Document:

exv10w15

Exhibit 10.15

CONFIDENTIAL

EXECUTION VERSION

DEVELOPMENT, LICENSE AND SERVICES AGREEMENT

([***]/METHSCOPOLAMINE PRODUCT)

     This Development, License and Services Agreement (including all Schedules hereto, this
“Agreement) is made and dated as of March 19, 2008 (the “Effective Date”), by and
between Cornerstone BioPharma, Inc., a Delaware corporation (“Cornerstone”), and Neos
Therapeutics, L.P., a Texas limited partnership (“Neos” and together with Cornerstone, the
“Parties”).

     WHEREAS, Neos is engaged in providing development and manufacturing services to pharmaceutical
companies and owns dynamic variable release technologies that result in products that show
controlled release characteristics in vitro (the “DVR Technology”), which technologies are
in part the subject of the pending patent application[s] set forth in Schedule A hereto
(the “DVR Patent Application[s]”);

     WHEREAS, Cornerstone is engaged in research, development, marketing and sale of human
pharmaceutical products, wishes to utilize the DVR Technology to develop the Product (as defined
below) for Commercialization (as defined below) in the Territory (as defined below), and wishes to
engage Neos to perform the Development Work (as defined below), including the production of
quantities of GMP Product for use as clinical material;

     WHEREAS, Neos has the capabilities and is willing to provide such development activities and
manufacturing services and to license rights under the DVR Technology and the DVR Patent
Applications in the Territory to Cornerstone, subject to the terms and conditions set forth herein;

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

ARTICLE 1.

DEFINITIONS

     In addition to the other terms defined elsewhere herein, the following terms and phrases shall
have the following meanings when used in this Agreement.

     “Affiliate” shall mean, with respect to any person, any person that directly or
indirectly through stock ownership or through other arrangements either controls, or is controlled
by or is under common control with, such person. The direct or indirect ownership of over 50% of
the outstanding voting securities of an entity, or the right to receive over 50% of the profits or
earnings of an entity, and such other relationships as in fact results in actual control over
the management of an entity, each shall be deemed to constitute control.

     “Clinical Product” means active and placebo batches of Product produced for use in
connection with Cornerstone’s clinical trials of the Product.

 

[***] Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.

 

 

CONFIDENTIAL

     “CMC” means the chemistry, manufacturing and controls section(s) and data in the NDA.

     “Commercialization” (or “Commercialize”) means developing, conducting
preclinical or clinical studies or trials, seeking regulatory approvals, manufacturing, marketing,
distributing, importing, offering for sale or selling the Product.

     “Development Work” means all the activities specified to be performed by Neos under
this Agreement including without limitation work related to formulation of the Product, developing
and documenting the manufacturing process related to the Product, preparing the CMC section of the
NDA for the Product, and manufacturing the Product for use in connection with the NDA submission.

     “FDA” means the United States Food and Drug Administration or any successor entity
thereto.

     “Force Majeure” has the meaning set forth in Section 11.7.

     “GLP” means the FDA’s current good laboratory practices, as specified in Title 21,
Code of Federal Regulations, Part 58, and applicable FDA guidance documents, as the same shall be
amended from time to time.

     “GMP” means the FDA’s current good manufacturing practices, as specified in Title 21,
Code of Federal Regulations, Part 210, and applicable FDA guidance documents, as the same shall be
amended from time to time.

     “ICH” means the International Conference on Harmonization of Technical Requirements
for Registration of Pharmaceuticals for Human Use.

     “Joint Invention” has the meaning set forth in Section 2.5(c).

     “Insolvency Event” has the meaning set forth in Section 10.2(d).

     “Know-How” means any and all product specifications, processes, product designs,
plans, trade secrets, know-how, ideas, concepts, manufacturing, engineering and other manuals and
drawings, standard operating procedures, flow diagrams, chemical, pharmacological, toxicological,
pharmaceutical, physical and analytical, safety, quality assurance, quality control and clinical
data, technical information, data, research records, supplier lists and similar data and
information, and all other confidential or proprietary technical and business information.

     “Laws” means any and all federal, state, and local laws, rules, regulations, orders
and requirements applicable to the Parties in performance of this Agreement including without
limitation the following: the Prescription Drug Marketing Act of 1987, the Federal Food, Drug and
Cosmetic Act, and all regulations and other guidance or requirements of the FDA or any equivalent
agency.

     “Manufacturing Site” means Neos’ facilities where the Product formulation and
manufacturing process are developed and the Product is manufactured, stored and handled.

     “Materials” has the meaning set forth in Section 2.1(b).

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     “NDA” means, in respect of the Product, a New Drug Application filed by Cornerstone
with the FDA and all subsequent related submissions thereto.

     “Neos Intellectual Property” means (i) the DVR Patent Applications, (ii) the Neos
Know-How related to the DVR Technology, (iii) the general Know-How of Neos related to manufacturing
processes or procedures utilized by Neos, its Affiliates or the Manufacturing Site in manufacturing
pharmaceutical products, (iv) any Neos Sole Inventions, and (v) Neos’ rights in any Joint
Inventions.

     “Net Sales” means the gross amounts invoiced by Cornerstone, any of its Affiliates or
any of its sublicensees for sales of Product in the Territory to third parties, less the total of
the following deductions to the extent actually and reasonably allowed or incurred in connection
with such sales:

     (a) reasonable and customary trade, cash and quantity discounts off the invoiced price;

     (b) excise, sales and other consumption taxes and custom duties to the extent included in the
invoice price;

     (c) freight, insurance and other transportation charges to the extent included in the invoice
price;

     (d) amounts repaid, credited or accrued, or allowances or adjustments made, by reason of
returns, rejections, or recalls, or because of chargebacks, retroactive price reductions, or
billing errors;

     (e) reasonable and customary rebates and chargebacks to pharmacy benefit managers, federal,
state, or local governments (or their agencies or purchasers), and managed health organizations
(including without limitation Medicaid rebates); and

     (f) any amounts actually written off or specifically identified as uncollectible in accordance
with GAAP;

solely to the extent the above deductions are taken in accordance with GAAP applicable to the
particular selling entity.

Use of Product for promotional, sampling or compassionate use purposes or for use in clinical
trials (but excluding post-approval clinical trials for which compensation is received by the
selling entity) shall not be considered in determining Net Sales. In the case of any sale of
Product between a Party and its Affiliates or sublicensees for resale, Net Sales shall be
calculated as above only on the first arm’s length sale thereafter to a third party.

     “Product” means a [***]/Methscopolamine [***] capsule that the Parties intend will
[***]. If the Parties agree as a result of the Development Work that the Product shall have a
different active pharmaceutical ingredient strength or other release charactistics, “Product” shall

 

[***] Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.

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mean such other combination pharmaceutical product for human use in the Territory containing [***]
and Methscopolamine as so agreed.

     “Registration Product” means Product produced for use in connection with Cornerstone’s
submission of its NDA to the FDA.

     “Sole Invention” has the meaning set forth in Section 2.5(b).

     “Territory” means the United States of America, including the states, territories and
possessions thereof, the District of Columbia, and the Commonwealth of Puerto Rico.

     “Valid Claim” means a claim of an issued and unexpired patent or a good faith claim in
a patent application, which claim has not been held invalid, unpatentable or unenforceable by a
court or other government agency of competent jurisdiction from which no appeal can be further
taken, and has not been held or admitted to be invalid, unpatentable or unenforceable through
abandonment, re-examination or disclaimer, opposition procedure, nullity suit or otherwise, which
claim covers the Product or its manufacture or use.

ARTICLE 2.

FORMULATION AND MANUFACTURING PROCESS DEVELOPMENT

     2.1 General.

          (a) Neos shall, at its expense, establish the Manufacturing Site as an FDA certified and
approved GMP facility by the date specified in the Development Plan and promptly shall provide
Cornerstone with a copy of the written GMP facility approval it receives from the FDA.

          (b) Neos shall use commercially reasonable efforts to perform the Development Work by the date
or dates specified in the plan of action and milestones attached hereto as Schedule B (as
the same may be amended in writing by the Parties from time to time, the “Development
Plan”). Neos shall, at its expense, provide all equipment necessary or advisable to complete
the Development Work. Neos also shall acquire raw materials, components, active pharmaceutical
ingredients or other materials necessary or advisable to complete the Development Work
(“Materials”), which shall be acquired only from approved suppliers where applicable, and
Cornerstone shall reimburse Neos for the costs of such items.

          (c) Except as set forth in this Agreement, Neos shall have no responsibility for clinical or
regulatory work associated with gaining FDA approval of the NDA for the Product.

     2.2 Formulation of Product and Development and Documentation of Manufacturing Process.

          (a) Neos shall use commercially reasonable efforts to develop a formulation of, and
manufacturing process for, the Product and shall, in consultation with Cornerstone’s development
staff, prepare and provide regulatory data and documentation and draft CMC

 

[***] Confidential portions of the exhibit have been omitted and filed separately with the
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respecting the manufacture of the Product, all in compliance with applicable FDA guidelines and any
other applicable Laws. The project timeline for, and the Parties’ respective responsibilities with
respect to, such manufacturing process development and documentation are described in greater
detail in the Development Plan. Neos shall draft the CMC section of the NDA, and Cornerstone shall
cooperate with Neos to provide information reasonably requested by Neos in support of Neos’
drafting of the CMC. Cornerstone shall critically review and provide corrections to the CMC
section in a timely fashion. Neos shall use commercially reasonable efforts to be prepared for any
FDA pre-approval inspection of the Manufacturing Site. Neos agrees that Cornerstone may reference
Neos as the manufacturer of the Product in Cornerstone’s NDA and any other documentation required
under any regulatory filings for the Product, and Neos will provide Cornerstone with all required
documentation, including development and analytical reports to support such filings.

          (b) The Parties understand and agree that the Development Work and the manufacture of Product
contemplated by this Agreement are: to support Cornerstone’s product, clinical and regulatory
development plans respecting the Product; to support Cornerstone’s obtaining clearance from the FDA
for marketing of the Product; and to establish facilities, manufacturing processes and quality
control/quality assurance procedures and systems that will be found in compliance with GMP and
other Laws in the event of a related inspection by the FDA. Neos will comply with all applicable
GLP, GMP and other applicable U.S. regulations in order for the Development Work and the supplied
Product to meet all applicable Laws for the conduct and completion of validation runs. Without
limiting the foregoing, Neos will implement and maintain the policies and procedures and take the
other actions set forth in the Development Plan, and as may be requested by Cornerstone from time
to time. Neos will cooperate with Cornerstone to respond to any FDA information requests relating
to the CMC section that may arise during the NDA submission, regulatory agency review and approval
processes and, upon Cornerstone’s reasonable request, will provide other assistance related to
obtaining NDA approval.

          (c) Cornerstone will use commercially reasonable efforts to fulfill its responsibilities
described in greater detail in the Development Plan to develop the Product. Cornerstone shall
prepare the NDA submission and diligently pursue NDA approval from the FDA. Upon receipt of NDA
approval, Cornerstone shall use commercially reasonable efforts to fully Commercialize the Product
in the Territory.

     2.3 Development Schedule. Neos shall provide sufficient staffing for the Development
Work and use commercially reasonable efforts to perform and complete the Development Work, and the
various components thereof, according to the milestone schedule set forth in the Development Plan,
in order that the Product shall be available for supply to Cornerstone in compliance with all
applicable Laws in connection with the NDA submission, it being understood that Cornerstone has a
strategic objective to complete GMP manufacture of Clinical Product by August 2008. During the
Term, Neos shall provide monthly reports within ten (10) days following the last day of each month
regarding its progress in relation to the milestones set forth in the Development Plan, such
reports to be in form and substance reasonably satisfactory to Cornerstone. The Parties agree that
time is of the essence in this Agreement. Nevertheless, Cornerstone may abandon development of the
Product at any time in its sole discretion, subject to Section 10.3(d).

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     2.4 Project Coordination; Senior Executive Resolution. Cornerstone appoints its Chief
Medical Officer, Brian Dickson, and Neos appoints its Vice President, Research and Development,
Russ McMahen to serve as their respective primary contact persons with regard to the Development
Work (the “Project Managers”). The Project Managers will meet, by phone or in person, as
necessary (but not less than twice per month) to review, coordinate, and discuss issues and
progress regarding the Development Work. The Project Managers shall to the extent practicable seek
to operate by consensus in coordinating and facilitating the activities of the Parties under this
Agreement. For the avoidance of doubt, the Project Managers shall have no authority to amend or
waive compliance with the terms and conditions of this Agreement, to resolve differences of opinion
between the Parties regarding the interpretation of this Agreement or to approve actions of the
Parties that are inconsistent with this Agreement. In the event that a dispute of any kind arises
pertaining in any manner to activities of the Parties under this Agreement (a “Dispute”),
prior to the initiation of any formal legal action, the Dispute will be submitted to the Presidents
of Cornerstone and Neos. For all Disputes referred to the Presidents, the Presidents shall use
their good faith efforts to meet at least two times in person and to resolve the Dispute within ten
(10) business days after such referral. If the Presidents are unable to resolve the Dispute, the
Parties agree to refer the Dispute for non-binding mediation within ten (10) days of either Party
making a request to the other by notice hereunder. Any such mediation will be conducted by the
American Arbitration Association in the State of New York. The Parties agree to share the cost of
any mediation equally.

     2.5 Ownership of Intellectual Property and Regulatory Files in Connection with Development
Work.

          (a) Existing Inventions and Know-How. Ownership of existing inventions and Know-How of either
Party or future inventions and Know-How of either Party made outside the scope of this Agreement
shall remain the sole property of such Party, subject to any licenses granted in this Agreement.

          (b) Inventions and Know-How Developed Under this Agreement by a Party. Any and all inventions
(including all results and Know-How), whether or not patentable, that is conceived, reduced to
practice, or otherwise developed within the scope of this Agreement solely by a single Party’s
officers, employees, contractors and agents shall be owned solely by such Party along with all
related intellectual property rights (“Sole Inventions”), subject to any licenses granted
in this Agreement.

          (c) Inventions and Know-How Developed Jointly Under this Agreement. All other inventions
(including all results and Know-How), whether or not patentable, that is jointly conceived, reduced
to practice, or otherwise developed by officers, employees, contractors and agents of both Parties
under the scope of this Agreement shall be owned jointly by the Parties along with all related
intellectual property rights (“Joint Inventions”).

          (d) Joint Invention Rights. Patent applications on Joint Inventions may be filed only if the
Parties agree to file jointly on them. If the Parties agree to file for and obtain patents on
Joint Inventions, all expenses incurred therein shall be shared equally, except that the

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employer of each inventor, if applicable, will pay the inventor’s compensation. If a patent is
obtained on a Joint Invention, no Party shall transfer its interest in such patent to a Third Party
unless both Parties agree to do so. Notwithstanding the foregoing, the Parties shall be entitled
to transfer their respective rights to their respective Affiliates and successors in interest as
set forth in Section 11.3 hereof. Subject to the exclusivity arrangements in Section 2.6, each
Party is free to use and sublicense Joint Inventions to third parties without any further
obligations or accounting to the other Party; provided, however, that nothing in this Section
2.5(d) gives either Party any rights with respect to intellectual property that is owned solely by
the other Party.

          (e) Assignments of Inventions. Each Party shall, and shall cause its officers, employees,
contractors and agents to, (i) execute, all documents, including, without limitation, assignments
of inventions and discoveries and all related intellectual property rights, and (ii) perform such
acts as may be necessary, useful or convenient to secure or enforce for the other Party statutory
protection including patent, trademark, trade secret or copyright protection throughout the world
for all intellectual property assigned to it pursuant to this Section 2.5.

          (f) Regulatory Files. Cornerstone shall own all regulatory files with respect to the Product
including without limitation regulatory data and documentation prepared by Neos under Section 2.2
respecting the manufacture of the Product, including without limitation the CMC section of any NDA
filing with the FDA related to the Product.

     2.6 Exclusivity. Commencing upon the Effective Date, and extending for a period
ending on the later of (a) the fifth (5th) anniversary of (a) initial NDA submission,
(b) the fifth (5th) anniversary of the expiration of the Term, or (c) the expiration of
termination of the Supply Agreement Term (as defined in Section 5.2(a)), Neos agrees not to utilize
or permit the utilization of the Manufacturing Site, nor to perform services, nor to permit the use
of the Neos Intellectual Property, for or on behalf of any third party in connection with or
related to the development, manufacture or Commercialization of any combination pharmaceutical
product for human use in the Territory containing [***] and Methscopolamine (a “Competing
Product”), without Cornerstone’s prior written consent. Neos represents and warrants to
Cornerstone that, as of the Effective Date, Neos has not contracted with, is not collaborating with
and is not negotiating with any third party to perform services with respect to any Competing
Product.

ARTICLE 3.

PRODUCT MANUFACTURE

     3.1 Product Manufacture for NDA and Clinical Trials.

          (a) During the Term, provided that the Product has been successfully developed to
Cornerstone’s reasonable satisfaction through the Development Work, Neos agrees to manufacture and
supply Registration Product and Clinical Product that complies with Laws and GMP and that conforms
to the specifications set forth in the Development Plan (the “Specifications”) in the
quantities, at the times and at the locations designated by Cornerstone in the Development Plan.
Neos shall notify Cornerstone if there is any issue with time lines and

 

[***] Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.

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delivery of Product under this Agreement. The Specifications may be amended from time to time by
written agreement of the Parties without the necessity of amending this Agreement.

          (b) Promptly following each manufacturing run, Neos shall (i) test each batch in accordance
with the protocols specified in the Development Plan (“Quality Control Testing Protocols”)
and as the same may be modified from time to time in accordance with the last sentence of this
Section 3.1(b), (ii) furnish Cornerstone (attention: Chief Medical Officer) with a certificate of
analysis, test result sheets, Product reconciliation and yield information, copies of label
specimens, all investigations and deviations, and test results (such test results due within three
business days of batch release) and other documents in form and content satisfactory to
Cornerstone, and (iii) retain all relevant records pertaining thereto as may be required by GMP and
other applicable Law. The Quality Control Testing Protocols may be modified in writing by
Cornerstone with Neos’ written consent, such consent not to be unreasonably withheld, and any
changes to the Quality Control Testing Protocols requested by Neos shall be subject to the prior
written approval of Cornerstone and all such changes must comply with all applicable Laws.

          (c) Neos shall (i) validate using relevant ICH guidelines all non-pharmacopeial analytical
methods required for Product release testing in accordance with the Specifications, (ii) furnish
Cornerstone (attention: Chief Medical Officer) with method validation reports in form and content
satisfactory to Cornerstone and in compliance with FDA requirements, (iii) perform suitability
testing of all pharmacopoeial analytical methods required for Product release testing in accordance
with the Specifications, and (iv) furnish Cornerstone (attention: Chief Medical Officer) with
method suitability reports in form and content satisfactory to Cornerstone and in compliance with
FDA requirements.

          (d) When storing and handling raw materials, components, active pharmaceutical ingredients,
Product, or Product-derived wastes, Neos shall comply with, and shall maintain all storage
facilities in compliance with, the Specifications, GMP, and applicable Laws.

          (e) Upon Cornerstone’s request, Neos shall ship Product as directed by Cornerstone F.O.B. the
Facility. Freight and insurance shall be for the account of Cornerstone, and the risk of loss,
delay or damage in transit shall be with Cornerstone from and after delivery to Cornerstone’s
designated carrier. Neos shall use commercially reasonable efforts to assist Cornerstone in
arranging any desired insurance. Neos shall package the Product for shipment in accordance with
Cornerstone’s instructions and its SOPs or customary practices therefor. In the event of any
conflict between Cornerstone’s packaging instructions and Neos’s SOPs or customary practices, the
Parties shall endeavor in good faith to resolve such conflict as quickly as practicable. Neos
shall include the following for each shipment of the Product: (i) the purchase order number; (ii)
the lot and batch numbers; (iii) the quantity of the Product; and (iv) the certificate of analysis.

     3.2 Failure to Meet Specifications. Without limiting any rights or remedies available
to Cornerstone hereunder, in the event that Product not meeting the Specifications or otherwise
defective is shipped by Neos, Neos and Cornerstone shall mutually determine in good faith that Neos
shall either (a) refund any Materials costs related to the non-conforming Product for which it was
reimbursed by Cornerstone or (b) promptly replace such non-conforming Product with conforming
Product.

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     3.3 Right to Audit. During the Term and for the two-year period following the Term,
Neos shall permit Cornerstone and its employees or third party designees access, during reasonable
business hours and after reasonable notice, to the Manufacturing Site and to manufacturing records
for Product manufactured by Neos so that Cornerstone may perform a quality assurance audit of such
facilities and related activities but no more than twice yearly. In the event that Cornerstone
observes a condition which causes it to believe that the Manufacturing Site, the Product or its
method of development and production, tests, record keeping or other matters is not in compliance
with GLP, GMP or other Laws applicable to the development and production of the Product and the
conduct of the validation process, the Project Managers shall meet to discuss the concerns and any
strategies to bring the facilities, procedures or other matters into compliance.

     3.4 Inspections. In the event the Manufacturing Site is inspected by representatives
of any federal, state or local regulatory agency in connection with the regulatory approval process
or manufacture of Product, Neos shall notify Cornerstone in writing within twenty-four (24) hours
upon learning of such inspection, and shall supply Cornerstone with copies of any correspondence or
portions of correspondence that relate to the Product. Neos will make all reasonable efforts to
cooperate with such regulatory agency to accommodate the inspection and shall provide Cornerstone
with daily updates of any such inspections. In the event Neos receives any regulatory letter or
comments from any federal, state or local regulatory agency in connection with its manufacture of
the Product including, but not limited to, receipt of a Form 483 (Inspectional Observations) or a
Warning Letter, Neos shall provide Cornerstone with a copy thereof and a copy of each response for
Cornerstone review prior to submission of such response and opportunity to comment where
practicable.

