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(o) establish a Development Manufacturing Plan and review and approve any amendments thereto, in accordance with Section 3.6.1; |
(p) establish a Global Commercialization Plan for the Commercialization of each Licensed Product and review and approve any amendments thereto, in accordance with Section 4.1.1; |
(q) oversee at a high level all Commercialization activities in the Territory with respect to the Licensed Products; |
(r) coordinate, where appropriate, communications regarding product positioning, brand planning, and other material aspects of Commercializing the Licensed Products in the Parties' Applicable Territories; |
(s) develop the Publication Policy and oversee the publication of abstracts, manuscripts and presentations that disclose results of the Development of any Licensed Compound or Licensed Product; |
(t) form such other joint committees or Working Groups under the JSC as may be necessary or desirable to facilitate the activities under this Agreement as the Parties may agree and oversee the activities of any such other committees or working groups (each, a "Subcommittee", and collectively with the JSC, "Joint Committees"); and |
(u) perform such other functions as are set forth herein or as the Parties may mutually agree in writing, except where in conflict with any provision of this Agreement. |
2.1.3. Disbandment. In the event of a Change in Control of Richter, AbbVie shall have the right at any time and for any reason, effective upon written notice, to disband the JSC and any Subcommittees pursuant to Section 13.2.1(b). |
2.2 General Provisions of the JSC. |
2.2.1. Meetings and Minutes. The JSC shall meet quarterly or as otherwise agreed to by the Parties, with the location of such meetings alternating between locations designated by Richter and locations designated by AbbVie. The chairperson of the JSC shall be responsible for calling meetings on no less than fifteen (15) Business Days' notice. Each Party shall make all proposals for agenda items and shall provide all appropriate information with respect to such proposed items at least five (5) Business Days in advance of the applicable meeting; provided, that under exigent circumstances requiring input by the JSC, a Party may provide its agenda items to the other Party within a shorter period of time in advance of the meeting, or may propose that there not be a specific agenda for a particular meeting, so long as the other Party consents to such later addition of such agenda items or the absence of a specific agenda for such meeting, such consent not to be unreasonably withheld or delayed. The person designated by the JSC shall prepare and circulate for review and approval of the Parties minutes of each meeting within fifteen (15) Business Days after the meeting. The Parties shall agree on the minutes of each meeting promptly, but in no event later than the next meeting of the JSC. |
2.2.2. Procedural Rules. Each Joint Committee shall have the right to adopt such standing rules as shall be necessary for its work, to the extent that such rules are not inconsistent with this Agreement. A quorum of the Joint Committee shall exist whenever there is present at a meeting at least one (1) representative appointed by each Party. Representatives of the Parties on a Joint Committee may attend a meeting either in person or by telephone, video conference or similar means in which each participant can hear what is said by, and be heard by, the other participants. Representation by proxy shall be allowed. Each Joint Committee shall take action by consensus of the representatives present at a meeting at which a quorum exists, with each Party having a single vote irrespective of the number of representatives of such Party in attendance, or by a written resolution signed by at least one (1) representative appointed by each Party. Employees or consultants of either Party that are not representatives of the Parties on a Joint Committee may attend meetings of such Joint Committee; provided, that such attendees (a) shall not vote, and (b) are bound by obligations of confidentiality and non-disclosure equivalent to those set forth in Article 9. |
2.2.3. Dispute Resolution. If a Joint Committee (other than the JSC) cannot, or does not, reach consensus on an issue at a meeting or within a period of ten (10) Business Days thereafter or such other period as the Parties may agree, then the dispute shall be referred to the JSC for resolution and a special meeting of the JSC may be called for the JSC to confer in good faith on the resolution of the issue, including discussing any possible material negative impact the proposed solutions may have on the Development, receipt or maintenance of any Regulatory Approval, or Commercialization of the Licensed Compound or Licensed Products in each of the Applicable Territories. If the JSC cannot, or does not, reach consensus on an issue, including any dispute arising in another Joint Committee, within a period of thirty (30) days thereafter or such other period as the Parties may agree, then the dispute shall first be referred to the Senior Officers of the Parties, who shall confer in good faith on the resolution of the issue. Any final decision mutually agreed to by the Senior Officers shall be conclusive and binding on the Parties. If the Senior Officers are not able to agree on the resolution of any such issue within thirty (30) days after such issue was first referred to them, then such dispute shall be resolved as follows: |
(a) Subject to Section 2.2.3(c), Richter shall have final decision-making authority with respect to any matter relating to (i) the day-to-day conduct of Discovery Program Activities and IND-Enabling Activities in accordance with the applicable Discovery Program Plan or IND-Enabling Studies Plan and Budget, (ii) the Richter Territory Development Plan or (iii) amendments to the Development Manufacturing Plan to include Richter Formulation Activities that do not require a new Clinical Study, other than a Bioequivalence Study, to be conducted provided that Richter may not exercise its final decision-making authority (1) to amend the Discovery Program Plan or the IND-Enabling Studies Plan and Budget or (2) in a manner that could reasonably be expected to materially negatively impact the Development, receipt or maintenance of any Regulatory Approval, or Commercialization of the Licensed Compounds or Licensed Products in the AbbVie Territory; if AbbVie has such reasonable expectation, then AbbVie will notify Richter and provide a detailed explanation as to the facts and circumstances, including supporting information, behind AbbVie's reasonable expectation. |
