CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM IF PUBLICLY DISCLOSED.
DEVELOPMENT AND MANUFACTURING SERVICES AGREEMENT
by and between
- hereinafter Lonza -
|353 Hatch Drive Foster City, CA 94404|
|- hereinafter Customer -|
Effective as of 29 October 2018 (the Effective Date)
Table of Contents
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| ||Definitions and Interpretation || || ||3 || |
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| ||Performance of Services || || ||8 || |
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| ||Project Management / Steering Committee || || ||10 || |
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| ||Quality || || ||11 || |
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| ||Insurance || || ||11 || |
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| ||Forecasting, Ordering and Cancellation || || ||11 || |
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| ||Delivery and Acceptance || || ||13 || |
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| ||Price and Payment || || ||14 || |
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| ||Capital Equipment || || ||16 || |
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| ||Intellectual Property || || ||16 || |
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| ||Warranties || || ||17 || |
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| ||Indemnification and Liability || || ||19 || |
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| ||Confidentiality || || ||19 || |
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| ||Term and Termination || || ||21 || |
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| ||Force Majeure || || ||22 || |
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| ||Miscellaneous || || ||22 || |
WHEREAS, Customer is engaged in the development and research of certain products and requires assistance in the development and manufacture of product:
WHEREAS, Lonza and its Affiliates have expertise in the evaluation, development and manufacture of products;
WHEREAS, Lonza and Customer are parties to a Development Master Services Agreement, dated October 21, 2016, as amended (collectively, the 2016 Agreement), under which Customer has engaged Lonza to perform development and manufacturing services related to various components of the Customers multi-valent pneumococcal vaccine product;
WHEREAS, Lonza and Customer are also parties to a letter agreement dated 19 June 2018, under which the parties have agreed on certain payment arrangements that would apply to Customers payment obligations under the 2016 Agreement and this Agreement (the Cap Agreement):
WHEREAS, Customer wishes to engage Lonza for Services relating to the development and manufacture of the Product as described in this Agreement; and
WHEREAS, Lonza, or its Affiliate, is prepared to perform such Services for Customer on the terms and subject to the conditions set out herein.
NOW, THEREFORE, in consideration of the mutual promises contained herein, and for other good and valuable consideration, the Parties intending to be legally bound, agree as follows:
|1. || |
Definitions and Interpretation
| || |
|Affiliate || ||means any company, partnership or other entity which directly or indirectly Controls, is Controlled by or Is under common Control with the relevant Party. Control means the ownership of more than fifty percent (50%) of the issued share capital or the legal power to direct or cause the direction of the general management and policies of the relevant Party.|
|Agreement || ||means this agreement incorporating all Appendices, as amended from time to time by written agreement of the Parties.|
|Antigens || ||means one or more polysaccharide-CRM12 conjugates, which are part of the active ingredient of Product. Antigens are Customer Materials for the purposes of this Agreement.|
|Applicable Laws || ||means all relevant U.S. and European Union federal, state and local laws, statutes, rules, and regulations which are applicable to a Partys activities hereunder, including, without limitation, the applicable regulations and guidelines of any Governmental Authority and all applicable cGMP together with amendments thereto.|
|Approval || ||means the first marketing approval by the FDA or EMA of Product from the Facility for commercial supply.|
|Background Intellectual Property || ||means any Intellectual Property either (i) owned, licensed or controlled by a Party prior to the Effective Date or (ii) developed or acquired by a Party independently from the performance of the Services hereunder during the Term of this Agreement, and, in the case of Lonza, without use or reliance on Customer Materials or Customer Information, and, in the case of the Customer, without use or reliance on Lonza materials or Lonza information.|
| || |
|Services || ||means all or any part of the services to be performed by Lonza under this Agreement (including, without limitation, process and analytical method transfer, process development, process optimization, validation, non-clinical, clinical and commercial manufacturing, as well as quality control and quality assurance activities), particulars of which are set out in a Project Plan.|
|Specifications || ||means the analytical tests and acceptance criteria of the Product as agreed between Customer and Lonza during the execution of the Services.|
|Technical Batch || ||means a Batch that is intended to demonstrate the transfer of the Manufacturing Process to the Facility.|
|Term || ||has the meaning given in Clause 14.1.|
|Third Party || ||means any party other than Customer, Lonza and their respective Affiliates.|
In this Agreement references to the Parties are to the Parties to this Agreement, headings are used for convenience only and do not affect its interpretation, references to a statutory provision include references to the statutory provision as modified or re-enacted or both from time to time and to any subordinate legislation made under the statutory provision, references to the singular include the plural and vice versa, and references to the word including are to be construed without limitation.