     3.5 Supply of Product After NDA Approval. Following NDA approval of the Product,
provided that this Agreement has not been terminated by Cornerstone pursuant to Sections 10.2(a) or
10.2(b), the Parties will negotiate diligently and in good faith to enter into a supply agreement
for Neos to provide finished Product to Cornerstone for sale to commercial customers. The Parties
agree that if they enter into a definitive supply agreement, which would constitute their final
binding agreement, the provisions set forth in Schedule C attached hereto (the “Supply
Terms”) will, without material modification but with such additional description and additional
customary commercial terms as the Parties agree to, be included in such definitive supply
agreement. The Supply Terms do not purport to include all of the essential terms of the
contemplated supply relationship and it is the intention of the Parties that neither shall be
obligated to enter into the supply relationship unless the definitive supply agreement is executed
and delivered by the Parties and then only in accordance with the terms of such definitive
agreement.

ARTICLE 4.

COMPENSATION

     4.1 Hourly Fees. Cornerstone shall pay Neos One Hundred Fifty Dollars ($150) per hour
for each hour of professional services rendered in performing the Development Work that is
reflected in the Development Plan or that has been otherwise approved by Cornerstone in writing in
advance (“Hourly Fees”).

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     4.2 [***] Payments for Development Work. In addition to the Hourly Fees, Cornerstone
shall pay Neos [***] payments [***] not to exceed One Million Seven Hundred Fifty Thousand Dollars
($1,750,000) in the aggregate for all such [***] Payments. Neos hereby acknowledges [***].
Subsequent [***] Payments shall be [***]

	 	 	 
	 

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     4.3 Invoicing; Payments.

          (a) Neos will render monthly invoices within five business days after the last day of each
month of the Term for the Hourly Fees due in respect of the total number of professional hours
(including any fraction thereof) performed during that month or Materials costs for which
Cornerstone is required to provide reimbursement to Neos under Section 2.1(b), which invoice shall
be submitted to Cornerstone (attention: Chief Medical Officer) at the address set forth in Section
11.2. If applicable, such monthly invoice may also include a billing for any [***] Payment that is
then due and payable under Section 4.2.

          (b) The Hourly Fees, Materials reimbursements, and [***] Payments invoiced under this Section
4.3, except for any amounts disputed in good faith by Cornerstone, shall be payable by Cornerstone
within thirty (30) days of Cornerstone’s receipt of each invoice. If any invoice is rejected by
Cornerstone, in whole or in part, for any reason, Cornerstone shall provide Neos with its reason(s)
for such rejection, in writing, within thirty (30) days of receipt of the invoice. All payments
provided for under the terms of this Agreement shall be made by check or wire payable to Neos.

     4.4 Taxes. Neos shall pay and otherwise be responsible for all applicable sales,
goods, services, and transfer taxes in connection with any payment made to Neos pursuant to this
Agreement. Any income or other tax that one Party is required to withhold and pay on behalf of the
other Party with respect to amounts payable under this Agreement shall be deducted from and offset
against said amounts prior to payment to the other Party; provided, however, that in each case such
Party shall furnish the other Party on whose behalf amounts were withheld, proper evidence of the
taxes paid on its behalf.

ARTICLE 5.

REPRESENTATIONS AND WARRANTIES

     5.1 Mutual Representations and Warranties. Each of the Parties hereby represents and
warrants to the other Party as follows:

 

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          (a) This Agreement has been duly authorized by all necessary corporate action, has been duly
executed and delivered, and is a legal and valid obligation binding upon such Party and enforceable
in accordance with its terms. Such Party has the full power and authority to enter into this
Agreement and to carry out the obligations contemplated hereby.

          (b) Delivery and performance of this Agreement by such Party does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a party or by which it is
bound, nor violate any Laws of any court, governmental body or administrative or other agency
having jurisdiction over it.

          (c) All of such Party’s officers, employees, contractors and agents that perform any
Development Work or work on Joint Inventions will have entered into agreements with such Party that
provide, among other things, that if they become the inventor of a patentable invention in the
course of their work on behalf of such Party, they will assign their rights with respect to such
invention to such Party or as otherwise directed by such Party.

     5.2 Neos Representations and Warranties. Neos hereby represents and warrants to
Cornerstone as follows:

          (a) As of the Effective Date, Neos has the right to license the Neos Intellectual Property to
Cornerstone for purposes of the Development Work and the Commercialization of the Product in the
Territory and has no knowledge it is violating the intellectual property rights or other rights of
any third party. Neos owns all right, title and interest in and to, or otherwise controls, the DVR
Technology and will continue to do so at all times throughout the Term and the term of the supply
agreement contemplated by Section 3.5 (the “Supply Agreement Term”).

          (b) Neos has not, and during the Term and the Supply Agreement Term will not, grant any right
to any third party relating to the Neos Intellectual Property in a manner, or pursue any other
activity, that would otherwise conflict with the rights granted to Cornerstone hereunder.

          (c) As of the Effective Date, Neos has no actual knowledge that (i) any third party is
infringing any of the DVR Patent Applications or misappropriating or using Neos Know-How related to
the DVR Technology, and (ii) the Neos Intellectual Property, as applied to the Product, infringes
any third party intellectual property rights. Neos has not received any written communication from
a third party claiming that intellectual property rights owned or controlled by such third party
would be misappropriated or infringed by the use of the DVR Technology.

          (d) As of the Effective Date, Neos has not been served with any interference action or
litigation with respect to the DVR Patent Applications, and Neos has not received any written
communication that expressly threatens interference actions or other litigation before any
patent office, court, or any other governmental entity in any jurisdiction in regard to the DVR
Patent Applications.

          (e) As of the time of release of Product to Cornerstone in accordance with this Agreement, all
Product released (i) will conform to the applicable Specifications, and (ii) will have been
manufactured in material accordance with GMP (if applicable) and all applicable Laws and in
accordance with the applicable certificates of analysis.

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          (f) Without limiting the generality of the foregoing, Neos represents and warrants that it has
the right to provide to Cornerstone the Product and information provided by Neos hereunder, and to
grant Cornerstone the right to use such Product and information for the conduct of Cornerstone’s
rights and obligations hereunder.

          (g) Neos will not use, in any capacity associated with or related to the manufacture of the
Product, the services of any persons who have been debarred under 21 U.S.C. § 335a(a) (or who
become the subject of new debarment proceedings commenced after the Effective Date) or (b) or any
comparable Law. Furthermore, neither Neos nor, to the knowledge of Neos, any of its officers,
employees, or consultants has been convicted of an offense under (i) either a federal or state law
that is cited in 21 U.S.C. § 335(a) as a ground for debarment, denial of approval, or suspension,
or (ii) any other Law cited in any comparable regulatory act as a ground for debarment, denial of
approval or suspension.

          (h) As of the date of this Agreement, Neos does not have all manufacturing governmental
consents necessary for the performance of its obligations hereunder but is diligently pursuing all
such consents. Following Neos’ receipt of the FDA’s approval of the Manufacturing Site as a GMP
manufacturing facility, Neos will use its commercially reasonable efforts to thereafter maintain
throughout the remainder of the Term all manufacturing Consents necessary for the performance of
its obligations hereunder.

          (i) Neos will not sell the Product in the Territory during the Royalty Term or the Supply
Agreement Term except for sales to Cornerstone permitted by this Agreement or the supply agreement
contemplated by Section 3.5.

          (j) The manufacture, packaging, processing, storage, disposal and other handling of the
Product by Neos until delivery to Cornerstone’s designated carrier or freight forwarder at the
Manufacturing Site shall be in material accordance with and conform to the Specifications, GMP, and
applicable Laws. Product shall not be adulterated or misbranded within the meaning of the Federal
Food, Drug and Cosmetic Act.

     5.3 Cornerstone Representations and Warranties. Cornerstone hereby represents and
warrants to Neos as follows:

          (a) Cornerstone is the owner or has the lawful right to use or grant the right to use any and
all trademarks and trademark rights, trade names and trade name rights, service marks and service
mark rights, service names and service name rights, brand names, copyrights and copyright rights,
trade dress, business and Product names, logos, slogans, other proprietary information and related
documentation, and all pending applications for and registrations of trademarks, service marks and
copyrights that (i) it provides to Neos in connection with the
manufacture of the Product, or (ii) it uses in connection with the marketing, sale or
distribution of Product.

          (b) Cornerstone will not make any claims in any packaging, labeling, advertising or
promotional material regarding the Product that it knows to be false.

          (c) As of the date hereof, Cornerstone has not been served with any interference action or
litigation with respect to the Product and Cornerstone has not received any written communication
that expressly threatens interference actions or other litigation before any

12

 

CONFIDENTIAL

patent office, court,
or any other governmental entity in any jurisdiction in regard to the Product. Cornerstone
represents and warrants that as of the date of this Agreement it is not aware of any prior art or
other information that would render any claim under the DVR Patent Applications invalid.
Cornerstone represents and warrants that as of the date of this Agreement it is not aware of any
patent or any other third party intellectual property right that would be infringed by Cornerstone
in fulfilling its obligations under this Agreement.

          (d) Cornerstone will not use, in any capacity associated with or related to the clinical
development, FDA submission, sale, marketing or distribution of the Product, the services of any
persons who have been debarred or who are currently under investigation for possible debarment
under 21 U.S.C. § 335a(a) or any comparable Law. Furthermore, neither Cornerstone nor, to the
knowledge of Cornerstone, any of its officers, employees, or consultants has been convicted of an
offense under (i) either a federal or state law that is cited in 21 U.S.C. § 335a as a ground for
debarment, denial of approval, or suspension, or (ii) any other Law cited in any comparable
regulatory act as a ground for debarment, denial of approval or suspension.

ARTICLE 6.

CONFIDENTIALITY AND NONDISCLOSURE

     6.1 Confidentiality Obligation. Except as permitted below, each of the Parties (the
“Receiving Party”) shall keep strictly confidential any information disclosed in writing,
orally, visually or in any other manner by the other Party (the “Disclosing Party”) or
otherwise made available to the Receiving Party which the Disclosing Party considers to be and
treats as proprietary or confidential (“Confidential Information”). Confidential
Information shall not include information (a) which is or becomes generally available to the public
other than as a result of disclosure thereof by the Receiving Party; (b) which is lawfully received
by the Receiving Party on a nonconfidential basis from a third party that is not itself under any
obligation of confidentiality or nondisclosure to the Disclosing Party or any other person with
respect to such information; (c) which by written evidence can be shown by the Receiving Party to
have been independently developed by or for the Receiving Party; (d) which the Receiving Party
establishes by competent proof was in its possession at the time of disclosure by the Disclosing
Party and was not acquired, directly or indirectly from the Disclosing Party; or (e) which is
required to be disclosed by applicable Laws.

     6.2 Nondisclosure of Confidential Information. The Receiving Party shall use
Confidential Information solely for the purposes of this Agreement and shall not disclose or
disseminate any Confidential Information to any third party at any time without the Disclosing
Party’s prior written consent, except for disclosure to those of its directors, officers,
employees,
advisors and agents whose duties reasonably require them to have access to such Confidential
Information, provided that such directors, officers, employees, advisers and agents are required to
maintain the confidentiality of such Confidential Information to the same extent as if they were
Parties hereto. Upon reasonable request of the Disclosing Party, the Receiving Party shall
promptly surrender and deliver to the Disclosing Party all Confidential Information of the
Disclosing Party.

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     6.3 Survival. The confidentiality and nondisclosure obligations of this Article 6
shall survive the expiration or termination of this Agreement and remain in effect for a period of
five (5) years following the expiration or termination of this Agreement.

ARTICLE 7.

LICENSE OF NEOS INTELLECTUAL PROPERTY

     7.1 Neos License to Cornerstone. Subject to the terms of this Agreement, Neos hereby
grants to Cornerstone, and Cornerstone hereby accepts, a exclusive, irrevocable license, with right
to sublicense, under the Neos Intellectual Property (a) for performance of Cornerstone’s rights and
obligations under this Agreement, and (b) to use, make, have made and otherwise Commercialize the
Product (as successfully developed under this Agreement) in the Territory; provided, however, that
Cornerstone shall only have the right under this Section 7.1 to make or have made such product by a
third party manufacturer (i) if Neos suffers an Insolvency Event, (ii) if following Neos’ receipt
of the FDA’s approval of the Manufacturing Site as a GMP manufacturing facility, the FDA revokes
such approval, or (iii) Neos is unable to manufacture such product for a period exceeding ninety
(90) days due to Force Majeure or other cause.

ARTICLE 8.

ROYALTIES

     8.1 Royalty Payments. As sole consideration for the license granted under Section
7.2, Cornerstone shall pay to Neos royalties in accordance with this Article 8
(“Royalties”) based on Net Sales of the Product in the Territory:

          (a) [***] percent ([***]%) of Net Sales of Product sold during the Royalty Term while the DVR
Technology used in the Product is not the subject of a Valid Claim in the Territory.

          (b)
[***] percent ([***]%) of Net Sales of Product sold during the Royalty Term while the DVR
Technology used in the Product is the subject of a Valid Claim in the Territory; or

The obligation to pay Royalties under this Article 8 shall be imposed only once (i) with respect to
any sale of the same unit of the Product, and (ii) with respect to a single unit of the Product.

     8.2 Royalty Term. The Royalties set forth in Section 8.1 shall be payable until the
later of (i) such date as there no longer exists a Valid Claim under a United States patent or

 

[***] Confidential portions of the exhibit have been omitted and filed separately with the

Securities and Exchange Commission.

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patent application, or (ii) the [***] anniversary of the Effective Date if no United States patent
with a Valid Claim has been issued with respect to any of the DVR Patent Applications by such date.
If, after the Royalty Term has ended pursuant to the preceding sentence, but a United States
patent with a Valid Claim is thereafter issued with respect to any of the DVR Patent Applications
or other applications applicable to the Product, then the Royalty Term shall recommence on the date
such patent is approved and Royalties shall again be payable based on Net Sales of Product sold
after the date such patent is approved.

     8.3 Reports and Payments. Cornerstone shall deliver to Neos, within forty-five (45)
days after the end of each calendar quarter, a report setting forth for such calendar quarter the
following information for Product: (i) Net Sales of the Product by Cornerstone, any of its
Affiliates or any of its sublicensees; and (ii) the Royalties due to Neos in respect of such Net
Sales. The total Royalties due in respect of Net Sales of Product during such calendar quarter
shall be remitted at the time such report is made by check payable to Neos.

     8.4 Maintenance of Records; Audit. For a period of two (2) years from the end of the
calendar quarter in which the particular sale occurred, Cornerstone shall maintain, and shall
require its respective Affiliates and sublicensees to maintain, complete and accurate books and
records in connection with the sale of Product by Cornerstone, its Affiliates and sublicensees, as
necessary to allow the accurate calculation consistent with GAAP of the Royalties due to Neos,
including any records required to calculate any royalty adjustments hereunder. Once per calendar
year, Neos shall have the right to engage an independent accounting firm reasonably acceptable to
Cornerstone, which shall have the right to examine in confidence the relevant records of
Cornerstone as may be reasonably necessary to determine or verify the amount of the Royalties due
hereunder. Such examination shall be conducted during normal business hours, after at least
fifteen (15) Business Days prior written notice to Cornerstone and shall take place at
Cornerstone’s facility(ies) where such records are maintained. Each such examination shall be
limited to pertinent books and records for any year ending not more than twenty-four (24) months
prior to the date of request; provided that Neos shall not be permitted to audit the same period of
time more than once. Before permitting such independent accounting firm to have access to such
books and records, Cornerstone may require such independent accounting firm and its personnel
involved in such audit, to sign a confidentiality agreement (in form and substance reasonably
acceptable to Cornerstone) as to any confidential information which is to be provided to such
accounting firm or to which such accounting firm will have access, while conducting the audit under
this Section 8.4. The independent accounting firm will prepare and provide to each Party a written
report stating whether the royalty reports submitted and Royalties paid are correct or incorrect
and the details concerning any discrepancies. Such accounting firm may not reveal to Neos any
information learned in the course of such audit other than the amount of any such discrepancies.
Neos agrees to hold in strict confidence all information disclosed to it by such accounting firm,
except to the extent necessary for Neos to enforce its rights under this Agreement or to the extent
disclosure is required by Law. In the event there was an underpayment by Cornerstone of amounts
owed under this Agreement, Cornerstone shall promptly (but in no event later than thirty (30) days
after Cornerstone’s receipt of the

 

[***] Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.

15

 

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independent auditor’s report) make payment to Neos of any shortfall. In the event that there was
an overpayment by Cornerstone hereunder, Neos shall promptly (but in no event later than thirty
(30) days after Neos’ receipt of the independent auditor’s report) refund to Cornerstone or credit
to future royalties, at Cornerstone’s election, the excess amount. Neos shall bear the full cost
of such audit unless such audit discloses an underreporting by
Cornerstone of more than [***] percent ([***]%) of the aggregate amount of Royalties in any twelve (12) month period, in which
case, Cornerstone shall bear the full cost of such audit.

     8.5 Reductions. If either Party determines in its good faith judgment that it is
commercially necessary to obtain license rights in the Territory from a third party (a “Third
Party License”) under patent rights owned or controlled by such third party that claim or cover
the Product or its manufacture or use and are required to Commercialize the Product in the
Territory (“Third Party Patent Rights”), then such Party shall notify the other Party and
promptly thereafter the Parties shall enter into discussions regarding the appropriate terms and
conditions of such Third Party License and the Parties agree to negotiate in good faith their
respective shares of any license fees payable to such third party in respect of such Third Party
License. Following such discussions, Cornerstone may enter into a Third Party License and may
reduce the Royalties owed to Neos by an amount not exceeding the amount the Parties agreed should
be Neos’ share of such Third Party License fees.

ARTICLE 9.

INDEMNIFICATION AND LIMITATION OF LIABILITY

     9.1 Indemnification by Neos. Except as may be otherwise provided herein, Neos shall
defend, indemnify and hold harmless Cornerstone, its directors, officers and employees
(collectively the “Cornerstone Indemnitees”) from and against all Losses incurred in
connection with any third party suits, claims or causes of action arising out of or resulting from
(a) Neos’ breach of any representation, warranty, covenant, or other obligation provided for in
this Agreement; (b) the manufacture, delivery, storage, handling and use of the Product or any of
its components by Neos; (c) any actual or alleged infringement or misappropriation of any patent,
copyright, trade secret or any actual or alleged violation of any other intellectual property
rights arising from or in connection with Neos’ performance of the Development Work; or (d) the
negligence, recklessness or willful misconduct of Neos any of its directors, officers or employees;
provided, however, that Neos shall not be required to indemnify the Cornerstone Indemnitees to the
extent that any Losses arise out of or result from: (i) the negligence, recklessness or willful
misconduct of any Cornerstone Indemnitee; or (ii) any breach by Cornerstone of this Agreement.

     9.2 Indemnification by Cornerstone. Except as may be otherwise provided herein,
Cornerstone shall defend, indemnify and hold harmless Neos, its directors, officers and employees
(collectively the “Neos Indemnitees”) from and against all Losses incurred in connection
with any third party suits, claims or causes of action arising out of or resulting from (a)
Cornerstone’s breach of any representation, warranty, covenant, or other obligation provided

 

[***] Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.

16

 

CONFIDENTIAL

for in this Agreement; or (b) the negligence, recklessness or willful misconduct of Cornerstone and
its directors, officers or employees; provided, however, that Cornerstone shall not be required to
indemnify the Neos Indemnitees to the extent that any Losses arise out of or result from: (i) the
negligence, recklessness or willful misconduct of any of the Neos Indemnitees, or (ii) any breach
by Neos of this Agreement.

     9.3 Insurance. Neos will maintain in full force and effect during the Term of this
Agreement and for a period of three (3) years thereafter, worker’s compensation and general
liability insurance coverage in amounts appropriate to the conduct of its business and sufficient
to cover its indemnification obligations hereunder. Neos shall provide evidence of such insurance
to Cornerstone and ensure that Cornerstone will receive no less than thirty (30) days notice of
cancellation, non-renewal or material change.

ARTICLE 10.

TERM AND TERMINATION

     10.1 Effective Date and Expiration Date. The term of this Agreement shall commence on
the Effective Date and, unless terminated sooner in accordance with Section 10.2, shall expire upon
the earlier of FDA approval of the NDA for the Product or the fifth (5th) anniversary of
the Effective Date (the “Term”).

     10.2 Termination. This Agreement may be terminated as follows:

          (a) either Party may terminate this Agreement upon sixty (60) days written notice upon the
material breach of any provision of this Agreement by the other Party if the breach is not remedied
prior to the expiration of such sixty (60)-day notice period;

          (b) Cornerstone may terminate this Agreement upon ninety (90) days written notice if Neos
fails to achieve any milestones or quality targets set forth in the Development Plan and such
failure is not remedied prior to the expiration of such ninety (90)-day notice period,

          (c) Cornerstone immediately may terminate this Agreement if following Neos’ receipt of the
FDA’s approval of the Manufacturing Site as a GMP manufacturing facility, the FDA revokes such
approval;

          (d) either Party may terminate this Agreement upon thirty (30) days written notice if the
other Party is unable to perform its obligations for a period of ninety (90) days due to a Force
Majeure event as described in Section 11.7;

          (e) either Party immediately may terminate this Agreement upon written notice if the other
Party shall: (i) file in any court pursuant to any statute a petition for bankruptcy or
insolvency, or for reorganization in bankruptcy, or for an arrangement or for the appointment of a
receiver, trustee or administrator of such Party or of its assets; (ii) be served with an
involuntary petition against it, filed in any insolvency proceeding, and such petition shall not be
dismissed within sixty (60) days after the filing thereof; (iii) propose or be a party to any
dissolution; or (iv) make an assignment for the benefit of its creditors (each, an “Insolvency
Event”); and

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          (f) Cornerstone may terminate this Agreement immediately by written notice to Neos if the
Product is unable to achieve a suitable pharmacokinetic profile as determined by the
bioavailability study in the Development Plan or if it receives a Not Approvable Letter from the
FDA pursuant to 21 CFR §314.120 with respect to the NDA for the Product.

