Exhibit 10.2

 

AMENDMENT TO MANUFACTURING AND SUPPLY AGREEMENT

 

This Amendment to Manufacturing and Supply Agreement (this “Amendment”) is
executed as of October 5, 2011 by and among Eli Lilly and Company (“Lilly”),
Lilly Del Caribe, Inc. (“Lilly Del Caribe”), and United Therapeutics Corporation
(“United Therapeutics”), and together, the “Parties”.

 

Recitals

 

WHEREAS, the Parties have entered into a Manufacturing and Supply Agreement
dated November 14, 2008, pursuant to which Lilly and Lilly Del Caribe supply
Product to United Therapeutics and conduct certain other activities in
connection therewith; and

 

WHEREAS, the Parties now desire to further amend the Supply Agreement in order
to provide for the manufacture of Samples (as defined below) for distribution by
LungRx, a wholly-owned subsidiary of United Therapeutics.

 

NOW THEREFORE, in consideration of the Recitals and the mutual covenants
contained herein, the Parties agree as follows:

 

1.              Section 1.5 of the Supply Agreement is hereby amended by adding
the following sentence to the end of the existing provision:

 

“Unless the context otherwise clearly requires, ‘Product’ shall include both
Product in the commercial presentation and Samples.”

 

2.              The Supply Agreement is hereby amended by adding thereto a new
Section 1.8 providing as follows and appropriately renumbering the remaining
Sections:

 

“Section 1.8. “Samples” shall mean Product packaged and labeled for distribution
to health care professionals free of charge for promotional purposes and marked
“Sample — Not for Resale” or words of similar import.”

 

3.              Section 2.4 of the Supply Agreement is hereby amended and
restated to read in its entirety as follows:

 

“The Parties acknowledge and agree that the Product and placebo may be required
by United Therapeutics for the Development of the Product, including use in
clinical trials (including Phase 4 clinical trials and label expansion studies),
complying with GMPs in accordance with the License Agreement and the Quality
Agreement (including conducting release testing, stability testing and
maintaining retention samples), and the Product may be required by United
Therapeutics for complimentary distribution for patient assistance,
compassionate use programs, and United Therapeutics’ sampling program. Such
Product shall not be sold to end-users. The Parties anticipate that United
Therapeutics’ sampling

 

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program will involve providing samples of the commercial presentation of the
Product in limited quantities at key centers as well as Samples distributed to
health care providers, in each case solely for the treatment of indications in
the Field in the Territory and in accordance with Applicable Laws and industry
practices, including appropriate sample accountability procedures. Lilly shall
use Commercially Reasonable Efforts to supply (a) the Product to United
Therapeutics for such purposes at the Purchase Price for such Product and
(b) placebo at Lilly’s cost, to be agreed upon by the Parties in each instance
in advance in writing.

 

4.              Section 6.2 of the Agreement is hereby amended by adding a new
Subsection (d) providing as follows:

 

“United Therapeutics shall from time to time order Samples from Lilly in
accordance with procedures to be agreed by the Parties. Lilly and United
Therapeutics will agree upon a minimum inventory level for Samples which Lilly
will use its Commercially Reasonable Efforts to maintain, and upon minimum
replenishment quantities. Lilly shall ship Samples to United Therapeutics or its
designated third party logistics agent for Samples (which initially will be
Lilly) in a manner consistent with the shipping, insurance and invoicing and
other provisions of this Section 6.2 and Section 7.3 applicable to shipments of
Product for commercial sale, adjusted as appropriate to reflect the distribution
process for Samples agreed by the Parties.

 

5.              Section 6.2 of the Agreement is hereby amended by adding a new
Subsection (e) providing as follows:

 

“Lilly shall serve as United Therapeutics’ third party logistics agent for
Samples. In such capacity, Lilly will use its Commercially Reasonable Efforts to
receive validated orders and ship the same to health care providers on behalf of
United Therapeutics. All such activities shall be conducted in accordance with
the usual procedures used by Lilly with respect to its own products, the terms
of this Agreement, and the procedures agreed to from time to time by the
Parties, including, as applicable, procedures relating to the use of a third
party samples validation contractor. As compensation for its services as third
party logistics agent, United Therapeutics shall pay Lilly a logistics fee as
set forth in Exhibit 6.2(e). In the event any of the estimates or assumptions
reflected on Exhibit 6.2(e) prove not to be accurate, then the fees charged by
Lilly shall be appropriately adjusted by agreement between the Parties. In
addition, the fees charged shall be reviewed and renegotiated on an annual
basis, with the negotiation to occur during the fourth quarter of the then
current calendar year and with agreed changes to become effective on January 1
of the ensuing year. Either Party may terminate Lilly’s service as third party
logistics fulfillment agent for Samples at any time without cause upon ninety
(90) days notice. Lilly shall have the right to approve any successor third
party logistics agent, such approval not to be unreasonably withheld.

 

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6.              Section 7.1 of the Agreement is hereby amended by adding to the
end of the existing provision the following:

 

“The Parties shall mutually agree upon a forecasting process for Samples.”

 

7.              Exhibit 6.3 (a) of the Agreement is hereby amended by and
restated in its entirety as follows:

 

“Purchase Price of Product for commercial sales and for Samples:

 

$0.26 per tablet, each tablet containing twenty (20) milligrams of the Compound,
supplied in sixty (60) count or fourteen (14) count bottles.

