Exhibit

10.32




 




Confidential

Materials omitted and filed separately with the 


Securities and Exchange Commission. 

Asterisks denote omissions.




 




COMMERCIAL

SUPPLY AND 


PROCESS VALIDATION AGREEMENT




 




THIS COMMERCIAL SUPPLY

AGREEMENT (the “Agreement”) is entered into as of this 6th day of December,

1999 by and between TRANSKARYOTIC THERAPIES, INC.,(“TKT”), a Delaware

corporation having an address at 195 Albany Street, Cambridge, MA 02139, and

CHESAPEAKE BIOLOGICAL LABORATORIES, INC., a Maryland corporation having an

address at 1111 South Paca Street, Baltimore, MD 21230 (“CBL”), with respect to

the following:




 




RECITALS




 




A.            TKT

is a development-stage biotechnology company active in the research and

development of drug products.




 




B.                                     CBL

is in the business of formulating, sterile filling, and packaging liquid

injectable drug products and medical devices.




 




C.                                     TKT

and CBL desire to enter into this Agreement in order to establish the terms and

conditions under which CBL will formulate, fill, and package Product for clinical

trial and consistency batches for FDA approval and, following FDA approval of

CBL as a formulation, fill-finish site for the Product, for commercial sale.




 




D.                                    Both

parties contemplate that additional TKT products may be included under this

Agreement, as amendments, by mutual written consent of the parties.




 




AGREEMENT




 




NOW THEREFORE, in

consideration of the premises and the mutual promises and covenants contained

in this Agreement, and for other good and valuable consideration, the receipt

and sufficiency of which is hereby acknowledged, the parties hereto agree as

follows:




 




ARTICLE

I




DEFINITIONS




 




All references to

particular Exhibits and Sections shall mean the Exhibits to, and Sections of,

this Agreement, unless otherwise specified. 

For the purposes of this Agreement and the Exhibits hereto, the

following words and phrases shall have the following meanings:




 




1





























 




1.01        “Active Ingredient”

shall mean active pharmaceutical ingredient (API) of alpha-Galactosidase A as

described in Exhibit A.




 




1.02        “Affiliate” shall

mean any corporation, firm, partnership or other entity, whether de jure

or de facto, which directly or indirectly owns, is owned by or is under

common ownership with a party to this Agreement to the extent of at least fifty

percent (50%) of the equity having the power to vote on or direct the affairs

of the entity and any person, firm, partnership, corporation or other entity

actually controlled by, controlling or under common control of a party to this

Agreement.




 




1.03        “Agreement” shall

mean this Commercial Supply Agreement.




 




1.04        “Batch or Lot” shall

mean a single run of Product processed by a single execution of the

instructions specified in the Batch Production and Control Record within the

meaning of 21 CFR part 210.3(b)(2) and/or within the meaning of 21 CFR part

600.3(x), or its successor as in effect from time to time.




 




1.05        “Batch Production and Control Record” or

“Batch Record” shall mean the set of detailed

processing instructions which are to be followed by CBL to process one batch of

Product within the meaning of 21 CFR part 211.188, or its successor as in

effect from time to time.




 




1.06        “FDA” shall mean the

United States Food and Drug Administration.




 




1.07        “Formulated Bulk”

shall mean formulated Active Ingredient as described in Exhibit A.




 




1.08        “Good Manufacturing Practices”

or the letters “GMP” or “cGMP” shall mean the writings of the Code

of Federal Regulations, Part 21, Section 210 and Section 211, or other sections

so designated by the title “Good Manufacturing Practices” promulgated under the

Federal Food, Drug and Cosmetic Act, as in effect from time to time.




 




1.09        “Master Production and Control Record” or

“Master Batch Record” shall mean a written description

of the procedure to be followed for processing a batch of Product including but

not limited to a complete list of all active and inactive ingredients,

components, weights and measures, descriptions of drug product containers,

closures, packaging materials, and labeling and complete specifications for

each, within the meaning of 21 CFR part 211.186, or its successor as in effect

from time to time.




 




1.10        “Materials” shall

mean all inactive ingredients, vials, stoppers, seals, labels, inserts, folding

cartons and/or shipping cartons as are otherwise necessary to be utilized in

the Processing and to meet the Specifications, but excluding Active Ingredient.




 




1.11        “Processing” shall

mean processing Product in accordance with the Master Batch Record for the

Product.  “Processed” and “Process”

shall have comparable meanings.




 




1.12        “Product(s)” shall

mean the liquid product(s) covered by this Agreement and processed as

contemplated hereby.




 




2





























 




1.13        “Project Summary”

shall mean those documents attached to this Agreement as Exhibit A, which

provide specific details about the Product to be processed for TKT by CBL.




 




1.14        “Specifications”

shall mean the acceptance criteria for the Product as set forth in the Master

Batch Record.




 




1.15        “USP” shall mean the

United States Pharmacopeia, Vol.  23, or

any subsequent addition thereof.




 




ARTICLE

II




SUPPLY

AND PROCESSING OF MATERIALS




 




2.01        Processing.  Subject to the terms and conditions of this

Agreement, CBL agrees that it shall formulate, fill, and package the Product at

its Camden parenteral filling facility in Baltimore, MD validated in accordance

with FDA regulations, and shall process the Product in accordance with cGMP’s,

including without limitation adherence to appropriate quality assurance and quality

control practices.  CBL will permit TKT

to review all written internal CBL quality assurance and quality control

practices.  If TKT requests a change in

CBL’s practices and the parties agree that such a change is appropriate to

comply with FDA regulations then CBL will act in good faith to implement the

requested change.  CBL further agrees

that it will use reasonable and customary efforts to comply with regulations of

foreign authorities applicable to the processing of Product by CBL.  The product cannot be processed at another

facility without the written authorization of TKT.




 




2.02        Master Production Record.  Subject to the terms and conditions of this

Agreement, CBL agrees to process the Product in accordance with a Master

Production and Control Record approved in writing by TKT.  CBL further agrees that any substantive

changes to the Master Production and Control Record and the process must

receive written approval of TKT prior to implementation, provided, however,

that any approvals to be delivered by TKT shall not be unreasonably withheld

and the parties shall cooperate and act reasonably and in good faith in

connection with their respective activities under this Section.  CBL will permit TKT to review all information

in Master Production Records pertaining to individual product lots as well as,

raw material test results and the results of environmental monitoring prior to

product release by CBL but after CBL’s completion of its internal review of the

batch record.  CBL will release the

batch record within [**] of receiving TKT’s comments and proposed changes.




 




2.03        TKT Supplied Materials.  TKT, at its expense, shall deliver

sufficient quantities of Active Ingredient, any Material, or production

equipment indicated on Exhibit A hereto as to be provided by TKT, to

CBL’s plant at Baltimore, Maryland prior to the scheduled date of Processing as

indicated in Exhibit A, unless otherwise agreed to by CBL.  All such items supplied by TKT for purposes

hereof shall meet the applicable specifications therefor as set forth on Exhibit

A and the Master Production Record. 

All items so delivered shall remain the property of TKT.




 




2.04        CBL Supplied Materials.  CBL will be responsible for supplying

sufficient quantities of any Materials indicated on Exhibit A hereto as

provided by CBL, insofar as required to permit CBL to complete the Processing

and delivery of Product in accordance with




 




3





























 




the terms hereof.  All such

items purchased by CBL for purposes hereof shall meet the applicable

Specifications therefor as set forth on Exhibit A and the Master

Production and Control Record.




 




2.05        Labeling Specifications.  TKT shall be responsible for furnishing to

CBL appropriate specifications, reasonably acceptable to CBL, for the labeling

and packaging (including package inserts) to be used on or in connection with

the Processing of Product which is to bear TKT labels or other identification,

and any necessary artwork and engineering drawings related thereto.  Insofar as required of CBL pursuant to Exhibit

A hereto, CBL will label and package Product in accordance with such

specifications.  CBL shall not affix any

other labeling to the Product, except with the prior written approval of TKT.




 




2.06        Stability Testing.  TKT shall be responsible for all requisite

stability testing of the Product.




