Document:

exv10w2

Exhibit 10.2

FOURTH AMENDMENT 

TO THE AMENDED AND RESTATED STRATEGIC ALLIANCE AGREEMENT

     This Fourth Amendment to the Amended and Restated Strategic Alliance Agreement (this
“Amendment”), effective as of April 8, 2010 (the “Amendment Date”) is made by and
among Penwest Pharmaceuticals Co., a Washington Corporation with its principal place of business at
2981 Route 22, Patterson, New York 12563 (“Penwest”) and Endo Pharmaceuticals Inc., a
Delaware corporation with its principal place of business at 100 Endo Boulevard, Chadds Ford,
Pennsylvania 19317 (“Endo”), and amends the Amended and Restated Strategic Alliance
Agreement, dated April 2, 2002, between Penwest and Endo (as amended) (the “Strategic Alliance
Agreement”). Penwest and Endo are referred to in this Amendment as the “Parties” and
individually as a “Party”. Any capitalized terms used but not defined herein will have the
meaning ascribed to such terms in the Strategic Alliance Agreement.

RECITALS

     WHEREAS, Penwest and Endo are parties to the Strategic Alliance Agreement, pursuant to which
the Parties intended that Endo would have an exclusive license to certain Penwest Product
Technology, Penwest Patents and Penwest Confidential Information in the relevant field of use;

     WHEREAS, on June 22, 2006, the FDA approved Endo’s new drug application No. 21-610 for
OPANA® ER tablets, which contain oxymorphone hydrochloride, under § 505(b) of the
Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 355(b), for the relief of moderate-to-severe pain
in patients requiring continuous, around-the-clock opioid treatment for an extended period of time;

     WHEREAS, Endo submitted information regarding certain of the Penwest patents (including United
States Patent Nos. 5,662,933 (the “‘933 Patent”) and 5,958,456 (the “‘456 Patent”
and each of the ‘933 Patent and the ‘456 Patent, a “Patent”))) to the FDA for listing in
its publication, the Approved Drug Products with Therapeutic Equivalence Evaluations (referred to
as the “Orange Book”), with respect to OPANA® ER tablets;

     WHEREAS, at least six generic companies have filed Abbreviated New Drug Applications
(“ANDAs”) seeking approval to engage in the commercial manufacture, use, and sale of
oxymorphone hydrochloride extended-release tablets, as generic versions of OPANA® ER
tablets, prior to the expiration of certain of the Penwest Patents (as defined in the Strategic
Alliance Agreement) listed in the Orange Book with respect thereto;

     WHEREAS, Endo and Penwest have brought suit against each of those generic companies pursuant
to the Hatch-Waxman Act for infringement of the ‘456 and/or ‘933 Patents, and in each instance,
Endo and Penwest alleged that Penwest is the owner and assignee of those Patents, and that Endo is
an exclusive licensee of the Patents in the relevant field of use pursuant to the Strategic
Alliance Agreement with Penwest;

 

 

     WHEREAS, Endo and Penwest reached an agreement to settle their claims against Actavis South
Atlantic LLC (“Actavis”), one of the generic companies they sued for patent infringement,
and in connection therewith, entered into a Settlement and License Agreement with Actavis;

     WHEREAS, pursuant to the Settlement and License Agreement with Actavis, Endo and Penwest
granted Actavis a non-exclusive license to the ‘456 Patent, effective as of the Commencement Date
defined therein (“Actavis License Commencement Date”), along with a covenant not to sue
Actavis for infringement of the ‘933 Patent with respect to certain activities that Actavis may
undertake on or after the Actavis License Commencement Date;

     WHEREAS, the Actavis License Commencement Date has not yet occurred, such that there is no
person or entity other than Endo that has a license to the ‘456 or ‘933 Patents within the relevant
field of use which is effective as of the Amendment Date;

     WHEREAS, Impax Laboratories, Inc. (“Impax”), one of the generic companies that Endo
and Penwest have sued for patent infringement, recently asserted for the first time that Endo lacks
standing to sue for infringement of the ‘456 and ‘933 Patents because it does not have an
appropriate exclusive license to those Patents within a relevant field of use;

