reasonable access to observe manufacturing activities, as needed and inspect
BVL’s facilities and procedures with respect to the Products including all
analytical and manufacturing documentation directly related to the Products upon
scheduling in advance with BVL’s compliance manager. Any such Customer appointed
third-party consultant must be pre-approved by BVL and be bound in writing to
the Confidentiality Agreement signed by Customer and BVL. Customer shall have
the right to one annual compliance audit each year to (i) observe, inspect and
audit the manner in which BVL, conducts quality control of Customer Products,
(ii) inspect BVL’s plant and records relating to BVL’s quality and other
controls related to its manufacture of the Products For cause audits will be
scheduled as mutually agreed to by the parties.

 

2.2 Customer’s employees and/or representatives including consultants who
inspect BVL facilities shall comply with all BVL policies and procedures.
Customer assumes all liability resulting from presence of Customer’s employees
at BVL facilities.

 

3. Materials & Documentation

 

3.1 Customer will provide active drug substance and any other mutually agreed to
Customer supplied components [*] in advance of scheduled manufacturing date in
accordance with BVL’s procedures.

 

3.2 BVL will, at a minimum, perform [*] test to verify active drug substance as
incoming material.

 

3.3 BVL will release all materials provided by BVL.

 

[*]=CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS. 

 

--------------------------------------------------------------------------------

CONFIDENTIAL

[COPY]

 

3.4 Customer will provide materials and manufacturing information necessary for
the development and manufacturing of Products.

 

 

3.5 Customer will specify samples to be sent for testing and provide address for
shipment on the purchase order for all sample request not included in the Master
Production Record.

 

 

3.6 BVL will provide, at Customer’s request, a copy of the BVL Drug Master File
(DMF) and authorization for FDA to access the DMF. This may be used by the
Customer to prepare a Regulatory filing.

 

 

3.7 BVL shall deliver Product and/or Services to Customer in compliance with
quotations provided to Customer which shall be referenced by quotation number on
Customer’s purchase order, which shall include by reference specifications
mutually agreed upon by the Customer and BVL. For manufacturing services said
specifications must be incorporated in the master batch record or in a special
instruction to a specific batch record.

 

 

3.8 BVL will submit to Customer a Certificate of Compliance, a Certificate of
Analysis listing results of testing, and a BVL QA approved completed batch
record for each lot of Product manufactured.

 

 

3.9 Customer will provide written QC testing requirements, methods,
specifications and reference standard for the drug Product. Customer will
provide a Certificate of Analysis for the Active Pharmaceutical Ingredient and
reference standard. Customer will approve initial testing documents, the Master
Production Record, Packaging Record, Master Labels and any revisions of the
documents thereafter. Revisions of approved documents requested within eight
weeks of scheduled manufacturing or other services may cause a delay or
postponement of manufacturing and/or other services requested by the Customer.

 

3.10 Customer is responsible for notifying BVL with instruction for disposition
of tailings and rejects, which will be incorporated into the Master Batch Record
and include a shipment address for tailing and rejects if Customer requests
return of tailings and rejects.

 

3.11 Customer will evaluate BVL Certificate of Analysis 3.12 Customer will
provide written authorization to BVL prior to shipment of Product.

 

3.12 Customer will be financially responsible for all materials purchased by BVL
on Customer’s behalf based on requirements communicated by Customer to BVL in
[*] Purchase Orders, [*].

 

4. Purchase Orders

 

4.1 Customer will provide Purchase Orders with information defined in Item 4.2
at least [*] in advance of the requested manufacturing date or [*] in advance of
the requested delivery date. Purchase Orders for other services will be issued
by the Customer on a mutually agreed upon timeline with BVL. All purchase orders
will reference the BVL quotation number(s) provided to Customer.

 

4.2 The following information must be included on all Purchase Orders

 

4.2.1 BVL end item number or description of service outlined in the Quotation
provided to Customer

4.2.2 BVL Product description or service description

4.2.3 Batch Size in vials from Quotation

4.2.4 Number of Batches

4.2.5 Delivery Date (Date for BVL, to release the lot and deliver Product &
batch record)

4.2.6 BVL Quotation Number for Product/Service

4.2.7 Delivery Address

4.2.8 Shipping requirements & Instructions (temperature, dedicated trucks,
preferred carrier, overnight etc.) Contact name for Preferred Carrier,
Temperature Monitors, Ship on BVL Release or Hold for Customer Authorization to
Ship or Ship in Quarantine.

4.2.9 Billing Address

 

[*]=CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS. 

--------------------------------------------------------------------------------

CONFIDENTIAL

[COPY]

 

4.2.10 Special Instructions for Specific Batch

 (Examples)

 “Annual Stability Batch”

  “Process Validation Batch”

“Special Sampling Instructions” mutually agreed to in advance

4.2.11 Customer Lot# and Expiration Date if Applicable

 

5. Forecast & Planning

 

5.1 Customer shall submit at least [*] before the start of each [*] an updated
estimate for both volumes and delivery dates of its requirement for Product for
the following [*]. The estimated requirements for the first of these [*] shall
be considered firm orders for which Customer will issue purchase orders pursuant
to Section 4 of this agreement. In addition a [*] forecast will be submitted by
the Customer to BVL on [*] for the following [*]. Ben Venue shall provide
Customer with a forecast template to be used for all forecasts. All forecasts
provided shall be non binding on either party, unless agreed to in writing by
both parties and shall be subject to acceptance of a purchase order which will
be confirmed in writing by BVL.

 

6. Insurance and Liability Limits

 

6.1 Customer will retain title to and risk of loss of the bulk active drug
substance, in process and in finished Product, except if BVL damages the
material while in storage at BVL’s facility, [*]. BVL will maintain general
liability insurance in an amount sufficient to cover the replacement cost of
Customer supplied raw materials [*], and will include Customer as an additional
insured under the relevant policies. For Process related losses see BVL 6.2.

 

6.2 After such time as all Production and Testing Procedures have been fully
developed and validated and a complete and successful technical transfer to
BVL’s production department has occurred, BVL will [*] Customer [*] per batch
for any [*] of customer supplied raw materials and/or components and will [*]
the manufacturing fee, if an invoice for the manufacturing fee has been issued
for the production, for any batch of Product which does not meet the
specifications contained in the master batch record, [*] portion of the batch if
applicable. The monetary values of all Customer supplied raw materials and
components must be disclosed to BVL prior to production in the questionnaire
provided by BVL to Customer. The Customer is responsible for notifying BVL in
writing of any changes in the value of the raw material or components supplied
to BVL. Further, any such [*] must be due to [*] or to [*] on their part.

 

6.3 BVL [*] for Customer’s consequential damages, including but not limited too
loss of sales, profit, clinical trial costs, regardless of the reason for such
consequential damages.

 

7. Safety

 

7.1 BVL and Customer shall mutually develop safety procedures for the handling
and manufacture of Product and treatment and disposal of waste relating thereto
that comply with all federal and state environmental and occupational safety and
health requirements. Such procedures shall be included in a separate document
and shall be followed by BVL and Customer in performing services under this
agreement.

 

7.2 Customer will provide Material Safety Data Sheets and other handling
information required by law, to be provided prior to shipment of any material to
BVL. BVL will not receive any material until all required information has been
provided.

 

7.3 Customer will provide BVL with [*] regarding safety of biological and drug
Products [*].

 

[*]=CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS. 