(b) AbbVie shall have final decision-making authority with respect to any matter relating to (i) any amendments to the IND-Enabling Studies Plan and Budget, (ii) the Clinical Development Plans (excluding amendments to include any New Indications proposed by AbbVie pursuant to Section 3.3.3(c)), the conduct of the Clinical Development Activities and filings of or with respect to INDs and other filings or communications with the Regulatory Authorities with respect to Clinical Development Activities (including approval of and any amendment to the Clinical Development Plans and the decision of whether to file INDs), other than, for clarity, activities under the Richter Territory Development Plan, (iii) the interpretation of, or compliance with, regulatory requirements related to preparing, obtaining, and maintain the Drug Approval Applications and all other Regulatory Approvals and other submissions for Licensed Compounds or Licensed Products in the AbbVie Territory, (iv) the approval of and any amendments to the Development Manufacturing Plan (excluding amendments to include Richter Formulation Activities that do not require a new Clinical Study, other than a Bioequivalence Study, to be conducted), (v) approval of and any amendments to the Global Commercialization Plan and all aspects of Commercialization in the AbbVie Territory, (vi) approval of and any amendments to the Publication Policy, (vii) the determination of whether any publications of abstracts, manuscripts or presentations that disclose results of the Development of any Licensed Compound or Licensed Product are consistent with the Publication Policies, and (viii) other issues of material consequence with regard to the Development or Commercialization of the Licensed Compounds or Licensed Products in the AbbVie Territory; provided that, subject to Section 2.2.3(c), AbbVie may not exercise its final decision-making authority in a manner that could reasonably be expected to materially negatively impact the Development, receipt or maintenance of any Regulatory Approval, or Commercialization of the Licensed Compounds or Licensed Products by Richter in the Richter Territory; |
(c) AbbVie shall have final decision-making authority with respect to any matter for which each Party believes in good faith that exercise by the other Party of its final decision-making authority could reasonably be expected to materially negatively impact the Development, receipt or maintenance of any Regulatory Approval, or Commercialization of the Licensed Compounds or Licensed Products by such Party in its Applicable Territory; if AbbVie has such reasonable expectation, then AbbVie will notify Richter and provide a detailed explanation as to the facts and circumstances, including supporting information, behind AbbVie's reasonable expectation; |
(d) Except as specified in Section 2.2.3(a), Section 2.2.3(b) and Section 2.2.3(c), neither Party will have final decision-making authority with respect to any matter if the Senior Officers are not able to agree on a resolution, including, for clarity, with respect to amendments to the Discovery Program Plan, the selection of Lead Compounds pursuant to Section 3.1.1(c), the selection of Backup Compounds pursuant to Section 3.2.2, and all such matters must be decided by unanimous agreement of the Parties in order to take any action or adopt any change from the then-current status quo; and |
(e) Disputes arising between the Parties in connection with or relating to this Agreement or any document or instrument delivered in connection herewith, and that are outside of the jurisdiction of the JSC, shall be resolved pursuant to Section 13.7. |
2.2.4. Limitations on Authority. Each Party shall retain the rights, powers, and discretion granted to it under this Agreement and no such rights, powers, or discretion shall be delegated to or vested in a Joint Committee unless such delegation or vesting of rights is expressly provided for in this Agreement or the Parties expressly so agree in writing. No Joint Committee shall have the power to amend, modify, or waive compliance with this Agreement, which may only be amended or modified as provided in Section 13.9 or compliance with which may only be waived as provided in Section 13.12. |
2.2.5. Alliance Manager. Each Party shall appoint a person(s) who shall oversee contact between the Parties for all matters between meetings of each Joint Committee and shall have such other responsibilities as the Parties may agree in writing after the Effective Date (each, an "Alliance Manager"). Each Party may replace its Alliance Manager at any time by notice in writing to the other Party. |
2.3 Discontinuation of Participation on a Committee. Subject to Section 2.1.3 and Section 13.2.1(b), each Joint Committee (other than the JSC) shall continue to exist until the Parties mutually agree to disband the Joint Committee. Once the Parties mutually agree to disband a Joint Committee, such Joint Committee shall be terminated and shall have no further rights or obligations under this Agreement, and thereafter any requirement of Richter to provide Information or other materials to such Joint Committee shall be deemed a requirement to provide such Information or other materials to the JSC. |
2.4 Interactions Between a Joint Committee and Internal Teams. The Parties recognize that each Party possesses an internal structure (including various committees, teams and review boards) that will be involved in administering such Party's activities under this Agreement. Nothing contained in this Article 2 shall prevent a Party from making routine day-to-day decisions relating to the conduct of those activities for which it has a performance or other obligations hereunder, in each case in a manner consistent with the then-current applicable plan and the terms and conditions of this Agreement. |
2.5 Working Groups. From time to time, a Joint Committee may establish and delegate duties to sub-committees or directed teams (each, a "Working Group") on an "as-needed" basis to oversee particular projects or activities (for example, joint project team, joint finance group, and/or joint intellectual property group). Each such Working Group shall be constituted and shall operate as the Joint Committee determines; provided that each Working Group shall have equal representation from each Party, unless otherwise mutually agreed. Working Groups may be established on an ad hoc basis for purposes of a specific project or on such other basis as the Joint Committee may determine. Each Working Group and its activities shall be subject to the oversight, review and approval of, and shall report to, the Joint Committee that formed said Working Group. In no event shall the authority of the Working Group exceed that specified for the Joint Committee that formed the Working Group to this Article 2. All decisions of a Working Group shall be by consensus. Any disagreement between the designees of AbbVie and Richter on a Working Group shall be referred to the Joint Committee that formed the Working Group for resolution. |
2.6 Expenses. Each Party shall be responsible for all travel and related costs and expenses for its members and other representatives to attend meetings of, and otherwise participate on, a Joint Committee or other Working Group. |
ARTICLE 3 DEVELOPMENT AND REGULATORY |
3.1 Discovery Programs. |
3.1.1. Discovery Program Activities. |
(a) Generally; Diligence. Richter shall perform the Discovery Program Activities, and shall do so in material compliance with the applicable Discovery Program Plan by allocating the time, effort, equipment, skilled personnel, and other resources that are required to complete such Discovery Program Activities successfully and promptly. Richter shall use Commercially Reasonable Efforts to identify at least one (1) Lead Compound and at least one (1) Backup Compound for each Discovery Program in accordance with the timeline set forth in the applicable Discovery Program Plan. If Richter is in material breach of its obligation to perform any Discovery Program Activities and fails to remedy such breach within ninety (90) days after written notice thereof from AbbVie, then AbbVie shall have the right, at AbbVie's sole election, and without limitation to any other right or remedy available to AbbVie, to assume and complete some or all of such Discovery Program Activities. If AbbVie so elects to assume and complete any such Discovery Program Activities, then, to the extent requested by AbbVie in writing, Richter shall assign to AbbVie any or all Third Party agreements relating to such Discovery Program Activities (including agreements with contract research organizations, investigators and manufacturing providers). The Discovery Program Plan is subject to revision by the JSC in light of the progress of the Discovery Program Activities in accordance with Section 3.1.2 and Article 2. |