 




ARTICLE

III




PROCESS

VALIDATION




 




3.01        Process Validation.  An outline for validation of the

formulation, filling, and packaging of the Product at CBL’s facilities is

attached hereto as Exhibit B.  In

accepting its obligations under the terms of this Agreement, developing the

cost in Exhibit C, and the event and time schedule in Exhibit D,

CBL has relied upon the accuracy, completeness, and correctness of the data and

information provided by TKT and the understanding that the Product can be

processed in a stable form in accordance with typical and standard

pharmaceutical production practices. 

CBL will proceed with reasonable promptness to perform its obligations

hereunder, but the parties acknowledge that such process validation is a

demanding effort and unanticipated events beyond the control of the parties may

change the event and time schedule; and, thus, the completion date of CBL’s

performance hereunder cannot be predicted with any meaningful degree of

certainty.  CBL agrees to allow TKT to

approve product related validation protocols prior to execution by CBL.




 




3.02        CBL Responsibilities.  CBL shall provide reasonable assistance to

TKT in its efforts to obtain and maintain all necessary regulatory approvals

and permits relating to the production of Product at CBL facilities.  Accordingly, insofar as relating to Product

and CBL’s processing thereof, CBL shall permit TKT or its designees

typical and customary access to CBL’s facility, other than the filling, and

packaging areas, during the formulation and filling of Product and, upon

reasonable notice and during reasonable business hours and so long as TKT does

not interfere with CBL’s day to day operations (i) to inspect CBL’s processing

facilities, (ii) to review manufacturing and quality control records relative

to production by CBL of the Product, prior to the disposition of the Product

(iii) to audit CBL’s production efforts in respect of Product for compliance

with FDA requirements, (iv) to review CBL’s facility master file, any

correspondence, reports, or other documents from CBL to the FDA, or to any

applicable foreign regulatory authority, or from the FDA, or from any

applicable foreign regulatory authority, to CBL, related to the Product and/or

the facility as it effects the Product, (v) to approve all Product related

variances which occur during manufacture or storage of the Product, including

approval of label text after receipt of labels and prior to application, and

(vi) CBL will inform TKT as quickly as possible regarding facility related

variances and will permit TKT onsite access to all




 




4





























 




facility related variances and information for review and those which

in CBL’s judgement may affect the Product will be reviewed with TKT prior to

implementation of corrective action.




 




3.03        TKT Responsibilities.  TKT will be responsible for obtaining all

Federal and International regulatory approvals or permits necessary for the

production, processing, distribution, use, and sale of the Product.  Additionally, TKT will be responsible for

all other regulatory requirements which are not specifically assigned to CBL in

the Project Summary, including the payment of any FDA user fees or other fees

associated with the review and approval to market the Product imposed by any

regulatory agency.  TKT agrees to supply

CBL with any documents, information, and/or data specified as TKT

responsibility in the Project Summary in a timely manner so as not to impede

CBL’s ability to comply with its obligations hereunder.




 




ARTICLE

IV




ORDERS,

PRICE, & TERMS OF PAYMENT




 




4.01        Purchase Orders.  Unless otherwise specified, TKT shall submit

a purchase order to CBL at least [**] prior to the requested delivery date for

the Product set forth in such purchase order. 

CBL shall accept such purchase orders from TKT and shall notify TKT of

the processing date.  CBL must receive

from TKT any Active Ingredient and Materials to be supplied by TKT for use in

Processing at least [**] prior to the processing date.




 




4.02        Forecast.  TKT shall provide CBL in writing with

rolling [**] non-binding, good faith forecasts of TKT’s annual requirements for

Product, in quarterly periods.  Such

forecasting shall be updated in writing quarterly.




 




4.03        Cancellation and Rescheduling.  TKT may cancel or postpone a purchase order

for Product in accordance with CBL’s Cancellation and Postponement Policy as

set forth in Exhibit E.




 




4.04        Price.  The price to be paid by TKT to CBL during

the term of this Agreement for any projects or validations, and each Batch of

Product, shall be as specified in Exhibit C.  All prices are FOB CBL’s facility in Baltimore, Maryland.  Payment of all FDA fees specific to the

Product will be the responsibility of TKT. 

CBL’s price does not include any other testing, studies, Product

specific validations not presently required, or other activities, which TKT may

deem necessary but which are not required of CBL by this Agreement.




 




4.05        Invoices.  The invoice for the total amount shall be

payable by TKT to CBL within [**] days of the date of invoice, date of shipment

or date of issuance of the Certificate of Conformance referred to in Section

5.03, whichever is latest; provided that if TKT requests or causes CBL to hold

a Batch of Product for more than [**] days, TKT will be invoiced and the [**]

day payment terms would commence on the invoice date.




 




ARTICLE

V




SHIPMENTS,

INSPECTION, & ACCEPTANCE




 




5.01        Shipments.  CBL shall ship or caused to be shipped at

TKT’s expense the Product to TKT to such destination(s) as designated by TKT

except that CBL shall not be required to




 




5





























 




ship Product to any clinical trial site.  CBL’s delivery of Product to a common carrier or licensed trucker

approved by TKT shall constitute delivery to TKT, and TKT shall bear all risk

of loss, delay or damage in transit. 

CBL agrees to provide reasonable support to assist TKT to pursue any

claims it may have against carriers.




 




5.02        Inventory in Quarantine.  TKT may request in writing that CBL ship

Product from CBL’s inventory in quarantine, prior to the issuance by CBL’s

Quality Assurance Department of the appropriate release; however, TKT agrees

not to introduce any of the Product into interstate commerce until the receipt

of proper quality control release by CBL applicable to the Product.  Such a request will result in an invoice

being sent as of the shipping date and commencement upon invoice delivery of

the [**] day payment terms.  TKT shall

indemnify and hold CBL harmless from any and all losses, damages, claims, or

costs, including reasonable attorney’s fees, which CBL may suffer or incur as a

result of and arising out of the shipment or use of the Product prior to its

release by CBL’s Quality Assurance Department.




 




5.03        Certificate of Conformance.  Upon completion of filling, inspection,

packaging, and quality assurance review, CBL shall promptly provide TKT a

Certificate of Conformance for each Batch of Product shipped, certifying that

the Product has met all Specifications set forth in this Agreement.




 




5.04        Inspection.  TKT shall inspect all shipments of Product

received from CBL for proper labeling, packaging and count within [**]days of

actual receipt of shipment at its designated receiving facility.  However, any such inspection shall not

relieve CBL of its obligation and warranties under this Agreement.  If any portion of the Product received fails

to conform with any applicable Specification, TKT may, subject to the terms of

Section 5.05 hereof, reject the same within [**] days of the latter date of

actual receipt of (i) the Product; or (ii) a Certificate of Conformance.




 




5.05        Rejection.  In any case where TKT expects to reject or

otherwise make a claim against CBL with respect to damaged or otherwise

nonconforming Product, TKT shall notify CBL of such expected rejection and CBL

shall be offered a reasonable opportunity to offer proof or evidence as to why

such Product should not be rejected and to inspect and/or test such

Product.  In the event of any dispute as

to whether the Product may be rightfully rejected by TKT, such Product shall be

tested for conformance with the applicable Specifications by an independent

testing organization mutually acceptable to both parties which analysis shall

be binding on TKT and CBL solely for the purpose of determining whether such

Product may be rightfully rejected or not. 

TKT shall not under any circumstances dispose of any Product claimed by

TKT or determined by independent testing organization to be damaged or

nonconforming, without CBL’s prior written consent.  All or part of any shipment of Product determined to have been

rightfully rejected by TKT shall be held by TKT for disposition by CBL, at

CBL’s expense.




 




ARTICLE

VI




REPRESENTATIONS

& WARRANTIES




 




6.01        Warranties by CBL.  CBL warrants that all Product delivered to

TKT (or shipped to a third party at the direction of TKT) under this Agreement

shall at the time of




 




6





























 




delivery, be free of defects in material and workmanship; meet the

Specifications (except in the case of Product delivered in quarantine pursuant

to Section 5.02, in which case upon release from quarantine); and have been

processed and maintained in conformance with cGMPs and other applicable FDA

regulations.




