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Exhibit 10.5    
    


Confidential Treatment Requested


 
 

EXCLUSIVE LICENCE, DEVELOPMENT AND SUPPLY
  AGREEMENT    
    


        THIS AGREEMENT is made this 20th day of June 2007 BETWEEN 



        JANSSEN PHARMACEUTICA NV, a company organized and existing under the laws of Belgium and having its registered office at Turnhoutseweg 30,
2340 Beerse, Belgium, (hereinafter referred to as "JANSSEN") 


        AND



        1.     LAB INTERNATIONAL SRL, a company organized and existing under the laws of Barbados and having an office at Windmark, Harts
Gap, Christ Church, Barbados, West Indies (hereinafter referred to as "LAB SRL") and 



        2.     LAB PHARMA OY, a company organized and existing under the laws of Finland and having an office at Biolinja 12, 20101
Turku, Finland (hereinafter referred to as "LAB OY"); 


together
"LAB" 


and
all together "the Parties" 


RECITALS



        WHEREAS
LAB OY has developed a specific reservoir metered dose dry powder inhaler (the Device, as further defined below). This Device is, together with the formulation technology, a
platform for pulmonary drug delivery, and is protected by Patents and Know-How (both as defined below). Further LAB OY and LAB SRL have developed, by using the Device, a pharmaceutical
product for pulmonary administration of fentanyl citrate formulations for the treatment of pain (the Product, as further defined below) that is currently undergoing clinical trials, 


        WHEREAS
JANSSEN is committed to undertake development, marketing and sale of the Product in the Territory under the terms and conditions of this Agreement and 


        WHEREAS
JANSSEN and LAB now wish to enter into an exclusive licence agreement with regard to the Patents, Know-IIow and LAB Trademarks (as defined below) and into an
exclusive development and supply agreement with regard to the Product; 


        NOW,
THEREFORE, in consideration of the above recitals and the mutual covenants and obligations set forth herein, the Parties hereby agree as follows: 


1.     Definitions  


        In this Agreement the following words and phrases shall have the meanings set out opposite them: 


	1.1
	"Additional
Indication" shall mean any and all medical indications of the Product other than the First Indication;



	1.2
	"Affiliate"
shall mean, with respect to either Party, any corporation, company, partnership, joint venture or any other entity which, directly or indirectly, controls or is controlled
by, or is under common control with such Party. For the purposes of this definition, "control" shall mean direct or indirect ownership of fifty percent (50%) or more of the stock or shares entitled to
vote for the election of directors;



	1.3
	"Agreement"
shall mean this Exclusive Licence, Development and Supply Agreement and its Schedules, as may be updated or amended from time to time;



	1.4
	"CHMP"
shall mean EMEA`s Committee for Medicinal Products for Human Use; 





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	1.5
	"current
Good Manufacturing Practice" or "cGMP" shall mean the current good manufacturing guidelines set out in the United States Code of Federal Regulations Parts 210 and 211, United
States 21CFR Part 820 Quality System Requirements and in EU Directive 2003/94/EC and ISO 13485 so far as the same are relevant in each case as amended and updated from time to time;



	1.6
	"current
Good Clinical Practice" or "cGCP" shall mean the current guidelines for the principles of good clinical practice in the conduct of clinical trials on medicinal products for
human use as set out in EU Directive 2001/20/EC and US Guidance for Industry E6 Good Clinical Practice so far as the same are relevant in each case as amended and updated from time to time;



	1.7
	"current
Good Laboratory Practice" or "cGLP" shall mean the current guidelines for the principles of good laboratory practice as set out in the EU Directives 2004/9/EC and 2004/10/EC
and the related OECD principles and FDA's GLP regulations so far as the same are relevant in each case as amended and updated from time to time;



	1.8
	"Confidential
Information" shall mean information which is transferred between the Parties by written or other tangible form and clearly marked as being confidential by the disclosing
Party. In the case of information which is disclosed orally, Confidential Information includes such information which is confirmed thereafter within thirty (30) days in writing or other
tangible form by the disclosing Party as confidential. The term Confidential Information shall include but not be limited to, all Product Specifications and manufacturing specifications, and
information relating to the market or technology or either Party's business provided by it in connection with this Agreement; Know-How revealed shall be deemed to be Confidential
Information, regardless of its marking as confidential or not; 



The
term Confidential Information shall also include information disclosed by JANSSEN and LAB International Inc. under the agreement of July 28, 2005 which shall also be applicable for
the Parties of the present Agreement; 


The
term Confidential Information shall not mean any information which is previously known to the receiving Party without obligation of confidence to the disclosing Party, as shown by its written
records, or which, without breach of this Agreement, is publicly disclosed either prior or subsequent to receipt by the receiving Party of such Confidential Information, or which is subsequently
received by the receiving Party from a Third Party not under an obligation of confidence to the disclosing Party, or which is independently developed by a Party without violation of any
confidentiality requirements or intellectual property rights hereunder, or disclosure of which is required by subpoena or other legal or administrative process or by law, provided that, with respect
to the latter, the Parties shall closely collaborate in order to obtain a protective order or other appropriate remedy concerning any such disclosure; if any such order or other remedy does not fully
preclude disclosure Parties shall make such disclosure only to the extent that such disclosure is legally required; 



	1.9
	"Development
Plan" shall mean the plan, as agreed by the Parties and set out in Schedule A as amended from time to time,
specifying all the development work, including goals, directions, activities, due dates for the non-clinical and clinical program, the clinical trial program for the development of the
First Indication, the implementation of agreed upon additional features into the Product, and regulatory preparations, to be performed mainly by LAB including completion of the regulatory file for the
Product in a form suitable for submission to the Regulatory Authority and as requested by JANSSEN, with the objective of obtaining a Marketing Authorisation for the First Indication in the European
Union;



	1.10
	"Development
Period" shall mean the period until the First Marketing Authorization has been obtained; 





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	1.11
	"Device"
shall mean a reservoir metered dose dry powder inhaler for the pulmonary delivery of multiple doses of a dry powder formulation of certain compounds;



	1.12
	"Documented
Manufacturing Cost" shall mean costs in accordance with GAAP (Generally Accepted Accounting Principles), which are reasonable and necessary, in each case linked to a
commercial sale and comprise: 






* * *  









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* * *  






	1.13
	"Effective
Date" shall mean the last date of execution of this Agreement;



	1.14
	"EMEA"
shall mean the European Medicines Evaluation Agency and any successor entity;



	1.15
	"FDA"
shall mean the US Food and Drug Administration and any successor entity;



	1.16
	"Field"
shall mean the pulmonary administration to humans of fentanyl, alfentanil, sufentanil or remifentanil in base or salt form, in particular fentanyl citrate, or the
stereoisomers, solvates, non-covalent complexes, chelates, polymorphs or amorphous forms thereof;



	1.17
	"First
Commercial Sale" shall mean the first sale of the Product by JANSSEN or its designees in any country in the Territory following receipt of the Marketing Authorisation; 



Any
sales made prior to the receipt of the Marketing Authorization, such as so-called "named patient sales", "compassionate use" sales and the like, shall not be deemed First Commercial
Sales; 



	1.18
	"First
Indication" shall mean the first medical use for the Product approved in a European Marketing Authorisation for the management of breakthrough pain in cancer patients who are
already receiving and who are tolerant to opioid therapy for their cancer pain;



	1.19
	"Force
Majeure Event" shall mean causes beyond a party's control, including, without limitation the following which, for the purposes of this Agreement, shall be regarded as beyond
the control of the Party in question; act of God, acts or omissions of any government or any rules, regulations or orders of any govermnental authority or any officer, department, agency or instrument
thereof; fire, storm, flood, earthquake, accident, acts of the public enemy, war, rebellion, insurrection, riot, invasion, strikes or lockouts; 





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	1.20
	"Global
Safety Database" ("GSD") shall mean the database containing all Adverse Events and pregnancy reports for the Product that will be used for regulatory reporting and responses
to safety queries from Regulatory Authorities. Adverse Event (AE) shall have the official meanings or definitions as provided by and as further defined or modified by the applicable law and Regulatory
Authorities;



	1.21
	"Improvement"
shall mean 






* * *  






	1.22
	"JANSSEN
Trademark" shall mean any trademark, commercial name, logo and/or other distinctive sign owned by JANSSEN or a JANSSEN Affiliate and chosen by JANSSEN for use with the
Product;



	1.23
	"Joint
Improvements" shall mean Improvements that include at least one inventor with an obligation to assign rights to LAB and at least one inventor with an obligation to assign
rights JANSSEN;



	1.24
	"Know-How"
shall mean any and all unpatented or unpublished inventions, discoveries, trade secrets, information, data, analysis, formulae, procedures, methods, processes
and results, or any other know-how in the possession of LAB which relates to or is useful in connection with the development, approval and eventual commercialization of the Product or
developed by LAB in the performance of this Agreement, including clinical, pre-clinical, and regulatory information concerning the Product;



	1.25
	"LAB
Trademark" shall mean any trademark, commercial name, logo and/or other distinctive sign owned by LAB (as listed in  Schedule K) and chosen by JANSSEN or an Affiliate for use with the Product;



