Master Alliance Provisions Guide (MAPGuide)

Biological E – Dynavax Technologies, COVID-19 Vaccine Adjuvant Supply Agreement

  • Business model | Payment Structures
  • Equitable Access | Affordable pricing

Definitions

Net Salesmeans, in any accounting period, the gross amounts invoiced by Customer, its affiliates and their respective Licensees (each, a “Selling Party”) for sales of Customer Product(s) to third parties (other than Selling Parties), but excluding sales of Customer Product(s) under any COVAX Supply Agreement or GAVI Customer Agreement, less the following, to the extent actually granted, allowed, incurred or paid by the Selling Party and specifically attributable to such sales of Customer Product(s): 

(l) normal and customary trade discounts, including trade, cash and quantity discounts or trade rebates,credits or refunds, or retroactive price reductions;
(m) credits or allowances additionally granted upon returns, rejections or recalls, allowances for uncollectible amounts or bad debts on previously sold Customer Product(s), provided that Customers shall use commercially reasonable efforts to collect such uncollectible amounts and any such amounts shall be included in Net Sales if and at such time as subsequently received;
(n) rebates, chargebacks, credits and discounts (or the equivalent thereof) accrued and actually paid, credited or granted to any third party including governmental agency (or agent or branch thereof) or to any third party payor, administrator or contractee, including managed healthcare organizations, pharmacy benefit managers (or equivalent thereof) or their agencies, purchasers, reimbursers, or trade customers;
(o) charges for tertiary packaging, outbound freight, insurance, transportation, postage and handling; and
(p) tariffs, taxes, excises, customs duties and other governmental charges (including any tax such as a value added or similar tax, GST or government charge, except to the extent reimbursed, but excluding income tax) levied on or measured by the production, sale, transportation, delivery or use of Customer Product(s) and actually paid, as adjusted for rebates and refunds.

All aforementioned deductions shall only be allowable to the extent they are (i) calculated in a manner consistent with the Selling Party’s customary practice for pharmaceutical products and, in any event, in accordance with U.S. Generally Accepted Accounting Principles or International Financial ReportingStandards, consistently applied by such Selling Party, and (ii) reasonably allocable to Customer Product, apportioned on a good faith, fair and equitable basis to Customer Product. No particular amount identified above shall be deducted more than once in calculating Net Sales (i.e., no “double counting” of deductions). 

For clarification, sale of Customer Product by a Selling Party to another Selling Party for resale by such other Selling Party to a third party (other than a Selling Party) shall not be deemed a sale for purposes of this definition of “Net Sales”, provided that the subsequent resale to such third party is included in the computation of Net Sales. In the event of any sale of Customer Product for any consideration other than exclusively monetary consideration on bona fide arm’s-length terms (including any sale of Customer Product by a Selling Party to another Selling Party for end use by such other Selling Party), then for purposes of calculating Net Sales under these Conditions, such Customer Product shall be deemed to have been sold exclusively for cash at the weighted (by sales volume) average sale price of such Customer Product in bona fide arm’s-length transactions (when sold alone, and not with other products) in the applicable country in which such sales occurred during the applicable accounting period. Customer Product(s) provided to third parties without charge in connection with research and development, clinical trials, compassionate use, humanitarian and charitable donations, or indigent programs shall be excluded from the computation of Net Sales.

Net Sales Per Unit” means, in any accounting period, the amount determined by dividing (x) total Net Salesof Customer Product(s) in such period by (y) Units Sold in such period. 

Unit Threshold Price” means [***] per Unit of Customer Product.

6. Prices, Royalties and Payments

6.1 Prices. The prices for the Dynavax Adjuvant shall be as set forth in Annex A, subject to Section 6.3.

6.2 Invoicing and Payment

(a) In respect of the Dynavax Adjuvant requested and supplied in the Order(s) for the [***] of the Dynavax Adjuvant referred to in row 1 of the table set forth in Annex A of the Supply Agreement as “CEPI allocation”, Dynavax shall invoice the Customer one hundred percent (100%) of the aggregate price of the Dynavax Adjuvant covered by such Order(s) upon delivery of the Dynavax Adjuvant toCustomer. Customer shall pay the amounts in such invoice(s) to Dynavax within fifteen (15) days of receiving the corresponding invoice(s) from Dynavax.

(b) In respect of the Dynavax Adjuvant requested in any Order(s) hereunder beyond the [***] of the Dynavax Adjuvant referred to in Section 6.2(a), Dynavax shall invoice the Customer [***] percent ([***]%) of the aggregate price of the Dynavax Adjuvant covered by an Order upon acceptance of such Order (which, except as otherwise provided in Annex A of the Supply Agreement or agreed toby the Parties in writing, shall be placed six (6) months in advance of delivery date in such Order)from Customer. Customer shall pay the amounts in such invoice(s) to Dynavax within fifteen (15) days of receiving the corresponding invoice(s) from Dynavax. For the avoidance of doubt, Dynavax Will not be obligated to submit to the Dynavax CMO an order for Dynavax Adjuvant ordered by Customer for delivery in 2022 prior to Dynavax’s receipt from Customer of payment of the initial [***] percent ([***]%) of the aggregate price of such Dynavax Adjuvant invoiced under this Section 6.2(b). 

