Document:

EX-10.1 MEMORANDUM OF AGREEMENT

 

Exhibit
10.1

PORTIONS OF THIS EXHIBIT MARKED “[***]” HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND THE
OMITTED PORTIONS HAVE BEEN FILED SEPARATELY IN PAPER FORM WITH THE SECURITIES AND EXCHANGE
COMMISSION.

DSM Pharmaceuticals, Inc.

5900 NW Greenville Blvd.

Greenville, NC 27834

Telephone (252) 707-7629

Telefax (242) 707-7622

Memorandum of Agreement In Respect of the Proposed

Transfer/Development of ST-603 Solution.

THIS MEMORANDUM OF AGREEMENT (this “MOA”), dated this 17th day of September, 2006, is
intended to state certain initial agreements between DSM Pharmaceuticals, Inc. (“DSM”), Greenville,
NC and Sirion Therapeutics, Inc. (“Sirion”) with respect to the proposed transfer of ST-603 for use
in conducting clinical trials and for subsequent commercial production at DSM’s Greenville, NC
plant facility.

	1.	 	Purpose. This MOA is intended to permit work to begin promptly on the transfer or
development of the Product while the Definitive Agreements, as referenced in Paragraph 2
hereinafter, are negotiated and finalized. The parties agree that DSM will perform certain
services for Sirion as more fully described in Schedules A and B attached hereto and
incorporated herein by reference, including Schedules A and B as they may hereafter be amended
by mutual agreement of the parties in writing.

	2.	 	Definitive Agreements. If DSM and Sirion mutually agree to go forward, after due
diligence and other preliminary work, the parties will prepare and negotiate in good faith one
or more definitive agreements (the “Definitive Agreements”) as may be appropriate to the
transactions contemplated herein, consistent with Schedules A and B. Definitive Agreements
may include Pharmaceutical Development Agreement, a Manufacturing and Supply Agreement, and a
Quality Agreement.

	3.	 	Confidentiality. Both parties acknowledge and agree to maintain the confidentiality
of the preparations and negotiations pursuant to this MOA. For a period of five (5) years
from receipt of information disclosed by either party hereunder, the receiving party,
including all of its respective representatives, agents, accountants and counsel, shall treat
confidentially the information received from the disclosing party in connection with the
evaluation of the transactions contemplated hereby, other than publically available
information; and will not, without the prior consent of the disclosing party, disclose any

 

 

	 	 	Information to any third party except as required by law. Information shall be deemed
“publicly available” if, (i) other than as a result of the breach of the obligation of
this MOA, it is or becomes generally available to the public or (ii) it is or becomes a
matter of public knowledge, or (iii) if it is within the possession of the receiving party
without an obligation of confidentiality or becomes available to the receiving party on a
non-confidential basis from another source having no obligation of confidentiality.

	4.	 	Exclusivity. As consideration for the effort and expense to be incurred by DSM in
undertaking a detailed analysis and preparation of the Definitive Agreements, Sirion agrees
that it will not discuss, negotiate, solicit, or in any manner encourage any proposal, similar
to the one under consideration through this MOA, with any third party. Without limitation of
the foregoing, Sirion shall not directly or indirectly furnish to any third party any
non-public information concerning the proposal or the Product, or otherwise engage in any act
related to or likely to induce any actual or potential transaction inconsistent with the
intention of this Paragraph 4.

	5.	 	Right of First Refusal to Manufacture. In the event Sirion elects to proceed with
commercial marketing of the Product, either alone or through an affiliate, agent, licensee or
commercial partner, DSM shall be granted the right of first refusal to be the exclusive or
primary source of Product manufacturing for the commercialization effort. In this regard
Sirion shall give DSM written notice of its intent to obtain a commercial source of supply of
the Product and shall provide DSM the opportunity to contract for the production of the
Product. If DSM elects to proceed, it shall notify Sirion in writing within [***] of receipt
of Sirion’s written notice; and the Parties shall promptly begin good faith negotiations on
the terms and conditions of a long term commercial supply agreement for the Product. The
Parties shall have a reasonable time period to complete good faith negotiations, which shall
be no less than [***] days after negotiations have been initiated, and, if the Parties are
unable to agree upon Product price and other specific supply terms for the Product, Sirion
shall have the right to offer the Product to a third party manufacturer, provided Sirion shall
not offer the Product to any third party manufacturer on more favorable terms without first
giving DSM written notice of such more favorable terms and the opportunity to accept the more
favorable terms. DSM shall have [***] from the date the more favorable terms are first
communicated in writing to DSM by Sirion to evaluate and accept such terms. In the event that
DSM and the Sirion are unable to reach agreement on terms of production of Product, the
parties shall conclude their arrangements hereunder; and Sirion shall complete its payment of
any costs or charges hereunder.

	6.	 	Expenses, Payments. Each party shall bear its own costs in connection with the
negotiations and preparations pursuant to this MOA. DSM and Sirion agree that DSM shall
initiate, as soon as reasonably possible, the work described in Schedules A and B as DSM may
incur such expenses in the performance of the work. For purposes of funding such work, Sirion
agrees to pay DSM, within [***] of the signing of this MOA, an initial payment (the “Initial
Payment”) of $[***] as a pre-payment for initial project work to be accomplished by DSM
following the signing of this MOA. In addition, Sirion agrees to pay DSM $[***] as a
pre-payment prior to the initial work in Schedule B. In the event that this MOA is terminated
and no Definitive Agreement is signed by DSM

Page 2

 

	 	 	and Sirion, DSM will refund to Sirion any unused portion of the Initial Payment. Additional
payments due hereunder shall be invoiced to Sirion by DSM on a net, [***] basis from date of
invoice. Overdue payments shall bear interest at the rate of [***] per month, pro-rated for
any partial month, beginning with the day following the due date and continuing to the date
of payment.

	7.	 	Limitation of Liability. DSM shall use its commercially reasonable efforts to
perform the services contemplated hereunder in accordance with the Summary and Scope set forth
in Schedules A and B, including Schedule A or B as it may be amended by mutual agreement of
the parties. It is recognized and agreed by and between DSM and Sirion, however, that since
the services are of a developmental or research nature, there can be no guarantee that they
will be successfully completed, or successfully completed within the contemplated time frame,
despite DSM’s commercially reasonable efforts to do so. DSM HEREBY DISCLAIMS ANY WARRANTIES
OF MERCHANTIBILITY OR WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE
PRODUCT. SIRION’s ONLY REMEDY FOR BREACH OF THIS MOA SHALL BE FOR REFUND OF EXPENSES PAID TO
DSM FOR SERVICES WHICH DID NOT COMPLY WITH THE REQUIREMENTS SET FORTH IN SCHEDULES A AND/OR B,
AS COMPLETED BY THE DATE OF TERMINATION OF THIS MOA. ALL OTHER DAMAGES, INCLUDING DAMAGES OR
DELAYS, LOST PROFITS, LOST BUSINESS OPPORTUNITY, OR CONSEQUENTIAL, INDIRECT, AND PUNITIVE
DAMAGES, ARE HEREBY EXCLUDED.

	8.	 	Termination. This MOA shall terminate as follows:

	 	(a)	 	At any time by either party upon thirty (30) days notice to the other, or upon
three (3) days notice if the parties are unable to reach agreement on necessary changes
to Schedule A or B.
	 
	 	(b)	 	Upon completion and signing of a Definitive Agreement.
	 
	 	(c)	 	Sixty (60) days following completion of any services set forth in Schedule A or
B unless the parties mutually agree to extend this MOA.
	 
	 	(d)	 	Obligations at Termination. Upon termination of this MOA, neither
party shall have any further rights against or obligations to the other hereunder
except for the obligation of confidentiality set forth in Paragraph 3, and the
obligation of (i) Sirion to reimburse DSM for the services completed by DSM pursuant to
Paragraphs 1 and 5, or (ii) the obligation of DSM to refund to Sirion any unused
portion of the Initial Payment pursuant to Paragraph 5 after all expenses have been
paid, whichever of (i) or (ii) is applicable.

	9.	 	Intellectual Property at Termination. If this MOA is terminated without any
Definitive Agreements having been signed, then Sirion shall be entitled to copies of
information generated by DSM during the development/transfer activities, provided that any
technology owned by DSM, including developments thereof hereunder, shall remain the

Page 3

 

	 	 	property of DSM unless licensed to Sirion upon mutually agreeable terms and conditions,
including any royalties to be paid in connection with such license.