	1.26
	"Manufacturing"
shall mean all steps leading to and including the preparation of the powder formulation, filling of the formulation in the subassembly of the Device, the final
assembly of the Device post filling, secondary packaging of the Product, all Product testing required for quality control, quality, assurance and warehousing;



	1.27
	"Manufacturing
Equipment" shall mean the single and multi-cavity production injection moulding tools and assembly/testing modules, filling and packaging equipment for Manufacturing
the Product and all equipment and fixtures necessary for control of Product quality;



	1.28
	"Manufacturing
Plan" shall mean the plan set out in Schedule F as amended from time to time, specifying all activities and
associated due dates for the design, establishment, validation and operation of the manufacturing facilities and procedures for the Manufacturing of the Product for the supply of the Product to
JANSSEN;



	1.29
	"Marketing
Authorisation" or "MA" shall mean any approval of the Product and/or establishment license, registration or authorization of any agency, department or other governmental
entity having regulatory jurisdiction, required for the manufacture, storage, import, export, transport or commercial sale or use of the Product for use in the Field in any country of the Territory; 







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	1.30
	"Marketing
Authorisation Application" or "MAA" shall mean the application for a Marketing Authorization;



	1.31
	"Net
Sales" shall mean, commencing with the First Commercial Sale of the Product in any country in the Territory, the aggregate of the gross invoiced sales price for the Product sold
by JANSSEN or its designees to Third Parties, after deduction of the following amounts according to standard method of accounting and to the extent included in the gross invoice amount: 






* * *  






	1.32
	"Patents"
shall mean the patents listed in Schedule K and any patents (including all additions, divisions, continuations,
continuations-in-part, substitutions, national patent rights, extensions, patent term extensions, supplementary protection certificates and renewals thereof), utility models
and patent applications (including patents issued thereon) deriving or claiming priority from any of the patents and patent applications that are or become owned or licensed by LAB and that would be
infringed (or, in the case of patent applications, contain claims which, if allowed in an issued patent, would be infringed) by the development, use or sale of the Product in the absence of the
licences granted herein;



	1.33
	"Price"
shall mean the price charged by LAB SRL to JANSSEN for the Product, net of VAT, as set out in Schedule I and
Section 15.3;



	1.34
	"Product"
shall mean the Device containing 30 doses of powder formulation of fentanyl citrate in two separate strengths of 100 and 200 micrograms per dose developed and owned by LAB
as specified in Schedule B, and any Improvements thereto;



	1.35
	"Recall"
shall mean the voluntary or forced recall of the Product from the market and "Recalled Product" shall mean Product which is the subject of a Recall;



	1.36
	"Regulatory
Authorities" shall mean EMEA, the CHMP, the MHRA and other national regulatory authorities responsible for granting MAs for pharmaceutical products in or outside the
Territory and the FDA with respect to the Manufacturing and supply of the Product from the United States of America;



	1.37
	"Royalty"
shall have the meaning set out in Schedule I;



	1.38
	"Scale
Up Plan" shall mean the plan set out in Schedule G; as amended from time to time, specifying all activities and
associated due dates for scale-up of the LAB manufacturing facilities to a commercial scale operation with capacity to meet the forecasted demand for the Product; 







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	1.39
	"Scientific
Advice" shall mean Scientific Advice from CHMP concerning the requirements for a MA for the Product for the First Indication within the EU;



	1.40
	







* * *  






	1.41
	"Subcontractor"
shall mean a Third Party performing a Manufacturing step for the Product under contract to LAB;



	1.42
	"Supplier"
shall mean a Third Party, other than a Subcontractor, supplying API, excipients, raw materials; Devices, primary and secondary packaging components, equipment or services
for Manufacturing the Product;



	1.43
	"Term"
shall mean the longest of (a) ten (10) years from the date of the First Commercial Sale of the Product in the Territory or (b) the expiration of the longest
lasting LAB Patent related to the Product or (c) the expiration of longest lasting regulatory exclusivity for the Product in the Territory;



	1.44
	"Territory"
shall mean European Union's current 27 member states plus Switzerland, Norway, Iceland, Liechtenstein, Russia, CIS (Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan,
Kyrgyzstan, Moldova, Tajikistan, Ukraine, Uzbekistan and as associate member Turkmenistan), Croatia, the former Yugoslav Republic of Macedonia (FYROM), Bosnia-Herzegovina, Serbia, Montenegro, Turkey,
Andorra, San Marino, Monaco, all the countries of the African continent, all the Middle East
countries                                * * *                                Sri Lanka
and Pakistan;



	1.45
	"Third
Party" shall mean any person, corporation, or other entity other than JANSSEN, LAB and their respective Affiliates;



	1.46
	"Training
Sample" shall mean a version of the Product not containing any active pharmaceutical ingredient designed and provided for demonstration purposes, education and training of
health care professionals, patients and others in the use of the Product. 



        In
this Agreement, the singular may, where the context so requires, include the plural, the masculine shall include the feminine and vice-versa. References to sections,
schedules and to headings are references to sections, schedules and to headings of this Agreement, unless otherwise stated, and are included for convenience only; in the case of any conflict between
the provisions of any Section or schedule, then the provisions of the Section shall prevail. 


I.     LICENCE  


2.     Grant of Licence, Improvements, right of first negotiation and payments  


	2.1
	LAB
OY hereby grants to JANSSEN an exclusive licence in the Field under the Patents, Know-How and LAB Trademarks to develop, make (both subject to Section 11.3
below), use, market, sell, promote and distribute the Product in the Territory, subject to the terms and conditions set forth in this Agreement. JANSSEN shall have the right to sublicense. For the
avoidance of doubt and except as expressly stated otherwise in this Agreement, LAB has not reserved the right, beyond its rights and obligations to perform the present Agreement, to develop, make,
use, market, sell, promote or distribute the Product itself, whether directly or indirectly in the Territory.



	2.2
	Without
prejudice to JANSSEN's exclusivity for the Product in accordance with Section 2.1, LAB shall be entitled to develop and manufacture (i) the Device in the
Territory for use by LAB or Third Parties in or outside the Territory and (ii) the Product in the Territory for use by LAB or Third Parties outside the Territory. 





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	2.3
	Titles,
rights and ownership to any and all Improvements, whether patented or not, obtained as a result of the development of the Product shall be owned by the Party/Parties that
has/have developed the Improvement. In case of (i) Improvements made solely by LAB and (ii) Joint Improvements, LAB will grant to JANSSEN an exclusive, royalty-free and sub-licensable
licence in the Field in the Territory. In the case of Improvements made solely by JANSSEN and Joint Improvements, JANSSEN shall, if such improvements cannot be used separately from the Product, grant
to LAB a royalty free non-exclusive licence in the Field outside the Territory (and, for Manufacturing and Development also inside the Territory). If and to the extent that such improvements can be
used separately from the Product, JANSSEN shall grant to LAB a royalty free non-exclusive licence in and outside the Field and in and outside of the Territory and LAB shall use such licence without
prejudice to JANSSEN's exclusivity for the Product in accordance with Section 2.1. 






* * *  






	2.4
	Improvements
that are made by employees of a Party shall, to the maximum extent permitted by the law governing such employee inventions, be demanded by the employing Party from the
inventing employee. The Parties shall discuss whether or not the Improvement should be kept in confidence as a trade secret or be protected through an application for a Patent or other formal
protection.



	2.5
	JANSSEN,
for a period ending two (2) years after the month that follows the First Commercial Sale of the Product withing the Territory, has a right of first negotiation to extend the
exclusive licence to territories other than the Territory. 






* * *  







Kong
and Taiwan) or Japan. If JANSSEN fails to exercise its matching right in due time, the right of first negotiation shall be void. 



	2.6
	If
JANSSEN wishes to extend the Territory, JANSSEN shall send LAB a written notification with detailed information about the extension. The Parties then shall enter into bona fide
discussions. 






* * *  






	2.7
	In
consideration of the rights granted by LAB and its development work and studies on the Device and the Product, the following payments ("Milestone Payments") are due and payable by
JANSSEN within 30 days of receipt of an
invoice                                * * *                                following the specified event. Each payment is due
only
once. 





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	2.8
	Any
income or other taxes which JANSSEN is required by law to pay or withhold on behalf of LAB with respect to any payments payable to LAB under this Agreement shall be deducted from
the amount of such payments due. JANSSEN shall furnish LAB with proof of such payments. Any such tax required to be paid or withheld shall be an expense of and borne solely by LAB. JANSSEN shall
promptly provide LAB with a certificate or other documentary evidence to enable LAB to support a claim for a refund or a foreign tax credit with respect to any such tax so withheld or deducted by
JANSSEN. Both parties will reasonably cooperate in completing and filing documents required under the provisions of any applicable tax treaty or under any other applicable law, in order to enable
JANSSEN to make such payments to LAB without any deduction or withholding. If JANSSEN had a duty to withhold taxes in connection with any payment it made to LAB under this Agreement but JANSSEN failed
to withhold, and such taxes were assessed against and paid by JANSSEN, then LAB will indemnify and hold harmless JANSSEN from and against such taxes. VAT (or equivalent), if any, shall be added to the
Price. 



