Isotope Agreement - MDS Nordion Inc. and IDEC Pharmaceuticals Corp.
THIS AGREEMENT made in duplicate as of this 14th day of May, 1999,
BETWEEN: MDS NORDION INC.
having a place of business at
447 March Road, Kanata
Ontario, Canada
("Nordion")
AND: IDEC PHARMACEUTICALS CORPORATION
having a place of business at
11011 Torreyana Road
San Diego, CA 92121
("IDEC")
(Nordion and IDEC are sometimes referred to in this Agreement individually as a
"party" and collectively as the "parties").
WHEREAS:
I IDEC is the owner of a Monoclonal Antibody used in the treatment of
non-Hodgkins lymphoma;
II Nordion has expertise in the manufacture and supply of Isotope;
III IDEC is the owner of labeling techniques and has demonstrated an ability
to label its Monoclonal Antibody with the Isotope;
IV IDEC desires that Nordion establish a manufacturing facility to
manufacture and supply Isotope [CONFIDENTIAL TREATMENT REQUESTED] in
sufficient quantities for use in the Clinical Trial Phase, the
Pre-Commercial Phase and the Commercial Phase.
NOW THEREFORE in consideration of the mutual covenants and agreements herein
contained, and subject to the terms and conditions hereinafter set out, the
parties agree as follows:
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2 CONFIDENTIAL TREATMENT REQUESTED
ARTICLE 1 - DEFINITIONS
For the purposes of this agreement:
1.1 "Affiliate" shall mean an entity or person which controls, is controlled
by or is under common control with either party. For purposes of this
Section 1.1 control shall mean (a) in the case of corporate entities, the
direct or indirect ownership of more than one-half of the stock or
participating shares entitled to vote for the election of directors, and
(b) in the case of a partnership, the power to direct the management and
policies of such partnership.
1.2 "Batch" shall mean a production batch of Isotope manufactured under this
agreement.
1.3 "BLA" shall mean a Biologics License Application, as defined by the
regulations promulgated under the United States FD&C Act and PHS Act and
any supplements thereunder, as amended from time to time.
1.4 "Calibration" shall mean [CONFIDENTIAL TREATMENT REQUESTED] shipment of
Isotope.
1.5 "Clinical Trials" shall mean human trials for clinical development of
Labelled Drug in the United States, Europe and/or Canada.
1.6 "Clinical Trial Phase" shall mean the period of Isotope supply for use in
Clinical Trials to the date of IDEC's BLA filing in the United States.
1.7 "Commercial Phase" shall mean the period of Isotope supply for use in
Clinical Trials and for commercial sale commencing after BLA regulatory
approval has been received in the United States by IDEC from the FDA.
1.8 "Current Good Manufacturing Practices" or "cGMP(s)" shall mean the good
manufacturing practices required by the FDA and set forth in the FD&C Act
or FDA regulations, policies or guidelines in effect at a particular time
for the manufacturing, testing and quality control of pharmaceutical
materials, except to the extent that Canadian or European standards for
the manufacture, testing and quality control of
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3 CONFIDENTIAL TREATMENT
pharmaceutical materials are higher or more stringent than those required
by the FDA, in which case such more stringent standards shall apply.
1.9 "Effective Date" shall mean the date first above written.
1.10 "FDA" shall mean the United States Food and Drug Administration.
1.11 "FD&C Act" shall mean the United States Federal Food, Drug and Cosmetic
Act, as amended.
1.12 "Isotope" shall mean radiopharmaceutical grade yttrium-90 chloride sterile
solution manufactured in accordance with the Specifications and cGMPs for
use with Labelled Drug.
1.13 "Labelled Drug" shall mean IDEC's pharmaceutical/biological product
containing Isotope labelled Monoclonal Antibody in therapeutic dosage form
for use in the Clinical Trial Phase, Pre-Commercial Phase or Commercial
Phase.
1.14 "Master Validation Plan" shall mean the program established by Nordion by
which documented evidence provides a high degree of assurance that the
Isotope will consistently be produced to meet Specifications.
1.15 "Monoclonal Antibody" shall mean IDEC's 2B8 monoclonal antibody for use in
the treatment of non-Hodgkins lymphoma.
1.16 "NDA" shall mean a New Drug Application, as defined by the regulations
promulgated under the United States FD&C Act and PHS Act and any
supplements thereunder, as amended from time to time.
1.17 "Pre-Commercial Phase" shall mean the period of Isotope supply for use in
Clinical Trials after completion of the Clinical Trial Phase and prior to
commencement of the Commercial Phase.
1.18 "PHS Act" shall mean the United States Public Health Service Act, as
amended.
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4 CONFIDENTIAL TREATMENT REQUESTED
1.19 "Specification(s)" shall mean the conditions, characteristics and
specifications for Isotope, set out in Exhibit 2, as amended by written
agreement between Nordion and IDEC from time to time.
ARTICLE 2 - PURPOSE
2.1 Scope and Object
The scope and object of this agreement is the development by Nordion of a
process to manufacture Isotope in sufficient quantities to meet the supply
needs of IDEC and to ship Isotope [CONFIDENTIAL TREATMENT REQUESTED] and
under circumstances set out herein [CONFIDENTIAL TREATMENT REQUESTED]. The
Project Schedule is set out in Exhibit 1. Both parties shall use
commercially reasonable best efforts to meet their respective milestones
set out in Exhibit 1. If either party, acting in good faith, materially
fails to satisfy any milestone, such party shall provide written notice
thereof to the other party and the parties shall determine a reasonable
corrective action plan and revised milestone schedule. Both parties shall,
in good faith, work together to develop a scale up strategy for the
manufacturing of Isotope to meet requirements for the [CONFIDENTIAL
TREATMENT REQUESTED] of Commercial Phase Isotope supply.
ARTICLE 3 - DEVELOPMENT/DOCUMENTATION OF MANUFACTURING PROCESS
3.1 Manufacturing Process
In accordance with Exhibit 1 and Exhibit 3 and as described in Section
2.1, Nordion will develop the process for the manufacture of Isotope in
accordance with cGMPs at its facility in Kanata, Ontario. During the
Clinical Trial Phase and subject to Section 21.2, Nordion may purchase
radiochemical grade yttrium-90 from third parties as the raw material used
in the manufacture of Isotope. In accordance with Exhibit 1, Nordion shall
establish a facility and develop and implement a process for the
manufacture of radiochemical yttrium-90 in-house at one of its facilities
or such other
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5 CONFIDENTIAL TREATMENT REQUESTED
facility as Nordion deems fit for such purpose, using Nordion technology
and personnel.
3.2 Documentation
Nordion shall generate all necessary cGMP documentation relating to the
production of Isotope; procure, test, and release all raw materials
relating to the Isotope; validate all necessary process equipment, and
perform all necessary process validation according to the Master
Validation Plan, which Master Validation Plan shall be prepared by
Nordion. All documentation, facilities and raw material standards shall
meet FDA regulatory requirements, and such other applicable regulatory
requirements in the United States, Canada and Europe.
ARTICLE 4 - SUPPLY MANAGEMENT
4.1 Performance Status
Within ten (10) days after execution of this agreement, the parties shall
each designate a Program Manager, who shall be responsible for
coordinating communication between the parties. The Program Manager for
Nordion shall respond to IDEC's reasonable inquiries regarding the status
of Nordion's obligations under this Agreement on an ongoing basis and
shall keep IDEC informed as to interim progress in periodic reports.
ARTICLE 5 - CONSIDERATION
5.1 Acknowledgement of Payment
[CONFIDENTIAL TREATMENT REQUESTED], IDEC has paid Nordion a lump sum
amount of [CONFIDENTIAL TREATMENT REQUESTED], of which payment Nordion
hereby acknowledges receipt, and which amount shall be non-refundable.
For the purposes of certainty all sums expressed in this agreement shall
be in United States currency.
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6 CONFIDENTIAL TREATMENT REQUESTED
ARTICLE 6 - CLINICAL TRIAL PHASE AND PRE-COMMERCIAL PHASE
6.1 Clinical Trial Phase and Pre-Commercial Phase Supply
Subject to the terms set out in this Agreement, Nordion agrees to use
commercially reasonable best efforts to commence supply of Isotope to IDEC
in accordance with Exhibit 1 for use in the Clinical Trial Phase and
Pre-Commercial Phase under IDEC's Investigational New Drug Applications
("IND(s)") in the United States and IDEC's or its designee's IND or
equivalents in Europe and Canada. Isotope shall meet the Specifications
and shall be manufactured by Nordion in accordance with cGMPs. Nordion
shall manufacture [CONFIDENTIAL TREATMENT REQUESTED] of Isotope
[CONFIDENTIAL TREATMENT REQUESTED] in accordance with Exhibit 3 and this
Article 6, taking into account holiday periods and facility maintenance
not to exceed in aggregate [CONFIDENTIAL TREATMENT REQUESTED] per year,
which at Nordion's election, may be taken in [CONFIDENTIAL TREATMENT
REQUESTED] periods. Nordion shall provide [CONFIDENTIAL TREATMENT
REQUESTED] prior written notice to IDEC prior to incurring a facility
maintenance or holiday period. Nordion shall ship Isotope to [CONFIDENTIAL
TREATMENT REQUESTED]. IDEC acknowledges that delivery of Isotope is
handled by third party carriers, however, Nordion will strive to meet
delivery by its third party carriers [CONFIDENTIAL TREATMENT REQUESTED]
at the destination on the day of delivery. Notwithstanding the foregoing
IDEC acknowledges that as a result of carrier flight scheduling and/or
customer location, that delivery of Isotope to certain customers may not
be achievable [CONFIDENTIAL TREATMENT REQUESTED], or if achievable, at
carrier rates in excess of those carrier rates that may be reasonably
acceptable to IDEC. For such customer locations to which IDEC requests
delivery, Nordion shall advise IDEC whether [CONFIDENTIAL TREATMENT
REQUESTED] delivery is achievable by the carrier and IDEC shall provide
instructions to Nordion.
In the event delivery of Isotope is delayed beyond its scheduled delivery
time and is not used as a direct result of late delivery, Nordion will
replace, [CONFIDENTIAL TREATMENT REQUESTED], such vial(s) of Isotope,
within the [CONFIDENTIAL TREATMENT REQUESTED].