--------------------------------------------------------------------------------

CONFIDENTIAL

[COPY]

 

8. Payment and Pricing

 

8.1 Customer acknowledges that all invoices must be paid to BVL no later than
[*] after the Acceptance Period. The Acceptance Period is defined as the time
when the Customer receives the Certificate of Analysis, Certificate of
Compliance and BVL QA approved completed batch record for review and approval
for accepting the Product, . Customer must notify BVL within [*] after receipt
of COA, COC, and BVL QA approved, completed batch record, if invoice is to be
disputed. For manufacturing services an invoice will be issued after BVL’s
Documentation Department has issued a Certificate of Compliance or, if
applicable, at the time a Quarantine shipment is made, for non production
services invoices will be sent in accordance with the terms outlined in
Proposals / Quotations provided to Customer as work is performed for those
services

 

Any invoice(s) remaining to be paid after [*] from the date of the Acceptance
Period), unless such invoice(s) are in dispute, will result in [*].

 

8.3 Customer acknowledges that all prices of Product shall be on the basis of
F.O.B. on the dock at BVL plant, Bedford, Ohio.

 

8.4 Customer may be asked to [*] the Purchase Order [*].

 

8.4 BVL will consider that the Product has been accepted by Customer, unless BVL
is notified in writing within [*] after shipment of the completed batch record
that the Product fails to conform to applicable specifications or cGMP.

 

8.5 Pricing will be established in Proposal/Quotations provided to Customer by
BVL.

 

9. Cancellation or Postponement

 

9.1 Customer will pay a cancellation fee of [*] if cancellation or postponement
is within [*] of the scheduled manufacturing date. If cancellation occurs within
[*] of the scheduled fill date, Customer is responsible for paying [*].

 

10. Storage

 

10.1 Customer is responsible for storage charges for Products stored more than
[*] beyond BVL’s release. A formal quotation for these charges may be obtained
from BVL’s Contract Service Department. These charges are reviewed annually.
Short term storage of Product in BVL’s warehousing facilities beyond one month
must receive prior approval from BVL. Such approval will be granted on a
space-available basis.

 

11. Stability Program

 

11.1 Customer is responsible for stability testing program. Customer may
contract with BVL to perform stability testing under separate proposals provided
to Customer by BVL based on a mutually agreed to protocol.

 

12. Retention Samples

 

12.1 Customer is responsible for maintaining retention samples of all finished
Product shipped to Customer.

 

13. Release for Sale and/or Distribution

 

13.1 Customer is responsible for release of the final Product for sale or
distribution.

 

14. Complaints

 

14.1 Customer is responsible for maintaining complaint file and notifying BVL of
complaints relating to manufacturing defects.

 

15. Regulatory

 

15.1 Customer is responsible for securing the necessary regulatory approvals for
the Product.

 

[*]=CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS. 

--------------------------------------------------------------------------------

CONFIDENTIAL

[COPY]

 

15.2 Customer is responsible for Drug Listing of Product and providing a copy of
Drug Establishment Regulatory Form 2656 to BVL once Product is approved by U.S.
FDA for marketing.

 

15.3 Customer will certify that the Product to be manufactured by BVL shall not
be processed, packed, or distributed in violation of any provision of the
Federal Food, Drug and Cosmetic Act.

 

15.4 Customer is responsible for all Product specific Agency(s) filings
including the Annual Report filing with the FDA.

 

15.5 Customer is responsible to insure that all filings with any agency are
consistent with the specifications for the Product contained in [*].

 

15.6 Customer will provide BVL with copies of all regulatory approvals for both
clinical and commercial use of the Product and in addition provide BVL with [*]
filings in all countries for both clinical and commercial use, BVL requires this
information to be on file at BVL for regulatory agencies.

 

16. Confidentiality

 

16.1Unless otherwise stated, the terms of this Confidentiality section are
mutual between BVL and Customer as either a Disclosing Party or Receiving Party
as the case may be.

 

16.2 Information including but not limited to, data, reports, patents, patent
applications, trade secrets, or the like concerning any scientific, technical,
financial, trade, or business information applicable to the specifically agreed
to project shall be referred to herein as. “Confidential Information”. The
Customer shall provide such Confidential Information to BVL as Customer, in
consultation with BVL, believes is necessary for BVL to perform the services the
parties have mutually agreed to. BVL shall provide to Customer such BVL
Confidential Information as is necessary for Customer to evaluate the services
and the Product. The Receiving party agrees to protect and keep confidential all
Confidential Information and all notes of information obtained pursuant to this
Agreement. BVL agrees that it shall limit its use of the Customer Confidential
Information to performing certain services as mutually agreed to in writing by
the Parties. The Receiving Party also agrees that it shall not use any
Confidential Information, directly or indirectly, for its own benefit or that of
any person, firm or corporation other than the Disclosing Party; provided,
however, Customer shall be entitled to use any data or other information
necessary to prepare the Product. All information exchanged regardless of format
shall be considered Confidential Information.

 

16.3 Subject to Paragraph 16.2, the Receiving Party agrees and acknowledges that
the Confidential Information to be disclosed to it pursuant to this Agreement
constitutes unique and valuable commercial and proprietary information of the
Disclosing Party. Accordingly, the Receiving Party shall not duplicate,
disclose, or discuss any such Confidential Information to or with third parties,
without the prior written consent of the Disclosing Party. Except that the
Receiving Party may disclose Confidential Information received by it under this
Agreement only to those of its directors, officers, employees, agents, and
consultants who have a need to know such Confidential Information in the course
of the performance of their duties with respect to the purposes of this
Agreement and who are bound by written agreement to protect the confidentiality
of such Confidential Information in accordance with the terms hereof.

 

16.4 Notwithstanding anything to the contrary herein, the Receiving Party shall
not be obligated to maintain the confidentiality of any information provided to
it under this Agreement which:

 

a.             Is already in the public domain at the time of disclosure to it,
or

b.             at any time after disclosure to the Receiving Party becomes
public knowledge through no fault of the Receiving Party;

c.             is disclosed to the Receiving Party by any third party who is
free to make such disclosure; or

d.             is disclosed by the Receiving Party with the prior written
consent of the Disclosing Party, or

e.             is information which the Receiving Party can establish was in its
possession prior to disclosure or was subsequently and independently developed
by employees of or on behalf of the Receiving Party without use, direct or
indirect, of Confidential Information protected by this Agreement.

 

[*]=CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS. 

--------------------------------------------------------------------------------

CONFIDENTIAL

[COPY]

 

f.              is required to be disclosed pursuant to a requirement of law,
subject to provisions outlined in Item 16.8 of Section 16 of this agreement.

 

16.5 The confidential undertakings and agreements of the Receiving Party shall
survive termination of this Agreement. Promptly upon termination of this
Agreement and request of the Disclosing Party, the Receiving Party shall return
to the Disclosing Party all notes of information obtained pursuant hereto and
summaries thereof and any copies of documents of the Disclosing Party, personnel
interviews, or other Confidential Information in its possession. This Agreement
shall not be construed as a grant of any right or license to the Receiving Party
with respect to Confidential Information or the Customer’s Product or as a
requirement to either party to enter into any further arrangement with respect
to Confidential Information the Customer’s Product or BVL’s services. The
foregoing is subject to the provisions of Paragraph 16.2.

 

16.6 The confidentiality obligations of this Agreement shall be maintained for a
period of [*] beyond the expiration or termination of this Agreement.

 

16.7 Provided all obligations of this Agreement are maintained, the parties
understand and acknowledge that the other may now market or have under
development products which are competitive with products now offered or which
may be offered by the other, and the parties’ communications hereunder will not
serve to impair the right of other to develop, make, use, procure, or market
products or services now or in the future which may be competitive to those
offered by the other party nor for the parties to disclose any planning or other
information to the other.