3.     * * *


	3.1
	Whenever
LAB has the intention to develop a                                *
* *                                in or outside the Territory,
LAB shall submit such
intention together with a development project proposal without undue delay to JANSSEN. Such proposal shall refer to the planned territory of use and to the device as planned for JANSSEN's review. LAB
shall also give JANSSEN an exclusive option to receive licences for intellectual property rights or know-how on
the                                * *
*                                for the Territory and in the
Field, if any.



	3.2
	In
the event that JANSSEN agrees to proceed with the development of the                * * *                for the Territory and in
the Field according to the agreed upon                * * *                Development Project, JANSSEN shall be responsible for the cost of any
pharmaceutical, preclinical and clinical trial development related to the                * * *                Product (but not the device
used) and LAB will be responsible for the cost of any licence fee, milestones, royalties or other payments, if any, to a Third Party licensor for the device with which the
                * * *                Product will be developed.



	3.3
	In
the event that JANSSEN decides at its sole discretion not to proceed with the proposed development of the                * *
*                Product for use in the Territory in the Field then LAB shall have the right to start or continue the development of the
                * * *                Product in or outside the Territory. LAB shall however not have the right to develop or license the
                * * *                Product for use in the Territory other than by the prior express written permission of JANSSEN. 





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	3.4
	Should
JANSSEN decide to proceed with the                * * *                Product, JANSSEN has the right of first negotiation
outside the Territory as set out in Section 2.5 and 2.6.



	3.5
	The
Parties shall agree on terms for the development of a                * * *                Product along the lines of this
Agreement. 



II.    PRODUCT DEVELOPMENT—REGULATORY APPROVAL—COMMERCIAL EFFORTS  


4.     Product Development  


	4.1
	







* * *  






	4.2
	At
the latest thirty (30) days of the Effective Date, the Parties shall establish a Joint Development Team ("JDT"). The JDT shall be comprised of six members as follows: three
(3) representatives of each Party to be chosen at each Party's entire discretion, but preferably including specialists from pharmaceutical, clinical, regulatory and manufacturing management.
Meetings of the JDT shall be held to the extent deemed necessary by the JDT and at locations as determined by the JDT but not less than four (4) meetings a year shall be held. Each party shall
have the right to request a JDT meeting with seven (7) days prior written notice if the need arises. The Parties shall bear their respective expenses in attending the meetings of the JDT.



	4.3
	The
JDT shall (i) coordinate, review and update the development activities as set forth in the Development Plan (including timings for finalizing each of the steps of the
Product development) and ensure that there is productive collaboration between the Parties, (ii) evaluate the scientific, technical and commercial feasibility of the proposed works and studies,
the safety of the Product and regulatory material for the further development of the Product in the Territory and (iii) evaluate Manufacturing and supply readiness of the Product. The Parties
acknowledge that the risk management and safety features of the Product will be an essential part of the discussions of the JDT.



	4.4
	







* * *  






	4.5
	Decisions
shall be made by the JDT by consensus after an open discussion. Regardless of the number of representatives from each Party, each Party shall present one consolidated view
on any issue in dispute. If the JDT fails to reach unanimous agreement on any matter, the decision of JANSSEN will be final and determinative. 



The
JDT shall review the Development Plan on a quarterly basis and will modify said Development Plan as required. The JDT shall not decide on changes of the Product Specifications, nor on Improvements
of the Product nor on changes of the Agreement. 


Notwithstanding
the foregoing, decisions made by JANSSEN which may increase the costs for the specific part of execution of the Development Plan by more than 10% for LAB due to requirements from
JANSSEN beyond the requirements as known and/or asked by the CHMP or other Regulatory Authorities shall not be binding for LAB unless JANSSEN agrees to bear such costs. In such event, LAB shall
substantiate and fully disclose to JANSSEN the base budget as well as the anticipated cost increase. 






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	4.6.
	Whether
or not included in the Development Plan, LAB shall be responsible for the conduct and costs of all pharmaceutical development, pre-clinical and clinical studies
necessary to obtain the applicable MA for the First Indication of the Product in the European Union within the agreed timelines as included in the Development Plan. JANSSEN shall, at its sole
discretion, assist LAB during the development at its own costs. 






* * *  







Any
event that occurs in the execution of the Development Plan that is likely to result in a delay of more than                * * *                
shall be disclosed by LAB to JANSSEN without undue delay. Upon request by JANSSEN, the Parties shall organize a JDT meeting immediately to discuss such event and agree on a plan for appropriate
countermeasures, if applicable. 


Any
event that occurs in the execution of the Development Plan, whether or not caused by a Force Majeure event, and which is likely to lead to the delay of the MAA filing more than
                * * *                JANSSEN shall have the right to take over the ongoing and planned development, studies and trials but only after
prior reasonable consultation of such consequences by the JDT. In the case of JANSSEN taking over the ongoing and planned development, studies and trials, JANSSEN's reasonable costs in performing or
having such development, studies and trials performed, shall be fully credited against any future milestone payments payable to LAB according to section 2.7. 


The
right of JANSSEN to take over the development is excluded for such deviations which are approved by the JDT. 



	4.7
	JANSSEN
shall be responsible for the costs of all additional pharmaceutical development, pre-clinical and clinical studies, all of them to the extent necessary, and
regulatory processes (including pricing and reimbursement negotiations, as set out in Section 6.1), as required for obtaining Marketing Authorisations for (i) the First Indication of the
Product in the non-EU Territory and (ii) any Additional Indications for the Product in the Territory. For all such pharmaceutical development and pre-clinical and
clinical studies, to the extent they are deemed reasonably necessary to JANSSEN, the Parties shall make a separate development plan and LAB shall promptly offer JANSSEN reasonable assistance in
preparation and execution of the development plan and JANSSEN will reimburse LAB as set forth in Schedule I. LAB shall strictly adhere to the agreed timelines and shall provide all clinical
trial materials at cost. If LAB, its Affiliates or Third Parties acting on behalf of LAB do not have adequate resources or capabilities to reasonably meet JANSSEN's requirements, then JANSSEN shall be
entitled to have the work performed by a Third Party Contract Research Organisation and in the latter event, LAB shall offer reasonable assistance at JANSSEN's request and expense. In that case,
JANSSEN shall inform LAB about the respective development steps and give LAB access and the right to use such information subject to JANSSEN's contractual obligations towards Third Parties.



	4.8
	LAB
will assign adequate personnel to perform its obligations under this Agreement during the Development Period. 





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	4.9
	LAB
shall, for additional development work identified under Section 4.7, use all reasonable efforts (JANSSEN giving LAB reasonable notice of its requirements) to provide to
JANSSEN all Products needed to carry out the development plan and provide all clinical trial supplies at cost.



	4.10
	The
JDT shall dissolve after completion of the Development Period. 




5.     Product Improvements  


	5.1
	From
time to time during the Term, either Party may submit to the other written proposals for the development, adoption and implementation of any Improvement of the Product. The
Parties shall exercise commercially reasonable efforts to review such proposed change with each other without undue delay and, if and when Parties agree in writing on the proposed Improvement and the
plan for its implementation, the change shall become effective, subject to any additional regulatory or other approval necessitated by such change, in which case it shall only become part of the
Product Specification when such approvals for implementation of such Improvements have been obtained and notified to JANSSEN by EMEA and any other relevant Regulatory Authorities. If the Parties agree
on the implementation of any such Improvement to the Product, they shall modify the Schedule B to reflect the same.



	5.2
	All
decisions regarding any Improvement shall only be made after the Parties have agreed upon the calculation of costs of the implementation of such Improvement, the cost of
manufacturing and the implications for the Price, if any. Except as agreed otherwise, LAB shall bear the cost for the development of any Improvement.



	5.3
	For
the avoidance of doubt, in no event shall any Improvement (or any change or modification to the Product Specification) of the Product in the Territory be notified to Regulatory
Authorities or be implemented or made without the prior written approval of both Parties. 



6.     Regulatory Strategy Procedures and Approval  


	6.1
	









* * *  






	6.2
	







* * *  







Except
if expressly agreed otherwise, pricing and reimbursement of the Product shall at all times exclusively be handled by JANSSEN. 



	6.3
	As
indicated in Section 4.6, LAB shall, at its cost and expense, follow the Scientific Advice and provide all necessary samples, information, documentation and data and prepare
the regulatory file according to the Regulatory Authorities' rules and guidelines and in agreement with JANSSEN, in a manner suitable (i) to submit to the Regulatory Authorities in the European
Union a MAA for the First Indication of the Product and (ii) for JANSSEN to obtain pricing and reimbursement for the Product in the EU and elsewhere where reasonably required by JANSSEN in the
Territory. 





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	6.4
	LAB
will also provide to JANSSEN, at LAB's cost and expense and as reasonably required by JANSSEN, any samples, information, documentation and data LAB has in its possession (except
that which it may not disclose, if any, being subject to obligations of confidentiality to Third Parties) for the preparation and filing of any MAA or variation of an MAA required for the Product
other than the MAA identified in Section 6.3.



	6.5
	LAB
will promptly and at its cost and expense give reasonable assistance to JANSSEN in answering any questions from the Regulatory Authorities related to the Product.