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7 CONFIDENTIAL TREATMENT REQUESTED
6.2 Production Planning for Clinical Trial Phase and Pre-Commercial Phase
Supply
Subject to Section 6.3, during the [CONFIDENTIAL TREATMENT REQUESTED] of
[CONFIDENTIAL TREATMENT REQUESTED], Nordion and IDEC will establish an
Isotope production schedule for the Clinical Trial Phase and
Pre-Commercial Phase supply, as the case may be, for the following
[CONFIDENTIAL TREATMENT REQUESTED], taking into account holiday periods
and facilities maintenance, not to exceed in aggregate [CONFIDENTIAL
TREATMENT REQUESTED] per year. In addition, IDEC will provide an estimate
of requirements for the [CONFIDENTIAL TREATMENT REQUESTED] through the
[CONFIDENTIAL TREATMENT REQUESTED] following the date upon which such
schedule is established. This approach to production planning may be
modified as mutually agreed to by the parties based on IDEC's experience
in conducting Clinical Trials and Nordion's experience in supplying
Isotope for the Clinical Trials. Isotope may be shipped in as many as
[CONFIDENTIAL TREATMENT REQUESTED] to be discussed by the parties and
approved by IDEC, however it is anticipated by IDEC that [CONFIDENTIAL
TREATMENT REQUESTED], will be required. Isotope shall be supplied in
[CONFIDENTIAL TREATMENT REQUESTED] in an appropriate lead shield.
[CONFIDENTIAL TREATMENT REQUESTED]
6.3 Purchase Price For Clinical Trial Phase and Pre-Commercial Phase Supply
During the Clinical Trial Phase and the Pre-Commercial Phase, IDEC shall
purchase from Nordion [CONFIDENTIAL TREATMENT REQUESTED] of Isotope
[CONFIDENTIAL TREATMENT REQUESTED], commencing within [CONFIDENTIAL
TREATMENT REQUESTED] following notice from Nordion that it has established
a reliable supply of Isotope and has filed an appropriate Drug Master File
amendment with the FDA. The purchase price for [CONFIDENTIAL TREATMENT
REQUESTED] of Isotope that is produced by Nordion as may be requested by
IDEC for use in the Clinical Trial Phase and the Pre-Commercial Phase and
that meets Specifications, shall be [CONFIDENTIAL TREATMENT REQUESTED].
IDEC shall provide to Nordion its Isotope supply requirements
[CONFIDENTIAL TREATMENT REQUESTED] prior to the Isotope production date.
It is acknowledged by IDEC that during the period described in Section 3.1
of this agreement during which Nordion purchases radiochemical grade
yttrium-90 from a
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8 CONFIDENTIAL TREATMENT REQUESTED
third party, IDEC may be required by Nordion to provide to Nordion its
Isotope supply requirements up to [CONFIDENTIAL TREATMENT REQUESTED] prior
to the Isotope production date. The exact number of days shall be mutually
agreed upon by IDEC and Nordion after Nordion has identified such third
party and ascertains such third party's scheduling requirements. The
supply requirements will specify the number of doses of Isotope to be
shipped [CONFIDENTIAL TREATMENT REQUESTED].
6.4 Clinical Trial Phase and Pre-Commercial Phase Batch Size
Each Batch shall contain [CONFIDENTIAL TREATMENT REQUESTED]. If additional
Isotope is required in a particular Batch, IDEC may, at no additional
charge to IDEC, request that Nordion produce [CONFIDENTIAL TREATMENT
REQUESTED]. In addition, IDEC may request that Nordion increase the Batch
size, provided further that the price of such additional Isotope supplied
shall be [CONFIDENTIAL TREATMENT REQUESTED]. For validation purposes a
maximum shall be set, which maximum shall not exceed [CONFIDENTIAL
TREATMENT REQUESTED].
For the purposes of clarity, Exhibit 4 sets out IDEC's Isotope ordering
options.
6.5 Regulatory Delay
The parties acknowledge that during the Clinical Trial Phase and
Pre-Commercial Phase, IDEC's clinical development of Labelled Drug is
subject to regulatory oversight and that regulatory requirements may
result in delay or suspension of clinical development and patient
treatment, while such matters are resolved. If such delay or suspension
occurs or if there are no active Clinical Trial protocols and it is not
then necessary for IDEC to receive its supply of Isotope [CONFIDENTIAL
TREATMENT REQUESTED], IDEC shall promptly notify Nordion in writing to
temporarily suspend manufacture of Isotope. During such suspension,
Nordion shall remain in a state of readiness to recommence supply of
Isotope upon [CONFIDENTIAL TREATMENT REQUESTED] written notice from IDEC.
In consideration of Nordion maintaining the facility in a state of
readiness
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9 CONFIDENTIAL TREATMENT REQUESTED
during such suspension, IDEC shall, in lieu of IDEC's purchase obligations
set forth in Section 6.3, [CONFIDENTIAL TREATMENT REQUESTED] until such
time as Isotope supply is resumed and shall [CONFIDENTIAL TREATMENT
REQUESTED]. Nordion shall provide to IDEC reasonable documentation
[CONFIDENTIAL TREATMENT REQUESTED]. In the event Nordion is sourcing
radiochemical grade yttrium-90 in house, IDEC shall in lieu of
[CONFIDENTIAL TREATMENT REQUESTED], until such time as Isotope supply
is resumed. Except in the event that delay in Nordion obtaining its NDA
for Isotope is caused by the acts or omissions of IDEC, if Nordion does
not receive NDA approval in accordance with Exhibit 1, or if Nordion
during Clinical Trials or Pre-Commercial Phase, is prevented from
supplying Isotope due to FDA regulatory requirements, [CONFIDENTIAL
TREATMENT REQUESTED] applicable under this section shall be suspended
until such time as NDA approval is obtained by Nordion or the FDA lifts
any requirement preventing Nordion from supplying Isotope, as the case may
be.
ARTICLE 7 - COMMERCIAL PHASE SUPPLY
7.1 Commercial Phase Supply in the United States and Canada
(i) During the Commercial Phase Nordion shall manufacture and supply
Isotope to IDEC for use in Clinical Trials under IDEC's IND in the
United States and IDEC's or its designee's IND or equivalents in
Canada and Europe, and for commercial sale in Canada and the United
States. IDEC shall, during the Commercial Phase, purchase from
Nordion [CONFIDENTIAL TREATMENT REQUESTED]. Except as otherwise set
out in this agreement, during the Commercial Phase IDEC agrees that
it shall not, [CONFIDENTIAL TREATMENT REQUESTED].
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10 CONFIDENTIAL TREATMENT REQUESTED
Nordion shall ship Isotope to [CONFIDENTIAL TREATMENT REQUESTED].
Isotope shall meet the Specifications and shall be manufactured in
accordance with cGMPs. IDEC agrees to purchase from Nordion during
the Commercial Phase for use with the Monoclonal Antibody in Canada
and the United States, in aggregate, a minimum of [CONFIDENTIAL
TREATMENT REQUESTED] of Isotope per [CONFIDENTIAL TREATMENT
REQUESTED] period, commencing from the start of the Commercial
Phase, prorated for any partial period. During the Commercial Phase,
except as provided in Section 7.4, Nordion will manufacture
[CONFIDENTIAL TREATMENT REQUESTED] ship Isotope [CONFIDENTIAL
TREATMENT REQUESTED]. Each Batch shall contain such amount of
Isotope to meet IDEC's requirements as set out in Section 7.4 below.
IDEC acknowledges that delivery of Isotope is handled by third party
carriers, however, Nordion will strive to meet delivery by its third
party carriers [CONFIDENTIAL TREATMENT REQUESTED] at the destination
on the day of delivery. Notwithstanding the foregoing IDEC
acknowledges that as a result of carrier flight scheduling and/or
customer location, that delivery of Isotope to certain customers may
not be achievable [CONFIDENTIAL TREATMENT REQUESTED], or if
achievable, at carrier rates in excess of those carrier rates that
may be reasonably acceptable to IDEC. For such customer locations to
which IDEC requests delivery, Nordion shall advise IDEC whether
[CONFIDENTIAL TREATMENT REQUESTED] is achievable by the carrier and
IDEC shall provide instructions to Nordion.
In the event delivery of Isotope is delayed beyond its scheduled
delivery time and is not used as a direct result of late delivery
Nordion shall [CONFIDENTIAL TREATMENT REQUESTED].
(ii) IDEC may, during the Commercial Phase, upon [CONFIDENTIAL TREATMENT
REQUESTED] prior written notice to Nordion, request that Nordion
[CONFIDENTIAL TREATMENT REQUESTED], for use with IDEC's Monoclonal
Antibody. Nordion agrees, that upon expiry of the above stated
notice period, it shall [CONFIDENTIAL TREATMENT REQUESTED],
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11 CONFIDENTIAL TREATMENT REQUESTED
in accordance with the [CONFIDENTIAL TREATMENT REQUESTED]. All costs
of transport of Isotope shall be to [CONFIDENTIAL TREATMENT
REQUESTED] and shall be shipped [CONFIDENTIAL TREATMENT REQUESTED].
Upon Nordion commencing to sell [CONFIDENTIAL TREATMENT REQUESTED],
except as otherwise agreed or for the purpose of Clinical Trials,
Nordion shall [CONFIDENTIAL TREATMENT REQUESTED].
Proceeding to sell Isotope in the manner contemplated in this
section shall in no way affect payment made by IDEC under Section
5.1 of this agreement, nor shall it render invalid, as between IDEC
and Nordion, any other term or condition set out in this agreement.
In the event IDEC elects that Nordion sell [CONFIDENTIAL TREATMENT
REQUESTED], IDEC agrees to [CONFIDENTIAL TREATMENT REQUESTED] as
IDEC's minimum Isotope purchase commitment set out in Section 7.1
(i).
(iii) After each [CONFIDENTIAL TREATMENT REQUESTED] period during the
Commercial Phase, [CONFIDENTIAL TREATMENT REQUESTED], pro-rated for
such other partial period if this agreement is earlier terminated.
[CONFIDENTIAL TREATMENT REQUESTED]. Nordion shall invoice IDEC and
IDEC shall forward payment to Nordion of such deficiency within
[CONFIDENTIAL TREATMENT REQUESTED] of the date of invoice.
