Exhibit 10.2


 


CONFIDENTIAL
TREATMENT


 


SECOND AMENDMENT TO DEVELOPMENT AND SUPPLY AGREEMENT


 


THIS
SECOND AMENDMENT TO DEVELOPMENT AND SUPPLY AGREEMENT (this “Second Amendment”)
is entered into as of the 26th day of June, 2008 (“Second Amendment Effective
Date”) by and between Cubist Pharmaceuticals, Inc., a Delaware corporation
(“Cubist”) and Hospira Worldwide, Inc., a Delaware corporation (“Hospira”)
to amend the terms of that certain Development and Supply Agreement, as
amended, between Abbott Laboratories, predecessor in interest to Hospira, and
Cubist (the “Agreement”).


 


Whereas, the parties desire to
amend the terms of the Agreement to reflect, among other items, the validation
of Hospira’s facility in Liscate, Italy, the manufacture of Product at such site,
changes to minimum purchases of Product and applicable pricing.


 


Now,
therefore in consideration of the mutual promises and
agreements contained herein, the parties agree to amend the Agreement as
follows:


 


1.               Incorporation
of the Agreement.     All capitalized terms which are not
defined herein shall have the same meanings as set forth in the Agreement, and
the Agreement is incorporated herein by this reference as though the same was
set forth in its entirety.  Except as
specifically set forth herein, the Agreement shall remain in full force and
effect and its provisions shall be binding on the parties hereto.


 


2.               Definitions.


 


a.               As
used herein Product shall refer to both the []* and D500 configurations of
CUBICIN® (daptomycin for injection)


 


b.              “[]*”
shall mean CUBICIN in a []* configuration


 


c.               “D500”
shall mean CUBICIN in a 500mg configuration.


 


d.              As
used in the Agreement, the term “Affiliate” shall mean any corporation or
non-corporate business entity which controls, is controlled by, or is under common
control with a party to this Agreement; A corporation or non-corporate business
entity shall be regarded as in control of another corporation or non-corporate
business entity if it owns, or directly or indirectly controls, in excess of
fifty percent (50%) of the voting stock of the other corporation, or (a) in
the absence of the ownership of in excess of fifty percent (50%) of the voting
stock of a corporation or (b) in the case of a non-corporate business
entity, if it possesses, directly or indirectly, the power to direct or cause
the direction of the management.


 


3.               Validation
of the Liscate, Italy Facility.


 


a.               D500
is currently manufactured at Hospira’s facility in McPherson, Kansas (“McPherson”).  The parties shall work jointly and in good
faith to complete the Feasibility Document and Plant Certification Protocol,
outlines of which are attached hereto at Exhibit A, in accordance with the
Technology Transfer Documents that were emailed by []* of Cubist to []* of Hospira on August 9, 2007 (the Feasibility Document,
Plant Certification Protocol and Technology Transfer Document, each a “Document”
and collectively the “Documents”).  For


 


*Confidential Treatment
Requested.  Omitted portions filed with
the Securities and Exchange Commission. (the “Commission”).


 

















 


the avoidance of
doubt, the Feasibility Document and Plant Certification Protocol shall each be
considered “complete” when both parties have agreed in writing to the content
of such Document, such agreement not to be unreasonably withheld, delayed or
conditioned.  The parties shall use the
Feasibility Document to determine if there are any major obstacles to Hospira
validating the Liscate, Italy site (“Liscate”) as a manufacturing site for the []*
and D500 Products in accordance with the Technology Transfer Document and as
further set forth in Section 3.b. and on Exhibit B (the “Liscate
Validation Program”).  The parties shall
complete the Feasibility Document and the Plant Certification Protocol and
perform the activities in the Plant Certification Protocol prior to Hospira’s
initiation of the Liscate Validation Program. 
If (a) the Feasibility Document is not completed and signed on or
before []* after the Second Amendment Effective Date; (b) the Plant
Certification Protocol is not completed and signed on or before []* after
completion of the Feasibility Document; or (c) Cubist reasonably
determines that the Liscate Validation Program is not technically feasible,
Sections 4 through 8 of this Amendment shall become null and void and, from
that date forward, the minimums and pricing shall revert to those detailed in
the June 1, 2006 First Amendment to Development and Supply Agreement (the “Amendment
One”); such minimums and pricing shall be referred to as the “Existing Terms”;
provided that Hospira shall continue to package and label Product at []* if
McPherson has already been qualified for packaging and labeling pursuant to the
Labeling and Packaging Program.