     10.3 Effects of Termination.

          (a) Accrued Rights; Delivery of Development Work Materials. Termination or expiration of this
Agreement for any reason shall (a) be without prejudice to any rights that shall have accrued to
the benefit of either Party prior to the effective date of such termination or expiration,
including without limitation rights to be paid any amounts owed to such Party hereunder as of such
date, and (b) not relieve either Party from obligations that are expressly indicated to survive
termination or expiration of this Agreement under Section 10.3(b).

          (b) Survival.

               (i) If FDA approval of the NDA for the Product is received and this Agreement expires or is
terminated, all rights granted and obligations undertaken by the Parties hereunder shall terminate
immediately upon the event of any termination or expiration of this Agreement, except for rights
and obligations set forth in Sections 2.5, 3.5, 10.3, 11.2, 11.7, 11.8, and 11.9, and in Articles
4, 6, 7, 8, and 9, or rights or obligations in this Agreement that by their express terms are
intended to operate after any termination or expiration of this Agreement.

               (ii) If FDA approval of the NDA for the Product is not received and this Agreement expires or
is terminated, all rights granted and obligations undertaken by the Parties hereunder shall
terminate immediately upon the event of any termination or expiration of this Agreement, except for
rights and obligations set forth in Sections 2.5, 10.3, 11.2, and 11.9, and in Articles 4, 6, and
9, or rights or obligations in this Agreement that by their express terms are intended to operate
after any termination or expiration of this Agreement.

               (iii) Should Neos become a party to a bankruptcy proceeding and such proceeding is not
dismissed within sixty (60) days then, to the extent permitted by applicable Laws, this Agreement
and the licenses granted by Neos hereunder shall continue, subject to the terms and conditions set
forth in this Agreement, and shall be adopted by any bankruptcy trustee or relevant third party
charged with the disposition of same, and shall not be rejected by same, it being the Parties’
intent that, in such event, Cornerstone and its Affiliates and sublicensees shall be entitled to
retain the rights granted to them hereunder by Neos.

          (c) Technical Transfer. If Cornerstone has the right under Section 7.1 to make or have made
by a third party manufacturer the Product, then Neos agrees to use commercially reasonable efforts
to assist Cornerstone to transfer the manufacture of the Product, including delivery of copies of
manufacturing and technical documentation, to any other facilities of Cornerstone or other third
party manufacturer selected by Cornerstone in its sole discretion.

          (d) Cessation of Work; Final Invoice. Upon delivery of written notice of termination to Neos
by Cornerstone, Neos shall immediately cease to perform work for or on behalf of Cornerstone,
unless authorized in writing by Cornerstone. In the event of termination of this Agreement for
any reason, Neos shall render a final invoice, due and payable promptly

18

 

CONFIDENTIAL

following receipt by Cornerstone, for Development Work performed for which Neos has not received
payment.

ARTICLE 11.

MISCELLANEOUS

     11.1 Counterparts. This Agreement may be signed in counterparts, each and every one
of which shall be deemed an original, notwithstanding variations in format or file designation
which may result from the electronic transmission, storage and printing of copies of this Agreement
from separate computers or printers. The exchange of copies of this Agreement or amendments
thereto and of signature pages by facsimile transmission or by email transmission in portable
document format (PDF), or similar format, shall constitute effective execution and delivery of such
instrument(s) as to the Parties and may be used in lieu of the original Agreement or amendment for
all purposes. Signatures of the Parties transmitted by facsimile or by email transmission in
portable document format (PDF), or similar format, shall be deemed to be their original signatures
for all purposes.

     11.2 Notices. In any case where any notice or other communication is required or
permitted to be given hereunder, such notice or communication shall be in writing, and shall be
deemed effective (a) in the case of hand delivery, when received, (b) in the case of overnight
delivery service, on the next business day after being placed in the possession of such service,
(c) in the case of facsimile, when electronic indication of receipt is received, and (d) in the
case of certified or registered mail, on the third day after being placed in the postal system
first class postage prepaid, at the respective addresses or facsimile numbers set forth below (or
such other address as the applicable Party may designate from time to time in writing):

          If to Cornerstone:

Cornerstone BioPharma, Inc.

2000 Regency Parkway, Suite 255

Cary, North Carolina 27511

Facsimile: (919) 678-6599

Attention: President

          If to Neos:

Neos Therapeutics

2940 N. Hwy. 360, Ste. 100

Grand Prairie, TX 75050

Facsimile: (972) 408-1143

Attention: President

     11.3 Binding Effect; Assignment. Neither this Agreement nor any rights or obligations
hereunder may be assigned, in whole or in part, by either Party without the prior written consent
of the other Party, and any attempted assignment without such consent shall be null and void.
Notwithstanding the foregoing, this Agreement or any rights and obligations under this Agreement
may be assigned (a) by Cornerstone to any Affiliate; (b) by Cornerstone to any person that acquires
substantially all of Cornerstone’s rights in the Product; or (c) by either Party
to a purchaser of substantially all of the capital stock or assets (including, in the case of

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Neos, the Neos Intellectual Property) of such Party by merger, purchase or other business combination.
Subject to the foregoing, this Agreement shall inure to the benefit of and be binding upon each of
the Parties hereto and their respective successors and permitted assigns.

     11.4 Entire Agreement; Amendment. The terms and conditions contained herein
constitute the entire agreement between the Parties relating to the subject matter hereof and shall
supersede all previous communications between the Parties with respect to the subject matter
hereof. This Agreement may be varied, amended or extended only by the written agreement of the
Parties, specifically referring to this Agreement.

     11.5 Severability. In case any one or more of the provisions contained herein shall,
for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this Agreement, but this
Agreement shall be construed as if such invalid, illegal or unenforceable provision or provisions
had never been contained herein unless the deletion of such provision or provisions would result in
such a material change as to cause completion of the transactions contemplated herein to be
impossible and provided that the performance required by this Agreement with such clause deleted
remains substantially consistent with the intent of the Parties.

     11.6 Applicable Law. The Agreement shall be governed by the laws of the State of New
York applicable to contracts made and to be performed entirely within such jurisdiction and without
giving effect to its choice or conflict of laws rules or principles.

     11.7 Force Majeure. No Party shall be liable for any failure to perform or any delay
in performing its obligations hereunder, when such failure or delay is due to Force Majeure and
without the fault or negligence of the Party so failing or delaying. For purposes of this
Agreement, “Force Majeure” is defined as acts of God; newly interpreted or issued Laws of
any government; war; civil commotion; destruction of production facilities or materials by fire,
flood, earthquake, explosion or storm; labor disturbances; epidemic; failure of public utilities or
common carriers; and other similar extraordinary unforeseen events that are beyond the control of
the affected Party, but shall not include general market or economic conditions and other ordinary
risks of doing business. If, for any of the reasons set forth in this Section 11.7, either Party
shall be unable to perform its obligations hereunder, such Party shall immediately notify the other
Party of such inability and the specific causes thereof and of the period for which such inability
is expected to continue. The Party giving such notice shall thereupon be excused from such of its
obligations under this Agreement as it is thereby disabled from performing during the pendency of
such causes, provided that it uses commercially reasonable efforts to overcome such causes.

     11.8 No Waiver of Rights. No failure or delay on the part of either Party in the
exercise of any power or right hereunder shall operate as a waiver thereof. No single or partial
exercise of any right or power hereunder shall operate as a waiver of such right or of any other
right or power. The waiver by either Party of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any other or subsequent breach hereunder. The remedies
herein provided are cumulative and not exclusive of any remedies provided by law.

     11.9 Publicity. Neither Party shall use the other Party’s name in any press release,
publicity, advertising, or other disclosure without the other Party’s prior written consent. Any

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public announcements or similar publicity with respect to this Agreement shall be at such time
and in such manner as the Parties shall mutually agree, provided that nothing herein shall prevent
either Party from, upon notice to and opportunity to review and comment by the other, making such
public announcements as such Party’s legal obligations require.

     11.10 Independent Contractor. In making and performing this Agreement, the Parties
are acting, and intend to be treated, as independent entities and nothing contained in this
Agreement shall be construed or implied to create an agency, partnership, joint venture, or
employer/employee relationship between Neos and Cornerstone. Except as otherwise expressly
provided herein, neither Party may make any representation, warranty or commitment, whether express
or implied, on behalf of, or incur any charges or expenses for or in the name of the other Party.
No Party shall be liable for the act of any other Party.

[signature page follows]

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[Signature Page to Development, License and Services Agreement]

     IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their duly
authorized representatives as of the date first written above.

	 	 	 	 	 	 	 
	 	 	CORNERSTONE, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Brian Dickson	 	 
	 

	 	Name:
	 	 

Brian Dickson
	 	 
	 

	 	Title:
	 	Chief Medical Officer	 	 

	 	 	 	 	 	 	 
	 	 	NEOS THERAPEUTICS, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Mark Tengler	 	 
	 

	 	Name:
	 	 

Mark Tengler
	 	 
	 

	 	Title:
	 	President	 	 

 

 

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SCHEDULE A

DVR Patent Applications

 

 

			
	United States Patent Application: 0050152967
	 	Page 1 of 20
	 	 	 

US PATENT & TRADEMARK OFFICE

PATENT APPLICATION FULL TEXT AND IMAGE DATABASE

( 5 of 5 )

			
	 	 	 
	United States Patent Application
	 	20050152967
	Kind Code
	 	A1
	Tengler, Mark; et al.
	 	July 14, 2005

Dynamic variable release

Abstract

The present invention relates to novel mixed release pharmaceutical formulations that include a
expectorant available for immediate release and a decongestant for extended release that provide
for the symptomatic relief of cough associated with respiratory tract conditions such as the common
cold, bronchial asthma, acute and chronic bronchitis.

	 	 	 
	Inventors:
	 	Tengler, Mark; (Colleyville, TX); Ryan, Darlene; (Fort Worth, TX)
	Correspondence
	 	CHALKER FLORES, LLP
	Name and
	 	12700 PARK CENTRAL, STE. 455
	Address:
	 	DALLAS
	 
	 	TX
	 
	 	75251
	 
	 	US
	Assignee Name PFab, LP
	and Address:
	 	Grand Prairie
	 
	 	TX
	 
	 	75050
	 
	 	 
	Serial No.:
	 	010944
	Series Code:
	 	11
	Filed:
	 	December 13, 2004

			
	 	 	 
	U.S. Current Class: 

U.S. Class at Publication: 

Intern’l Class:
	 	424/451; 424/464; 514/649

424/451; 424/464; 514/649

A61K 009/48; A61K 009/20; A61K 009/26; A61K 031/137

Claims

1. A pharmaceutical composition comprising: an expectorant packaged for release of over 90% within
about 90 minutes; and a decongestant packaged for extended release wherein between about 30 to 60%
of the decongestant is available after 90 minutes, between about 50 to 70 percent is available at
between 150 and 210 minutes and wherein between about 60 to 80 percent is available after 360 minutes.

 

 

			
	United States Patent Application: 0050152967
	 	Page 2 of 20
	 	 	 

2. The composition of claim 1, wherein the decongestant comprises phenylephrine.

3. The composition of claim 1, wherein the expectorant comprises guaifenesin.

4. The composition of claim 1, wherein the pharmaceutical formulation is packed into a capsule.

5. The composition of claim 1, wherein the decongestant and the expectorant are packed into a
capsule, caplet, softgel, gelcap, suppository, film, granule, gum, insert, pastille, pellet,
troche, lozenge, disk, poultice or wafer.

6. The composition of claim 1, wherein over 80% of the expectorant is released within about 60
minutes.

7. The composition of claim 1, wherein immediate release is defined further as comprising release
of over 90% of the expectorant within about 60 minutes.

8. The composition of claim 1, wherein the decongestant is packaged with PVPP and Povidone.

9. The composition of claim 1, wherein the decongestant is packaged with a talc and a stearate.

10. The composition of claim 1, wherein the expectorant comprises gauifenesin in a powder form.

11. The composition of claim 1, wherein the expectorant comprises 422 mg of 95% gauifenesin.

12. The composition of claim 1, wherein the decongestant comprises phenylephrine as a sustained
release bead, a layered sustained release bead or three or more layers of phenylephrine on a bead.

13. The composition of claim 1, wherein the expectorant is superposed on the decongestant.

14. The composition of claim 1, comprising further one or more inactives.

15. A pharmaceutical composition consisting essentially of: an expectorant packaged for release of
over 90% within about 90 minutes; a decongestant packaged for extended release wherein between
about 30 to 60% of the decongestant is available after 90 minutes, between about 50 to 70 percent
is available at between 150 and 210 minutes and wherein between about 60 to 80 percent is available
after 360 minutes; and one or more inactive agents.

16. A capsule consisting essentially of: an expectorant packaged for release of over 90% within
about 90 minutes; a decongestant packaged for extended release wherein between about 30 to 60% of
the decongestant is available after 90 minutes, between about 50 to 70 percent is available at
between 150 and 210 minutes and wherein between about 60 to 80 percent is available after 360
minutes; and one or more inactive agents.

17. A method of providing a dual-release formulation comprising: loading into a capsule an
expectorant in a powered form and a decongestant in an extended release form, wherein the capsule
comprises one or more excipients selected from a polymer, a cellulose, a stearate, a talc, a
lacquer and a pharmaceutical glaze.

18. A method of providing a dual-release formulation comprising: providing a expectorant packed
for immediate release in a powder form; providing a nasal decongestant packed for extended release

 

 

			
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comprising, phenylephrine, PVP, cellulose and a pharmaceutical glaze, and loading the expectorant
and the decongestant into a capsule.

19. A pharmaceutical composition consisting essentially of: a guaifenesin packaged for release of
over 90% within about 90 minutes; a phenylephrine packed for extended release; and one or more
inactive agents selected from a polyvinyl polymer, microcrystalline cellulose, stearate, lacquer,
talc and a pharmaceutical glaze, wherein between about 30 to 60% of the decongestant is available
after 90 minutes, between about 50 to 70 percent is available at between 150 and 210 minutes and
wherein between about 60 to 80 percent is available after 360 minutes.

20. A pharmaceutical composition consisting essentially of: an expectorant packaged for release of
over 90% within about 90 minutes; a decongestant packaged for extended release wherein between
about 30 to 60% of the decongestant is available after 90 minutes, between about 50 to 70 percent
is available at between 150 and 210 minutes and wherein between about 60 to 80 percent is available
after 360 minutes; and one or more inactive agents.

21. The composition of claim 20, wherein the decongestant comprises phenylephrine.

22. The composition of claim 20, wherein the expectorant comprises guaifenesin.

23. The composition of claim 20, wherein the pharmaceutical formulation is packed into a capsule.

24. The composition of claim 20, wherein the decongestant and the expectorant are packed into a
capsule, caplet, softgel, gelcap, suppository, film, granule, gum, insert, pastille, pellet,
troche, lozenge, disk, poultice or wafer.

25. The composition of claim 20, wherein over 80% of the expectorant is released within about 60
minutes.

26. The composition of claim 20, wherein immediate release is defined further as comprising
release of over 90% of the expectorant within about 60 minutes.

27. The composition of claim 20, wherein the decongestant is packaged with a polyvinyl polymer and
Povidone.

28. The composition of claim 20, wherein the decongestant is packaged with a talc and a stearate.

29. A pharmaceutical composition comprising: a guaifenesin salt packaged for release of over 90%
within about 90 minutes; a phenylephrine salt packaged for extended release wherein between about
30 to 60% of the decongestant is available after 90 minutes, between about 50 to 70 percent is
available at between about 150 and 210 minutes and wherein between about 60 to 80 percent is
available after 360 minutes.

30. The composition of claim 29, wherein the decongestant comprises phenylephrine.

31. The composition of claim 29, wherein the expectorant comprises guaifenesin.

32. The composition of claim 29, wherein the pharmaceutical formulation is packed into a capsule.

33. The composition of claim 29, wherein the decongestant and the expectorant are packed into a
caplet, softgel, gelcap, suppository, film, granule, gum, insert, pastille, pellet, troche,
lozenge, disk, poultice or wafer.

 

 

			
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34. The composition of claim 29, wherein over 80% of the expectorant is released within about 60
minutes.

35. The composition of claim 29, wherein immediate release is defined further as comprising
release of over 90% of the expectorant within about 60 minutes.

36. The composition of claim 29, wherein the decongestant is packaged with a polyvinyl polymer and
Povidone.

37. The composition of claim 29, wherein the decongestant is packaged with a talc and a stearate.

Description

FIELD OF INVENTION

[0001] The invention relates to novel mixed release pharmaceutical formulations having an
expectorant for immediate release and a decongestant for mixed release, wherein the release
profiles of the ingredients are controlled to maximize the effectiveness of their pharmacological
action.

BACKGROUND OF THE INVENTION

[0002] Without limiting the scope of the invention, its background is described in connection with
immediate and extended release formulations and combination drug therapy, as an example.
Heretofore, in this field, medications have been formulated so that they may be administered in a
reduced number of daily doses. These doses must also provide drug that is released uniformly over a
desired, extended period of time. Sustained or extended release pharmaceutical formulations provide
a significant advantage over immediate release formulations to both clinicians and their patients
because patients require fewer daily doses than their immediate release counterparts. In some
cases, extended release formulation may improve therapeutic efficiency due to more consistent drug
serum levels.

[0003] Various techniques have been developed to provide pharmaceutical preparations that include,
e.g., a drug-containing particle with a coating layer and a pharmaceutical preparation in a
continuous matrix with a drug dispersed therein, such as embedded into a rigid lattice of a resin.
To achieve extended release, some pharmaceutical preparations include generally, a partially or
completely insoluble matrix that in aqueous body fluids releases the drug. Alternatively,
pharmaceutical preparations made of particles may be coated to provide extended release. It is
believed that the release of the drug from such pharmaceutical preparations is driven by the
gradient of the drug concentration resulting from penetration of water by diffusion into the
formulation. The rate of the release decreases due to a decrease in the concentration gradient and
the increase in the distance of diffusion. A sustained release formulation is also believed to help
reduce side effects caused by a drug because they deliver the drug in slow, incremental amounts
versus the cyclic high and low concentrations of immediate release formulations. By providing more
consistent drug levels it is argued that the patient is better able to process the drug to avoid
undesirable side-effects. Sustained release formulations for the sequential or timed release of
medicaments are generally known in the art. Such formulations often contain drug particles mixed
with or covered by a polymer material, or blend of materials, which is resistant to degradation or
disintegration in the stomach and/or in the intestine for a selected period of time. Release of the
drug may occur by

 

 

			
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leeching, erosion, rupture, diffusion or similar actions depending upon the nature of the polymer material or polymer blend used.

[0004] To improve the release profile of certain sustained release dosage forms, some formulations
include tablets and capsules that include a combination of an immediate release formulation and a
sustained release formulation. Although the inclusion of tablets and capsules improves control over
the dosing of drug levels in the blood stream in some formulations, the extended therapeutic effect
may not be improved or desired.

[0005] Furthermore, every active has different solubility properties and pH dependencies that
affect, e.g., its dissolution rate, and hence its bioavailability. Bioavailability may also be
affected by a number of factors such as the amounts and types of additives used, its granulation
and compression, surface area, mechanical shearing (e.g., by the stomach), pH, solubility of the
active agent in water, the presence of food, etc. Due to these numerous factors, the specific form
of the drug, its excipients, coating, pH, dissolution profile alone, and in combination, affect the
manner and formulation of actives to achieve the best bioavailability profile to achieve an optimum
therapeutic effect.

[0006] U.S. Pat. Nos. 4,309,404 and 4,248,857 to DeNeale, et al., disclose slow release
formulations formed of a core material containing the active drug, carboxypolymethylene, zinc
oxide, stearic acid, and mannitol; a seal coating surrounding the core; and a sugar coating
surrounding the seal coating. U.S. Pat. No. 4,309,405 to Guley, et al., discloses a sustained
release tablet similar to that disclosed by DeNeale, et al., except that the core contains a drug,
a mixture of a water-soluble polymer such as hydroxypropylmethylcellulose or hydroxypropylcellulose
and a water-insoluble polymer (ethylcellulose alone or in admixture with carboxypolymethylene,
hydroxypropylcellulose and the like). The DeNeale and Guley patents disclose that their
compositions provide substantially zero order release of the core contained drug for about 12 hours
following the first hour of administration. Thus, zero order release is only obtained after the
initial surge of release of drug in the first hour.

[0007] U.S. Pat. No. 4,695,467 to Uemura, et al., relates to a sustained release tablet that
includes easily disintegrable granules including: a drug, a disintegrating agent selected from the
group consisting of starch derivatives, gums, cellulose derivatives and ion-exchange resins, and a
water-soluble polymer selected from the group consisting of cellulose derivatives, synthetic water
soluble polymers and polysaccharides. The surfaces of the granules are treated with a wax selected
from the group consisting of plant or animal wax, hydrogenated oils and paraffin.

[0008] U.S. Pat. No. 6,372,252 to Blume, et al., relates to guaifenesin sustained release
formulation and tablets that require a hydrophilic polymer and a water-insoluble polymer. The
formulation is said to be capable of providing therapeutically effective bioavailability of
guaifenesin for at least twelve hours after dosing in a human subject. The invention also relates
to a modified release guaifenesin tablet that has two portions: the first portion comprises an
immediate release formulation of guaifenesin and the second portion comprises a sustained release
formulation of guaifenesin as described above. A two portion, or bi-layer, tablet has a maximum
serum concentration equivalent to that of an immediate release guaifenesin tablet, and is capable
of providing therapeutically effective bioavailability of guaifenesin for at least twelve hours
after dosing in a human subject.

[0009] U.S. Pat. No. 6,462,094 to Dang, et al., relates to decongestant/expectorant compositions
consisting essentially of phenylephrine tannate and guaifenesin that are effective when
administered orally for the symptomatic relief of cough associated with respiratory tract
conditions such as the common cold, bronchial asthma, acute and chronic bronchitis are disclosed.