 

16.8 Notwithstanding any provision herein to the contrary, in the event that any
Receiving Party hereafter becomes obligated by mandatory applicable law,
regulatory rule or judicial or administrative order to disclose Confidential
Information or any portion thereof, to any third party, governmental authority
or court, the Receiving Party shall immediately notify the Disclosing Party
thereof of each such requirement and identify the Confidential Information so
required thereby, so that the Disclosing Party may seek an appropriate
protective order or other remedy with respect to narrowing the scope of such
requirement and/or waive Receiving Party’s compliance with the provisions of
this Agreement.

 

16.9 Both parties agree that should this Agreement be breached, money damages
would be inadequate to remedy such a breach. As a result, the non-breaching
party shall be entitled to seek, and a court of competent jurisdiction may
grant, specific performance and injunctive or other equitable relief as a remedy
for any such breach of this Agreement. Such remedy shall be in addition to all
other remedies, including money damages, available to a non-breaching party at
Law or in equity.

 

16.10 Upon request and subject to the other provisions of this Agreement, each
party shall return all copies of the Confidential Information to the other
party, except for a single copy to be kept by it’s legal counsel in its
confidential file for the purpose of determining compliance with its obligations
of this Agreement.

 

16.11 Neither party will issue any press release or other public announcement
relating to any activities involving the other party without the prior written
consent of the other party, except where such announcements are required by law
or regulation. The parties will use all reasonable efforts to consult with the
other and cooperate with respect to wording of any such announcement.

 

16.12 New techniques, inventions, processes and know-how (hereinafter “New
Developments”) that are useful in the Manufacturing, using or selling of the
Product may be developed by BVL during the performance of this Agreement. To the
extent Customer’s Confidential Information is used to make any such New
Development, then Customer shall have ownership of such New Development, and BVL
shall have a non-transferable, non-exclusive, royalty-free, worldwide,
perpetual, license to make, use New Development such license shall not include
BVL’S use of Customer’s Confidential Information or use of New Development to
make Product. Notwithstanding the grant of such license, BVL shall not use such
New Development or Customer’s Confidential Information to make, or assist third
parties to make Product. BVL agrees to cooperate in the filing and prosecution
of all New Development patent applications owned by Customer, but Customer shall
bear all associated expenses. As to New Developments that may be developed by
BVL during the performance of this Agreement and do not use Customer’s
Confidential Information, BVL grants Customer a non-transferable, royalty-free,
irrevocable, worldwide, non-exclusive license to make, have made, use or sell
the New Development in connection with Product.

 

[*]=CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS. 

--------------------------------------------------------------------------------

CONFIDENTIAL

[COPY]

 

17. Batch Rejections

 

17.1 BVL will reserve the right to sample and retest Product per defined SOP if,
prior to Customer’s release, Customer claims that Product fails to meet
applicable specifications.

 

17.2 Customer will provide an approved rework procedure (if Product can be
reworked).

 

17.3 In the event of a rejection of a batch of Product, BVL will cease further
production of Product until such time as the results of the investigation have
been communicated to Customer and Customer has confirmed the corrective action.
Should Customer desire to have Product manufactured while the investigation is
in process, Customer will be responsible for the fees for service performed by
BVL whether the batch is accepted or rejected by Customer or BVL. Customer will
provide a written statement of financial responsibility upon requesting BVL to
perform additional production while investigations and corrective actions are
being determined by BVL and Customer.

 

17.4 Customer may reject any commercial, developmental or clinical Products
manufactured for Customer if such Products fail to comply with Manufacturing
Instructions and Specifications, incorporated in the master batch record,
previously agreed upon by Customer and Ben Venue. However, until such time as
all manufacturing processes and/or analytical procedures are validated, Customer
will be financially responsible for all BVL fees for services for each batch of
Product provided by BVL, at prices confirmed by quotation(s) and purchase
orders, unless such batch is rejected due to [*] of BVL. Customer acknowledges
that until all processes and methods are [*] that additional cost may be
incurred for unanticipated developmental issues.

 

18. Term and Termination

 

18.1 This agreement remains in effect until superceded by a future agreement or
upon termination by either party.

 

18.2 This agreement may be terminated by either party by giving [*] written
notice to the other.

 

19. Notices

 

19.1All notices required or permitted hereunder shall be given in writing and
sent by mailed postage prepaid, certified or registered mail, return receipt
requested, or sent by a nationally recognized express courier service, or
hand-delivered at the following addresses:

 

 

If to Ben Venue:

Ben Venue Laboratories, Inc.

 

 

A Boehringer–Ingelheim Company

 

 

Attn: General Manager

 

 

Contract Manufacturing Services

 

 

300 Northfield Road

 

 

Bedford, Ohio 44 146

 

 

Fax:[*]

 

 

 

 

If to Theravance:

Theravance, Inc.

 

 

Attn: General Counsel

 

 

901 Gateway Blvd.

 

 

South San Francisco, CA 94080,

 

 

Fax: [*]

 

Notices shall be effective upon receipt. A party may change its address listed
above by written notice to the other party.

 

20. Amendments and Waiver of Provision

 

20.1 This Agreement may only be amended by a written instrument duly executed by
both parties.

 

20.2 No waiver of any provision of this Agreement shall be effective unless the
party whose rights are being waived duly executes it. No waiver with respect to
any one occurrence, action, or inaction shall be effective with respect to any
subsequent or other occurrence, action or inaction, similar or otherwise.

 

[*]=CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS. 

--------------------------------------------------------------------------------

CONFIDENTIAL

[COPY]

 

21. Assignment

 

21.1 This Agreement may not be assigned by either party hereto EXCEPT to an
affiliate or a purchaser of all or substantially all of the stock or assets of
either one of the parties without the prior written consent of the other and
shall be binding upon and inure to the benefit of the successors and permitted
assigns of each party.

 

22. Governing Law

 

22.1 This Agreement and the rights, duties and obligations of the parties
hereunder shall be governed by and construed in accordance with the laws of the
State of Delaware, USA.

 

23. Miscellaneous

 

23.1 Customer will provide the name and phone numbers of a contact person(s) who
may he called at any hour during the times when BVL is manufacturing the
Product.

 

23.2 Nothing contained in this Agreement shall be construed, by implication or
otherwise, as an obligation to enter into any further agreement relating to any
of the Confidential Information or as the grant of a license to either party to
use the other’s Confidential Information other than for the purpose herein.

 

These terms and conditions supersede any conflicting Terms and Conditions
contained with the Customer’s Purchase Orders or on BVL’s Purchase Order
acknowledgment. Customer acknowledges that these terms and conditions are
incorporated by reference on every purchase order.

 

THIS DOCUMENT SUPERSEDES ALL OTHER DOCUMENTS AND AGREEMENTS.

 

For BEN VENUE LABORATORIES, INC. (BVL)

 

 

BY

 /s/[*]

 

 

[*]

 

General Manager,Contract Manufacturing Services

Date: 2-17-2004

 

 

 

 

For: THERAVANCE, INC.

 

BY

 /s/ A.L. Campbell

 

 

Arthur Campbell

 

 

Senior Vice President, Technical Operations, Process R&D

Date: Feb 13, 04

 

 

 

 

 

[*]=CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS. 

--------------------------------------------------------------------------------

CONFIDENTIAL

 

Attachment “A”

Quality Agreement

Theravance, Inc. and Ben Venue Laboratories, Inc.