|2. || |
Performance of Services
|2.1 || |
Performance of Services. Subject to Clause 2.3, Lonza shall itself and through ***its Affiliates, diligently carry out the Services as provided in the Project Plan and use commercially reasonable efforts to perform the Services without any material defect and according to the estimated timelines as set forth in the Project Plan. Lonza shall retain appropriately qualified and trained personnel with the requisite knowledge and experience to perform the Services in accordance with this Agreement. Lonza may subcontract or delegate any of its rights or obligations under this Agreement to perform the Services: provided, that Lonza shall remain primarily responsible for the actions of any such subcontractor and/or delegate. For the sake of clarity, Laboratoire Baccinex SA qualifies as subcontractor. Specifically and without limiting the foregoing, any External Laboratories shall be subject to the same obligations of confidentiality at least as stringent, and as protective of Customer, as those obligations of confidence and non-use imposed upon Lonza and provided that such External Laboratories shall be subject to obligations to act diligently. Lonza shall not be responsible for analytical lab services performed by External Laboratories.
|3. || |
Project Management / Steering Committee
|3.1 || |
Project Plans. With respect to a new project to be governed by this Agreement, a new Project Plan shall be added by agreement in a writing signed by the Parties and appended to Appendix A. Each Project Plan shall include a description of the Services to be provided, the Product to be manufactured, Specifications, a schedule for completion of the Project Plan, pricing details, and such other information as is necessary for relevant Services. In the event of a conflict between the terms of a Project Plan and this Agreement, the terms of this Agreement will govern.
|3.2 || |
Project Management. With respect to each Project Plan, each party will appoint a project manager who will be the party responsible for overseeing the Project Plan.
|3.3 || |
Steering Committee. Each Party shall name a mutually agreed upon equal number of representatives for the Steering Committee, which shall meet twice per calendar year, or as otherwise mutually agreed by the Parties. In the event that a Steering Committee dispute cannot be resolved, such dispute shall be escalated to a senior executive of each of Customer and Lonza.
The primary function of the Steering Committee is to ensure the ongoing communication between the Parties and discuss and resolve any issues arising under this Agreement. In addition to the primary function described above, the Steering Committee shall also take on the following responsibilities:
| ||3.3.1 || |
discuss and seek resolution of issues around management of the Services;
| ||3.3.2 || |
agree and monitor deadlines and milestones for the Services; and
| ||3.3.3 || |
discuss and recommend any changes to the Services (although such changes will not take effect until they have been incorporated into a written amendment to the Project Plan which has been signed by the Parties).
|3.4 || |
Person In Plant. During manufacturing of the first Technical Batch, Customer shall be permitted to have [***] at the drug product manufacturing Facility as reasonably requested by Customer, at any time during the Manufacturing Process for the purpose of observing, reporting on, and consulting as to the performance of the Services. During manufacturing of the GMP Batches, Customer shall be permitted to have [***] at the drug product manufacturing Facility as reasonably requested by Customer, at any time during the GMP Manufacturing Process for the purpose of observing and reporting on the performance of the Services.
Furthermore, unless otherwise agreed to by the Parties, if Lonza does not have suitable space at Lonzas Services site for drug product (Drug Product Services Site), Customer shall [***]. In addition, Customer shall be permitted to [***] within the Drug Product Services Site as visitor(s), for visits over periods to be determined by mutual agreement to (a) facilitate real-time (same time-zone) communications between SutroVax technical drug product team and the Lonza drug product team, (b) facilitate transfer of process and analytical technology between the companies; (c) facilitate master batch record review and approval process; (d) perform technical review of manufacturing batch data; and/or (e) augment program management by providing local input.