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12 CONFIDENTIAL TREATMENT REQUESTED
7.2 Commercial Phase Supply in Europe
Upon IDEC's written request, Nordion shall ship Isotope to IDEC or as
directed by IDEC, for commercial sale in Europe with Monoclonal Antibody
on the same terms and conditions set out in this Agreement, subject to and
provided that:
(i) IDEC provides to Nordion written notice of its requirements for
co-ordinated and concurrent regulatory filing with IDEC for
marketing authorization for Isotope and Labelled Drug in Europe,
which notice shall include a required filing date which shall not be
earlier than [CONFIDENTIAL TREATMENT REQUESTED] from the date of
receipt of notice by Nordion. If the submission for marketing
authorization for Labelled Drug in Europe is not submitted by IDEC
within the aforementioned time frame, or marketing authorization is
not received by IDEC within [CONFIDENTIAL TREATMENT REQUESTED] of
submission (provided such failure to receive marketing authorization
is not due in whole or in part to the fault of Nordion with respect
to Nordion's Isotope submission) IDEC agrees to [CONFIDENTIAL
TREATMENT REQUESTED];
(ii) [CONFIDENTIAL TREATMENT REQUESTED];
(iii) IDEC agrees to purchase in the aggregate [CONFIDENTIAL TREATMENT
REQUESTED] per [CONFIDENTIAL TREATMENT REQUESTED] for use in Europe,
commencing from the date of receipt of marketing authorization with
respect to Labelled Drug in Europe; and
(iv) [CONFIDENTIAL TREATMENT REQUESTED], and further provided
[CONFIDENTIAL TREATMENT REQUESTED].
In addition, IDEC shall, with respect to Isotope supply in Europe, pay
Nordion [CONFIDENTIAL TREATMENT REQUESTED].
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13 CONFIDENTIAL TREATMENT REQUESTED
7.3 Commercial Phase Isotope Supply in Asia
At IDEC's written request Nordion shall supply Isotope to IDEC for
shipment to Asia for Clinical Trials and for commercial sale with
Monoclonal Antibody, on the same terms and conditions set out in this
agreement subject to and provided that:
(i) IDEC and Nordion agree on a schedule for regulatory filing of
Isotope and Labelled Drug in specified Asian jurisdictions, for the
purpose of seeking marketing approval;
(ii) [CONFIDENTIAL TREATMENT REQUESTED];
(iii) IDEC compensates Nordion for Isotope decay losses incurred by
Nordion as a result of additional shipping time incurred in excess
of the shipping time of Isotope to the United States.
(iv) [CONFIDENTIAL TREATMENT REQUESTED];
(v) [CONFIDENTIAL TREATMENT REQUESTED];
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14 CONFIDENTIAL TREATMENT REQUESTED
(vi) [CONFIDENTIAL TREATMENT REQUESTED]; and
(vii) IDEC and Nordion agree on the applicable [CONFIDENTIAL TREATMENT
REQUESTED] Isotope purchase commitment in Asia.
7.4 Production Planning for Commercial Phase Supply
During the [CONFIDENTIAL TREATMENT REQUESTED] of the Commercial Phase,
Nordion and IDEC will establish an Isotope production schedule and
anticipated Batch sizes for Commercial Phase supply for the next
[CONFIDENTIAL TREATMENT REQUESTED], taking into account holiday periods
and facilities maintenance not to exceed in aggregate [CONFIDENTIAL
TREATMENT REQUESTED] per year, which at Nordion's election may be taken in
[CONFIDENTIAL TREATMENT REQUESTED]. Nordion shall provide [CONFIDENTIAL
TREATMENT REQUESTED] days written notice to IDEC prior to incurring a
facility maintenance or holiday period. Isotope shall be supplied in a
[CONFIDENTIAL TREATMENT REQUESTED], as determined by IDEC and Nordion
during Clinical Trials, in a [CONFIDENTIAL TREATMENT REQUESTED] in an
appropriate lead shield. [CONFIDENTIAL TREATMENT REQUESTED]. IDEC shall
provide Nordion with confirmation of IDEC's Labelled Drug orders no later
than [CONFIDENTIAL TREATMENT REQUESTED] prior to a scheduled Batch
completion date.
7.5 Purchase Price for Commercial Phase Supply
Subject to section 7.6, IDEC's purchase price for Isotope during the
Commercial Phase shall be [CONFIDENTIAL TREATMENT REQUESTED].
7.6 PPI Increases and Pricing
On [CONFIDENTIAL TREATMENT REQUESTED], and on [CONFIDENTIAL TREATMENT
REQUESTED], the purchase price of Isotope, established in section 7.5, and
fees, prices and costs set out and or determined in accordance with
sections 6.3, 6.4, 6.5, 7.2 and 7.3 shall be increased for the
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15 CONFIDENTIAL TREATMENT REQUESTED
[CONFIDENTIAL TREATMENT REQUESTED], respectively, if the United States
Producer Price Index ("PPI") increases by more than [CONFIDENTIAL
TREATMENT REQUESTED] in the prior calendar year, [CONFIDENTIAL TREATMENT
REQUESTED]. [CONFIDENTIAL TREATMENT REQUESTED], during the term of this
Agreement, the price of Isotope for such calendar year and fees, prices
and costs above referenced, shall be adjusted [CONFIDENTIAL TREATMENT
REQUESTED] PPI for the prior calendar year. Under the terms of this
agreement, so long as IDEC is purchasing Isotope from Nordion for
commercial sale, the purchase price to IDEC for Isotope in the United
States shall [CONFIDENTIAL TREATMENT REQUESTED].
7.7 Expanded Commercial Supply Capability
Upon request by IDEC, Nordion shall consider in good faith the merits of
establishing a second Isotope manufacturing facility at its site in
Kanata, Ontario or at an alternative Nordion site, and shall reasonably
and in good faith determine the price of Isotope to be supplied therefrom.
ARTICLE 8 - GENERAL MANUFACTURE AND SUPPLY OBLIGATIONS
8.1 Compliance with Law; Handling of Isotope
While the Isotope is in its possession or under its control, Nordion shall
be responsible for complying with and shall comply with all applicable
statutory and regulatory requirements of the United States, Canada and
Europe regarding the manufacture, handling, storage, packaging,
transportation, shipment and exporting of the Isotope. In performing its
obligations under this agreement, Nordion shall comply with all applicable
environmental and health and safety laws except where such failure to
comply would have no material adverse effect on Nordion's ability to
perform hereunder. Except as otherwise set forth in this agreement,
Nordion shall be solely responsible for determining how to carry out these
obligations. [CONFIDENTIAL TREATMENT REQUESTED].
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16 CONFIDENTIAL TREATMENT REQUESTED
8.2 Testing and Documentation
Nordion shall certify in writing that each Batch of Isotope shipped was
produced and tested in compliance with the Specifications and cGMP
requirements. Nordion shall notify IDEC immediately in writing of any
Batch of Isotope that does not meet the Specifications and cGMPs, and
include the probable cause for the failure and the proposed corrective
actions.
8.3 Isotope Warranty/Recall
Nordion warrants that the Isotope will meet Specifications and be
manufactured in accordance with cGMPs and be free from defects in material
and workmanship for the period from the date of manufacture to the expiry
date set out on each vial of Isotope.
If either party discovers that a Batch of Isotope does not meet the
Specifications, then the discovering party shall promptly communicate with
the other party to determine a mutually agreed course of action. Nordion
shall notify IDEC if the Isotope is the subject of a recall, withdrawal or
correction and Nordion shall have sole responsibility for the handling and
disposition of such recall and shall notify IDEC of proposed corrective
actions. [CONFIDENTIAL TREATMENT REQUESTED]. Nordion reserves the right to
refuse to ship, for human use, a Batch of Isotope which fails to meet
Specifications. If IDEC determines that the failure to meet Specifications
results from an act, failure to act or other fault of Nordion, or agent of
Nordion, Nordion [CONFIDENTIAL TREATMENT REQUESTED]:
(i) [CONFIDENTIAL TREATMENT REQUESTED], and
(ii) [CONFIDENTIAL TREATMENT REQUESTED].
In the event Nordion disputes IDEC's determination that the fault is due
to Nordion and/or its agent, the parties will select a mutually agreeable
outside consulting firm which will be instructed to review the applicable
information and data and confirm or
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17 CONFIDENTIAL TREATMENT REQUESTED
dissent from IDEC's determination. If the consulting firm confirms IDEC's
determination, Nordion will have the obligations set out in this section
and Nordion will pay the fees of such consulting firm. If the consulting
firm dissents from IDEC's determination, Nordion will not have the
obligations set out in this section with respect to the disputed Batch and
IDEC will pay the fees of such consulting firm. The decision of the
consulting firm shall be final, and the provisions of sections 27.3 shall
not apply.
8.4 Performance Standards
Without limiting Nordion's obligations under this Agreement, the parties
agree as follows:
(a) If Nordion's carrier fails to deliver the [CONFIDENTIAL TREATMENT
REQUESTED], Nordion will [CONFIDENTIAL TREATMENT REQUESTED].
(b) If Nordion is unable to supply the Isotope [CONFIDENTIAL TREATMENT
REQUESTED] due to [CONFIDENTIAL TREATMENT REQUESTED], MDS Nordion
will, [CONFIDENTIAL TREATMENT REQUESTED], (and in no event later
than [CONFIDENTIAL TREATMENT REQUESTED] after failure to supply)
either by [CONFIDENTIAL TREATMENT REQUESTED].
(c) [CONFIDENTIAL TREATMENT REQUESTED]
(i) Nordion is unable to supply Isotope due to [CONFIDENTIAL
TREATMENT REQUESTED], and
(ii) Nordion is unable to [CONFIDENTIAL TREATMENT REQUESTED] in
accordance with Section 8.4(b) for use in patient
administration protocols,
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18 CONFIDENTIAL TREATMENT REQUESTED
IDEC shall be entitled on written notice, provided within
[CONFIDENTIAL TREATMENT REQUESTED] of the failure, to notify Nordion
of its intent [CONFIDENTIAL TREATMENT REQUESTED].
(d) In the event of an occurrence under Section 8.4(c) wherein Nordion
remedies its failure to supply Isotope pursuant to 8.4(b) as
referenced in 8.4(c)(ii) [CONFIDENTIAL TREATMENT REQUESTED], IDEC
shall be entitled, on written notice, provided within [CONFIDENTIAL
TREATMENT REQUESTED] of such failure, to notify Nordion of its
intent to [CONFIDENTIAL TREATMENT REQUESTED].
ARTICLE 9 - ORDERS AND SHIPMENTS
9.1 Orders and Shipments
Subject to IDEC's election under 7.1(ii), during the term of this
agreement, IDEC will [CONFIDENTIAL TREATMENT REQUESTED] or in an
alternative manner acceptable to both parties; orders shall include
[CONFIDENTIAL TREATMENT REQUESTED]; delivery of Isotope [CONFIDENTIAL
TREATMENT REQUESTED]. All sums payable by IDEC to Nordion shall be paid
within [CONFIDENTIAL TREATMENT REQUESTED] days of the date of invoice
which invoice shall not be dated prior to the shipment of Isotope and
shall be accompanied by an order schedule report itemizing shipment
details.