	6.6
	JANSSEN
shall manage the GSD for the Product. The Parties shall enter into a separate Pharmacovigilance Agreement                * *
*                after signature of the Agreement. Such Pharmacovigilance Agreement shall be included as Schedule L and
shall set out roles and responsibilities of the Parties in the coordination with other territories where the Product is marketed. 






* * *  







All
Pharmacovigilance communications and transfer of information between the Parties shall be in the English language. 




7.     Commercial Efforts  


	7.1
	All
business decisions, including but not limited to the pricing, reimbursement, package design, sales, the choice of the JANSSEN Trademark and promotional activities and the decision
to launch or continue to market the Product in a particular country in the Territory, shall be within the sole discretion of JANSSEN and its Affiliates.



	7.2
	Notwithstanding
Section 7.1, JANSSEN and its Affiliates shall undertake commercially reasonable efforts to launch and market the Product in as many countries of the Territory
as possible, provided it makes reasonable business sense for JANSSEN, and to prioritize the Product accordingly, as JANSSEN and its Affiliates normally do for their own products having a similar
potential. Amongst other things, sales representatives promoting the Product shall be duly trained and shall have experience with analgesic products. In case JANSSEN or its Affiliates decide to use a
hired sales force, the same qualification and requirements shall apply.



	7.3
	During
the Term JANSSEN or its Affiliates or designees shall not distribute in the Territory another product in the Field. 



III.  MANUFACTURING AND SUPPLY  


8.     Manufacturing Responsibilities of LAB SRL  


	8.1
	Not
later than thirty (30) days after the dissolution of the JDT, the Parties shall form a Steering Committee which shall steer and coordinate further joint development,
manufacturing or clinical work on the Product according to the same decision making principles as applicable to the JDT. 





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	8.2
	All
obligations, responsibilities and rights under this Section 8 belong on the side of LAB solely to LAB SRL. LAB SRL shall act as exclusive manufacturer and supplier of the
Product to JANSSEN or any designee of JANSSEN. For the avoidance of doubt, JANSSEN and its Affiliates are not allowed to manufacture the Product, except in the event of a Failure to Supply, according
to the terms and conditions set out in Section 11.3.



	8.3
	All
Products manufactured by LAB under this Agreement shall be processed and packaged strictly in accordance with the Product Specification  (Schedule B) and the Packaging Specification (Schedule J—as further specified
in Section 12). LAB will maintain the high standards and precautions customary among leading pharmaceutical product and device manufacturers and shall comply with (i) cGMP, as if the
Products were required to be CE-marked (as set out in Directive 93/42/EC), (ii) all applicable rules and regulations for opioids and other controlled substance including, but not
limited to the "Controlled Substances Act" as of October 27, 1970, codified at 21 U.S.C. § 801 as amended, (iii) all appropriate LAB Standard Operating Procedures as related
to the Manufacturing of the Product as amended from time to time, a list of which is attached as Schedule C to this Agreement.



	8.4
	LAB
shall perform all in-process and final quality control on the Product. Towards this end, parties shall enter into a Quality Agreement prior to the commencement of the
Phase III clinical trials. Such Quality Agreement shall constitute Schedule D to this Agreement.



	8.5
	LAB
shall send any documentation required by JANSSEN for approval of Product prior to shipment to JANSSEN. LAB shall only ship Product after receiving such authorization. JANSSEN
shall maintain final authority for release of the Product to the market in the Territory. Such Product release criteria, specific documentation and procedures will be outlined in the Quality Agreement
as set forth in Schedule D.



	8.6
	Furthermore,
LAB shall submit to JANSSEN a validation protocol for Product approval and shall validate the Manufacturing process according to the approved validation protocol on
                * * *                full
scale batches of the Product (the size of the batches being as set out in the Manufacturing Plan and the
Scale-up Plan as set forth in Schedules F and G). The Manufacturing Plan  (Schedule F) shall be added to
this Agreement not later than
                * * *                months after the Effective Date.



	8.7
	For
each batch of the Product, LAB shall take sample(s) according to the requirements of the Quality Agreement. Such sample(s) and records shall be retained in accordance with the
Quality Agreement.



	8.8
	Before
releasing each batch of the Product to JANSSEN or the party designated by JANSSEN, LAB shall undertake and will be responsible for the performance of final quality controls and
batch record review on the Product in accordance with the requirements of the Quality Agreement.



	8.9
	It
is expressly understood that this Section 8 is not intended to relieve LAB from its responsibility for following cGMP and meeting all appropriate and applicable regulatory,
safety and quality standards.



	8.10
	LAB
shall submit to JANSSEN (i) a complete batch record for each manufactured batch of Product and (ii) a sample of each manufactured batch of Product. JANSSEN shall
within                * * *                from receipt of the sample (i) perform, or have performed, the retesting by EU legislation,
(ii) review each batch record and, upon comparison of the batch records and retest results, advise LAB of the acceptance or rejection. 



Should
a batch of the Product or any of the Product fail to meet the standards of quality required and the approved release specifications under this Agreement, including  Schedule D and F, JANSSEN or its
Affiliates shall inform LAB in writing of the alleged shortcomings without undue delay but not later than within
                * * *                after
receiving said Products in the case on a non-latent defect, and
                * * *                from
confirmation by JANSSEN in case of a discovery by JANSSEN or                * *
*                days from first notice in case of a notice to JANSSEN by a Third Party in case of a latent defect. 






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In
case of a latent defect JANSSEN will promptly notify LAB of the discovery or first notice of such defect to allow LAB to be involved in the investigation of the claimed latent defect. 



	8.11
	Without
prejudice to any other remedy which JANSSEN may have and upon completion of an appropriate investigation by the Parties of the final disposition of a batch or batches of the
Product which do(es) not meet the Product Specifications outlined in Schedule B, LAB shall replace at its own cost and expense, including
reimbursement of freight and disposition costs incurred by JANSSEN, the whole or part of the out of specification batch so rejected and shall destroy, upon JANSSEN's instructions and according to
LAB's standard procedure for destruction of the Product, the rejected batch of the Product which cannot be corrected. In case Parties disagree about the conformity of the Product, Section 19
shall apply. Parties will exercise all commercially reasonable efforts to complete the aforementioned investigation within                * *
*                from JANSSEN's notification set out in Section 8.10.



	8.12
	LAB
shall observe and comply with all applicable laws, ordinances, codes of practice and regulations of government agencies, including but not limited to, federal, state European and
local governing bodies having jurisdiction with respect to Manufacturing of the Product.



	8.13
	Without
prejudice to the generality of the foregoing, LAB and its officers confirm that they have read and understand the JOHNSON & JOHNSON Policy on the Employment of Young
Persons (the "Policy"), a copy of which forms Schedule E to this Agreement. In the manufacture and supply of the Product hereunder, LAB shall
employ young persons only as permitted by the Policy. LAB shall permit representatives of JANSSEN to enter LAB's premises at any reasonable time and on reasonable notice, and LAB shall ensure that
representatives of JANSSEN shall be permitted to enter the premises of any subcontractor involved in the manufacture or supply of the Product at any reasonable time and on reasonable notice, in order
to inspect relevant employment, health and safety records. LAB shall, if so requested, provide to JANSSEN a written certification, if available, of such compliance during the Term.



	8.14
	LAB
agrees to maintain a safe operating workplace for its employees through the use of appropriate and sufficient environmental controls and practices. 






* * *  






	8.15
	Should
LAB intend to assign one or more Manufacturing steps to one or more Subcontractors, LAB shall communicate in writing to JANSSEN the legal form and registered address of such
Subcontractor. Upon receipt of such communication for each proposed Subcontractor, JANSSEN shall have                * * *                to complete an
audit of such Subcontractor and notify LAB of any deficiencies. If JANSSEN notifies LAB of any deficiencies of the proposed Subcontractor during
such                * *
*                period, then the Parties shall attempt in good faith to resolve such deficiencies. If JANSSEN does not notify LAB of any such
deficiencies within such
                * * *                day
period, then such proposed Subcontractor shall be considered approved by JANSSEN for purposes of the Agreement;
and thereafter LAB shall be permitted to assign such Subcontractor as intended. In all cases, LAB shall ensure that such Subcontractors provide at least the same quality as expected from LAB under
this Agreement.



	8.16
	LAB
remains liable to JANSSEN for the full and proper performance of Manufacturing. The approved subcontracting shall not create any kind of contractual relationship between JANSSEN
and the Subcontractor unless otherwise provided by binding law. LAB shall ensure that each Subcontractor understands that (i) it shall not further subcontract and that (ii) its
performance shall be in strict compliance with all relevant Manufacturing provisions of this Agreement. 





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	8.17
	LAB
shall act as exclusive manufacturer and supplier of Training Samples to JANSSEN or any designee of JANSSEN.



	8.18
	All
Training Samples shall be manufactured by LAB using the same standards and precautions customary among leading pharmaceutical product and device manufactures. Training Samples
shall comply with (i) cGMP, as if the Products were required to be CE-marked (as set out in Directive 93/42/EC) and (ii) all applicable LAB Standard Operating Procedures  (Schedule C).



	8.19
	From
time to time, JANSSEN shall order Training Samples from LAB in reasonable quantities to allow JANSSEN to adequately train health care professionals (including nurses and other
assisting personnel) and patients. LAB shall exercise commercially reasonable efforts to provide JANSSEN with such Training Samples without undue delay at cost plus 20%. 