Each such employee or authorized representative shall be subject to and agree to abide by confidentiality obligations to Third Parties and Lonzas customary practices, and such employee agrees to comply with all instructions of Lonzas employees at the drug product manufacturing Facility and/or Drug Product Services Site.
|4.1 || |
Responsibility for quality assurance and quality control of Product shall be allocated between Customer and Lonza as set forth in the Quality Agreement and in Lonza standard operating procedures. If there is a conflict between the terms and conditions of this Agreement and the Quality Agreement, the terms and conditions of this Agreement shall prevail. If the Quality Agreement is not in place at the Effective Date, Lonza and Customer commit to enter into the Quality Agreement in a timely manner, but in no event later than the commencement of cGMP manufacturing.
|4.2 || |
Provisions regarding inspections by Regulatory Authorities and audits shall be set out in the Quality Agreement.
|5.1 || |
Customer shall, during the Term prior to any clinical use of the Product, obtain and maintain at its own cost and expense from a qualified insurance company, comprehensive general liability insurance in the amount of at least [***] U.S. dollars. Customer shall at least [***] days prior to the first clinical use of a Product manufactured or Services provided under this Agreement, and for [***] years after delivery of the last such Product, obtain and maintain at its own cost and expense from a qualified insurance company, comprehensive general liability insurance including, but not limited to product liability coverage in the amount of at least [***] U.S. dollars. Lonza shall, during the Term and for [***] years after delivery of the last Product manufactured or Services provided under this Agreement, obtain and maintain at its own cost and expense from a qualified insurance company, comprehensive general liability insurance including, but not limited to product liability coverage in the amount of at least [***] Swiss Francs per claim. Each Party shall provide the respective other Party with a certificate of such insurance upon reasonable request.
|6. || |
Forecasting, Ordering and Cancellation
|6.1 || |
Forecasting. To the extent not already set forth in the then-current Project Plan, no later than the [***] of each [***], Customer shall supply Lonza with a written forecast showing Customers good faith estimated [***] requirements for Batches for the [***] month period (the Forecast). No later than [***] days following Lonzas receipt of a Forecast, Lonza shall provide written notice to Customer of [***] and shall provide Customer with an estimated production schedule showing the estimated Commencement Date and delivery date of each Batch. The forecast and [***] given in this Section 6.1 shall not be binding on Customer or Lonza.
|6.2 || |
Purchase Orders. Customer shall place purchase orders binding on Customer for the number of Batches it wishes to order at least [***] months (or earlier as may be [***]) prior to the Commencement Date for such Batches in accordance with Lonzas most recent response to the Forecast. For the sake of clarity, Parties acknowledge that the lead times with respect to the issuance of Purchase Orders for commercial launch and supply need to be longer and will be agreed upon between the Parties and amended at a later stage.
| || Each binding purchase order shall be signed by Customer and shall authorize Lonza to manufacture such Batches of the Product as are set forth therein. Lonza shall not be obligated to commence manufacture of any Batch unless and until such written purchase order is accepted in writing by Lonza. Any delivery date set forth in Lonzas written confirmation of a purchase order shall be an estimated delivery date only. All ordered Batches shall be scheduled in a single Campaign in each calendar year unless otherwise agreed by Lonza. Any additional or inconsistent terms or conditions of any Customer purchase order, acknowledgement or similar standardized form given or received pursuant to this Agreement shall have no effect and such terms and conditions are hereby rejected. For clarity, the then-current Project Plan shall be deemed a binding Purchase Order for the Batches set forth in the Project Plan with the Commencement Date of such Batches being the commencement dates set forth in the Project Plan, and Customer shall not be required to place separate Purchase Orders for such Batches. Customer shall have the right to reschedule and/or cancel any of the Batches in the Project Plan in the same manner and pursuant to the same terms and conditions as the rescheduling and cancellation set forth in Sections 6.3 through 6.6 as if they were the Batches ordered through a Purchase Order. |
|6.3 || |
Rescheduling. Lonza shall have the right to reschedule a Commencement Date of any Batch or Campaign upon reasonable prior written notice to Customer, provided that the rescheduled Commencement Date is less than [***] days from the Commencement Date originally estimated at the time of Lonzas acceptance of the binding purchase order, and further provided that Customer is able to provide the necessary Customer Materials. If the Customer requests to change the Commencement Date, Lonza will make all reasonable attempts to accommodate the request; provided, however, in the event that this change would impact other projects scheduled for occupancy in the designated suite or suites, manufacture of the Customers Batch or Campaign may be delayed until an adequate time period is available in the Facility schedule. Unless otherwise agreed, any such change requested by Customer may result in a rescheduling fee. Any delay requested by Customer of more than [***] days shall be considered a cancellation pursuant to Section 6.4. Notwithstanding the foregoing, ordinary updates to the schedule during the execution of the Project Plan (via contract amendment /scope change) shall not be subject to a rescheduling fee.
