Document:

Exhibit 10.6

 

[Theravance Biopharma, Inc. Logo]

 

May 12, 2014

 

Frank Pasqualone

 

Dear Frank:

 

As you know, Theravance, Inc. (“Theravance”) will spin-off its drug discovery and development business into a separate publicly traded company, Theravance Biopharma, Inc., a Cayman Islands corporation (the “Spin-Off”). You, together with substantially all of the current Theravance employees who are involved with its drug discovery and development business, will become an employee of Theravance Biopharma US, Inc., (the “Company” or “Theravance Biopharma US”) shortly before the Spin-Off becomes effective. The Company is a wholly-owned Delaware operating subsidiary of Theravance Biopharma, Inc.

 

At Theravance Biopharma US, you will continue to work in the exempt position of Senior Vice President, Operations, reporting to Rick Winningham.  Your salary on an annualized basis will be $475,000.  Any accrued but unused vacation will rollover to Theravance Biopharma US and will be immediately available following your transition to Theravance Biopharma US.  Annual vacation accrual will continue under the same accrual schedule formerly utilized at Theravance and you will receive credit under Theravance Biopharma US’ vacation policy for your years of service at Theravance.

 

You will remain eligible to receive an annual discretionary bonus of up to 50% of your annual salary in 2014 (and each calendar year thereafter).  Your 2014 bonus will be paid by the Company.  As is currently required by Theravance’s bonus program, you will be required to be an active employee in good standing at the time the bonus is paid in order to receive the bonus.  The Company’s bonus percentage targets may change from time-to-time at the sole discretion of the Board of Directors.

 

The Company will provide a similar comprehensive benefits package to that which you enjoyed at Theravance.  Health and welfare benefits will include medical, vision and dental coverage, life insurance, long-term disability insurance, and a flexible spending plan.  If you are a participant in the 401(k) plan, your account will be maintained, and you will continue to participate in the same plan with the same deferral and investment elections following your transfer of employment. If you do not currently participate in the plan, your transfer of employment will not impact your eligibility to become a participant.  You will generally be eligible to participate in these benefit programs (or continue to participate, as applicable) immediately following the transition of your employment to Theravance Biopharma US.  Theravance Biopharma, Inc. will also offer an Employee Stock Purchase Plan, although it has not yet been determined when the first offering period will commence.

 

Subject to the approval by the appropriate committee of the Theravance Biopharma, Inc. Board of Directors, you will be granted an option to purchase ordinary shares of Theravance Biopharma, Inc. at a per share purchase price equal to the fair market value of one Theravance Biopharma, Inc. ordinary share on the date of grant, which will be after the effective date of the Spin-Off.  The number of shares subject to the option and the vesting and exercise details of your option grant will be set forth in your option paperwork. The option granted to you will be contingent on your execution of an Option Agreement and will be subject to all terms of the Theravance Biopharma, Inc. 2013 Equity Incentive Plan.

 

To the extent you hold outstanding equity awards granted to you by Theravance at the time of the Spin-Off, such awards (including outstanding stock options, restricted stock units and restricted stock awards) and the related stock option, restricted stock unit and restricted stock agreements will be adjusted.  One of the primary purposes of these adjustments is to permit continued vesting of Theravance equity awards based on service to Theravance Biopharma, Inc. or any subsidiary thereof, including the Company, after the Spin-Off.  These adjustments and other relevant information are set forth on Exhibit A.  Except as described on Exhibit A, each of your adjusted Theravance equity awards will continue to be governed by the applicable Theravance award agreement and the Theravance equity plan under which the award was granted.

 

 

In connection with the Spin-Off and the transition of your employment, you must sign the enclosed Proprietary Information and Inventions Agreement with Theravance Biopharma, Inc.  In addition, we will need all employees to present documents establishing their legal right to work in the United States as required by the government’s Form I-9.  We will set up a time to meet with you to complete the necessary paperwork.

 

As a condition of continuing employment with Theravance Biopharma, if you were hired by Theravance within the last year and the terms of your offer letter included an obligation to repay relocation expenses and/or a signing bonus if you left the Company before the expiration of one year of employment, by signing this offer letter you acknowledge and agree that any obligation of repayment shall remain in full force and effect.  Should you decide to leave Theravance Biopharma US for any reason prior to the expiration of one year of employment (based on your original hire date with Theravance), you will repay the bonus or relocation expenses to Theravance Biopharma US.

 

While we hope that your employment with Theravance Biopharma US will be mutually satisfactory, your employment status will remain at-will.  As a result, both you and the Company are free to terminate the employment relationship at any time for any reason, with or without cause.  Although your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures to which you will be subject, may change from time-to-time, the “at-will” nature of your employment may only be changed in an express writing signed by you and a Senior Officer of the Company.

 

There are two copies of this letter enclosed; if all of the foregoing is satisfactory, please sign and date each copy to acknowledge your receipt and acceptance of the terms, and return one copy to me no later than May 23, 2014, saving the other copy for yourself.  Your signature below also constitutes your agreement to the adjustments to all of your outstanding Theravance equity awards as described in Exhibit A.  Please also sign and return the enclosed Proprietary Information and Inventions Agreement.  If we do not receive your completed paperwork by the due date your employment transition from Theravance to the Company will not occur.

 

We are very excited about the transition!  Should you need further assistance, please don’t hesitate to contact the Human Resources department.

 

	
Sincerely,
    	
 
    
	
 
    	
 
    
	
/s/   Rick Winningham
    	
 
    
	
Rick Winningham
    	
 
    

 

Foregoing terms and conditions hereby accepted upon the effective date of the Spin-Off:

 

	
 
    	
 
    	
 
    
	
 
    	
Signed:
    	
/s/   Frank Pasqualone
    
	
 
    	
 
    	
Frank   Pasqualone
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
May 20,   2014
    

 

 

EXHIBIT A

 

Adjustments to Your Theravance Equity Awards in Connection with the Spin-Off

 

This Exhibit A sets forth adjustments to your outstanding options to purchase shares of Theravance common stock (“Theravance Options”), awards of Theravance restricted stock units (“Theravance RSU Awards”) and Theravance restricted shares (“Theravance RSAs” and, together with Theravance Options and Theravance RSU Awards, “Theravance Equity Awards”) granted to you by Theravance and the related stock option, restricted stock unit and restricted stock agreements (each, an “Award Agreement” and collectively the “Award Agreements”) in connection with the Spin-Off.  These adjustments will apply to your Theravance Equity Awards outstanding immediately prior to the effective time of the Spin-Off.  For your reference, a list of your currently outstanding Theravance Equity Awards can be found by logging into your E*Trade Theravance Stock Plan Account.  The adjustments described on this Exhibit A are being made in connection with the Spin-Off.  If the Spin-Off does not occur for any reason, the adjustments described below will not be made to your Theravance Equity Awards and they will continue to be governed by their existing terms.

 

The Theravance Equity Awards, as adjusted, are referred to as “Adjusted Theravance Options” (including Adjusted Theravance ISOs and Adjusted Theravance NSOs, as defined below), “Adjusted Theravance RSU Awards” and “Adjusted Theravance RSAs” (collectively, “Adjusted Theravance Awards”).  Except as described below, each of your Adjusted Theravance Awards will continue to be governed by (i) the applicable Award Agreement, as adjusted hereby, and (ii) the Theravance equity plan under which the Adjusted Theravance Award was granted.

 

You will not receive a new Award Agreement(s) to reflect the adjustments described below.  Please keep a copy of this Exhibit A with the Award Agreement(s) applicable to your Adjusted Theravance Award(s) as evidence of the adjusted terms.

 

Following the Spin-Off, Theravance may delegate certain administrative responsibilities associated with the Adjusted Theravance Awards to Theravance Biopharma, Inc. (“Biopharma”).  If you have any questions about your Adjusted Theravance Awards or how to effect a particular stock plan transaction, please contact our stock administrator.

 

Adjustments to Theravance Incentive Stock Options

 

The following adjustments apply to Theravance Options that are “incentive stock options” under the federal tax laws immediately prior to the Spin-Off (each, a “Theravance ISO”):

 

·                  The per share exercise price and number of Theravance shares subject to each outstanding Theravance ISO will be adjusted to account for the effect of the Spin-Off on the value of Theravance’s common stock (as adjusted, the “Adjusted Theravance ISOs”).  The adjusted exercise price and number of shares subject to each Adjusted Theravance ISO can be found by logging into your E*Trade Theravance Stock Plan Account following the Spin-Off.  An announcement will be posted on the Company’s Intranet and on the E*Trade website when the adjustments have been completed.

