Question: Consider the Promotion Agreement between Depomed, Inc. and King Pharmaceuticals, Inc. for Glumetza; Does this contract include any right of first refusal, right of first offer, or right of first negotiation?
Answer: Depomed agrees to grant and hereby grants to King an exclusive option (exercisable at King's sole discretion by providing written notice of intent at any time, but in no event later than 180 days after the Effective Date) to obtain an exclusive license in the Territory to certain of Depomed's proprietary drug delivery technology in combination with both metformin hydrochloride and any other active pharmaceutical ingredients (a "Combination Product License"). If King notifies Depomed in writing within 180 days after the Effective Date that King desires to exercise its option to obtain a Combination Product License, King and Depomed shall promptly commence good-faith negotiations regarding a definitive agreement providing for the Combination Product License, for a period of 60 days or such longer period as may be mutually agreed upon by the parties in writing; and it is agreed that, as part of such good faith negotiations, the parties will discuss, for inclusion in any definitive agreement, appropriate non-compete obligations for each party with respect to any product containing metformin hydrochloride as an active pharmaceutical ingredient. If Depomed and King fail to enter into such a definitive agreement during such period, then Depomed shall thereafter have the right to negotiate and enter into one or more agreements with Third Parties related to Depomed's proprietary drug delivery technology in combination with both metformin hydrochloride and other active pharmaceutical ingredients; provided that, for a period of 6 months, any such agreement may not be on terms and conditions materially more favorable to the Third Party than the terms and conditions last offered by King prior to the termination of discussions with Depomed.
Depomed shall notify King in writing in the event that Depomed desires to divest itself of its rights to the Product in the Territory (e.g., by asset sale or product license to a Third Party), or of its rights in the Territory to a product owned or controlled by Depomed containing metformin and another active pharmaceutical ingredient in combination with Depomed's proprietary drug delivery technology incorporated within the Product (currently referred to as the AcuForm technology) (a "Combination Product").
If King is interested in obtaining the Metformin Product Rights, it shall so notify Depomed in writing prior to the expiration of the Evaluation Period, and upon Depomed's receipt of such notice King and Depomed shall promptly commence good-faith negotiations, for a period of 30 days and such longer period as may be mutually agreed upon by the parties in writing in the event the parties have made material progress in the negotiations (the "Negotiation Period"), regarding the commercially reasonable terms of an agreement pursuant to which King shall obtain the Metformin Product Rights. If Depomed and King fail to enter into an agreement for the Metformin Product Rights prior to the expiration of the Negotiation Period, then Depomed shall thereafter have the right to negotiate and enter into an agreement with a Third Party granting the Metformin Product Rights to a Third Party; provided that, for a period of 6 months, any such agreement may not be on terms and conditions materially more favorable to the Third Party than the terms and conditions last offered by King prior to the termination of discussions with Depomed.