(b) Results of Discovery Programs; Disclosure of Licensed Compounds. Richter will provide all material data and results generated by or on behalf of Richter or its Affiliates in the course of any Discovery Program Activities as soon as reasonably practicable following generation of such data and results. In addition, at least once every Calendar Quarter, in conjunction with JSC meetings, Richter will (i) provide a summary of all material data and results generated by Richter, its Affiliates or subcontractors from all Discovery Program Activities, including the identity and a description of all compounds meeting or potentially meeting the D3 Receptor Compound Criteria or the Pro-metabolite Compound Criteria, and (ii) provide the identity and a description of any other Licensed Compounds that comes under the Control of Richter or any of its Affiliates at any time during the Discovery Program Term. If reasonably requested by AbbVie, Richter will provide to AbbVie and its representatives an opportunity to discuss such activities and results with Richter personnel in connection with JSC meetings or more frequently as mutually agreed by the Parties. |
(c) Lead Compound Nomination; Backup Compounds. The JSC will determine on a Licensed Compound-by-Licensed Compound and Discovery Program-by-Discovery Program basis if any Licensed Compound has met the Lead Compound Criteria for such Discovery Program or should otherwise advance or not advance, regardless of whether such Licensed Compound meets the applicable Lead Compound Criteria, for further Development (including IND-enabling studies with respect to such Licensed Compound) (each, a "Lead Compound"). As of the Effective Date, the Lead Compound for the Pro-metabolite Discovery Program is set forth in the Pro-metabolite Discovery Program Plan. On a Discovery Program-by-Discovery Program basis, any Licensed Compound that is not designated as a Lead Compound will initially be designated as a backup compound (each, a "Backup Compound"). For clarity, the Parties may also elect to advance one or more Backup Compounds to IND-Enabling Studies in parallel with the Development of any Lead Compound; provided that, unless mutually agreed otherwise, no Backup Compound will be advanced to GLP toxicology studies so long as a viable Licensed Compound is being advanced. The JSC must select at least one (1) Licensed Compound to advance to IND-Enabling Activities for each Discovery Program. |
3.1.2. Discovery Program Plan Amendments. The JSC shall review each Discovery Program Plan covering Discovery Program Activities at least once every Calendar Quarter for the purpose of considering appropriate amendments thereto. In addition, either Party, through its representatives on the JSC, may propose amendments to any Discovery Program Plan for Discovery Program Activities at any time. Any and all such amendments shall be subject to approval by the JSC as set forth in Section 2.1.2, subject to the dispute resolution procedures set forth in Section 2.2.3. |
3.1.3. Discovery Program Term. Each Discovery Program shall be performed during the period commencing on the Effective Date and expiring with respect to each Discovery Program upon the earlier of (a) the date on which at least one (1) Lead Compound and at least one (1) Backup Compound have been identified for such Discovery Program, and (b) the completion of all activities set forth in such Discovery Program Plan, unless, in each case ((a) and (b)), (i) extended by AbbVie and agreed to by Richter, or (ii) earlier terminated as provided in Article 12 of this Agreement (each, a "Discovery Program Term"). |
3.2 IND-Enabling Studies. |
3.2.1. IND-Enabling Activities. |
(a) IND-Enabling Studies Plan and Budget. Within thirty (30) days of designating any Licensed Compound as a Lead Compound, the JSC shall develop the initial IND-Enabling Studies Plan and Budget for the performance by the Parties of Development with respect to such Lead Compound (such activities, "IND-Enabling Activities"). The Parties can elect for the IND-Enabling Studies Plan and Budget to be a subsection of the applicable Discovery Program Plan. Richter shall conduct IND-Enabling Activities in accordance with the terms and conditions of this Agreement and the applicable IND-Enabling Studies Plan and Budget by allocating the time, effort, equipment, skilled personnel, and other resources that are required to complete such IND-Enabling Activities successfully and promptly. In connection with the conduct of such IND-Enabling Activities, Richter shall use Commercially Reasonable Efforts to identify as least one (1) candidate to advance to Clinical Development Activities in accordance with the timeline set forth in the applicable IND-Enabling Studies Plan and Budget. If Richter is in material breach of its obligation to perform any IND-Enabling Activities and fails to remedy such breach within ninety (90) days after written notice thereof from AbbVie, then AbbVie shall have the right, at AbbVie's sole election, and without limitation to any other right or remedy available to AbbVie, to assume and complete some or all of such IND-Enabling Activities. If AbbVie so elects to assume and complete any such IND-Enabling Activities, then, to the extent requested by AbbVie in writing, Richter shall assign to AbbVie any or all Third Party agreements relating to such IND-Enabling Activities (including agreements with contract research organizations, investigators and manufacturing providers). |
(b) Results of IND-Enabling Studies. Richter will provide all material data and results generated by or on behalf or Richter or its Affiliates in the course of any IND-Enabling Activities as soon as reasonably practicable following generation of such data and results. In addition, at least once every Calendar Quarter, in conjunction with JSC meetings, Richter will provide a summary of all material data and results generated by Richter, its Affiliates or subcontractors from all IND-Enabling Activities. If reasonably requested by AbbVie, Richter will provide to AbbVie and its representatives an opportunity to discuss such activities with Richter personnel in connection with JSC meetings or more frequently as mutually agreed by the Parties. |
3.2.2. Completion of IND-Enabling Studies; Backup Compounds. The JSC will determine on a Lead Compound-by-Lead Compound basis whether the IND-Enabling Activities have been successfully completed in accordance with the applicable IND-Enabling Studies Criteria in the applicable IND-Enabling Studies Plan and Budget. If the JSC determines that IND-Enabling Activities cannot be successfully completed with respect to any Lead Compound in accordance with the applicable IND-Enabling Studies Criteria, then the JSC will select one or more Backup Compounds for IND-Enabling Studies, and the applicable IND-Enabling Studies Plan and Budget will be amended as promptly as possible to include IND-Enabling Activities for such Backup Compound. On a Discovery Program-by-Discovery Program basis, if the Parties do not advance the first Lead Compound for a Discovery Program to Clinical Development Activities and at least one Backup Compound exists for such Discovery Program, then, unless mutually agreed otherwise, the Parties will select at least one Backup Compound to designate as a new Lead Compound for such Discovery Program and advance such Lead Compound to IND-Enabling Activities. |