·                  Certain exercises of your Adjusted Theravance ISOs may be restricted following the Spin-Off if a blackout period at Theravance is in effect at the time of the Spin-Off.  Additionally, the exercise of your Adjusted Theravance ISOs will be restricted completely for a short period of time immediately following the Spin-Off to allow the adjustments to be completed.  You will be notified of any restrictions that are placed on your ability to exercise your Adjusted Theravance ISOs and when those restrictions will be lifted.

·                  If your Award Agreement currently permits you to pay the exercise price of your Theravance ISOs by either (i) surrendering (or attesting to the ownership of) shares of Theravance common stock that you already own or (ii) having Theravance withhold shares of Theravance common stock that would otherwise be issued upon exercise of the option, following the Spin-Off you will no longer have the right to elect such forms of payment.  Instead, if you choose to exercise your Adjusted Theravance ISOs following the Spin-Off, you must pay the exercise price by means of another method permitted in the applicable Award Agreement.

 

 

·                  No other changes will be made to Theravance ISOs.  Effective as of the Spin-Off, your service with Theravance will terminate and any Adjusted Theravance ISOs must be exercised within the applicable post-termination exercise period (or, if sooner, prior to the expiration date applicable to the option).  For avoidance of doubt, the provision of transition services to Theravance on behalf of Biopharma does not count as “service” for purpose of your Adjusted Theravance ISOs.

 

Adjustments to Theravance Nonstatutory Stock Options

 

The following adjustments apply to Theravance Options that are nonstatutory stock options under the federal tax laws immediately prior to the Spin-Off (each, a “Theravance NSO”):

 

·                  The per share exercise price and number of Theravance shares subject to each outstanding Theravance NSO will be adjusted to account for the effect of the Spin-Off on the value of Theravance’s common stock (as adjusted, the “Adjusted Theravance NSOs”).  The adjusted exercise price and number of shares subject to each Adjusted Theravance NSO can be found by logging into your E*Trade Theravance Stock Plan Account following the Spin-Off.  An announcement will be posted on the Company’s Intranet and on the E*Trade website when the adjustments have been completed.

·                  Certain exercises of your Adjusted Theravance NSOs may be restricted following the Spin-Off if a blackout period at Theravance is in effect at the time of the Spin-Off.  Additionally, the exercise of your Adjusted Theravance NSOs will be restricted completely for a short period of time immediately following the Spin-Off to allow the adjustments to be completed.  You will be notified of any restrictions that are placed on your ability to exercise your Adjusted Theravance NSOs and when those restrictions will be lifted.

·                  For all purposes related to your Adjusted Theravance NSOs and the applicable stock option agreements (including vesting, exercisability and expiration of your Adjusted Theravance NSOs), your continuous service as an employee or consultant of Biopharma or any Parent, Subsidiary or Affiliate thereof will be treated as “service” with Theravance.

·                  Although you are currently eligible to participate in either the Theravance, Inc. Change in Control Severance Plan or the Theravance, Inc. 2009 Change in Control Severance Plan (each, a “Severance Plan”), your eligibility to participate in such plan will terminate as of the Spin-Off.  As a result, your Adjusted Theravance NSOs will no longer be eligible for vesting acceleration if you are subject to an “involuntary termination” (as defined in the applicable Severance Plan) in connection with or following a “change in control” (as defined in the applicable Severance Plan) of Theravance.  However, your Adjusted Theravance NSOs will vest and become exercisable in full if, after the Spin-Off, Biopharma is subject to a “change in control” (as defined in the Biopharma 2013 Equity Incentive Plan as of the effective time of the Spin-Off) and you are subject to an “Involuntary Termination” (as defined below) within 3 months prior to or 24 months after that change in control.

·                  If your Award Agreement currently permits you to pay the exercise price of your Theravance NSOs by either (i) surrendering (or attesting to the ownership of) shares of Theravance common stock that you already own or (ii) having Theravance withhold shares of Theravance common stock that would otherwise be issued upon exercise of the option, following the Spin-Off you will no longer have the right to elect such forms of payment.  Instead, if you choose to exercise your Adjusted Theravance NSOs following the Spin-Off, you must pay the exercise price by means of another method permitted in the applicable Award Agreement.

 

Adjustments to Theravance RSUs

 

·                  The number of Theravance restricted stock units subject to each outstanding Theravance RSU Award will be adjusted to account for the effect of the Spin-Off on the value of Theravance’s common stock.  The adjusted number of Theravance restricted stock units subject to each Adjusted Theravance RSU Award can be found by logging into your E*Trade Theravance Stock Plan Account following the Spin-Off.  An announcement will be posted on the Company’s Intranet and on E*Trade website when the adjustments have been completed.

 

 

·                  For all purposes related to your Adjusted Theravance RSU Awards and the applicable restricted stock unit agreements (including vesting and forfeiture of your Adjusted Theravance RSU Awards), your continuous service as an employee or consultant of Biopharma or any Parent, Subsidiary or Affiliate thereof will be treated as “service” with Theravance.

·                  Although you are currently eligible to participate in a Severance Plan, your eligibility to participate in such plan will terminate as of the Spin-Off.  As a result, your Adjusted Theravance RSU Awards will no longer be eligible for vesting acceleration if you are subject to an “involuntary termination” (as defined in the applicable Severance Plan) in connection with or following a “change in control” (as defined in the applicable Severance Plan) of Theravance.  However, your Adjusted Theravance RSU Awards will vest in full if, after the Spin-Off, Biopharma is subject to a “change in control” (as defined in the Biopharma 2013 Equity Incentive Plan as of the effective time of the Spin-Off) and you are subject to an “Involuntary Termination” (as defined below) within 3 months prior to or 24 months after that change in control.

·                  You currently have the ability to satisfy withholding taxes due in connection with the settlement of your Theravance RSU Awards by having Theravance withhold a portion of the shares that would otherwise be released to you upon settlement of your Theravance RSU Awards (this method of satisfying withholding taxes is referred to as “stock withholding”).  Pursuant to the terms of your Theravance RSU Awards, the Theravance Board of Directors or Compensation Committee, in their sole discretion, may withdraw consent for stock withholding at any time with respect to future vesting dates.  Notwithstanding the foregoing, the Theravance Board of Directors and Compensation Committee will provide you with at least 90 days notice in the event that stock withholding will no longer be permitted.  In the event the Theravance Board of Directors or Compensation Committee withdraws their consent for stock withholding, it will be necessary for you to satisfy the tax withholding obligations related to your Theravance RSU Awards by means of another method permitted by your Award Agreement.

 

Adjustments to Theravance RSAs

 

·                  No adjustment will be made in the number of outstanding Theravance RSAs in connection with the Spin-Off.  However, as a Theravance stockholder, you will receive shares of Biopharma in the Spin-Off with respect to your Theravance RSAs that are outstanding on the record date for the Spin-Off.  As provided in your Theravance restricted stock agreements, the Biopharma shares distributed in respect of your Theravance RSAs will be subject to the same terms and conditions, including vesting and forfeiture, as apply to the applicable Adjusted Theravance RSAs.

·                  For all purposes related to your Adjusted Theravance RSAs and the applicable restricted stock agreements (including vesting and forfeiture of your Adjusted Theravance RSAs and the related Biopharma shares distributed in respect of your Theravance RSAs), your continuous service as an employee (or, if the applicable Award Agreement currently permits it, as a consultant) of Biopharma or any Parent, Subsidiary or Affiliate thereof will be treated as “service” with Theravance.

·                  Although you are currently eligible to participate in a Severance Plan, your eligibility to participate in such plan will terminate as of the Spin-Off.  As a result, your Adjusted Theravance RSAs (and the related Biopharma shares distributed in respect of your Theravance RSAs) will no longer be eligible for vesting acceleration if you are subject to an “involuntary termination” (as defined in the applicable Severance Plan) in connection with or following a “change in control” (as defined in the applicable Severance Plan) of Theravance.  However, your Adjusted Theravance RSAs (including the related Biopharma shares distributed in respect of your Theravance RSAs) will vest in full if, after the Spin-Off, Biopharma is subject to a “change in control” (as defined in the Biopharma 2013 Equity Incentive Plan as of the effective time of the Spin-Off) and you are subject to an “Involuntary Termination” (as defined below) within 3 months prior to or 24 months after the change in control.