 

 

			
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SUMMARY OF THE INVENTION

[0010] It has been found, however, that the present methods fail to provide an efficacious amount
of an expectorant in an immediate release form and a decongestant that is provided as an extended
release formulation that takes advantage of the pharmacological effect of the immediate release active to
maximize the efficiency of the delivery and pharmacological action of the decongestant. Yet another
problem is that certain drugs affect the release profile of a second drug that is being provided in
a single dose. The present invention solves these problems in the art.

[0011] The present invention also addresses a growing concern for physicians as they write
prescriptions for drugs: cost. While pharmacists continue to substitute generics in order to reduce
cost to the patients or allow for greater insurance coverage, the effectiveness of dosing and
effect has become paramount. The present invention increases the effectiveness of the individual
components, thereby reducing the number of doses and increasing the therapeutic effectiveness. It
may also be used to decrease dose sizes, thereby reducing costs. In one example of the advantages
of the present invention, an expectorant (e.g., gauifenesin) is provided at lower doses and is made
available immediately for absorption, followed by a lower dose of a decongestant (e.g.,
phenylephrine) which is release slowly over, e.g., about 90 minutes to about 8 hrs. This release
profile makes the product more efficacious since the large amount of expectorant begins to break up
mucus and the time released decongestant provides long acting decongestant activity.

[0012] One embodiment of the present invention is a capsule that includes an expectorant available
for immediate release and a decongestant for extended release. The expectorant may be, e.g.,
gauifenesin that is compressed into a slug of between about 50, 200, 400, 500, 600 or more
milligrams and packaged for release of over 90% of the active within about 90 minutes. The
decongestant comprises a nasal decongestant, e.g., phenylephrine packaged as a sustained release
bead, e.g., from between about 1.5 to 30 mg. The term immediate release is defined as release of
over 90% within about 90 minutes. The decongestant for extended release provides between about 40
to 60% of the decongestant after 90 minutes, between about 50 to 70 percent at between 150 and 210
minutes and wherein between about 60 to 80 percent after 360 minutes.

[0013] In another embodiment, the present invention is a single pharmaceutical composition that
includes an expectorant that is packed for immediate release; and a decongestant that is a nasal
decongestant packed for extended release, wherein the expectorant provides productive coughs in the
short-term and the decongestant provides long-acting decongestant activity.

[0014] In yet another embodiment, the present invention provides a time released phenylephrine that
is formulated to provide maximum effective release over 2-8 hours using a combination of polymers
and/or pharmaceutical glaze. It was found that when the phenylephrine were overcoated with
immediate release gauifenesin the process was not only time consuming (since building up the bead
with gauifenesin had adhesion problems), but also that overcoating of the gauifenesin on the
phenylephrine slowed the release of the phenylephrine to an unacceptable level. Further attempts to
increase adhesion by sustain releasing both actives also resulted in a poor release profile for
gauifenesin. Nevertheless, overcoating the extended release active with an immediate release active
may be used with these or other actives, depending on the actives selected and the desired
efficacy. One embodiment of the present invention includes powder filling the gauifenesin and
extended release phenylephrine into a capsule. The solution provided herein addresses the problems
of dosing, effective pharmacological serum levels and cost. This process also reduces greatly the
already taxed capacity on the bead room since up to about 96% of the active load would not need to
go through the coating process.

 

 

			
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[0015] In one embodiment, the present invention includes a pharmaceutical composition having an
expectorant packaged for release of over 90% within about 90 minutes; and a decongestant packaged
for extended release wherein between about 40 to 60% of the decongestant is available after 90
minutes, between about 50 to 70 percent is available at between 150 and 210 minutes and wherein between
about 60 to 80 percent is available after 360 minutes. In another embodiment, the present invention
is a method of providing a dual-release formulation that includes an expectorant packed for
immediate release in a powder form, a nasal decongestant packed for extended release, e.g.,
phenylephrine, PVP, cellulose and a pharmaceutical glaze, and loading the expectorant and the
decongestant into a capsule. Yet another embodiment is a pharmaceutical composition with an
expectorant (e.g., guaifenesin) packaged for release of over 90% within about 90 minutes and a
nasal decongestant (e.g., phenylephrine HCl) packed for extended release with PVP, microcrystalline
cellulose and a pharmaceutical glaze, wherein between about 40 to 60% of the decongestant is
available after 90 minutes, between about 50 to 70 percent is available at between about 150 and
210 minutes and wherein between about 60 to 80 percent is available after 360 minutes; and one or
more inactive agents.

BRIEF DESCRIPTION OF THE DRAWINGS

[0016] For a more complete understanding of the features and advantages of the present invention,
reference is now made to the detailed description of the invention along with the accompanying
figures and in which:

[0017] FIG. 1 is a graph that shows one embodiment of the present invention for immediate release
guaifenesin and delayed release phenylephrine HCl;

[0018] FIG. 2 is a graph that shows another embodiment of the present invention for immediate
release guaifenesin and delayed release phenylephrine HCl; and

[0019] FIG. 3 is a graph that shows another embodiment of the present invention for immediate
release guaifenesin and delayed release phenylephrine HCl.

DETAILED DESCRIPTION OF THE INVENTION

[0020] While the making and using of various embodiments of the present invention are discussed in
detail below, it should be appreciated that the present invention provides many applicable
inventive concepts which can be embodied in a wide variety of specific contexts. The specific
embodiments discussed herein are merely illustrative of specific ways to make and use the invention
and do not delimit the scope of the invention.

[0021] The present invention is based on the recognition that patients and physicians are looking
to simplify the number of doses that a patient takes, improving the efficacy of drug delivery and
reducing costs. The effectiveness of dosing and effect has become paramount in order to reduce cost
to the patients and allow for greater insurance coverage, while improving patient compliance.

[0022] Definitions

[0023] A number of definitions are provided herein to facilitate an understanding of the present
invention. As used herein, the term “enveloped pharmaceutical” means a capsule, a suppository, a
gel cap, a softgel, a lozenge, a sachet or even a fast dissolving wafer. As used herein the term
“carrier” is used to describe a substance, whether biodegradable or not, that is physiologically
acceptable for human or animal use and may be pharmacologically active or inactive.

 

 

			
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[0024] The term “immediate release” as used herein is used to describe a release profile to effect
delivery of an active as soon as possible, that is, as soon as practically made available to an
animal, whether in active form, as a precursor and/or as a metabolite. Immediate release may also
be defined functionally as the release of over 80 to 90 percent (%) of the active ingredient within about 60, 90, 100 or 120
minutes or less. Immediate release as used herein may also be defined as making the active
ingredient available to the patient or subject regardless of uptake, as some actives may never be
absorbed by the animal. Immediate release formulations of the active on a carrier, such as rolled
or compressed beads, may be formulated such that the surface area is maximized on beads and the
active is exposed immediately. The immediate release formulations may also include effervescing
agents that cause the disintegration of the structure integrity of the active and carrier such that
release of the active is maximized. Various immediate release dosage forms may be designed readily
by one of skill in art to achieve drug delivery to the stomach and small intestine, depending upon
the choice of compression, adhesive materials and/or beading.

[0025] The terms “extended release” and “delayed release” as used herein is used to define a
release profile to effect delivery of an active over an extended period of time, defined herein as
being between about 60 minutes and about 2, 4, 6 or even 8 hours. Extended release may also be
defined functionally as the release of over 80 to 90 percent (%) of the active ingredient after
about 60 minutes and about 2, 4, 6 or even 8 hours. Extended release as used herein may also be
defined as making the active ingredient available to the patient or subject regardless of uptake,
as some actives may never be absorbed by the animal. Various extended release dosage forms may be
designed readily by one of skill in art as disclosed herein to achieve delivery to both the small
and large intestines, to only the small intestine, or to only the large intestine, depending upon
the choice of coating materials and/or coating thickness.

[0026] “Extended release” and “delayed release” formulations may be prepared and delivered so that
release is accomplished at some generally predictable location in the lower intestinal tract more
distal to that which would have been accomplished if there had been no delayed release alterations.
A method for delay of release is, e.g., a coating. Any coatings should be applied to a sufficient
thickness such that the entire coating does not dissolve in the gastrointestinal fluids at pH below
about 5, but does dissolve at pH about 5 and above. It is expected that any anionic polymer
exhibiting a pH-dependent solubility profile can be used as an enteric coating in the practice of
the present invention to achieve delivery to the lower gastrointestinal tract. Polymers and
compatible mixtures thereof may be used to provide the coating for the delayed or the extended
release of active ingredients, and some of their properties, include, but are not limited to:
shellac, also called purified lac, a refined product obtained from the resinous secretion of an
insect. This coating dissolves in media of pH>7.

[0027] The present pharmaceutical composition may also be provided in a variety of dosage forms,
e.g., solution, suspension, cream, ointment, lotion, capsule, caplet, softgel, gelcap, suppository,
enema, elixir, syrup, emulsion, film, granule, gum, insert, jelly, foam, paste, pastille, pellet,
spray, troche, lozenge, disk, magma, poultice, or wafer and the like.

[0028] For gelcap preparations, the pharmaceutical formulation may include oils, e.g.: (1) fixed
oils, such as peanut oil, sesame oil, cottonseed oil, corn oil and olive oil; (2) fatty acids, such
as oleic acid, stearic acid and isostearic acid; and fatty acid esters, such as ethyl oleate,
isopropyl myristate, fatty acid glycerides and acetylated fatty acid glycerides; (3) alcohols, such
as ethanol, isopropanol, hexadecyl alcohol, glycerol and propylene glycol; (4) glycerol ketals,
such as 2,2-dimethyl-1,3-dioxolane-4-methanol; (5) ethers, such as poly(ethylene glycol) 450; (6)
petroleum hydrocarbons, such as mineral oil and petrolatum; and (7) water, or with mixtures
thereof; with or without the addition of a pharmaceutically suitable surfactant, suspending agent
or emulsifying agent.

 

 

			
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[0029] For oral, buccal, and sublingual administration, the pharmaceutical composition of the
invention may be administered as either solutions or suspensions in the form of gelcaps, caplets,
tablets, capsules or powders. For rectal administration, the compounds of the invention may be administered in the form
of suppositories, ointments, enemas, tablets and creams for release of compound in the intestines,
sigmoid flexure and/or rectum. For example, when making a suppository a beeswax/glycerol
composition may be used to form a body meltable suppository for transrectal or transurethral
delivery.

[0030] It is contemplated that the “immediate release” active may be formulated as, e.g., freeze
dried, rotary dried or spray dried powders; amorphous or crystalline powders; granules,
precipitates or particulates. The immediate release active may be either free-flowing or
compressed. The pharmaceutical formulation may further include, e.g., water, aqueous solvents,
non-protic solvents, protic solvents, hydrophilic solvents, hydrophobic solvents, polar solvents,
non-polar solvent, emollients and/or combinations thereof. Other formulations may include,
optionally, stabilizers, pH modifiers, surfactants, perfumes, astringents, cosmetic foundations,
pigments, dyes, bioavailability modifiers and/or combinations thereof.

[0031] The immediate release actives of the present invention may be processed by agglomeration,
air suspension chilling, air suspension drying, balling, coacervation, coating, comminution,
compression, cryopelletization, encapsulation, extrusion, wet granulation, dry granulation,
homogenization, inclusion complexation, lyophilization, melting, microencapsulation, mixing,
molding, pan coating, solvent dehydration, sonication, spheronization, spray chilling, spray
congealing, spray drying, or other processes known in the art. The extended release actives may be
provided in the form of a minicapsule, a capsule, a tablet, an implant, a troche, a lozenge
(minitablet), a temporary or permanent suspension, a pellet, a bead, a pill, a strip or a sachet.

[0032] The pharmaceutical composition and/or the solid carrier particles may be coated with one or
more enteric coatings, seal coatings, film coatings, barrier coatings, compress coatings, fast
disintegrating coatings, or enzyme degradable coatings. Multiple coatings may be applied for
desired performance. For example, the pharmaceutical composition, e.g., phenylephrine may be mixed
with one or more agents that delay release until the proper pH, gel formation and/or timed-release
polymers and/or additives are provided. Further, some actives may be provided for immediate
release, pulsatile release, controlled release, extended release, delayed release, targeted
release, synchronized release, or targeted delayed release. For release/absorption control, solid
carriers can be made of various component types and levels or thicknesses of coats, with or without
an active ingredient. Such diverse solid carriers can be blended in a dosage form to achieve a
desired performance. The compositions may be formulated for oral, nasal, buccal, ocular, urethral,
transmucosal, vaginal, topical or rectal delivery, although oral delivery is used mostly.

[0033] For example, suitable mixed or extended release polymers for use with the present invention
include but are not limited to synthetic polymers such as poly(ethylene glycol), poly(ethylene
oxide), partially or fully hydrolyzed poly(vinyl alcohol), poly(vinylpyrrolidone),
poly(ethyloxazoline), poly (ethylene oxide)-co-poly(propylene oxide) block copolymers (poloxamers
and meroxapols), poloxamines, carboxymethyl cellulose, and hydroxyalkylated celluloses such as
hydroxyethyl cellulose and methylhydroxypropyl cellulose, and natural polymers such as
polypeptides, polysaccharides or carbohydrates such as Ficoll.RTM., polysucrose, hyaluronic acid,
dextran, heparan sulfate, chondroitin sulfate, heparin, or alginate, and proteins such as gelatin,
collagen, albumin, or ovalbumin or copolymers or blends thereof. As used herein, “celluloses”
includes cellulose and derivatives of the types described above; “dextran” includes dextran and
similar derivatives thereof.

 

 

			
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[0034] The blend of polymers may form a hydrogel or matrix using a material such as a carbohydrate
polymer or polysaccharide (e.g., hyaluronic acid) in the presence of an initiator such as mono-,
di- or trivalent cations or anions in water, a radical, or a photoinitiator. The polymer blend may
be intrinsically biodegradable, biocompatible, or of sufficiently low molecular weight to allow
excretion. Some components of the polymer blend exhibit little to no ability to biologically degrade. Where there
are two or more water-soluble polymer blocks joined by other groups, the joining groups may include
biodegradable linkages, polymerizable linkages, or both.

[0035] Other polymer formulations for use with the present invention include scaffolds prepared
with the polymer of the present invention and one or more bioactive compounds or active species so
that the polymer or scaffold becomes a microcarrier for one or more active species. The active
species may be incorporated into the polymer or polymer solution (e.g., scaffold) or may be
attached to its surface using techniques readily apparent to those skilled in the art. In some
instances, it may be preferred to incorporate or attach a precursor of the active agent, e.g., an
inactive version of the species that can then be activated to the active species as needed and
required. The active species may be a drug or other biologically active compound; thus, the
scaffold may be a microcarrier for the delivery of drugs or other biologically active compounds
when used in the body. Examples of biologically active compounds are proteins, peptides,
polysaccharides, nucleic acids, oligonucleotides, natural and synthetic organic or inorganic
molecules, and those biologic molecules used for therapeutic, prophylactic or diagnostic purposes.
Drugs may include antibiotics, antivirals, chemotherapeutic agents, anti-angiogenic agents,
hormones, anti-inflammatory agents, drugs having an effect on vascular flow or that are effective
against one or more diseases, and combinations thereof.

[0036] When formulated as a capsule, the capsule can be a hard or soft gelatin capsule, a starch
capsule, or a cellulosic capsule. Although not limited to capsules, such dosage forms may be
further coated with, for example, a seal coating, an enteric coating, an extended release coating,
or a targeted delayed release coating. For example, the capsule may include one or more actives in
powder form. The term “powder” as used herein include, e.g., true powder, as well as truly
crystalline materials, microgranulated, nanosprayed, nanoprecipitated, microprecipitated and/or
granulated materials, agglomerates, adsorbates and the like. In addition, when these powders are
coated, the coating contemplated is a rapid release coating. For immediate release of an active,
suitable coatings (if any) will dissolve, disintegrate and/or become sufficiently porous to allow
the full release and dissolution of the coated drug in a manner consistent with the administration
of the same drug in a completely uncoated fashion. Certainly, the use of these “coated powders”
should not alter the dissolution rates of the drug in the digestive tract by more than an hour and
preferably by less than half an hour.

[0037] Dosage forms of the compositions of the present invention can also be formulated as enteric
coated delayed release oral dosage forms, i.e., as an oral dosage form of a pharmaceutical
composition as described herein that uses an enteric coating to effect release in the lower
gastrointestinal tract. The enteric coated dosage form may be a compressed or molded or extruded
tablet/mold (coated or uncoated) containing granules, pellets, beads or particles of the active
ingredient and/or other composition components, which are themselves coated or uncoated. The
enteric coated oral dosage form may also be a capsule (coated or uncoated) containing pellets,
beads or granules of the solid carrier or the composition, which are themselves coated or uncoated.

[0038] The coating may also contain a plasticizer and possibly other coating excipients such as
colorants, talc, and/or magnesium stearate, which are well known in the art. Suitable plasticizers
include: triethyl citrate (Citroflex 2), triacetin (glyceryl triacetate), acetyl triethyl citrate
(Citroflec A2), Carbowax 400 (polyethylene glycol 400), diethyl phthalate, tributyl citrate,
acetylated monoglycerides, glycerol, fatty acid esters, propylene glycol, and dibutyl phthalate. In
particular, anionic carboxylic acrylic polymers

 

 

			
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usually will contain 10-25% by weight of a plasticizer, especially dibutyl phthalate, polyethylene glycol, triethyl citrate and triacetin.
Conventional coating techniques such as spray or pan coating are employed to apply coatings. The
coating thickness must be sufficient to ensure that the oral dosage form remains intact until the
desired site of topical delivery in the lower intestinal tract is reached.

[0039] Colorants, detackifiers, surfactants, antifoaming agents, lubricants, stabilizers such as
hydroxy propyl cellulose, acid/base may be added to the coatings besides plasticizers to solubilize
or disperse the coating material, and to improve coating performance and the coated product.

[0040] Immediate release coating of solid carriers is commonly used to improve product elegance as
well as for a moisture barrier, and taste and odor masking. Rapid breakdown of the film in gastric
media is important, leading to effective disintegration and dissolution. Eudragit RD100 (Rohm) is
an example of such a coating. It is a combination of a water insoluble cationic methacrylate
copolymer with a water-soluble cellulose ether. In powder form, it is readily dispensable into an
easily sprayable suspension that dries to leave a smooth film. Such films rapidly disintegrate in
aqueous media at a rate that is independent of pH and film thickness.

[0041] Actives. Decongestants useful with the present invention (along with a salt form) are
phenylephrine (bitartrate, tannate, HBr, HCl), phenylpropanolamine (HCl) and pseudoephedrine (HCl).
Furthermore, a number of herbal and/or natural decongestants are known in the art, all of which may
be used with the present invention.

[0042] Expectorants for use with the present invention include, e.g., guaifenesin, terpin hydrate,
(glyceryl guaiacolate), potassium (iodide, citrate) and potassium guaicolsulfonate. Other
expectorants, whether individual ingredients or combinations of ingredients may be used with the
present invention. Furthermore, a number of herbal and/or natural expectorants are known in the
art, all of which may be used with the present invention, e.g., Oregano Leaf Extract 25-500 mg
(which may be a liquid extract), Red Clover 25-500 mg, Buckthorn Root 25-500 mg, or Fenugreek
25-500 mg, or mixtures thereof.

[0043] Examples of antihistamines for use with the present invention (e.g., in salt form) are
chlorpheniramine (maleate), brompheniramine (maleate), dexchlorpheniramine (maleate),
dexbrompheniramine (maleate), triprolidine (HCl), diphenhydramine (HCl), doxylamine (succinate),
tripelennamine (HCl), cyproheptatine (HCl), bromodiphenhydramine (HCl), phenindamine (tartrate),
pyrilamine (maleate, tannate) and azatadine (maleate). Antitussives that may be used with the
present invention (with salt form) include: caramiphen (edisylate), dextromethorphan (HBr) and
codeine (phosphate, sulfate). A number of herbal and/or natural antihistamines are known in the
art, all of which may be used with the present invention.

[0044] Other actives may also be included with the present invention, e.g., non-steroidal
anti-inflammatory drugs (NSAIDs) such as propionic acid derivatives; acetic acid derivatives;
fenamic acid derivatives; biphenylcarboxylic acid derivatives; and oxicams. Examples of propionic
acid derivatives include: ibuprofen, naproxen, ketoprofen, flurbiprofen, fenoprofen, suprofen,
fenbufen, and fluprofen may be mentioned as preferred compounds. Acetic acid derivatives include:
tolmetin sodium, zomepirac, sulindac and indomethacin. Fenamic acid derivatives include: mefenamic
acid and meclofenamate sodium. Diflunisal and flufenisal are biphenylcarboxylic acid derivatives,
while oxicams include piroxicam, sudoxicam and isoxicam. Other analgesics for use with the present
invention include acetaminophen and phenacetin.

[0045] Those skilled in the art will appreciate that any of the foregoing compounds may be used in
the form of their pharmaceutically acceptable salt forms, e.g.—carboxylic acids with potassium or
sodium

 

 

			
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counter-ions, and the like. In one example of the present invention, an expectorant (e.g.,
Gauifenesin DC) is provided at lower doses and is made available immediately for absorption,
followed by a lower dose of a decongestant (e.g., phenylephrine) which is release slowly over,
e.g., about 1 to 8 hrs. This release profile makes the product more efficacious since the large
amount of expectorant begins to break up mucus prior to the time the decongestant is released to
provide long acting decongestant activity after mucus breakdown has begun. Generally, guaifenesin is present in amounts of about 10 to about 600
milligrams per capsule. Guaifenesin may be present in amounts of 100, 150, 200, 300, 400, 440, 500
or even 600 or more milligrams per capsule. In one example, guaifenesin is present in amounts of
about 100 to about 200 milligrams per capsule, with half or less of that amount used in a pediatric
form of the formulation.