3.2.3. Updates; Amendments. The JSC shall review each IND-Enabling Studies Plan and Budget covering all IND-Enabling Activities at least once every Calendar Quarter for the purpose of considering appropriate amendments thereto. In addition, either Party, through its representatives on the JSC, may propose amendments to any IND-Enabling Studies Plan and Budget for IND-Enabling Activities at any time, including in accordance with Section 3.2.2. Any and all such amendments shall be subject to approval by the JSC as set forth in Section 2.1.2, subject to the dispute resolution procedures set forth in Section 2.2.3. |
3.3 Clinical Development Activities. |
3.3.1. Clinical Development Plan. Prior to completion of the IND-Enabling Activities with respect to any Lead Compound, the JSC shall jointly develop an initial Clinical Development Plan for the performance of Clinical Studies and other Development activities not covered under the applicable Discovery Program Plan or the applicable IND-Enabling Studies Plan and Budget with respect to Licensed Products containing such Lead Compound and any Backup Compounds to such Lead Compound (such activities, together with any Development activities included in any amendment to a Clinical Development Plan, the "Clinical Development Activities"). The Parties can elect for the Clinical Development Plan to be a subsection of the applicable Discovery Program Plan or IND-Enabling Studies Plan and Budget. |
3.3.2. Results of Clinical Studies. AbbVie will provide all material data and results generated by or on behalf of AbbVie or its Affiliates or its Sublicensees in the course of any Clinical Development Activities as soon as reasonably practicable following generation of such data and results. In addition, at least once every Calendar Quarter, in conjunction with JSC meetings, AbbVie will provide a summary of all material data and results generated by AbbVie, its Affiliates, Sublicensees or subcontractors from all Clinical Development Activities. If reasonably requested by Richter, AbbVie will provide to Richter and its representatives an opportunity to discuss such activities with AbbVie personnel in connection with JSC meetings or more frequently as mutually agreed by the Parties. |
3.3.3. Updates; Amendments. |
(a) Generally. The JSC shall review each Clinical Development Plan covering all Clinical Development Activities at least annually for the purpose of considering appropriate amendments thereto. In addition, either Party, through its representatives on the JSC, may propose amendments to any Clinical Development Plan for Clinical Development Activities at any time. |
(b) PAC Studies. |
(i) In the event a Regulatory Authority in the AbbVie Territory, but not in the Richter Territory, requires the Conduct of one or more PAC Studies for a Licensed Product, unless otherwise agreed by the Parties, AbbVie shall have sole control over and decision-making authority with respect to the completion of such PAC Studies; provided that AbbVie keeps Richter reasonably informed regarding such PAC Studies and considers all comments provided by Richter in good faith. If AbbVie proceeds with such PAC Study, then the Parties shall cooperate to amend the Clinical Development Plan accordingly. |
(ii) In the event a Regulatory Authority in the Richter Territory, but not in the AbbVie Territory, requires the Conduct of one or more PAC Studies for a Licensed Product, Richter may conduct and shall have sole control over and decision-making authority with respect to the completion of such PAC Studies; provided that Richter keeps AbbVie reasonably informed regarding such PAC Studies and considers all comments provided by AbbVie in good faith. If Richter proceeds with such PAC Studies, then Richter (through the JSC) shall amend the Richter Territory Development Plan accordingly. |
(iii) In the event that a Regulatory Authority in the AbbVie Territory and a Regulatory Authority in the Richter Territory each require the Conduct of one or more PAC Studies for a Licensed Product in their Applicable Territories, then AbbVie shall have sole control over and decision-making authority with respect to the completion of such PAC Studies (provided that AbbVie keeps Richter reasonably informed regarding such PAC Studies and considers all comments provided by Richter in good faith), and the Parties shall cooperate to amend the Clinical Development Plan accordingly. |
(c) Additional Indications. If either Party wishes to Conduct Clinical Studies to support Regulatory Approval of an existing Licensed Product in a New Indication, then the Party wishing to Conduct Clinical Studies shall propose such Indication expansion and a plan for such Clinical Studies to the JSC. If the JSC agrees to such Indication expansion, then the Parties shall cooperate to amend the Clinical Development Plan accordingly through the JSC. If the JSC does not agree to amend the Clinical Development Plan to include such New Indication and AbbVie is the requesting Party, then AbbVie shall have the sole right to Conduct such Clinical Studies in the Territory (and, for clarity, no amendment to the Clinical Development Plan will be required) at its sole cost and expense (subject to Section 3.9.3(d)). If the JSC does not agree to amend the Clinical Development Plan to include such New Indication and Richter is the requesting Party, then Richter shall have the right to Conduct such Clinical Studies in the Territory only with AbbVie's prior written consent, at Richter's sole cost and expense (subject to Section 3.9.3(d)) and in accordance with the proposal provided to the JSC. Each Party will keep the other Party reasonably informed of any Clinical Studies Conducted for a New Indication pursuant to this Section 3.3.3(c). Solely for the purposes of this Section 3.3.3(c), if AbbVie is the requesting Party then the JSC's decision of whether to amend the Clinical Development Plan to include such New Indication shall not be subject to AbbVie's final decision-making authority pursuant to Section 2.2.3(b) or Section 2.2.3(c). |
3.4 Required Richter Territory Development Activities. |