Prior to first shipment of Isotope by Nordion to any third party site,
Nordion shall obtain such third party's license evidencing proper legal
authority for the receipt and possession of the Isotope by such third
party. [CONFIDENTIAL TREATMENT REQUESTED]. Nordion shall ship Isotope
[CONFIDENTIAL TREATMENT REQUESTED]. All shipping costs incurred to deliver
Isotope shall be borne by [CONFIDENTIAL TREATMENT REQUESTED].
<PAGE>
19 CONFIDENTIAL TREATMENT REQUESTED
9.2 Shortage of Isotope
In the event of [CONFIDENTIAL TREATMENT REQUESTED] as a result of an event
of Force Majeure, [CONFIDENTIAL TREATMENT REQUESTED], determined based on
the worldwide supply to such customers over the previous [CONFIDENTIAL
TREATMENT REQUESTED] period. In the event that Nordion cannot meet IDEC's
requirements for Isotope in a timely manner, [CONFIDENTIAL TREATMENT
REQUESTED].
ARTICLE 10 - REGULATORY MATTERS
10.1 IDEC Responsibilities
IDEC shall use commercially reasonable best efforts to complete its
Labeled Drug development and Clinical Trials necessary for BLA filings and
use good faith commercially reasonable best efforts to file a BLA for the
Labeled Drug by [CONFIDENTIAL TREATMENT REQUESTED]. It shall be the
responsibility of IDEC or its designee to file, obtain and maintain such
licenses, including BLA, marketing authorizations, registrations,
listings, authorizations and approvals as the FDA or any other applicable
governmental entity may require to enable use and sale of the Labelled
Drug in Clinical Trials, the Pre-Commercial Phase and Commercial Phase, in
accordance with the timetable set out in Exhibit 1. IDEC shall at
Nordion's request promptly supply Nordion on a confidential basis with any
technical information which is in its possession and which may be legally
disclosed, with respect to the Monoclonal Antibody and Clinical Trials
which may assist Nordion in meeting its obligations under this Agreement.
10.2 Nordion Responsibilities
Nordion shall be responsible at its own expense for obtaining and
maintaining all necessary licenses including, without limitation, facility
licenses, registrations, authorizations and approvals, which are necessary
to develop, manufacture, handle, store, label, package, and transport
Isotope under cGMP conditions and other
<PAGE>
20 CONFIDENTIAL TREATMENT REQUESTED
regulatory requirements including, but not limited to, the use and
handling of radioactive materials.
[CONFIDENTIAL TREATMENT REQUESTED], Nordion shall update its existing
yttrium-90 bulk chemical and Isotope Type II Drug Master Files or
equivalent with the FDA and shall file new ytttrium-90 bulk chemical and
Isotope Type I Drug Master Files or equivalent with the FDA and as
necessary in Canada and Europe in accordance with Exhibit 1 ("DMFs") as
may be required for the chemistry, manufacture and control section of
IDEC's IND in the United States and IDEC's or its designee's IND or
equivalents in Europe or Canada for Labelled Drug and upon request shall
provide letters of access allowing regulatory review of the DMFs.
Nordion shall use its best efforts, [CONFIDENTIAL TREATMENT REQUESTED], to
submit a New Drug Application ("NDA") to the Health Authority in Canada
and FDA with respect to Isotope, prior to or concurrently with IDEC's BLA
submissions for the Labelled Drug and in accordance with Exhibit 1.
Nordion hereby grants IDEC a right of reference to such NDA, and upon
request shall provide letters of access allowing regulatory review of the
DMFs and NDA by the FDA in conjunction with IDEC's BLA submissions for
Labelled Drug. IDEC shall supply to Nordion upon request letters of access
allowing regulatory review of IDEC's BLAs by the FDA in conjunction with
Nordion's NDA.
Nordion shall provide directly to the regulatory authority or to IDEC, if
required by the regulatory authority that such submission be through IDEC,
all required information in its possession with respect to the Isotope
necessary to assist IDEC in filing, obtaining and maintaining all
licenses, registrations, listings, authorizations and approvals of any
governmental entities necessary for the use of Labelled Drug in the
Clinical Trials and in order to seek licenses and marketing authorization
approval for the Labelled Drug.
<PAGE>
21 CONFIDENTIAL TREATMENT REQUESTED
10.3 Regulatory Status
Upon Nordion's reasonable request, and no less frequently than
[CONFIDENTIAL TREATMENT REQUESTED], IDEC shall provide updates to Nordion
on the progress of (i) Clinical Trials, and (ii) submissions to the FDA
for BLA approval with respect to the Labelled Drug.
Upon IDEC's reasonable request, and no less frequently than [CONFIDENTIAL
TREATMENT REQUESTED], Nordion shall provide updates to IDEC on the
progress of submissions to the FDA for NDA approval of the Isotope.
10.4 Government Inspections, Compliance Review and Inquiries
Upon request of any governmental entity or any third party entity
authorized by a governmental entity, such entity shall, for the purpose of
regulatory review, have access to observe and inspect Nordion's Isotope
manufacturing facility and procedures with respect to the manufacturing,
testing, storage and shipping of Isotope, and to audit such facilities for
compliance with cGMP and/or other applicable regulatory standards. Nordion
shall give IDEC prompt notice of any upcoming inspections or audits by a
governmental entity of the facility or procedures and shall provide IDEC
with a written summary of such inspection or audit following completion
thereof, purged of confidential information. Nordion agrees to use
commercially reasonable best efforts to promptly rectify or resolve any
deficiencies noted by a government entity in a report or correspondence
issued to Nordion.
10.5 Access to Nordion's Facility
IDEC shall have reasonable access to Nordion's Isotope facility and
procedures no more frequently than [CONFIDENTIAL TREATMENT REQUESTED]
(except in the event of Isotope recall or safety concerns in which case as
reasonably required) for the sole purpose of auditing Nordion's Isotope
manufacturing process and its cGMP procedures. IDEC shall provide Nordion
at least [CONFIDENTIAL TREATMENT REQUESTED] prior written notice of
requested access to Nordion's Isotope facility for the purpose of this
section.
<PAGE>
22 CONFIDENTIAL TREATMENT REQUESTED
All such information disclosed during such audit to IDEC or its employees
or agents, shall be deemed to be Nordion's Confidential Information as
such term is defined in this agreement.
10.6 Quality Assurance Program
Nordion shall maintain production and quality assurance activities
materially consistent with cGMPs, as required by the FDA and other
applicable government or regulatory bodies with respect to Nordion's
manufacture of Isotope. It is acknowledged by Nordion and IDEC that as a
result of out-sourcing of yttrium-90 radiochemical, and in-house
manufacturing and testing of yttrium-90 radiochemical, in accordance with
Exhibit 1, that the Specifications may require amendment or modification.
IDEC and Nordion agree that any such amendment or modification shall be
discussed in good faith, and shall be subject to the approval of IDEC
which shall not be unreasonably withheld. Without limiting the foregoing
it shall be reasonable to withhold approval in the event that such
amendment or modification could impact the performance of the
radiolabelling of Monoclonal Antibody with Isotope or the safe
administration of Labelled Drug to patients.
10.7 Complaints and Adverse Reactions
Each party shall, within [CONFIDENTIAL TREATMENT REQUESTED], advise the
other of any serious or life threatening events resulting from the use of
Labelled Drug of which it becomes aware, regardless of the origin of such
information. IDEC and Nordion agree to cooperate with any governmental
entity in evaluating any complaint, claim, or adverse reaction report
related to the Isotope and the Labelled Drug and except as regards the
Isotope, IDEC shall have the lead role in interacting with such
governmental entities.
10.8 Recalls
IDEC shall notify Nordion promptly if the Labelled Drug is the subject of
a recall, market withdrawal or correction and IDEC [CONFIDENTIAL TREATMENT
REQUESTED] shall have sole responsibility for the handling and disposition
of such recall. IDEC [CONFIDENTIAL TREATMENT REQUESTED] shall bear the
costs of any recall of Labeled Drug unless and to the extent
<PAGE>
23 CONFIDENTIAL TREATMENT REQUESTED
such recall shall have been the result of Nordion's employees or agents,
acts or omissions or any defects in Isotope to meet Specification, in
which case Nordion shall [CONFIDENTIAL TREATMENT REQUESTED]:
(i) [CONFIDENTIAL TREATMENT REQUESTED],
(ii) [CONFIDENTIAL TREATMENT REQUESTED], and
(iii) [CONFIDENTIAL TREATMENT REQUESTED].
In the event that Nordion disputes IDEC's determination that the fault is
due to Nordion and/or its agent, the parties will select a mutually
agreeable outside consulting firm which will be instructed to review the
applicable information and data and to confirm or dissent from IDEC's
determination. If the consulting firm confirms IDEC's determination,
Nordion will pay the fees of such consulting firm. If the consulting firm
dissents from IDEC's determination, Nordion will not have the obligations
set forth herein with respect to the recall and IDEC will pay the fees of
such consulting firm. The decision of the consulting firm shall be final
and the provisions of Sections 27.3 shall not apply. For the period of
time as required by applicable regulation, Nordion shall maintain records
of all sales and shipments of Isotope and IDEC [CONFIDENTIAL TREATMENT
REQUESTED] shall maintain records of all sales, shipping records of
Labelled Drug and customers, sufficient to adequately administer a recall.
10.9 New Regulatory Requirements
Each party shall promptly notify the other of new regulatory requirements
of which it may become aware which are relevant to the manufacture of the
Isotope under this agreement and which are required by the FDA and other
applicable governmental entities and the parties shall confer with each
other with respect to the best means to comply with such requirements.
10.10 Records
Nordion shall, as applicable, maintain all records necessary to evidence
compliance with (i) all applicable laws, regulations and other
requirements of applicable governmental entities in the United States,
Canada, Europe and Asia, relating to the
<PAGE>
24 CONFIDENTIAL TREATMENT REQUESTED
manufacture of Isotope (ii) the NDA, corresponding license registrations,
authorizations or approvals in Canada, Europe, Asia and the United States,
(iii) the Specifications and (iv) obligations under this Agreement. All
such records shall be maintained by Nordion for at least [CONFIDENTIAL
TREATMENT REQUESTED] and Nordion shall provide to IDEC reasonable access
to such records upon request. Prior to destruction of any record after
such time, Nordion shall give written notice to IDEC. IDEC shall have the
right to request that Nordion maintain such records in an off-site storage
facility for such longer period as IDEC requests, provided that IDEC pays
all costs associated with such off-site storage.