·                  You currently have the ability to satisfy withholding taxes due in connection with the vesting of your Theravance RSAs by having Theravance withhold a portion of the shares that would otherwise be released to you upon vesting of your Theravance RSAs (this method of satisfying withholding taxes is referred to as “stock withholding”).  However, pursuant to the terms of your Theravance RSAs, the Theravance Board of Directors or Compensation Committee, in their sole discretion, may withdraw consent for stock withholding at any time with respect to future vesting dates.  Notwithstanding the foregoing, the Theravance Board of Directors and Compensation Committee will provide you with at least 90 days notice in the event that stock withholding will no longer be permitted.

 

 

·                  After the Spin-Off, you will also need to satisfy the withholding tax obligations for Biopharma shares distributed in respect of your Theravance RSAs.  Because you will become an officer of Biopharma who is subject to Section 16(a) of the Securities Exchange Act of 1934 (a “Biopharma Section 16 Insider”) in connection with the Spin-Off, you may elect to satisfy the withholding taxes on any Biopharma shares distributed in respect of your Theravance RSAs by having Biopharma withhold a number of Biopharma shares that would otherwise be released to you upon vesting with a fair market value not in excess of the amount necessary to satisfy the minimum withholding amount on such shares, provided that the Biopharma Board of Directors or Compensation Committee, in their sole discretion, may withdraw consent for stock withholding at any time with respect to future vesting dates.  Notwithstanding the foregoing, the Biopharma Board of Directors and Compensation Committee will provide you with at least 90 days notice in the event that stock withholding will no longer be permitted.

·                  In the event that the Theravance and/or Biopharma Board of Directors or Compensation Committee withdraws consent for stock withholding, it will be necessary for you to satisfy the tax withholding obligations related to your Adjusted Theravance RSAs and the related Biopharma shares distributed in respect of your Theravance RSAs, as applicable, by means of another method permitted by your Award Agreement.

 

Definitions

 

The following definitions will apply to your Adjusted Theravance Awards:

 

·                  “Subsidiary” means any corporation (other than Biopharma) in an unbroken chain of corporations beginning with the Biopharma, if each of the corporations other than the last corporation in the unbroken chain owns shares possessing 50% or more of the total combined voting power of all classes of shares in one of the other corporations in such chain.

·                  “Affiliate” means any entity other than a Subsidiary, if Biopharma and/or one or more Subsidiaries own not less than 50% of such entity.

·                  “Parent” means any corporation (other than Biopharma) in an unbroken chain of corporations ending with Biopharma, if each of the corporations other than Biopharma owns stock possessing 50% or more of the total combined voting power of all classes of shares in one of the other corporations in such chain.

·                  “Involuntary Termination” means a termination of your service by reason of (i) an involuntary dismissal or discharge by Biopharma (or the Parent, Subsidiary or Affiliate employing you) for reasons other than Cause or (ii) your voluntary resignation following one of the following that is effected by Biopharma (or the Parent, Subsidiary or Affiliate) employing you without your consent (A) a change in your position with Biopharma (or the Parent, Subsidiary or Affiliate employing you) which materially reduces your level of responsibility, (B) a material reduction in your base compensation or (C) a relocation of your workplace by more than fifty miles from your workplace immediately prior to the Change in Control (as defined in the Biopharma 2013 Equity Incentive Plan) that also materially increases your one-way commute, provided that in either case a “separation from service” (as defined in the regulations under Code Section 409A) occurs.  In order for your resignation under clause (ii) to constitute an “Involuntary Termination,” all of the following requirements must be satisfied: (1) you must provide notice to Biopharma of your intent to resign and assert an Involuntary Termination pursuant to clause (ii) within 90 days of the initial existence of one or more of the conditions set forth in subclauses (A) through (C), (2) Biopharma (or the Parent, Subsidiary or Affiliate employing you) will have 30 days from the date of such notice to remedy the condition and, if it does so, you may withdraw your resignation or resign without any vesting acceleration, and (3) any termination of service under clause (ii) must occur within two years of the initial existence of one or more of the conditions set forth in subclauses (A) through (C).  Should Biopharma remedy the condition as set forth above and then one or more of the conditions arises again within two years following the occurrence of a Change in Control, you may assert clause (ii) again subject to all of the conditions set forth herein.

·                  “Cause” means (i) the unauthorized use or disclosure of the confidential information or trade secrets of Biopharma, a Parent, Subsidiary or Affiliate, which use causes material harm to Biopharma, a Parent, Subsidiary or Affiliate, (ii) conviction of a felony under the laws of the United States or any state thereof, (iii) gross negligence or (iv) repeated failure to perform lawful assigned duties for thirty days after receiving written notification from Biopharma’s Board of Directors.Exhibit 10.12

 

License Agreement

 

executed as of the date last below written (hereinafter referred to as “Effective Date”) by and between

 

JANSSEN PHARMACEUTICA, Naamloze Vennootschap, a business corporation organized under the laws of Belgium, entered in the Trade Register of Turnhout under Nr. 4203, having its principal office at B-2340 Beerse (Belgium), Turnhoutseweg 30, facsimile: +32 14 602 443 (hereinafter referred to as “JANSSEN”)

 

and

 

Theravance, INC., a businesses corporation organized under the laws of Delaware, United States of America, and having its principal office at South San Francisco, CA 94080, 901 Gateway Boulevard, facsimile: +1650-808-6095 (hereinafter referred to as “THERAVANCE”)

 

WITNESSETH

 

WHEREAS, JANSSEN has developed through its research a drug delivery system on the basis of cyclodextrin derivatives for the administration of therapeutic compounds with low aqueous solubility or chemical stability; and

 

WHEREAS, JANSSEN has accumulated and is the owner of certain proprietary information in connection with the use of hydroxypropyl-beta-cyclodextrin (“HPBCD”) in pharmaceutical applications; and

 

WHEREAS, JANSSEN owns or controls certain patent and/or patent applications in connection with the use of HPBCD in pharmaceutical applications; and

 

WHEREAS, THERAVANCE intends to use HPBCD in the development and commercialisation of injectable glycopeptide antibiotics for the treatment of gram positive bacteria in humans (e.g., TD-6424), and has requested a license from JANSSEN under the above-mentioned patents and proprietary information for said purpose; and

 

WHEREAS, JANSSEN is willing to grant such a license under the terms and conditions set forth hereinafter.

 

 

NOW, THEREFORE, in consideration of the premises, mutual covenants and obligations herein contained, it is agreed by and between the parties hereto as follows

 

Article 1 :  Definitions

 

Each term defined below shall, for the purpose of this Agreement, have the following meaning unless the context clearly requires otherwise and the singular shall include the plural and vice versa:

 

1.1                               “Affiliate” of a party to this Agreement shall mean any company which owns or controls at least forty per cent (40%) of the voting stock of such party or any other company at least forty per cent (40%) of whose voting stock is owned by or controlled by such owning or controlling company or by a party to this Agreement.

 

1.2                               “Field” shall mean injectable glycopeptide antibiotics for the treatment of gram positive bacteria in humans.

 

1.3                               “HPBCD” shall mean a selected hydroxypropyl derivative of beta-cyclodextrin for use in pharmaceutical applications, as covered by the Patents, which increases the aqueous solubility of drugs with a low aqueous solubility and/or chemical stability and the toxicological and pharmacokinetic profile of which is specified in the Know How.

 

1.4                               “Know-How” shall mean all scientific and technical data, information and knowledge concerning HPBCD and the use thereof in pharmaceutical applications now or hereafter owned by or under the control of JANSSEN. Know-How shall include but shall not be limited to pharmaceutical data, the summary of the toxicological studies and specific data on the intravenous route and the summary of metabolism and kinetic studies of HPBCD, all as indicated in Exhibit II hereto and made a part hereof.

 

1.5                               “Major Countries” shall mean any or all of the following: United States, UK, France, Germany, Spain and Italy.