9.     Warehousing  


	9.1
	LAB
shall provide adequate and safe storage (i) for all materials as shall be reasonably required at any given time for the Manufacturing operations to meet and support the
qualities of the Product and the agreed safety stocks and as agreed by forecast and (ii) for all Product pending delivery to JANSSEN or a party designated by JANSSEN in accordance with the
Product Specification and requirements according to the legislation on controlled substances.



	9.2
	LAB
shall take care to store the materials and Products in storage facilities adapted to the materials and the Product in compliance with applicable legal requirements and cGMP. The
location of LAB's warehouse in which the materials and the Product are stored, must at all times be known to and previously approved by JANSSEN.



	9.3
	LAB
shall keep any materials and Products owned by JANSSEN at all times secured and insured, at LAB's expense, for their replacement value against any loss or damage caused by any
event outside reasonable control of LAB, including, but not limited to, fire, theft, etc. 




10.   Manufacturing Equipment  


	10.1
	During
the Term, LAB shall operate and maintain the Manufacturing Equipment in accordance with good business practice. LAB warrants that its arrangements with Subcontractors shall
contain equal obligations for such Subcontractors.



	10.2
	JANSSEN
shall have the right to enter LAB's and its Subcontractors' facilities in order to (i) inspect the Manufacturing Equipment and (ii) inspect all records relating
to the repair, maintenance, servicing and replacement of the Manufacturing Equipment. JANSSEN shall be given access to such facilities, on reasonable notice, during normal business hours as long as
such facilities perform work subject to this Agreement.



	10.3
	During
the Term, LAB shall service, repair, maintain and replace the Manufacturing Equipment as may be necessary to keep the Manufacturing Equipment in good working order. 



11.   Inventory and Continuity of Supply  


	11.1
	LAB
will maintain inventory of the Product on a first-in, first-out basis. LAB shall maintain separate records showing opening and closing inventories of all
semi-finished and finished Product. Representatives of JANSSEN will have the right to inspect and to have access during reasonable business hours on reasonable notice, to such records
separately kept by LAB as are necessary to verify the accuracy of the reports made by LAB. Such representatives may take photocopies and other excerpts from such records. 





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	11.2
	Not
later than                * * *                after JANSSEN has communicated to LAB its initial forecast as outlined in 13.2
below, LAB shall deliver to JANSSEN a continuity supply plan ("Continuity Supply Plan") so as to enable JANSSEN to maintain a commercial supply of Product at least sufficient to meet the requirements
of the market within its Territory and avoid stock-outs. The Continuity Supply Plan will provide contingency planning and implementation of appropriate measures to mitigate the impact of
events such as failures of Manufacturing Equipment and disasters to the supply of Product to JANSSEN and will include plans for maintaining adequate safety stocks of components and subassemblies,
spare parts to ensure the continued operability of moulds and equipment and other Manufacturing Equipment and disaster recovery plans. Without limiting the foregoing, the Continuity Supply Plan shall
provide that the minimum quantity of safety stock of the Products to be held by LAB, and its location, are to be agreed annually by the parties, no later than in January of each year for that calendar
year. For the first calendar year of production post launch of the Product, LAB shall hold                * * *                forecast supply of the
Product as safety stock at LAB approved warehouse facility. LAB, at its option, may decide to dedicate to these safety stocks and hold in inventory for JANSSEN more than the agreed minimum quantities,
but not more        * * *        the agreed minimums. LAB will notify JANSSEN in writing of any decisions on safety stock
quantities in
excess of the agreed minimums and make its decisions after consultation with JANSSEN. LAB shall use its commercially reasonable efforts to replenish any draw-down of safety stock within
                * * *                but
the replenishment lead time will depend on parameters such as quantities, production schedules, capacity, etc.,
which LAB will discuss with JANSSEN. In any event, LAB agrees to deliver all Product with no less than 75% of the remaining shelf-life existing at the time of shipment. JANSSEN will take
possession of the quantities they order via the forecast procedure without undue delay.



	11.3
	In
the event that LAB shall 






* * *  







(hereinafter
collectively referred to as a "Failure to Supply"), then JANSSEN, after due consultation with LAB about the causes of the problem, shall be licensed (with no obligation or liability to
LAB) upon            * * *                written
notice to LAB, to use, sell, make and have made Products pursuant to the licence
granted in Section 2. 







* * *  







Notwithstanding
anything to the contrary contained in this Agreement, in the event that JANSSEN shall make or have made the Product, pursuant to this Section 11, JANSSEN shall be permitted to
disclose to any Third Party such Confidential Information as is reasonably necessary in connection with such activities (subject to such Third Party agreeing in writing to be bound by the terms of
Section 31 hereof) and LAB shall reasonably assist in such disclosures. 






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	11.4
	LAB
shall reasonably consult with JANSSEN in respect of any refurbishment or construction of facilities that LAB intends to undertake of facilities where the Products are or are
intended to be manufactured and shall ensure compliance with cGMP. For the avoidance of doubt, this requirement shall not release LAB from its obligations under Section 8 of this Agreement.



	11.5
	Upon
the start of Manufacturing, LAB shall disclose to JANSSEN a description of LAB's process for the manufacture of the Product in sufficiently clear and detailed terms that it can
be readily followed and carried out by a trained scientist or engineer to make the Product in the manner LAB considers most efficient. Furthermore, should LAB alter, modify or change its process for
manufacturing the Product in accordance with the terms of this Agreement, LAB shall amend the description to include such alteration, modification or change. The description pursuant to this Section
shall be used by JANSSEN or its designee only during a Failure to Supply.



	11.6
	During
any period when LAB is not supplying the Product to JANSSEN, for any Product sold by JANSSEN manufactured from another source, JANSSEN shall make payments to LAB OY as set
forth in Schedule I part c.



12.   Packaging and Labelling  


	12.1
	LAB
shall package the Product in accordance with the agreed Packaging Specification as defined in Schedule J, which may be
amended from time to time according to the procedures established in the Quality Agreement (Schedule D) for the modification of such
Specifications. The Packaging shall be in any event in a manner suitable for shipment and sufficient to enable the Products to withstand the effects of shipping, including handling during loading and
unloading.



	12.2
	JANSSEN
shall deliver to LAB for each country in the Territory to which the Product is to be delivered all labelling for the Product in a manner ready for reproduction. Within
                * * *                of the
Effective Date, the Parties shall agree on a standard procedure for the submission, approval and revision of
all labelling. An order shall not be accepted into the forecasting procedure unless labelling has been provided by JANSSEN. 



13.   Program of Manufacturing and Supply of the Product  


	13.1
	LAB
agrees to accept and Manufacture such quantities of the Product as are specified in written orders submitted from time to time to LAB by JANSSEN or a party designated by JANSSEN
according to the forecasting and ordering procedure. LAB shall undertake reasonable commercial efforts to fulfil, but is not be required to fulfil in orders in excess of more than
                * * *                of the
quantities (total) specified in the latest forecast period. 



JANSSEN
may submit purchase orders to LAB for quantities of the Product in excess of the forecast amounts pursuant this Section 13. LAB shall use commercially reasonable efforts to fulfil those
orders. If LAB expects to be unable to fulfil the portion of any such excess order within the time frame requested, then LAB shall notify JANSSEN
within                * *
*                working days after receipt of the purchase order. 



	13.2
	JANSSEN
shall notify to LAB within the first five days of each calendar month its monthly requirements for the Product for                * *
*                following the respective calendar month and an indicative estimate of its requirements for the
following                * *
*                period for capacity planning purposes. The first notification by JANSSEN shall take place no later than at the time of
filing of the first MAA.
Requirements and estimates shall be given per Product strength and on a country by country basis of the Territory. The first                * *
*                months of each forecast shall be considered as firm orders. Such finn orders will be confirmed via purchase orders, all of which
shall be issued at least
                * * *                days
in advance. Each purchase order will specify which amounts of each order will be packaged for which country (or
set of required labelling specifications). All orders will be for full batch quantities, and no mixed lots will be accepted. The current batch size is estimated at
                * * *                for
the                * * *                strength and
                * * *                for
the                * * *                strength. The Parties
will adjust the batch sizes during the development and scale-up period prior to initiation of the commercial forecast practice, and if so required, after manufacturing of the
                * * *                commercial batches of each strength. An order
containing                * *
*                percent more or less on quantity shall be considered filled in full. 







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	13.3
	JANSSEN
shall be bound by the firm orders. Within                * * *                days from receipt of JANSSEN's order, LAB shall
confirm its acceptance thereof, in writing, indicating at the same time the approximate production week and the confirmed delivery date, such dates being within an absolute range of plus or minus
                * * *                from
the original specified date.



	13.4
	If
requested by JANSSEN, LAB shall render monthly and/or periodical inventory reports to JANSSEN, in such forms as JANSSEN shall specify, including the numbers of Products
manufactured for JANSSEN and still on hand. 



14.   Timely Production and Delivery  



Both
Parties understand that a timely production and delivery schedule of the Product is essential. In this respect LAB shall use all commercially reasonable efforts to prevent any delay in the agreed
upon production and delivery schedule, unless prevented by a Force Majeure Event and subject to Section 11.3 (Failure to Supply). 