 

This Quality Agreement (the “Quality Agreement”) is a required and integral part
of the Terms & Conditions (the “Agreement”) with an Effective Date of February
17, 2004 to which it is attached and integrated. This Quality Agreement defines
the roles and responsibilities for BVL quality operations when providing
services for Customer and further defines how BVL and Customer will interact
with each other.

 

A.1          Purpose and Term of the Quality Agreement

Capitalized terms used in this Quality Agreement and not otherwise defined shall
have the meanings ascribed thereto in the Agreement unless otherwise specified. 
This Quality Agreement outlines the responsibilities of Customer and BVL with
respect to the quality assurance and cGMP compliance of the Product and is the
Quality Agreement referenced in the Agreement.  In the event of any conflict
between the terms of this Quality Agreement and the Agreement, the terms of the
Agreement will control.

A matrix of responsibilities included at the end of this document delineates the
primary responsible Party for the various aspects of this Quality Agreement.

This Quality Agreement commences with the Effective Date of the Agreement and
remains in effect through the term of that Agreement.  In the event that the
Agreement is terminated for any reason provided for therein, the Quality
Agreement will terminate on the later of: (i) the expiration date of the last
Batch of Product produced by BVL for commercial distribution; (ii) completion of
any ongoing stability studies; or (iii) two years of the termination of the
Agreement.

All changes in this Quality Agreement must be documented in writing as an
Addendum to the original Quality Agreement and reviewed and approved in writing
by representatives from Customer and BVL.

This Quality Agreement is between Customer and BVL.

A.1.1      Customer Quality Representatives:

Name:

 

[*]

Title:

 

Vice President, Quality

Company:

 

Theravance, Inc.

Street Address:

 

901 Gateway Blvd.

City, State Zip:

 

South San Francisco, CA 94080

Phone:

 

[*]

Fax:

 

[*]

E-mail:

 

[*]

 

Quality Agreement (BVL and Theravance)

Page 1

[*]=CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS. 

--------------------------------------------------------------------------------

CONFIDENTIAL

 

This Quality Agreement has been reviewed and approved by:

FOR CUSTOMER:

 

SIGNATURE: /s/
[*]                                                                           
DATE: September 24, 2007

A.1.2      BVL Quality Representatives:

Name:

[*]          

Title:

Vice President of Quality Operations              

Company:

Ben Venue Laboratories, Inc.            

Street Address:

300 Northfield Road            

City, State Zip:

Bedford, OH 44146-0568    

Phone:

[*]

Fax:

[*]          

E-mail:

[*]

 

FOR BVL:

 

SIGNATURE: /s/
[*]                                                                           
DATE: 9/19/07

 

A.1.3      BVL Business Representative:

Name:

[*]          

Title:

Vice President, Contract Manufacturing Services         

Company:

Ben Venue Laboratories, Inc.            

Street Address:

300 Northfield Road            

City, State Zip:

Bedford, OH 44146-0568    

Phone:

[*]

 

Quality Agreement (BVL and Theravance)

Page 2

[*]=CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS. 

--------------------------------------------------------------------------------

CONFIDENTIAL

 

Fax:

[*]

 

 

E-mail:

[*]

 

FOR BVL:

 

SIGNATURE: /s/
[*]                                                                           
DATE: 9/17/07

A.1.4      On-Call Customer Representative:

In addition to the foregoing contact information, Customer will provide the name
and phone numbers of a contact person(s) who may be called at any hour during
the times when BVL is Manufacturing the Product, as follows:

Name:

[*]

Title:

Vice President, Pharmaceutical R&D

Company:

Theravance, Inc.

Street Address:

901 Gateway Blvd.

City, State Zip:

South San Francisco, CA 94080

Phone:

Work) [*]               Cell) [*]

Fax:

[*]

E-mail:

[*]

 

A.2          Quality Responsibilities

The activities for and associated with the manufacturing of the Product must
meet the current cGMPs as set forth in the “Code of Federal Regulations of the
U.S. Food and Drug Administration”, 21 CFR Parts 210 & 211, as well as “The
Rules Governing Medicinal Products in the European Community”, volume IV, “Guide
to good manufacturing practice for medicinal products”, as well as the
requirements of any applicable national guidelines to which the Product has been
registered. In the event of a conflict in cGMPs, the U.S. Code of Federal
Regulations shall apply.

BVL is responsible for review and approval of all manufacturing, testing, and
support documentation executed in the Production of each Batch of the Product as
included or referenced in the Master Batch Record and for providing formal
release to Customer. Customer is responsible for further release of each Batch
of the Product for commercial and any other use.

Any dispute between Customer and BVL with regard to acceptance of the Product
shall be subject to the procedures as set out in the Agreement between Customer
and BVL. Customer’s disposition will be independent of BVL’s review and release.

Quality Agreement (BVL and Theravance)

Page 3

[*]=CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS. 

--------------------------------------------------------------------------------

CONFIDENTIAL

 

BVL is responsible for maintaining training records for all personnel that
perform cGMP functions relating to the Customer operations performed at the
site, including personnel in QA/QC, manufacturing, etc.

A.3          Regulatory Compliance and Product Licensure

A.3.1           Customer is the owner of the Product and is responsible for
product licensure, annual reports, and any other regulatory filings that are
required for the marketing of Product, and is responsible to ensure that all of
such filings with regulatory authorities are consistent with the Specification
and the Master Production Record.  This includes the supplement of product
registration to update commitments, methods, records, or specifications based
upon regulatory requirements defined in 21 CFR Part 314.

A.3.2           In the event that the Territory as defined herein includes the
European Union or any member states thereof, then in addition to all other
responsibilities, Customer shall also:

A.3.2.1                                 certify in writing to BVL that it has
properly appointed one or more Qualified Person(s) in compliance with EU
Directives, standards and rules, including without limitation, Article 49 of
Directive 2001/82/EC, with respect to the Product(s) subject to this Agreement;
and further that Customer’s Qualified Person(s) shall fully comply with all EU
standards, directives and rules, including without limitation, as set forth in
Article 51 of 2001/83/EC;

A.3.2.2                                 as appropriate, cause its Qualified
Person to certify that the Facility supplying the API complies with EU GMP;

A.3.2.3                                 cause its Qualified Person to certify
the GMP status of the manufacturing and supply of an Active Pharmaceutical
Ingredient; and

A.3.2.4                                 for each batch of Product Manufactured
by BVL, as appropriate, provide a Certificate of Analysis.

A.4          Change Control

BVL will utilize a documented system of procedures for the control of changes to
raw materials, packaging materials, utilities, facilities, equipment,
manufacturing methods, and Product specifications and requirements, sampling,
test methods, and release requirements.  BVL will be responsible for contacting
Customer to discuss changes which impact the Manufacturing license for any
Territory.  Product-specific changes will not be made without mutual approval. 
Customer will be responsible for applying for any necessary variation to the
Manufacturing license(s) to allow production of the Product(s).

A.4.1      Master Production Records

Master Production Records (MPRs) are documents that specify or reference the
manufacturing instructions, related bills of material, in process testing, and
production specifications used in the production process.  These documents are
developed and approved by BVL and Customer.  Customer’s approval of the MPR must
be received at least eight (8) weeks prior to the start of manufacture.

 

Quality Agreement (BVL and Theravance)

Page 4

--------------------------------------------------------------------------------

CONFIDENTIAL

 

A.4.2      Specification

Specification initiation or revision that affects the scientific or technical
content requires approval in writing by BVL and Customer before proposed changes
are implemented.  This applies to manufacturing, testing, storage, and labeling
of the Product, as well as any changes to the specifications for raw materials
and Product.  Editorial or format changes to applicable specifications not
affecting the scientific/technical content or intent of the specification will
not require approval by Customer.  Those documents requiring Customer approval
are as follows:

Product Specification

Master Production Records

Raw Material Specifications

When Customer initiates a change request on all applicable specifications, the
appropriate BVL department shall be provided the proposed specification and
appropriate documentation that summarizes and justifies each change.