 

1.6                               “Net Sales” shall mean the amount billed, invoiced or received (whichever is first) on first sales of any Product to non-Affiliate third-party customers by THERAVANCE or by any Affiliate or sublicensee of THERAVANCE in the Territory, less:

 

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(a)                                 Customary trade, quantity, or cash discounts and non-affiliated brokers’ or agents’ commissions actually allowed and taken, discounts, refunds, chargebacks, retroactive price adjustments, rebates, including but not limited to government mandated rebates, and any other allowances which effectively reduce the net selling price;

 

(b)                                 Amounts repaid or credited by reason of rejections or return; and/or

 

(c)                                  Any freight or other transportation costs, insurance charges, duties, tariffs and all sales and excise taxes based directly on sales or turnover or delivery or use of material produced under this Agreement and/or

 

(d)                                 Any other similar and customary deductions (as defined and accepted by generally accepted accounting principles (“GAAP”)), actually incurred.

 

Net Sales shall not include sales of Product by THERAVANCE to its sub-licensees.

 

1.7                               “Patents” shall mean the patents and patent applications owned or controlled (including patents that can be sublicensed) by JANSSEN or by any JANSSEN Affiliate claiming the use of HPBCD in pharmaceutical applications, including any continuations, continuations-in-part, divisions, reissues, renewals or extensions thereof or any supplementary protection certificate granted on the basis of the marketing authorisations obtained by THERAVANCE for the Product. An updated list of the Patents is attached hereto as Exhibit 1.

 

1.8                               “Process Patents” shall mean the patent owned, or licensed by JANSSEN, as specifically listed in Exhibit B, that claims a process for preparing HPBCD, including any extensions thereof or any supplementary protection certificate relating thereto or any other patent or patent application hereafter acquired by JANSSEN under which JANSSEN is licensed with the right to sub-license and which patent or patent applications claimed pertain to the process of manufacturing HPBCD.

 

1.9                               “Product” shall mean any pharmaceutical product in finished dosage form containing TD-6424 and HPBCD for the treatment of multi-drug resistant gram positive infections in humans the manufacture, use or sale of which infringes a Valid Claim of a Patent, and/or, utilises the proprietary information encompassed in the Know-How.

 

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1.10                        “Specifications” shall mean the basic specifications of HPBCD described in Exhibit III hereto and made a part hereof.

 

1.11                        “Territory” shall mean the world.

 

1.12                        “Valid Claim” shall mean a claim in a Patent which has not lapsed or become abandoned and which claim has not been declared invalid or that has not been finally rejected by a court of competent jurisdiction or a patent authority such as the European Patent Office or which has not been admitted to be invalid or unenforceable through reissue or disclaimer.

 

Article 2 :  Grant

 

2.1                               Subject to the terms and conditions of this Agreement, JANSSEN hereby grants THERAVANCE a world-wide sole license in the Field under the Patents (i.e. “sole license” means JANSSEN solely retains the right to practice under the Patents in the Field without the right to transfer, other than to an Affiliate, any rights under the Patents in the Field and THERAVANCE has an exclusive license under the Patents in the Field subject only to JANSSEN’s retained right) and a world-wide sole license in the Field under the Know-How for the sole purpose of developing, registering, making, having made, using and selling the Products and a non-exclusive license under the Process Patents for the sole purpose of making or having HPBCD made for the benefit of THERAVANCE, THERAVANCE’s Affiliates or THERAVANCE’s sublicensees for the Product in accordance with Article 5 below.

 

2.2                               Promptly following the Effective Date, and thereafter during the term of this Agreement, JANSSEN shall disclose the Know-How to THERAVANCE or to regulatory agencies as THERAVANCE deems necessary for the exercise of its rights hereunder.

 

2.3                               All rights herein granted, are personal to THERAVANCE and are indivisible and non-transferable, subject to Article 2.4 below, except that the rights granted to THERAVANCE may be exercised by any of THERAVANCE’s Affiliates.

 

2.4                               THERAVANCE will be entitled to grant sublicenses for the Product to third parties. THERAVANCE will notify JANSSEN of any third party so sublicensed by THERAVANCE. THERAVANCE shall procure that any such third party so sublicensed

 

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will abide by the obligations of this Agreement. In the event such a sublicense pertains to one or more Major Countries, THERAVANCE shall require Janssen’s prior written approval, such approval not to be unreasonably withheld.

 

2.5                               THERAVANCE acknowledges JANSSEN’s representation that, depending on the nature and scope of the responsibilities sublicensed to such a third party in the United States, it may be necessary for JANSSEN to consult with the Public Health Services Office of Technology (“OTT”) further to an agreement entered into between Janssen and OTT on March 26, 1998 (“OTT Agreement”).

 

Article 3 :  Royalties - Milestone payments

 

3.1                               In consideration of the rights and licenses granted by JANSSEN to THERAVANCE, THERAVANCE agrees to pay a royalty of two and one half percent (2.5%) on Net Sales for the license under the Know-How and a royalty of two and one half percent (2.5%) on Net Sales for the license under the Patents.

 

3.2                               THERAVANCE’s obligation to pay Patent royalties hereunder will remain in effect on a country-by-country basis until expiration of the last Patent in the subject country having a Valid Claim covering the Product.

 

THERAVANCE’s obligation to pay Know-How royalties shall remain in effect for a period of ten years following the first commercial sale of Product in any country of the Territory. No further Know-How royalties shall be payable after the expiry of the above ten-year period.

 

Notwithstanding the above, it is understood that the combined Patent and Know-How royalties payable by THERAVANCE shall amount to no less than four percent (4%) on a country-by-country basis for a period of five years following first commercial sale of the Product notwithstanding the prior expiry of the last Patent in the subject country having a Valid Claim covering the Product.

 

3.3                               In consideration of the rights and licenses granted hereunder, THERAVANCE agrees to pay milestone payments to JANSSEN in accordance with the following schedule:

 

·                                 US$ 200,000 shall be paid within thirty (30) days following the execution of this Agreement;

 

5

 

·                                 US$ 300,000 shall be paid within thirty (30) days following the first filing by THERAVANCE of a marketing authorisation application in relation to the Product;

 

·                                 US$ 300,000 shall be paid within thirty (30) days following the approval of a marketing authorisation application in relation to the Product granted to THERAVANCE, any of its Affiliates or sub-licensee in the United States;

 

·                                 US$ 200,000 shall be paid within thirty (30) days following approval of the first marketing authorisation of the Product in the European Union.

 

The foregoing milestone payments are non-refundable and not creditable against future royalties. In the event that the Product fails at any stage prior to any of the above milestone payments becoming due, such remaining milestone payments shall be payable if the failed Product is replaced by THERAVANCE with a back-up compound in the Field which requires HPBCD for its development and/or commercialisation.

 

Article 4 :  Sales and Royalty Reports - Royalty Payments

 

4.1                               Ninety (90) days following each calendar quarter, THERAVANCE shall submit to JANSSEN a sales report showing its total sales of Product in Territory in units and Net Sales value. Such sales report shall also include a royalty report containing a calculation of the royalty due and payable to JANSSEN.

 

4.2                               Together with such royalty report, THERAVANCE shall pay the royalty due and payable. All royalty payments to be made by THERAVANCE to JANSSEN shall be converted into US Dollars at the average rate of exchange for the calendar quarter for which royalty payments are being remitted according to THERAVANCE’s normal procedures, as consistently applied by THERAVANCE for its other products.

 

All payments shall be made by wire transfer to a designated JANSSEN account within ninety (90) days following the end of each calendar quarter. In the event that royalties are payable with respect to Net Sales in a country whose currency cannot be freely converted, such currency shall be converted in accordance with the normal procedures consistently applied by THERAVANCE

 

6

 

4.3                               Any income or other taxes which THERAVANCE is required by law to pay or withhold on behalf of JANSSEN with respect to milestones or royalties payable to JANSSEN under this Agreement shall be deducted from the amount due. THERAVANCE shall furnish JANSSEN with proof of such payments. Any such tax required to be paid or withheld shall be an expense of and borne solely by JANSSEN. THERAVANCE shall provide JANSSEN with a certificate or other documentary evidence to enable JANSSEN to support a claim for a refund or a foreign tax credit with respect to any such tax so withheld or deducted by THERAVANCE.

 

4.4                               THERAVANCE shall keep true and accurate books clearly specifying its sales per country of Territory in Net Sales value as well as in units sold for the purpose of making such reports.