 




6.02        Warranties by TKT.  TKT warrants that its storage, labeling

(including, without limitation any labeling, packaging and insert

specifications supplied by TKT pursuant to or as contemplated by Section 2.05

hereof), distribution, use, and sale of Product complies and will comply with

all applicable Federal, state and local laws, rules and regulations and will be

undertaken in a safe and responsible manner. 

If the Product is intended for distribution, use, and/or sale outside of

the United States, TKT further warrants that all necessary US export licenses

are in place or will be in place at the time of export and that the export,

distribution and/or sale comply with all laws, rules and regulations of the

country where the Product will be used. 

TKT represents and warrants to CBL that TKT is not aware that Product,

or the processing or distribution thereof, will violate the intellectual

property rights of any third party, and that TKT is not engaged in the theft or

misuse of any third party’s trade secret information regarding the processing

or use or distribution of Product, nor does TKT have notice of any claim of a

third party regarding any such theft or misuse.




 




6.03        Limitation on Warranties.  The warranties set forth in this Article VI

are expressly stated and in lieu of and exclude, and the parties do expressly

disclaim, all other warranties expressed or implied, arising by operation of

law or otherwise, including, on the part of CBL, any implied warranties of

fitness for a particular purpose and any representation or warranty as to the

suitability or efficacy of Product.




 




ARTICLE

VII




INDEMNITY,

LIMITATION ON LIABILITY, & RECALLS




 




7.01        Indemnification by CBL.  CBL shall defend, indemnify, and hold TKT

harmless from and against any and all claims, liability, damage, loss, cost and

expenses (including reasonable attorney’s fees) arising from any third party

claims made or brought, or any proceedings of any sort initiated against TKT

which (i) arise out of CBL’s breach of any obligations or warranty, or negligence

by CBL under this Agreement, or arise out of or are based upon any claim of

violation by CBL of any patent, trade secret or other intellectual property

rights of any person or entity, subject, however, in each case to the

limitations set forth in Section 7.05 below.




 




7.02        Indemnification by TKT.  TKT will defend, indemnify, and hold CBL

harmless from and against any and all claims, liability, damage, loss, cost and

expenses (including reasonable attorney’s fees) resulting from any third party

claims made or brought against, or proceedings of any sort initiated against

CBL which (i) arise out of TKT’s breach of any obligation, warranty or

negligence by TKT under this Agreement, (ii) arise out of the promotion,

distribution, sale or use by TKT or any third party of Product, including

without limitation any product liability claim (except to the extent CBL is at

fault or has failed to deliver or supply Product in accordance with the

Specifications), or (iii) arise out of any or are based upon any claim of violation

by TKT of any, patent, trade secret or other intellectual property rights of

any person or entity, subject, however, in each case to the limitation set

forth in Section 7.05 below.




 




7





























 




7.03        Conditions.  Each party’s indemnity obligations (the

“Indemnifying Party”) under Sections 7.01 and 7.02 are conditioned upon the

other party (the “Indemnified Party”) promptly notifying the Indemnifying Party

of any such claim or proceeding in writing, tendering to the Indemnifying Party

the opportunity to defend or settle such a claim or proceeding at its expense

and cooperating with the Indemnifying Party (at the expense of the Indemnifying

Party) in defending or settling any such claim or proceeding.  The indemnifying party should not enter into

any settlement which imposes liability on the indemnified party without the

indemnified party’s prior written consent not unreasonably withheld.




 




7.04        Recall.  Subject to the limitations set forth in

Section 7.05 below, CBL agrees to indemnify TKT against the reasonable and

necessary actual costs of managing and controlling any recall of Product,

provided that such recall is attributable to a breach by CBL of any of the

warranties provided herein, that CBL is given an adequate opportunity to

participate in any and all discussions with the FDA or otherwise concerning the

proposed recall and unless otherwise specified by the FDA, the manner and

method of a voluntary recall shall have been reasonably approved by CBL.  CBL shall not be obligated under this

Section 7.04 to indemnify TKT if the recall is due to misbranding of the

Product by TKT or is due to any other act or omission of TKT or any other third

party not controlled by CBL.




 




7.05        Limitation on Liability.  Anything herein to the contrary

notwithstanding:




 




(i)            Neither party hereto shall be liable

to the other, or the successors or permitted assigns of the other, or any other

person, for any loss of profits, loss of business or interruption of business,

or for any indirect, incidental, special or consequential damages, costs,

losses or expenses, suffered or incurred under this Agreement or otherwise,

even if advised of the possibility of such loss; and




 




(ii)           CBL’s liability for the replacement

or for the cost or value of any Active Ingredient, Materials, or production

equipment supplied to CBL hereunder by TKT, including but not limited to any

Active Ingredient, Materials, or production equipment lost or damaged or

incorporated into any single rejected or nonconforming Batch of Product, shall

be limited to the actual value thereof, up to the extent of CBL’s insurance

coverage for property of others which has a dollar value of $2.0 (two) million

dollars in the aggregate.  TKT will be

responsible to prove value of any claimed loss to CBL’s insurance carrier for

losses covered by CBL’s insurance policy. 

The parties hereto agree that the limitation on liability provided for

under the terms of this Section 7.05, excludes product liability claims and is

an integral part of the agreement of the parties as evidenced by this Agreement

and that the parties are entering into this Agreement in reliance upon the

terms and provisions of this Section 7.05, and that, but for such terms and

provisions, the parties would not be entering into this Agreement.




 




(iii)          Promptly, following the execution of

this Agreement, CBL shall furnish to TKT a certificate of insurance signed by

an authorized representative of CBL’s underwriter evidencing the insurance

coverage required by this Agreement and providing for at least [**] prior

written notice to TKT of any cancellation, termination, material change or

reduction of such insurance coverage.




 




8





























 




ARTICLE

VIII




REGULATORY




 




8.01        TKT Responsibilities.  TKT will be responsible for obtaining and

maintaining all necessary regulatory approvals for the distribution and sale of

Product.  Additionally, TKT will be

responsible for all other regulatory requirements which are not specifically

assigned to CBL in this Agreement, including the payment of any FDA user fees

or other fees associated with the review and approval to market the Product

imposed by any regulatory agency.  TKT

will be responsible for maintaining claim files and for submitting appropriate

reports to the FDA and other similar foreign regulatory agencies.  TKT will be further responsible for promptly

notifying CBL of all communications from the FDA or other regulatory agencies,

which may impact or change the production and/or testing of the Product as

performed by CBL.  TKT will notify CBL

of any consumer complaints concerning Product, which might reasonably be

attributed to CBL’s obligations and warrants, within seven (7) days of receipt

by TKT of any such complaints.  All such

information disclosed to CBL shall be considered confidential information under

Section 9 below.




 




8.02        CBL Responsibility.  So long and insofar as necessary to permit

it to perform its obligation hereunder, CBL shall maintain its Annual

Registration of Drug Establishment (form FDA 2656e) and its Annual Registration

of Device Establishment (form FDA 2891a) granted by the FDA updated and in good

order and will make the license and copies of all related documents available

to TKT and its designees for inspection, upon reasonable request.  CBL shall file and maintain a facility Master

File as required by the FDA and maintain Product complaint files pursuant to

applicable federal regulations as covered by CBL’s Standard Operating Procedure

#3075.  CBL will be further responsible

for promptly notifying TKT of all communications from the FDA or other

regulatory agencies, which may impact or change the production and/or testing

of the Product as performed by CBL.




 




8.03        CBL Assistance with Filing.  CBL will provide to TKT, at no additional

cost, copies, electronic formatted disks, of all documents, in CBL’s standard

format, for the manufacturing and control of Product at CBL’s facility, in

support of TKT’s regulatory filings for approval to market Product.  Any additional support, beyond the documents

above, requested by TKT will be charged at CBL’s standard labor rates.