     WHEREAS, Endo and Penwest disagree with Impax, and hereby confirm that it was and always has
been the Parties’ intent that Endo would have an exclusive license to the Penwest Patents (as
defined in the Strategic Alliance Agreement), including the ‘456 and ‘933 Patents, in the relevant
field of use;

     WHEREAS, to clarify their intent and in order avoid further litigation and expense over Endo’s
standing to sue for infringement of the ‘456 and ‘933 Patents, the Parties hereby enter into this
Amendment;

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set forth below,
the Parties agree as follows:

1. Amendments to Strategic Alliance Agreement. Penwest and Endo hereby amend the Strategic
Alliance Agreement as follows, solely with respect to the United States, such amendments to become
effective as of the Amendment Date:

     (a) Endo License. Section 6 of the Strategic Alliance Agreement is amended by adding the
following:

“6.3.1.1. Subject to the non-exclusive license granted to Actavis pursuant to the Actavis
Settlement and License Agreement, which license is not effective as of the Amendment Date
and shall not become effective until the Actavis License Commencement Date, Penwest hereby
grants to Endo an exclusive license under the

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Penwest Patents to Endo to make, have made, use, sell, offer for sale, and import in the
United States solid-dosage forms of extended-release pharmaceutical products for oral
administration in humans containing Oxymorphone (or Oxymorphone metabolites, Oxymorphone
derivatives and/or Oxymorphone salts) as the only active therapeutic drug substance (but
excluding the Product) which fall within the scope of the Penwest Patents (“Licensed
Oxymorphone Product”). Such license does not extend to the making of TIMERx or
Formulated TIMERx (which is covered by Section 6.6 hereto), but does cover the incorporation
of the same into any Licensed Oxymorphone Product and the sale of the same as part of the
Licensed Oxymorphone Product. Such license shall be exclusive even as to Penwest and its
Affiliates, and Endo shall have the right to grant sublicenses under this Section 6.3 with
the prior written consent of Penwest, which consent shall not be unreasonably withheld.
Penwest will, throughout the License Term, promptly notify Endo of all Penwest Patents
referred to in Section 1.32 of the Definitions Exhibit and provide Endo with access to all
of the same, solely for use within the scope of the license stated in this section.”

     (b) Endo’s Continuing License. Section 6.7 of the Strategic Alliance Agreement is amended by
adding the words “and Licensed Oxymorphone Products” after the first three occurrences of the word
“Product” (i.e., through Section 6.7.2) in such Section.

     (c) Infringement. Section 11.1 of the Strategic Alliance Agreement is amended by replacing
the first sentence of such Section in its entirety with the following:

“11.1 Notice of Infringement. Penwest shall promptly inform Endo of any suspected
infringement of any of the Penwest Patents or Penwest Product Technology Patents or the
infringement or misappropriation of the TIMERx Production Technology or Penwest Product
Technology by a third party, to the extent such infringement or misappropriation involves
the manufacture, use or sale of the Product, a substitutable or directly competitive product
in the Territory, or any Licensed Oxymorphone Product (“Covered Infringement”).”

     (d) Patent Enforcement Litigation. Section 11.7 of the Strategic Alliance Agreement is
amended by adding the words “or a Licensed Oxymorphone Product” after each occurrence of the word
“Product” in such Section.

     (e) Definition of Exclusivity Period. Section 1.20 of the Definitions Exhibit of the
Strategic Alliance Agreement is amended by adding the words “and Licensed Oxymorphone Products”
after the word “Product” in such Section.

     (f) Financials for Licensed Oxymorphone Product. Sections 1.45, 4.5.1, 4.6.1, 4.8 and 4.11 of
the Strategic Alliance Agreement are amended by adding the words “or Licensed Oxymorphone Product”
after each occurrence of the word “Product” in such Sections.

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2. Entire Agreement. Except as expressly amended by this Amendment, no other portion of
the Strategic Alliance Agreement is amended and all of the terms, covenants and conditions of
the Strategic Alliance Agreement shall remain in full force and effect to the same extent as if
fully set forth herein. For the avoidance of doubt, nothing in Section 1 shall amend the Strategic
Alliance Agreement with respect to any country in the Territory other than the United States, and
Section 6.4 of the 2002 Agreement shall continue to operate as it did immediately prior to the 2007
Amendment Effective Date.. The Parties agree that all references in the Strategic Alliance
Agreement to “this Agreement” shall be deemed to include the provisions of this Amendment.