A.4.3      Packaging and Labeling Specifications

The packaging and labeling specifications are documents that describe the
labeling artwork, container/closure, Product packaging for shipment, shipper
specifications and drawings used in the packaging of the Product.  These
packaging and labeling specifications are Developed and approved by BVL and
Customer.  This information will be incorporated into the MPR, associated
Product Specific SOPs, and raw material specifications, as appropriate.

A.4.4      Product Changeover

BVL will follow its validated cleaning protocols based on product
classifications per BVL SOP’s.

A.4.5      Changes to the Plant

BVL will notify Customer in advance of any changes of utilities, in the layout
or structure of the equipment or in the operation and structure of the plant,
which could have an adverse impact on the manufacturing of the Product or the
quality of the Product.  BVL shall not be obligated to obtain prior approval for
changes required as a result of an Agency’s order, provided BVL promptly
notifies Customer of any such proposed change and consults with Customer before
implementation of such changes and its potential impact on Customer Product.

A.5          Documentation Retention

Batch specific documentation (e.g., executed batch records, investigation
reports, Certificates of Analysis) will be retained by BVL for one (1) year
beyond the expiration date of the Agreement, or in the event the Agreement is
ongoing, then for not more than seven (7) years from the Manufacturing date  BVL
will notify Customer prior to destruction of the records and customer must
provide a response to BVL as to the disposition of the documents within thirty
(30) calendar days or the record will be destroyed.  Customer may request that
such records be transferred to Customer at Customer’s expense.

Quality Agreement (BVL and Theravance)

Page 5

--------------------------------------------------------------------------------

CONFIDENTIAL

 

For the basic product specific documentation (e.g., master production records,
SOPs, validation documentation) the retention should be for the life of the
product, i.e., until the registration for the product has been withdrawn and the
responsibility of Customer with support from BVL.  Such documents will be
returned to the Customer in the event of termination of the Agreement,
withdrawal of all registrations for the Product, or upon cessation of the
business relationship between Customer and BVL and completion of BVL’s
compliance with Applicable Laws.

A.6          Materials

A.6.1       BVL is responsible for performing raw material and supplies
procurement, QC testing, and material handling and submission of samples to
outside testing laboratories (as applicable).  BVL will obtain approval from
Customer if BVL needs to subcontract the analytical release testing of raw
materials provided by Customer.

A.6.2       BVL shall maintain an approved suppliers list in accordance with
BVL’s procedures.  BVL will provide the material name and supplier name upon
request.  Changes to non-compendial raw materials, such as a new supplier or
process changes, shall be approved by Customer.

A.6.3       All materials purchased for use in the manufacture, storage and
shipping of product will be purchased, received, inspected as appropriate,
tested as appropriate, stored, and handled in accordance with BVL’s SOP’s.  BVL
agrees to sample and retain sufficient amounts of all raw materials, except
water, compressed gases and any highly volatile compounds.  The amount of
retained samples is specified in BVL’s raw material specifications.  All
materials shall be in accordance with the approved specifications.

A.6.4       BVL will qualify primary vendors of all raw materials and
components.  Vendor qualification will be in accordance with BVL SOP’s.

A.6.5 BVL will provide, at Customer’s request, a copy of the BVL Drug Master
File (DMF) and authorization for FDA to access the DMF. This may be used by the
Customer to prepare a regulatory filing.  BVL shall, upon Customer’s request,
assist Customer with all other applicable filings for the non-US market in
accordance with proposals submitted to Customer and confirmed by Purchase Order.

A.7          Product Specification

The Product must be manufactured, packaged, labeled, and handled according to
the Specifications and procedures mutually agreed to in writing between Customer
and BVL.  Customer and BVL shall develop all in-process and Product release
specifications, including acceptance limits for each required test. 
Establishment of appropriate test methods and supporting test method validation
will be performed by BVL and approved by Customer.  Each lot of Product
manufactured by BVL for Customer will be sampled and tested in accordance with
the Specification.

A.8          Manufacturing and Packaging of the Product

A.8.1       The manufacturing of the Product will be done under cGMP and in
accordance with specific procedures and instructions mutually agreed upon
between Customer and BVL, and documented in the MPR.  The Date of Manufacture
will be as specified in the Product Specification.

Quality Agreement (BVL and Theravance)

Page 6

--------------------------------------------------------------------------------

CONFIDENTIAL

 

A.8.2       Any regulations regarding storage of different types of products
shall be adhered to.

A.8.3       The manufacturing of Customer’s Product by BVL must be in adherence
to the Specification as mutually agreed upon, and in compliance with all cGMPs
and any other applicable regulatory requirements.  BVL will provide
documentation for each Batch as agreed upon between Customer and BVL.

A.9          Testing of the Product

A.9.1       The testing of the Product is carried out by BVL according to the
Specification.  For those procedures which appear in the current USP/NF or other
recognized standard references, qualification of the method for the Product and
a statement indicating the reference shall suffice.  For all Product-specific
test methods utilized by BVL, documentation supporting the validation of the
test method shall be available for review during annual audits by Customer, or
be provided at other times as reasonably requested by customer.

A.9.2       If any Third Party is utilized to perform testing of raw materials
or release/stability testing the vendor(s) must be qualified by BVL as required
by BVL SOPs and approved for use by Customer.  The Third Party vendor must
utilize validated or qualified test methods and provide complete documentation
and copies of associated raw data upon request.

A.9.3       Customer will provide BVL a reference standard in accordance with
BVL procedures for use in Product testing, as needed, and BVL will maintain the
reference standard under appropriate storage conditions with appropriate
controls.  Customer is responsible for performing qualification of the reference
standard in accordance with approved validated protocols.

A.9.4       BVL will provide to Customer a Certificate of Analysis and any other
associated testing documentation for each Batch of Product manufactured as
agreed upon between Customer and BVL.  Customer reserves the right to inspect
and/or test all Batches of the Product produced by BVL prior to Customer’s
acceptance and distribution.

A.10       Notification and Approval of Deviations

BVL must notify Customer within three (3) business days from the initiation of
the investigation, whenever there is a significant deviation from stated
procedures or specifications.  A significant deviation is defined as any Out Of
Specification (OOS) result and/or any manufacturing, packaging, labeling, or
testing deviation that may affect the quality, safety or efficacy of the
Product.  BVL will only release/reject a Product Batch as an outcome of a BVL
and Customer approved investigation report.  In the event of conflict, BVL may
release or reject any Product Batch at its sole discretion.  Customer is
responsible for the final product disposition of a product released by BVL.

All deviations will be investigated and fully documented by BVL in accordance to
BVL procedures.  This documentation will be retained as part of the batch
documentation for the Batch affected.  When deemed necessary, Customer reserves
the right to request the need for a more in-depth investigation of the deviation
by BVL.  BVL and Customer will work together in determining the need for
additional investigational work.  Customer approval shall be obtained in writing
(fax or PDF electronic document confirmation is acceptable) for any significant
deviation.  Customer approval shall not be unreasonably withheld.  Customer and
BVL will

Quality Agreement (BVL and Theravance)

Page 7

--------------------------------------------------------------------------------

CONFIDENTIAL

 

jointly provide the documented product impact assessment for all deviations that
impact the Product.  The documented assessment must be received within 5 (five)
business days of the completion of the investigation.  In cases where Customer
requests a deviation, the request must be submitted in writing.  Customer is
responsible for notifying the FDA regarding any required Field Alert Report
according to 21 CFR 314.81. BVL shall be notified by the Customer of any Field
Alerts filed for Product.