15.   Price, Payment  


	15.1
	JANSSEN
will pay a Royalty on Net Sales to LAB and purchase Product from LAB at the Prices set out in Schedule I. All Prices
and risk of loss are                * * *                as defined in 1CC Incoterms 2000.



	15.2
	Payment
terms on all orders shall be                * * *                days net from receipt of invoice.



	15.3
	







* * *  







Within                * * *                after the end of each calendar quarter, JANSSEN shall deliver a report to LAB specifying, for such calendar
quarter in the Territory: the quantities of Product sold by JANSSEN and its distributors in each country in that calendar quarter and the Net sales (the "Sales Report"). 


Within                * * *                after the end of each calendar quarter, LAB shall deliver a report to JANSSEN specifying for such calendar
quarter and for the cumulative period from beginning of the calendar year till end of
such quarter, the quantities of Product produced and the actual Documented Manufacturing Cost for these quantities (the "Manufacturing Cost Report"). 


Within                * * *                after the end of each calendar quarter, JANSSEN shall deliver a report to LAB ("the Reconciliation Report")
that documents the actual price calculated using the actual Market Price per unit and the actual Documented Manufacturing Cost for such calendar quarter and for the cumulative period from beginning of
the calendar year till end of such quarter. This report will also document the difference between the actual Price per unit and the Forecast Price per unit and the total difference (differences in
unit price times total quantities sold). 


Within                * * *                after the end of the calendar year, JANSSEN shall deliver the full year Reconciliation Report to LAB. Based
on this, the Parties will settle the full year difference (full year difference in unit price times quantities sold). However, should a quarterly Reconciliation Report already report a cumulative
price difference bigger than                * * *                (up or down), than an intermediate settlement will be made within
                * * *                after issuance of the Reconciliation Report. The intermediate settlement will be equal to cumulative
difference actual vs. Forecast Price times actual cumulative units sold. 






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	15.4
	







* * *  






	15.5
	JANSSEN
will keep, and will require that its Affiliates keep, accurate records of Net Sales. JANSSEN will allow, and will require that its Affiliates will allow, at LAB's sole
expense, an audit by an independent auditor selected by LAB (as to which JANSSEN has no reasonable objection). The auditor shall be permitted to audit the aforementioned records on a yearly basis upon
at least                * * *                advance notice during normal business hours, but not later
than                * *
*                following the rendering of any such records. Notwithstanding the above it is agreed that any audit will in a first instance be
discussed with JANSSEN. If the
auditor in good faith deems it necessary to go through detailed documents, the auditors shall have the right to audit the books of JANSSEN and its Affiliates. The auditors shall promptly make the
results of the audit available to LAB and JANSSEN. Any deviation determined by such audit shall be promptly paid or refunded as the case may be. If JANSSEN has underpaid payments by more than
                * * *                over
any reporting period, JANSSEN shall also reimburse LAB for the cost of such audit. The auditors will be bound
by confidentiality obligations and shall not reveal any information to LAB or its Affiliates obtained during such audit other than information strictly necessary to verify the basis and accuracy of
the payments under this Agreement.



	15.6
	LAB
will keep, and will require that its Affiliates keep, accurate records of Documented Manufacturing Cost. JANSSEN shall be entitled to appoint an independent auditor (to which LAB
has no reasonable objection) who shall be permitted to audit the aforementioned records on a yearly basis upon at least                * *
*                advance notice during normal business hours, but not later
than                * * *                following
the rendering of any such records. Notwithstanding the above it is agreed that any audit will in a first instance be discussed with LAB. If the auditor in good faith deems it necessary to go through
detailed documents, the auditors shall have the right to audit the books of LAB and its Affiliates. The auditors shall promptly make the results of the audit available to LAB and JANSSEN. Any
deviation determined by such audit shall be promptly paid or refunded as the case may be. If LAB has overstated the Documented Manufacturing Cost by more
than                *
* *                over any reporting period, LAB shall also reimburse JANSSEN for the cost of such audit. The auditors will be hound by
confidentiality obligations and shall
not reveal any information to JANSSEN or its Affiliates obtained during such audit other than information strictly necessary to verify the basis and accuracy of the payments under this Agreement. 





16.   Delivery  



LAB
will arrange for the Product to be delivered to the respective countries in the Territory in accordance with Sections 13 and 14. All charges for packing, hauling, storage, and bar coding are
included in the Price unless otherwise agreed to by the Parties. All shipments must be accompanied by a packing slip which describes the articles, states the purchase order number and shows the
shipment's destination. LAB agrees to promptly forward the original bill of lading or other shipping receipt for each shipment in accordance with JANSSEN's instructions. LAB further agrees to promptly
render, after delivery of goods or performance of services, correct and complete invoices to JANSSEN, and to accept payment by cheque or at JANSSEN's discretion, other cash equivalent (including
electronic transfer of funds). 






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17.   Inspections  


	17.1
	JANSSEN
shall have the right, upon reasonable notice to LAB and during regular business hours, to inspect and audit while accompanied by LAB personnel the facilities being used by
LAB and any Affiliate or Subcontractor engaged by LAB for Manufacturing the Product, to assure compliance by LAB and, if applicable, its Subcontractors with cGMP, cGLP, cGCP and FDA, EMEA and other
applicable rules and regulations and with other provisions of this Agreement. LAB shall within                * * *                of receipt a written
notice from JANSSEN, remedy or cause the remedy of any deficiencies which may be noted in any such audit and specified in the written notice, or, in any such deficiencies can not reasonably be
remedied within such                * * *                period, present to JANSSEN a written plan to remedy such deficiencies as soon as possible; and
the failure by LAB to remedy or cause the remedy of any such deficiencies within such                * * *                or to present such a plan
within such                * * *                and then use its best efforts to remedy or cause the remedy of such deficiencies in accordance with such
written plan, as the case may be, shall be deemed a material breach of this Agreement. LAB acknowledges that the provisions of this Section 18 granting JANSSEN certain audit rights shall in no
way relieve LAB of any of its obligations under this Agreement, nor shall such provisions require JANSSEN to conduct any such audits.



	17.2
	The
Parties are aware that the EMEA "s Inspection Sector is responsible for the coordination of controlling systems under the Regulation 726/2004/EC, also together with the
different national Regulatory Authorities in Europe and elsewhere. Those inspections, which are covering for example the GCP, GLP, GMP and PhV of medical products, may arise after the MAA filed by
JANSSEN or LAB, as the case may be. Therefore, the Parties agree to fulfil all their obligations under such inspections and shall support the respective body when inspecting. Without prejudice to the
roles and responsibilities of the Parties as set out in the Pharmacovigilance Agreement (Schedule L), Parties shall make all commercially
reasonable efforts to collaborate as efficiently as possible. 



18.   Quality  


        LAB warrants that any Product sold to JANSSEN hereunder shall comply in all respects with the Product Specifications set out in  Schedule B (as amended from time to time) therefore and shall be free from defects in scale-up, manufacture, materials and
workmanship. 


19.   Independent Testing  


        If, after LAB's inspections of the Product, the Parties disagree as to the Products' conformance to the Product Specifications or whether the Product has such a
defect, either Party may deliver the Product to an independent Third-Party laboratory mutually and reasonably acceptable to both Parties, for analytical testing to confirm the Product's conformity or
non-conformity to the Product Specifications or the presence or absence of defects. All costs associated with such Third-Party testing shall be at JANSSEN's expense unless the tested
Product is deemed by such Third-Party to be defective or not in compliance with the Product Specifications, in which case all such costs, including
reimbursement of freight and disposition costs, shall be promptly paid by LAB. No inspection or testing of or payment for the Product by JANSSEN or any Third-Party agent of JANSSEN shall constitute
acceptance by JANSSEN thereof, nor shall any such inspection or testing be in lieu or substitution of any obligation of LAB for testing, inspection and quality control as provided in the Product
Specifications or under applicable local, state, federal laws, rules, regulations, standards, codes or statutes. 





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20.   Recall  


	20.1
	In
the event any governmental agency having jurisdiction requests or orders, or if JANSSEN determines to undertake, any Recall, and the cause or basis of such Recall is attributable
to a breach by LAB of the warranty, LAB's liability shall be as set out in this Section.



	20.2
	JANSSEN
must use its reasonable endeavours to allow LAB a reasonable opportunity to inspect and, if required, remedy any Product before the Recall is taken and shall, to the extent
reasonably possible, reasonably consult with LAB prior to and during the Recall.



	20.3
	Subject
to Sections 25 and 26, LAB's maximum liability and JANSSEN's exclusive remedy, in respect of any Recall shall be limited 








* * *  







IV.    PATENTS—INFRINGEMENT  


21.   Patent Prosecution  


        LAB shall continue to be responsible for filing, prosecuting, maintaining and defending opposition proceedings against the Patents at its own cost. LAB will keep
JANSSEN informed of the status of each such Patent and application for such Patent. 