 




8.04        Master File.  CBL shall maintain one or more facility

master files at the FDA and agrees to provide TKT with any requisite letters

authorizing the FDA access to CBL’s facility master file in conjunction with

regulatory review of CBL’s production of Product as set forth in this

Agreement.




 




ARTICLE

IX




CONFIDENTIALITY




 




9.01        Confidentiality.  Each party shall forever maintain in

confidence all information and materials disclosed by the other party and

marked as confidential or which the other party knows or has reason to know are

or contain trade secrets or other proprietary information of the other,

including without limitation the Specifications, Master Batch and Control

Record, Batch Production and Control Record, and other information relating to

the Product (all such




 




9





























 




information being “Confidential Information”), and shall not use such

trade secrets or proprietary information for any purpose except as permitted by

this Agreement or disclose them to anyone other than those of its employees,

consultants, agents or subcontractors as are necessary in connection with such

party’s activities as contemplated in this Agreement.  Each party shall be responsible for ensuring compliance with

these obligations by such party’s employees, consultants, agents and

subcontractors.  Each party shall take

precautions at least as strong as those which it takes to protect its own most

valuable trade secrets or proprietary information to ensure that its employees,

consultants, agents and subcontractors do not disclose or make any unauthorized

use of trade secrets or proprietary information of the other party.  Each party shall notify the other promptly

upon discovery of any unauthorized use or disclosure of the other’s trade

secrets or proprietary information.




 




9.02        Exceptions.  The foregoing restrictions on use and

disclosure shall not apply to any TKT Confidential Information or CBL

Confidential Information that:




 




(i)            was know to the receiving party

prior to its disclosure to the receiving party by the disclosing party as

evidenced by written documents predating the receiving party’s receipt of such

Information; or




 




(ii)           is public knowledge at the time of

its disclosure to the receiving party or became public knowledge after its

disclosure to the receiving party through no act or omission or on its behalf;

or




 




(iii)          is lawfully disclosed or made

available to the receiving party by a third party having no direct or indirect

obligation to the disclosing party to maintain the confidentiality of such

Information; or




 




(iv)          is independently developed by the

receiving party without the aid or benefit of Information disclosed to the

receiving party by the disclosing party.




 




Information may be disclosed by the receiving party

pursuant to a subpoena lawfully issued by a court or governmental agency

provided that the receiving party notifies the disclosing party immediately

upon receipt of any such subpoena.




 




ARTICLE

X




TERM AND

TERMINATION




 




10.01      Term.  Unless terminated in accordance with the

provisions of Section 10.02, the term of this Agreement shall commence on the

date hereof and shall continue until the second (2) yearly anniversary

of the date of FDA approval of CBL as a processor of the Product.  In the event TKT has not received FDA

approval for CBL to process the Product for commercial sale and distribution

prior to December 31, 2000 or has not placed binding purchase orders with CBL

pursuant to the terms hereof, within 180 days following such approval, this

Agreement shall be terminable by CBL upon delivery to TKT by CBL of written

notice of termination.  The term of this

Agreement may be extended by mutual written consent of both parties.




 




10.02      Termination.  This Agreement may be terminated by either

party, in the event that the other party (a) files or has filed against it a

petition under the Bankruptcy Act, makes an




 




10





























 




assignment for the benefit of creditors, has a receiver appointed for

it or a substantial part of its assets, or otherwise takes advantage of any

statute or law designed for relief of debtors or (b) fails to perform or

otherwise breaches any of its obligations hereunder, if, following the giving

of notice by the terminating party of its intent to terminate and stating the

grounds therefor, the party receiving such notice shall not have cured the

failure or breach within thirty (30) days. 

In no event, however, shall such notice or intention to terminate be

deemed to waive any rights to damages or any other remedy which the party

giving notice of breach may have as a consequence of such failure or breach.




 




10.03      Obligations and Duties Upon Termination or

Expiration.  If

this Agreement expires or is terminated pursuant to Section 10.02, both parties

shall be released from all obligations and duties imposed or assumed hereunder

to the extent so terminated, except as expressly provided to the contrary in

this Agreement.  Upon termination, both parties

shall cease any further use of, and promptly return any, confidential

information disclosed to the receiving party by the other party.  Termination of this Agreement, for whatever

reason, shall not affect the obligation of either party to make any payments

for which it is liable prior to or upon such termination.  Upon termination of this Agreement, TKT

shall purchase from CBL, at CBL’s cost, any Materials purchased for the Product

which CBL has reasonably purchased or ordered (which order cannot be canceled)

based upon TKT’s forecast.  CBL shall

immediately ship such materials to TKT in accordance with TKT’s instructions,

provided that TKT has given reasonable assurance of payment for such items.




 




ARTICLE

XI




MISCELLANEOUS




 




11.01      Exclusive Rights.  TKT and its Affiliates will purchase [**]%

of their annual worldwide requirements for the Product exclusively from CBL

pursuant to the terms hereof each year and for so long as this Agreement

remains in effect.  TKT and its

Affiliates will be relieved of this obligation in any year, in the event that

failure to purchase [**]% of their annual worldwide requirements is due to

either CBL’s (i) failure to accept a valid purchase order, (ii) late delivery

of Product, or (iii) delivery of Product not meeting the Specifications.




 




11.02      Independent Contractor.  CBL shall at all times during the term of

this Agreement be an independent contractor, maintaining sole and exclusive

control over its personnel and operation. 

It is understood that all work performed by CBL shall meet

specifications set forth in this Agreement, and the detailed manner and method

of doing the same shall be under the control of CBL.  At no time will either CBL or TKT hold itself out to be the

agent, employee, lessee, sublessee, partner, or joint venturer of the other,

and it is further understood and agreed between the parties that the full and

exclusive relationship between them is that of an independent contractor.  Nothing in this Agreement shall be construed

to create any agency, employment, partnership, joint venture or similar

relationship between the parties other than that of an independent

contractor.  Neither party shall have

any right or authority whatsoever to incur any liability or obligation (express

or implied) or otherwise act in any manner in the name or on the behalf of the

other, or to make any promise, warranty or representation binding on the

other.  CBL and TKT agree not to use or

refer to the other without prior written permission, in any public statements,

whether oral or written, related to this Agreement.  Furthermore, CBL and TKT both agree not to employ or solicit for

employment or




 




11





























 




as an independent contractor any employee of either party during the

term of this Agreement and for a period of two (2) years thereafter.




 




11.03      Insurance; Liability to Third Persons.  CBL and TKT, each at their own expense,

shall obtain and thereafter maintain workers’ compensation and comprehensive

general liability (bodily injury and property damage) insurance, with respect

to performance under this Agreement. 

Each party shall give the other or its representative immediately notice

of any suit or action filed, or prompt notice of any claim made, against them

arising out of the performance of this Agreement.




 




11.04      Product Liability.  TKT and CBL each agree at its own expense to

maintain Product Liability insurance coverage of at least $2.0 million.  TKT and CBL will provide a Certificate of

Insurance to the other upon request, and such coverage will remain in effect

indefinitely and so long as either party has product liability exposure for any

Product manufactured for TKT.  If such

Product Liability insurance is underwritten on a “claims made” basis, TKT and

CBL agree that any change in underwriters during the term of this Agreement

will require the purchase of “prior acts” coverage to ensure that coverage will

be continuous throughout the term of this Agreement.




 




11.05      Governing Law.  This Agreement shall be construed, and legal

relations between the parties hereto shall be determined, in accordance with

the laws of the State of Maryland applicable to contracts solely executed and

wholly to be performed within the State of Maryland without giving effect to

the principles of conflicts of laws.




 




11.06      Arbitration.  Any controversy or dispute by and between

the parties hereto or any of their Affiliates arising out of this Agreement

which is not resolved in good faith by the parties within sixty (60) days of

first becoming known to both parties, except with respect to resort to remedies

of injunction or other court order, shall be submitted to binding arbitration

in accordance with the Commercial Arbitration Rules then pertaining of the

American Arbitration Association, and judgment upon the award rendered thereby

may be entered in any court having jurisdiction thereof.  The place for arbitration shall be the city

of the company not bringing the request for arbitration.  The Parties to this contract shall select an

arbitrator based on mutual agreement. 