 

JANSSEN shall have the right to nominate an independent certified public accountant acceptable to and approved by THERAVANCE who shall have access, on reasonable notice, to THERAVANCE and its Affiliates’ records during reasonable business hours for the purpose of verifying the royalties payable as provided in this Agreement for the two preceding years. This right may not be exercised more than once in any calendar year, and once a calendar year is audited it may not be re-audited. The said accountant shall disclose to JANSSEN only information for the purpose of verifying the accuracy of the royalty report and the royalty payments made according to this Agreement.

 

Any adjustment required by such audit shall be made within thirty (30) days of the determination by the accountants. If the adjustment payable to JANSSEN is greater than five percent (5%) of the amount paid for the calendar year, then the cost to JANSSEN for the audit shall be paid by THERAVANCE.

 

Article 5 :  Supply of HPBCD

 

5.1                               In order to be assured of a source being able to supply constant standard quality of pharmaceutical grade HPBCD complying with the Specifications and the toxicological and pharmacokinetic data contained in JANSSEN’s Know-How, JANSSEN has entered into an agreement with ROQUETTE FRERES a manufacturer of cyclodextrins which agreement provides that HPBCD produced by ROQUETTE FRERES shall comply with the Specifications. The data contained within the JANSSEN Know-How have been validated utilising HPBCD supplied by the said supplier.

 

7

 

5.2                               It will be the responsibility of THERAVANCE to procure supplies of HPBCD either from ROQUETTE FRERES or from an alternative supplier under terms and conditions to be agreed separately with such supplier, provided that, at THERAVANCE’s request, JANSSEN shall assist THERAVANCE in its negotiations with ROQUETTE FRERES regarding the terms and conditions of supply of HPBCD. If despite good faith efforts ROQUETTES FRERES and THERAVANCE would be unable to enter into a supply agreement, THERAVANCE and JANSSEN will meet following THERAVANCE’s request to discuss in good faith potential course of action, including the use of alternative suppliers. It is understood by THERAVANCE that to the extent it wants to utilise an alternative supplier, JANSSEN can not provide a guarantee that such supplier is capable of supplying pharmaceutical grade HPBCD nor that the specifications of such alternative supplier would comply with the data contained within the JANSSEN Know-How.

 

Article 6 :  Warranties

 

6.1                               JANSSEN represents and warrants to the best of its knowledge, that as of the date hereof it has title to and ownership of the Patents and Know-How.

 

6.2                               JANSSEN makes no representation or warranty, express or implied, that the use of HPBCD shall eventually result in marketable Product. No further statement of warranty covering HPBCD shall be binding on JANSSEN without the written consent of an authorised officer of JANSSEN.

 

6.3                               Each party further warrants that it has the right to enter into this Agreement and that it is under no obligation to any third party, express or implied, conflicting with the terms and conditions of this Agreement.

 

6.4                               Nothing in this Agreement shall be considered as a warranty, either express or implied, that the use of HPBCD in Products will not infringe any third party’s patent rights.

 

Article 7 :  Product liability

 

7.1                               THERAVANCE agrees to indemnify and hold JANSSEN harmless from and against all claims, actions, direct damages, losses, costs and expenses of any kind resulting from or arising out of claims by third parties based on product liability or similar theories

 

8

 

relating to the development, manufacturing, transportation, storage, promotion or sale of the Product, except to the extent such losses arose or resulted from faulty conduct or negligence by JANSSEN in supplying the Know-How and so long as (i) JANSSEN allows THERAVANCE to participate in or, at THERAVANCE’s sole option but without any obligation, to conduct at THERAVANCE’s expense the defense of a claim or action for which indemnification is sought under this Article, and (ii) JANSSEN does not compromise or settle such claim or action without THERAVANCE’s prior written consent, which shall not be unreasonably withheld.

 

7.2                               In no event shall THERAVANCE be liable for any consequential or indirect damage of JANSSEN whatsoever.

 

Article 8 :  Patent Infringement

 

8.1                               If either party learns of an infringement of a Patent by a third party, using HPBCD in the promotion or sale of a product substantially similar to a Product, the party learning of the alleged infringement shall promptly inform the other party.

 

8.1.1                     In case of such an infringement, JANSSEN shall have the right (but not the obligation), in its own name and at its own cost, to either bring an enforcement action to stop the alleged infringement or settle with the alleged infringer; provided, however, that no such settlement shall diminish or otherwise affect THERAVANCE’s rights hereunder, unless THERAVANCE gives its prior written consent. THERAVANCE will give reasonable assistance to JANSSEN in such action against a third party, including making available to JANSSEN records, information and evidence relevant to the infringement and, if necessary, being named a party in such action.

 

All sums awarded or received in settlement of such suit shall be equally divided between JANSSEN and THERAVANCE, after having reimbursed both parties for all reasonable out of pocket expenses incurred in bringing or assisting in such action.

 

8.1.2                     Whenever JANSSEN elects not to take action against such infringement within a reasonable period of time not to exceed three (3) months THERAVANCE will have the right but not the obligation to take action in its own name, at its own expense and by counsel of its own choice.

 

9

 

JANSSEN will give all reasonable assistance in taking such action, including being a named party and making available to THERAVANCE records, information and evidence relevant to the infringement. THERAVANCE will be entitled to all recovery monies awarded or received in settlement of such suit. Any out of pocket expenses incurred by JANSSEN in assisting THERAVANCE in such action will be reimbursed by THERAVANCE out of the recovery monies awarded or received.

 

Whenever THERAVANCE so elects to take action JANSSEN will at any time be entitled to be represented in such action at its own cost and by counsel of its own choice.

 

THERAVANCE will in no event settle or consent to a judgement or other final disposition of a suit without the prior written approval of JANSSEN, which shall not unreasonably be withheld. Furthermore, whenever during such action, the infringing party would invoke a declaration of invalidity of the Patents, JANSSEN will be entitled to take over the direction of the suit.

 

8.1.3                     In the event that all of the claims included within the Patents under which THERAVANCE is developing, registering, or selling the Product shall be held invalid or not infringed by a court of competent jurisdiction, whether or not there is a conflicting decision by another court of jurisdiction, THERAVANCE may pay the royalties which would have otherwise been due under the Patent on sales covered by such claims into an escrow account until such judgement shall be finally reversed by an unappealed or unappealable decree of a court of competent jurisdiction of higher authority, in which event royalty payments shall be resumed and the full amount in escrow shall become due and payable. In the event the judgement is upheld, the full escrow amount will revert to THERAVANCE and no further royalties under the Patents will be due.

 

8.2                               THERAVANCE shall be responsible at its own cost and responsibility to defend against any claim or allegation that the development, manufacturing or commercialisation of the Product infringes a third party patent.

 

Article 9 :  Regulatory Matters

 

9.1                               THERAVANCE shall be responsible at its own cost to file and maintain the marketing authorisation applications in connection with Product and in general to procure any license, registration or approval required to use HPBCD in the import, manufacture and

 

10

 

sale of the Product in any country of Territory where THERAVANCE decides to commercialise Product.

 

All scientific and technical data, information and knowledge developed by THERAVANCE with respect to the Product, including the registration file shall be exclusively owned by THERAVANCE and JANSSEN shall have no right to use such THERAVANCE’s information.

 

9.2                               JANSSEN shall reasonably assist THERAVANCE whenever the regulatory authorities in any country of the Territory have questions in relation to HPBCD and the use thereof in pharmaceutical applications. Any request for additional information specifically related to HPBCD shall be referred to JANSSEN and JANSSEN shall use reasonable efforts to address the same in due time in consultation with THERAVANCE. To the extent necessary representatives of both parties will meet to discuss any such requests.

 

Article 10 :  Adverse Drug Reporting

 

Each party will notify the other in writing of any adverse drug reaction or other unusual physiochemical, pharmacologic, toxicological or pharmacokinetic finding in relation to the use of HPBCD in the Product including, without limitation, any experimental or clinical use. The parties will establish a standard operating procedure in relation to ADE-reporting.

 

Article 11 :  Commercialisation

 

All business decisions, including but not limited to the selection of the trademark(s) for Product, pricing, reimbursement, package design, sales and promotional activities and the decision to launch or continue to market a Product in a particular country in the Territory, shall be within the sole discretion and responsibility of THERAVANCE.

