Exhibit 10.3

[****] = Certain confidential information contained in this document has been
omitted because it is both not material and would be competitively harmful if
publicly disclosed.

 

AMENDMENT NO. 1 TO LICENSE AND COMMERCIALIZATION AGREEMENT
AND COMMERCIAL SUPPLY AGREEMENT

THIS AMENDMENT NO. 1 TO LICENSE AND COMMERCIALIZATION AGREEMENT AND COMMERCIAL
SUPPLY AGREEMENT (the “Amendment”) is effective as of the 1st day of January,
2019 (the “Amendment Effective Date”) by and between VIVUS, INC., a Delaware
corporation with its principal place of business at 900 E. Hamilton Avenue,
Suite 550, Campbell, CA 95008, United States (“VIVUS”), and BERLIN-CHEMIE AG, a
German public limited company having a place of business at Glienicker Weg 125 –
127, 12489 Berlin, Germany (“Menarini”). VIVUS and Menarini are sometimes
referred to herein individually as a “Party” and collectively as the “Parties”.

The Parties have entered into (a) that certain License and Commercialization
Agreement, having an execution date of July 5, 2013 (the “License Agreement”)
and (b) that certain Commercial Supply Agreement, having an effective date of
July 5, 2013 (the “Supply Agreement”).

The Parties now desire to amend the License Agreement and Supply Agreement as
set forth below.

NOW THEREFORE, in consideration of the foregoing premises and the mutual
promises, covenants and conditions contained in this Amendment, the Parties
agree as follows:

1.

The countries of Australia and New Zealand shall be excluded from the definition
of Menarini Territory (the “Excluded Territories”). For the avoidance of doubt,
this amendment to the License Agreement also changes the definition of
“Purchaser Territory” in the Supply Agreement and any and all references to the
Excluded Territories shall be deleted accordingly.

2.

Section 4.3(e) of the License Agreement is hereby deleted in its entirety and
replaced by the following:

(e)Other Development. As between the Parties, except for the responsibilities
assigned to Menarini pursuant and Sections 4.1, 4.2(b), 4.3(b), and 4.9 or as
agreed by the Parties below, VIVUS shall have the sole right to conduct any
further Development work (including clinical trials) on the Product, at its sole
discretion but with the aim of preserving the Product profile and the commercial
viability of the Product in the Menarini Territory. VIVUS shall be responsible
for all of its costs in connection with any further Development activities that
it conducts, unless otherwise mutually agreed by the Parties. Notwithstanding
the above, the Parties hereby agree that an oral dispersible formulation of the
Product (the “ODF”) may be developed for sale and use by Menarini in the
Menarini Territory, by VIVUS in the VIVUS Territory, and by Menarini or its
Affiliates or sublicensees (the “Menarini Group”) in the countries that the
Menarini Group has the right to Commercialize the Product. The Parties further
agree that: (i) Menarini shall lead and direct the ODF Development, with
assistance from VIVUS as reasonably requested by Menarini from time to time;
(ii) the ODF shall be a Joint Invention; (iii) Menarini shall be responsible for
all of the costs in connection with the ODF

 

Development subject to the royalty reduction set forth in Section 7.5(d); and
(iv) VIVUS, with reasonable and necessary support by Menarini, shall be solely
responsible for obtaining Regulatory Approval of the ODF for sale and use in the
VIVUS Territory. Notwithstanding the above and for the sake of clarity, the
Parties agree that Menarini shall have the right but not the obligation to
perform such ODF Development and Menarini shall be entitled to suspend and/or
stop such ODF Development at any time and for whatsoever reason. In such case,
Menarini shall promptly inform VIVUS in writing of its decision to suspend or
stop the ODF Development and VIVUS shall not be entitled to receive any fee or
other payment, compensation, indemnity, damages for loss of profit, expenses or
the like as a consequence of Menarini’s decision; provided that Menarini shall
be solely responsible for any third party costs incurred by VIVUS at Menarini’s
request as part of the ODF Development, including orders of API or Product.