Nothing in this Agreement shall be construed or interpreted as granting

the arbitrators the power to award punitive damages as part of any award

rendered relating to this Agreement or the transactions contemplated

hereby.  The costs and expenses of such

arbitration shall be shared equally by the parties.




 




11.07      Notice.  All notices or communication required or

permitted to be given by either party hereunder shall be deemed sufficiently

given if mailed by registered mail or certified mail return receipt requested

or sent by overnight courier return receipt requested, such as Federal Express,

to the other party at its respective address set forth below or to such other

address as one party shall give notice of to the other from time to time

hereunder.  Mailed notices shall be

deemed to be received on the third business day following the date of

mailing.  Notices sent by overnight

courier shall be deemed received the following business day.




 




12





























 




	

  If to TKT:


  	

  Transkaryotic Therapies, Inc.,


  195 Albany Street


  Cambridge, MA 02139


  Attn:  President and CEO


  Tel:  617-349-0200


  Fax:  617-491-7903


  
	

   


  	

   


  
	

  With a copy to:


  	

  Hale and Dorr, LLP


  60 State Street


  Boston, MA 02109


  Attn:  Steven D. Singer


  Tel:  617-526-6000


  Fax:  617-526-5000


  
	

   


  	

   


  
	

  If to CBL:


  	

  Chesapeake Biological Laboratories, Inc.


  1111 South Paca Street


  Baltimore, MD 21230-2591


  Attn:  President


  Tel:  410-843-5000


  Fax:  410-843-4414


  





 




11.08      Compliance with All Laws.  In all activities undertaken pursuant to

this Agreement, both CBL and TKT covenant and agree that each will in all

material respects comply with such Federal, state and local laws and statutes,

as may be in effect at the time of performance and all valid rules, regulations

and orders thereof regulating such activities.




 




11.09      Successors and Assigns.  CBL shall not assign this Agreement (or any

schedule hereto) without the prior written consent of TKT, except that CBL

shall be permitted to assign its rights and obligation hereunder with such

consent to (i) one or more of its Affiliates or (ii) the purchaser of all or

substantially all of its assets, through merger, consolidation or

otherwise.  TKT may assign this

Agreement upon (x) providing prior written notice to CBL; and (y) causing the

assignee to acknowledge, in writing, that it will be bound by the terms and

conditions of this Agreement.




 




11.10      No Waivers; Severability.  No waiver of any breach of this Agreement

shall constitute a waiver of any other breach of the same or other provision of

this Agreement, and no waiver shall be effective unless made in writing.  Any provision hereof prohibited by or

unenforceable under any applicable law of any jurisdiction shall as to such

jurisdiction be deemed ineffective and deleted herefrom without affecting any

other provision of this Agreement.  It

is the desire of the parties hereto that this Agreement be enforced to the

maximum extent permitted by law, and should any provision contained herein be

held by any governmental agency or court of competent jurisdiction to be void,

illegal and unenforceable, the parties shall negotiate in good faith for a

substitute term or provision which carries out the original intent of the

parties.  If the parties cannot reach

agreement upon such a substitute term or provision within sixty (60) days after

the original term or provision is held void, illegal or unenforceable, then the

matter shall be settled by binding arbitration in accordance with Section

11.06.




 




11.11      Entire Agreement; Amendment.  TKT and CBL acknowledge that they have read

this entire Agreement and that this Agreement, including the attached Exhibits

constitutes




 




13





























 




the entire understanding and contract between the parties hereto and

supersedes any and all prior or contemporaneous oral or written communications

with respect to the subject matter hereof, all of which communications are

merged herein.  It is expressly

understood and agreed that this Agreement shall not be modified, amended or in

any way altered except by an instrument in writing signed by both of the

parties hereto.




 




11.12      Delays or Omissions.  Except as expressly provided herein, no

delay or omission to exercise any right, power or remedy accruing to any party

hereto, shall impair any such right, power or remedy to such party nor shall it

be construed to be a waiver of any such breach or default, or an acquiescence

therein, or in any similar breach or default be deemed a waiver of any other

breach or default theretofore or thereafter occurring.  Any waiver, permit, consent or approval of

any kind or character on the part of any party of any breach or default under

this Agreement, or any waiver on the part of any party of any provisions or

conditions of this Agreement, must be in writing and shall be effective only to

the extent specifically set forth in such writing.  All remedies either under this Agreement or by law or otherwise

afforded to any party, shall be cumulative and not alternative.




 




11.13      Force Majeure.  If either party fails to fulfill its obligations

hereunder (other than an obligation for the payment of money), when such

failure is due to an act of God, or other circumstances beyond its reasonable

control, including but not limited to fire, flood, civil commotion, riot, war

(declared and undeclared), revolution, action by government including delays in

obtaining governmental approvals or embargoes, then said failure shall be

excused for the duration of such event and for such a time thereafter as is

reasonable to enable the parties to resume performance under this Agreement.




 




11.14      Further Assurances.  Each party shall, at any time, and from to

time, prior to or after the effective date of this Agreement, at reasonable

request of the other party, execute and deliver to the other such instruments

and documents and shall take such actions as may be required to more

effectively carry out the terms of this Agreement.




 




11.15      Survival.  All representations, warranties, covenants

and agreements made herein and which by their express terms or by implication

are to be performed after the execution and/or termination hereof, or are

prospective in nature, shall survive such execution and/or termination, as the

case may be.  Specifically Sections

5.03, 5.05, 10.03, and Article IX shall survive such termination and Articles

VI, VII, and XI shall survive for so long as any Product produced by CBL for

TKT remains within its expiration dating.




 




11.16      No Third Party Beneficiaries.  Nothing in this Agreement shall be construed

as giving any person, firm, corporation or other entity, other than the parties

hereto and their successors and permitted assigns, any right, remedy or claim

under or in respect of this Agreement or any provision hereof.




 




11.17      Headings.  Section headings are for convenient

reference and not a part of this Agreement. 

All Exhibits are incorporated herein by this reference.




 




14





























 




11.18      Counterparts.  This Agreement may be executed in

counterparts, each of which shall be deemed an original and all of which when

taken together shall be deemed but one instrument.




 




11.19      No Rights.  No rights or licenses with respect to the

Product or any of either party’s intellectual property rights and granted or

deemed granted hereunder or in connection herewith, other than those rights

expressly granted in this Agreement.




 




11.20      Disclosure.  Except as TKT may be required by law or

regulation, neither party shall disclose the name of the other party, the

identity of the Product or any information with respect thereto, the existence

of this Agreement or the terms and provisions of this Agreement without the

prior written approval to the other party. 

Neither party shall use the name of the other party in any publicity or

advertising without the other party’s prior written consent.  If CBL is required in accordance with SEC or

other relevant governmental regulations to disclose TKT’s name, the existence

of this Agreement or the terms and provisions of this Agreement, CBL shall (i) give

TKT prior written notice of such disclosure, and (ii) assist TKT in any efforts

to prevent or limit such disclosure including without limitation seeking

confidential treatment of such information.




 




IN WITNESS WHEREOF, this Agreement shall take effect

as of the date first written above when it has been executed below by the duly

authorized representatives of the parties.




 




 




	

  CHESAPEAKE BIOLOGIC LABORATORIES, INC.


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

  By:


  	

          /s/ Thomas

  P. Rice


  	

   


  
	

   


  	

  Title: 

  Thomas P. Rice, President & CEO


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

  TRANSKARYOTIC THERAPIES, INC.


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

  By:


  	

          /s/ Richard

  F. Seldon


  	

   


  
	

   


  	

  Title: 

  Richard F. Selden, President & CEO


  	

   


  





 




Exhibits:




Exhibit A:  Project Summary.




Exhibit B: 

Validations/Qualifications.




Exhibit C:  Price.




 




15





























 




EXHIBIT

A




 




PROJECT

SUMMARY




 




 




 




CONFIDENTIAL




 




 




1





























 




TRANSKARYOTIC

THERAPIES, INC.