3. Governing Law. This Amendment and all matters or issues collateral thereto shall be
governed by and construed in accordance with the laws of the State of New York without regard to
its conflict of laws rules.

4. Counterparts. This Amendment may be executed in one or more counterparts, each of which
shall constitute an original but all of which together shall constitute but a single document.

     IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be duly executed as of
the day and year first above written.

	 	 	 	 	 	 	 	 	 	 	 

	PENWEST PHARMACEUTICALS CO.	 	 	 	ENDO PHARMACEUTICALS INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Jennifer L. Good
	 	 	 	By:
	 	/s/ Caroline B. Manogue	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name: Jennifer L. Good	 	 	 	Name: Caroline B. Manogue	 	 
	Title: President and CEO	 	 	 	Title: Executive VP, Chief Legal Officer, and Secretary	 	 

4exv10w3

Exhibit 10.3

FIFTH AMENDMENT TO THE AMENDED AND RESTATED STRATEGIC

ALLIANCE AGREEMENT

     This Fifth Amendment to the Amended and Restated Strategic Alliance Agreement (this
“Amendment”) dated as of June 8, 2010 is made by and between PENWEST PHARMACEUTICALS CO., a
corporation organized and existing under the laws of the State of Washington, with its principal
place of business at 2981 Route 22, Patterson, New York 12563 (“Penwest”), and ENDO PHARMACEUTICALS
INC., a corporation organized and existing under the laws of the State of Delaware, with its
principal place of business at 100 Endo Boulevard, Chadds Ford, Pennsylvania 19317 (“Endo”), and
amends the Amended and Restated Strategic Alliance Agreement, dated April 2, 2002, between Penwest
and Endo (as amended, the “Strategic Alliance Agreement”). Any capitalized terms used but not
defined in this Amendment will have the meaning ascribed to such terms in the Strategic Alliance
Agreement. Penwest and Endo are referred to in this Amendment as the “Parties” and individually as
a “Party”. Any capitalized terms used but not defined herein will have the meaning ascribed to
such terms in the Strategic Alliance Agreement.

     In consideration of the mutual covenants and conditions herein set forth, the receipt and
sufficiency of which consideration is hereby acknowledged, the Parties agree as follows:

1. AMENDMENT TO ROYALTIES

     1.1 Effective April 1, 2010 and continuing through December 31, 2012 (the “First Royalty
Reduction Period”), the Royalty rate set forth in Section 4.5.1 of the Strategic Alliance Agreement
with respect to the Product shall not exceed 22% as a percentage of U.S. Product Net Sales during
such period, subject to the following sentences. During the fourth calendar quarter of 2012,
Penwest and Endo shall calculate the difference between the amount of Royalties for Product that
would have been payable by Endo to Penwest during the First Royalty Reduction Period through the
third calendar quarter of 2012 as if the Royalty rate had not been capped at 22% as provided in the
first sentence of this paragraph and the amount of Royalties payable during such period giving
effect to the 22% cap on the Royalty rate as provided in this paragraph. The Royalty rate on U.S.
Product Net Sales shall be adjusted during the fourth calendar quarter of 2012 to such percentage
of U.S. Product Net Sales for Product for such calendar quarter as will result in the Royalties
payable by Endo to Penwest in respect to U.S. Product Net Sales for Product to be $7,300,000 lower
for the First Royalty Reduction Period than the aggregate Royalties would have been for Product for
such period had the Royalty rate not been adjusted for such period as provided in this paragraph;
provided, however, that Penwest shall have no obligation to make any payment to Endo as a result of
the adjustments in this paragraph.

     1.2 Effective January 1, 2013 and continuing through December 31, 2013 (the “Second Royalty
Reduction Period”), the Royalty rate set forth in Section 4.5.1 of the Strategic Alliance Agreement
with respect to the Product shall not exceed 20% as a percentage of U.S.