	10.	 	Governing Law. This MOA shall be governed by and construed in accordance with the
laws of the State of North Carolina, without reference to principles of conflicts of law.

IN WITNESS WHEREOF, the parties have signed this Memorandum of Understanding by and through their
authorized representatives, effective as of the date first set forth above.

	 	 	 	 
	DSM Pharmaceuticals, Inc. (“DSM”)	 
	 	 	 	 
	By:	 	/s/ Terence S. Novak	 
	 	 	 	 
	 	 	Terence S. Novak

Chief Marketing Officer	 
	 	 	 	 
	Sirion Therapeutics, Inc. (“Sirion”)	 
	 	 	 	 
	By:	 	/s/ William Stringer	 
	 	 	 	 
	Name/Title: 	 	William Stringer/VP Manufacturing/Compliance
	Date:	 	9/20/2006	 

Page 4

 

SCHEDULE A:

Scope and Assumptions for Pharamaceutical Development

Or Technology Transfer

Of Sirion’s Product

Schedules: Page 1

 

 

mapps Proposal template

Schedule A: ST-603 Solution Proposal for Sirion

Therapeutics, Inc. Transfer and CTM Batches

Issued for

Sirion Therapeutics, Inc.

3110 Cherry Palm Drive, Suite 340 Tampa, Florida 33619

September 18, 2006

Submitted By: Curtis Gingles

DSM Pharmaceuticals, Inc.

5900 NW Greenville Blvd.

Greenville, NC 27834

www.dsm.com

Confidential: for intended use only.

Copyright © 2004 DSM Pharmaceuticals, Inc.

 

					
	Revision April 26, 2004
	 	Valid for 60 days
	 	Page 1

Proprietary and Confidential — DSM Pharmaceuticals

This document remains the property of DSM Pharmaceuticals and is intended for the exclusive use of the addressee.

Disclosure, copying, distribution, or reliance on it be anyone else is prohibited except by written permission of DSM

Pharmaceuticals, Inc.

 

 

mapps Proposal template

CONTENTS

	 	 	 	 	 	 	 
	Section 1:	 	Executive Summary
	 

	 	 	1.1	 	 	Proposal Summary
	 

	 	 	1.2	 	 	Terms of Supply
	 
	 	 	 	 	 	 
	Section 2:	 	Project Strategy
	 

	 	 	2.1	 	 	Project Scope
	 

	 	 	2.2	 	 	Transfer Strategy
	 

	 	 	2.3	 	 	Key Project Assumptions
	 
	 	 	 	 	 	 
	Section 3:	 	Project Execution
	 

	 	 	3.1	 	 	High Level Milestones Timeline
	 

	 	 	3.2	 	 	Progress Reporting
	 

	 	 	3.3	 	 	Customer Responsibilities
	 

	 	 	3.4	 	 	Critical Success Factors
	 

	 	 	3.5	 	 	Change Management
	 

	 	 	3.6	 	 	Contacts Listing
	 
	 	 	 	 	 	 

					
	 	 	 	 	 
	Revision April 26, 2004
	 	Valid for 60 days
	 	Page 2

Proprietary and Confidential — DSM Pharmaceuticals

This document remains the property of DSM Pharmaceuticals and is intended for the exclusive use of the addressee.

Disclosure, copying, distribution, or reliance on it be anyone else is prohibited except by written permission of DSM

Pharmaceuticals, Inc.

 

 

mapps Proposal template

Section 1: Executive Summary

	1.1	 	Proposal Summary

This proposal/project is focused on executing all elements required to
successfully transfer production and to providing subsequent ongoing clinical supply
of ST -603 Solution on behalf of Sirion Therapeutics, Inc.

For this product transfer, DSM will utilize our mappsTM system to ensure successful
implementation of ST -603 Solution as per the agreed upon schedule.
mappsTM is our
standardized methodology for executing technical transfer projects and was created and
implemented to ensure the successful delivery of these types of projects in support of
our customers strategic supply objectives.

	1.2	 	Terms of Supply

	 	1.2.1	 	Commercial Pricing

	 	 	 	 	 
	 	 	 	 	Per unit
	Presentation	 	Batch Size	 	Price
	[***]% sol [***]ml fill-[***]mI bottle
	 	[***]	 	$[***]/bottle
	[***]% sol [***]ml fill-[***]mI bottle
	 	[***]	 	$[***]/bottle
	[***]%
sol [***]ml fill-[***]mI bottle
	 	[***]	 	$[***]/bottle
	[***]% sol [***]ml fill-[***]ml bottle
	 	[***]	 	$[***]/bottle

 

			
	1.	 	Pricing above does not include the cost of the API.

	 
	2.	 	

Pricing above is for bulk packaged vials, no secondary packaging.
	 
	3.	 	Assumes batch sizes as identified in tables above.
	 
	4.	 	DSM to get first right of refusal on the commercial production.
	 
	5.	 	Unit price will be finalized prior to the manufacture of validation batches.
	 
	6.	 	Annual pricing and minimum volumes subject to negotiated contract.
	 
	 	 	 

					
	Revision April 26, 2004
	 	Valid for 60 days
	 	Page 3

Proprietary and Confidential — DSM Pharmaceuticals

This document remains the property of DSM Pharmaceuticals and is intended for the exclusive use of the addressee.

Disclosure, copying, distribution, or reliance on it be anyone else is prohibited except by written permission of DSM

Pharmaceuticals, Inc.

 

 

mapps Proposal template

	 	1.2.2	 	Technical Transfer Estimate

	 	 	 	 	 
	Transfer Activity Description 	 	Pricing
	Item #’s, RM and component procurement
	 	$	[***]	 
	Tech Transfer Dev activities
	 	$	[***]	 
	Process Validation Protocol Development
	 	$	[***]	 
	Tech Transfer of Analytical Methods and validation of Cleaning Methods
	 	$	[***]	 
		 	 	 
	Total
	 	$	[***]	 

 

			
	1.	 	See Section 2 for details of services included in proposal.
	 
	2.	 	Mock PAl (optional)- $ [***]
	 
	3.	 	A down payment of $ [***] USD will be required to
initiate the project.

Batch Cost

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Batch	 	Batch	 	#	 	Total
	Batch Type	 	Size	 	Price	 	Batches	 	Price
	Dev Batches
	 	 	[***]	 	 	$	[***]	 	 	 	[***]	 	 	$	[***]	 
	Placebo Batch
	 	 	[***]	 	 	$	[***]	 	 	 	[***]	 	 	$	[***]	 
	CTM Batches
	 	 	[***]	 	 	$	[***]	 	 	 	[***]	 	 	$	[***]	 
		 	 		 	 			 	 	 		 	 	 	 
		 	 	 	 	 	 	 	 	 	 	 	Total
	 	$	[***]	 

 

			
	1.	 	Includes manufacturing, packaging (where applicable), testing and
release (where applicable). Price does not include drugs, chemicals, or
packaging components.
	 
	2.	 	Batch costs are not included in the associated transfer
costs.

Stability Estimate: No Stability requested

Section 2: Project Strategy

2.1 Project Scope

This project is intended to execute the transfer of ST-603 Solution for Sirion
Therapeutics, Inc. and at the conclusion of transfer, DSM will be granted the first
right to refusal by Sirion Therapeutics, Inc. The strategy for executing this project
is as follows:

ST-603 Solution is an aseptically filled ophthalmic solution. The product is intended
for distribution in the US. Sirion Therapeutics, Inc. is requesting a bid for
transfer of the process to DPI Pharmaceuticals (DPI), validation of the process at
DPI, and data for a NDA regulatory filing. The project requires at minimum the scope
of work outlined below to qualify DPI as a site of manufacture for ST-603 Solution.

The project’s scope involves development and technology transfer of the ST-603
Solution product manufacture and is therefore developmental in nature. As such,
issues and unexpected outcomes are anticipated for which ongoing technical support by
DPI may be required. The project will be executed by DPI on a best efforts basis. The
development exercise is finite as defined in this agreement. As such, not all
technical issues regarding the process will be observed and identified. It is assumed
that technical issues outside of the development exercise will be discovered in
subsequent commercialization action and production activities. It is assumed that
Sirion Therapeutics, Inc. maintains responsibility to support resolution of these
technical issues and recognizes them as scope changes.