|6.4 || |
Cancellation of a Binding Purchase Order. Customer may cancel a binding purchase order upon written notice to Lonza, subject to the payment of a cancellation fee as calculated below (the Cancellation Fee):
| ||6.4.1 || |
In the event that Customer provides written notice of cancellation of [***] to Lonza less than or equal to [***] prior to the Commencement Date of the first subject Batch, then [***] of the Batch Price of each such Batch cancelled is payable;
| ||6.4.2 || |
In the event that Customer provides written notice of cancellation of [***] to Lonza more than [***] but less than or equal to [***] prior to the Commencement Date of the first subject Batch, then [***] of the Batch Price of each such Batch cancelled is payable; and
For the avoidance of doubt, no Cancellation Fee is payable in the event that Customer provides (i) written notice of cancellation of [***] to Lonza more than [***] prior to the Commencement Date of the first subject Batch or (ii) written notice of cancellation of [***] to Lonza more than [***] prior to the Commencement Date of the first subject Batch.
| || assign this Agreement to (i) any Affiliate of such Party or (ii) any third party in connection with the sale or transfer (by whatever method) of all or substantially all of the assets of the business or Product of such Party to which this Agreement relates, whether by merger, consolidation, acquisition or other form of business combination. Any purported assignment without a required consent shall be void. No assignment shall relieve any Party of responsibility for the performance of any obligation that accrued prior to the effective date of such assignment. Lonza shall be entitled to sell, assign and/or transfer its trade receivables resulting from this Agreement without the consent of the Customer. |
|16.4 || |
Notice. All notices must be written and sent to the address of the Party first set forth above. All notices must be given (a) by personal delivery, with receipt acknowledged, (b) by facsimile followed by hard copy delivered by the methods under (c) or (d), (c) by prepaid certified or registered mail, return receipt requested, or (d) by prepaid recognized next business day delivery service. Notices will be effective upon receipt or at a later date slated in the notice.
|16.5 || |
Governing Law/Jurisdiction. This Agreement is governed in all respects by the laws of the State of Delaware, without regard to its conflicts of laws principles. The Parties agree to submit to the jurisdiction of the state and federal courts located in Delaware.
|16.6 || |
Entire Agreement. This Agreement contains the entire agreement between the Parties as to the subject matter hereof and supersedes all prior and contemporaneous agreements with respect to the subject matter hereof. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of which together shall constitute one and the same document. Each Party acknowledges that an original signature or a copy thereof transmitted by facsimile or by .pdf shall constitute an original signature for purposes of this Agreement.
IN WITNESS WHEREOF, each of the Parties hereto has caused this Development and Manufacturing Services Agreement to be executed by its duly authorized representative effective as of the date written above.
| || |
|By: || || |
/s/ Cordula Altekrüger
| || ||Name Cordula Altekrüger|
| || ||Title Senior Legal Counsel|
| || ||Date|
|By: || || |
/s/ Bart A. M. van Aarnhem
| || ||Name Bart A. M. van Aarnhem|
| || ||Title Senior Legal Counsel|
| || ||Date 27 November 2018|