 

Notwithstanding the above it is agreed that THERAVANCE shall otherwise use reasonable efforts consistent with its normal business practices to market and promote Product. In doing so it will use the same level of effort as with its other, similar products of similar sales potential. Failure to use reasonable efforts as qualified herein can be considered a material breach in accordance with the provisions of Article 14.1.

 

11

 

Article 12 :  Confidentiality - Limitations on Use

 

12.1                        Neither party shall disclose proprietary or confidential information of the other party to any third party without prior written consent of the other party, except and to the extent as required by law, including without limitation to governmental regulatory agencies, and is thereafter publicly disclosed or made available to the public by operation of law, or except that any of such confidential and proprietary information can be shown by the receiving party’s written records:

 

(i)                                     to be in its possession or in the possession of its employees prior to such disclosure to the receiving party; or

 

(ii)                                  is now or hereafter becomes available as public knowledge or literature through no fault of the receiving party; or

 

(iii)                               is received by such party from an independent third party who did not receive the information directly or indirectly from the other party.

 

Such proprietary and confidential information shall be disclosed to each party’s personnel only on a strict need-to-know basis.

 

The obligation of confidentiality contained in this Article, shall survive the expiration and/or termination of this Agreement for five (5) years.

 

12.2                        In the event that THERAVANCE licenses the Product to third parties or otherwise involves third parties in the manufacturing and/or commercialisation of Product and such third party needs to receive certain Know-How, THERAVANCE shall, prior to disclosing any such Know-How enter into a confidentiality undertaking that is essentially similar to the one contained herein and shall in any event provide such Know-How on a strict need-to-know basis.

 

Article 13 :  Term

 

Unless sooner terminated in accordance with the provisions of Article 14, this Agreement shall remain in full force and effect from the Effective Date until the date THERAVANCE has no further royalty obligation towards JANSSEN under the provisions of Article 3.

 

12

 

Upon termination of THERAVANCE’s royalty obligations for Know-How, THERAVANCE will have a royalty-free right to use the Know-How in the manufacture, use and sale of Product.

 

Article 14 :  Termination

 

14.1                        In the event JANSSEN or THERAVANCE or their respective Affiliates (or licensees or distributors in case of THERAVANCE) are in breach of any of the respective obligations and conditions contained in this Agreement the other party shall be entitled to give the party in breach notice requiring it to make good such breach. If such breach constitutes a material breach and is not cured or there is no commencement of cure within sixty (60) days after receipt of such notice, including good faith efforts by senior management of both parties to overcome the issue, the notifying party shall be entitled (without prejudice to any of its other rights conferred on it by this Agreement) to terminate this Agreement by giving a notice to take effect immediately. The right of either party to terminate this Agreement in accordance with this Article 14.1 shall not be affected in any way by its waiver of, or failure to take action with respect to any previous breach.

 

14.2                        In the event that one of the parties hereto shall go into liquidation, a receiver or a trustee be appointed over a significant and/or material property or estate of that party and said receiver or trustee is not removed within sixty (60) days, or the party makes an assignment for the benefit of creditors, and whether any of the aforesaid events be the outcome of the voluntary act of that party, or otherwise, the other party shall be entitled to terminate this Agreement forthwith by giving a written notice to the first party.

 

14.3                        THERAVANCE may terminate this Agreement in its entirety upon one (1) month written notice to JANSSEN.

 

Article 15 :  Effects of Termination

 

In case of termination of this Agreement in accordance with Article 14 and if there is no good faith dispute between the parties, THERAVANCE shall immediately refrain from formulating and selling or offering for sale Product in Territory and return all proprietary and confidential Know-How and information relative to HPBCD together with all physical embodiments thereof shall be returned to JANSSEN. Furthermore THERAVANCE shall make all payments accrued under this Agreement prior to the effective termination date

 

13

 

Notwithstanding the above, THERAVANCE may reasonably sell out its remaining stock of Product which THERAVANCE has in stock at the moment of termination of this Agreement, provided it shall pay the royalties due and payable on such sales.

 

Article 16 :  Force Majeure

 

Neither party hereto shall be liable to the other party for failure or delay in meeting any obligation hereunder due to circumstances beyond such party’s reasonable control such as, but not limited to, strikes, lockouts, acts of God, riots, war, fire, flood, embargoes, failure of power, acts of government or of any agency, provided that the party affected shall immediately inform the other party about the cause of such delay. The party so affected shall use its reasonable efforts to eliminate, cure and overcome any such causes and resume performance of its covenants with all possible speed.

 

Article 17 :  Severability

 

If any clause or provision of this Agreement or the application of any such clause or provision in a particular context or to a particular situation or circumstance should be held unenforceable or otherwise in conflict with or in violation of any applicable law, by, or as a result of determination of any court, tribunal or authority acting in a judicial capacity of competent jurisdiction, the decision of which is binding upon the parties, the parties agree that such determination shall not affect the validity and application of such clause or provision in contexts, situations or circumstances other than that in or to which it is held unenforceable and shall only apply for those countries of the Territory amenable under the law applied by such tribunal, court or authority.

 

Parties further agree to replace any clause or provision so held unenforceable in a lawful manner, reflecting to the extent possible, the economic, business and other purposes of the clause or provision held void or unenforceable in such specific contexts, situations or circumstances.

 

Article 18 :  General provisions

 

18.1                        No damages shall be owed by either party to the other if this Agreement or any part of it is held invalid or void at any time by virtue of future acts of legislation.

 

18.2                        Neither party shall assign or otherwise dispose of the whole or any part of its rights under this Agreement without the prior written consent of the other party, except that

 

14

 

either party may assign this Agreement to one of its Affiliates and except as provided in 18.5.

 

18.3                        Neither party nor its employees or representatives are under any circumstances to be considered as employees or agents or representatives of the other party. Neither party nor its employees have the authority or power to bind the other party or contract in the other party’s name.

 

18.4                        Save as required by law, no announcement or circular in connection with the subject matter of this Agreement shall be made by or on behalf of JANSSEN or THERAVANCE without the prior approval of the other party, such approval not to be unreasonably withheld. This Agreement may be filed with regulatory authorities as required by law.

 

18.5                        A change of control of THERAVANCE through a merger, acquisition or sale of substantially all assets (including the assets relating to the development of the Product) shall not by and of itself give rise to the right for JANSSEN to terminate the License, provided always that prior to the closing of any such transaction the acquiring party has agreed in writing to abide by the terms and conditions of the License Agreement.

 

18.6                        No rights are granted by either party to the other except those expressly set forth in this Agreement.

 

Article 19 :  Dispute Resolution - Applicable Law

 

The Parties hereto shall attempt to settle any dispute arising out of or relating to this Agreement in an amicable way. In the event that such attempts should fail, then the Parties can take such actions as are available at law under the laws of the State of New York, United States of America, with venue for any such dispute being New York City, New York..

 

Article 20 :  Notices

 

Any notice required or permitted under this Agreement shall be made in writing either by registered mail or facsimile to the parties at their respective addresses first above written or as subsequently changed by notice duly given.

 

15

 

Notices by registered mail are deemed to be given after three (3) days of mailing. Notices by facsimile shall be deemed to be given one day after the date on which such notice has been given.

 

Article 21 :  Headings

 

The section headings in this Agreement are for convenience only and shall not in any way affect the meaning or interpretation of this Agreement.

 

IN WITNESS WHEREOF, JANSSEN and THERAVANCE have caused this instrument to be executed in duplicate by their respective duly authorised officers.

 

 

	
 
    	
 
    	
THERAVANCE, INC.
    
	
 
    	
 
    	
This 14th day of May,   2002
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Brad Shafer
    	
 
    	
By
    	
/s/ David Brinkley
    
	
(title)
    	
Brad Shafer
    	
(title)
    	
David Brinkley
    
	
 
    	
Senior Vice President
    	
 
    	
Senior Vice President
    
	
 
    	
General Counsel
    	
 
    	
Commercial Development
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
JANSSEN PHARMACEUTICA N.V.
    