PROJECT

SUMMARY




 




Transkaryotic Therapies, Inc. (TKT) desires Chesapeake Biological

Laboratories, Inc. (CBL) to formulate and aseptically fill, package and label

for clinical and commercial use the product known as (gene activated)

GA-GAL.  The active ingredient is

α-Galactosidase A, an acid hydrolase which specifically cleaves terminal

α-linked galactose residues from glycosphingolipid ceramide trihexoside

(CTH).  A




 




The Project will consist of the following parts.




 




1.        Clinical

Manufacturing Phase




a.         Technology [**]




b.         Technology [**].




c.         Acquisition and testing of [**].




d.         Preparation of [**].




e.         Production of [**].




 




2.        Validation

Phase




a.         Execution of [**].




b.         Preparation of [**].




 




3.        Consistency

Lot Manufacturing




a.         Production of [**]Production of [**]




b.         Assist TKT in [**]




 




4.             Commercial

Manufacturing (requirements to be determined)




 




*Contact at TKT is Bill Fallon: 

Phone (617) 349-0203  Fax (617)

491-7903




Program Manager at TKT is Suzanne Bruhn:  Phone (617) 503-0394  Fax

(617) 491-7903




 




2





























 




Overview of Formulation and Fill

Processes




 




Following is an outline of the formulation, filtration, aseptic

filling, QC testing, labeling, and packaging to be performed:




 




1.         TKT will supply the active pharmaceutical ingredient (API)

and text for the vial label, unit carton and package insert.




2.         CBL will supply all equipment, chemicals, and materials

required to produce and test the product.




3.         All receipt, in-process and certain release* testing will be

performed by CBL.




4.         API will be received as a frozen bulk in 2 L PETG bottles

filled to ~ 1 L.




5.         Samples of API will be tested per receipt testing

requirements.




6.         API will be thawed, formulated, filtered and aseptically

filled into 5 cc vials (3.5 cc label claim), stoppered and crimped.




7.         Drug product will be stored at 2 - 8°C.




8.         Vials containing drug product will be visually inspected, QC

tested, labeled and packaged appropriately.




 




A Certificate of Analysis and any other documentation required will be

supplied along with the API to CBL prior to the scheduled date of manufacture.




 




Each container of API will be sealed with tamper evident tape or device

and labeled with the gross and net weight and temperature storage

condition.  Each shipping container of

API should be labeled as “Store @-20°C. 

Upon arrival, CBL will inspect for tampering, weigh each container and

receive per CBL SOP’s.  The API will

then be stored until required for manufacture.




 




At the completion of all work for each lot, CBL will provide TKT with a

copy of the completed Batch Production record including a Certificate of

Analysis.




 




 




3





























 




TESTING

REQUIREMENTS




 




CBL

Testing of API Upon Receipt




 




	

  Volume

  Required


  	

   


  	

  Delivered

  To


  	

   


  	

  Assay


  	

   


  	

  Specification


  	

   


  
	

  [**]


  	

   


  	

  CBL QC-Lab


  	

   


  	

  [**]


  	

   


  	

  [**]


  	

   


  
	

  [**]


  	

   


  	

  CBL QC-Lab


  	

   


  	

  [**]


  	

   


  	

  [**]


  	

   


  





 




*may be performed

by TKT if technical transfers are not complete




 




In-Process

Testing of Formulated Bulk




 




	

  PRE-FILTRATION/POST-QS


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  #

  Samples/Vol


  	

   


  	

  Delivered

  To


  	

   


  	

  Assay


  	

   


  	

  Specification


  	

   


  
	

  [**]


  	

   


  	

  CBL-Micro


  	

   


  	

  [**]


  	

   


  	

  [**]


  	

   


  
	

  [**]


  	

   


  	

  CBL QC-Lab


  	

   


  	

  [**]


  	

   


  	

  [**]


  	

   


  
	

   


  	

   


  	

  CBL-Pharm Tech


  	

   


  	

  [**]


  	

   


  	

  [**]


  	

   


  





 




	

  POST-FILTRATION


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Volume

  Required


  	

   


  	

  Delivered

  To


  	

   


  	

  Assay


  	

   


  	

  Specification


  	

   


  
	

  [**]


  	

   


  	

  CBL-Micro


  	

   


  	

  [**]


  	

   


  	

  [**]


  	

   


  
	

  [**]


  	

   


  	

  CBL-Pharm Tech


  	

   


  	

  [**]


  	

   


  	

  [**]


  	

   


  





 




Final

Drug Product Testing




 




	

  #

  Samples/Vol


  	

   


  	

  Delivered

  To


  	

   


  	

  Assay


  	

   


  	

  Specification


  	

   


  
	

  [**]


  	

   


  	

  CBL-Micro-Lab


  	

   


  	

  [**]


  	

   


  	

  [**]


  	

   


  
	

  [**]


  	

   


  	

  CBL Micro-Lab


  	

   


  	

  [**]


  	

   


  	

  [**]


  	

   


  
	

  [**]


  	

   


  	

  CBL QC-Lab


  	

   


  	

  [**]


  	

   


  	

  [**]


  	

   


  
	

  [**]


  	

   


  	

  CBL QC-Lab


  	

   


  	

  [**]


  	

   


  	

  [**]


  	

   


  





 




 




4





























 




DETAILED

DESCRIPTION OF FORMULATION, ASEPTIC FILLING, LABELING AND PACKAGING




 




Overview




 




Receipt of Bulk Drug Substance




 




Bulk material will be delivered to CBL at least [**] prior to

formulation.  Upon receipt, the bulk

will be stored at [**].  A sample sent

with the bulk will be tested as specified in testing requirements.  All batch record steps are performed in

accordance with Good Manufacturing Practices.




 




Preparation of Diluent




 




GA-GAL diluent is prepared within [**] of use by mixing appropriate

quantities of [**].  The composition of

GA-GAL diluent is listed in Table 4.4-1.




 




Table 4.4-1.  Composition of GA-GAL Diluent (per Liter)




 




	

  Component


  	

   


  	

  TKT Part Number


  	

   


  	

  Quantity


  	

   


  
	

  [**]


  	

   


  	

  [**]


  	

   


  	

  [**]


  	

   


  
	

  [**]


  	

   


  	

  [**]


  	

   


  	

  [**]


  	

   


  
	

  [**]


  	

   


  	

  [**]


  	

   


  	

  [**]


  	

   


  
	

  [**]


  	

   


  	

  [**]


  	

   


  	

  [**]


  	

   


  





 




The diluent is filtered [**] until required.  All filters are subjected to post-filtration

integrity testing.




 




Formulation of α-Galactosidase

A for Injection, by CBL




 




The formulation of the Product will be performed in

Class [**] conditions.




 




Only [**]% of the purified bulk will be initially used

to ensure that material is available for adjustment in the event that the

formulated bulk is too dilute.




 




Based on the volume and concentration of the bulk and

the desired concentration of GA-GAL in the final formulation, the volume of

GA-GAL diluent required for addition is determined.  An appropriate amount of diluent is added to [**]% of the target

final volume.  Then [**] is added, the

solution is pH adjusted and finally Q.C. tested for concentration and pH.




 




Sterile Filtration




 




The formulated bulk drug product is sterile filtered

through [**]  Filtration is conducted

[**] and then the filter(s) is subjected [**]. 

All filter integrity testing must be completed with acceptable results

before the material is released for further processing.  CBL maintains a stringent accountability

record on all steps of the filtration process.




 




5





























 




Aseptic Filling and Sealing




 




Filling is conducted in a Class [**] room by trained

technicians using validated processes for low volume fills.  The filling process is performed using an

[**].  The weight of fill per vial is

set and checked at the beginning of the fill. 

Additional weight checks are usually conducted at an interval of [**]

and on the last vial filled.  Weight

check vials are identified, isolated as weight checks and noted in the

accountability records.




 




During the filling process each vial is purged

[**].  Each vial is then [**].  Upon completion of the fill, a complete

product accountability is performed for the filling process.  The filled units in labeled trays are

transferred to the appropriate storage conditions (2-8°C) awaiting further

processing.