* * *  







22.   Infringement of Third Party's Patent Rights  


	22.1
	In
the event that the development, manufacture, use, promotion, marketing or sale of the Product is alleged to infringe or constitutes an infringement of intellectual property rights
of a Third Party (other than a violation by trade names or trademarks selected by JANSSEN or unfair competition claims) in a country of the Territory, or in the country of Manufacturing (regardless
whether in or outside the Territory), each Party shall, as soon as it becomes aware of the same, notify the other thereof in writing, giving in the same notice full details known to it of the claims
of such Third Party insofar as they relate to the Product and the extent of any alleged infringement. To the extent that the Product falls or is alleged to fall within the claims of a Third Party
patent, the Parties shall after receipt of such notice analyze the infringement claim, and to the extent necessary, attempt to agree on a course of action.



	22.2
	Should
the alleged infringement take place where the Product is actually marketed or a MAA has been filed, the Parties' aim shall be to permit JANSSEN to continue marketing the
Product in the Territory. 






* * *  







If
it is necessary in the judgment of JANSSEN to obtain a licence from such Third Party, then JANSSEN, with LAB's reasonable assistance, may negotiate for such a licence 







* * *  









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* * *  







23.   Enforcement of Patents  


	23.1
	In
the event that in any country in the Territory in which JANSSEN, its Affiliates or licensees are marketing the Product, and JANSSEN, its Affiliates or licensees become aware of
the infringement of a Patent by a Third Party, JANSSEN or its Affiliates shall promptly notify LAB in writing to that effect, including with said written notice evidence establishing a prima facie
case of infringement by such Third Party.



	23.2
	LAB
has the right to take action to stop such infringement, including without limitation conducting patent infringement proceedings.                * *
*                JANSSEN will co-operate with LAB in any such suit and shall have the right to consult with LAB and be represented by its own
counsel at its own
expense. 






* * *  






	23.3
	







* * *  






	23.4
	







* * *  









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	23.5
	







* * *  







 IV.    REPRESENTATIONS—WARRANTIES—INDEMNITIES—INSURANCE—LIMITATION OF LIABILITY  


24.   Representations and Warranties  


	24.1
	LAB
represents and warrants to JANSSEN as at the Effective Date that



	(a)
	LAB
International SRL is organized and in good standing under the laws of Barbados;



	(b)
	LAB
Pharma OY is organized and in good standing under the laws of Finland;



	(c)
	LAB
has the full power, authority and legal right to execute and deliver this Agreement, grant the rights granted to JANSSEN hereby and perform LAB's obligations and the other
agreements reference herein and therein;



	(d)
	The
execution, delivery and performance of this Agreement do not and will not violate (i) the by-laws of LAB or equivalent organisational document in LAB's
countries of organisation, or (ii) any provision of any agreement or other instrument or document to which LAB is a party or by which any of its assets or properties is bound or affected;



	(e)
	Other
than consents, authorisations, filings, notices and other acts that have been obtained or anticipated in this Agreement, no consent or authorisation of, filing with, notice to
or other act by or in request of, any governmental authority r any other person or entity, in the name of LAB, is required in connection with the execution, delivery, performance, validity or
enforceability of this Agreement.






	24.2
	LAB
represents and warrants that it has full authority to enter into this Agreement and that it has no knowledge at the date of this Agreement of (i) any actions, suits or
proceedings pending or threatened in writing against LAB, (ii) any circumstances which might give rise to such actions, suits or proceedings, or (iii) any Third Party rights that would
adversely affect performance by LAB of its obligations under this Agreement or JANSSEN's enjoyment of the rights granted to JANSSEN hereunder. More in particular, to the best of its knowledge, LAB
represents and warrants that it has sole and full ownership of all Patents, that they are and shall remain free from any encumbrances and that the manufacture, use, promotion, distribution and sale of
the Product in countries where the Product is covered by a Patent does not infringe the intellectual property rights of any Third Party. LAB does not warrant that a MA will be obtained.



	24.3
	LAB
represents and warrants that it is under no obligation, contractual or otherwise, to any other person, institution or other entity that would interfere with the rendering of
services called for in this Agreement.



	24.4
	LAB
represents and warrants that, to the best of LAB's knowledge, LAB has disclosed to JANSSEN any data and other information that could reasonably be considered material to the
safety or efficacy of the Product. 





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	24.5
	JANSSEN
represents and warrants as at the Effective Date that:



	(a)
	JANSSEN
is organized and in good standing under the laws of Belgium;



	(b)
	JANSSEN
has the full power, authority and legal right to execute and deliver this Agreement and perform JANSSEN's obligations and the other agreements reference herein and therein. 







25.   Indemnity and Insurance  


	25.1
	LAB
shall indemnify JANSSEN and its Affiliates, their directors, officers, employees and representatives against and hold them harmless from all Third Party losses, claims, damages,
costs and expenses (including reasonable attorneys fees) to the extent arising out of, or resulting from (i) 






* * *  






	25.2
	JANSSEN
shall indemnify LAB and its Affiliates, their directors, officers, employees and representatives against and hold them harmless from all Third Party losses, claims, damages,
costs and expenses (including reasonable attorneys fees) to the extent arising out of, or resulting from (i) 






* * *  






	25.3
	LAB
agrees to procure and maintain in full force and effect during the term of this Agreement valid and collectible insurance policies, a copy of which is attached as  Schedule H. Upon JANSSEN's request,
 LAB shall provide to JANSSEN a copy of the certificate of insurance, evidencing such insurance coverage.




	25.4
	The
liability for a claim against either LAB or JANSSEN (each an "Indemnifier") in favour of JANSSEN or LAB (each an "Indemnitee"), respectively, pursuant to Section 25.1 or
25.2 (a "Claim"), as the case may be, shall be subject to the following conditions: 






* * *  









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* * *  







26.   Limitation of Liability  


	26.1
	Nothing
in this Agreement will operate to exclude or limit the liability of either Party for death or personal injury arising out of its gross negligence or for its intent in any way
whatsoever.



	26.2
	Subject
to Section 26.1 and Section 22, LAB's maximum total liability (whether in contract, tort (including negligence) or otherwise) under or in connection with this
Agreement, will not exceed                * * *                for any one occurrence.



	26.3
	The
express terms of this Agreement are in lieu of all warranties, conditions, terms, representations, undertakings and obligations implied by statute, common law, custom, trade
usage, course of dealing or otherwise, all of which are excluded to the fullest extent permitted by law. 




V.     TERM AND TERMINATION  


27.   Term  


	27.1
	Unless
terminated earlier on any of the grounds in Section 28, the Term shall be as defined in Section 1.43.



	27.2
	The
Term may be extended at JANSSEN's option for subsequent periods of 2 years on the same terms and conditions on 12 months written notice before the expiry of the Term. 




28.   Termination  


	28.1
	In
the event of an Act of Insolvency or an Unauthorized Assignment by either Party, the other Party may terminate this Agreement or may avail itself of any remedies for termination
or continuation of the licences granted hereunder which it may have under applicable law, if such law allows the termination,



	28.2
	A
Party shall be deemed to commit an act of insolvency ("Act of Insolvency") if it applies for or consents to the appointment of a receiver, trustee or liquidator for all or a
substantial part of its assets; admits in writing its inability to pay its debts generally as they mature; makes a general assignment for the benefit of creditors; is adjudicated a bankrupt; submits a
petition or a request seeking an arrangement with creditors; takes advantage of any insolvency law; submits an answer admitting the material allegations of a petition in bankruptcy or insolvency
proceedings; has an order, judgment or decree entered against it by any court of competent jurisdiction approving a petition seeking its winding up, re-organization or appointing a
receiver, trustee or liquidator for it, or for a substantial part of any of its assets and such order, judgment or decree shall continue unstayed and in effect for any period of
                * * *                consecutive days; or files a voluntary petition in bankruptcy; or fails to remove an involuntary
petition in bankruptcy filed against it within                * * *                consecutive days of the filing thereof. 



This
Section 28.2 shall not apply to a voluntary winding up due to corporate restructuring if such restructuring does not harm or does not even improve the status of creditors. 



	28.3
	A
Party shall be deemed to have made an unauthorized assignment if it purports to assign or to grant a security interest in or otherwise encumber this Agreement without the prior
written consent of the other Party ("Unauthorized Assignment") other than a customary assignments of receivables to secure an ordinary bank loan. 





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	28.4
	This
Agreement may be terminated by either Party by notice having immediate effect in the event of an Uncured Material Breach by the other Party. Failure of a Party (the "Defaulting
Party") to remedy a breach of any material duty or obligation required of the Defaulting Party under the terms of this Agreement within
                * * *                business days after receipt of written notice of such breach from the other Party shall be deemed an
uncured material breach ("Uncured Material Breach"). If LAB terminates by an uncured Material Breach by JANSSEN, all development results belong to LAB, including MA and MAA without further cost for
LAB. JANSSEN then shall reasonably support LAB to transfer such results, MA and MAA to LAB or a designee of LAB. 



The
Parties agree that in the event that LAB commits an Uncured Material Breach, then in any arbitration proceedings brought by JANSSEN pursuant to Section 40.2 the arbitrators shall be
empowered, at the request of JANSSEN and the discretion of the arbitrators, to reduce the Price otherwise payable by JANSSEN to redeem the actual damages incurred by JANSSEN as a result of the Uncured
Material Breach by LAB. 