3.4.1. All Clinical Development Activities shall be designed and implemented so as to support the filing of Drug Approval Applications and the obtaining of all Regulatory Approvals for the Licensed Product in the AbbVie Territory. The Parties will also aim to include the Development activities required to support the filing of Drug Approval Applications and the obtaining of Regulatory Approvals for the Licensed Products in the Richter Territory (such Development activities, the "Required Richter Territory Development Activities") as long as such Required Richter Territory Development Activities do not require additional Development Costs or risks as compared to the Clinical Development Activities for the AbbVie Territory. If the Required Richter Territory Development Activities would require additional Development Costs, then AbbVie can elect to conduct such Required Richter Territory Development Activities as part of the Clinical Development Activities and invoice Richter for the additional Development Costs of including such Required Richter Territory Development Activities as part of the Clinical Development Activities. If AbbVie does not elect to conduct such Required Richter Territory Development Activities as part of the Clinical Development Activities, then Richter shall have the right to conduct such Required Richter Territory Development Activities itself, at its sole cost and expense. If Richter elects to conduct the Required Richter Territory Development Activities, then Richter shall prepare a development plan setting forth in reasonable detail the specific Required Richter Territory Development Activities (such plan, the "Richter Territory Development Plan") and provide copies of such Richter Territory Development Plan to the JSC to review and approve. On at least an annual basis during the Term, Richter will review and update the Richter Territory Development Plan. For clarity, any activities set forth in a Richter Territory Development Plan will not be considered Clinical Development Activities. |
3.4.2. Richter may not conduct any Development activity under the Richter Territory Development Plan that could reasonably be expected to materially negatively impact the Development, receipt or maintenance of any Regulatory Approval, or Commercialization of the Licensed Compounds or Licensed Products in the AbbVie Territory. If AbbVie reasonably expects that any Development activity under a Richter Territory Development Plan or update thereto could reasonably be expected to materially negatively impact the Development, receipt or maintenance of any Regulatory Approval, or Commercialization of the Licensed Compounds or Licensed Products in the AbbVie Territory, then AbbVie will notify Richter and provide a detailed explanation as to the facts and circumstances, including supporting information, behind AbbVie's reasonable expectation. If Richter disagrees with AbbVie's assessment, then the Parties will submit the information to the JSC for the JSC to review and determine whether the proposed Development activity under the Richter Territory Development Plan could reasonably be expected to materially negatively impact the Development, receipt or maintenance of any Regulatory Approval, or Commercialization of the Licensed Compounds or Licensed Products in the AbbVie Territory. Richter may only conduct such Development activities if the JSC determines that the proposed Development activity could not reasonably be expected to materially negatively impact the Development, receipt or maintenance of any Regulatory Approval, or Commercialization of the Licensed Compounds or Licensed Products in the AbbVie Territory. |
3.5 Development and Regulatory Diligence. On a Discovery Program-by-Discovery Program basis, following the successful completion by Richter of the IND-Enabling Activities for such Discovery Program, AbbVie shall use Commercially Reasonable Efforts to Develop and obtain Regulatory Approval for one (1) Licensed Product for such Discovery Program for the first Indication in the United States. Richter acknowledges and agrees that, in addition to the foregoing, (a) AbbVie shall have the right to satisfy its diligence obligations under this Section 3.5 through its Affiliates or Sublicensees, and (b) nothing in this Section 3.5 is intended, or shall be construed, to require AbbVie to Develop or seek Regulatory Approval for a specific Licensed Compound or Licensed Product or to require AbbVie to Develop or seek Regulatory Approval for more than one (1) Licensed Compound or Licensed Product per Discovery Program or any Licensed Compound or Licensed Product in more than one (1) Indication. Except as set forth in this Section 3.5 and Section 4.2, AbbVie shall have no other diligence obligations, express or implied, with respect to the Development, Commercialization or other Exploitation of the Licensed Compounds or Licensed Products in the Territory. |
3.6 Pre-Clinical and Clinical Supply of Licensed Compounds or Licensed Products; Subcontracting. |
3.6.1. Development Manufacturing Plan. Within one hundred twenty (120) days after the Effective Date, the JSC shall finalize a plan setting forth in reasonable detail the specific Manufacturing activities to be performed by each Party to support the Development of the Licensed Compounds and Licensed Products based on and consistent with the draft plan attached hereto as Schedule 3.6.1 (such finalized plan, the "Development Manufacturing Plan" and any activities under such Development Manufacturing Plan, "Development Manufacturing Activities"). The JSC shall review the Development Manufacturing Plan at least annually for the purpose of considering appropriate amendments thereto. |
3.6.2. Supply by Richter. Richter shall, as and to the extent required under the Development Manufacturing Plan, supply pre-clinical and clinical requirements (including for formulation Development activities) of the Licensed Compounds for use by Richter and AbbVie in the Development of Licensed Compounds or Licensed Products as contemplated hereunder and Richter shall bear one hundred percent (100%) of the Manufacturing Costs thereof; except for the Manufacturing Costs related to any Licensed Compounds required for formulation Development activities, which each Party shall bear fifty percent (50%) of. At either Party's option, Richter and AbbVie shall enter into (a) a reasonable and customary supply agreement setting forth any additional terms and conditions of such supply and (b) a reasonable and customary quality assurance agreement setting forth the terms and conditions on which the Parties shall conduct their quality activities in connection with such supply agreement. Such agreements shall be negotiated and agreed by the Parties in good faith. Richter shall Manufacture all Licensed Compounds delivered by it pursuant to this Section 3.6.2 pursuant to GMP. |
3.6.3. Supply by AbbVie. AbbVie shall, as and to the extent required under the Development Manufacturing Plan, be responsible for supplying the pre-clinical and clinical requirements of the Licensed Products (the Licensed Compound contained therein having been provided by Richter pursuant to Section 3.6.2) for use by Richter and AbbVie in the Development of Licensed Products as contemplated hereunder and AbbVie shall bear one hundred percent (100%) of the Manufacturing Costs to convert such Licensed Compound provided by Richter pursuant to Section 3.6.2 to Licensed Product. Notwithstanding the foregoing, Richter shall bear one hundred percent (100%) of the Manufacturing Costs to convert Licensed Compounds to Licensed Product to the extent such Licensed Product is used for the Required Richter Territory Development Activities. At either Party's option, Richter and AbbVie shall enter into (a) a supply agreement setting forth any additional terms and conditions of such supply and (b) a reasonable and customary quality assurance agreement setting forth the terms and conditions on which the Parties shall conduct their quality activities in connection with such supply agreement. Such agreements shall be negotiated and agreed by the Parties in good faith. AbbVie shall Manufacture all Licensed Products delivered by it pursuant to this Section 3.6.3 pursuant to GMP. |