This proposal is based on a number of assumptions regarding the scope and complexity
of many aspects of this project. If any of the assumptions made In this proposal are
later found to be inaccurate the proposed prices quoted herein are no longer
applicable and must be appropriately adjusted and possibly re-quoted.

In all aspects of this project, DPI is responsible for adhering to appropriate GMPs
and sound defensible development or transfer plans which will be acceptable, in DPl’s
opinion, to current regulatory expectations.

 

					
	Revision April 26, 2004
	 	Valid for 60 days
	 	Page 4

Proprietary and Confidential — DSM Pharmaceuticals

This document remains the property of DSM Pharmaceuticals and is intended for the exclusive use of the addressee.

Disclosure, copying, distribution, or reliance on it be anyone else is prohibited except by written permission of DSM

Pharmaceuticals, Inc.

 

 

mapps Proposal template

	2.2	 	Transfer Strategy

	 	2.2.1	 	Kick Off Meeting/Scope/Contract Finalization

Following proposal approval, a Memorandum of Agreement (MOA) will be approved by
both organizations. After the MOA is in place, the project will be initiated. A joint
team kick off meeting will be scheduled to review the technical assumptions of the
bid. The scope will be defined and the proposal will be revised if needed.

	 	2.2.2	 	Initial Process Feasibility/Transfer Activities

Joint Team meetings will be held to review the technical documents submitted by
Sirion Therapeutics, Inc. for the manufacture, testing, and/or packaging of ST-603
Solution. Documents to be reviewed include master documents, technical reports from
the client, trends observed in the dissolution and manufacturing, process flow
proposed at DSM, etc.

DSM will initiate the item numbers and purchasing documents in order to receive and
test the API.

	 	2.2.3	 	Analytical Development

Microbiological Methods Development/Transfer — Sterility and Bacterial Endotoxin
Testing will be required for the finished product

Analytical Methods Development/Transfer — API will be provided by Sirion Therapeutics.
Inc. The first three lots will require full release testing: loss on drying, heavy
metals, pH, HPLC assay and identification,• GC residual solvents. Additional lots will
be accepted on a reduced testing schedule. Finished product testing will be performed
by an alternate site.

	 	2.2.4	 	Pharmaceutical Services

To facilitate the technology transfer of ST-603 Solution to DPI, the following
strategy is proposed:

CTM batches to be performed in M2-33:

Lab
Scale Development Batches

[***] for each formulation will be prepared to define the manufacturing processes.
Areas for evaluation during the lab batches will include manufacturing and mixing
parameters and filtration parameters.

Partial
Scale Development Batches

[***] will be manufactured and filled. The purpose of these lots will be to define the
manufacturing and filling processes at partial scale in commercial equipment. Areas
for evaluation during the development batch include manufacturing and mixing
parameters, filtration parameters, filling parameters, and fill weight. Analytical
testing of the batch will include all intended release testing. Following the
completion of the batches, a technical review meeting will be held to facilitate a
joint DPI and Sirion Therapeutics, Inc. review of the batch data to verify that the
processes are suitable for use in CTM. If it is determined that the processes are not
well defined,. additional development batches may be required and would be beyond the
scope of this proposal.

Placebo
Batch

[***] will be manufactured and filled for use as CTM,

CTM
Batches — [***] will be prepared. The [***] batches will represent [***] for each
of the following presentations: [***]% [***]mL and [***]mL fill and [***]%[***]mL and
[***]mL. Analytical testing for the CTM batches will include all intended in-process
and release testing.

 

					
	Revision April 26, 2004
	 	Valid for 60 days
	 	Page 5

Proprietary and Confidential — DSM Pharmaceuticals

This document remains the property of DSM Pharmaceuticals and is intended for the exclusive use of the addressee.

Disclosure, copying, distribution, or reliance on it be anyone else is prohibited except by written permission of DSM

Pharmaceuticals, Inc.

 

 

mapps Proposal template

Please note the developmental nature of this project may require additional batches
that are outside the scope of this bid.

	 	2.2.5	 	Validation Services

DSM’s validation department will document the requirements for the transfer
project in a Validation Project Plan to be approved by DSM, the client
representatives, and DSM Quality Assurance. This project plan will outline the
activities required to achieve the project goals. The following documents will be
required, at a minimum, in order to fulfill validation requirements for the project:
Validation Project Plan and Summary, Process Validation Protocol and Summary, Cleaning
Limit Rationale Document, Cleaning Verification / Validation Protocol and Summary,
confirmation of Container / Closure Integrity.

Additional document requirements, dependent upon the client selection of components
and the product processing steps are: Component Machineability Protocol and Summary,
Media Fill Protocol and Summary, Component Processing Protocols and Summaries (for
qualification of processing of stoppers, vials, seals).

Qualification of the filter / solution system for extractables, microbial retention,
and compatibility (to be performed at Millipore) will be required for commercial. If
current filter media is the client filter of choice, the sterilization of the filter
is already validated and no additional studies are necessary.

Procedures for cleaning will be transferred or developed and validated to verify the
product can be removed from manufacturing equipment utilizing the DPI cleaning model.

	 	2.2.6	 	Regulatory Services

The Customer will be responsible for submitting the Registration package for
regulatory agency approval within a mutually agreed time from receipt of the package
from DSM.

This proposal assumes that a data only package will be supplied by DSM to support the
product registration. The deliverables for the registration package will be clearly
defined at project initiation and included in the project timeline. If additional
regulatory support activities are required, this will be considered a scope change.

	 	2.2.7	 	Quality Assurance Strategy

DSM’s Quality Assurance department will act as a compliance consultant and provide
Quality oversight for adherence to regulatory requirements. This will include but not
limited to the following: Documentation, Validation, Investigations, and Vendors.

The following departments will agree to the project approach to development and
validation and any required changes: Project Management, QA, Affected Business Unit
(if applicable) and the customer.

The customer understands that DSM has considerable regulatory and compliance
responsibility associated with this project In the event the existing Quality
Agreement does not cover any issue that may arise each party will mutually agree to
resolve these issues in the best interest of both parties and the project. In all
aspects of this project, DSM is responsible for adhering to appropriate GMPs and sound
defensible development or transfer plans which will be acceptable, in DSM’s opinion,
to current regulatory expectations. DSM will not knowingly execute (or bypass)
activities which are inconsistent with DSM’s Regulatory policies. At a minimum DSM’s
Quality Systems must be met

DSM’s Quality Assurance Department will be responsible for oversight of project
activities as it relates to adherence to regulatory requirements.

 

					
	Revision April 26, 2004
	 	Valid for 60 days
	 	Page 6

Proprietary and Confidential — DSM Pharmaceuticals

This document remains the property of DSM Pharmaceuticals and is intended for the exclusive use of the addressee.

Disclosure, copying, distribution, or reliance on it be anyone else is prohibited except by written permission of DSM

Pharmaceuticals, Inc.

 

 

mapps Proposal template

	2.3	 	Key Project Assumptions

	 	2.3.1	 	General Assumptions

	 	1.	 	Project requires completion of a MSDS, and assessment of Safety issues,
potential environmental concerns, and wastes disposal procedures, as
appropriate for this project. This proposal assumes there are no safety
concerns for this API or product. It is assumed that during manufacturing and
packaging the exposure level will remain below the OEL (Occupational Exposure
Limit) and that no facility or procedural changes will be required to support
this product.
	 
	 	2.	 	Raw materials, packaging components, change parts and special
or custom shipping containers supplied by DPI will be billed to Sirion
Therapeutics, Inc. at cost to DPI, plus a handling fee.
	 
	 	3.	 	Shipping of product, product samples, and documentation will
be freight collect FOB Greenville.
	 
	 	4.	 	It is assumed that additional process development and process
scale-up activities may be required during the course of the project Because
such activities are not clearly defined at the bid stage, they are not
included in the bid estimate. It is assumed that any additional process
development work will be defined and included in a separate proposal as a
scope change.

	 	2.3.2	 	Product / Manufacturing Assumptions

	 	5.	 	ST-603 Solution is to be manufactured according to all applicable cGMP
requirements. The product will be manufactured on the drop dose line in the
Steriles South facility.
	 