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Product Net Sales during such period, subject to the following sentences. During the fourth
calendar quarter of 2013, Penwest and Endo shall calculate the difference between the amount of
Royalties for Product that would have been payable by Endo to Penwest for the Second Royalty
Reduction Period through the third calendar quarter of 2013 as if the Royalty rate had not been
capped at 20% as provided in the first sentence of this paragraph and the amount of Royalties
payable during such period giving effect to the 20% cap on the Royalty rate as provided in this
paragraph. The Royalty rate on U.S. Product Net Sales shall be adjusted for the fourth calendar
quarter of 2013 to such percentage of U.S. Product Net Sales for Product during such period as will
result in the aggregate Royalties payable by Endo to Penwest in respect to U.S. Product Net Sales
for Product to be $700,000 lower for the Second Royalty Reduction Period than the aggregate
Royalties would have been for Product for such period had the Royalty rate not been adjusted for
such period as provided in this paragraph; provided, however, that Penwest shall have no obligation
to make any payment to Endo as a result of the adjustments in this paragraph.

     1.3 Notwithstanding any other provision to the contrary, the Parties agree that sales of those
Impax Products (as defined in the Settlement Agreement) which are covered only by the Existing
Patents (as defined in the Settlement Agreement) and sold during the applicable Exclusivity Period
(as defined in the Settlement Agreement) shall not be considered sales of Licensed Oxymorphone
Products and no financial consideration, including, without limitation, royalties or sales
milestones, shall be due to Penwest with respect to such sales. For all other Impax Product sales,
any payments received by Endo from Impax with respect to such sales shall be deemed to be
“Applicable Sublicense Consideration” and Penwest shall be entitled to payment thereon pursuant to
the Agreement. Penwest shall not be entitled to payment of any kind with respect to the sale of
any Licensed Oxymorphone Products for which Endo receives no consideration. “Settlement Agreement”
means the Settlement and License Agreement entered into among Penwest, Endo and Impax Laboratories,
Inc. (“Impax”) concurrently herewith.

     1.4 The Parties agree that Endo shall be solely responsible for all payments to Impax pursuant
to the Settlement Agreement and that Endo may not deduct such payments from Net Sales or offset
such payments against any amounts owed by Endo to Penwest pursuant to the Strategic Alliance
Agreement.

2. MISCELLANEOUS

     2.1 Except as set forth herein, no other portion of the Strategic Alliance Agreement is hereby
amended and the terms of the Strategic Alliance Agreement shall continue in full force and effect.
All references in the Strategic Alliance Agreement to “this Agreement” shall be deemed to include
the provisions of this Amendment.

     2.2 This Amendment, together with the Strategic Alliance Agreement, constitutes the entire
agreement and supersedes all prior agreements and understandings, both written and oral between the
Parties with respect to the subject matter hereof.

     2.3 Any terms of this Amendment may be amended, modified or waived only in a writing signed by
both Parties.

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     2.4 This Amendment shall be governed by, and construed and enforced in accordance with, the
laws of the State of New York without regard to its conflict of laws rules.

     2.5 Neither Party shall issue any press release or make any public announcements regarding the
subject matter of this Amendment and related provisions of the Strategic Alliance Agreement, as
amended hereby, without the prior written consent of the other Party, which will not be
unreasonably withheld; provided, however, that notwithstanding the foregoing, either Party shall
have the right to issue press releases and to make public announcements regarding the subject
matter of this Amendment and related provisions of the Strategic Alliance Agreement, as amended
hereby, without the consent of the other Party in order to comply with disclosure obligations that
are imposed by applicable law, regulation or legal process, including without limitation by rules
and regulations under applicable securities laws and by rules and regulations of any stock exchange
or NASDAQ, provided that the Party complying with any such disclosure requirement
shall, if practicable, provide the other Party with an opportunity to review and comment on the
content of any such disclosure, to the extent such content has not previously been disclosed
publicly.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first above
written.

	 	 	 	 	 

	ENDO PHARMACEUTICALS INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ David P. Holveck
	 	 
	 

	 	 	 	 
	Name and Title: President and CEO	 	 
	 
	 	 	 	 
	Date: June 7, 2010	 	 
	 
	 	 	 	 
	PENWEST PHARMACEUTICALS CO.	 	 
	 
	 	 	 	 
	By:

	 	Jennifer L. Good	 	 
	 

	 	 	 	 
	Name and Title: President and CEO	 	 
	 
	 	 	 	 
	Date: June 8, 2010	 	 

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