3.Section 4.6(a) of the License Agreement is hereby deleted in its entirety and
replaced by the following:

(a)Product Launch. Subject to Section 4.6(b), Menarini shall (i) commence a
Product Launch in each Major Country in the Menarini Territory no later than
[****] after grant of the Product Marketing Authorization by the European
Commission; (ii) use [****] to commence a Product Launch in each of the other
European Union countries in the Menarini Territory that are not a Major Country
within [****] after grant of the Product Marketing Authorization by the European
Commission; and (iii) commence a Product Launch in each other non-European Union
country in the Menarini Territory as agreed separately by the Parties in
writing; provided that Menarini shall have a period of [****] from the date of
this Amendment to commence a Product Launch in Montenegro, Macedonia and Kosovo,
and should Menarini fail to commence the Product Launch within such period in
such countries VIVUS shall be entitled to terminate the Agreement on a country
by country basis; provided, however that Menarini accepts and acknowledges that
MTPC has the right as set forth in Section 6.1 of the MTPC Agreement to request
a reversion of the license on a country by country basis in such countries for
the failure to commence a Product Launch within [****] from the earliest first
sale in the United States or Major European Country (France, Germany, Italy,
Spain and United Kingdom). For the sake of clarity, it is agreed between the
Parties that the Product Launch shall be fulfilled as of the first placing on
the market of any form, formulation, dosage strength, or packaging configuration
of the Product by Menarini in accordance with the definition of Product Launch
set forth in Section 1.54.

4.Section 4.8(a) of the License Agreement is hereby deleted in its entirety and
replaced by the following:

(a)Menarini shall be responsible, at its sole expense, for preparing and
producing the Promotional Materials. VIVUS will review and approve English
translations of the Promotional Materials developed by at the central level
(excluding local translation and adaptation of such Promotional Materials)
within and no later than [****] from the receipt of the Promotional Materials
from Menarini. In the absence of comments or approval within the [****] period
by VIVUS, Menarini’s central level proposal

Page 2 of 11

 

for Promotional Material in question shall be considered accepted and approved
by VIVUS. VIVUS shall not refuse approval of Promotional Material unreasonably;
provided that Menarini acknowledges that VIVUS is obligated to obtain approval
from MTPC of all Promotional Materials. In any event, Menarini shall ensure that
all Promotional Materials used by it, its Affiliates, and its sublicensees are
consistent with applicable Regulatory Approval(s) in the Menarini Territory and
otherwise comply with Applicable Law. To the extent that VIVUS disagrees with
Promotional messages or tactics proposed by Menarini for Product in the Menarini
Territory, it may raise such issues with Menarini for discussion and resolution,
with escalation to the JSC, if necessary.

5.

Section 4.8(d) of the License Agreement shall be added as follows:

(d)To the extent permitted by Applicable Law and is customary for such materials
in the United Kingdom, Italy, France, Germany, Spain, Austria, Switzerland,
Sweden, Finland, Denmark, Norway, Iceland, the Netherlands and to the extent
feasible depending upon the status of the relevant MAA, all Promotional
Materials shall include the following statement: “Licensed by Vivus Inc. and
Mitsubishi Tanabe Pharma Corporation”. Menarini shall provide VIVUS with copies
of the above mentioned materials as soon as reasonably practicable after such
Promotional Materials are first used. For the sake of clarity, such statement
shall not be applicable to any and all Promotional Materials already produced by
Menarini; provided, that Menarini will use Commercially Reasonable Efforts to
have MTPC’s name removed from any Promotional Materials at an appropriate time
(e.g., reprinting and label amendment) in all countries in the Menarini
Territory other than those noted above.

6.

Section 5.1(b) of the License Agreement is hereby deleted in its entirety and
replaced by the following:

(b)Other Approvals. Menarini shall be the legal and beneficial owner of all
Other Approvals. Regulatory Materials relating to the Other Approvals shall be
filed by, and in the name of, Menarini, or by Menarini’s designee reasonably
acceptable to VIVUS, unless otherwise mutually agreed in writing by the Parties.