 




Inspection




 




The batch record includes a Bill of Materials,

Signature Log, and Final Product Accountability.  A 100% visual inspection is conducted using a black and white

background.  Reject samples are

classified by CBL.  Other defects are

also isolated, for example, improper crimps, container flaws, and stopper

defects.  Approved inspected units are

then made available to the labeling group, who are responsible for label

accountability, proper labeling, and packaging.




 




Storage




 




Upon completion of inspection, all passed units are

quarantined and stored at 2-8°C, awaiting final release.




 




Unit Labeling




 




The drug product vials will be labeled as follows:




 




α-Galactosidase

A 1 mg/mL Sterile




3.5 mL Lot No.:  #####




Caution:  New

Drug - Limited by Federal Law to Investigational Use




Store at 2-8°C




Transkaryotic Therapies Inc.




195 Albany Street




Cambridge, MA 02139 USA




 




Any changes in labeling text as may occur from time to

time, must be sent to the attention of CBL a minimum of 6 weeks prior to the

anticipated date of manufacture.




 




Packaging




 




GA-GAL drug product is [**].  Vials are [**].




 




The α-Gaacosidase A drug product will be bulk

packaged and shipped to TKT in a temperature-controlled, monitored

container.  If more than one shipper

container is necessary,




 




6





























 




each container will contain a temperature monitor.  The shipping containers will be labeled as

follows:




 




α

-Galactosidase A Sterile




Lot no. ####




Quantity enclosed: 

## vials




Caution:  New

Drug - Limited by Federal Law to Investigational Use




Single use vials




Refer to Clinical Protocol and Investigator’s Brochure

for administration directions




Store at 2-8°C




 




Transkaryotic Therapies Inc.




195 Albany Street




Cambridge, MA 02139 USA




 




Upon commercialization, the labeling and packaging

will be changed from bulk.  All

necessary text and specifications will be supplied by TKT prior to that time.




 




Retain

Samples




 




CBL holds retain samples for commercial products.  Retain samples will be invoiced as regular

product, but held at CBL under label storage conditions.  The number of retains will be determined by

the amount of finished product testing required.  Usual practice is to retain sufficient samples to perform all of

the testing two times.  The retained

samples will be held for one year past the expiration date of the lot and CBL

will properly dispose of such samples for TKT, or return to TKT upon request.




 




Stability

Samples




 




Stability in its entirety will be the responsibility

of TKT.  Any samples held by CBL for

stability will be subject to a separate agreement.




 




Shipping




 




Final Product to be shipped overnight to:




 




Transkaryotic Therapies, Inc.


195 Albany Street


Cambridge MA 02139




 




or another designated site as determined by TKT.




 




Manufacturing Batch Record Summary




 




All operations are governed by a CBL batch record

developed exclusively for TKT’s GA-GAL product.  The approved batch record is assigned a TKT project number and a

unique CBL lot number.  These documents

detail the preparation of materials (vials, stoppers, closures,




 




7





























 




processing materials, and equipment) used in the manufacturing

process.  The batch record has been

approved by Quality Assurance and Manufacturing at TKT along with appropriate

approvals from CBL.  CBL staff has the

responsibility to perform the aseptic processing and related processing to the

instructions detailed in the approved Batch Records.  CBL has provided TKT the opportunity to review validation data

and reports that reflect the processing of components that have intimate

contact with the product.




 




Reference to the environmental monitoring and

personnel monitoring is noted along with the actual data.  Before proceeding with manufacturing

operations, the operation room conditions are verified for temperature and

pressure.  CBL performs a [**] prior to

filtration and [**] prior to filling.




 




The batch record is designed to include all quality

control testing performed at CBL.  The

batch record references an SOP to the central sample receiving, in-processing

testing (pre and post filtration) and final product testing.  The documentation references an SOP to a

detailed sampling plan for [**].  The

final product testing section relates to tests conducted at CBL and other

contracted testing facilities approved by TKT. 

Final [**] testing at CBL includes [**].  A final Certificate of Analysis is presented along with final

review and signature by CBL Quality Assurance.




 




Batch Record Availability




 




At the completion of all work for each lot, CBL will

provide Client with a copy of the completed Batch Production Record including a

Certificate of Analysis.  The “batch

record” is normally complete within [**] after a fill date unless otherwise

agreed upon previously.  CBL will work

in good faith to reduce the time needed for completion of the batch record.




 




Disposal or Disposition of Product




 




Remaining bulk product will be refrozen and all

inspection rejects will be stored refrigerated.  All will be returned to the client.




 




8





























 




Transkaryotic

Therapies, Inc.




 




 




 




 




 




Chart




 




 




 




 




 




 




9





























 




EXHIBIT

B




 




VALIDATION

PROCESSES




 




CONFIDENTIAL




 




10





























 




VALIDATION

PROCESS




 




USP Testing of Raw Materials (Europe,

Japan and USP)




 




Chemicals purchased with the “USP” or “NF” grade are

suitable for use in Pharmaceutical products. 

Under cGMP they need to undergo only identity testing in addition to

establishing the reliability of the suppliers analyses at appropriate intervals

in order to be released for use in a regulated product.  It is sometimes misunderstood by clients

that other chemical grades, such as ACS or Aldrich gold, which are perceived as

superior products by the criteria of purity and strength, are not approved for

use as parenterals in humans.  For CBL

to use non USP/NF raw materials, it is necessary to perform full USP testing on

the chemical, thereby certifying that it meets the requirements of USP/NF.




 




For those chemicals that are not compendial (US

Pharmacopoeia), appropriate tests must be identified to assess identity;

purity, quality, and strength.  At an

appropriate time, that testing must be validated according to guidelines from

“Validation of Compendial Assays”  USP

XXIII <1225>.  For concentration

(strength) the assay validations are needed for CBL to guarantee formulation

results.  For other assays, the

validation can wait until phase III production, or until it is needed for a

guarantee of conformance to specifications.




 




Assay Tech Transfer

[Qualification/Validation]




 




Evaluation of any Compendial or client supplied assay

must be made prior to CBL accepting responsibility for its quantitative

use.  Compendial assays are assumed to

be fully validated and require only a demonstration of their applicability to

the analyte as formulated. 

Client-supplied assays, for which full validation exists, may also be

used upon demonstration of congruency, usually involving the comparison of data

on a single set of samples which have been assayed in both the client’s and

CBL’s laboratories.  Non-validated

assays for use in early stage (up to early Phase II) testing will also require

a transfer of technology with direct comparison of samples between

laboratories.  Technology transfers as

described above will require demonstration of accuracy, precision, ruggedness

and linearity.  Later stages of the drug

approval process require validated assays. 

If called upon to validate an assay, CBL will follow the guidelines of

USP XXIII <1225>.  Assays for use

in stability programs must be validated regardless of stage of drug development

and must be shown to be stability indicating.




 




Assay tech transfers will be required for [**]




 




Bacteriostasis / Fungistasis (for

Product)




 




B/F is required in order to establish the potential of

the formulation to interfere with sterility assays.  B/F testing can be performed on developmental batches as long as

they are prepared with GNP material which meets specifications for incoming raw

material and have the same formulation as will the GNP batches.




 




Enhancement / Inhibition (for

Product)




 




E/I evaluates the potential for interference by the

formulation with the assay used to measure endotoxin.  A preliminary E/I determination will be required to allow

quantitation of endotoxin in developmental batches.  Full validation of E/I is required once preparation of GNP

batches begins.  Validation involves

performing E/I on three consecutive batches.




 




 




11





























 




Filter Function/Compatibility Study




 




All materials have some affinity for filter

media.  In some instances, that affinity

is sufficient to cause concern about the ability to filter product and maintain

concentration through the process.  A

successful study is one in which no significant differences are observed when

comparing the drug product pre and post filtration.  These results help to assure the concentration of product after

filtration.  This is particularly a

problem with biological products and products with very low concentrations.