ARTICLE 11 - AUDIT
11.1 Right of Audit
Nordion, at its sole expense and through an independent certified public
accountant reasonably acceptable to IDEC, shall have the right to access
the books and records of IDEC for the sole purpose of verifying whether
IDEC is complying with its purchase obligations set out in this agreement.
Such audit shall be conducted upon [CONFIDENTIAL TREATMENT REQUESTED]
prior written notice to IDEC during ordinary business hours and may be
conducted [CONFIDENTIAL TREATMENT REQUESTED] and no earlier than
[CONFIDENTIAL TREATMENT REQUESTED] following [CONFIDENTIAL TREATMENT
REQUESTED] and no later than [CONFIDENTIAL TREATMENT REQUESTED] following
[CONFIDENTIAL TREATMENT REQUESTED]. Nordion agrees to keep in strict
confidence all information learned in the course of such audit, except
when it is necessary to reveal such information in order to enforce its
rights under this agreement. Nordion's right to have such records examined
shall survive termination or expiry of this agreement for a period of
[CONFIDENTIAL TREATMENT REQUESTED]. In the event that IDEC did not comply
with the purchase commitments in this agreement, IDEC shall promptly remit
to Nordion any amount IDEC would have owed Nordion had IDEC complied in
full. IDEC shall have a comparable right of audit for the purpose of
verification of fulfillment of the obligations set out in sections
7.1(iii), 7.6, 9.1 and 9.2, and with respect to other amounts otherwise
payable by IDEC hereunder, subject to Nordion's right to purge such books
and records of customer identity information.
<PAGE>
25 CONFIDENTIAL TREATMENT REQUESTED
ARTICLE 12 - [CONFIDENTIAL TREATMENT REQUESTED]
12.1 [CONFIDENTIAL TREATMENT REQUESTED]
ARTICLE 13 - IDEC REPRESENTATIONS AND WARRANTIES
13.1 IDEC Warranties
IDEC represents, warrants and covenants that:
(i) it has full right, power and authority to enter into this agreement;
(ii) there is no action or proceeding pending or insofar as IDEC knows,
threatened against IDEC before any court, administrative agency or
other tribunal which might have an adverse material effect on its
business;
(iii) it has not received any notice of adverse claim of infringement of
any patent or other intellectual property right, including
misappropriation of trade secrets in connection with the use and
exploitation of the Monoclonal Antibody or Labelled Drug;
(iv) to the best of its knowledge and belief, it is the owner of or has
the right to use all data, information, know-how, technology and
intellectual property used by IDEC in the manufacturing of
Monoclonal Anitbody; and
(v) to the best of its knowledge and belief, use or sale of the
Monoclonal Antibody and Labelled Drug and the data, information and
technology used in
<PAGE>
26 CONFIDENTIAL TREATMENT
the manufacture of the Monoclonal Antibody and Labelled drug do not
infringe any valid third party patent or pending published patent
application.
ARTICLE 14 - NORDION'S REPRESENTATIONS AND WARRANTIES
14.1 Nordion Warranties
Nordion represents, warrants and covenants that:
(i) it has full right, power and authority to enter into this agreement;
(ii) it has not received any notice of adverse claim of infringement of
any patent or other intellectual property right, including
misappropriation of trade secret, in connection with the use and
sale of Isotope or the data, information and technology used with
respect to the manufacture of Isotope;
(iii) to the best of its knowledge and belief (i) it is the owner or has
the right to use all of the data, information, know-how,
intellectual property and technology to be used by Nordion in
carrying out its obligations hereunder, and (ii) development and
implementation of the process used in the manufacture of Isotope,
and the performance of Nordion's obligations hereunder, do not
infringe any third party patent or pending published patent
application or other intellectual property right;
(iv) there is no action or proceeding pending or insofar as Nordion knows
or ought to know, threatened against Nordion before any court,
administrative agency or other tribunal which might have a material
adverse effect on Nordion's business.
ARTICLE 15 - INDEMNITY
15.1 Indemnification by IDEC
IDEC agrees to indemnify, defend and hold Nordion and its Affiliates and
their respective directors, officers, employees and agents harmless from
and against any
<PAGE>
27 CONFIDENTIAL TREATMENT
damages, claims, liabilities and expenses (including, but not limited to,
reasonable attorney's fees) resulting from any third party claims or suits
("General Claims against Nordion") arising out of (a) the use, handling,
shipment, marketing or sale of the Isotope, Monoclonal Antibody or
Labelled Drug, (b) IDEC's breach of any of its obligations, warranties or
representations hereunder, or (c) IDEC's negligent acts or omissions or
willful misconduct. Notwithstanding the foregoing, IDEC will not be
required to indemnify, defend and hold Nordion and its Affiliates and
their respective directors, officers, employees and agents harmless from
and against any General Claims against Nordion to the extent such claims
arise out of (i) Nordion's breach of any of its obligations, warranties or
representations hereunder; (ii) Nordion's negligent acts, omissions or
willful misconduct; (iii) any failure of the Isotope to meet the
Specifications; or (iv) any failure of Nordion to manufacture, handle,
store, label, package, transport or ship the Isotope in accordance with
cGMP or any other applicable laws, regulations, or other requirements of
any applicable governmental entity. Notwithstanding anything in this
Section 15.1, General Claims against Nordion shall not include
intellectual property claims against Nordion as described in Section 15.3.
15.2 Indemnification by Nordion
Nordion agrees to indemnify, defend and hold IDEC and its Affiliates and
their respective directors, officers, employees and agents harmless from
and against any damages, claims, liabilities and expenses (including, but
not limited to, reasonable attorney's fees) resulting from any third party
claims or suits ("General Claims against IDEC") arising out of (a)
Nordion's manufacture, handling, storage, labeling, packaging or delivery
of the Isotope; (b) Nordion's breach of any of its obligations, warranties
or representations hereunder; (c) Nordion's negligent acts or omissions or
willful misconduct; (d) any failure of the Isotope to meet the
Specifications; or (e) any failure of Nordion to manufacture, handle,
store, label, package, transport or ship the Isotope in accordance with
cGMPs or any other applicable laws, regulations or other requirements of
any applicable governmental entity. Notwithstanding the foregoing, Nordion
will not be required to indemnify, defend and hold IDEC and its Affiliates
and their respective directors, officers, employees and agents harmless
from and against
<PAGE>
28 CONFIDENTIAL TREATMENT
any General Claims against IDEC to the extent that such claims arise out
of (i) IDEC's breach of any of its obligations, warranties or
representations hereunder; or (ii) IDEC's negligent acts, omissions or
willful misconduct. Notwithstanding anything in this Section 15.2 General
Claims against IDEC shall not include intellectual property claims against
IDEC as described in Section 15.4.
15.3 Intellectual Property Claims Against Nordion
IDEC agrees to indemnify, defend and hold Nordion and its Affiliates and
their respective directors, officers employees and agents harmless from
and against any damages, claims, liabilities and expenses (including, but
not limited to, reasonable attorney's fees) resulting from any third party
claims or suits arising out of any proceeding instituted by or on behalf
of a third party based upon a claim that,
(i) the use or sale of the Monoclonal Antibody or Labelled Drug,
(ii) the process used in the manufacturing of the Monoclonal
Antibody or radiolabelling of the Monoclonal Antibody, or
(iii) the performance of any of IDEC's obligations hereunder,
infringes any United States or other patent or any other proprietary
rights of a third party. Notwithstanding the foregoing, IDEC shall not be
required to indemnify, defend and hold harmless Nordion and its Affiliates
and their respective directors, officers, employees and agents from and
against any intellectual property claims against Nordion to the extent of
Nordion's obligations in Section 15.4.
15.4 Intellectual Property Claims Against IDEC
Nordion agrees to indemnify, defend and hold IDEC and its Affiliates and
their respective directors, officers, employees and agents harmless from
and against any damages, claims, liabilities and expenses (including, but
not limited to, reasonable attorney's fees) resulting from any third party
claims or suits arising out of any proceeding instituted by or on behalf
of a third party based upon a claim that the process used in manufacturing
the Isotope or the performance of any of Nordion's obligations hereunder
infringes a United States or other patent or any other
<PAGE>
29 CONFIDENTIAL TREATMENT
proprietary right of a third party. Notwithstanding the foregoing, Nordion
shall not be required to indemnify, defend and hold harmless IDEC and its
Affiliates from and against any intellectual property claims against IDEC
to the extent of IDEC's obligations in Section 15.3.
15.5 Indemnification Procedures
A party (the "Indemnitee") which intends to claim indemnification under
this Article 15 shall promptly notify the other party (the "Indemnitor")
in writing of any action, claim or other matter in respect of which the
Indemnitee or any of its directors, officers, employees or agents intend
to claim such indemnification; provided, however, the failure to provide
such notice within a reasonable period of time shall not relieve the
Indemnitor of any of its obligations hereunder except to the extent the
Indemnitor is prejudiced by such failure. The Indemnitee shall permit, and
shall cause its directors, officers, employees and agents to permit the
Indemnitor, at its discretion, to settle any such action, claim or other
matter. The Indemnitee agrees to the complete control of such defense or
settlement by the Indemnitor, provided, however, such settlement does not
adversely affect the Indemnitee's rights hereunder, admit liability by
Indemnitee or impose any obligations on the Indemnitee. No such action,
claim or other matter shall be settled without the prior written consent
of the Indemnitor, and the Indemnitor shall not be responsible for any
attorney's fees or other costs incurred other than provided herein. The
Indemnitee and its directors, officers, employees and agents shall
co-operate fully with the Indemnitor and its legal representatives in the
investigation and defence of any action, claim or other matter covered by
this indemnification. The Indemnitee shall have the right, but not the
obligation, to be represented by counsel of its own selection and at its
own expense.
<PAGE>
30 CONFIDENTIAL TREATMENT REQUESTED
ARTICLE 16 - CONFIDENTIALITY
16.1 Confidentiality and Exceptions
During the term of this agreement and for a period of [CONFIDENTIAL
TREATMENT REQUESTED] thereafter, each party hereto shall maintain in
confidence the content of the transaction contemplated in this agreement,
all know-how, technological information reports, data, processes, methods,
techniques, formulas, and other proprietary information (collectively
"Confidential Information") disclosed to such party by the other party
which is identified as "Confidential Information" by the disclosing party.