7.

Section 7.2 of the License Agreement is hereby deleted in its entirety and
replaced by the following:

7.2 Regulatory Milestone Payment. Menarini shall make each of the payments
indicated below to VIVUS within [****] after the achievement of the
corresponding milestone event.

 

Page 3 of 11

 

Milestone Event

Approval of MAA by European Commission

Payment 
€[****]

Approval by European Commission (or other Regulatory Authority in the Menarini
Territory) of a Time of Onset Claim for Product in the Menarini Territory,
whether as part of the initial approval of an MAA, through approval of a Label
Expansion Filing, or otherwise*

€[****]

Product Launch in Italy

€[****]

Product Launch in Spain

€[****]

Product Launch in Germany

€[****]

Product Launch in France

€[****]

Product Launch in the United Kingdom

€[****]

 

 

*For the avoidance of doubt, this second milestone would be in addition to the
first milestone, since the first milestone applies regardless of whether the
Label Expansion Filing is filed or approved. The Parties shall work together to
include the Time of Onset Claim in the SmPC. VIVUS shall have [****] from
approval of the MAA by the European Commission to seek modification of the SmPC
in one or more Label Expansion Filings; provided, however, that such deadline
shall automatically be extended to [****] after approval of the MAA by the
European Commission if modification of the SmPC is delayed as a result of the
action or inaction of Menarini.

Each milestone payment in this Section 7.2 shall be paid only once. The maximum
total amount of payment to VIVUS pursuant to this Section 7.2 shall be €[****].
Each such payment shall be made in Euros by wire transfer of immediately
available funds into an account designated by VIVUS. Except as set forth in
Section 7.5(c), each such payment is nonrefundable and noncreditable against any
other payments due hereunder.

8.Section 7.4 of the License Agreement is hereby deleted and replaced in its
entirety by the

following:

7.4 Sales Milestone Payments. Menarini shall make each of the sales milestone
payments indicated below to VIVUS when aggregate Net Sales of Product in any
calendar year in the Menarini Territory reach the specified vales.

Aggregate Net Sales in a Calendar Year

Payment

€[****]

€[****]

€[****]

€[****]

€[****]

€[****]

It is expressly agreed between the Parties that the Net Sales made by Menarini
in the Excluded Territories shall not be taken into consideration in the
calculation of such Aggregate Net Sales. Each sales milestone payment in this
Section 7.4 shall be paid only once. The maximum total amount of payment to
VIVUS pursuant to this Section 7.4 shall be €[****]. Menarini shall notify and
pay to VIVUS the amounts set forth in this Section

Page 4 of 11

 

7.4 together with the delivery of the quarterly report pursuant to Section 7.8
for the calendar quarter in which the applicable event was achieved. For
clarity, in the event more than one (1) of the aggregate Net Sales thresholds in
achieved in a calendar year, Menarini shall owe each of the corresponding
payments. Each such payment shall be made in Euros by wire transfer of
immediately available funds into an account designated by VIVUS. Each such
payment is nonrefundable and noncreditable against any other payments due
hereunder.

9.Section 7.5 of the License Agreement is hereby deleted and replaced in its
entirety by the following:

7.5Royalty to VIVUS.

(a)

During the Royalty Term, on a calendar quarter basis, Menarini shall pay to
VIVUS a royalty equal to [****] percent ([****]%) of Net Sales of Products
(excluding ODF Products which are addressed in Section 7.5(c) below) in the
Menarini Territory; provided, however, that until the Royalty Pre-Payment has
been fully credited pursuant to Section 7.5(b), such royalty percentage shall be
[****] percent ([****]%).

(b)

Menarini may credit the Royalty Pre-Payment against royalties owed under Section
7.5(a) (but not any payments owed under Sections 7.5(c) or 7.6). The Royalty
Pre-Payment shall be creditable against €[****] of royalty owed under Section
7.5(a) (but not any payments owed under Sections 7.5(c) or 7.6).

