Exhibit 10.22: US Product Profit Share Calculation Agreement between Shire and New River for ADHD Collaboration Products

Summary

This agreement outlines how profits from the sale of ADHD collaboration products in the US will be shared between Shire and New River. For the first 24 months after the initial product launch, New River receives at least 25% of profits, or a higher percentage based on a specific formula. After 24 months, New River's minimum share increases to 50%, or more if the formula yields a higher result. Shire receives the remaining profit. The agreement also defines annual sales thresholds that affect the calculation.

EX-10.22 2 ex10_22.htm EXHIBIT 10.22 Exhibit 10.22

Exhibit 10.22

CALCULATION OF US PRODUCT PROFIT SHARE FOR SCHEDULE II CLASSIFICATION

During the first twenty-four (24) months following First Commercial Sale of the first Collaboration Product for ADHD, New River's share of US Product Profits pursuant to clause (b) of Section 7.4.1 shall be the greater of: (i) 25%, and (ii) the value of "X" determined as follows:

X = {(0.25 * A) + [0.35 * (B - A)] + [0.1 * (B - 2A)]} / B

A = the CII Threshold Sales for the applicable calendar year, as defined below

B = the Net Sales of the applicable Collaboration Product in the US Territory during such calendar year

After such twenty-four (24) month period, New River's share of US Product Profits pursuant to clause (b) of Section 7.4.1 shall be the greater of: (i) 50%, and (ii) the value of "Y" determined as follows:

Y = {(0.5 * A) + [0.6 * (B - A)] + [0.1 * (B - 2A)]} / B

A = the CII Threshold Sales for the applicable calendar year, as defined below

B = the Net Sales of the applicable Collaboration Product in the US Territory during such calendar year

During all periods, Shire's share of US Product Profits will be equal to 100% minus New River's share of US Product Profits.

By way of example, if the first Collaboration Product for ADHD receives Regulatory Approval in 2007, is classified as CII, and achieves U.S. sales of $312.5 million in calendar year 2010, then New River's share of US Product Profit in that year would be (calculated in millions, for simplicity):

X = {(0.5 * 125) + [0.6 * (312.5 - 125)] + [0.1 * (312.5 - 2 * 125)]} / 312.5

X = {62.5 + 112.5 + 6.25} / 312.5

X = 0.58

Thus, in this example, New River's share of US Product Profit for the first Collaboration Product for ADHD would be 58% and Shire's share would be 42%.

For purposes of this Exhibit B, "CII Threshold Sales" means the following amount of Net Sales of a Collaboration Product in the US Territory during each of the following calendar years:

Calendar Year		U.S. Sales

2007		$ 32 million

2008		$ 61 million

2009		$ 95 million

2010		$ 125 million

2011		$ 155 million

2012		$ 200 million

and future years