This obligation of confidentiality shall not apply to the extent that it
can be established by the party in receipt of such information, that the
information:
i) was already known to the receiving party at the time of disclosure;
ii) was generally available to the public or otherwise part of the
public domain at the time of its disclosure;
iii) became generally available to the public or otherwise part of the
public domain after its disclosure to the receiving party through no
act or omission of the receiving party;
iv) was disclosed to the receiving party by a third party who had no
obligation to restrict disclosure of such information; or
v) was independently developed by the receiving party without any use
of Confidential Information of the disclosing party.
Each party agrees that it will take the same steps to protect the
confidentiality of the other party's Confidential Information as it takes
to protect its own proprietary and confidential information, which shall
in no event be less than reasonable steps. Each party, and its employees
and agents shall protect and keep confidential and shall not use, publish
or otherwise disclose to any third party, except as permitted by this
agreement, or with the other party's written consent, the other party's
Confidential Information.
<PAGE>
31 CONFIDENTIAL TREATMENT REQUESTED
It is agreed that disclosure of data, information or technology by IDEC or
Nordion to the other under this agreement shall not constitute any grant,
option or license under any patent, technology or other rights, held by
IDEC or Nordion. Any use of the data, information and technology provided
by IDEC to Nordion which relates to the Monoclonal Antibody or labeling of
Labelled Drug shall be for the limited purpose of assisting Nordion in
carrying out its obligations under this Agreement. All data, information,
or technology supplied by one party to the other to assist in carrying out
the obligations hereunder shall remain the property of such party and
shall be returned to the other party upon termination of this Agreement.
16.2 Authorized Disclosure
Notwithstanding Section 16.1 above, each party may disclose Confidential
Information hereunder to the extent such disclosure is reasonably
necessary for prosecuting or defending litigation, complying with
applicable government laws or regulations or conducting Clinical Trials,
provided that if a party is required by law or regulation to make any such
disclosure of the other party's Confidential Information it will, except
where impracticable for necessary disclosures, for example in the event of
medical emergency, give reasonable advance notice to the other party of
such disclosure requirement and will use its reasonable efforts to secure
a protective order or confidential treatment of such Confidential
Information required to be disclosed. In addition, upon written approval
of Nordion, IDEC may disclose, under a comparable binder of
confidentiality, and on a need-to-know basis, information related to or
received under this Agreement to its other partners for the development of
commercialization of Labelled Drug.
ARTICLE 17 - TERM AND TERMINATION
17.1 Initial Term
The term of this agreement shall commence upon the Effective Date and,
unless terminated earlier pursuant to this agreement, or extended pursuant
to section 17.2, shall expire upon the [CONFIDENTIAL TREATMENT REQUESTED]
("Initial Term").
<PAGE>
32 CONFIDENTIAL TREATMENT REQUESTED
17.2 Extension
The term of this agreement shall be automatically extended for an
additional [CONFIDENTIAL TREATMENT REQUESTED] after expiration of the
Initial Term unless at least [CONFIDENTIAL TREATMENT REQUESTED] year prior
to expiration of the Initial Term (the "Notice Date") either party
notifies the other party that it does not desire to extend the term of the
agreement. At least [CONFIDENTIAL TREATMENT REQUESTED] prior to the Notice
Date, the parties agree to meet to discuss, in good faith, their
intentions with respect to whether to extend the term of this agreement.
17.3 Termination Without Cause
During the period of three (3) years from the Effective Date Nordion may
terminate this agreement without cause or penalty upon twenty (20) months
prior written notice to IDEC. Thereafter Nordion may terminate this
agreement upon twenty-four (24) months prior written notice to IDEC.
IDEC may terminate this agreement without cause (i) upon six (6) months
prior written notice to Nordion provided that such notice of termination
is accompanied by a payment to Nordion in the amount of [CONFIDENTIAL
TREATMENT REQUESTED] failing which such notice of termination shall be of
no effect, or (ii) without such payment upon twenty-four (24) months prior
written notice.
17.4 Termination for Breach
This agreement may be terminated by either party in the event of the
material breach by the other party of the terms and conditions hereof;
provided, however, the other party shall first give to the breaching party
written notice of the proposed termination of this agreement (a "Breach
Notice"), specifying the grounds therefor. Upon receipt of such Breach
Notice, the breaching party shall have such time as necessary, but in any
event not more than [CONFIDENTIAL TREATMENT REQUESTED] to cure such
breach. Notwithstanding the foregoing, IDEC shall have [CONFIDENTIAL
TREATMENT REQUESTED] following receipt of Breach Notice to cure a breach
with respect to a failure by IDEC to pay any amounts hereunder when due,
other than with respect to amounts which IDEC, in good faith, disputes are
due to Nordion. If the breaching party does not cure such breach within
such cure
<PAGE>
33 CONFIDENTIAL TREATMENT REQUESTED
period, the other party may terminate the agreement without prejudice to
any other rights or remedies which may be available to the non-breaching
party.
17.5 Bankruptcy
This agreement may be terminated by either party in the event the other
party files a petition in bankruptcy, is adjudicated a bankrupt, or files
a petition or otherwise seeks relief under or pursuant to any bankruptcy,
insolvency or reorganization statute or proceeding, or if a petition in
bankruptcy is filed against it which is not dismissed within [CONFIDENTIAL
TREATMENT REQUESTED] days or proceedings are taken to liquidate the assets
of such party.
17.6 Failure To Obtain NDA, BLA, Marketing Authorization
Provided IDEC's failure to obtain BLA approval for Labelled Drug is not
due in whole or in part to the fault of Nordion with respect to Nordion's
DMF/NDA submissions, Nordion may terminate this agreement upon thirty (30)
days written notice to IDEC if (i) IDEC abandons Clinical Trials or
suspends such trials prior to the Commercial Phase for a period in excess
of one hundred and eighty (180) days, or (ii) does not receive BLA and
marketing authorization for Labelled Drug from the FDA within three (3)
years of the Effective Date of this agreement.
IDEC may terminate this agreement upon [CONFIDENTIAL TREATMENT REQUESTED]
written notice to Nordion if Nordion does not receive NDA approval or
marketing authorization from the FDA (provided such failure to obtain the
NDA approval or marketing authorization is not due, in whole or in part,
to the fault of IDEC with respect to IDEC's BLA or marketing authorization
submission) with respect to the Isotope, within [CONFIDENTIAL TREATMENT
REQUESTED] from the Effective Date of this agreement.
<PAGE>
34 CONFIDENTIAL TREATMENT
ARTICLE 18 - SURVIVAL
18.1 Consequences of Termination or Expiration
Upon expiration or termination of this agreement, the obligations of the
parties under Articles 5,11,15,16,20,23,30 and Section 27.2, and any other
section which by its nature is to survive, shall survive such expiration
or termination.
ARTICLE 19 - NOTICES
19.1 Any notice to be sent to a party hereunder shall be forwarded to:
Nordion at: MDS Nordion Inc.
447 March Road
Kanata, ON
K2K 1X8
Attention: Senior Vice President, Nuclear Medicine
IDEC at: IDEC Pharmaceuticals Corporation
11011 Torreyana Road
San Diego, CA 92121
Attention: Secretary
Any notice required or authorized to be given by a party to the other in
accordance with the provisions of this agreement shall, unless otherwise
specifically stipulated, be in writing and delivered personally, by a
nationally recognized overnight courier telegram or electronic facsimile
confirmed by certified mail. Notice shall be deemed delivered upon
receipt.
ARTICLE 20 - DISCLAIMER OF CONSEQUENTIAL DAMAGES
20.1 Disclaimer
In no event shall either party be liable to the other party for indirect,
contingent, incidental, special or consequential damages, including, but
not limited to, any claim for damages based on lost profits.
<PAGE>
35 CONFIDENTIAL TREATMENT
20.2 Limitation of Product Warranty
IDEC acknowledges that Nordion is manufacturing and supplying Isotope to
meet Specification. Except as expressly set out in this agreement, Nordion
hereby disclaims all other warranties or conditions, whether express or
implied, statutory or otherwise, including but not limited to any implied
warranties or conditions of merchantability or fitness for a particular
purpose.
ARTICLE 21 - ASSIGNMENT AND SUBCONTRACTING
21.1 No Assignment
This agreement shall enure to the benefit of and shall be binding upon the
heirs, executors, administrators, successors and permitted assigns of the
parties. Neither Nordion nor IDEC shall assign any portion of this
agreement without the written approval of the other party, which approval
shall not be unreasonably withheld.
21.2 Subcontracting
To the extent Nordion subcontracts to third parties any of its obligations
set out in this agreement, such subcontractor shall agree to be bound by
the provisions hereof pertaining to ownership of work performed and
confidentiality. Nordion shall not subcontract the manufacture of Isotope
and shall remain responsible for the performance of its sub-contractors
and shall indemnify IDEC and hold it harmless from and against any and all
costs, claims, judgments or other expenses arising from any of its
sub-contractor's actions or performance.
ARTICLE 22 - COMPLIANCE
22.1 Compliance with Laws
This agreement and Nordion's and IDEC's obligations hereunder shall be
carried out in compliance with all applicable laws, by-laws, rules,
regulations and orders of all applicable Federal, State, Provincial and
Municipal governments.
<PAGE>
36 CONFIDENTIAL TREATMENT
ARTICLE 23 - NON-WAIVER
23.1 Non-Waiver of Rights
Failure by either party to enforce at any time any of the provisions of
this agreement shall not be construed as a waiver of its rights hereunder.
Any waiver of a breach of any provision hereof shall not be effective
unless in writing and shall not affect either party's rights in the event
of any additional breach.
ARTICLE 24 - FORCE MAJEURE
24.1 Force Majeure
Neither party shall be liable to the other for failure to perform or delay
in performing its obligations under this agreement by virtue of the
occurrence of an event of Force Majeure. In the event of Force Majeure,
the party affected shall promptly notify the other and shall exert
commercially reasonable efforts to eliminate, cure or overcome such event
and to resume performance of its obligations. For such time as Nordion is
affected by an event of Force Majeure, IDEC is relieved from its purchase
obligations under this agreement. In the event such Force Majeure
affecting either party continues for more than six (6) months the party
not subject of the Force Majeure may terminate this agreement without
further obligation. "Force Majeure" shall mean an occurrence which
prevents, delays or interferes with the performance by a party of any of
its obligations hereunder, if such event occurs by reason of any act of
God, flood, power failure, fire, explosion, casualty or accident, or war,
revolution, civil commotion, acts of public enemies, blockage or embargo,
or any law, order or proclamation of any government, failure of suppliers
or usual suppliers to provide materials, equipment or machinery,
interruption of or delay in transportation, strike or labor disruption, or
other cause, whether similar or dissimilar to those above enumerated,
beyond the commercially reasonable control of such party.