 


b.              Upon
completion of the Documents, Hospira shall complete the Liscate Validation
Program in accordance with the Documents and Exhibit B.  Hospira shall be responsible for all
reasonable costs associated with the validation of the []* and D500 Products at
Liscate as outlined in the Documents and Exhibit B, provided that Cubist
shall supply all Bulk Drug necessary for such validation activities, and (ii) Cubist
shall issue Purchase Orders in accordance with the Agreement for all lots of
Product manufactured under the Liscate Validation Program.


 


4.               Labeling
and Packaging.


 


a.               Hospira
currently supplies Product to Cubist in bulk packaging.  The parties intend to qualify both McPherson
and Liscate to label and package Product as outlined in the June 3, 2008
letter from []* (the “Labeling and Packaging Program”, attached hereto as Exhibit C).


 


5.               Location
of Manufacture.


 


a.               Upon
successful completion of the Liscate Validation Program, Hospira shall begin to
manufacture Product at Liscate.  Hospira
shall determine in its reasonable judgment the location of the manufacture of
the Products; provided that if Cubist’s []* Product requirements are less than []*,
Hospira shall manufacture all []* Product requirements at Liscate and shall use
[]* to manufacture at least []* of Product total in each Contract Year at
Liscate ([]* Product and D500 Product).  If
Cubist desires to have Hospira manufacture additional units of Product in
Europe that Hospira is unable to manufacture at Liscate, the parties shall meet
to discuss in good faith the possibility of []* for the manufacture of Product,
provided that should the parties agree to proceed with []*, any such []* shall
be subject to Hospira and Cubist agreeing upon payment to Hospira for such []*
activities.


 


b.              Within
thirty (30) days after Hospira’s receipt of Cubist’s firm purchase orders
pursuant to Section 8.7.4 of the Agreement which firm orders shall be
broken down by D500 Product and []* Product, Hospira will provide Cubist with a
detailed production schedule for the McPherson and Liscate plants in accordance
with this Section 5.


 


*Confidential Treatment Requested.  Omitted portions filed with the Commission.


 


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c.               Upon
successful completion of the Liscate Validation Program with respect to the
D500 Product, Hospira shall manufacture D500 Product at Liscate []*, as
necessary to maintain its competency in the manufacture of the D500 Product at
Liscate; provided that Hospira continues to manufacture all []* Product at
Liscate and that Hospira’s obligations as set forth in 5.a. above shall
continue to apply.


 


6.               Schedule
and Prices.  Section 8.1.1 is hereby deleted in its
entirety and replaced with the following:


 


8.1.1        Purchase and Sale of Product.


 


Cubist
shall place Purchase Orders with Hospira and Hospira shall manufacture Product
for Cubist in accordance with the volume schedule outlined in Exhibit 8.5.1,
as set forth in Section 7 of Amendment 2. 
The initial minimum volume schedule is defined under the column labeled “Minimum
Volume (1)”.  Hospira shall deliver such
Product to Cubist in accordance with Section 8.6.


 


Cubist
shall pay the applicable price as set forth in Exhibit 8.5.1 as set forth
in Section 7 of Amendment 2 based on the applicable Contract Year and
whether or not the Product is unfinished (bulk packaging only) or finished
(final Product includes Product labeling and packaging), which shall be at
Cubist’s discretion as specified on the applicable Purchase Order.


 


7.               Pricing
Table.  Exhibit 8.5.1 of the Agreement is hereby
deleted in its entirety and replaced with the following:


 


Minimums
and Prices


 


	
  Contract

  Year

  	
   

  	
  Minimum

  Volume (1)

  in units

  	
   

  	
  Minimum

  Volume (2)

  in units

  	
   

  	
  Unfinished

  Price In US$ 

  McPherson

  	
   

  	
  Unfinished

  Price In US$

  Liscate

  	
   

  	
  Finished

  Price In US$ 

  McPherson

  	
   

  	
  Finished

  Price In US$ 

  Liscate

  
	
  2008

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  
	
  2009

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  
	
  2010

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  
	
  2011

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  
	
  2012

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  
	
  2013

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  	
  []*

  



 


a.               This
pricing is effective as of []*.  As set
forth in the chart, annual price increases shall be []*.  Annual price increases will not exceed the
lesser of []*.


 


b.              “Minimum
Volume (1)” and “Minimum Volume (2)” columns apply to total volume of D500
Product and []* Product.


 


c.               If
during the Term of this
Agreement, []*,
then Cubist shall have the right to
reduce the minimum purchase volume for that year and subsequent years, provided
that, unless both parties agree in writing, such revised minimums shall not be
lower than []*; and, provided 


 


*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.