	 	6.	 	The compounding process is a single shift operation. Filling
is a single shift operation. The hold times for manufacturing and filling will
be established during the manufacture of development, and registration
batches. Minimum bulk hold times of at least 24-48 hours are assumed
	 
	 	7.	 	The CTM batch sizes for M2-33 are estimated at 10,000 filled
units. Commercial batch sizes are estimated at 50,000 vials, final batch sizes
for M2-34 will be determined when the filler is in place.
	 
	 	8.	 	Sirion Therapeutics, Inc. is to approve all master batch
documentation prior to batch scheduling. DPI will send master documents by
express mail or FAX. Sirion Therapeutics, Inc. will complete the review and
approval within [***] of receipt, or provide written feedback. Approval from
Sirion Therapeutics, Inc. will be supplied by FAX and express mail signatures
of original signed approvals are required. The project plan assumes no delays
due to critical document revision.
	 
	 	9.	 	DSM will fully test the [***] lots of API and test subsequent
lots on a reduced testing schedule.
	 
	 	10.	 	Sirion Therapeutics, Inc. will supply DPI with a written
certification of cGMP compliance of the API manufacturing facilities to
facilitate item number assignment and release of the API for use.
	 
	 	11.	 	All materials supplied by Sirion Therapeutics, Inc. will
arrive at DPI with appropriate documentation to be received into DPI’s
inventory management system, including, but not limited to, a certificate of
analysis.
	 
	 	12.	 	This bid assumes dedicated product contact equipment is not
required, however, known required capital is included in the bid.
	 
	 	13.	 	It is assumed that product contact parts and equipment can be
cleaned using standard DPI cleaning processes. This bid includes cleaning
process development It is also assumed that standard DPI cleaning processes
can be validated for removal of ST-603 Solution from product contact equipment
to support multi-product use of the equipment.
	 
	 	 	 	 

					
	Revision April 26, 2004
	 	Valid for 60 days
	 	Page 7

Proprietary and Confidential — DSM Pharmaceuticals

This document remains the property of DSM Pharmaceuticals and is intended for the exclusive use of the addressee.

Disclosure, copying, distribution, or reliance on it be anyone else is prohibited except by written permission of DSM

Pharmaceuticals, Inc.

 

 

mapps Proposal template

	 	 	 	If it is determined that the cleaning of product contact parts and equipment cannot be
validated, this would be considered a scope change requiring dedicated product
contact parts which may necessitate re-evaluation of which filling line could
be used to produce the product.

	 	14.	 	Target fill weights for the commercial product will be
[***]mL and [***]mL. Fill tolerances will be established during development
batches based on equipment capabilities using the actual product formulation.
	 
	 	15.	 	It is assumed that Sirion Therapeutics, Inc, can provide
product contact compatibility data for product contact surfaces to DPI. If
this assumption is incorrect, additional development work to generate this
data will be required and is outside the scope of this proposal.
	 
	 	16.	 	Filter validation (including protocols and packages for
extractables, compatibility, and microbial retention) is required for the
selected filter/solution system. It is assumed that Sirion Therapeutics, Inc.
will agree to use [***] filters for any pre-filters and sterilizing filters
and contract with [***] to generate data for extractables, compatibility, and
microbial retention. Additional sterilization validation will be required if
the selected filter differs from existing DPI validated filters and would be
considered to be an additional scope of work which is not included in this
proposal. Utilization of filters other than [***] is outside the scope of this
bid.
	 
	 	17.	 	The product will be 100% inspected. Sirion Therapeutics, Inc.
and DPI will jointly determine inspection criteria.
	 
	 	18.	 	Sirion Therapeutics, Inc. is responsible for ensuring that
finished product is shipped under appropriate conditions according to
customer-supplied specifications.

	 	2.3.3	 	Analytical Assumptions

	 	19.	 	The API will require the generation of a new item number and purchasing
documentation, as well as the creation of a new analytical standard (test
methods and specifications) and transfer of analytical methods. If such
materials are not supplied by existing DPI-approved suppliers or by the
customer’s audited and cGMP-certified supplier, performance of a cGMP audit
and certification will be required by either the customer or DPI and is
outside the scope of this estimate, All other raw materials are assumed to be
existing DPI item numbers from DPI-approved suppliers and releasable by
existing DPI specifications. If non-DPI-approved suppliers must be used to
source these materials, or if different, additional or fewer specifications
are required, this would render these materials different from existing DPl
item numbers, requiring the generation of new item numbers and purchasing
documentation as well as the creation of new analytical standards (test
methods and specifications) and the need to formally transfer any related
analytical methods. None of these additional activities are included in the
scope of this estimate. An analytical standard must also be generated for the
finished product. Analytical standards are critical documents and
review/approval is required.
	 
	 	20.	 	Raw materials (API and excipients) and finished product
testing is based on the efficiencies gained by ganging similar testing
together to the extent practicable and accepting data from CoA from qualified
testing labs. To affect this, the cost to the client of testing is based on
the concurrent testing of several lots of material or product (to the maximum
extent that testing efficiencies can be realized). These testing efficiencies
are passed on to the client in the form of a reduced price for concurrently
lots to nonconcurrent lots. If testing is executed with less concurrent
testing than originally assumed, this constitutes a scope change and will
result in a higher testing price than presented in this estimate.
	 
	 	21.	 	Sirion Therapeutics, Inc. will provide product for use in
analytical method transfer and cleaning process evaluation.
	 
	 	22.	 	It is assumed that DPI laboratories are capable of performing
required product testing with existing instrumentation. Testing which DPI
cannot currently support either due to instrumentation or capabilities is
outside the scope of this estimate. If it is determined DPI is not capable of
supporting testing, any additional equipment is not included in the scope of
this estimate.
	 
	 	 	 	 

					
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	 	23.	 	It is assumed that development and validation of a cleaning
method for product residue with sufficient sensitivity for DPl cleaning
validation is required.
	 
	 	24.	 	Analytical transfer of previously developed and validated
microbiological test methods (pre-filtration bioburden, sterility and
bacterial endotoxin) will be performed by method revalidation using
appropriate challenges per USP expectations and, as appropriate, other
compendial approaches. If such methods are found to not exist or have not been
previously validated, additional method development/validation is not included
in the scope of this estimate.
	 
	 	25.	 	Since the customer’s test methods are unfamiliar to DPI at
this time, all analytical bids employing anticipated test times should be
considered approximations of the actual time that may be required. The
customer will only be charged for and agrees to pay for the time actually
utilized to execute the various testing functions, including validation,
method transfer, verification, In-process, Release and Stability Testing of
Raw Materials and Products.
	 
	 	26.	 	All analytical activities assume that the execution of the
test procedures will yield acceptable results on the first attempt, requiring
no second/third stage or repeat testing and no OOS investigations. If such
activities do occur, they are outside the scope of this estimate and will
result in a higher cost to the customer than presented in this estimate.
	 
	 	27.	 	Analytical transfers of any chemistry test methods will be
performed primarily by the collaborative transfer approach with the Customer
responsible for generating the transfer protocol and DPI writing the final
report. DPI will be responsible for providing comments to and approving the
customer’s protocol. Both parties will execute their portion of the transfers.
The customer will submit test results to DPI, and provide comments to and
approve DPl’s final report. Sirion Therapeutics, Inc. will generate all
analytical method transfer protocols and approve all transfer reports. Sirion
Therapeutics, Inc. will complete the review and approval within three working
days of receipt, or provide written feedback. Approval from Sirion
Therapeutics, Inc. will be supplied by FAX and express mail signatures of
originals are required. A maximum of two reviews each by DPI and the customer
will occur per document The project plan assumes no delays due to critical
documentation revision.
	 
	 	28.	 	Every effort has been made to anticipate the required
analytical support for this project and its realistic labor requirements.
Nevertheless, project scope changes and unexpected developments can occur
which affect the accuracy of this estimate in ways and extents that cannot be
anticipated. It is assumed that the customer accepts that these situations can
occur and is willing to pay for such unanticipated changes should they result
in a higher price than presented in this estimate. This includes method
ruggedness and robustness issues that may not become apparent until sufficient
testing has been completed by DPI.
	 
	 	29.	 	Stability testing will be performed by an alternate site.
	 
	 	 	 	 

					
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Section 3: Project Execution

	3.1	 	High Level Milestones Timeline

			
	           Note:	 	The timeline below is based on a best efforts estimate to meet Sirion’s
CTM requirements. A detailed timeline will be provided after scope definition
is completed at the T2 milestone.