The Investigation Report for significant deviations will be approved by both BVL
and Customer as stated below.  The approved document will become part of the
batch record of that specific lot of material.  Any resulting corrective and
preventative actions shall be followed through timely closure in accordance to
BVL procedure.  Approval by the appropriate Quality Assurance functions is
solicited and may be obtained via fax or electronic copy.

 

Failure

Approval Requirements

Product

Customer and BVL

Raw Materials sourced and used by BVL

BVL

 

In the event of a dispute regarding the failure of Product, an independent,
mutually acceptable qualified Third Party may be engaged to determine failure. 
The Third Party’s decision will determine acceptance of the Product and shall be
subject to the procedures as set out in the Agreement.

Reprocessing would always be considered a significant deviation, and would only
be performed if validated by BVL and approved by BVL and Customer.

A.11       Release and Shipment of the Product

A.11.1     A Certificate of Compliance (COC), a Certificate of Analysis (COA),
copies of executed batch records, deviations and investigation reports, and any
applicable documentation, as agreed upon between Customer and BVL, shall be
provided to Customer by BVL within one (1) week after the Batch is released by
BVL QA.

A.11.2     Customer is responsible for acceptance and disposition of the Product
after review of BVL’s test results and supporting data, COC, COA and batch
records as required.

A.11.3     The disposition of the Product, which is defined as the release for
clinical or commercial distribution, is the responsibility of Customer.  BVL has
the responsibility to release the Product to Customer.  BVL will not ship any of
Customer’s Product to any destination until the final disposition by Customer,
unless prior approval has been received in writing from Customer to perform such
shipments.  Such receipt of written shipping approval will not exceed thirty
(30) days beyond BVL’s release to Customer unless Customer provides written
notice disputing the release of the Batch.

A.11.4     BVL will control and coordinate all shipping activity unless
specified by Customer.  Shipping instructions will be provided in the associated
Batch Purchase Order (PO).

Quality Agreement (BVL and Theravance)

Page 8

--------------------------------------------------------------------------------

CONFIDENTIAL

 

Shipping validation will be Customer’s responsibility, but will be performed in
collaboration with BVL and appropriate qualified contractors.

A.12       Retained Samples of the Product

BVL agrees to store retained samples for all BVL composition used in the
Product(s) in accordance with BVL SOP’s.

Final Product retains shall be the responsibility of Customer.

A.13       Storage of Product

BVL will store Product prior to final Customer disposition and shipment in
accordance with the Specification and BVL SOPs.

A.14       Stability Activities

The responsibility for stability testing and reporting shall belong to BVL so
long as Customer contracts such activities with BVL.  Stability protocols will
be prepared by BVL and jointly reviewed and approved by BVL and Customer.  BVL
will provide stability reports to Customer in accordance with specifications
contained in stability proposals.  Data interpretation and the updating of
stability information to regulatory documents for the Product is the
responsibility of Customer.  All stability related activities under the
responsibility of BVL shall be completed in accordance with BVL SOPs.

A.15       Process Validation

A.15.1     The Manufacturing Process and control procedures (including, but not
limited to cleaning procedures; aseptic procedures, process hold times,
in-process stability, and development and justification of all processing
parameters) shall be validated and qualified by BVL according to the
Manufacturing Process Validation (MPV) plan for Product in the facility and
using the equipment BVL intends to employ to make Customer’s Product, as further
defined in Section 15.2.

A.15.2     The MPV will be created with input from both BVL and Customer for
Customer’s process.  The MPV will be jointly generated and approved by BVL and
Customer.  The MPV will contain all of the required activities and the
acceptance criteria and is approved and documented.  The MPV is executed on at
least three (3) consecutive Batches of Product produced by BVL for Customer as
mutually agreed to between Customer and BVL.  If there are any problems during
the execution of the MPV, then, upon discovery shall be communicated to
Customer.  If the problems cannot be resolved, the MPV must be repeated on
additional Batches until at least three (3) consecutive Batches of Customer’s
Product meet all specification requirements.  Any problems encountered during
the execution of the MPV must be documented by BVL.

A.15.3     All related validation/qualification documents will be assembled in a
process validation summary report and reviewed and approved by BVL and
Customer.  Customer will retain copies of the approved protocols and final
reports.

A.16       Product Complaints

A.16.1     Customer, or their agent, will receive complaints and communicate
with their Customers and close all complaints related to the Product.  Customer
will inform BVL

Quality Agreement (BVL and Theravance)

Page 9

--------------------------------------------------------------------------------

CONFIDENTIAL

 

within 5 business days of registration of a complaint, or sooner as required, of
complaints involving potential Product issues that may be related to
Manufacturing.  Upon written request by Customer, BVL will investigate the
complaints as required and provide a written report on the results of the
investigation to Customer in no more than thirty (30) working days, or sooner if
agreed to by the Parties.  Customer will communicate with the Customers and/or
regulatory authorities the results of the complaint investigation, if necessary.

A.16.2     In the event of a notification by Customer to BVL of a serious
adverse event (SAE) potentially related to Manufacturing of the Product, BVL
will provide all necessary support and assistance in the relevant phase of the
investigation and provide a written response within an agreed upon time frame,
usually no longer than 10 days, that allows Customer to respond to the
applicable regulatory agency within 15 days of their notification.

A.16.3     Customer shall provide complaint files to BVL onsite, or via fax or
other electronic means, within one (1) business day if they are required during
a FDA inspection.

A.17       Returned Goods

Customer will be responsible for returned goods.  The specific handling of
returned goods will be specified and documented by Customer, as required.  BVL
will not have responsibility for returned goods.

A.18       Recall of the Marketed Product

In the event of recall, withdrawal, or field correction of Product, i.e., if the
Product violates applicable laws, regulations, agreed upon specifications, or is
deemed unacceptable for some other reason, whether or not such action is
requested by any governmental agency, Customer shall immediately notify BVL
Quality Assurance in writing.  During a Product recall, withdrawal, or field
correction, BVL shall fully cooperate with Customer in conducting the necessary
investigational activities when appropriate.

A.19       Audits and Inspections of Facilities and Product

A.19.1     Upon scheduling in advance, Customer shall have the right to one
annual audit per Contract Year and at such other times as mutually agreed upon
by the Parties for cause to: (i) observe, inspect, and audit the manner in which
BVL conducts Manufacture of Customer Product(s); (ii) inspect BVL’S Facilities
and records relating to BVL’S quality and other controls related to its
Manufacture of the Product(s); or (iii) observe and audit the books and records
of BVL relating to the existence, safeguard, use and maintenance by BVL of the
Customer Composition.  Customer annual audits will be limited to 2 auditors for
2 days.  BVL shall make such books and records available to Customer for
review.  Customer and any third-Party consultant appointed by Customer shall
have reasonable access to observe and inspect BVL’S Facilities and SOPs with
respect to the Product, including all analytical and Manufacturing documentation
related to the Product upon reasonable prior notice to and scheduling in advance
by BVL.  Any such Customer appointed third-Party consultant must be pre-approved
by BVL, although such approval shall not be unreasonably or untimely withheld. 
Information provided during audits will be limited to technical information
related to the Manufacture of Product.  No financial information is provided for
auditing.