[0046] In one example, 400 milligrams of gauifenesin are included as an active for immediate
release. Guaifenesin is an expectorant that increases the output of phlegm (sputum) and bronchial
secretions by reducing adhesiveness and surface tension. The increased flow of less viscous
secretions promotes cilliary action and facilitates the removal of mucus. Hence, expectorants such
as guaifenesin change a dry, unproductive cough to one that is more productive and less frequent.
Guaifenesin, known chemically as 3(2-methoxyphenoxy)-1,2-propanediol, is a crystalline powder
soluble in water and alcohol. It is indicated in the USP Drug information as an expectorant for the
symptomatic relief of cough due to colds and minor upper respiratory infections.

[0047] Phenylephrine may be present in amounts of between about 15 and about 60 milligrams per
capsule. Phenylephrine is generally in amounts of about 5 to about 30 milligrams per capsule, with
half or less of that amount used in a pediatric form of the formulation. In one example of the
present invention, phenylephrine is provided in the amount of about 15 mg for extended release.
Phenylephrine hydrochloride is an orally effective nasal decongestant. Chemically it is
(S)-3-hydroxy-.alpha. [(methylamino) methyl]benzenemethanol hydrochloride. Phenylepherine is a
synthetic, optically active sympathomimetic amine that has one hydroxyl group on the benzene ring.
The hydroxyl group is placed in the position meta to the aliphatic side chain. The meta position
affords optimal activity and phenylepherine (neo-synephrine) replaced an older preparation,
synephrine, in which the hydroxyl was in the para position. Phenylephrine hydrochloride is
available in the form of the levorotatory isomer, a white, odorless, non-hygroscopic, crystalline
compound possessing a bitter taste. Phenylephrine hydrochloride has a melting point of 140-145
degrees C and is freely soluble in water and alcohol. Decongestant compounds in the form of their
free bases as well as their salts, e.g., hydrochloride, citrate, maleate, tannate, etc., are well
known.

[0048] Excipients for use with the present invention are well known to those of skill in the art
and include humectants such as glycerin and propylene glycol, preservatives such as sodium benzoate
and paraben, sweeteners such as sodium saccharin, corn syrup and sorbitol solutions, menthol and
various flavoring and coloring agents. The pharmaceutically active compounds and excipients for
human use should be of N.F. or U.S.P. grade.

[0049] Sugar spheres may be used as inert cores in capsule and tablet formulations particularly
multiparticulate sustained release formulations and are provided in amounts sufficient to accept
the active ingredient for extended release, e.g., phenylephrine. Sugar spheres are generally of
relatively uniform diameter and contain 62.5%-91.5% sucrose with the remainder being starch.

[0050] Pharmaceutical Glaze: (4.5 mg) Shellac is a natural occurring material, consisting of a
complex mixture of constituents. The main component of shellac (.about.95%) is a resin that upon
mild basic hydrolysis gives a mixture of compounds of high plasticity. Shellac is used extensively
in the pharmaceutical industry as a film coating agent for beads and tablets.

 

 

			
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[0051] Substrate(s) for use with the present invention may be a powder or a multiparticulate, such
as a granule, a pellet, a bead, a spherule, a beadlet, a microcapsule, a millisphere, a
nanocapsule, a nanosphere, a microsphere, a platelet, a minitablet, a tablet or a capsule. A powder
may be a finely divided (milled, micronized, nanosized, precipitated, sprayed) to form of an active
ingredient or additive molecular aggregates or a compound aggregate of multiple components or a
physical mixture of aggregates of an active ingredient and/or additives. Such substrates may be
formed of various materials known in the art, such as, for example: sugars, such as lactose, sucrose or dextrose; polysaccharides, such as
maltodextrin or dextrates; starches; cellulosics, such as microcrystalline cellulose or
microcrystalline cellulose/sodium carboxymethyl cellulose; inorganics, such as dicalcium phosphate,
hydroxyapitate, tricalcium phosphate, talc, or titania; and polyols, such as mannitol, xylitol,
sorbitol or cyclodextrin.

[0052] It should be emphasized that a substrate need not be a solid material, although often it
will be a solid. For example, the encapsulation coat on the substrate may act as a solid “shell”
surrounding and encapsulating a liquid, semi-liquid, powder or other substrate material. Such
substrates are also within the scope of the present invention, as it is ultimately the carrier, of
which the substrate is a part, which must be a solid.

[0053] Excipients. Solid pharmaceutical compositions may include optionally one or more additives,
sometimes referred to as excipients or additives. The excipients may be contained in an
encapsulation coat in compositions, which include an encapsulation coat, or can be part of the
solid carrier, such as coated to an encapsulation coat, or contained within the components forming
the solid carrier. Alternatively, the excipients can be contained in the pharmaceutical composition
but not part of the solid carrier itself.

[0054] Suitable excipients are those used commonly to facilitate the processes involving the
preparation of the solid carrier, the encapsulation coating, or the pharmaceutical dosage form.
These processes include agglomeration, air suspension chilling, air suspension drying, balling,
coacervation, comminution, compression, pelletization, cryopelletization, extrusion, granulation,
homogenization, inclusion complexation, lyophilization, nanoencapsulation, melting, mixing,
molding, pan coating, solvent dehydration, sonication, spheronization, spray chilling, spray
congealing, spray drying, or other processes known in the art. The excipients may also be
pre-coated or encapsulated, as are well known in the art.

[0055] The pharmaceutical compositions of the present invention may include optionally one or more
solubilizers, i.e., additives to increase the solubility of the pharmaceutical active ingredient or
other composition components in the solid carrier. It has been recognized by the present inventors
that guaifenesin, in fact, acts as a solubilizer for phenylephrine, and is used as such in the
examples provided herein. Other solubilizers are known in the art. Mixtures of solubilizers are
also within the scope of the invention and are readily available from standard commercial sources.

[0056] The amount of solubilizer that may be included in compositions of the present invention is
not particularly limited. Of course, when such compositions are administered to a patient, the
amount of a given solubilizer is limited to a bioacceptable amount, which is readily determined by
one of skill in the art. In some circumstances, it may be advantageous to include amounts of
solubilizers far in excess of bioacceptable amounts, for example, to maximize the concentration of
active ingredient, with excess solubilizer removed prior to providing the composition to a patient
using conventional techniques, such as distillation or evaporation.

[0057] Other additives conventionally used in pharmaceutical compositions may be included, which
are well known in the art. Such additives include, e.g.,: anti-adherents (anti-sticking agents,
glidants, flow promoters, lubricants) such as talc, magnesium stearate, fumed silica), micronized
silica, polyethylene

 

 

			
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glycols, surfactants, waxes, stearic acid, stearic acid salts, stearic acid derivatives, starch, hydrogenated vegetable oils, sodium benzoate, sodium acetate, leucine,
PEG-4000 and magnesium lauryl sulfate.

[0058] Other additives include, binders (adhesives), i.e., agents that impart cohesive properties
to powdered materials through particle-particle bonding, such as matrix binders (dry starch, dry
sugars), film binders (polyvinylpyrrolidone (PVP), starch paste, celluloses, bentonite and
sucrose), and chemical binders (polymeric cellulose derivatives, such as carboxy methyl cellulose,
HPC and HPMC; sugar syrups; corn syrup; water soluble polysaccharides such as acacia, tragacanth, guar and alginates; gelatin;
gelatin hydrolysate; agar; sucrose; dextrose; and non-cellulosic binders, such as PVP, PEG, vinyl
pyrrolidone copolymers, pregelatinized starch, sorbitol, and glucose).

[0059] For certain actives it may be useful to provide buffering agents (or bufferants), where the
acid is a pharmaceutically acceptable acid, such as hydrochloric acid, hydrobromic acid, hydriodic
acid, sulfuric acid, nitric acid, boric acid, phosphoric acid, acetic acid, acrylic acid, adipic
acid, alginic acid, alkanesulfonic acid, amino acids, ascorbic acid, benzoic acid, boric acid,
butyric acid, carbonic acid, citric acid, fatty acids, formic acid, fumaric acid, gluconic acid,
hydroquinosulfonic acid, isoascorbic acid, lactic acid, maleic acid, methanesulfonic acid, oxalic
acid, para-bromophenylsulfonic acid, propionic acid, p-toluenesulfonic acid, salicylic acid,
stearic acid, succinic acid, tannic acid, tartaric acid, thioglycolic acid, toluenesulfonic acid
and uric acid, and where the base is a pharmaceutically acceptable base, such as an amino acid, an
amino acid ester, ammonium hydroxide, potassium hydroxide, sodium hydroxide, sodium hydrogen
carbonate, aluminum hydroxide, calcium carbonate, magnesium hydroxide, magnesium aluminum silicate,
synthetic aluminum silicate, synthetic hydrotalcite, magnesium aluminum hydroxide,
diisopropylethylamine, ethanolamine, ethylenediamine, triethanolamine, triethylamine,
triisopropanolamine, or a salt of a pharmaceutically acceptable cation and acetic acid, acrylic
acid, adipic acid, alginic acid, alkanesulfonic acid, an amino acid, ascorbic acid, benzoic acid,
boric acid, butyric acid, carbonic acid, citric acid, a fatty acid, formic acid, fumaric acid,
gluconic acid, hydroquinosulfonic acid, isoascorbic acid, lactic acid, maleic acid, methanesulfonic
acid, oxalic acid, para-bromophenylsulfonic acid, propionic acid, p-toluenesulfonic acid, salicylic
acid, stearic acid, succinic acid, tannic acid, tartaric acid, thioglycolic acid, toluenesulfonic
acid, and uric acid.

[0060] In some formulations additives may also include: chelating agents (such as EDTA and EDTA
salts); colorants or opaquants (such as titanium dioxide, food dyes, lakes, natural vegetable
colorants, iron oxides, silicates, sulfates, magnesium hydroxide and aluminum hydroxide); coolants
(e.g., trichloroethane, trichloroethylene, dichloromethane, fluorotrichloromethane);
cryoprotectants (such as trehelose, phosphates, citric acid, tartaric acid, gelatin, dextran and
mannitol); and diluents or fillers (such as lactose, mannitol, talc, magnesium stearate, sodium
chloride, potassium chloride, citric acid, spray-dried lactose, hydrolyzed starches, directly
compressible starch, microcrystalline cellulose, cellulosics, sorbitol, sucrose, sucrose-based
materials, calcium sulfate, dibasic calcium phosphate and dextrose).

[0061] Yet other additives may include disintegrants or super disintegrants; hydrogen bonding
agents, such as magnesium oxide; flavorants or desensitizers; ion-exchange resins, such as
styrene/divinyl benzene copolymers, and quaternary ammonium compounds; plasticizers, such as
polyethylene glycol, citrate esters (e.g., triethyl citrate, acetyl triethyl citrate,
acetyltributyl citrate), acetylated monoglycerides, glycerin, triacetin, propylene glycol,
phthalate esters (e.g., diethyl phthalate, dibutyl phthalate), castor oil, sorbitol and dibutyl
seccate; and preservatives, such as ascorbic acid, boric acid, sorbic acid, benzoic acid, and salts
thereof, parabens, phenols, benzyl alcohol, and quaternary ammonium compounds.

[0062] It should be appreciated that there is considerable overlap between the above-listed
additives in common usage, since a given additive is often classified differently by different
practitioners in the field, or is commonly used for any of several different functions. Thus, the
above-listed additives should be

 

 

			
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taken as merely exemplary, and not limiting, of the types of additives that can be included in compositions of the present invention. The amounts of such
additives may be readily determined by one skilled in the art, according to the particular
properties desired.

[0063] The compositions of the present invention may be prepared by a variety of processes to apply
an encapsulation coat onto a substrate or to form a substrate-free solid carrier such as a
multiparticulate or a powder. The most commonly used coating and pelletization processes include:
balling, spheronization, extrusion, spray congealing, spray drying, pan coating, fluidized bed coating, melt extrusion,
crystallization, cryopelletization, nanoencapsulation, coacervation, spraying, precipitation, etc.
One skilled in the art will recognize that appropriate additives may also be introduced to the
composition or during the processes to facilitate the preparation of the solid carrier or the
dosage forms, depending on the need of the individual process.

[0064] A coating process frequently involves spraying a coating solution onto a substrate. The
coating solution can be a molten solution of the encapsulation coat composition free of a
dispersing medium. The coating solution may also be prepared by solubilizing or suspending the
composition of the encapsulation coat in an aqueous medium, an organic solvent, a supercritical
fluid, or a mixture thereof. At the end of the coating process, the residual dispersing medium can
be further removed to a desirable level using appropriate drying processes, such as vacuum
evaporation, heating, freeze drying, etc.

[0065] A pelletization process typically involves preparing a molten solution of the composition of
the solid carrier or a dispersion of the composition of the solid carrier solubilized or suspended
in an aqueous medium, an organic solvent, a supercritical fluid, or a mixture thereof. Such
solution or dispersion is then passed through a certain opening to achieve the desired shape, size,
and other properties. Similarly, appropriate drying processes may be used to control the level of
the residual dispersing medium, if necessary. The processes, the combination of the processes
and/or the modification of the processes described above are well known in the art. Some of the
processes are briefly described herein for reference.

[0066] Balling. In a broad sense, pellets are very much like granules and bead; the techniques for
producing pellets may also produce granules, beads, etc. Pellets, granules or beads are formed with
the aid of, e.g., a pelletizer, a spheronizer or an extruder. The pelletizer, spheronizer or
extruder is able to form approximately spherical bodies from a mass of finely divided particles
continuously, by a rolling or tumbling action on a flat or curved surface with the addition of a
liquid.

[0067] Pelletizers are generally classified based on the angle of their axis as a horizontal drum
or an inclined dish pelletizer. Rotary fluidized granulators may also be used for pelletization. A
standard fluidized drier bowl may be replaced with a rotating plate as an air distributor. For
granulation, a binder liquid is sprayed from via one or two binary nozzles located axially to the
rotational movement of the powder bed. The granulation results in rounding of the granules to
approximately spherical pellets. Such balling or agitation techniques are generally influenced by
operating conditions, e.g., the bridging/binding liquid requirements, the residence time of the
material in the pelletizer, the speed and angle of inclination of the pelletizer, the amount of
material fed to the pelletizer and the choice and levels of binder, etc. Those skilled in the art
may adjust readily such factors to produce a satisfactory product.

[0068] The choice of binder for a given application may also be determined readily by those skilled
in the art. Generally, the binder must be capable of wetting the surfaces of the particle being
pelletized or granulated. In general, binders must have sufficient wet strength to allow
agglomerates to be handled and sufficient dry strength to make them suitable for their intended
purposes. Each process, however, makes use of a different system of forces and may require a
different agglomerate strength. The final selection of

 

 

			
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the binder is made generally based on the type of equipment used. Factors that affect the equipment and binder choices include: the size and
size distribution of pellets, bulk density, strength and flow properties. Other factors that affect
the performance of the pellets, which may be adjusted by one skilled in the art by the inclusion of
additives, choice of equipment and processing conditions.

EXAMPLES

[0069] Example 1

[0070] The amount of active dissolution over time, e.g., guaifenesin and/or phenylephrine in the
tablets or capsules disclosed herein below may be tested as follows. Briefly, in vitro guaifenesin
or phenylephrine release may be determined using an acid/base dissolution bath, e.g., a standard
USP 23/NF Drug Release Apparatus. Dissolution vessels of a USP calibrated dissolution bath,
equipped with shafts and paddles, are filled with 675 ml of 0.1N hydrochloric acid at 37.0 degrees
Centigrade. The bath and vessels are maintained at a temperature of 37.0.+-.0.5 degrees Centigrade
throughout a standard 7 hour dissolution test. The paddles were set to rotate at 50 RPM and slowly
lowered into the vessels. One tablet or capsule is dropped into each vessel.

[0071] At the testing intervals, e.g., 1 minute, 10, 10, 30, 45, 60 or 90 minutes, 2, 3, 4, 6, 7, 9
or 12 hour testing intervals, an aliquot, e.g., 5 mls of dissolution solution is withdrawn from
each vessel, filtered (e.g., through a 10-22 micron polyethylene filter) and tested using an HPLC.
To stop the dissolution a strong base may be added to the sample, e.g., 0.2M sodium phosphate
tribasic to increase the pH of the solution to about 6.8. The percent dissolution is determined
using HPLC.

[0072] Capsule shells and process: 7.5% phenylephrine immediate release beads where used as
starting material. A portion of this lot was transferred to a rotating pan. Phenylephrine was added
to the beads using of pharmaceutical glaze. The beads were then allowed to roll and cure for 6
hours before sustained release coating was added. In-order to develop the product, four different
levels of sustained release coating amounts were added. In one example, 10.93 Kgs of phenylephrine
were added to the beads using 4.32 Kgs of pharmaceutical glaze. The beads were then allowed to roll
and cure for 6 hours before sustained release coating was added.

[0073] In order to develop the product four different levels of sustained release coating amounts
were added. The first was 7.15 kg’s of SR mix #1 and 4.96 kg’s of pharmaceutical glaze. Once this
loading was complete 5.0 kg’s were removed for drying and testing. The second load consisted of
4.75 kg’s of SR mix #1 and 2.68 kg’s of pharmaceutical glaze. Again 5.0 kg’s of beaded material was
removed for drying at 40.degree. C. and testing. The third load consisted of 5.92 kg’s SR mix #1
and 3.43 kg’s of glaze. After application another 5.0 kg’s of beaded material was removed from the
pan for drying at 40.degree. C. and testing. The fourth and final load consisted of 7.78 kg’s of SR
mix #1 and 4.56 kg’s of pharmaceutical glaze. The entire pan was allowed to roll and cure under
heat lamps for 6 hours before sampling for study.

[0074] Table 1 is a list of all theoretical percentages and actual assay results for the, above,
described material.

1 SR Mix Theoretical PEH % Actual PEH % Diss. 90 min, 3 hr, 6 hr #1 21.6% 20.8% 4.6%, 18.6%, 59.3%
#2 19.8% 19.3% 0.2%, 0.8%, 11.0% #3 17.8% 17.3% 0.16%, 0.4%, 2.7% #4 15.5% 15.4% 0.6%, 0.8%, 2.6%

[0075] Based on assay and dissolution profile load #1 was selected for use in further development.
The moisture content in load #4 may be higher than those loads dried in the tray drier. This may
have

 

 

			
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contributed to why load #3 and #4 have essentially the same dissolution profile despite the
increased SR mix. The gauifenesin DC 95% was compressed into slugs using a bb2 type tablet press
with standard 1/4” cup tooling. GRA001 was pressed into slugs weighing 220 mg each. Capsules were
filled using 75 mg of Load #1 beads (15 mg phenylephrine). Then two 220 mg slugs of Gauifenesin DC.
These capsule were then placed in a 75 cc bottle and conditioned at 35.degree. C. for 24 hours.
Dessicant was then added. The material was capped and the induction seal was activated. The
material was placed on accelerated stability.

[0076] Dissolution: The present inventors found that the dissolution rate of the phenylephrine is
accelerated when combined with Gauifenesin DC. Due to this effect the testing of the dissolution
rate is achieved by first making a mock-up of the finished product. By doing so the suitability of the
phenylephrine beads was determined more accurately. Direct specifications for dissolution were
determined once data was collected to accurately predict this rate change.

[0077] Stability: Capsules were studied for stability. Accelerated stability indicates that the
product is stable. Gauifenesin DC released 100% immediately with stable potency. The phenylephrine
exhibited a first order release profile consistent with an 8 hour product and was consistent from
month to month. Results are summarized below in Table 2.

2 Lot # Count Container Closure Desiccant DEV 191 100 CON014 CLO452 DES101 GFN PEH Diss. PEH Time
Diss. 90 min/Assay 90 min/3 hr/6 hr Assay Initial 103.7%/99.8% 30.1%/43.5%/70.5% 105.2% 4 week
103.5%/98.5% 33.8%/49.4%/78.7% 105.7% 6 week 104.2%/98.7% 20.8%/38.3%/70.6% 100.4% 8 week
102.6%/99.5% 26.8%/44.5%/78.7% 107.3% 10 week 103.9%/99.4% 31.5%/46.2%/73.1% 97.8% 12 week
104.1%/98.8% 33.7%/51.0%/85.5% 107.7%

[0078] Equipment: Bosch GKF 700 and GKF 2000 machines were used for the pellet and powder
functions. The GKF 700 runs the 400/15 product that requires the beads to be dosed prior to powder.
The GKF 2000 runs product 200/7.5 and is capable of filling powder followed by beads. The reason
for this is that the 400/15 product is in a size 0 elongated capsule that is overfilled. If the
beads are added after the powder slug they will tend to roll off the slug during capsule closure.
This would result in poor closure and poor content uniformity.

Example 2

[0079] Phenylephrine for delayed release may be prepared using pharmaceutical glaze,
polyvinylpyrrolidone and/or microcrystalline cellulose in combination with one or more inactive
agents. For example, the phenylephrine may be allowed to roll and cure for 1-6 hours in the
presence of the polyvinylpyrolidone and microcrystalline cellulose. Optionally, a sustained release
coating may be added to infuse and/or coat the active-polymer (phenylephrine-polyvinylpyrrolidone).
Different levels of sustained release coating amounts may be added, with or without intervening
layers of active and/or polymer. In one example, 10.93 Kgs of phenylephrine may be added to
polyvinylpyrrolidone and pharmaceutical glaze. The phenylephrine-polyvinylpyrrolidone is allowed to
roll and cure for 1-6 hours before sustained release coating (pharmaceutical glaze) is added.

[0080] Table 3 is a list of all percentages of actual assay results for the above described
formulation for extended release phenylephrine.

3 PHFB DVR II Phenylephrine 90 min 3 hours 6 hours ELA 30 mg 41.5 58.0 80.3 GFD 30 mg 57.6 69.9
86.4 EER 30 mg 36.2 51.2 74.6

 

 

			
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[0081] Table 4 shows the release profile for guaifenesin immediate release.