<PAGE>
37 CONFIDENTIAL TREATMENT REQUESTED
ARTICLE 25 - INSURANCE
25.1 IDEC Product Liability Insurance
IDEC at its own expense shall provide and maintain a products liability
insurance policy with respect to Labelled Drug, issued by a reputable
insurance company. Such policy shall have a limit of liability of not less
than [CONFIDENTIAL TREATMENT REQUESTED] per occurrence and in aggregate,
during the Clinical Trials and Pre-Commercial Phase and [CONFIDENTIAL
TREATMENT REQUESTED] per occurrence and in aggregate, during the
Commercial Phase. IDEC shall be solely responsible for any [CONFIDENTIAL
TREATMENT REQUESTED] associated with this policy and such shall not affect
Nordion's interests. [CONFIDENTIAL TREATMENT REQUESTED] on such policy and
IDEC shall deliver a certificate of insurance endorsing Nordion's
inclusion as an additional insured on such insurance policy. The policy
shall contain a [CONFIDENTIAL TREATMENT REQUESTED] and shall provide for
severability of interest such that breach of a policy condition committed
by any one insured shall not adversely affect the rights of the other
insured. Nordion shall be provided [CONFIDENTIAL TREATMENT REQUESTED]
prior written notice of any material change to the policy. Nothing
contained in this section shall be deemed to limit in any way the
indemnification provisions contained in this agreement.
25.2 Nordion Product Liability Insurance
Nordion at its own expense shall provide and maintain a products liability
insurance policy with respect to Isotope issued by a reputable insurance
company. Such policy shall have a limit of liability of not less than
[CONFIDENTIAL TREATMENT REQUESTED] per occurrence and in aggregate, during
the Clinical Trial Phase and Pre-Commercial Phase and [CONFIDENTIAL
TREATMENT REQUESTED] per occurrence and in aggregate, during the
Commercial Phase. Nordion shall be solely responsible for any
[CONFIDENTIAL TREATMENT REQUESTED] associated with this policy, and such
shall not affect IDEC's interests. [CONFIDENTIAL TREATMENT REQUESTED] on
such policy and Nordion shall deliver a certificate of insurance endorsing
[CONFIDENTIAL TREATMENT REQUESTED] on such insurance policy. The policy
shall contain
<PAGE>
38 CONFIDENTIAL TREATMENT REQUESTED
[CONFIDENTIAL TREATMENT REQUESTED] and shall provide for severability of
interest such that breach of a policy committed by one insured shall not
adversely affect the rights of the other insured. IDEC shall be provided
[CONFIDENTIAL TREATMENT REQUESTED] days prior written notice of any
material change to the policy. Nothing contained in this section shall be
deemed to limit in any way the indemnification provisions contained in
this agreement.
ARTICLE 26 - SEVERABILITY
26.1 Invalid Provisions
If any provision or term of this agreement is found unenforceable under
any of the laws or regulations applicable thereto, all other conditions
and provisions of this agreement shall nevertheless remain in full force
and effect. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this agreement to effect the original
intent of the parties as closely as possible, in a mutually acceptable
manner, in order that the transaction contemplated hereby be consummated
as originally contemplated to the greatest extent possible.
ARTICLE 27 - GENERAL
27.1 Entire Agreement
This agreement, including the Exhibits attached hereto which are
incorporated herein, constitute the entire agreement of the parties with
respect to the subject matter hereof and supersedes all previous
proposals, oral or written, and all previous negotiations, conversations,
or discussions. This agreement may not be modified, amended, rescinded,
canceled or waived, in whole or in part, except by written amendment
signed by both parties hereto.
27.2 Publicity
The parties agree that except, as may otherwise be required by applicable
laws, regulations, rules or orders, the content of the transactions
contemplated herein shall
<PAGE>
39 CONFIDENTIAL TREATMENT REQUESTED
not be announced publicly by either party without the prior written
consent of the other, and in the event a party is required to publicly
disclose such information pursuant to securities law or otherwise, such
party shall provide reasonable notice to the other party and consult the
other party prior to any such disclosure in order that the content
disclosed be purged by the other party of confidential, proprietary and
commercially sensitive information to the extent permitted by applicable
law.
27.3 Dispute Resolution
Except as otherwise set out, in the event that at any time during the term
of this agreement, a disagreement, dispute, controversy or claim should
arise relating to the (i) interpretation of or performance under this
agreement or the attribution of liability or breach thereof, or (ii)
scientific or technical issues in connection with Nordion or IDEC's
performance under this agreement, the parties will attempt, in good faith,
to resolve their differences for a period of [CONFIDENTIAL TREATMENT
REQUESTED]. With respect to scientific or technical issues if, after
[CONFIDENTIAL TREATMENT REQUESTED], the parties are unable to resolve such
dispute, the parties shall refer the matter to a third party consultant
with expertise in the scientific or technical area of dispute
[CONFIDENTIAL TREATMENT REQUESTED]. If the matter includes issues
described in both items (i) and (ii) above, the parties shall attempt to
resolve their differences in good faith until the expiry of the latest
dispute resolution period applicable. In the event the parties or such
consultant, as the case may be, are unable to work out a resolution of the
issue with the parties, either party shall be free to take any action and
seek any remedy it may have at law or in equity including specific
performance and injunctive relief.
<PAGE>
40 CONFIDENTIAL TREATMENT
ARTICLE 28 - INDEPENDANT CONTRACTOR
28.1 No Joint Venture
The parties agree that with respect to the transactions contemplated
herein that they shall both be acting as independent contractors and
nothing herein shall constitute the parties as entering into a joint
venture or partnership, nor shall constitute either party as an agent of
the other for any purpose whatsoever.
ARTICLE 29 - YEAR 2000
29.1 Y2K
Nordion will ensure that there will be no material failure or production
of erroneous data as a consequence of the inability to receive, store,
process or output date information regardless of the date(s) utilized
(including, without limitation, relating to the change of the century) in
any computer software, computer hardware, automation systems or other
devices owned, licensed, or otherwise used by Nordion that would result in
the inability of Nordion to successfully carry out its obligations
hereunder.
ARTICLE 30 - LAW
30.1 Applicable law
This agreement shall be governed and construed in accordance with the laws
of the State of New York, USA without reference to its principles on
conflict of laws. The parties agree to attorn to the non-exclusive
jurisdiction of the courts of New York. The application of the United
Nations Convention for the International Sale of Goods is expressly
excluded.
<PAGE>
41 CONFIDENTIAL TREATMENT
IN WITNESS WHEREOF the parties hereto have executed this agreement on the date
first above written.
MDS NORDION INC. IDEC PHARMACEUTICALS CORPORATION
by: /s/ Iain Trevena by: /s/ William H. Rastetter
------------------------ --------------------------------
<PAGE>
42 CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT 1
Project Schedule
--------------------------------------------------------------------------------
Activity Party [CONFIDENTIAL TREATMENT
REQUESTED]
--------------------------------------------------------------------------------
Completion of Pilot Nordion [CONFIDENTIAL TREATMENT
Isotope Facility (with REQUESTED]
out-sourced yttrium-90
radiochemical)
--------------------------------------------------------------------------------
Commencement of Isotope Nordion [CONFIDENTIAL TREATMENT
Supply for Clinical Trials REQUESTED]
--------------------------------------------------------------------------------
Completion of In-house Nordion [CONFIDENTIAL TREATMENT
Production Facility for REQUESTED]
yttrium-90 radiochemical.
Submission of NDA for
Isotope from in-house
yttrium-90 radiochemical
--------------------------------------------------------------------------------
Completion of facility for Nordion [CONFIDENTIAL TREATMENT
FDA Inspection pursuant to REQUESTED]
NDA approval
--------------------------------------------------------------------------------
Target date for BLA IDEC [CONFIDENTIAL TREATMENT
submission to FDA REQUESTED]
--------------------------------------------------------------------------------
Target date for BLA IDEC [CONFIDENTIAL TREATMENT
approval by FDA REQUESTED]
--------------------------------------------------------------------------------
Target date for NDA Nordion [CONFIDENTIAL TREATMENT
approval REQUESTED]
--------------------------------------------------------------------------------
* [CONFIDENTIAL TREATMENT REQUESTED].
** [CONFIDENTIAL TREATMENT REQUESTED].
*** [CONFIDENTIAL TREATMENT REQUESTED].
<PAGE>
43 CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT 2
Specifications *
[CONFIDENTIAL TREATMENT REQUESTED]
<PAGE>
44 CONFIDENTIAL TREATMENT REQUESTED
Exhibit 3
[CONFIDENTIAL TREATMENT REQUESTED]
<PAGE>
45 CONFIDENTIAL TREATMENT REQUESTED
Exhibit 4
================================================================================
Isotope Ordering Options for US Destinations
[CONFIDENTIAL TREATMENT REQUESTED]
--------------------------------------------------------------------------------
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED EXHIBIT 10.15
CONFIDENTIAL TREATMENT REQUESTED: PAGES WHERE CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED ARE MARKED "CONFIDENTIAL TREATMENT REQUESTED" AND APPROPRIATE
SECTIONS, WHERE TEXT HAS BEEN OMITTED, ARE NOTED WITH "[CONFIDENTIAL TREATMENT
REQUESTED]." AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
Connie Matsui
VP, Planning & Resource Development
IDEC Pharmaceuticals,
11011 Torreyana Rd.,
San Diego, CA 92121
Dear Connie:
MDS Nordion offers the following proposal for an expedited schedule that we feel
will meet the needs and expectations of both companies:
1. Initial upfront payment by IDEC of [CONFIDENTIAL TREATMENT REQUESTED] upon
full execution of this letter agreement.
2. Additional payments based on the following flowchart:
[CONFIDENTIAL TREATMENT REQUESTED]
Milestone 1 is critical as it is the first quantifiable milestone which
demonstrates whether or not MDS Nordion is meeting the expedited schedule. While
material from this milestone may not be of clinical significance, it does
increase the confidence level for completing the rest of the project according
to the expedited schedule. It also gives IDEC the ability to gage when clinical
material will be available.