(c)

During the Royalty Term, on a calendar quarter basis, Menarini shall pay to
VIVUS a royalty equal to [****] percent ([****]%) of Net Sales of ODF Products;
provided, however, that such royalty shall be reduced to [****] percent
([****]%) of the first $[****] of Net Sales of ODF Products in the Menarini
Territory (the “ODF Reduced Royalty”) until such time that the aggregate ODF
Reduced Royalty paid to VIVUS exceeds the lesser of (i) [****] percent ([****]%)
of the reasonable and necessary Third Party costs and expenses incurred in the
ODF Development or (ii) €[****] (the “ODF Reduced Royalty Cap”); provided
further, however, that the Parties agree to implement a similar royalty
reduction on royalties payable to VIVUS under Section 7.5(a) to the extent
VIVUS, or its sublicensee, obtains Regulatory Approval of the ODF Product in the
VIVUS Territory and the ODF Reduced Royalty Cap has yet to be achieved. The
Parties further agree that, as of January 1, 2021, the ODF Reduced Royalty shall
be adjusted to apply on a calendar year basis and equal [****] percent ([****]%)
of the first $[****] of Net Sales of ODF Products in the Menarini Territory;
provided further, however, that the Parties agree to implement a similar royalty
reduction on royalties payable to VIVUS under Section 7.5(a) to the extent
VIVUS, or its sublicensee, obtains Regulatory Approval of the ODF Product in the
VIVUS Territory and the ODF Reduced Royalty Cap has yet to be achieved. To the
extent the ODF Reduced Royalty Cap has yet to be achieved as of the end of the
Royalty Term and VIVUS, or its sublicensee, is commercializing the ODF Product
in the VIVUS Territory at that time, VIVUS agrees to [****]. For the sake of
clarity, Menarini acknowledges and agrees that (i) the ODF Reduced Royalty Cap
shall be achieved one time only regardless of which

Page 5 of 11

 

royalty it is applied against and (ii) the ODF Reduced Royalty shall not in any
circumstance apply to royalties owed under Section 7.6.

10.

Section 8.5 of the License Agreement is hereby deleted and replaced in its
entirety by the following:

8.5 Patent Marking. Menarini shall, and require its Affiliates and sublicensees,
to mark Products sold by it hereunder with appropriate patent numbers or indicia
to the extent required by Applicable Law and/or customary within each country of
the Menarini Territory here Product is sold.

11.

For the sake of clarity, the Parties agree that the “Effective Date” of the
License Agreement occurred on July 5, 2013.

12.

The Parties to discuss in good faith the possible transfer of the Avanafil
Global Safety Database from VIVUS to Menarini.

13.

A definition of “API” is hereby added to the Supply Agreement as follows: “API”
means the Product’s active pharmaceutical ingredient.

14.

The definition of “Minimum Purchase Obligation” and Exhibit C thereto of the
Supply Agreement are hereby deleted and replaced in their entirety by the
following:

“Minimum Purchase Obligation” means the greater of (a) such quantities of
Product or API, subject to Section 2.4, described in Exhibit C and (b) [****]
percent ([****]%) of Purchaser’s, or Purchaser’s designee’s, worldwide
requirements of Product or API, subject to Section 2.4.

EXHIBIT C

Minimum Purchase Obligations

Calendar Year

Minimum Purchase Obligation

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

Page 6 of 11

 

[****]

[****]

[****]

[****]

[****]

[****]

 

Notwithstanding the above, the Parties agree that Menarini shall be entitled to
sell the finished Product manufactured by Menarini at its Von Heyden
manufacturing facility from API supplied by VIVUS to Menarini for purposes of
process validation; provided that the quantities of API supplied by VIVUS to
Menarini for such process validation shall not be credited against Menarini’s
Minimum Purchase Obligations (the “Tablet Validation Product”). Furthermore, the
Parties agree that Menarini shall be entitled to sell the finished Product
manufactured with the API manufactured by Menarini at its Lusochimica
manufacturing facility; provided that the quantities of API manufactured by
Menarini for such process validation shall not be credited against Menarini’s
Minimum Purchase Obligations (the “API Validation Product”). Menarini further
agrees (i) to pay royalties pursuant to Article 7 on any Product sold pursuant
to this paragraph and (ii) that the Tablet Validation Products and API
Validation Products are not to exceed [****] batches in total of each dosage
with an estimated total yield of [****] tablets, [****] tablets, and [****]
tablets.