 


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further,
that Cubist shall have no right to cancel any previously issued purchase orders
unless Cubist receives Hospira’s written agreement to cancel such purchase orders.


 


d.              Cubist
shall pay to Hospira all VAT due on any Product, if applicable, on the receipt
by Cubist of Hospira’s invoice.  Such
invoice shall set forth the purchase price and itemize the applicable VAT.


 


e.               Cubist’s
Affiliates may purchase Products directly from Hospira hereunder, as directed
by Cubist, provided that Cubist shall be responsible for all such Affiliates’
compliance with the terms of this Agreement, including prompt payment for such
Products in accordance with the terms hereof. 
Any such purchases by Cubist’s Affiliates shall apply to the minimum
volumes required by Section 8.1.1 and detailed in Exhibit 8.5.1.


 


8.               Section 8.2. 
The revised Section 8.2 as set forth in Amendment One shall
continue to apply provided that the reference to Exhibit 8.5.1 shall refer
to the Exhibit 8.5.1 as revised pursuant to Section 6 above;
provided, however, that notwithstanding anything to the contrary in this
Amendment Two or the Agreement, Section 8.2 shall no longer be of any
effect and no minimums shall apply to Cubist under this Agreement []*.


 


9.               Section 8.6.  Section 8.6
of the Agreement is hereby replaced with the following:


 


                        Hospira
shall deliver Product to Cubist, F.C.A. (Incoterms 2000), Hospira’s
manufacturing plant in McPherson, KS, USA or E.X.W. (Incoterms 2000),
Hospira’s manufacturing plant in Liscate, Italy; provided
that Hospira shall prepare any documentation necessary for
exportation.  Shipment shall be by a carrier designated by
Cubist.  Title shall pass to
Cubist upon placement of Product on carrier.


 


10.         Section 8.7.4.  Section 8.7.4
of the Agreement is hereby amended such that the language, “the first []*”
shall be changed to “the first []*” and the language, “the remaining []*” shall
be changed to “the remaining []*.”


 


11.         Section 8.8.2.  Section 8.8.2 of the Agreement is hereby
amended to add the following at the end of such Section:


 


                        Neither
Hospira nor any of its Affiliates (as defined above) []* shall no longer be of any effect and []*
to Cubist under this Agreement; provided that,
Cubist shall have no right to cancel any previously issued purchase orders
unless Cubist receives Hospira’s written agreement to cancel such purchase
orders.


 


12.         Effective
Date.  The amendment to the Agreement contemplated
by this Second Amendment shall be deemed effective as of the date first written
above upon the full execution of this Second Amendment and without any further
action required by the parties hereto. 
There are no conditions precedent or subsequent to the effectiveness of
this Second Amendment.


 


13.         Counterparts.  This Second Amendment may be executed in two
or more counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.  One or more counterparts of this Second
Amendment may be delivered by facsimile, with the intention that delivery by
such means shall have the same effect as delivery of an original counterpart
thereof.


 


*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.


 


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


 


 


	
  HOSPIRA WORLDWIDE, INC.

  	
   

  	
  CUBIST PHARMACEUTICALS,
  INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By

  	
       /s/
  Anthony N. Cacich

  	
   

  	
  By

  	
       /s/
  Michael W. Bonney

  
	
   

  	
   

  	
   

  
	
  Name

  	
    Anthony N.
  Cacich

  	
   

  	
  Name

  	
     Michael
  W. Bonney

  
	
   

  	
  (type or print)

  	
   

  	
   

  	
  (type or print)

  
	
   

  	
   

  	
   

  
	
  Title

  	
  Vice President and
  General Manager,

  	
   

  	
  Title

  	
    President
  and CEO

  
	
   

  	
  Contract Manufacturing
  Services

  	
   

  	
   

  	
   

  
									



 


*Confidential Treatment Requested.  Omitted portions filed with the Commission.


 


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Exhibit A


 


Outlines of


Feasibility Document and Plant Certification Protocol


 


[SEE ATTACHMENTS]


 


*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.


 

















 


Feasibility Report
Outline


 


[]*


 


*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.


 

















 


Plant Certification Outline


 


[]*


 


*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.


 

















 


Exhibit B


 


Liscate Validation
Program


Project Plan


 


[]*


 


*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.


 

















 


Exhibit C


 


Labeling and Packaging Program


 


[SEE
ATTACHMENT]


 


*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.


 

















 


3 June 2008


 


[]*


 


Dear []*:


 


[]*


 


*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.