 

8.              As soon as practicable after the execution of this Amendment,
the Parties shall amend the Quality Agreement as appropriate to reflect this
Amendment.

 

9.              This Amendment does not supersede, eliminate or change any part
of the Agreement except as specifically stated herein. In the event of any
inconsistency between the terms of this Amendment and the Agreement, the terms
of this Amendment shall control. All other terms and conditions of the Agreement
not amended hereby shall remain in full force and effect.

 

10.       This Amendment shall be effective as of October 5, 2011.

 

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IN WITNESS WHEREOF, the Parties have executed this Second Amendment as of the
date first written above.

 

Eli Lilly and Company

 

United Therapeutics Corporation

 

 

 

By:

/s/ Darren J. Carroll

 

By:

/s/ Jay A. Watson

 

 

 

Name:

Darren J. Carroll

 

Name:

Jay A. Watson

 

 

 

Title:

VP, Corporate Business Development

 

Title:

Senior VP, Strategic Operations & Logistics

 

 

Lilly Del Caribe, Inc.

 

 

 

 

 

By:

/s/ JA Ward

 

 

 

 

 

Name:

JA Ward

 

 

 

 

 

Title:

VP & CFO

 

 

 

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SCHEDULE 6.2(E)

 

Adcirca Sample Program Fees Schedule

 

Start-Up

 

A charge of $30,1651, payable within thirty (30) days of execution of this
agreement, will be required to pay for equipment required for this new samples
program and to establish picking areas for this special security substance in
each of Lilly’s three US Distribution centers and for creation of logistics
program.

 

Monthly Transaction Fees*

 

1.              Order fees: $5.00 per order for order entry and order management

 

2.              Shipment fees: $18.00 per order. Assumes shipment in a plastic
bag — MAXIMUM 10 bottles per shipment, includes all distribution-related fees
except for freight fees (see item 3.)

 

3.              Freight fee estimate: Pass-through cost from Lilly to United
Therapeutics using actual contracted Lilly UPS rates + 10%. Request for standard
method of shipment be chosen for Adcirca sample shipments (ground or next day
air).

 

·        $5.50 per shipment for ground freight (1 to 5 lbs.)

 

·                       $12.10 per shipment for next day airfreight (1 lb.).
Cost would increase for each pound shipped.

 

4.              Sample Returns: $15.00 per returned bottle (same as current fee
for Adcirca trade bottles). Covers returned order processing and product
destruction.

 

Assumptions:

 

a.              Assumes initial quantity of 30,000 sample bottles

b.              Assumes continuous storage of approximately 10,000 sample
bottles once program is underway

c.               Assumes 10 sample bottles are shipped to 200 physicians within
4 weeks of the start of the program

d.              Assumes 4 sample bottles are shipped to an additional 1300
physicians within the first 6 weeks of the start of the program.

e.               Assumes supplement shipments to these 200 and 1300 physicians
in the same quantities described above occur approximately 4 months after the
initial shipments and reoccur every 6 to 12 months thereafter.

f.                Assume shipments of 4 sample bottles are sent to 200
physicians outside of Deciles 2-10 (based upon approval from UT Strategic
Operations that they are PAH related) occur within the first 4 months from
launch.

g.               Assume shipments of 4 sample bottles to the 4,070 physicians in
Deciles 2-4 begin to occur 4 months post launch and reoccur every 6 months
thereafter.

h.              Assume that carrier returns are treated like any return of a
sample (product) outside of GMP conditions, etc. documenting from whom the
return came, reason for return, etc. per current Lilly SOPs and placing the
materials in quarantine to later be destroyed and not returned to the general
population.

i.                  Assume orders to be shipped within 48 hours of receipt.

j.                 Assume that faxed order receipts from Cegedim are validated

k                 Assume that once Lilly receives the order, that the Physician
was validated by Cegedim per current standards and that the shipment execution
is acceptable. This process is still being vetted with Cegedim.

 

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(1) The Fee total referenced above are $15,165 to be reimbursed to Lilly for
specific equipment that was purchased to properly set up the Sample production
line; and $15,000 is for a set-up fee for the systems at Lilly’s distribution
centers to manage logistics for this Sample Program.

 

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I.                Assume that Lilly will only be shipping the samples and the
packing slips. No other materials will be shipped.

m.          Assume that it is also required for Lilly to keep shipping documents
on file with the shipping and that Cegedim will be performing the signature
verification activities and keep original signatures for Health Care
Practitioners..

n.              Assume reports to be generated that will include physician,
shipment date, shipment quantity, sample inventory, etc. Reports to be provided
by Kym Thompson or Jonathan Lane.

o.              Assume that all documentation will be maintained per an agreed
to period of time as dictated by the Quality Agreement or MSA.

p.              An order will have a maximum of 10 bottles due to the
limitations of size of the shipping bag. For orders over 10 bottles, an
additional Distribution Services fee will be assessed for each additional
shipment.

q.              Additional fees would need to be evaluated for expedited
shipments (shipments that need to be processed sooner than 48 hours).

r.                 All shipments will be to a commercial address - shipments to
patient’s homes not in scope due to licensing.

 

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