4 PHFB DVR II Guaifenesin 90 min 3 hours 6 hours ELA 400 mg 100.9 N/A N/A GFD 400 mg 99.7 N/A N/A
EER 400 mg 101.4 N/A N/A

[0082] The results from the formulations are summarized in FIGS. 1-3, which demonstrate the
percentage release of the three different formulations and packaging of actives over time. The
gauifenesin DC 95% may be compressed into slugs using, e.g., a bb2 type tablet press with standard
1/4” cup tooling. GRA001 was pressed into slugs weighing 220 mg each. Capsules may be filled with
phenylephrine and two 220 mg slugs of Gauifenesin DC. These capsules are placed in a 75 cc bottle and conditioned at 35.degree.
C. for 24 hours. Dessicant was then added. The material was capped and the induction seal was
activated. The material was placed on accelerated stability.

[0083] Dissolution: The present inventors found that the dissolution rate of the phenylephrine is
accelerated when combined with Gauifenesin DC. Due to this effect the testing of the dissolution
rate is achieved by first making a mock-up of the finished product. By doing so the suitability of
the phenylephrine was determined more accurately. Direct specifications for dissolution were
determined once data was collected to accurately predict this rate change.

[0084] Stability: Capsules were studied for stability. Accelerated stability indicates that the
product is stable. Gauifenesin DC released 100% immediately with stable potency. The phenylephrine
exhibited a first order release profile consistent with an 8 hour product and was consistent from
month to month. Results are summarized below.

[0085] Formula I. A batch of immediate release expectorant, e.g., guaifenesin for use with the
enveloped formulation was prepared with the following components:

5 Components Weight Guaifenesin DC 421 mg Talc 5 mg

[0086] Formula II. A batch of immediate release guaifenesin for use with the enveloped formulation
was prepared with the following components:

6 Components Weight Guaifenesin DC 632 mg Talc 3 mg Stearic Acid 2 mg

[0087] Formula III. A batch of immediate release guaifenesin for use with the enveloped formulation
was prepared with the following components:

7 Components Weight Guaifenesin DC 211 mg Talc 3 mg Magnesium Stearate 2 mg

[0088] Formula IV. A batch of immediate release guaifenesin for use with the enveloped formulation
was prepared with the following components:

8 Components Weight Guaifenesin DC 421 mg Magnesium Stearate 3 mg Ludipress 50 mg

[0089] Formula IV. A batch of effervescent expectorant for immediate release, e.g., guaifenesin for
use with the enveloped formulation was prepared with the following components:

9 Components Weight Guaifenesin DC 421 mg Talc 5 mg Sodium bicarbonate 25 mg

 

 

			
	United States Patent Application: 0050152967
	 	Page 19 of 20
	 	 	 

[0090] When combining the first and the second active, these may be formulated as follows. A
capsule for immediate release of a first active and extended release of a second active in an
enveloped formulation, in a single capsule:

10 First Active Weight Second Active Weight Guaifenesin DC 421 mg Phenylephrine 15 mg Talc 5 mg
Bead 44 mg Lacquer 6 mg Talc 5 mg Calcium Stearate 5 mg Capsule 1

[0091] A formulation for immediate release of a first active and extended release of a second
active in an enveloped formulation, in a gelcap:

11 First
Active Weight Second Active Weight Guaifenesin DC 421 mg Phenylephrine 15 mg Talc 0 mg Bead 44 mg Lacquer 6 mg Talc 5 mg Calcium Stearate 5 mg Gelcap 1

[0092] A formulation for immediate release of a first active and extended release of a second
active in an enveloped formulation, in a suppository:

12 First Active Weight Second Active Weight Guaifenesin DC 421 mg Phenylephrine 5 mg Talc 5 mg Bead
15 mg Lacquer 2 mg Talc 1.5 mg Calcium Stearate 1.5 mg Stearic Acid 2 mg beeswax/glycerol 1- 2 gr

[0093] An effervescent tablet for immediate release of a first active and extended release of a
second active in an enveloped formulation, in an effervescent tablet:

13 First Effervescent Active Weight Second Active Minicap Weight Guaifenesin DC 421 mg
Phenylephrine 15 mg Talc 5 mg Bead 44 mg Lacquer 6 mg Talc 5 mg Calcium Stearate 5 mg Monosodium
citrate 10 mg Sodium bicarbonate 10 mg

[0094] For immediate release of a first active and extended release of a second active in an
enveloped formulation one may add the following ingredients, in a caplet:

14 First Active Weight Second Active Weight Guaifenesin DC 421 mg Phenylephrine 15 mg Talc 3 mg
Bead 44 mg Lacquer 6 mg Talc 5 mg Calcium Stearate 5 mg

[0095] When combining the first active and the decongestant, these may be formulated as follows. A
capsule for immediate release of an expectorant and extended release of a decongestant in an
enveloped formulation, in a single capsule:

15 Expectorant Weight Decongestant Weight Guaifenesin DC 421 mg Phenylephrine HCl 30 mg Talc 5 mg
PVPyrrole 44 mg Povidone 6 mg Talc 5 mg Calcium Stearate 5 mg Capsule 1

[0096] When combining the first active and the decongestant, these may be formulated as follows. A
capsule for immediate release of an expectorant and extended release of a decongestant in an
enveloped formulation, in a single capsule:

16 Expectorant Weight Decongestant Weight Guaifenesin DC 421 mg Phenylephrine HCl 30 mg Talc 5 mg
PVPyrrole 44 mg Povidone 6 mg Microcrystalline Cellulose 5 mg Magnesium Stearate 5 mg Gelatin
Capsule 1

[0097] A formulation for immediate release of an expectorant and extended release of a decongestant
in an enveloped formulation, in a gelcap:

 

 

			
	United States Patent Application: 0050152967
	 	Page 20 of 20
	 	 	 

17 Expectorant Weight Decongestant Weight Guaifenesin DC 421 mg Phenylephrine 30 mg
Microcrystalline Cellulose 44 mg Magnesium Stearate 5 mg Gelcap 1

[0098] A formulation for immediate release of an expectorant and extended release of a decongestant
in an enveloped formulation, in a suppository:

18 Expectorant Weight Decongestant Weight Guaifenesin DC 421 mg Phenylephrine 15 mg Talc 5 mg
PVPyrrole 44 mg Povidone 6 mg Microcrystalline Cellulose 5 mg Magnesium Stearate 5 mg Stearic Acid
2 mg beeswax/glycerol 1-2 gr

[0099] An effervescent tablet for immediate release of an expectorant and extended release of a decongestant in an enveloped formulation, in an effervescent tablet:

19 First Effervescent Active Weight Decongestant Minicap Weight Guaifenesin DC 421 mg Phenylephrine
15 mg Talc 5 mg PVPyrrole 44 mg Povidone 6 mg Microcrystalline Cellulose 5 mg Magnesium Stearate 5
mg Monosodium citrate 10 mg Sodium bicarbonate 10 mg

[0100] For immediate release of an expectorant and extended release of a decongestant in an
enveloped formulation one may add the following ingredients, in a caplet:

20 Expectorant Weight Decongestant Weight Guaifenesin DC 421 mg Phenylephrine 15 mg Talc 3 mg
PVPyrrole 44 mg Povidone 6 mg Microcrystalline Cellulose 5 mg Magnesium Stearate 5 mg

[0101] While this invention has been described in reference to illustrative embodiments, this
description is not intended to be construed in a limiting sense. Various modifications and
combinations of the illustrative embodiments, as well as other embodiments of the invention, will
be apparent to persons skilled in the art upon reference to the description. It is therefore
intended that the appended claims encompass any such modifications or embodiments.

 

 

CONFIDENTIAL

SCHEDULE B

Development Plan

	 	 	 	 	 
	1.

	 	Determine formulation for combination product
of [***] and methscopolamine [***] to be a [***]
dosing for allergic rhinitis
	 	[***]
	 
	 	 	 	 
	2.

	 	Method development – prevalidation
	 	[***]
	 
	 	 	 	 
	3.

	 	Method development – including degredants
and impurities
	 	[***]
	 
	 	 	 	 
	4.

	 	Formulation development protocol
	 	[***]
	 
	 	 	 	 
	5.

	 	Perform cleaning validation studies
	 	[***]
	 
	 	 	 	 
	6.

	 	Write clinical lot MBR
	 	[***]
	 
	 	 	 	 
	7.

	 	Write feasibility protocol
	 	[***]
	 
	 	 	 	 
	8.

	 	Write stability protocol
	 	[***]
	 
	 	 	 	 
	9.

	 	Manufacture GMP batch
	 	[***]
	 
	 	 	 	 
	10.

	 	Commence stability studies
	 	[***]
	 
	 	 	 	 
	11.

	 	Pre-IND meeting with FDA
	 	[***]
	 
	 	 	 	 
	12.

	 	Submit IND
	 	[***]
	 
	 	 	 	 
	13.

	 	Conduct single dose PK study
	 	[***]
	 
	 	 	 	 
	14.

	 	Conduct multiple dose study
	 	[***]
	 
	 	 	 	 
	15.

	 	Conduct Phase III clinical study
	 	[***]
	 
	 	 	 	 
	16.

	 	Prepare NDA
	 	[***]
	 
	 	 	 	 
	17.

	 	Submit NDA
	 	[***] 2010

 

			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the Securities and Exchange Commission.

 

 

CONFIDENTIAL

SCHEDULE C

Supply Terms

Requirements Contract. Neos to supply all of Cornerstone’s requirements for Product for
commercial sale and promotional samples of Product in the United States except as set forth in the
next paragraph.

Alternate Third Party Supplier. Neos to assist Cornerstone to qualify an alternate third
party supplier selected by Cornerstone in its sole discretion, which shall be permitted to supply a
quantity up to the greater of (i) one lot of bottles with the same number of capsules per bottle as
supplied by Neos to Cornerstone under the definitive supply agreement, or (ii) [***] percent
([***]%) of Cornerstone’s requirements for Product in the United States. However, if Neos is
unable to supply 100% of the quantities of Product ordered for sixty (60) days or more, then
Cornerstone may increase its purchases of Product from the alternate third party supplier to
address any shortfall.

Term. Five year initial term, with a Cornerstone option to renew for an additional five
year renewal term.

Pricing.

	 	•	 	Initial pricing shall be set by the Parties based on [***] of Neos’ direct
manufacturing costs
	 
	 	•	 	Prices may be increased on January 1st of each year during the Term based
on Neos’ demonstrating increased costs but any price increase shall not exceed
increases in the Producer Price Index for manufactured goods for that same period and
provided further that such increase shall not increase the Product Price by more than
[***] from the previous calendar year.

Intellectual Property. All intellectual property relating to the Product, excluding
Process Developments (as defined below), conceived, reduced to practice, authored, or otherwise
generated or developed in the course of activities under the supply agreement, whether patentable
or not, and any authorship of works relating to a Product, including any trademarks, trade dress,
trade secrets or copyrights (“Product Developments”), shall be owned by Cornerstone without
payment to Neos. Such Product Developments shall not include any intellectual property, including,
without limitation, know-how or improvements relating to the manufacture of pharmaceutical products
generally or relating to the DVR Technology generally, conceived, reduced to practice or otherwise
developed by or on behalf of Neos, in connection with the performance of its obligations under the
supply agreement (“Process Developments”).

Representations and Warranties. Customary for agreements of this type, including regarding
maintenance of all manufacturing regulatory approvals and GMP facility status, and manufacture of
Product to Specifications, GMP, Neos manufacturing SOPs, and applicable Laws.

 

			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.exv10w16

Exhibit 10.16

EXECUTION VERSION

DEVELOPMENT AND MANUFACTURING AGREEMENT

     THIS DEVELOPMENT AND MANUFACTURING AGREEMENT (this “Agreement”) is made effective the
27th day of February, 2008, among Cornerstone BioPharma, Inc., a Delaware corporation
(“Company”), NEOS Therapeutics, L.P., a Texas limited partnership (“Manufacturer”)
and Coating Place, Inc., a Wisconsin corporation (“Supplier”). Manufacturer, Supplier, and
Company are sometimes referred to herein individually as a “Party” and collectively as the
“Parties.”

RECITALS

     WHEREAS, Manufacturer is in the business of developing, compounding, processing, filling,
testing and packaging human pharmaceutical products;

     WHEREAS, Supplier is in the business of supplying Wurster fluid bed coating for encapsulation
of solid particulate materials used in the manufacture of human pharmaceutical products and,
additionally, owns certain drug resin complex technologies;

     WHEREAS, Company is in the business of research, development, marketing and sales of human
pharmaceutical products; and

     WHEREAS, the Parties desire to enter into this Agreement pursuant to which each will
contribute its respective expertise and/or technologies with a view towards developing,
manufacturing, marketing, and selling a [***] Hydrocodone/[***] suspension [***] (the
“Product”), subject to obtaining necessary approvals from the United States Food and Drug
Administration (“FDA”) [***].

     NOW, THEREFORE, in consideration of the premises and the representations, warranties,
covenants and agreements set forth hereby and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties hereto have agreed and do hereby
agree as follows:

     1. Definitions. In addition to the other terms defined elsewhere herein, the following terms
and phrases shall have the following meanings when used in this Agreement.

     [***]

 

			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.

Page 1 of 24

 

     “CMC” means the chemistry, manufacturing and controls section(s) and data in the
[***].

     “Development Work” means all the activities specified to be performed by Supplier or
Manufacturer under this Agreement including without limitation work related to formulation of the
Product, developing and documenting the manufacturing process related to the Product, preparing the
CMC section of the [***] for the Product, and manufacturing the Product for use in connection with
the [***]submission.

     “DMF” means, in relation to Supplier’s Drug Resin Complex, the Drug Master File
containing all the information on the production and control of the Drug Resin Complex.

     “Drug Resin Complex” means the certain drug resin complex technologies that result in
products with API ionically bound to an ion resin complex that may be coated for sustained release
characteristics, which technologies are the subject of the Supplier Patent Applications (as defined
in Section 9.9).

     “FDCA” means the federal Food, Drug and Cosmetic Act, as amended, and the regulations
promulgated thereunder.

     “GAAP” means United States generally accepted accounting principles.

     “GMP” or “cGMP” means the FDA’s current good manufacturing practices, as
specified in Title 21, Code of Federal Regulations, Part 210, and applicable FDA guidance
documents, as the same shall be amended from time to time.

     “Laws” means any and all federal, state, and local laws, rules, Regulations, orders
and requirements applicable to the Parties in performance of this Agreement including without
limitation the following: the Prescription Drug Marketing Act of 1987, the Federal Food, Drug and
Cosmetic Act, the Federal or State Regulatory Authorities (as defined below), and all regulations
and other guidance or requirements of the FDA or any equivalent agency.

     “Manufacturer Adjusted COGs” means [***], all calculated in accordance with GAAP.

     “Manufacturing Site” means Manufacturer’s facilities where the Product formulation and
manufacturing process are developed and where Product samples and quantities of Product for
commercial sale are manufactured, stored and handled.

     “Net Profits” means [***], all calculated in accordance with GAAP.

     “Supplier Adjusted COGs” means [***], all calculated in accordance with GAAP.

 

			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.

Page 2 of 24

 

     “Territory” means the United States of America and Canada (upon approval by the
Canadian Regulatory Authority), including each of the states, provinces, territories, possessions
and protectorates thereof, the District of Columbia, and the Commonwealth of Puerto Rico.

     2. General.

     2.1 Project Overview. Supplier, Manufacturer and Company each specialize in separate and
distinct processes needed for successful commercialization of the Product, and each Party wishes to
contribute its respective expertise and technologies to further that end. Supplier and
Manufacturer shall license their respective intellectual property necessary to manufacture and
commercialize the Product. Supplier shall supply Manufacturer with the Drug Resin Complex for
manufacture of Product. Manufacturer shall develop, formulate, test and package the Product for
delivery to Company. Company shall prepare and prosecute any applicable FDA approvals and, upon
approval, shall market, sell and distribute the Product in the Territory. In turn, as more
specifically set forth in this Agreement, each Party shall share equally in the Net Profits.

     2.2 Federal or State Regulatory Authorities; Regulations. The Parties are regulated by the
FDA, the U.S. Drug Enforcement Administration (DEA), the Environmental Protection Agency (EPA), the
Occupational Safety and Health Administration (OSHA), the Federal Trade Commission (FTC), as well
as other federal agencies and ancillary state authorities (hereinafter referred to individually and
collectively as “Federal or State Regulatory Authorities”). The Parties further
acknowledge that each of these Federal or State Regulatory Authorities has the authority to impose
restrictions on their operations that could result in the commercial infeasibility of the
objectives of this Agreement. Such restrictions may be the result of statutory or regulatory
change, changes in non-regulatory guidances and policies issued by such Federal or State Regulatory
Authorities, or enforcement actions, all of which are outside of their control. The regulatory
environment under which the Parties operate, including current statutory and regulatory
requirements, guidances, and policies, as well as any changes to such statutory and regulatory
requirements, guidances, and policies promulgated or otherwise made effective after the date of
execution of this Agreement are hereinafter referred to as the “Regulations.” Each of the
Parties shall use reasonable efforts to keep all Parties apprised of statutory or regulatory
changes, changes in non-regulatory guidances and policies issued by such agencies (i.e., changes to
the Regulations) or enforcement actions that could affect the successful achievement of the
objectives of this Agreement.

     2.3 Exclusivity/Non-Competition. During the Term of this Agreement, except as otherwise
permitted hereunder (e.g., bankruptcy of Manufacturer), Company agrees not to purchase the Product,
or any composition that directly competes with the Product, from any person or entity other than
Manufacturer or to designate any other person or entity as a manufacturer of the Product, or any
composition that competes with the Product, in supplemental filings with the FDA. During the Term
of this Agreement, Manufacturer agrees not to (and not to assist any other person or entity to)
develop, formulate, manufacture or supply the Product to any other person or entity, and, except as
otherwise permitted hereunder (e.g., bankruptcy of Supplier), agrees not to purchase the Drug Resin
Complex from any person or entity other than Supplier. During the Term of this Agreement, Supplier
agrees not to supply (or to license any

Page 3 of 24

 

other person or entity to supply) the Drug Resin Complex related to the Product to any other
person or entity.

     3. Formulation and Manufacturing Process Development.

     3.1 Manufacturer’s Site. Manufacturer shall, at its expense, establish the Manufacturing Site
as an FDA certified and approved GMP facility by the date specified in the Product Development Plan
(as defined below) and promptly shall provide Company with a copy of the written GMP facility
approval it receives from the FDA. The Parties acknowledge that Manufacturer is in the process of
GMP recertification by the FDA and that it expects such approval prior to commencing the clinical
[***] study. However, in the event that Manufacturer has not achieved GMP recertification from the
FDA during the development phase, Manufacturer shall provide sufficient technology transfer and
personnel to Supplier to transfer the development and manufacture of Product to Supplier’s facility
or a third-party facility as agreed by the Parties, such approval not to be unreasonably withheld.
If, pursuant to the preceding sentence, Supplier assumes Manufacturer’s manufacturing
responsibility, then Supplier shall assume the rights and obligations of Manufacturer under this
Agreement with respect to the manufacture of the Product.

     3.2 Product Development Plan. The Parties agree to jointly develop a plan of action and
milestones to perform the Development Work (the “Product Development Plan”), which will be
negotiated in good faith, duly executed by the Parties, and attached hereto as Exhibit A to
this Agreement. All development activities shall be performed by Manufacturer in compliance with
all applicable Laws. Manufacturer and Supplier shall use commercially reasonable efforts to
complete the development of the Product in a timely fashion consistent with the Product Development
Plan, and keep Company informed of the progress and status of the development activities. Upon
successful completion of the Development Work, the Parties’ mutually agreed specifications for the
Product (the “Specifications”) will be attached hereto as Exhibit B. Except as set
forth in Section 3.4, fees for the development activities for the Product shall be as provided in
the Product Development Plan. Supplier shall invoice Manufacturer, and Manufacturer shall invoice
Company, for each of its completed steps of the Product Development Plan monthly. Invoices shall
contain details regarding the steps completed and the amount being charged for such completed work.
Payments of invoices shall be in accordance with Section 7.5(a).

     3.3 CMC. Manufacturer shall, in consultation with Company’s development staff, prepare and
provide regulatory data and documentation and draft CMC respecting the manufacture of the Product,
all in compliance with applicable Regulations. Company shall critically review and provide
corrections to the CMC section in a timely fashion. Manufacturer shall use commercially reasonable
efforts to be prepared for any FDA pre-approval inspection of the Manufacturing Site. Manufacturer
shall cooperate with Company to respond to any FDA information requests relating to the CMC section
that may arise during the [***] submission, Federal or State Authorities Regulatory review and
approval processes and, upon Company’s reasonable request, will provide other assistance related to
obtaining [***] approval.

 

			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.

Page 4 of 24

 

     3.4 Retesting; Manufacturer Adjusted COGs; Supplier Adjusted COGs. Company acknowledges and
agrees that, because this is a development project, Manufacturer and Supplier may need to repeat
certain steps in connection with each FDA approval if testing indicates that additional work is
necessary or if additional work is requested by the FDA. In addition, Company acknowledges and
agrees that additional work may be required by the FDA after its inspection or review of the
documents filed with the FDA. Manufacturer and Supplier will attempt to minimize any deviations
from the Product Development Plan; however, if additional steps or work are determined to be
necessary by Manufacturer or Supplier or the FDA to be necessary, Manufacturer or Supplier shall
inform Company of the nature, extent and expected costs associated with such additional steps or
work and Company and Manufacturer or Supplier, as the case may be, shall negotiate in good faith to
amend the Product Development Plan to provide for same.

     3.5 Project Coordination. During the development phase, at least one representative of each
Party will participate in one weekly telephone conference and one quarterly face-to-face conference
at a mutually agreeable location to review, coordinate, and discuss issues and progress regarding
Product development. For the avoidance of doubt, such representatives shall have no authority to
amend or waive compliance with the terms and conditions of this Agreement, to resolve differences
of opinion between the Parties regarding the interpretation of this Agreement or to approve actions
of the Parties that are inconsistent with this Agreement.