	 	 	 	 	 
	Table 1: High Level Milestones	 	Tech. Transfer	 
	Milestone Estimate	 	Step Duration – ends	 
	T0 – Written Authorization
	 	 	[***]	 
	T1 – Project Initiation: Int & Ext Kickoff Mtgs, scope gap analysis
	 	 	[***]	 
	T2 – Project Scope Finalized
	 	 	[***]	 
	T3 – Facility/Equip/Dev Materials Ready: No change parts
	 	 	[***]	 
	T4 – Transfer / Development Complete (Submission Prep Package)
	 	 	[***]	 
	T4 – Placebo
	 	 	[***]	 
	T-4 – 4 CTM Batches produced
	 	 	[***]	 

	3.2	 	Progress Reporting

Progress on this project is reported to Sirion Therapeutics, Inc. as part of
regularly scheduled project team meetings (frequency to be determined at project
initiation).

DSM Pharmaceuticals’ Milestone and Activity-based Project Planning System (mappsTM) is
a proprietary project management system that ensures the successful delivery of
development and process transfer projects. mappsTM offers customers a clearly defined
milestone-based method of planning and executing projects. In addition to providing a
customized project plan,. customers also receive standardized monthly milestone
progress reports. The system also includes an integrated resource-loaded master
schedule to ensure efficient allocation of project resources.

	3.3	 	Customer Responsibilities

The successful execution of this project requires the cooperation and coordination
of the DSM and the Sirion Therapeutics, Inc. project teams at key points within the
project timeline. The project timeline requires that the following timeframes be
supported by the Sirion Therapeutics, Inc. project team in order to assure timely
completion:

	 	•	 	Sirion Therapeutics, Inc. Regulatory group will file
regulatory package in a mutually agreed upon timeframe.
	 
	 	•	 	Customer will be able to provide required document
approvals within [***].
	 
	 	•	 	Customer will provide analytical methods documentation
for evaluation by DSM analytical staff within [***] of project initiation.
	 
	 	 	 	 

					
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	3.4	 	Critical Success Factors

There are many elements within the project schedule that need to occur, the
following critical success factors are especially important and will require special
attention by both DSM and Sirion Therapeutics, Inc. throughout execution of this work.
These items include:

	 	•	 	Identification and qualification of API source.
	 
	 	•	 	Creation and approval of master documents.
	 
	 	•	 	Commitments made by both DSM and Sirion Therapeutics,
Inc. with regards to timely review and turnaround of project documentation
must be honored.

	3.5	 	Change Management and Control

Maintaining original project scope and property managing requested scope changes
during the execution of this project is a key requirement of effective project
management and allows for timely completion of project deliverables. Having an agreed
to process will help to protect the interests of both Sirion Therapeutics, Inc. and
DSM, and will ultimately ensure the ultimate success and satisfaction of both
companies. In order to support this key project management factor the following
controls will be utilized:

	 	i.	 	Sirion Therapeutics. Inc. requested scope changes -
Formal requests for scope changes will be forwarded by the designated Sirion
Therapeutics. Inc. Project Leader to the designated DSM Project Manager for
evaluation and pricing. DSM will provide formal written response within
[***].
	 
	 	ii.	 	DSM requested scope changes - Formal requests for scope
changes will be forwarded by the Account Manager to the designated Sirion
Therapeutics, Inc. Project leader for evaluation and acceptance. Sirion
Therapeutics, Inc. will provide formal written response within [***].

	3.6	 	Contact Listing

Primary DSM contacts for this proposal are as follows:

Table 1: Contacts

	 	 	 	 	 	 	 
	Name	 	Phone number	 	Role	 	E-mail address
	Bill Conway

	 	480-538-4870
	 	New Business Director
	 	Bill.Conway@dsm.com
	Curtis Gingles

	 	252-707-7041
	 	New Business Manager
	 	Curtis.Gingles@dsm.com
	Denise Muck

	 	252-707 -7914
	 	Strategic Planning
	 	Denise.Muck@dsm.com
	Norma Noble

	 	252-707 -2476
	 	Project Management
	 	Norma.Noble@dsm.com
	 
	 	 	 	 	 	 

					
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Pharmaceuticals, Inc.

 

 

SCHEDULE B:

Scope and Assumptions for Pharamaceutical Development

Or Technology Transfer

Of Sirion Therapeutics, Inc.’s Product

Schedules: Page 2

 

 

mapps Proposal template

Schedule B: ST-603 Solution Proposal for Sirion
Therapeutics, Inc. Registration Batches and

Commercial

Issued for

Sirion Therapeutics, Inc.

3110 Cherry Palm Drive, Suite 340

Tampa, Florida 33619

September 15, 2006

Submitted By: Curtis Gingles

DSM Pharmaceuticals, Inc.

5900 NW Greenville Blvd.

Greenville, NC 27834

www.dsm.com

Confidential: for intended use only.

Copyright © 2004 DSM Pharmaceuticals, Inc.

 

					
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CONTENTS

	 	 	 
	Section 1:

	 	Executive Summary
	1.1

	 	Proposal Summary
	1.2

	 	Terms of Supply
	 	 	 
	Section 2:

	 	Project Strategy
	2.1

	 	Project Scope
	2.2

	 	Transfer Strategy
	2.3

	 	Key Project Assumptions
	 	 	 
	Section 3:

	 	Project Execution
	3.1

	 	High Level Milestones Timeline
	3.2

	 	Progress Reporting
	3.3

	 	Customer Responsibilities
	3.4

	 	Critical Success Factors
	3.5

	 	Change Management
	3.6

	 	Contacts Listing

      

					
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Section 1: Executive Summary

	1.1	 	Proposal Summary

This proposal/project is focused on executing all elements required to
successfully complete the transfer and validate production and to providing subsequent
ongoing commercial supply of ST-603 Solution on behalf of Sirion Therapeutics, Inc.

For this product transfer, DSM will utilize our mappsTM system to ensure successful
implementation of ST-603 Solution as per the agreed upon schedule.
mappsTM is our
standardized methodology for executing technical transfer projects and was created and
implemented to ensure the successful delivery of these types of projects in support of
our customers strategic supply objectives.

	1.2	 	Terms of Supply

	 	1.2.1	 	Commercial Pricing

	 	 	 	 	 	 	 	 
	 	 	 	 	 	Per unit	 
	Presentation	 	Batch Size	 	 	Price	 
	[***]% sol [***]ml fill-[***]ml bottle
	 	[***]	 	 	$[***]/bottle
	[***]% sol [***]ml fill-[***]ml bottle
	 	[***]	 	 	$[***]/bottle
	[***]%
sol [***]ml fill-[***]ml bottle
	 	[***]	 	 	$[***]/bottle
	[***]% sol [***]ml fill-[***]ml bottle
	 	[***]	 	 	$[***]/bottle

 

			
	1.	 	Pricing above does not include the cost of the API.
	 
	2.	 	Pricing above is for bulk packaged vials, no secondary packaging.
	 
	3.	 	Assumes batch sizes as identified in tables above.
	 
	4.	 	Unit price will be finalized prior to the manufacture of validation batches.
	 
	5.	 	Annual pricing and minimum volumes subject to negotiated contract.
	 
	 	 	 

					
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	1.2.2	 	Technical Transfer Estimate

	 	 	 
	Transfer Activity Description	 	Pricing
	Regulatory Support-Registration Batches 

Filter Validation Support 

PV Batch Support [***] batches 

Regulatory Support PV Batches 

        TOTAL =

	 	$[***]

$[***]

$[***]

$[***]

$[***]

 

			
	1.	 	See Section 2 for details of services included in proposal.

	 
	2.	 	Mock PAl (optional)— $ [***]
	 
	3.	 	A down payment of $ [***] USD will be required to
initiate the project.

Batch Cost

	 	 	 	 	 	 	 	 	 
	 	 	Batch	 	Batch	 	#	 	Total
	Batch Type	 	Size	 	Price	 	Batches	 	Price
	Water Batch for
7.5ml Bottle

	 	[***]
	 	$[***]
	 	[***]
	 	$[***]
	Media Fill for 

Container Closure

	 	[***]
	 	$[***]
	 	[***]
	 	$[***]
	Registration
Batches

	 	[***]
	 	$[***]
	 	[***]
	 	$[***]
	Dev Batches

	 	[***]
	 	$[***]
	 	[***]
	 	$[***]
	Process Validation 

Batches

	 	[***]
	 	Commercial

Price
	 	[***]
	 	Commercial

Price
	 

	 	 	 	 	 	Total
	 	$[***]

 

			
	1.	 	Includes manufacturing, packaging (where applicable), testing and
release (where applicable). Price does not include drugs, chemicals, or
packaging components.
	 