Quality Agreement (BVL and Theravance)

Page 10

--------------------------------------------------------------------------------

CONFIDENTIAL

 

A.19.2     Customer employees and Customer’s consultants who inspect BVL’S
Facilities shall at all times comply with BVL’s rules, regulations and SOPs
relating to their inspection, and Customer assumes responsibility for the
presence and actions of its employees and consultants on BVL’s premises.

A.19.3     BVL will notify Customer of any inspections or actions by regulatory
agencies or other enforcement bodies which impact Product.  BVL will provide
Customer with the applicable or redacted written observations of all such
Product Specific regulatory audits in no more than 5 business days.  If the
inspection is specific to Product, Customer will have up to 2 representatives on
site during the inspection to address product specific questions, and these
representatives will be permitted to participate in the inspection when
required.  Customer shall provide to BVL any requested documents if they are
required for a regulatory inspection.  Customer must notify BVL immediately of
any activities or communications that may result in an inspection of BVL.  BVL
will respond to regulatory authority PAI observations within 15 days if possible
and all other Product-specific inspection observations within 30 days or the
time specified by that agency, which ever is less.

A.19.4     Customer reserves the right to be on-site at BVL during the
manufacture of Product, and/or during the inspection of Product by any
regulatory agencies.  Customer shall provide at least two (2) weeks advance
notice to be on site at BVL during manufacture.

A.20       Reprocessing

Reprocessing can only be performed per written agreement between both BVL and
Customer.  Reprocessing directions must be established to define the process. 
If the Product is registered, reprocessing parameters must be validated,
submitted, and approved prior to implementation and batch release.  Reprocessing
of material or product must be documented to state rationale and justification.

A.21       Annual Product Review (APR)

Customer will be responsible for the Annual Product Review (APR).

A.22       Annual Quality Agreement Review

Not less than once per Contract Year during the term of the Agreement, the
Parties shall meet and confer in good faith to review the Quality Agreement and
make such changes as may be mutually agreed upon in writing by the Parties.

(Quality Matrix begins on following page)

Quality Agreement (BVL and Theravance)

Page 11

--------------------------------------------------------------------------------

CONFIDENTIAL

 

Quality Agreement Distribution of Responsibility Matrix:

 

 

Responsible Party

Item

Activity

Customer

BVL

1. Purpose and Term of the Quality Agreement

 

 

 

 

Define purpose and term of the Quality Agreement

X

X

2. Quality Responsibility

 

 

 

 

Assure that all activities associated with production of Customer’s Product are
performed in compliance with cGMP as set forth in 21 CFR part 211, the European
GMPs, and any other regulatory region the drug is for distribution for clinical
or commercial use.

X

X

 

Review all batch documentation and test results, approve, and release Product to
Customer.

 

X

 

Review appropriate batch documentation and test results, and release and
disposition Product for clinical or commercial use

X

 

 

Maintain training records for all BVL personnel that perform cGMP functions
relating to the Product.

 

X

3. Regulatory Compliance and Product Licensure

 

 

 

 

Responsible for product licensure, annual reports, and other regulatory filings
as defined in 21 CFR 314 or other regulatory agencies for the Territory.

X

 

 

Provide Customer with information required for regulatory filings pursuant to
written proposals provided by BVL

 

X

 

Prepare and submit regulatory filings to the appropriate authorities

X

 

4. Change Control

 

 

 

 

Establish and maintain appropriate change control procedures, including but not
limited to revisions, changes or modifications to documentation, processes,
equipment, utilities or facilities that affect the defined operation and
processes or have the potential to affect the quality, purity, safety, or
efficacy of the Product.

 

X

 

Prepare and submit a change request or notification to Customer for all proposed
changes to documentation, facilities/equipment, manufacturing process, test
methods, and specifications that affect Customer manufacturing process.

 

X

 

Review proposed changes, assess the impact on regulatory filings, and approve
changes.

X

X

 

Quality Agreement (BVL and Theravance)

Page 12

--------------------------------------------------------------------------------

CONFIDENTIAL

 

 

 

Responsible Party

Item

Activity

Customer

BVL

4.1 Master Production Record

 

 

 

 

Draft and maintain MPR

 

X

 

Review and approve MPR

X

X

4.2 Specifications

 

 

 

 

Draft and approve non-compendial raw material specifications

X

X

 

Draft and approve API specification

X

X

 

Draft and approve Product Specification

X

X

4.3 Packaging and Labeling Specifications

 

 

 

 

Prepare draft packaging and labeling specifications

X

X

 

Approve label and packaging specifications

X

X

 

Implement packaging and labeling procedures

 

X

4.4 Product Changeover

 

 

 

 

Perform cleaning validation studies as necessary to demonstrate and document
suitable clearance of other products for the equipment used for Customer per BVL
SOPs.

 

X

4.5 Changes to the Plant

 

 

 

 

Notification to Customer of all changes to the facility that could impact
Customer’s Product

 

X

5. Documentation

 

 

 

 

Retain Batch production documentation for 7 years after a batch is manufactured.

 

X

 

Mutually agree upon disposition of documentation following the 7 year retention
period.

X

X

 

Maintain product specific documentation (e.g., master batch records, SOPs,
validation documentation, etc.) in accordance with BVL SOPs.

 

X

6. Materials

 

 

 

 

Establish quality requirements for raw materials, process components, and
packaging material.

X

X

 

Establish raw material specifications.

X

X

 

Establish a vendor qualification program for vendors of all raw materials to be
used in GMP manufacturing (excluding API).

 

X

 

Quality Agreement (BVL and Theravance)

Page 13

--------------------------------------------------------------------------------

CONFIDENTIAL

 

 

 

Responsible Party

Item

Activity

Customer

BVL

 

Qualify API vendor

X

 

 

Promptly provide vendor change notifications

X

X

 

Approve vendor changes

X

X

 

Ensure that all raw materials (excluding API), consumables, and packaging
component suppliers are qualified or reviewed according to defined requirements
and procedures, and to maintain file of vendor qualifications

 

X

 

Prepare and maintain a bill of materials that includes specifications and
acceptable grades for required raw materials and consumables.

X

X

 

Perform raw material and supplies procurement, QC testing, and material handling
and submission of samples to outside testing laboratories (as applicable) for
BVL Supplied Composition.

 

X

 

Perform API procurement, QC testing, and material handling

X

 

 

Maintain programs and procedures for returning unused or damaged goods.

X

X

 

Maintain and archive raw material C of A’s for final release.

 

X

 

Maintain and archive API C of A’s

X

 

 

Obtain approval from Customer if BVL needs to subcontract the analytical release
testing of raw materials

 

X

 

Approve BVL subcontracted analytical testing facility per BVL SOP

X

 

7. Product Specification

 

 

 

 

Establish and approve Specification

X

X

 

Perform Product testing according to validated procedures and approved
Specification

 

X

8. Manufacturing and Packaging of the Product

 

 

 

 

Ensure all manufacturing operations are conducted in compliance with cGMPs,
SOPs, and the Master Production Record

 

X

9. Testing of Product

 

 

 

 

Review and approve all test methods and validation protocols and reports.

X

X

 

Validate all test methods, as appropriate

X

X

 

Maintain Reference Standard according to BVL SOP’s and specifications

 

X

 

Quality Agreement (BVL and Theravance)

Page 14

--------------------------------------------------------------------------------

CONFIDENTIAL

 

 

 

Responsible Party

Item

Activity

Customer

BVL

 

Store QC stability samples for specified time period

 

X

 

Qualify and approve any contract lab used for product testing

X

X

10. Notification and Approval of Deviations

 

 

 

 

Ensure a thorough investigation and justification of any deviation to stated
procedures or out of specification (OOS) result

 

X

 

Ensure all investigation reports are reviewed and completed prior to completion
of the batch production record review

 

X

 

Promptly notify Customer within 3 business days of initiation of investigation
of any deviation or OOS that affects the material or Product being tested per
BVL SOP.