     4. Manufacture of the Product.

     4.1 General. Following approval [***] by the FDA, and during the Term of this Agreement,
Manufacturer agrees to manufacture and supply the Product, the Product of which shall conform to
the Specifications, Regulations, and cGMPs. Manufacturer or Supplier shall notify Company if there
is any issue with time lines and delivery of Product under this Agreement. The Specifications may
be amended from time to time by written agreement of the Parties without the necessity of amending
this Agreement.

     4.2 Testing and Documentation. Promptly following each manufacturing run, Manufacturer shall
(a) test each lot of finished Product in accordance with Parties’ agreed upon written Product
Specifications; and (b) certify within a commercially reasonable period of lot release that: (i)
each lot of finished Product shall conform with all Regulations of all applicable Federal or State
Regulatory Authorities, (ii) each lot was produced and tested in accordance with the
Specifications, (iii) each lot is in compliance with cGMP requirements and other applicable
documents including the [***] and DMF for Product, and (iv) each lot complies with any other
regulatory documents that contain procedures agreed upon in writing between the Parties.
Manufacturer shall retain all relevant records pertaining thereto as may be required by GMP and
other applicable Laws.

     4.3 Acceptance of Lots. Company shall have a period of thirty (30) days following receipt of
samples and completed batch records for a Product lot from Manufacturer to notify Manufacturer that
the Product lot is rejected. Rejection of the Product shall be based on: (a) non-

 

			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.

Page 5 of 24

 

conformance to Specifications; (b) adulteration or misbranding within the meaning of the FCDA, or
(c) Product not having been prepared under compliance with cGMP or other applicable Laws. Along
with rejection, Company shall provide an accompanying report of analysis (including the Product
sample and lot number from the lot analyzed) conducted in accordance with the testing protocols in
the Product Specifications set forth in the [***]. If no such notice of rejection of
non-conforming Product is received by Manufacturer in accordance with the procedure and time frame
described herein, Company shall be deemed to have accepted such delivery of Product.

     4.4 Remedies for Rejection of a Lot. Manufacturer shall cooperate in good faith to resolve
the rejection of a lot. Within thirty (30) days from Manufacturer’s receipt of notice of
rejection, Manufacturer shall notify Company whether or not it accepts the basis for Company’s
rejection. If Manufacturer’s and Company’s testing data disagrees, each of Manufacturer and
Company hereby agree to submit a sample of the rejected Product to a mutually agreed upon
third-party laboratory for testing in accordance with the Product Specifications. The fees and
expenses for such laboratory testing shall be borne equally by the Parties if the Product is found
to be non-conforming and otherwise by Company. Upon rejection of Product, Manufacturer shall use
commercially reasonable best efforts to replace such rejected Products.

     5. Supply of Drug Resin Complex and Materials for Commercial Supply.

     5.1 Drug Resin Complex.

          (a) Following approval [***] by the FDA, and during the Term of this Agreement, Supplier
agrees to supply Drug Resin Complex to Manufacturer with all quantities needed to produce Product
in any Firm Zone (as defined below) from time to time, which Drug Resin Complex shall conform to
and be supplied in accordance with the DMF, Laws, and cGMPs. Supplier shall notify both
Manufacturer and Company, if there is any issue with time lines and delivery of Drug Resin Complex
to support quantities in any Firm Zone.

          (b) Supplier shall (i) test each lot of Drug Resin Complex in accordance with the
Specifications; and (ii) certify that: (A) each lot of Drug Resin Complex shall conform with all
Laws, (B) each lot was produced and tested in accordance with the Specifications, (C) each lot is
in compliance with cGMP requirements and other applicable documents including the [***] and DMF for
Product, and (D) each lot complies with any other regulatory documents that contain procedures
agreed upon in writing between the Parties. Supplier shall retain all relevant records pertaining
thereto as may be required by GMP and other applicable Laws.

     5.2 Materials. Manufacturer shall source all bulk materials, active ingredients or inactive
ingredients and other manufacturing and test materials (other than Drug Resin Complex) in order to
manufacture Product in accordance with the Specifications, such items to be in accordance with the
United States Pharmacopeia (“USP”) and other Laws. Manufacturer shall perform all testing
of such Drug Resin Complex required by the applicable Specifications. Supplier shall similarly
source all materials needed by it for production of Drug Resin Product.

 

			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.

Page 6 of 24

 

     6. Regulatory Filings.

     6.1 Filing Fees. Company shall be solely responsible for all costs and expenses directly
related to filings required by the FDA, with the exception of the Pharmaceutical Development
Utility Fee Act (“PDUFA”) fees, which shall be shared equally by the Parties. Upon written
demand by Company, each of Manufacturer and Supplier shall within thirty (30) days reimburse
Company for its share of the PDUFA fees.

     6.2 Designation as Manufacturer. Manufacturer shall be responsible for providing all
documentation necessary for Company to designate Manufacturer as the manufacturer and supplier of
the Product [***]. Manufacturer shall be available for any required FDA inspections of its
facility or its documentation. Manufacturer shall have no obligation to manufacture the Product
unless and until Manufacturer has successfully been designated and approved as a manufacturer
[***].

     6.3 [***] DMF References. Supplier shall be responsible for preparing and filing the DMF for
the Drug Resin Complex at its sole expense. Supplier promptly thereafter shall issue a letter to
FDA Drug Master File Staff granting the Company reference authorization to its DMF for the Drug
Resin Complex used in the manufacture of the Product.

     6.4 [***] Submission. After Manufacturer successfully completes the development and
manufacture of samples of Product, Company shall have [***] studies performed [***]. Company will,
at its sole and exclusive expense, arrange and pay for the performance of the studies that are
necessary, if such studies are successful, to satisfy the requirements of the FDA [***] (including
contracting with, at its sole and exclusive expense, the contract research organization(s)
(“CRO”) and approving the protocols and contracts for applicable [***] studies [***]), and
subject to successful completion of those studies, for preparing and submitting to the FDA [***] to
obtain regulatory approval for the Product. Company shall use commercially reasonable efforts to
receive regulatory approval for the Product within [***] after Company submits [***] for the
Product to the FDA.

     6.5 Remedial Actions. If the [***] study for the Product fails or if [***] the Product is
rejected by the FDA, the Parties will investigate the reasons why the [***] study for the Product
failed or Company’s [***] was rejected by the FDA, and the Parties will discuss the results of the
investigation and the additional research and development work they believe is necessary for the
Product and the anticipated costs to perform the additional research and development work and to
have the additional study or studies performed. If Company decides to proceed with such additional
work and/or studies, then Manufacturer and Supplier will perform at Company’s request such
additional research and development work for the Product, and Company will pay Manufacturer and
Supplier for such additional work Manufacturer and Supplier perform for Company based on a new
Product Development Plan.

     7. Price; Sales.

     7.1 Compensation. Compensation for Parties shall be as follows: (a) Two Hundred Fifty
Thousand Dollars ($250,000) to be paid by Company to Manufacturer upon execution of

 

			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.

Page 7 of 24

 

this Agreement, (b) Two Hundred Fifty Thousand Dollars ($250,000) to be paid by Company to Supplier
upon execution of this Agreement, and (c) after Product is launched, the Parties shall share Net
Profits in equal parts.

     7.2 Cost Determination. [***]

     7.3 Selling Price Determination. Selling price, changes in selling price, or pricing strategy
related to selling price shall be determined by the Company in its sole discretion (a) following a
consultation with Supplier and Manufacturer and (b) using a commercially reasonable methodology.

     7.4 Production Forecasts.

          (a) Manufacturer shall use commercially reasonable efforts to manufacture and supply
sufficient quantities of the Product to fulfill Company’s anticipated requirements as indicated by
actual purchase orders submitted by Company from time to time during the Term; provided, that
Manufacturer shall have at least three (3) months after receipt of a purchase order to deliver the
Product and that Company shall have continued to provide Manufacturer three (3) months in advance
with a noncancellable, firm three (3) month purchase order (the “Firm Zone”) and a
non-binding rolling six (6) month forecast of anticipated orders outside the Firm Zone. In the
event that the Company at any time fails to provide the Manufacturer with such purchase order
and/or forecast, the Manufacturer shall have no obligation to produce any quantities of Products in
excess of the quantities set forth in the last non-binding forecast received by Manufacturer from
the Company.

          (b) From time to time, due to significant unforeseen circumstances, Company may deliver to
Manufacturer a Purchase Order for Product volumes in excess of those specified in any forecast. In
the event that Company delivers a purchase order requesting that Manufacturer provide Product
volumes in excess of the last non-binding forecast received by Manufacturer from the Company,
Manufacturer shall use commercially reasonable efforts to provide Company with such excess Product
volumes.

          (c) Promptly following Manufacturer’s receipt of each purchase order and rolling forecast,
Manufacturer shall place counterpart purchase orders and non-binding forecasts with Supplier
regarding its requirements for Drug Resin Complex.

     7.5 Invoicing; Payments; Audit.

          (a) Supplier and Manufacturer will render invoices in connection with their shipments of Drug
Resin Complex and Product hereunder, which invoices shall be due and payable by Manufacturer or
Company as the case may be within thirty (30) days after receipt.

 

			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.

Page 8 of 24

 

          (b) After Product is launched, a third of Net Profits shall be paid by Company to Supplier and
a third of the Net Profits shall be paid by Company to Manufacturer, which payments shall be
accompanied by a report detailing the calculation of such Net Profits and paid within thirty (30)
days after the end of (i) each of the first six (6) full calendar months following commercial
launch, and (ii) each calendar quarter thereafter.

          (c) In determining the direct costs that any of the Parties attributes to the Product
(“Product Direct Costs”) for purposes of calculating Manufacturer Adjusted COGS, Supplier
Adjusted COGS or Net Profits, as the case may be, the Parties shall not include any costs or
expenses to the extent arising out of or relating to (i) any contract or agreement entered into
prior to the date of this Agreement, or (ii) any event or occurrence happening prior to the date of
this Agreement.

          (d) In the event of a dispute regarding Product Direct Costs, the Parties shall attempt to
resolve the discrepancy in good faith by providing such financial information as may be required,
which information shall be Confidential Information under Section 10. If the Parties are unable to
resolve the dispute informally, each of the Parties shall have the right, at its own expense and at
any reasonable time or times, to cause a third party independent auditor not engaged on a
contingency basis and approved by the audited Party (not to be unreasonably withheld) to inspect
and audit the books and records of the other Party solely to verify Product Direct Costs attributed
to their respective contribution for a period of two (2) years from and after the period in which
such Product Direct Costs were incurred; provided, however, that once Product Direct Costs have
been audited with respect to any period, such Product Direct Costs for such period shall not again
be subject to audit. Any such audit (i) shall be conducted after reasonable prior notice, during
normal business hours and at the location(s) where such books and records are normally kept and
(ii) may not be conducted more than once in any given twelve (12) month period. The auditor shall
only report to the Parties the amount, if any, of any correction (each a “Correction
Amount”) and shall not disclose to the Parties either the detailed or underlying information
supporting such conclusion or any of such auditor’s work papers. The results of the Audit shall be
Confidential Information, shall be shared concurrently with all the Parties, and shall be binding
on the Parties. Notwithstanding the foregoing, in the event that any such audit results in a
Correction Amount, it shall be accounted for in the following monthly or quarterly payment under
Section 7.5(b) as follows:

               (i) If Product Direct Costs originally were overstated by a Party, then such Party’s share of
Net Profits shall be reduced by an amount equal to two-thirds of the Correction Amount and the
other Parties’ respective share of Net Profits for such monthly or quarterly period shall be
increased by an amount equal to one-third of the Correction Amount.

               (ii) If Product Direct Costs originally were understated by a Party, then such Party shall be
entitled to a payment from monthly or quarterly Net Profits prior to and in preference to the other
Parties in an amount equal to the Correction Amount. Following such preferential payment, the
remaining Net Profits for such monthly or quarterly period shall be allocated to the Parties in
equal shares as contemplated by Section 7.5(b).

Page 9 of 24

 

     8. Representations and Warranties.

     8.1 Mutual Representations and Warranties. Each Party hereby represents and warrants to each
of the other Parties as follows:

          (a) This Agreement has been duly authorized by all necessary corporate action, has been duly
executed and delivered, and is a legal and valid obligation binding upon such Party and enforceable
in accordance with its terms. Such Party has the full power and authority to enter into this
Agreement and to carry out the obligations contemplated hereby.

          (b) Delivery and performance of this Agreement by such Party does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a party or by which it is
bound, nor violate any Regulations of laws of any court having jurisdiction over it.

     8.2 Manufacturer’s Representations and Warranties. Manufacturer hereby represents and
warrants to Company and Supplier as follows:

          (a) As of the date hereof, Manufacturer has the right to license the Manufacturer IP to
Company for purposes of the Development Work and the commercialization of the Product.
Manufacturer owns all right, title and interest in and to, or otherwise controls, the Manufacturer
IP.

          (b) Manufacturer has not, and during the Term and will not, grant any right to any third party
relating to the Manufacturer IP in a manner, or pursue any other activity that would otherwise
conflict with the rights granted to Company hereunder.

          (c) As of the date hereof, Manufacturer has no actual knowledge that (i) any third party is
infringing any of Manufacturer IP or misappropriating or using Manufacturer IP, and (ii) the
Manufacturer IP, as applied to the Product, infringes any third party intellectual property rights.
Manufacturer has not received any written communication from a third party claiming that
intellectual property rights owned or controlled by such third party would be misappropriated or
infringed by the use of the Manufacturer IP.

          (d) As of the date hereof, Manufacturer has not been served with any interference action or
litigation with respect to the Manufacturer IP and Manufacturer has not received any written
communication that expressly threatens interference actions or other litigation before any patent
office, court, or any other governmental entity in any jurisdiction in regard to any of the
Manufacturer IP. Manufacturer represents and warrants that as of the date of this Agreement it is
not aware of any prior art or other information that would render any patent under the Manufacturer
IP invalid. Manufacturer represents and warrants that as of the date of this Agreement it is not
aware of any patent or any other third party intellectual property right that would be infringed by
Manufacturer in the fulfilling its obligations under this Agreement.

          (e) Without limiting the generality of the foregoing, Manufacturer represents and warrants
that it has the right to provide to Company the Product and information provided by Manufacturer
hereunder, and to grant Company the right to use such Product and information for the conduct of
Company’s rights and obligations hereunder.

Page 10 of 24

 

          (f) Manufacturer will not use, in any capacity associated with or related to the manufacture
of the Product, the services of any persons who have been debarred under 21 U.S.C. § 335a(a) (or
who become the subject of new debarment proceedings commenced after the Effective Date) or any
comparable Law. Furthermore, neither Manufacturer nor, to the knowledge of Manufacturer, any of
its officers, employees, or consultants has been convicted of an offense under (i) either a federal
or state law that is cited in 21 U.S.C. § 335a as a ground for debarment, denial of approval, or
suspension, or (ii) any other Law cited in any comparable regulatory act as a ground for debarment,
denial of approval or suspension.

          (g) Following Manufacturer’ receipt of the FDA’s approval of the Manufacturing Site as a GMP
manufacturing facility, Manufacturer will use its commercially reasonable efforts to thereafter
maintain throughout the remainder of the Term all manufacturing consents necessary for the
performance of its obligations hereunder.

          (h) The manufacture, packaging, processing, storage, disposal and other handling of the
Product by Manufacturer until delivery to Company’s designated carrier or freight forwarder at the
Manufacturing Site shall be in material accordance with and conform to the Specifications, GMP, and
applicable Regulations. Product shall not be adulterated or misbranded within the meaning of the
Federal Food, Drug and Cosmetic Act.

     8.3 Supplier’s Representations and Warranties. Supplier hereby represents and warrants to
Company and Manufacturer as follows:

          (a) As of the date hereof, Supplier has the right to license the Supplier IP to Manufacturer
for purposes of the Development Work and the commercialization of the Product. Supplier owns all
right, title and interest in and to, or otherwise controls, the Supplier IP.

          (b) Supplier has not, and during the Term and will not, grant any right to any third party
relating to the Supplier IP in a manner, or pursue any other activity, that would otherwise
conflict with the rights granted to Company and Manufacturer hereunder.

          (c) As of the date hereof, Supplier has no actual knowledge that (i) any third party is
infringing any of Supplier IP or misappropriating or using Supplier IP, and (ii) the Supplier IP,
as applied to the Drug Resin Complex or the Product, infringes any third party intellectual
property rights. Supplier has not received any written communication from a third party claiming
that intellectual property rights owned or controlled by such third party would be misappropriated
or infringed by the use of the Supplier IP.

          (d) As of the date hereof, Supplier has not been served with any interference action or
litigation with respect to the Supplier IP, and Supplier has not received any written communication
that expressly threatens interference actions or other litigation before any patent office, court,
or any other governmental entity in any jurisdiction in regard to any of the Supplier IP. Supplier
represents and warrants that as of the date of this Agreement it is not aware of any prior art or
other information that would render any patent under the Supplier IP invalid. Supplier represents
and warrants that as of the date of this Agreement it is not aware of any patent or any other third
party intellectual property right that would be infringed by Supplier in the exercise or practice
of this Agreement.

Page 11 of 24

 

          (e) As of the time of release of Drug Resin Complex to Manufacturer in accordance with this
Agreement, all Drug Resin Complex released (i) will conform to the applicable Specifications, and
(ii) will have been manufactured in material accordance with GMP (if applicable) and all applicable
Laws and in accordance with the applicable certificates of analysis.

          (f) Without limiting the generality of the foregoing, Supplier represents and warrants that it
has the right to provide to Manufacturer the Drug Resin Complex and information provided by
Supplier hereunder, and to grant Company and Manufacturer the right to use such Drug Resin Complex
and information for the conduct of Company and Manufacturer’s rights and obligations hereunder.

          (g) Supplier will not use, in any capacity associated with or related to the supply of the
Drug Resin Complex, the services of any persons who have been debarred or who are currently under
investigation for possible debarment under 21 U.S.C. § 335a(a) or any comparable Regulations.
Furthermore, neither Supplier nor, to the knowledge of Supplier, any of its officers, employees, or
consultants has been convicted of an offense under (i) either a federal or state law that is cited
in 21 U.S.C. § 335a as a ground for debarment, denial of approval, or suspension, or (ii) any other
Regulations cited in any comparable regulatory act as a ground for debarment, denial of approval or
suspension.

     8.4 Company’s Representations and Warranties. Company hereby represents and warrants to
Supplier and Manufacturer as follows:

          (a) Company is the owner or has the lawful right to use or grant the right to use any and all
trademarks and trademark rights, trade names and trade name rights, service marks and service mark
rights, service names and service name rights, brand names, copyrights and copyright rights, trade
dress, business and Product names, logos, slogans, other proprietary information and related
documentation, and all pending applications for and registrations of trademarks, service marks and
copyrights that (i) it provides to Manufacturer in connection with the manufacture of the Product,
or (ii) it uses in connection with the marketing, sale or distribution of Product.

          (b) Company will not make any claims in any packaging, labeling, advertising or promotional
material regarding the Product that it knows to be false.

          (c) As of the date hereof, Company has not been served with any interference action or
litigation with respect to the Product and Company has not received any written communication that
expressly threatens interference actions or other litigation before any patent office, court, or
any other governmental entity in any jurisdiction in regard to the Product. Company represents and
warrants that as of the date of this Agreement it is not aware of any prior art or other
information that would render any patent under the Supplier IP or the Manufacturer IP invalid.
Company represents and warrants that as of the date of this Agreement it is not aware of any patent
or any other third party intellectual property right that would be infringed by Company in
fulfilling its obligations under this Agreement.

Page 12 of 24

 

          (d) Company will not use, in any capacity associated with or related to the clinical
development and FDA submission of the Product, the services of any persons who have been debarred
or who are currently under investigation for possible debarment under 21 U.S.C. § 335a(a) or any
comparable Regulations. Furthermore, neither Company nor, to the knowledge of Company, any of its
officers, employees, or consultants has been convicted of an offense under (i) either a federal or
state law that is cited in 21 U.S.C. § 335a as a ground for debarment, denial of approval, or
suspension, or (ii) any other Regulations cited in any comparable regulatory act as a ground for
debarment, denial of approval or suspension.

     9. Intellectual Property.

     9.1 Existing Inventions and Know-How. Ownership of existing inventions and know-how of any
Party or future inventions and know-how of any Party made outside the scope of this Agreement shall
remain the sole property of such Party, subject to any licenses granted in this Agreement.

     9.2 Inventions and Know-How Developed Under this Agreement by a Party. Any and all inventions
(including all results and know-how), whether or not patentable, that is conceived, reduced to
practice, or otherwise developed within the scope of this Agreement solely by a single Party’s
officers, employees, contractors and agents shall be owned solely by such Party along with all
related intellectual property rights (“Sole Inventions”), subject to any licenses granted
in this Agreement.

     9.3 Inventions and Know-How Developed Jointly Under this Agreement. All other inventions
(including all results and know-how), whether or not patentable, that is jointly conceived, reduced
to practice, or otherwise developed by officers, employees, contractors and agents of two or more
Parties under the scope of this Agreement shall be owned jointly by such Parties along with all
related intellectual property rights (“Joint Inventions”).

     9.4 Joint Invention Rights. Patent applications on Joint Inventions may be filed only if the
relevant Parties agree to file jointly on them. If such Parties agree to file for and obtain
patents on Joint Inventions, all expenses incurred therein shall be shared equally, except that the
employer of each inventor, if applicable, will pay the inventor’s compensation. If a patent is
obtained on a Joint Invention, no such joint Party shall transfer its interest in such patent to a
third party unless the other Party agrees to do so. Notwithstanding the foregoing, the Parties
shall be entitled to transfer their respective rights to their respective Affiliates and successors
in interest. Subject to the exclusivity arrangements described in this Agreement, each Party is
free to use and sublicense Joint Inventions to third parties without any further obligations or
accounting to any other Party; provided, however, that nothing in this Section 9.4 gives another
Party any rights with respect to intellectual property that is owned solely by the other Party.