	2.	 	Batch costs are not included in the associated transfer
costs.

Stability Estimate: No Stability requested

Capital Estimate: No Capital expected at this time. DSM will be funding ~$ [***]
in change parts for the new drop dose filler line for commercial volumes.

Section 2: Project Strategy

	2.1	 	Project Scope

This project is intended to complete the transfer and validation of ST-603
Solution for Sirion Therapeutics, Inc. and at the conclusion of transfer, DSM will
also commercially supply this product for Sirion Therapeutics, lnc. The strategy for
executing this project is as follows:

ST-603 Solution is an aseptically filled ophthalmic solution. The product is intended
for distribution in the US. Sirion Therapeutics, Inc. is requesting a bid for transfer
of the process to DPI Pharmaceuticals (DPI), validation of the process at DPI, and
data for a NDA regulatory filing. The project requires at minimum the scope of work
outlined below to qualify DPI as a site of manufacture for ST-603 Solution.

The project’s scope involves development and technology transfer of the ST-603
Solution product manufacture and is therefore developmental in nature. As such, issues
and unexpected outcomes are anticipated for which ongoing technical support by DPI may
be required. The project will be executed by DPI on a best efforts basis. The
development exercise is finite as defined in this agreement. As such, not all
technical issues regarding the process will be observed and identified. It is assumed
that technical issues outside of the development exercise will be discovered in
subsequent commercialization action and production activities. It is assumed that
Sirion Therapeutics, Inc. maintains responsibility to support resolution of these
technical issues and recognizes them as scope changes.

This proposal is based on a number of assumptions regarding the scope and complexity
of many aspects of this project. If any of the assumptions made in this proposal are
later found to

 

					
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be inaccurate or incorrect, the proposed prices quoted herein are no longer applicable
and must be appropriately adjusted and possibly re-quoted,

In all aspects of this project, DPI is responsible for adhering to appropriate GMPs
and sound defensible development or transfer plans which will be acceptable, in DPl’s
opinion, to current regulatory expectations.

	2.2	 	Transfer Strategy

	 	2.2.1	 	Kick Off Meeting/Scope/Contract Finalization

Following proposal approval, a Memorandum of Agreement (MOA) will be approved by
both organizations. After the MOA is in place, the project will be initiated. A joint
team kick off meeting should not be required since this is an extension of a Phase III
CTM project.

	 	2.2.2	 	Initial Process Feasibility/Transfer Activities

Joint Team meetings will be held to continue the transfer/validation activities
for the manufacture, testing, and/or packaging of ST-603 Solution.

All item numbers and purchasing documents should be in place from previous Phase III
activities to receive and test the API. Any changes will be handled with a scope
change

	 	2.2.3	 	Analytical Development

All Testing and Cleaning verification methods should be in place from the previous
Phase III activities. Any changes will be handled with a scope change

	 	2.2.4	 	Pharmaceutical Services

To facilitate the technology transfer of ST-603 Solution to DPI, the following
strategy is proposed:

Part 2 to be performed in M2-34 with new filler and room upgrades:

Registration
Batches — [***] of [***] bottles each will be prepared. The [***] will
represent [***] for each of the following presentations: [***]%[***]mL and [***]mL
fill and [***]%[***]mL and [***]mL. Analytical testing for the CTM batches will
include all intended in-process and release testing.

Partial Scale Development Batches

[***] ([***] per formulation) will be manufactured and filled. The purpose of these
lots will be to define the manufacturing and filling processes at partial scale in
commercial equipment. Areas for evaluation during the development batch include
manufacturing and mixing parameters, filtration parameters, filling parameters, and
fill weight. Analytical testing of the batch will include all intended release
testing. Following the completion of the batches, a technical review meeting will be
held to facilitate a joint DPI and Sirion Therapeutics, Inc. review of the batch data
to verify that the processes are suitable for use in PV batches.

Process
Validation (PV) Batches — A minimum of [***] will be produced to support
validation of the process transfer for four presentations. Analytical testing for the
PV batches will include all intended in-process and release testing plus any
additional testing agreed to by DPI and Sirion Therapeutics, Inc. The details of the
additional PV testing will be documented in the PV Protocol. These batches can be
utilized for commercial release following regulatory approval.

 

					
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	 	2.2.5	 	Validation Services

DSM’s validation department will document the requirements for the transfer
project in a Validation Project Plan to be approved by DSM, the client
representatives, and DSM Quality Assurance. This project plan will outline the
activities required to achieve the project goals. The following documents will be
required, at a minimum, in order to fulfill validation requirements for the project:
Validation Project Plan and Summary, Process Validation Protocol and Summary, Cleaning
Limit Rationale Document, Cleaning Verification / Validation Protocol and Summary,
confirmation of Container / Closure Integrity.

Additional document requirements, dependent upon the client selection of components
and the product processing steps are: Component Machineability Protocol and Summary,
Media Fill Protocol and Summary, Component Processing Protocols and Summaries (for
qualification of processing of stoppers, vials, seals).

Qualification of the filter / solution system for extractables, microbial retention,
and compatibility (to be performed at Millipore) will be required. If current filter
media is the client filter of choice, the sterilization of the filter is already
validated and no additional studies are necessary.

Procedures for cleaning will be transferred or developed and validated to verify the
product can be removed from manufacturing equipment utilizing the DPI cleaning model.

	 	2.2.6	 	Regulatory Services

The Customer will be responsible for submitting the Registration package for
regulatory agency approval within a mutually agreed time from receipt of the package
from DSM.

This proposal assumes that a data only package will be supplied by DSM to support the
product registration. The deliverables for the registration package will be clearly
defined at project initiation and included in the project timeline. If additional
regulatory support activities are required, this will be considered a scope change.

	 	2.2.7	 	Quality Assurance Strategy

DSM’s Quality Assurance department will act as a compliance consultant and provide
Quality oversight for adherence to regulatory requirements.

This will include but not limited to the following: Documentation, Validation,
Investigations, and Vendors.

The following departments will agree to the project approach to development and
validation and any required changes: Project Management, QA, Affected Business Unit
(if applicable) and the customer.

The customer understands that DSM has considerable regulatory and compliance
responsibility associated with this project. In the event the existing Quality
Agreement does not cover any issue that may arise each party will mutually agree to
resolve these issues in the best interest of both parties and the project. In all
aspects of this project, DSM is responsible for adhering to appropriate GMPs and sound
defensible development or transfer plans which will be acceptable, in DSM’s opinion,
to current regulatory expectations. DSM will not knowingly execute (or bypass)
activities which are inconsistent with the above or which will jeopardize DSM’s
regulatory status. At a minimum DSM’s Quality Systems must be met.

DSM’s Quality Assurance Department will be responsible for oversight of project
activities as it relates to adherence to regulatory requirements.

 

					
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	2.3	 	Key Project Assumptions

	 	2.3.1	 	General Assumptions

	 	1.	 	Project requires completion of a MSDS, and assessment of Safety issues,
potential environmental concerns, and wastes disposal procedures, as
appropriate for this project. This proposal assumes there are no safety
concerns for this API or product. It is assumed that during manufacturing and
packaging the exposure level will remain below the OEL (Occupational Exposure
Limit) and that no facility or procedural changes will be required to support
this product.
	 
	 	2.	 	Raw materials, packaging components, change parts and special
or custom shipping containers supplied by DPI will be billed to Sirion
Therapeutics, Inc. at cost to DPI, plus a handling fee.
	 
	 	3.	 	Shipping of product, product samples, and documentation will
be freight collect FOB Greenville.
	 
	 	4.	 	It is assumed that additional process development and process
scale-up activities may be required during the course of the project. Because
such activities are not clearly defined at the bid stage, they are not
included in the bid estimate. It is assumed that any additional process
development work will be defined and included in a separate proposal as a
scope change.