3.6.4. Formulation Activities. If Richter wishes to conduct any formulation Development activities for the Licensed Product for use in the Richter Territory (such activities, "Richter Formulation Activities"), then Richter shall propose an amendment to the Development Manufacturing Plan that includes such Richter Formulation Activities to the JSC for the JSC to review, discuss and determine whether to approve. If the JSC approves the amendment or Richter exercises its final decision-making right under Section 2.2.3(a)(iii), then Richter shall have the right to conduct such Richter Formulation Activities in accordance with the amended Development Manufacturing Plan, with Richter being responsible for one hundred percent (100%) of the costs and expenses for such Richter Formulation Activities. |
3.7 Subcontracting. AbbVie shall have the right to subcontract any of its Party Development Activities and its Development Manufacturing Activities to a Third Party (a "Third Party Provider"); provided, that AbbVie furnishes Richter with advanced written notice thereof and an opportunity to consult regarding such subcontract, which notice shall specify the work to be subcontracted, and obtains a written undertaking from the Third Party Provider that it shall be subject to the applicable terms and conditions of this Agreement and the confidentiality provisions of Article 9. Richter shall have the right to subcontract its Party Development Activities and its Development Manufacturing Activities to Third Parties only with AbbVie's prior written consent, such consent not to be unreasonably withheld, delayed or conditioned. |
3.8 Supply of Technology for Development Purposes. |
(a) Richter shall, and shall cause its Affiliates to, without additional compensation, disclose and make available to AbbVie, in whatever form AbbVie may reasonably request, Regulatory Documentation, Richter Know-How, Joint Know-How, and any other Information described in any Richter Patent or Joint Patent or otherwise directed to any Licensed Compound or Licensed Product, immediately after the Effective Date to the extent not done so already and thereafter during the Term immediately upon the earlier of the development, making, conception, or reduction to practice of such Regulatory Documentation, Richter Know-How, Joint Know-How, or other Information. As part of such technology transfer, any proprietary Information will be provided via secure access methods (such as secure databases) established by the JSC. |
(b) If Richter is conducting any Richter Formulation Activities under the Development Manufacturing Plan in accordance with Section 3.6.4, then, upon reasonable request by Richter, AbbVie shall, and shall cause its Affiliates to, without additional compensation, disclose and make available to Richter, in whatever form Richter may reasonably request, Regulatory Documentation, AbbVie Know-How, Joint Know-How, and any other Information described in any AbbVie Patent or Joint Patent or otherwise directed to any Licensed Compound or Licensed Product, that is necessary or reasonably useful for Richter to perform such Richter Formulation Activities. |
(c) Each Party, at its sole cost and expense, shall provide the other Party with all reasonable assistance required in order to transfer (but, for clarity, not assign) to the other Party the Regulatory Documentation, the Richter Know-How or the AbbVie Know-How (as applicable), the Joint Know-How, and any other Information required to be produced pursuant to Section 3.8(a) or Section 3.8(b) above, in each case, in a timely manner, and shall assist the other Party with respect to the Exploitation of any Licensed Compound and Licensed Product. Without prejudice to the generality of the foregoing, if visits of one Party's representatives to the other Party's facilities are reasonably requested by the receiving Party for purposes of transferring the Regulatory Documentation, the Richter Know-How or AbbVie Know-How (as applicable), the Joint Know-How, or any other Information to such Party or for purposes of the receiving Party acquiring expertise on the practical application of such Information or assisting on issues arising during such Exploitation, the disclosing Party shall send appropriate representatives to the other Party's facilities at their own expense. |
3.9 Development Costs. |
3.9.1. Development Costs Relating to Discovery Program Activities. Richter shall be solely responsible for and shall bear all Development Costs (a) incurred by it and its Affiliates in connection with the performance of the Discovery Program Activities, and (b) incurred by AbbVie and its Affiliates in connection with Discovery Program Activities that AbbVie elects to assume and complete upon a material breach by Richter pursuant to Section 3.1.1. |
3.9.2. Development Costs Relating to IND-Enabling Activities. |
(a) Each Party shall bear fifty percent (50%) of all aggregate Development Costs incurred in connection with the performance of IND-Enabling Activities in accordance with the applicable IND-Enabling Studies Plan and Budget, unless otherwise agreed by the Parties and set forth in the applicable IND-Enabling Studies Plan and Budget. |
(b) Richter shall promptly inform AbbVie upon Richter determining that it is likely to overspend or underspend by more than ten percent (10%) its respective aggregate budgeted costs and expenses for IND-Enabling Activities, as the case may be, set forth in each applicable IND-Enabling Studies Plan and Budget. The portion of any overspend that is less than or equal to ten percent (10%) of Richter's aggregate budgeted costs and expenses for IND-Enabling Activities set forth in an applicable IND-Enabling Studies Plan and Budget shall be included in Development Costs and allocated to each Party pursuant to Section 3.9.2(a) (as if such overspend had been included in amounts contained in the applicable IND-Enabling Studies Plan and Budget). |
(c) If Richter exceeds its aggregate budgeted costs and expenses by more than ten percent (10%), Richter shall provide to the JSC a full explanation for exceeding such aggregate budgeted costs under the applicable IND-Enabling Studies Plan and Budget. If and to the extent that any such overspend is in excess of ten percent (10%) was outside the reasonable control of Richter and not caused by the negligence or willful misconduct of Richter, then provided that Richter has promptly notified AbbVie of such overspend and used reasonable efforts to mitigate the amount of such overspend, such overspend shall be included in Development Costs and allocated to each party pursuant to Section 3.9.2(a). |
(d) To the extent that any overspend is not included in Development Costs as provided in Section 3.9.2(b) or Section 3.9.2(c) above, Richter shall be solely responsible for the overspend. |
3.9.3. Development Costs Relating to Clinical Development Activities. |
(a) Phase I Studies and Phase II Studies. Each Party shall bear fifty percent (50%) of all Development Costs incurred in connection with the Conduct of Phase I Studies and Phase II Studies and related Clinical Development Activities in accordance with the applicable Clinical Development Plan (including, for clarity, any Phase I Studies or Phase II Studies added to the Clinical Development Plan in accordance with Section 3.3.3(c)), unless otherwise agreed by the Parties and set forth in the applicable Clinical Development Plan. |