	28.5
	Except
during the                * * *                after the Effective Date, JANSSEN reserves the right to terminate this Agreement
at any time upon                * * *                written notice. In such event JANSSEN shall be obligated to pay LAB only for (a) 






* * *  







Notwithstanding
the above, JANSSEN shall have the right to terminate this Agreement during the Development Period upon                * *
*                prior written notice in case any event occurs (including, but not limited to major safety issues in the clinical development of
the Product) that would by
generally accepted standards prevent JANSSEN or LAB to submit a MAA. 



	28.6
	All
rights to terminate shall be executed for the whole Territory or for single or more countries in the Territory, which than shall be reduced accordingly. Any termination of this
Agreement shall not affect existing payment obligations and such payments deemed to be due at the same time when the termination may come due.



	28.7
	Should
JANSSEN decide not to launch the Product not even in one country of the                * * *                after the First
Marketing Authorization (including pricing) of the Product, LAB may terminate the Agreement. Should JANSSEN decide not to launch the Product                * *
*                the Territory outside                * * *                of the Product, LAB may terminate the Agreement for
such respective country. In such cases of Termination Section 28.5 sentences three and four (3 and 4) above shall apply. 



VI.   MISCELLANEOUS  


29.   Employees  


        Nothing contained in this Agreement is intended or is to be construed to constitute LAB and JANSSEN as partners of joint ventures or either Party as an employee
of the other. Neither Party hereto shall have any express or implied rights or authority to assume or create any obligations on behalf of or in the name of the other Party or to bind the other Party
to any contract, agreement or undertaking with any Third Party. 





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30.   Permits  


        LAB shall maintain all government permits and licenses, including but not limited to, health, safety and environmental permits, necessary for the conduct of the
activities and procedures that LAB undertakes pursuant to this Agreement. 


31.   Confidential Information  


        During the term of this Agreement and for a period of                * *
*                thereafter, JANSSEN and
LAB agree to hold all Confidential Information in confidence for the disclosing Party and not to disclose the Confidential Information of the other party to any Third Party other than an Affiliate,
agent or consultant, except those who need to know such Confidential Information for purposes of carrying out the terms of this Agreement and who, including Affiliates, are bound by an equivalent
obligation of confidentiality and non-use, and not to use such Confidential Information for any purpose other than for the purposes of this Agreement. 


32.   Force Majeure  


        Except as expressly stated otherwise in this Agreement, each of the Parties hereto shall be excused from the performance of its obligations hereunder in the event
such performance is prevented by a Force Majeure Event and such excuse shall continue as long as the condition constituting such Force Majeure Event continues, plus
                * * *                days
after the termination of such condition. 


33.   Notices  


        All notices, demands and communications provided for in this Agreement shall be in writing and shall be deemed effective by a Party upon hand delivery or when
mailed, postage prepaid, by registered or certified mail, or by telecopy when received to the other Party or its copy designee at the respective addresses listed below, unless and until such address
is changed by giving written notice thereof in like manner. 



To
LAB INTERNATIONAL SRL

Windmark, Harts Gap, Christ Church, Barbados, West Indies

Attention: Managing Director Dr. Halvor Jaeger

Fax No: ++1 246 435 3262 


To
LAB PHARMA OY

Biolinja 12, 20750 Turku, Finland

Attention: Stephen Lermer, President

Fax No: ++358 2 33324444 


To
JANSSEN:

JANSSEN PHARMACEUTICA NV

Turnhoutseweg 30, B-2340 Beerse

Attention: Managing Director

Fax No:+ +32 14 60 31 79

cc. J&J Law Department Europe

Fax No: ++32 2 749 25 59 






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34.   Publicity  


        Neither Party shall originate any publicity, news release or public announcements, written or oral, whether to the public or press, stockholders or otherwise,
relating to this Agreement, including its existence, without the prior written consent of the other Party, which shall not be unreasonably withheld. If a Party believes that it has legal requirement
to make public the existence of or any details of or any events related in any way to this Agreement, it shall provide a copy of any such announcement to the other Party for review and approval at
least                * * *                prior to making said announcement or, if the legal requirement does not reasonably allow such
                * * *                notice,
 without undue delay Both Parties shall reasonably co-operate with each other so as to ensure
that any such reports can be reviewed and issued in accordance with the above timelines. 


35.   Expenses  


        Each Party shall pay all of its own fees and expenses (including all legal, accounting and other advisory fees) incurred in connection with the negotiation and
execution of this Agreement and the arrangements contemplated hereby 


36.   Assignment  


	36.1
	JANSSEN
may assign or delegate all or any of its rights and obligations under this Agreement to an Affiliate without the prior consent of LAB. In the event JANSSEN assigns all or any
parts of its rights and obligations hereunder to an Affiliate, LAB shall at the request of JANSSEN enter into with such Affiliate, such supplemental agreements not inconsistent herewith as may be
necessary or advisable to permit such Affiliate to avail itself of or perform any right or obligation of JANSSEN hereunder. Any such assignment or delegation shall not alleviate JANSSEN of its
obligation hereunder.



	36.2
	LAB
may assign or delegate to an Affiliate of LAB, all or any of its rights, obligations and intellectual property under this Agreement, but in no event shall such assignment or
delegation (i) be deemed to relieve LAB of its liabilities or obligations to JANSSEN under this Agreement or (ii) adversely affect the financial, fiscal and commercial position of
JANSSEN. LAB expressly acknowledges and agrees that LAB shall remain fully and unconditionally obligated and responsible for the full and complete performance of all of LAB's obligations under the
terms and conditions of this Agreement. JANSSEN shall at the request of LAB enter into such supplemental agreements with any such Affiliate of LAB not inconsistent herewith as may be necessary or
advisable to permit such Affiliate to avail itself of or perform any right or obligation of LAB hereunder. 



37.   Severability  


        The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability
of the other provisions hereof. If any provision of this Agreement, or the application thereof to any person or entity or any circumstance, is invalid or unenforceable, (i) a suitable and
equitable provision shall be substituted therefore in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid and unenforceable provision and (ii) the
remainder of this Agreement and the application of such provision to other persons, entities or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability of such provision, or the application thereof, in any other jurisdiction. 





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38.   Entire Agreement—Sole benefit of the Parties—Amendments  


	38.1
	This
Agreement and its appendices embody the entire understanding and agreement among the Parties and supersedes all previous negotiations, representations, writings and agreements,
written or oral, with respect to the subject matter of this Agreement.



	38.2
	This
Agreement is intended to be solely for the benefit of the Parties hereto and no term of this Agreement shall be enforceable by a person who is not a party to this Agreement.



	38.3
	No
modification, amendment, variation, extension or waiver of this Agreement or any provision hereof shall be binding or effective unless in writing and signed by a duly authorized
representative of each of the Parties. 



39.   Conflicts  


        To the extent of any conflict or inconsistency between this Agreement and any purchase order, purchase order release, confirmation, acceptance or any similar
document, the terms of this Agreement shall govern. 


40.   Dispute, Governing Law & Jurisdiction  


	40.1
	This
Agreement shall be governed by and construed in accordance with the laws of                * * *                



	40.2
	The
Parties will attempt in good faith to resolve any dispute arising out of or relating to this Agreement promptly by negotiation between executives of the Parties.



	(a)
	Any
controversy or claim arising out of or relating to this Agreement, including any such controversy or claim involving Affiliates of any Party (a "Dispute"), shall first be
submitted to mediation according to                * * *                Such mediation shall be attended on behalf of each party for at
least one session by a senior business person with authority to resolve the Dispute. Any period of limitations that would otherwise expire between the initiation of mediation and its conclusion shall
be extended until                * * *                after the conclusion of the mediation.



	(b)
	Any
Dispute that cannot be resolved by mediation within                * * *                of notice by one party to the other of the
existence of a Dispute (unless the parties agree to extend that period) shall be resolved by arbitration in accordance with the                * *
*                The arbitration shall be conducted in the English language
in                * * *                by
three
arbitrators, one named by each party and the third appointed in accordance with                * * *                The arbitrators, by accepting
appointment, undertake to exert their best efforts to conduct the process so as to issue an award within                * * *                of the
appointment of the last arbitrator, but failure to meet that timetable shall not affect the validity of the award. The arbitrators shall decide the Dispute in accordance with the law governing this
Agreement. The award of the arbitrators may be entered in any court of competent jurisdiction. 








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41.   Counterparts  


        This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same
instrument. 


        IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed and delivered on the date first written above by their duly authorized representatives. 



	

LAB INTERNATIONAL SRL
	By:	 	/s/ DR. HALVOR JAEGER
	 	June 17, 2002
	Name: Dr. Halvor Jaeger
	Title: Chief Executive Officer
	

LAB PHARMA OY
	By:	 	/s/ STEPHEN LERMER
	 	June 16, 2007
	Name: Stephen Lermer
	Title: President
	

JANSSEN PHARMACEUTICA NV
	By:	 	/s/ RENE HEK
	 	June 20, 2007
	Name: Rene Hek
	Title: Vice President Finance and CFO
	

By:	
 	

/s/ ROGER COX
	
 	

June 20, 2007
	Name: Roger Cox
	Title: Executive Director Licensing









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QuickLinks



Exhibit 10.5


EXCLUSIVE LICENCE, DEVELOPMENT AND SUPPLY AGREEMENT