	 	2.3.2	 	Product / Manufacturing Assumptions

	 	5.	 	ST-603 Solution is to be manufactured according to all applicable cGMP
requirements. The product will be manufactured on the drop dose line in the
Steriles South facility.
	 
	 	6.	 	The compounding process is a single shift operation. Filling
is a single shift operation. The hold times for manufacturing and filling will
be established during the manufacture of development, and registration
batches. Minimum bulk hold times of at least 24 -48 hours are assumed
	 
	 	7.	 	The Registration batches in M2-34 are estimated at [***]
filled units. Commercial batch sizes are estimated at [***] vials, final batch
sizes for M2-34 will be determined when the filler is in place.
	 
	 	8.	 	Sirion Therapeutics, Inc. is to approve all master batch
documentation prior to batch scheduling. DPI will send master documents by
express mail or FAX. Sirion Therapeutics, Inc. will complete the review and
approval within [***] of receipt, or provide written feedback. Approval from
Sirion Therapeutics, Inc. will be supplied by FAX and express mail signatures
of original signed approvals are required. The project plan assumes no delays
due to critical document revision.
	 
	 	9.	 	DSM will fully test the [***] of API and test subsequent lots
on a reduced testing schedule.
	 
	 	10.	 	Sirion Therapeutics, Inc. will supply DPI with a written
certification of cGMP compliance of the API manufacturing facilities to
facilitate item number assignment and release of the API for use.
	 
	 	11.	 	All materials supplied by Sirion Therapeutics, Inc. will
arrive at DPI with appropriate documentation to be received into DPI’s
inventory management system, including, but not limited to, a certificate of
analysis.
	 
	 	12.	 	This bid assumes dedicated product contact equipment is not
required, however, known required capital is included in the bid.
	 
	 	13.	 	It is assumed that product contact parts and equipment can be
cleaned using standard DPI cleaning processes. This bid includes cleaning
process development. It is also assumed that standard DPI cleaning processes
can be validated for removal of ST-603
	 
	 	 	 	 

					
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Solution from product contact equipment to support multi-product use
of the equipment. If it is determined that the cleaning of product contact
parts and equipment cannot be validated, this would be considered a scope
change requiring dedicated product contact parts which may necessitate
re-evaluation of which filling line could be used to produce the product.

	 	14.	 	Target fill weights for the commercial product will be
[***]mL and [***]mL. Fill tolerances will be established during development
batches based on equipment capabilities using the actual product formulation.
	 
	 	15.	 	It is assumed that Sirion Therapeutics, Inc. can provide
product contact compatibility data for product contact surfaces to DPI. If
this assumption is incorrect, additional development work to generate this
data will be required and is outside the scope of this proposal.
	 
	 	16.	 	Filter validation (including protocols and packages for
extractables, compatibility, and microbial retention) is required for the
selected filter/solution system. It is assumed that Sirion Therapeutics, Inc.
will agree to use [***] filters for any pre-filters and sterilizing filters
and contract with [***] to generate data for extractables, compatibility, and
microbial retention. Additional sterilization validation will be required if
the selected filter differs from existing DPI validated filters and would be
considered to be an additional scope of work which is not included in this
proposal. Utilization of filters other than [***] is outside the scope of this
bid.
	 
	 	17.	 	The product will be 100% inspected. Sirion Therapeutics, Inc.
and DPI will jointly determine inspection criteria.
	 
	 	18.	 	Sirion Therapeutics, Inc. is responsible for ensuring that
finished product is shipped under appropriate conditions according to
customer-supplied specifications.

	 	2.3.3	 	Analytical Assumptions

The following are basic analytical assumptions and some may not apply to
this portion of the proposed activities, but apply to the overall project.

	 	19.	 	The API will require the generation of a new item number and purchasing
documentation, as well as the creation of a new analytical standard (test
methods and specifications) and transfer of analytical methods. If such
materials are not supplied by existing DPI-approved suppliers or by the
customer’s audited and cGMP-certified supplier, performance of a cGMP audit
and certification will be required by either the customer or DPI and is
outside the scope of this estimate. All other raw materials are assumed to be
existing DPI item numbers from DPI-approved suppliers and releasable by
existing DPI specifications. If non-DPI-approved suppliers must be used to
source these materials, or if different, additional or fewer specifications
are required, this would render these materials different from existing DPI
item numbers, requiring the generation of new item numbers and purchasing
documentation as well as the creation of new analytical standards (test
methods and specifications) and the need to formally transfer any related
analytical methods. None of these additional activities are included in the
scope of this estimate. An analytical standard must also be generated for the
finished product. Analytical standards are critical documents and
review/approval is required.
	 
	 	20.	 	Raw materials (API and excipients) and finished product
testing is based on the efficiencies gained by ganging similar testing
together to the extent practicable and accepting data from CoA from qualified
testing labs. To affect this, the cost to the client of testing is based on
the concurrent testing of several lots of material or product (to the maximum
extent that testing efficiencies can be realized). These testing efficiencies
are passed on to the client in the form of a reduced price for concurrently
lots to nonconcurrent lots. If testing is executed with less concurrent
testing than originally assumed, this constitutes a scope change and will
result in a higher testing price than presented in this estimate.
	 
	 	21.	 	Sirion Therapeutics, Inc. will provide product for use in
analytical method transfer and cleaning process evaluation.
	 
	 	22.	 	It is assumed that DPI laboratories are capable of performing
required product testing with existing instrumentation. Testing which DPI
cannot currently support either due to
	 
	 	 	 	 

					
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Disclosure, copying, distribution, or reliance on it be anyone else
is prohibited except by written permission of DSM 
Pharmaceuticals, Inc.

 

 

mapps Proposal template

instrumentation or capabilities is outside the scope of this estimate. If it
is determined DPI is not capable of supporting testing, any additional
equipment is not included in the scope of this estimate.

	 	23.	 	It is assumed that development and validation of a cleaning
method for product residue with sufficient sensitivity for DPI cleaning
validation is required.
	 
	 	24.	 	Analytical transfer of previously developed and validated
microbiological test methods (pre-filtration bioburden, sterility and
bacterial endotoxin) will be performed by method revalidation using
appropriate challenges per USP expectations and, as appropriate, other
compendial approaches. If such methods are found to not exist or have not been
previously validated, additional method development/validation is not included
in the scope of this estimate.
	 
	 	25.	 	Since the customer’s test methods are unfamiliar to DPI at
this time, all analytical bids employing anticipated test times should be
considered approximations of the actual time that may be required. The
customer will only be charged for and agrees to pay for the time actually
utilized to execute the various testing functions, including validation,
method transfer, verification, In-process, Release and Stability Testing of
Raw Materials and Products.
	 
	 	26.	 	All analytical activities assume that the execution of the
test procedures will yield acceptable results on the first attempt, requiring
no second/third stage or repeat testing and no OOS investigations. If such
activities do occur, they are outside the scope of this estimate and will
result in a higher cost to the customer than presented in this estimate.
	 
	 	27.	 	Analytical transfers of any chemistry test methods will be
performed primarily by the collaborative transfer approach with the Customer
responsible for generating the transfer protocol and DPI writing the final
report. DPI will be responsible for providing comments to and approving the
customer’s protocol. Both parties will execute their portion of the transfers.
The customer will submit test results to DPI, and provide comments to and
approve DPl’s final report. Sirion Therapeutics, Inc. will generate all
analytical method transfer protocols and approve all transfer reports. Sirion
Therapeutics, Inc. will complete the review and approval within three working
days of receipt, or provide written feedback. Approval from Sirion
Therapeutics, Inc. will be supplied by FAX and express mail signatures of
originals are required. A maximum of two reviews each by DPI and the customer
will occur per document. The project plan assumes no delays due to critical
documentation revision.
	 
	 	28.	 	Every effort has been made to anticipate the required
analytical support for this project and its realistic labor requirements.
Nevertheless, project scope changes and unexpected developments can occur
which affect the accuracy of this estimate in ways and extents that cannot be
anticipated. It is assumed that the customer accepts that these situations can
occur and is willing to pay for such unanticipated changes should they result
in a higher price than presented in this estimate. This includes method
ruggedness and robustness issues that may not become apparent until sufficient
testing has been completed by DPI.
	 
	 	29.	 	Stability testing will be performed by an alternate site.
	 
	 	 	 	 

					
	Revision April 26, 2004
	 	Valid for 60 days Page
	 	Page 9

Proprietary and Confidential — DSM Pharmaceuticals

This document remains the property of DSM Pharmaceuticals and is intended for the exclusive use of the addressee.