(b) Phase III Studies. Each Party shall bear Development Costs incurred in connection with the Conduct of Phase III Studies and related Clinical Development Activities in accordance with the applicable Clinical Development Plan (including, for clarity, any Phase III Studies added to the Clinical Development Plan in accordance with Section 3.3.3(c) ) on a Licensed Product-by-Licensed Product and Indication-by-Indication basis as follows: |
(i) Each Party shall bear fifty percent (50%) of the aggregate Development Costs incurred with respect to such Licensed Product and such Indication less than or equal to Fifty Million Dollars ($50,000,000); |
(ii) Richter shall bear forty percent (40%) and AbbVie shall bear sixty percent (60%) of the aggregate Development Costs incurred with respect to such Licensed Product and such Indication in excess Fifty Million Dollars ($50,000,000) and less than or equal to One Hundred Million Dollars ($100,000,000); |
(iii) Richter shall bear thirty percent (30%) and AbbVie shall bear seventy percent (70%) of the aggregate Development Costs incurred with respect to such Licensed Product and such Indication in excess of One Hundred Million Dollars ($100,000,000) and less than or equal to Two Hundred Million Dollars ($200,000,000); and |
(iv) AbbVie shall bear one hundred percent (100%) of the aggregate Development Costs incurred with respect to such Licensed Product and such Indication in excess of Two Hundred Million Dollars ($200,000,000). |
Notwithstanding the foregoing but subject to any adjustments pursuant to Section 3.9.3(d), Richter's obligations to bear Development Costs in accordance with this Section 3.9.3(b) shall not exceed (a) Seventy Five Million Dollars ($75,000,000) with respect to any single Indication for any Licensed Product (the "Indication Cap") or (b) Two Hundred Twenty Five Million Dollars ($225,000,000) with respect to a Discovery Program (the "Discovery Program Cap"). |
(c) PAC Studies. |
(i) In Both Territories. |
(1) If a PAC Study is required by a Regulatory Authority in the AbbVie Territory as a condition to Regulatory Approval and in the Richter Territory as a condition to Regulatory Approval, then each Party shall bear fifty percent (50%) of the Development Costs incurred with respect to the Conduct of such PAC Study, subject to the Indication Cap and Discovery Program Cap. |
(2) If a PAC Study is required by a Regulatory Authority in the Richter Territory but not as a condition to Regulatory Approval and by a Regulatory Authority in the AbbVie Territory but not as a condition to Regulatory Approval, then each Party shall bear fifty percent (50%) of the Development Costs incurred with respect to the Conduct of such PAC Study. |
(ii) Only in the AbbVie Territory. |
(1) If a PAC Study is required only by a Regulatory Authority in the AbbVie Territory and such PAC Study is required as a condition to Regulatory Approval, then each Party shall bear fifty percent (50%) of the Development Costs incurred with respect to the Conduct of such PAC Study, subject to the Indication Cap and Discovery Program Cap. |
(2) If a PAC Study is required only by a Regulatory Authority in the AbbVie Territory and such PAC is not a condition to Regulatory Approval, then AbbVie shall bear one hundred percent (100%) of the Development Costs incurred with respect to the Conduct of such PAC Study. |
(iii) Only in the Richter Territory. If a PAC Study is required only by a Regulatory Authority in the Richter Territory, then Richter shall bear one hundred percent (100%) of the Development Costs incurred with respect to the Conduct of such PAC Study (regardless of whether such PAC Study is required as a condition to Regulatory Approval). |
(d) Additional Indications. Each Party shall bear Development Costs incurred in connection with the Conduct of any Clinical Studies to support Regulatory Approval of an existing Licensed Product in a New Indication as follows: |
(i) If the Parties mutually agree to the Conduct of such Clinical Studies and amend the Clinical Development Plan to include such Clinical Study in accordance with Section 3.3.3(c), then the Development Costs incurred with respect thereto will be borne by the Parties as set forth in Section 3.9.3(a) and Section 3.9.3(b), as applicable; and |
(ii) If the Parties do not mutually agree to the Conduct of such Clinical Studies and amend the Clinical Development Plan to include such Clinical Study in accordance with Section 3.3.3(c) and AbbVie is the interested Party, then AbbVie shall initially bear one hundred percent (100%) of Development Costs incurred by AbbVie with respect to any such Clinical Study Conducted by AbbVie in the Territory. If (a) AbbVie obtains Regulatory Approval of such Licensed Product in such New Indication in any country or jurisdiction in the AbbVie Territory or (b) Richter wishes to use any Clinical Data from any such Clinical Studies Conducted solely by or on behalf of AbbVie in any regulatory filings in the Richter Territory as the basis for the grant of a new or expanded Regulatory Approval for such Licensed Compound or Licensed Product in the Richter Territory, then Richter shall reimburse AbbVie for the portion of the Development Costs that Richter would have borne under Section 3.9.3(a) and Section 3.9.3(b), as applicable, had such Clinical Studies been Conducted by agreement of the Parties in accordance with Section 3.3.3(c), plus a markup of twenty percent (20%). Richter's obligations to reimburse AbbVie's Development Costs under this Section 3.9.3(d) are subject to the Indication Cap and the Discovery Program Cap, provided that, solely for purposes of this Section 3.9.3(d), the Indication Cap will be deemed to be Ninety Million Dollars ($90,000,000) and the Discovery Program Cap will be deemed to be increased by Fifteen Million Dollars ($15,000,000) multiplied by the number of New Indications where Richter has to or elects to contribute to the Development Costs subsequently but to maximum of Two Hundred Seventy Million Dollars ($270,000,000). |
(iii) If the Parties do not mutually agree to the Conduct of such Clinical Studies and amend the Clinical Development Plan to include such Clinical Study in accordance with Section 3.3.3(c) and Richter is the interested Party, then if AbbVie consents to Richter Conducting such Clinical Studies in accordance with Section 3.3.3(c), then Richter shall initially bear one hundred percent (100%) of Development Costs incurred by Richter with respect to any such Clinical Study Conducted by Richter in the Territory. If AbbVie wishes to use any Clinical Data from any such Clinical Studies Conducted solely by or on behalf of Richter in any regulatory filings in the AbbVie Territory as the basis for the grant of a new or expanded Regulatory Approval for such Licensed Compound or Licensed Product in the AbbVie Territory, then AbbVie shall reimburse Richter for the portion of the Development Costs that AbbVie would have borne under Section 3.9.3(a) and Section 3.9.3(b), as applicable, had such Clinical Studies been Conducted by agreement of the Parties in accordance with Section 3.9.3(c), plus a markup of twenty percent (20%). |