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
Milestone 2 is important as this represents the moment when IDEC can begin
testing MDS Nordion sterile Y-90 in patients.
3. Milestone definitions:
[CONFIDENTIAL TREATMENT REQUESTED]
4. In the event that MDS Nordion does not submit the DMF by [CONFIDENTIAL
TREATMENT REQUESTED] and is not impeded from doing so in any way, directly
or indirectly, by IDEC the initial upfront payment of [CONFIDENTIAL
TREATMENT REQUESTED] and the [CONFIDENTIAL TREATMENT REQUESTED] Milestone
1 payment, if previously paid by IDEC to MDS Nordion, would be returned to
IDEC.
If you are satisfied with this proposal, please execute this letter in the space
provided below and return a fully executed copy to my attention. A fully
executed copy shall be deemed an amendment to the Agreement dated May 14, 1999
and except as set forth in this amendment, the Agreement shall remain in full
force and effect.
Sincerely,
MDS Nordion, Inc.
By: /s/ C.M. David
-------------------------------
Its: Director, Therapeutics Products
--------------------------------
Approved and Accepted:
IDEC Pharmaceuticals Corporation
By: /s/ Connie Matsui
-------------------------------
Its: Vice President
-------------------------------
Date: 1/28/00
------------------------------
2
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED EXHIBIT 10.15
CONFIDENTIAL TREATMENT REQUESTED: PAGES WHERE CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED ARE MARKED "CONFIDENTIAL TREATMENT REQUESTED" AND APPROPRIATE
SECTIONS, WHERE TEXT HAS BEEN OMITTED, ARE NOTED WITH "[CONFIDENTIAL TREATMENT
REQUESTED]." AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
March 16, 2001
IDEC Pharmaceuticals Corporation
3030 Callan Road
San Diego, CA 92121
Attn: Mr. Mark Wiggins
Vice President
Marketing and Business Development
Re: Second Amendment to Isotope Agreement
Dear Mark:
MDS Nordion Inc. ("Nordion") and IDEC Pharmaceuticals Corporation ("IDEC") are
parties to that certain Isotope Agreement dated May 14, 1999, as amended (the
"Agreement"). The first amendment to the Agreement was effected January 21,
2000. The purpose of this letter is to set forth the terms of a second amendment
to the Agreement ("Second Amendment"). This letter, when fully executed by IDEC
and Nordion, shall become the Second Amendment to the Agreement.
1. Nordion shall use commercially reasonable best efforts to establish a
second Isotope manufacturing facility ("New Facility") which is
substantially similar to the facility currently used by Nordion in Kanata,
Ontario to manufacture Isotope in accordance with the following project
schedule:
[CONFIDENTIAL TREATMENT REQUESTED]
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
It is understood and acknowledged by the parties that the Completion Dates and
the sequence for carrying out the above activities shall serve only as a guide.
Nordion will use commercially reasonable best efforts to complete projects in
advance of stated Completion Dates. IDEC, however, acknowledges that Nordion's
ability to meet the Completion Dates above depends heavily on the ability of
external vendors and consultants to complete projects in a timely manner.
2. (a) In consideration of Nordion's obligations in Section 1 above, IDEC
agrees that it shall not exercise its termination rights set forth in
Section 17.3 of the Agreement and such termination right, except as set
out below, shall be suspended until such time as Nordion's cumulative
gross revenues received during the Commercial Phase from the sale of
Isotope under the Agreement reaches [CONFIDENTIAL TREATMENT REQUESTED].
Nordion shall notify IDEC as soon as Nordion becomes aware that the
[CONFIDENTIAL TREATMENT REQUESTED] has been reached.
(b) In the event that Nordion does not submit the updated Drug Master File
(DMF) for the New Facility on or prior to [CONFIDENTIAL TREATMENT
REQUESTED], IDEC's right of termination under Section 17.3 of the
Agreement shall revive. In the event IDEC exercises its termination right
under the revived termination provisions of Section 17.3 of the Agreement
prior to the [CONFIDENTIAL TREATMENT REQUESTED], IDEC [CONFIDENTIAL
TREATMENT REQUESTED], pay to Nordion a lump sum amount equal to the
[CONFIDENTIAL TREATMENT REQUESTED]. In the event that IDEC fails to make
such payment in accordance with this paragraph, IDEC's termination notice
shall be of no force and effect. For purposes of this Second Amendment,
[CONFIDENTIAL TREATMENT REQUESTED].
(c) Notwithstanding Section 2(a) or (b), IDEC may terminate the Agreement
pursuant to Section 17.3 of the Agreement at any time prior to BLA
approval. In the event that IDEC exercises its right to terminate the
Agreement, pursuant to this section 2(c) or Nordion terminates the
Agreement pursuant to Section 17.6 of the Agreement, IDEC, [CONFIDENTIAL
TREATMENT REQUESTED], shall pay Nordion a lump sum amount equal to
[CONFIDENTIAL TREATMENT REQUESTED]. In the event IDEC fails to make such
payment IDEC's termination notice shall be of no force and effect.
2
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
(d) IDEC acknowledges that the amount and payment of the foregoing is fair
and reasonable. The parties further acknowledge that Nordion shall not be
required to manufacture Isotope in the New Facility until immediately
prior to such time as capacity of the initial facility is exceeded.
(e) In consideration of the payment set out in Section 2(b) or 2(c) above,
Nordion agrees that IDEC may at any time within [CONFIDENTIAL TREATMENT
REQUESTED] following the effective date of termination reinstate the
Agreement upon [CONFIDENTIAL TREATMENT REQUESTED] prior written notice to
Nordion, provided such notice of reinstatement is accompanied by a payment
to Nordion of [CONFIDENTIAL TREATMENT REQUESTED]. Such payment of
[CONFIDENTIAL TREATMENT REQUESTED] shall be reduced to [CONFIDENTIAL
TREATMENT REQUESTED] if prior to such date of termination Nordion had yet
to submit an updated DMF. It is acknowledged and agreed that the
Agreement, as reinstated, shall apply to the New Facility only.
Notwithstanding anything to the contrary set forth in this Section 2(e),
in the event Nordion advises IDEC in writing during the [CONFIDENTIAL
TREATMENT REQUESTED] that it has initiated negotiations with a third party
regarding use of the New Facility, IDEC shall have [CONFIDENTIAL TREATMENT
REQUESTED] from the date of such notification to elect to reinstate the
Agreement in accordance with this Section 2(e) or waive such right of
reinstatement. In the event IDEC waives such right of reinstatement and
Nordion's negotiations with such third party fail to result in an
agreement to utilize the New Facility, Nordion shall promptly notify IDEC
and IDEC shall again have the right of reinstatement set forth in this
Section 2(e) until expiration of the original [CONFIDENTIAL TREATMENT
REQUESTED], subject to Nordion's continuing right to initiate negotiations
with a third party and to require IDEC to elect to reinstate the Agreement
or waive such right in [CONFIDENTIAL TREATMENT REQUESTED].
3. IDEC's right of audit set forth in Section 11.1 of the Agreement shall be
extended for the purpose of verifying [CONFIDENTIAL TREATMENT REQUESTED]
and fulfillment of Nordion's obligations described in Section 2.
4. IDEC and Nordion are contemplating the [CONFIDENTIAL TREATMENT REQUESTED]
and a third amendment to the Agreement ("Third Amendment"). The Third
Amendment shall delineate milestones and timelines related to the
[CONFIDENTIAL TREATMENT REQUESTED]. The Third Amendment may also amend,
among other things, dose size, purchase price, minimum purchase
requirements, distribution obligations and termination rights set forth in
the Agreement.
5. IDEC and Nordion agree to negotiate the terms and conditions of the Third
Amendment in good faith and in an effort to enter into the Third Amendment
on or before [CONFIDENTIAL TREATMENT REQUESTED].
6. In the event the parties are unable to agree upon the terms of and enter
into the Third Amendment on or before [CONFIDENTIAL TREATMENT REQUESTED]
(which date may be extended by the mutual agreement of the parties in
writing), IDEC may at any time thereafter enter into an agreement with a
third party Yttrium-90 isotope supplier and, as of the [CONFIDENTIAL
TREATMENT REQUESTED], IDEC's obligation to purchase from Nordion
[CONFIDENTIAL TREATMENT REQUESTED]
3
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
[CONFIDENTIAL TREATMENT REQUESTED], shall be null and void and of no
further force or effect. In the event IDEC obtains supply of Yttrium-90
for commercial, as opposed to clinical, use from a third party as provided
in this Section 6, and Nordion [CONFIDENTIAL TREATMENT REQUESTED] to
continue to perform its obligations under the Agreement, Nordion shall be
entitled to terminate the Agreement upon [CONFIDENTIAL TREATMENT
REQUESTED] prior written notice to IDEC. IDEC agrees that it shall notify
Nordion in writing in the event it obtains supply of Yttrium-90 from a
third party for commercial use with the Monoclonal Antibody in the United
States.
7. Notwithstanding anything to the contrary set forth in the Agreement, the
purchase price for Isotope delivered during the Commercial Phase to
radiopharmacies and other entities for the sole purpose of Isotope dose
calibration shall be [CONFIDENTIAL TREATMENT REQUESTED] of the purchase
price otherwise payable under Section 7.5 of the Agreement. To the extent
IDEC requests that Nordion increase the Batch size during the Clinical
Trial Phase or Pre-Commercial Phase to provide Isotope to radiopharmacies
and other entities for the sole purpose of Isotope dose calibration, the
price of such additional Isotope beyond the [CONFIDENTIAL TREATMENT
REQUESTED] and required for dose calibration, shall be [CONFIDENTIAL
TREATMENT REQUESTED] of the price payable under Section 6.4 of the
Agreement.
8. Capitalized terms not defined in this Second Amendment shall have the
meanings given them in the Agreement.
9. This Second Amendment shall be effective as of the 2nd day of January
2001. Except as amended by the first and Second Amendment, the Agreement
shall remain in full force and effect.
Please confirm IDEC's agreement with the terms set forth above by executing this
letter agreement in the space provided below and returning a fully executed copy
to my attention.
Very truly yours,
/s/ Claudette David
Claudette David
Vice President, Therapeutic Products
The foregoing is approved and accepted by IDEC
Pharmaceuticals Corporation this 22nd day of March,
2001
By: /s/ Mark Wiggins
-------------------------------
Its: VP, Business Dev. & Marketing
-------------------------------