     9.5 Assignments of Inventions. Each Party shall, and shall cause its officers, employees,
contractors and agents to, (a) execute, all documents, including, without limitation, assignments
of inventions and discoveries and all related intellectual property rights, and (b) perform such
acts as may be necessary, useful or convenient to secure or enforce for the other Party statutory
protection including patent, trademark, trade secret or copyright protection within the Territory
for all intellectual property assigned to it pursuant to this Section 9.

Page 13 of 24

 

     9.6 Regulatory Files. Company shall own all regulatory files with respect to the Product
including without limitation regulatory data and documentation prepared by Manufacturer respecting
the manufacture of the Product, including without limitation the [***] filing with the FDA related
to the Product.

     9.7 Manufacturer IP. Manufacturer shall provide the intellectual property necessary for each
Party to perform under this Agreement including all applicable know-how, trade secrets and United
States Patent Application Serial Nos. 11/068,124 and 60/940,956 (the “Manufacturer IP”).

     9.8 License of Manufacturer IP. Subject to the terms of this Agreement, Manufacturer hereby
grants to Company, and Company hereby accepts, an exclusive, irrevocable license, with right to
sublicense, under the Manufacturer IP (a) for performance of Company and Supplier’s respective
rights and obligations under this Agreement related to the Product in the Territory, and (b) to
use, make, have made and otherwise to sell, market and commercialize the Product (as successfully
developed under this Agreement) in the Territory; provided, however, that Company and Supplier
shall only have the right under this Section 9.8 to make or have made such Product by a third-party
manufacturer (i) if Manufacturer suffers an Insolvency Event, (ii) if following Manufacturer’s
receipt of the FDA’s approval of the Manufacturing Site as a GMP manufacturing facility, the FDA
revokes such approval, or (iii) if Manufacturer is unable to manufacture such Product for a period
exceeding ninety (90) days due to Force Majeure or other cause.

     9.9 Supplier IP. Supplier shall provide the intellectual property necessary for each Party to
perform under this Agreement including with respect to its technologies which are the subject of
U.S. Patent Application Nos. 11/225,834, 11/674,921, and 11/674,940 (the “Supplier Patent
Applications”), related know-how and trade secrets (collectively, the “Supplier IP”).

     9.10 License of Supplier IP. Subject to the terms of this Agreement, Supplier hereby grants
to Company and Manufacturer, and Company and Manufacturer hereby accept, an exclusive, irrevocable
license, with right to sublicense, under the Supplier IP (a) for performance of Company and
Manufacturer’s rights and obligations under this Agreement related to the Product in the Territory,
and, and (b) to use, make, have made and otherwise commercialize the Product (as successfully
developed under this Agreement) in the Territory.

     9.11 Protection of Licensed IP. Manufacturer and Supplier may, but are not obligated to seek,
in their respective name and sole expense, appropriate patent protection for its intellectual
property. In the event that Manufacturer or Supplier have not sought patent protection for a
particular feature of their respective intellectual property, the Parties may agree that
Manufacturer or Supplier should apply for protection and Manufacturer or Supplier shall take
reasonable steps to obtain such protection, with the out-of-pocket costs of seeking such protection
being borne equally by the Parties.

     9.12 Section 365(n) of the Bankruptcy Code. All rights and licenses granted under or pursuant
to this Agreement by any Party to the other Parties are, and shall otherwise be deemed

 

			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.

Page 14 of 24

 

to be, for purposes of Section 365(n) of the United States Bankruptcy Code, 11 U.S.C. Section 101,
et seq. (the “Bankruptcy Code”), licenses of rights to “intellectual property” as defined
under Section 101(56) of the Bankruptcy Code. Each Party further agrees that, in the event that
any proceeding shall be instituted by or against it seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief of composition or it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking an entry of an order for relief or the appointment
of a receiver, trustee or other similar official for it or any substantial part of its property or
it shall take any action to authorize any of the foregoing actions, the other Parties as licensees
shall have the right to retain and enforce their rights and license under this Agreement and shall
retain and may fully exercise all of their respective rights and elections under the Bankruptcy
Code.

     9.13 Further Assurances. Both during the Term of this Agreement and at any time thereafter,
the Parties agree to execute any documents reasonably requested by the other Party to effect any of
the above provisions.

     10. Confidential Information.

     10.1 Except as permitted below, each of the Parties (the “Receiving Party”) shall keep
strictly confidential any information disclosed in writing, orally, visually or in any other manner
by the other Party (the “Providing Party”) or otherwise made available to the Receiving
Party which the Providing Party considers to be and treats as proprietary or confidential
(“Confidential Information”). Confidential Information shall not include information (a)
which is or becomes generally available to the public other than as a result of disclosure thereof
by the Receiving Party; (b) which is lawfully received by the Receiving Party on a nonconfidential
basis from a third party that is not itself under any obligation of confidentiality or
nondisclosure to the Providing Party or any other person with respect to such information; (c)
which by written evidence can be shown by the Receiving Party to have been independently developed
by or for the Receiving Party; (d) which the Receiving Party establishes by competent proof was in
its possession at the time of disclosure by the Providing Party and was not acquired, directly or
indirectly from the Providing Party; or (e) which is required to be disclosed by applicable Laws.

     10.2 Scope of Use. The Receiving Party shall not use any portion of the Confidential
Information outside the scope of this Agreement.

     10.3. Restrictions on Use. The Receiving Party shall not directly or indirectly disclose,
display, provide, transfer or otherwise make available all or any part of the Confidential
Information to any person or entity at any time, unless the Receiving Party has received prior
written permission from the Providing Party. The Receiving Party shall not make copies of the
Confidential Information or any portion thereof. The Receiving Party shall not provide access to
the Confidential Information to third parties, including consultants and independent contractors.
The Receiving Party shall not at any time incorporate all or any portion of the Confidential
Information into any other work, presentation, or product.

     10.4. Return of Information. The Receiving Party shall agree upon request of the Providing
Party to return to the Providing Party all copies of the Confidential Information and all notes,
memoranda or analysis relating thereto. In addition, the Receiving Party shall erase,

Page 15 of 24

 

delete or destroy all notes, documents, electronic mail, magnetic media or other computer
storage, including system backups, which contain any Confidential Information.

     10.5. Compelled Disclosure. In the event that the Receiving Party, or anyone to whom
Confidential Information is transmitted, becomes legally compelled to disclose any of the
Confidential Information, the Receiving Party will provide the Providing Party with prompt notice
so that the Providing Party may seek a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Agreement. In the event that such protective order or other
remedy is not obtained, or that the Providing Party waives compliance in writing with the
provisions of this Agreement, the Receiving Party or its representatives will furnish only that
portion of the Confidential Information that is legally required to be disclosed (by judicial or
similar process that would subject the Receiving Party or its representatives to contempt or
similar penalty for failure to disclose) and will exercise the Receiving Party’s or its
representatives’ best efforts to obtain reliable assurance that confidential treatment will be
afforded to the Confidential Information.

     10.6. Responsibility for Breach by Representatives. The Receiving Party shall be responsible
for any breach of this Agreement by its representatives.

     10.7 Survival. The confidentiality and nondisclosure obligations of this Section 10 shall
survive the expiration or termination of this Agreement and remain in effect for a period of five
(5) years following the expiration or termination of this Agreement.

     11. Term/Termination.

     11.1 Unless sooner terminated pursuant to the terms hereof, this Agreement shall remain in
full force and effect for fifteen (15) years after approval of the [***] (the “Term”).
This Agreement may be extended beyond the Term for successive five (5) year period(s)
(a “Successive Term”) if, at least one hundred eighty (180) days prior to the expiration of
the Term or the expiration of a Successive Term, the Parties agree, in writing, that this Agreement
will be extended for a Successive Term.

     11.2 This Agreement may be terminated by a Party hereto with respect to any other Party if:
(a) such other Party hereto applies for or consents to the appointment of a custodian, receiver,
trustee, or liquidator of all or a substantial part of its assets, or makes a general assignment
for the benefit of creditors; or (b) such other Party hereto files, or submits, a petition or
answer seeking an arrangement with its creditors under any bankruptcy or insolvency law or
proceeding; or (c) any order, judgment or decree is entered against such other Party hereto,
without the application, consent or approval of such Party appointing a custodian, receiver,
trustee or liquidator or a substantial part of its assets or approving a petition seeking
reorganization of such Party and such order, judgment, or decree shall continue unstayed and in
effect for any period of sixty (60) days; or (d) such other Party hereto fails to remove an
involuntary petition in bankruptcy filed against it within forty-five (45) days of the filing
thereof; or (e) any order for relief is entered against such other Party hereto under the
Bankruptcy Code

 

			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.

Page 16 of 24

 

(each, an “Insolvency Event”). Any such termination shall not affect the rights and
obligations of the other Party hereto that is not subject to such Insolvency Event.

     11.3 This Agreement may be terminated immediately by written notice of any Party to the other
Parties hereto if the Product is not commercially launched within the Territory by the fifth
anniversary of this Agreement. Additionally, if following a failed [***] study for the Product or
Company’s receipt of an FDA rejection of [***] the Product, Company decides not to proceed with
additional work or studies, Company may by written notice to Manufacturer and Supplier immediately
terminate this Agreement.

     11.4 Effects of Termination. Termination or expiration of this Agreement for any reason shall
(a) be without prejudice to any rights that shall have accrued to the benefit of each Party prior
to the effective date of such termination or expiration, including without limitation rights to be
paid any amounts owed to such Party hereunder as of such date, and (b) not relieve either Party
from obligations that are expressly indicated to survive termination or expiration of this
Agreement under Section 10.7.

     12. Dispute Resolution. In the event that a Party to this Agreement perceives the existence
of a dispute with any Party or the other Parties to this Agreement concerning any right or duty
provided for herein, the President, Chief Executive Officer or designee with authority to resolve
the dispute completely of each Party will, as soon as practicable, confer in an attempt to resolve
the dispute.

     13. Indemnification.

     13.1 Company hereby indemnifies and holds Manufacturer and Supplier harmless from and against
any and all direct costs including actions, suits, proceedings, claims, losses, liabilities,
damages and expenses (“Direct Costs”) arising out of or in connection with:

          (a) any breach by Company of any term, provision, covenant, agreement, representation or
warranty contained herein; and

          (b) the sale, distribution or marketing of Product by Company or the administration or use
thereof.

     13.2 Manufacturer hereby indemnifies and holds Company and Supplier harmless from and against
any and all Direct Costs arising out of or in connection with any breach by Manufacturer of any
term, provision, covenant, agreement, representation or warranty contained herein.

     13.3 Supplier hereby indemnifies and holds Manufacturer and Company harmless from and against
any and all Direct Costs arising out of or in connection with any breach by Supplier of any term,
provision, covenant, agreement, representation or warranty contained herein.

 

			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.

Page 17 of 24

 

     13.4 Notwithstanding Sections 13.1, 13.2 and 13.3, the indemnification obligations under those
Sections shall not apply in each case to the extent any particular Loss is a direct result of (i)
the negligence or intentional misconduct of the Party seeking indemnification or its
representatives, or (ii) any matter for which the Party seeking indemnification is obligated to
provide indemnification under Section 13.1, 13.2 or 13.3 to the other Party.

     13.5 Upon the occurrence of any event giving rise to a right to seek indemnification
hereunder, the Party seeking indemnification shall give the indemnifying Party written notice of
such claim, action or proceeding within ten (10) days after it becomes known to such Party;
provided, however, that the failure to give such notice shall not relieve the indemnifying Party of
its obligations to indemnify unless such failure materially and adversely affects the defense of
such action and increases the liability of the indemnifying Party. The indemnifying Party shall,
within ten (10) days after receipt of such notice, notify the other Party as to whether or not it
intends to take over the defense of such action, failing which, the Party seeking indemnification
shall be entitled to take over the defense of the action. Upon proper notification by the
indemnifying Party of its intention to defend the claim, the indemnifying Party shall engage
counsel reasonably satisfactory to the indemnified Party to assume the investigation and defense of
the claim and shall keep the indemnified Party and its counsel currently informed as to all
material aspects of the claim and its investigation and defense. The indemnified Party may, in
such case, engage counsel to assist in the investigation and defense of the claim, but shall not be
entitled to reimbursement for any expenses related to the engagement of such counsel. If the
indemnifying Party elects not to assume the investigation and defense of the claim, or fails to
make any election within the time period herein provided, then the indemnified Party shall be
entitled to engage its own counsel for such investigation and defense, and shall be entitled to the
full indemnification therefor.

     13.6 Notwithstanding the Parties’ respective rights to indemnification under this Section 13,
no Party, nor any of its Affiliates or their respective directors, officers, employees or agents
shall have any liability to any other Party for any special, incidental, indirect or consequential
damages, including, but not limited to the loss of opportunity, use, revenue or profit, in
connection with or arising out of this Agreement, even if such damages were foreseeable.

     14. Notices. Any and all notices, elections, demands, requests and responses thereto
permitted or required to be given under this Agreement shall be in writing, signed by or on behalf
of the Party giving the same, and shall be deemed to have been properly given and shall be
effective upon being personally delivered or delivered by nationally recognized courier such as
Federal Express which maintains a record of receipt and delivery, or three (3) days after being
deposited in the United States mail, postage prepaid, registered or certified with return receipt
requested, to another party at the address of such other Party set forth below or at such other
address within the continental United States as such other Party may designate by notice
specifically designated as a notice of change of address and given in accordance herewith;
provided, however, that the time period in which a response to any such notice, election, demand or
request must be given shall commence on the earlier of the date of actual or deemed receipt
thereof; and provided further that no notice of change of address shall be effective until the
earlier of the date of actual or deemed receipt thereof. Personal delivery to a Party or to any

Page 18 of 24

 

officer, agent or employee of such Party at said address shall constitute receipt. Rejection
or other refusal to accept or inability to deliver because of changed address of which no notice
has been received shall also constitute receipt. Any such notice, election, demand, request or
response shall be addressed as follows:

	 	 	 	 	 
	 
	 	If to Manufacturer, to:	 	NEOS Therapeutics, Inc.
	 
	 	 	 	2940 N. Hwy. 360, Suite 100
	 
	 	 	 	Grand Prairie, Texas  75050
	 
	 	 	 	 
	 
	 	If to Supplier, to:	 	Coating Place, Inc.
	 
	 	 	 	PO Box 930310
	 
	 	 	 	Verona, WI 53593
	 
	 	 	 	 
	 
	 	If to Company, to:	 	Cornerstone BioPharma, Inc.
	 
	 	 	 	2000 Regency Parkway, Suite 255
	 
	 	 	 	Cary, North Carolina  27511
	 
	 	 	 	Attention:  President

     15. Relationship between the Parties. The Parties acknowledge that they are, and shall at all
times remain, independent contractors. The Parties and their agents, servants, and employees shall
under no circumstances be deemed agents or representatives of each other for any purpose
whatsoever, unless otherwise agreed to in writing, and the Parties shall have no authority to enter
into any contracts or commitments in the name or on behalf of each other or to bind the other in
any way. No Party hereto is or shall be deemed to be a franchisee of any other Party hereto, and
each covenants and agrees not to make any representation to any person, express or implied, to the
contrary.

     16. Severability. The Parties agree that each of the provisions included in this Agreement is
separate, distinct and severable from the other and remaining provisions of this Agreement, and
that the invalidity or unenforceability of any Agreement provision shall not affect the validity or
enforceability of any other provision or provisions of this Agreement. Notwithstanding the
foregoing, if from any circumstances whatsoever fulfillment of any term or provision of this
Agreement shall involve transcending the limit of validity of any applicable Law with regard to
obligations of like character, then ipso facto the obligation to be fulfilled shall be reduced to
the limit of such validity and such obligation shall be fulfilled to the limit of such validity.

     17. Assignment. This Agreement and the rights and obligations of the Parties hereunder are
freely assignable by each of the Parties; provided, however, that new assignee shall be required to
accept all the rights and obligations of the assigning Party under this Agreement in a writing
delivered to each of the other two Parties hereto.

     18. Waiver. The waiver by a Party of any breach of this Agreement shall not be effective
unless in writing, and no such waiver shall operate or be construed as a waiver of the same or
another breach on a subsequent occasion.

Page 19 of 24

 

     19. Governing Law. All matters arising out of or relating to this Agreement and the
transactions it contemplates shall be governed, construed and enforced in accordance with the laws
of the State of New York, without regard to conflicts-of-laws principles that would require the
application of any other law.

     20. Independent Judgment. The Parties acknowledge that: (a) they have read this Agreement;
(b) they understand the terms and conditions of this Agreement; (c) they have had the opportunity
to seek legal counsel and advice; (d) they are of equal bargaining power; and (e) they have relied
on their own judgment in entering into this Agreement.

     21. Entire Agreement; Amendment. This Agreement, the Product Development Plan and the
purchase orders issued in connection herewith and consistent herewith embody the entire agreement
of the Parties on the subject matter herein. No amendment or modification of this Agreement shall
be valid or binding unless made in writing and signed by the Parties hereto. All prior
understandings and agreements relating to the subject matter of this Agreement are hereby expressly
terminated.

     22. Force Majeure. No Party shall be liable for any failure to perform or any delay in
performing its obligations hereunder, when such failure or delay is due to Force Majeure and
without the fault or negligence of the Party so failing or delaying. For purposes of this
Agreement, “Force Majeure” is defined as acts of God; newly interpreted or issued Laws of
any government; war; civil commotion; destruction of production facilities or materials by fire,
flood, earthquake, explosion or storm; labor disturbances; epidemic; failure of public utilities or
common carriers; and other similar extraordinary unforeseen events that are beyond the control of
the affected Party, but shall not include general market or economic conditions and other ordinary
risks of doing business. If, for any of the reasons set forth in this Section 21, any Party shall
be unable to perform its obligations hereunder, it shall immediately notify the other Parties of
such inability and the specific causes thereof and of the period for which such inability is
expected to continue. The Party giving such notice shall thereupon be excused from such of its
obligations under this Agreement as it is thereby disabled from performing during the pendency of
such causes, provided that it uses commercially reasonable efforts to overcome such causes.

     23. Insurance.

     23.1 Product Liability. Company shall, throughout the Term, obtain and maintain at its own
cost and expense from a qualified insurance company with a Moody’s Rating of B+ or better, standard
Product Liability Insurance naming Manufacturer, Supplier, and each of its officers, directors,
employees, agents, and shareholders as additional insureds. Such policy shall provide protection
against all claims, demands, and causes of action arising out of any defects or failure to perform,
alleged or otherwise, of the Product or Drug Resin Complex used in connection therewith or any use
thereof.

     23.2 Other Insurance. Each Party shall, throughout the Term, obtain and maintain at its own
cost and expense from a qualified insurance company sufficient insurance of the following types to
insure its obligations under this Agreement, including, but not limited to: (i) worker’s
compensation insurance in accordance with the statutory requirements of each state in which
services related to Product or Drug Resin Complex are to be performed; (ii) employer’s

Page 20 of 24

 

liability insurance; and (iii) comprehensive general liability insurance, including
contractual liability. Upon request, a Party shall provide any requesting Party with an original
signed certificate of insurance evidencing all coverage herein required within thirty (30) days
after such request. The certificate must provide that thirty (30) days prior written notice of
cancellation or material change in insurance coverage will be provided to the other Parties hereto.

     23.3 Insurance Primary. An insurer who is otherwise obligated to pay a claim of a Party is
not relieved of the responsibility with respect to such claim and has no subrogation rights with
respect to the claim, in either instance, solely by virtue of the indemnification provisions of
Section 13. Upon payment of an indemnity claim, a Party that provides indemnification hereunder is
subrogated to the rights of an indemnified Party against any insurer otherwise obligated to pay for
such Direct Costs.

     24. Public Announcements. No Party shall use any other Party’s name in any press release,
publicity, advertising, or other disclosure without such other Party’s prior written consent. Any
public announcements or similar publicity with respect to this Agreement shall be at such time and
in such manner as the Parties shall mutually agree, provided that nothing herein shall prevent any
Party from, upon notice to and opportunity to review and comment by the other Parties, making such
public announcements as such Party’s legal obligations require.

     25. Counterparts. This Agreement may be signed in counterparts, each and every one of which
shall be deemed an original, notwithstanding variations in format or file designation which may
result from the electronic transmission, storage and printing of copies of this Agreement from
separate computers or printers. The exchange of copies of this Agreement or amendments thereto and
of signature pages by facsimile transmission or by email transmission in portable document format
(PDF), or similar format, shall constitute effective execution and delivery of such instrument(s)
as to the Parties and may be used in lieu of the original Agreement or amendment for all purposes.
Signatures of the Parties transmitted by facsimile or by email transmission in portable document
format (PDF), or similar format, shall be deemed to be their original signatures for all purposes.

[signature page follows]

Page 21 of 24

 

[Signature Page to Development and Manufacturing Agreement]

     IN WITNESS WHEREOF, Company, Manufacturer and Supplier have each caused this Agreement to be
executed by its duly authorized officer as of the date first shown above.

	 	 	 	 	 
	 	 	COMPANY:
	 
	 	 	 	 
	 	 	Cornerstone BioPharma, Inc.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Craig Collard
	 

	 	 	 	 
	 

	 	Name
	 	Craig Collard
	 

	 	Title:
	 	CEO
	 
	 	 	 	 
	 	 	MANUFACTURER:
	 
	 	 	 	 
	 	 	NEOS Therapeutics, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark Tengle
	 

	 	 	 	 
	 

	 	Name
	 	Mark Tengle
	 

	 	Title:
	 	President
	 
	 	 	 	 
	 	 	SUPPLIER:
	 
	 	 	 	 
	 	 	Coating Place, Inc.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Tim A Breunig
	 

	 	 	 	 
	 

	 	Name
	 	Tim A Breunig
	 

	 	Title:
	 	President

 

 

EXHIBIT A

PRODUCT DEVELOPMENT PLAN

 

 

EXHIBIT B

SPECIFICATIONS

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