	
 
    	
This 14th day of   May 2002
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Rik Carlier
    	
 
    	
/s/ Guy Vercauteren
    
	
Rik Carlier
    	
Guy Vercauteren
    
	
Licensing Director
    	
International Vice President,
    
	
 
    	
Business Development
    
						

 

16

 

EXHIBIT I

 

PATENTS

 

SCHEDULE A

 

Hydroxypropyl-β-cyclodextrin patents (Müller)

 

“PHARMACEUTICAL COMPOSITIONS CONTAINING DRUGS WHICH ARE INSTABLE OR SPARINGLY SOLUBLE IN WATER AND METHODS FOR THEIR PREPARATION”

 

	
Country
    	
 
    	
Type
    	
 
    	
Application
   Number
    	
 
    	
Filing Date
    	
 
    	
Patent
   Number
    	
 
    	
Grant Date
    	
 
    	
Expiry Date
    	
 
    	
Abandonment
   Date
    
	
Australia
    	
 
    	
PCT
    	
 
    	
38352/85
    	
 
    	
20-Dec-84
    	
 
    	
565966
    	
 
    	
18-Jan-88
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
Bahrain
    	
 
    	
REG
    	
 
    	
 
    	
 
    	
 
    	
 
    	
BP980
    	
 
    	
06-Apr-94
    	
 
    	
10-Mar-08
    	
 
    	
 
    
	
Bermuda
    	
 
    	
REG
    	
 
    	
 
    	
 
    	
 
    	
 
    	
91
    	
 
    	
15-Feb-94
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
Canada
    	
 
    	
 
    	
 
    	
470876
    	
 
    	
21-Dec-84
    	
 
    	
1222697
    	
 
    	
09-Jun-87
    	
 
    	
09-Jun-04
    	
 
    	
 
    
	
Cyprus (Greek)
    	
 
    	
REG
    	
 
    	
1689
    	
 
    	
27-Jan-93
    	
 
    	
1689
    	
 
    	
29-Mar-93
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
Denmark
    	
 
    	
PCT
    	
 
    	
3595/85
    	
 
    	
20-Dec-84
    	
 
    	
 
    	
 
    	
 
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
EPO
    	
 
    	
 
    	
 
    	
84115965
    	
 
    	
20-Dec-84
    	
 
    	
149197
    	
 
    	
21-Mar-90
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
Austria
    	
 
    	
EPO
    	
 
    	
84115965
    	
 
    	
20-Dec-84
    	
 
    	
149197
    	
 
    	
21-Mar-90
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
Belgium
    	
 
    	
EPO
    	
 
    	
84115965
    	
 
    	
20-Dec-84
    	
 
    	
149197
    	
 
    	
21-Mar-90
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
France
    	
 
    	
EPO
    	
 
    	
84115965
    	
 
    	
20-Dec-84
    	
 
    	
149197
    	
 
    	
21-Mar-90
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
Germany
    	
 
    	
EPO
    	
 
    	
84115965
    	
 
    	
20-Dec-84
    	
 
    	
149197
    	
 
    	
21-Mar-90
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
Great Britain
    	
 
    	
EPO
    	
 
    	
84115965
    	
 
    	
20-Dec-84
    	
 
    	
149197
    	
 
    	
21-Mar-90
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
Italy
    	
 
    	
EPO
    	
 
    	
84115965
    	
 
    	
20-Dec-84
    	
 
    	
149197
    	
 
    	
21-Mar-90
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
Luxemburg
    	
 
    	
EPO
    	
 
    	
84115965
    	
 
    	
20-Dec-84
    	
 
    	
149197
    	
 
    	
21-Mar-90
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
Netherlands
    	
 
    	
EPO
    	
 
    	
84115965
    	
 
    	
20-Dec-84
    	
 
    	
149197
    	
 
    	
21-Mar-90
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
Sweden
    	
 
    	
EPO
    	
 
    	
84115965
    	
 
    	
20-Dec-84
    	
 
    	
149197
    	
 
    	
21-Mar-90
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
Switzerland
    	
 
    	
EPO
    	
 
    	
84115965
    	
 
    	
20-Dec-84
    	
 
    	
149197
    	
 
    	
21-Mar-90
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
Finland
    	
 
    	
PCT
    	
 
    	
85/3198
    	
 
    	
20-Dec-84
    	
 
    	
86140
    	
 
    	
27-Jul-92
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
Hong Kong
    	
 
    	
REG
    	
 
    	
 
    	
 
    	
 
    	
 
    	
1312/1993
    	
 
    	
25-Nov-93
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
Hungary
    	
 
    	
PCT
    	
 
    	
795/85
    	
 
    	
20-Dec-84
    	
 
    	
200943
    	
 
    	
28-Apr-90
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
Japan
    	
 
    	
PCT
    	
 
    	
500307/85
    	
 
    	
20-Dec-84
    	
 
    	
1852300
    	
 
    	
21-Jun-94
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
Korea S.
    	
 
    	
PCT
    	
 
    	
85-700172
    	
 
    	
20-Dec-84
    	
 
    	
59912
    	
 
    	
03-Mar-93
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
Norway
    	
 
    	
PCT
    	
 
    	
853070
    	
 
    	
20-Dec-84
    	
 
    	
171888
    	
 
    	
19-May-93
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
PCT
    	
 
    	
 
    	
 
    	
PCT/EP84/00417
    	
 
    	
20-Dec-84
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Singapore
    	
 
    	
REG
    	
 
    	
 
    	
 
    	
 
    	
 
    	
248/93
    	
 
    	
16-Jun-93
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
South Africa
    	
 
    	
 
    	
 
    	
84/10042
    	
 
    	
21-Dec-84
    	
 
    	
84/10042
    	
 
    	
25-Sep-85
    	
 
    	
21-Dec-04
    	
 
    	
 
    
	
Tanganyika
    	
 
    	
REG
    	
 
    	
 
    	
 
    	
 
    	
 
    	
2465
    	
 
    	
30-Apr-93
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
Trinidad &   Tobago
    	
 
    	
REG
    	
 
    	
 
    	
 
    	
 
    	
 
    	
17/1993
    	
 
    	
16-Mar-93
    	
 
    	
20-Dec-04
    	
 
    	
 
    
	
USA
    	
 
    	
PCT
    	
 
    	
06/756498
    	
 
    	
20-Dec-84
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
02-Nov-88
    
	
USA
    	
 
    	
CONT
    	
 
    	
07/264726
    	
 
    	
31-Oct-88
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Zanzibar
    	
 
    	
REG
    	
 
    	
 
    	
 
    	
 
    	
 
    	
P8/1993
    	
 
    	
22-Apr-94
    	
 
    	
20-Dec-04
    	
 
    	
 
    

 

 

Schedule B

 

Patents re the manufacture of hydroxypropyl-β-cyclodextrin

 

“REGIOSELECTIVE SUBSTITUTIONS IN CYCLODEXTRINS”

 

	
Country
    	
 
    	
Type
    	
 
    	
Application
   Number
    	
 
    	
Filing Date
    	
 
    	
Patent
   Number
    	
 
    	
Grant Date
    	
 
    	
Expiry Date
    	
 
    	
Abandonment
   Date
    
	
Australia
    	
 
    	
PCT
    	
 
    	
53587/90
    	
 
    	
30-Mar-1990
    	
 
    	
631628
    	
 
    	
26-Mar-1993
    	
 
    	
30-Mar-2010
    	
 
    	
 
    
	
Canada
    	
 
    	
PCT
    	
 
    	
2047726-1
    	
 
    	
30-Mar-1990
    	
 
    	
2047726
    	
 
    	
17-Apr-2001
    	
 
    	
30-Mar-2010
    	
 
    	
 
    
	
EPO
    	
 
    	
PCT
    	
 
    	
90905461.1
    	
 
    	
30-Mar-1990
    	
 
    	
465535
    	
 
    	
3-Jun-1998
    	
 
    	
30-Mar-2010
    	
 
    	
 
    
	
Austria
    	
 
    	
EPO
    	
 
    	
90905461.1
    	
 
    	
30-Mar-1990
    	
 
    	
465535
    	
 
    	
3-Jun-1998
    	
 
    	
30-Mar-2010
    	
 
    	
 
    
	
Belgium
    	
 
    	
EPO
    	
 
    	
90905461.1
    	
 
    	
30-Mar-1990
    	
 
    	
465535
    	
 
    	
3-Jun-1998
    	
 
    	
30-Mar-2010
    	
 
    	
 
    
	
Denmark
    	
 
    	
EPO
    	
 
    	
90905461.1
    	
 
    	
30-Mar-1990
    	
 
    	