 

X

 

Provide technical, compliance, and regulatory oversight in support of the
investigation

X

 

 

Hold and segregate material or Product that does not conform to in-process or
release specifications.

 

X

 

Prepare and approve investigation report

 

X

 

Review and release/reject material or Product Batch as an outcome of an approved
investigation report.

X

X

 

Disposition Product as an outcome of the approved investigation

X

 

 

Establish procedures for the releasing/rejecting failed Batches of raw material
or Product.

 

X

 

Promptly notify Customer of cause for investigation and proposed action plan for
raw material or Product failures.

 

X

 

Participate in Product investigations, as needed.

X

 

 

Generate Investigation Report.

X

X

 

Review and approve Investigation Report

X

X

11. Release and Shipment of Product

 

 

 

 

Provide a copy of executed Batch Records, deviations and investigation reports,
and any applicable documentation within 1 week of BVL Batch release

 

X

 

Generate BVL Certificate of Analysis

 

X

 

Generate BVL Certificate of Compliance

 

X

 

Perform Product disposition

X

 

 

Quality Agreement (BVL and Theravance)

Page 15

--------------------------------------------------------------------------------

CONFIDENTIAL

 

 

 

Responsible Party

Item

Activity

Customer

BVL

 

Establish and maintain shipping procedures and documentation.

X

X

 

Insure Shipping of Product from BVL to Customer destination is in compliance
with the Specifications for the Product, specifically including without
limitation temperature shipping requirements

X

 

 

 

 

 

 

Approve shipping configuration and procedures.

X

X

 

Package Product for shipment to specified distributors. Store and transport
Product to conform to label copy storage conditions.

 

X

 

Request shipment of Product, specifying date of shipment, shipping address, lot
number, quantity, etc.

X

 

 

Ship Product as specified in Batch PO per SOP.

 

X

12. Retained Samples of the Product

 

 

 

 

Store retain samples of all Product composition

 

X

 

Specify the number of Product retains per lot, the retain period, and arrange
for the appropriate storage of the Product retains

X

 

13. Storage of Product

 

 

 

 

Define storage conditions for Product.

X

 

 

Securely store Product under controlled temperature and storage conditions as
specified in Product Specification.

 

X

 

Establish and maintain an appropriate environmental monitoring program of
storage conditions

 

X

14. Stability Activities

 

 

 

 

Prepare stability protocols.

 

X

 

Review and approve stability protocols

X

X

 

Conduct stability studies per approved protocols.

 

X

 

Compile data on a regular basis, and provide regular updates to Customer.

 

X

 

Prepare and approve final stability reports.

X

 

 

Provide stability updates to Regulatory Authorities in Annual Reports or as
needed.

X

 

15. Process Validation

 

 

 

 

Prepare Manufacturing Process Validation

 

X

 

Quality Agreement (BVL and Theravance)

Page 16

--------------------------------------------------------------------------------

CONFIDENTIAL

 

 

 

Responsible Party

Item

Activity

Customer

BVL

 

(MPV) Plan

 

 

 

Review and approve MPV

X

X

 

Generate process validation protocols

 

X

 

Review and approve process validation protocols

X

X

 

Perform validation studies per approved protocols.

 

X

 

Generate validation data in a timely fashion and maintain raw data and
supporting documentation

 

X

 

Prepare validation reports.

 

X

 

Review and approve all final reports.

X

X

16. Product Complaints

 

 

 

 

Receive notice of complaints

X

 

 

Inform BVL within 5 business days, or sooner as required, of complaints
involving potential product tampering or adverse medical event

X

 

 

Upon a suspected manufacturing issues and upon mutual agreement of the Parties,
perform investigation and provide a written report within 30 business days, or
sooner if mutually agreed

 

X

 

Respond to Product complaints with respect to known adverse events related to
the Product

X

 

 

Support the investigation of a potential SAE and provide information allowing
for meeting regulatory reporting requirements

 

X

 

Maintain a record of all complaints, and notify Health Authorities as required.

X

 

17 Returned Goods

 

 

 

 

Specify and document handling of returned goods.

X

 

 

 

 

 

18 Recall of Marketed Product

 

 

 

 

Notify BVL, regulatory authorities, and Customers, and all relevant Parties of
product recall.

X

 

 

Perform investigation, as appropriate.

X

X

 

Maintain copies of all recall investigations performed on behalf of a Customer
and as required by regulations.

 

X

19 Audits and Inspections of Facilities and Product

 

 

 

 

Perform audit of BVL on an annual basis, as a mock PAI, or as needed on a “for
cause” basis

X

 

 

Quality Agreement (BVL and Theravance)

Page 17

--------------------------------------------------------------------------------

CONFIDENTIAL

 

 

 

Responsible Party

Item

Activity

Customer

BVL

 

Conduct periodic audits of raw material vendor’s quality systems in accordance
with BVL SOPs.

 

X

 

Manage, coordinate and host regulatory inspections: PAI, general GMP, for-cause,
MHRA, and EMEA GMP inspections etc.

 

X

 

Support product specific PAI or other inspection with up to 2 Customer staff on
site during the inspection. As appropriate, Customer staff will be permitted to
respond to product specific questions and participate in Product-specific wrap
up sessions.

X

 

 

Notify Customer within 24 hrs of receipt of notification of inspection by
regulatory authorities for Customer specific inspection.

 

X

 

Prepare written responses to regulatory actions specific to facility, operations
and site specific, non-Customer related processes

 

X

 

Prepare written responses to written regulatory observations specific to
Product.

X

X

 

Prepare, review, and approve responses to agency observations issued directly to
the site. Respond to PAI observations within 15 days and all other inspection
observations within 30 days or the time specified by that agency, which ever is
less.

 

X

 

Provide a copy of redacted inspection observations and responses to Customer
within one week of completion of said documents.

X

X

 

Support product specific regulatory inspections and participate in the
Development of product specific responses or inquiries.

X

X

 

Support the preparation of regulatory responses that support inquires made to
Customer by authorized regulatory agencies

X

X

 

Observe operations on an as needed basis and notify BVL in advance.

X

 

20. Reprocessing

 

 

 

 

Initiate reprocessing request

X

X

 

Document rationale, justification, and directions for reprocessing

X

X

 

Approve reprocessing

X

X

 

Quality Agreement (BVL and Theravance)

Page 18

--------------------------------------------------------------------------------

CONFIDENTIAL||

 

 

 

Responsible Party

Item

Activity

Customer

BVL

21. Annual Product Review

 

 

 

 

Preparation and submission of the Annual Product Review (APR)

X

 

22. Certifications

 

 

 

 

Provide certification of Customer supplied Composition to be free from BSE/TSE

X

 

 

Provide certification of QP when applicable for Products shipped for use in EU
countries

X

 

 

Provide Certification of facility which produced API for use in Products when
applicable for Products shipped for use in the EU countries

X

 

 

Provide Certificate of Analysis and Certification of each batch of API shipped
to BVL for use in Product to be shipped to EU countries

X

 

 

Customer’s Qualified Person shall generate and approve a Certificate of Batch
Release and Certificate of Compliance to EU GMP for each Batch of Product
Manufactured by BVL for Customer which is distributed for clinical or commercial
use in EU countries

X

 

 

Quality Agreement (BVL and Theravance)

Page 19

--------------------------------------------------------------------------------