3.9.4. FTE Costs. Each Party shall record and account for its FTE Costs and its out-of-pocket costs with respect to each Licensed Compound or Licensed Product to the extent that such costs are included in Development Costs that are, or may in the future, be shared under this Agreement, including costs for the Discovery Program Activities, IND-Enabling Activities and Clinical Development Activities, in each case, in a manner that allocates costs to the extent possible to a specific activity in the applicable Discovery Program Plan, IND-Enabling Studies Plan and Budget, or Clinical Development Plan. Out-of-pocket costs allocable to Development Costs, but otherwise included within FTE Costs, shall not be charged separately as Development Costs. Each Party shall calculate and maintain records of FTE Costs and its out-of-pocket costs incurred by it in the same manner as used for other products developed by such Party. |
3.9.5. Adjustment of FTE Rates. The FTE Rates applicable to activities undertaken by either Party are subject to adjustments effective on January 1 of each Calendar Year, with the first such annual adjustment to be made as of January 1, 2023, based on the applicable employment cost index published by the United States Department of Labor, Bureau of Labor Statistics for the third quarter of the preceding Calendar Year, or as otherwise agreed to by the Parties. |
3.9.6. Reports. During the Term, each Party shall report to the other Party in writing, within forty-five (45) days after the end of each Calendar Quarter, the Development Costs incurred by such Party during such Calendar Quarter (broken down by activity). Such report(s) shall specify in reasonable detail all amounts included in such Development Costs during such Calendar Quarter. Each report shall enable the receiving Party to compare the reported costs against each applicable Discovery Program Plan, IND-Enabling Studies Plan and Budget, and Clinical Development Plan, on both a quarterly basis and a cumulative basis for each activity covered therein. The Parties shall seek to resolve any questions related to such reports within thirty (30) days following receipt by each Party of the other Party's report. |
3.9.7. Payments. Unless otherwise specified in a Discovery Program Plan, IND-Enabling Studies Plan and Budget, or Clinical Development Plan, Development Costs initially shall be borne by the Party incurring the Development Cost and thereafter shall be subject to reimbursement by the other Party, if applicable, in accordance with Section 3.9.1, Section 3.9.2 or Section 3.9.3, and this Section 3.9.7. Within thirty (30) days after the end of each Calendar Quarter, the Party that has paid more than its share of Development Costs during such Calendar Quarter shall issue an invoice to the other Party for the amount of Development Costs owed by such other Party to achieve the appropriate allocation of Development Costs provided in Section 3.9.1, Section 3.9.2 or Section 3.9.3 and the other Party shall pay such invoiced amount within the later of sixty (60) days after the end of the applicable Calendar Quarter and thirty (30) days after receipt of the applicable invoice. |
3.10 Regulatory Matters. |
3.10.1. Regulatory Activities Controlled by AbbVie. |
(a) Subject to Section 3.10.3, as between the Parties, AbbVie shall have the sole right to prepare, obtain, and maintain (i) the Drug Approval Applications (including the setting of the overall regulatory strategy therefor), all other Regulatory Approvals and other submissions, and to conduct communications with the Regulatory Authorities, for Licensed Compounds or Licensed Products in the AbbVie Territory (which shall include filings of or with respect to INDs and other filings or communications with the Regulatory Authorities with respect to Clinical Development Activities) and (ii) any INDs for the Licensed Compounds and the Licensed Products required in the Richter Territory for the Clinical Development Activities and any other filings or communications with Regulatory Authorities in the Richter Territory with respect to Clinical Development Activities. |
(b) All Regulatory Documentation (including all Regulatory Approval and Product Labeling) relating to the Licensed Compounds or Licensed Products with respect to the AbbVie Territory or, to the extent controlled by AbbVie pursuant to Section 3.10.1(a), the Richter Territory, shall be owned by and shall be the sole property and held in the name of, AbbVie or its designated Affiliate, Sublicensee or designee. |
3.10.2. Regulatory Activities Controlled by Richter. |
(a) Subject to Section 3.10.3, as between the Parties, Richter shall have the sole right to prepare, obtain, and maintain the Drug Approval Applications (including the setting of the overall regulatory strategy therefor), all other Regulatory Approvals and other submissions, and to conduct communications with the Regulatory Authorities, for Licensed Compounds or Licensed Products in the Richter Territory (which shall include filings of or with respect to INDs and other filings or communications with the Regulatory Authorities with respect to Required Richter Territory Development Activities and Bioequivalence Studies conducted as part of the Richter Formulation Activities pursuant to Section 3.6.4) to the extent not controlled by AbbVie pursuant to Section 3.10.1(a), including for all activities set forth in a Richter Territory Development Plan. |
(b) All Regulatory Documentation (including all Regulatory Approval and Product Labeling) relating to the Licensed Compounds or Licensed Products with respect to the Richter Territory, to the extent controlled by Richter pursuant to Section 3.10.2(a), shall be owned by and shall be the sole property and held in the name of, Richter or its designated Affiliate, Sublicensee or designee. |
3.10.3. Cooperation Regarding Regulatory Matters in the Territory. Each Party shall support the other Party, as may be reasonably necessary, in obtaining all Regulatory Approvals for the Licensed Products in the other Party's Applicable Territory, and in the activities in support thereof, including providing necessary Regulatory Documentation or other documents and materials required by Applicable Law to obtain all Regulatory Approval, in each case in accordance with the terms and conditions of this Agreement and the applicable Clinical Development Plan. Each Party shall provide the other Party with reasonable access to interim drafts of material regulatory filings via access methods (such as secure databases) as agreed by the Parties, and such other Party shall provide any comments on such drafts of all regulatory filings or of proposed material actions within fifteen (15) Business Days, or such other longer period of time as mutually agreed to by the Parties, provided that the filing Party shall have no obligation to incorporate such comments into such regulatory filings. AbbVie shall be permitted, to the extent allowable by Applicable Law, to have up to three (3) employees attend meetings (whether in person or by teleconference) between Richter and Regulatory Authorities in the Richter Territory. Richter shall be permitted, to the extent allowable by Applicable Law, to have a reasonable number of its employees attend meetings (whether in person or by teleconference) between AbbVie and Regulatory Authorities (a) in the Richter Territory and (b) in the AbbVie Territory if AbbVie provides prior written consent. Each Party shall be given access to, and copies upon reasonable request of, all material correspondence and meeting minutes from any meeting (whether in person or by teleconference) between the other Party and Regulatory Authorities in such other Party's Applicable Territory at the cost and expense of the requesting Party. |
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