 




Cleaning Recovery Study




 




Contract manufacturers must be able to assure themselves,

their clients, and the FDA that no significant chance exists for cross

contamination to occur among products sharing equipment which may conceivably

contact product.  While the interior of

the lyophilizer (for example) is certainly not designed to be a product contact

surface, the possibility that product may reach the lyophilizes shelves and be

dried down on them does present a potential for contamination from a dislodged

fragment of some previous client’s product. 

CBL requires demonstration that products are easily removed from glass

or stainless steel surfaces (as appropriate) by the routine cleaning methods

called for in CBL cleaning procedures. 

The cleaning study involves spotting product onto a stainless steel

coupon or tray and simulating the method for cleaning the inside of the

lyophilizer.  Recovery of the product

from a stainless steel surface and evaluation of cleaning are monitored by TOC

(Total Organic Carbon) analysis which, while lacking the specificity of methods

such as BPLC, compensates by virtue of its sensitivity.  The cleaning study is expected to

demonstrate removal of product from the steel surface.  While a negative result is not expected,

such a result would require additional evaluation of the data obtained and

close consultation with the Client regarding the ability of CBL to proceed.




 




Equipment Cleaning Validation




 




Three successive

successful demonstrations.




 




To validate the ability of CBL to prevent cross

contamination from Client product, three successive successful demonstrations

of effective cleaning of product contact equipment will be required.  Collection of each data set will occur after

an actual manufacturing event with GMP product.  Technicians will sample predetermined sites within the equipment

for TOC.  The most common equipment for

Cleaning Validation are tanks and Pump contact parts.  CBL attempts to use as much virgin equipment as possible in order

to reduce the need for rigorous and extensive cleaning validation.




 




Product Hold Time Studies:




 




The most efficient way to schedule formulation and

fill is to do the formulation on the day prior to the fill.  A holding study allows CBL to demonstrate

that the product will not be adversely affected by holding it for 12-48 hours

at cold room conditions with or without an initial filtration to lower

bioburden.  Bench scale batches will be

formulated, treated and stored according to a standard protocol.  Potency and other properties which might be,

affected by storage will then be analyzed.




 




 




12





























 




Filling Machine Fill Volume

Qualification




 




CBL will perform a fill volume study with the actual

product (or placebo) to assure machine process capability.  This study will set the target volume for

the fill using volume specifications or label data for the product.  Typically, a minimum alert level is set at +3

sigma from the target weight for the fill volume.  The specification is then set slightly outside of those alert

levels.




 




Filter Extractables Study




 




This is an FDA requirement for phase III.  Product is filtered and the effluent is

assayed for known extractable substances. 

For a purely aqueous product, it is normally not of any consequence.  It is typically performed by the filter

manufacturer.




 




Microbial Retention Study




 




Subcontracted to Millipore.  Laboratory testing is conducted with specific pharmaceutical

biopharmaceutical product using a standard protocol using B. diminuta grown in

saline lactose broth.  These experiments

are run at room temperature for less than 24 hours on 47 mm disk membranes with

less than 20 liters of solution. 

Microbial Retention Validation is performed to validate microbial

retention of sterilizing-grade membrane filters with specific pharmaceutical

preparation.  Microbial retention

testing was recommended by the US Food and Drug Administration’s 1987

“Guideline on Sterile Drug Products Produced by Aseptic Processing” to validate

sterilizing-grade membrane filter performance. 

Under worst case process conditions, the testing determines the ability

of a sterilizing-grade filter using scaled-down processing conditions to retain

a minimum challenge of 10 cells of B. diminuta per cm2 of filter area.  A sample of one drug product lot is

evaluated using filters from three manufacturing lots.  Initial testing determines whether the

sample drug product inhibits the microbial challenge prior to conducting the

microbial retention studies.  This

initial testing will determine the mode of the final testing, ie., whether it

is performed in the presence or absence of the product.




 




Validation Package for BLA




 




In support of product approval applications, CBL

maintains Master Files at FDA for both its Seton and Camden facilities.  Clients may request letters authorizing FDA

to review CBL’s file in support of their regulatory application (e.g., NDA,

ANDA, BLA).




 




The file contains pertinent information on building

and facilities, overall manufacturing operation flow patterns, equipment

locations, component sterilization validations (e.g. oven and autoclave loads),

action concerning product when media fills fail, details of the environmental

monitoring program (viables and non-viables), initial vial and stopper washing

validations and utility system validations such as production of water for

injection and distribution, clean steam production and distribution, and HVAC

systems validations.




 




Aseptic processing validations are supplied as a

summary sheet outlining CBL media fill history.




 




 




13





























 




Finally, the process validation package supplied for

the BLA will contain the prospective protocol and the results of the enhanced

testing program from the (recommended) three at scale conformance lots.  This enhanced testing will be used to

demonstrate control of critical manufacturing operations such as mixing

uniformity during formulation as well as conformance to production

specifications throughout the filling process.




 




14





























 




EXHIBIT

C




 




PRICING

& PAYMENT




SCHEDULE




 




 




CONFIDENTIAL




 




 




15





























 




PRICING

AND PAYMENT SCHEDULE




 




I                                            Validation Package




 




	

  Title


  	

   


  	

  Deliverable


  	

   


  	

  Price


  	

   


  
	

  [**]


  	

   


  	

  Testing Standards


  	

   


  	

  $[**] per new test


  	

   


  
	

  [**]


  	

   


  	

  Validation Report Report


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

  Report


  	

   


  	

  $[**]


  	

   


  
	

   


  	

   


  	

  Report


  	

   


  	

  $[**]


  	

   


  
	

  [**]


  	

   


  	

  Report


  	

   


  	

  $[**]


  	

   


  
	

  [**]


  	

   


  	

  Report


  	

   


  	

  $[**]


  	

   


  
	

  [**]


  	

   


  	

  Report


  	

   


  	

  $[**]


  	

   


  
	

  [**]


  	

   


  	

  Report


  	

   


  	

  $[**]


  	

   


  
	

  [**]


  	

   


  	

  Report


  	

   


  	

  $[**]


  	

   


  
	

  [**]


  	

   


  	

  External Report


  	

   


  	

  $[**]


  	

   


  
	

  [**]


  	

   


  	

  Report


  	

   


  	

  $[**]


  	

   


  
	

  [**]


  	

   


  	

  Reference Letter


  	

   


  	

  $[**]


  	

   


  
	

  [**]


  	

   


  	

  External Report


  	

   


  	

  $[**]


  	

   


  
	

  [**]


  	

   


  	

  Report


  	

   


  	

  $[**]


  	

   


  





 




(1) This charge will not apply if the filter function study is

performed in conjunction with the process validation, listed here as

“Validation Package for BLA”.




 




(2) CBL has bracketing media fills that cover the following

vial/stopper/crimp combination




 




[**].




 




If this or any combination is used for which CBL has

existing media fills and change parts, then no special media fills will be

performed and there will be no media fill charge.




 




(3) If CBL bracketing media fills are used to support a client’s

application then this charge will apply.




 




II                                        Lot Price / Unit Price* (Includes packaging, FOB CBL’s

dock)




 




For lot sizes less than [**] units                       $[**] per unit




For lot sizes of [**] units or more                     $[**] per unit [**]




 




*Price includes an allowance of $[**]/unit [**].  Costs in excess of the allowance will be

charged at [**] %.




 




III                                    Minimum

Purchase Orders




 




The minimum annual purchase order requirement is [**].




 




 




16





























 




IV                                   Basis for Price Increase




 




Price per lot is comprised of [**].  Following FDA approval of CBL as the

manufacturer, and for the first year the prices will hold.  Thereafter the price may be increased

annually based on (i) actual increases in packaging component cost (syringes,

stoppers, crimps, labels inserts, cartons), (ii) non-component costs may be

increased based upon a weighted average factor using both the Bureau of Labor

Statistics, employment cost index series ID ECU 19002A, (ECU and the Consumer

Price Index (CPI).  [**]% of the non-component

cost of the price per lot will be subject to increases in the ECU.  The remaining [**]% of the non-component

cost price per lot will be subject to increase in the CPI adjusted annually.




 




 




17