Disclosure, copying, distribution, or reliance on it be anyone else
is prohibited except by written permission of DSM
 Pharmaceuticals, Inc.

 

 

mapps Proposal template

Section 3: Project Execution

	3.1	 	High Level Milestones Timeline

			
	Note:	 	The timeline below is based on historical data from similar projects
assuming filing with 1 lot and 3-months data. A detailed timeline will be
provided after scope definition is completed at the T2 milestone.

	 	 	 
	Table
1: High Level Milestones
Milestone	 	Tech. Transfer
		 	Step Duration – ends
	T0 – Written Authorization 

T1 – Project Initiation: Int & Ext Kickoff Mtgs, scope gap analysis 

T2 – Project Scope Finalized 

T3 – Facility/Equip/Dev Materials Ready: Change parts, no major capital 

T4 – Transfer / Development Complete Dev Batches 

T4 – Registration Batches in M2-34 – 10ml 

T5 – DPI Submission 

T6 – Regulatory Application filed 

T4 – PV Batches in M2-34

T7 – Regulatory Approval 

T8 – Launch

	 	[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

	3.2	 	Progress Reporting

Progress on this project is reported to Sirion Therapeutics, Inc. as part of
regularly scheduled project team meetings (frequency to be determined at project
initiation).

DSM Pharmaceuticals’ Milestone and Activity-based Project Planning System (mappsTM) is
a proprietary project management system that ensures the successful delivery of
development and process transfer projects. mappsTM offers customers a clearly defined
milestone-based method of planning and executing projects. In addition to providing a
customized project plan, customers also receive standardized monthly milestone
progress reports. The system also includes an integrated resource-loaded master
schedule to ensure efficient allocation of project resources.

	3.3	 	Customer Responsibilities

The successful execution of this project requires the cooperation and coordination
of the DSM and the Sirion Therapeutics, Inc. project teams at key points within the
project timeline. The project timeline requires that the following timeframes be
supported by the Sirion Therapeutics, Inc. project team in order to assure timely
completion:

	 	•	 	Sirion Therapeutics, Inc. Regulatory group will file
regulatory package in a mutually agreed upon timeframe.
	 
	 	•	 	Customer will be able to provide required document
approvals within [***].
	 
	 	•	 	Customer will provide analytical methods documentation
for evaluation by DSM analytical staff within [***] of project initiation.
	 
	 	 	 	 

					
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is prohibited except by written permission of DSM 
Pharmaceuticals, Inc.

 

 

mapps Proposal template

	3.4	 	Critical Success Factors

There are many elements within the project schedule that need to occur, the
following critical success factors are especially important and will require special
attention by both DSM and Sirion Therapeutics, Inc. throughout execution of this work.
These items include:

	 	•	 	Identification and qualification of API source.
	 
	 	•	 	Creation and approval of master documents.
	 
	 	•	 	Commitments made by both DSM and Sirion Therapeutics,
Inc. with regards to timely review and turnaround of project documentation
must be honored.

	3.5	 	Change Management and Control

Maintaining original project scope and properly managing requested scope changes
during the execution of this project is a key requirement of effective project
management and allows for timely completion of project deliverables. Having an agreed
to process will help to protect the interests of both Sirion Therapeutics, Inc. and
DSM, and will ultimately ensure the ultimate success and satisfaction of both
companies. In order to support this key project management factor the following
controls will be utilized:

	 	i.	 	Sirion Therapeutics, Inc. requested scope changes -
Formal requests for scope changes will be forwarded by the designated Sirion
Therapeutics. Inc. Project Leader to the designated DSM Project Manager for
evaluation and pricing. DSM will provide formal written response within
[***].
	 
	 	ii.	 	DSM requested scope changes — Formal requests for scope
changes will be forwarded by the Account Manager to the designated Sirion
Therapeutics, Inc. Project Leader for evaluation and acceptance. Sirion
Therapeutics, Inc. will provide formal written response within [***].

	3.6	 	Contact Listing

Primary DSM contacts for this proposal are as follows:

Table 1: Contacts

	 	 	 	 	 	 	 
	Name	 	Phone number	 	Role	 	E-mail address
	Bill Conway

	 	480-538-4870
	 	New Business Director
	 	Bill.Conway@dsm.com
	Curtis Gingles

	 	252-707-7041
	 	New Business Manager
	 	Curtis.Gingles@dsm.com
	Denise Muck

	 	252-707-7914
	 	Strategic Planning
	 	Denise.Muck@dsm.com
	Norma Noble

	 	252-707-2476
	 	Project Management
	 	Norma.Noble@dsm.com
	 
	 	 	 	 	 	 

					
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Disclosure, copying, distribution, or reliance on it be anyone else
is prohibited except by written permission of DSM 
Pharmaceuticals, Inc.EX-10.2 ASSIGNMENT AND AMEND OF CONSULTING AGMNT

 

Exhibit
10.2

ASSIGNMENT AND AMENDMENT OF CONSULTING AGREEMENT

     THIS ASSIGNMENT AND AMENDMENT OF CONSULTING AGREEMENT (this “Assignment”) is made
effective as of this 25th day of September, 2006, by and among Kenneth J. Widder, M.D.
(“Assignor”), DSC Associates, LLC (“Assignee”) and Sirion Therapeutics,
Inc. (“Sirion”).

W I T N E S S E T H:

     WHEREAS, Assignor, as Consultant, personally entered into that certain Consulting Agreement
(the “Agreement”) with Sirion, dated July 5, 2006, whereby Assignor has agreed to perform
consulting services for Sirion;

     WHEREAS, Assignor desires to assign and transfer to Assignee all of Assignor’s right, title
and interest in and to the Agreement, and Assignee desires to accept such assignment and transfer,
subject to the terms hereof;

     WHEREAS, Assignor is solely and personally responsible for the performance of Assignor’s
duties under the Agreement and Assignor is uniquely qualified by knowledge, training and experience
to perform such services and no other person is so uniquely qualified;

     WHEREAS, as a condition to Sirion accepting this Assignment, Sirion requires that Assignor be
an employee or consultant of Assignee and remain the sole person to perform the services under the
Agreement; and

     WHEREAS, Assignor and Assignee agree to such conditions.

     NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is
understood and agreed as follows:

     1. Assignor does hereby assign and transfer to Assignee all of Assignor’s right, title and
interest in and to the Agreement, subject to the terms and conditions hereof.

     2. Assignee does hereby accept Assignor’s assignment and transfer of the Assignor’s rights,
title and interest in and to the Agreement, subject to the terms and conditions hereof.

     3. Assignor and Assignee acknowledge and agree that Assignor shall be required to personally
perform all of the consulting duties to be performed under the Agreement.

     4. All payments under the Agreement shall be paid to Assignee.

     5. Section 1 of the Agreement is hereby amended to provide that the Consultant shall guaranty
that Assignor shall be the sole person to provide the services to be provided by Consultant under
the Agreement and that failure of such shall be a breach of the Agreement.

 

 

     6. All other provisions of the Agreement shall remain in full force and effect and shall be
interpreted consistent with the provisions of this Assignment and Amendment.

     IN WITNESS WHEREOF, the parties hereto have executed this Assignment and Amendment effective
as of the day and year first written above.

	 	 	 	 	 
	 

	 	ASSIGNOR:	 	 
	 
	 	 	 	 
	 

	 	    /s/ Kenneth J. Widder
	 	 
	 

	 	 	 	 
	 

	 	Kenneth J. Widder, M.D.	 	 
	 
	 	 	 	 
	 

	 	ASSIGNEE:	 	 
	 
	 	 	 	 
	 

	 	DSC Associates, LLC	 	 
	 
	 	 	 	 
	 

	 	    /s/ Mary Jacqueline Johnson	 	 
	 

	 	 	 	 
	 

	 	By: Mary Jacqueline Johnson	 	 
	 
	 	 	 	 
	 

	 	SIRION:	 	 
	 
	 	 	 	 
	 

	 	SIRION THERAPEUTICS, INC.	 	 
	 
	 	 	 	 
	 

	 	    /s/ Barry S. Butler
	 	 
	 

	 	 	 	 
	 

	 	By: Barry Butler	 	 
	 

	 	Title: Chief Executive Officer

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