15.Section 2.4 of the Supply Agreement is hereby deleted and replaced in its
entirety by the

following:

2.4 Minimum Purchase Requirements. Purchaser shall be required to either (a)
purchase no less than the [****] from VIVUS in accordance with the terms of this
Agreement or (b) [****]; provided, however, that Purchaser may fulfill its
obligations under subsection (a) above by electing [****] (the “API Purchase
Option”). Menarini shall reimburse VIVUS, in cash, for any payment or penalty
that VIVUS may incur from the New Third Party Manufacturer and/or any other
relevant Third Party manufacturer as a result of Purchaser’s failure to purchase
the Minimum Purchase Obligation or Purchaser’s decision to exercise the API
Purchase Option; provided that such payment or penalty shall be reasonably
documented and justified by VIVUS as to the amount of such payment or penalty.
VIVUS acknowledges and agrees that to the extent Menarini or VIVUS’ other
sublicensees have purchased a minimum of [****] final blend batches of bulk
Product in any calendar year that Purchaser shall not be obligated to reimburse
VIVUS any amounts relating to Purchaser’s election to fulfill its Minimum
Purchase Obligation under subsection (a) above for the same calendar year
through the purchase of API rather than bulk Product. The Parties agree that
with respect to the API purchased by Menarini pursuant to the API Purchase
Option: (a) such API shall be stored at a facility owned and operated by the New
Third Party Manufacturer and/or any other relevant Third Party manufacturer
according to good manufacturing practices and (b) the ownership and risk of loss
shall pass to Menarini as of the date of the invoice from VIVUS for such API
Purchase Option; such invoice shall be issued not earlier than the end of each
Calendar Year.

Page 7 of 11

 

16.A Section 2.12 shall be inserted into the Supply Agreement as follows: 2.12
Manufacturing Yield.

(a) The Parties agree that the annual target yield of the manufacturing process
for the Product (the “Product Target Yield”) shall be no lower than [****]
percent ([****]%). In the event that the actual annual yield (the “Actual
Yield”) falls below the Product Target Yield, then VIVUS shall [****]; provided
that in no event shall the VIVUS markup be reduced below [****] percent
([****]%). For example, if the Actual Yield in calendar year 2018 totals [****]
percent ([****]%), then the VIVUS markup of [****] percent ([****]%) would be
reduced for calendar year 2019 to [****] percent ([****]%). For purposes of this
Amendment, the Parties acknowledge and agree that Actual Yield is calculated as
follows: (annual mean amount of API in the useable yield in bulk tablets /
(annual mean amount of dispensed API to the API+mannitol milling step). At the
time of this Amendment, the [****] percent ([****]%) Actual Yield was calculated
as follows: (mean [****] API in bulk tablet lots / [****] API dispensed to the
milling step) x 100 = [****]%. The Parties further acknowledge and agree that
this calculation represents the percentage of Actual Yield in tablets vs. the
total amount of API input into each batch of bulk tablets and its calculated
theoretical tablet yield.

(b) During the [****] period following the Amendment Effective Date, VIVUS
agrees to perform optimization studies as mutually agreed upon with the New
Third Party Manufacturer with the goal of reducing the overage of API added at
the milling steps in order to increase the Actual Yield. At the end of this
[****] period, any process changes would be evaluated by VIVUS and the New Third
Party Manufacturer and implemented, if feasible, based on the regulatory and GMP
requirements identified for such change. If such attempts to reduce the overage
are unsuccessful, VIVUS will not be penalized beyond the reduction of the markup
as set forth above.