465535
    	
 
    	
3-Jun-1998
    	
 
    	
30-Mar-2010
    	
 
    	
 
    
	
France
    	
 
    	
EPO
    	
 
    	
90905461.1
    	
 
    	
30-Mar-1990
    	
 
    	
465535
    	
 
    	
3-Jun-1998
    	
 
    	
30-Mar-2010
    	
 
    	
 
    
	
Germany
    	
 
    	
EPO
    	
 
    	
90905461.1
    	
 
    	
30-Mar-1990
    	
 
    	
465535
    	
 
    	
3-Jun-1998
    	
 
    	
30-Mar-2010
    	
 
    	
 
    
	
Great Britain
    	
 
    	
EPO
    	
 
    	
90905461.1
    	
 
    	
30-Mar-1990
    	
 
    	
465535
    	
 
    	
3-Jun-1998
    	
 
    	
30-Mar-2010
    	
 
    	
 
    
	
Italy
    	
 
    	
EPO
    	
 
    	
90905461.1
    	
 
    	
30-Mar-1990
    	
 
    	
465535
    	
 
    	
3-Jun-1998
    	
 
    	
30-Mar-2010
    	
 
    	
 
    
	
Luxemburg
    	
 
    	
EPO
    	
 
    	
90905461.1
    	
 
    	
30-Mar-1990
    	
 
    	
465535
    	
 
    	
3-Jun-1998
    	
 
    	
30-Mar-2010
    	
 
    	
 
    
	
Netherlands
    	
 
    	
EPO
    	
 
    	
90905461.1
    	
 
    	
30-Mar-1990
    	
 
    	
465535
    	
 
    	
3-Jun-1998
    	
 
    	
30-Mar-2010
    	
 
    	
 
    
	
Spain
    	
 
    	
EPO
    	
 
    	
90905461.1
    	
 
    	
30-Mar-1990
    	
 
    	
465535
    	
 
    	
3-Jun-1998
    	
 
    	
30-Mar-2010
    	
 
    	
 
    
	
Sweden
    	
 
    	
EPO
    	
 
    	
90905461.1
    	
 
    	
30-Mar-1990
    	
 
    	
465535
    	
 
    	
3-Jun-1998
    	
 
    	
30-Mar-2010
    	
 
    	
 
    
	
Switzerland
    	
 
    	
EPO
    	
 
    	
90905461.1
    	
 
    	
30-Mar-1990
    	
 
    	
465535
    	
 
    	
3-Jun-1998
    	
 
    	
30-Mar-2010
    	
 
    	
 
    
	
Finland
    	
 
    	
PCT
    	
 
    	
914620
    	
 
    	
30-Mar-1990
    	
 
    	
101385
    	
 
    	
15-Jun-1998
    	
 
    	
30-Mar-2010
    	
 
    	
 
    
	
Hong Kong
    	
 
    	
 
    	
 
    	
98109960
    	
 
    	
18-Aug-1998
    	
 
    	
HK100935
    	
 
    	
28-May-1999
    	
 
    	
30-Mar-2010
    	
 
    	
 
    
	
Hungary
    	
 
    	
PCT
    	
 
    	
2934/90
    	
 
    	
30-Mar-1990
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
29-Oct-2000
    
	
Japan
    	
 
    	
PCT
    	
 
    	
505324/90
    	
 
    	
30-Mar-1990
    	
 
    	
2792610
    	
 
    	
19-Jun-1998
    	
 
    	
30-Mar-2010
    	
 
    	
 
    
	
Korea S.
    	
 
    	
PCT
    	
 
    	
91-701230
    	
 
    	
30-Mar-1990
    	
 
    	
163440
    	
 
    	
7-Sep-1998
    	
 
    	
7-Sep-2013
    	
 
    	
 
    
	
Norway
    	
 
    	
PCT
    	
 
    	
19913871
    	
 
    	
30-Mar-1990
    	
 
    	
304269
    	
 
    	
23-Nov-1998
    	
 
    	
30-Mar-2010
    	
 
    	
 
    
	
PCT
    	
 
    	
 
    	
 
    	
PCT/EP90/00524
    	
 
    	
30-Mar-1990
    	
 
    	
 
    	
 
    	
 
    	
 
    	
3-Oct-1991
    	
 
    	
 
    
	
USA
    	
 
    	
 
    	
 
    	
633402
    	
 
    	
17-Dec-1990
    	
 
    	
5096893
    	
 
    	
17-Mar-1992
    	
 
    	
3-Apr-2009
    	
 
    	
 
    
	
USA
    	
 
    	
PARENT
    	
 
    	
332606
    	
 
    	
3-Apr-1989
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
3-Apr-1990
    

 

18

 

EXHIBIT II

 

KNOW-HOW TO BE PROVIDED UPON THE EFFECTIVE DATE

 

·              Pharmaceutical data

 

·                                          Physical, chemical and microbiological specifications + analysis methodology and validation

·                                          Reference substance sample

·                                          Production method with specification of solvents used

·                                          Quality of the starting materials used for the production and controls during production

·                                          Evidence of Chemical Structure:

 

·                                          Physical and chemical data (solubility,...)

 

·                                          Impurities (related impurities -residual solvents - inorganic impurities...):

 

·              Nature

·              Control method and validation

·              Limits

 

·                                          Summary of toxicological studies on the intravenous route.

 

·                                          Summary of metabolism and kinetic studies of Encapsin

 

·                                          Access to the Drug Master File and/or similar regulatory documents on a need-to-know basis in connection with TD-6424

 

19

 

EXHIBIT III

 

SPECIFICATIONS

 

	
Test description
    	
 
    	
Specifications
    	
 
    	
Method
    
	
Appearance
    	
 
    	
White to almost white powder
    	
 
    	
Visual inspection.
    
	
Identity by IR spectroscopy
    	
 
    	
Complies with reference spectrum
    	
 
    	
Ph Eur
    
	
Identity by   Fehling’s reagent tests:
   Determination 1
   Determination 2
    	
 
    	
1. The solution keeps clear and blue
   2. A reddish-brown precipitate is formed
    	
 
    	
E/ID/0006/01
    
	
Assay β-cyclodextrin
    	
 
    	
≤ 1.0 %
    	
 
    	
HPLC, E/A/0001/01
    
	
Relative complexation capacity
    	
 
    	
85% - 110%
    	
 
    	
UV absorbance
    
	
Molar substitution degree
    	
 
    	
0.58-0.73
    	
 
    	
IR spectroscopy
    
	
Light absorbing impurities
    	
 
    	
< 0.5 at 230 - 400 nm
    	
 
    	
UV absorbance, E/S/7005/01
    
	
Appearance of solution 10% w/v aq.
    	
 
    	
Clear and colourless
    	
 
    	
Ph Eur
    
	
pH
    	
 
    	
5.0-7.5
    	
 
    	
E/PH/0001/01
    
	
Loss on drying
    	
 
    	
≤ 5.0 %
    	
 
    	
Ph Eur
    
	
Sulphated ash
    	
 
    	
≤ 0.2 %
    	
 
    	
Ph Eur
    
	
Reducing Substances
    	
 
    	
≤ 1.0 %
    	
 
    	
β-cyclodextrin titration, USP
    
	
Heavy metals
    	
 
    	
≤ 10 ppm
    	
 
    	
Limit test, Ph Eur
    
	
Specific optical rotation
    	
 
    	
+138° - +144°-
    	
 
    	
Ph Eur
    
	
Total viable   aerobic count:
   Bacteria
   Fungi and yeasts
    	
 
    	
 

≤100 CFU/g of product
   ≤100 CFUI of product
    	
 
    	
USP
    
	
Pathogens:
    Salmonella sp.
   Escherichia coli  
    Staphylococcus aureus  
    Pseudomonas aeruginosa
    	
 
    	
 

absent in 10 g of product
   absent in 10 g of product
   absent in 10 g of product
   absent in 10 g of product
    	
 
    	
USP
    
	
Bacterial endotoxins
    	
 
    	
< 25 EU/g
    	
 
    	
LAL, Ph. Eur.
    
	
Residual solvent:  1,2-propanediol
    	
 
    	
≤ 5000 ppm
    	
 
    	
GC
    
	
Propylene oxide (if tested)
    	
 
    	
≤1 ppm
    	
 
    	
CGC
    

 

20

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