17.Section 3.1 of the Supply Agreement is hereby deleted and replaced in its
entirety by the following:

3.1 Prices for Product and API. Purchaser shall pay to VIVUS the Price for the
units of Product or quantity of API supplied to Purchaser pursuant to this
Agreement. Purchaser shall be solely responsible for determining the price at
which it will sell the Product. The Parties acknowledge and agree that the
current costs for Product and API from VIVUS’ current New Third Party
Manufacturer, which shall be used to calculate Manufacturing Cost, are as
follows:

(a)API:

(i)for [****] batches or [****] or less, €[****] per [****];

(ii) for [****] batches to [****] batches or [****], €[****] per [****]; and

Page 8 of 11

 

(iii) for [****] batches or more or [****], €[****] per [****].  

(b)Products:

(i) for [****] to [****] batches, per 1,000 tablets:
[****]/€[****], [****]/€[****], and [****]/€[****]; and

(ii) for [****] or more batches, per 1,000 tablets:
[****]/€[****], [****]/€[****], and [****]/€[****].

Notwithstanding the above, the Parties acknowledge and agree that these costs
remain subject to [****] and such other increases that are specified under the
Agreement.

18.Section 9.1 of the Supply Agreement is hereby deleted and replaced in its
entirety by the following:

9.1 Term. The term of this Agreement (the “Term”) will commence on the Effective
Date and will continue, unless otherwise agreed by the Parties in writing, until
December 31st, 2023.

19.

Section 9.5 of the Supply Agreement is hereby deleted and replaced in its
entirety by the following:

9.5 Effects of Termination. Upon expiration or termination of this Agreement,
VIVUS shall manufacture and supply, and Purchaser shall purchase from VIVUS (a)
any and all quantities of Product or API ordered by Purchaser pursuant to this
Agreement prior to the date on which such notice is given, for the applicable
Price (“Ordered Product”), and (b) any and all materials held by VIVUS or MTPC
(or any other Third Party manufacturer of Product) for exclusive use in the
manufacture of Compound, API or bulk Product based on binding part of the
Forecasts provided by Purchaser, for an amount equal to the [****] with respect
to such materials (“Required Materials”). Termination or expiration of this
Agreement will not relieve any outstanding obligations due hereunder prior to
the termination or expiration, including, without limitation, Purchaser’s
Minimum Purchase Obligations hereunder; provided, however, that following a
termination pursuant to Section 9.2 or Section 9.3 VIVUS shall not be obligated
to supply Product or API and shall have the right to receive [****].

20.

Section 9.6 of the Supply Agreement is hereby deleted and replaced in its
entirety by the following:

9.6 Survival. Expiration or termination of this Agreement shall not relieve the
Parties of any obligation accruing prior to the effective date of such
expiration or termination. The following sections shall survive the termination
or expiration of this Agreement for any reason: 1 (any relevant definitions),
2.4, 3 (solely in relation to Product sold prior to expiration or termination of
this Agreement or in relation to Product or other materials sold pursuant to
Section 9.5), 4.2, 4.3, 8.1, 9.5, 9.6, and 10-16.

Page 9 of 11

 

21.

The Parties acknowledge and agree that (a) except as expressly provided in this
Amendment, each of the License Agreement and Supply Agreement shall remain
unmodified and in full force and effect and (b) other than this Amendment, no
other binding alteration, amendment, change or addition to the License Agreement
and/or Supply Agreement exists as of the Amendment Effective Date.

22.

This Amendment may be executed in one (1) or more counterparts, including by
facsimile or other electronic transmission, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

IN WITNESS WHEREOF, the Parties have executed this Amendment in duplicate
originals by their duly authorized officers as of the Amendment Effective Date.

VIVUS, INC.Berlin–Chemie Ag

 

By:    /s/ John L. SlebirBy:  /s/ Dr. Reinhard Uppenkamp

Name:  John L. SlebirName:  Dr. Reinhard Uppenkamp

Title:  SVP, General Counsel  Title:  Chairman of the Board

Date:  21 May 2019Date:   

 

By:  /s/ Dr. Attilio Sebastio

Name:  Dr. Attilio Sebastio

Title:  CFO

Date: 

 

Page 10 of 11