(c) In respect of the Dynavax Adjuvant requested in any Order(s) hereunder referred to in the preceding paragraph of this Section 6.2(b), upon Customer’s receipt of the Dynavax Adjuvant covered by anOrder, Dynavax shall issue an invoice to Customer for the remaining [***] percent ([***]%) of the aggregate price of such Dynavax Adjuvant which shall be payable by Customer within fifteen (15) days of receipt of the invoice by Customer.

(d) The price of the Dynavax Adjuvant in each invoice delivered under Section 6.2(a) or Section6.2(b) shall be based on the LMIC Price only. Each invoice shall include such supporting information required by the Customer to verify the accuracy of the invoice, including but not limited to the relevant purchase order number. The Customer shall pay the amounts invoiced under Sections 6.2(a) and 6.2(b) as soon as practicable after, and in any event within fifteen (15) days of, the date of receipt of the invoice to a bank account designated in writing by Dynavax.

6.3 Trueing up. For purposes of this Section 6.3, a Unit of Customer Product will be deemed to have been “Disposed” of by or on behalf of Customer (including, for purposes of this Section 6.3, by Customer, Customer’s affiliates and their Licensees) in a particular country (i.e., an LMIC, UMIC or HIC, as applicable) if it is actually sold by or on behalf of Customer for delivery or distribution in such country; provided, however, that a Unit of Customer Product will be deemed to have been “Disposed” of by or on behalf of Customer (including, for purposes of this Section 6.3, by Customer, Customer’s affiliates and their Licensees) (i) at the [***] UMIC Price [***] if it is actually sold by or on behalf of Customer for a private market in an LMIC or (ii) at the [***] HIC Price [***] if it is actually sold by or on behalf of Customer for a private market in a UMIC. Within twenty (20) Business Days of the end of each Quarter in which any Customer Product containing Dynavax Adjuvant supplied hereunder is Disposed of by or on behalf of Customer anywhere in the world, the Parties Shall undertake a ‘trueing up’ exercise in order to establish whether the Customer has Disposed of any Doses for which Customer paid the [***] LMIC Price [***] at prices that are deemed to exceed the [***] LMIC Price [***].For clarity, this Section 6.3 assumes that [***]. In the event that [***]. For purposes of performing such trueing up exercise, within ten (10) Business Days after the end of each Quarter, the Customer shall report to Dynavax: (i) the total number of Doses of Dynavax Adjuvant contained in all Units of Customer Product(s) Disposed of by or on behalf of Customer in LMICs (excluding private market in LMICs) during such Quarter; (ii) the total number of Doses of Dynavax Adjuvant contained in all Units of Customer Product(s) Disposed of by or on behalf of Customer (a) in UMICs (excluding private markets in UMICs) and (b) for private markets in LMICs during such Quarter; and (iii) the total number of Doses of Dynavax Adjuvant contained in all Units of Customer Product(s) Disposed of by or on behalf of Customer(a) in HICs and (b) for private markets in UMICs, in each case, during such Quarter. If the total number of Doses of Dynavax Adjuvant invoiced by Dynavax to Customer at the LMIC Price in such Quarter exceeds the total number of Doses of Dynavax Adjuvant contained in all Units of Customer Product(s) Disposed of by or on behalf of Customer in LMICs (excluding private markets in LMICs) during such Quarter, then Customer shall pay to Dynavax an additional amount (the “Additional Amount”) calculated in USD (United States dollars) according to the following formula: [(UMIC Price – LMIC Price) MULTIPLIED BY (W –X – Z))] PLUS [(HIC Price – LMIC Price) MULTIPLIED BY (W – X – Y)]; where:

“W” equals the total number of Doses of Dynavax Adjuvant invoiced by Dynavax to Customer at the LMIC Price in such Quarter;

“X” equals the total number of Doses of Dynavax Adjuvant contained in all Units of CustomerProduct(s) Disposed of by or on behalf of Customer in LMICs (excluding private markets in LMICs) in such Quarter;

“Y” equals the sum of (a) the total number of Doses of Dynavax Adjuvant contained in all Units of Customer Product(s) Disposed of by or on behalf of Customer in UMICs (excluding private market in UMICs), and (b) the total number of Doses of Dynavax Adjuvant contained in all Units of Customer Product(s) Disposed of by or on behalf of Customer in private markets in LMICs; and

“Z” equals the sum of (a) the total number of Doses of Dynavax Adjuvant contained in all Units of Customer Product(s) Disposed of by or on behalf of Customer in HICs, and (b) the total number of Doses of Dynavax Adjuvant contained in all Units of Customer Product(s) Disposed of by or on behalf of Customer in private markets in UMICs.

The Customer shall provide to Dynavax promptly upon request all such additional information as Dynavax may reasonably request in order to determine the Additional Amount. The Additional Amount shall be due and payable within thirty (30) days of the date of receipt by Customer of an invoice from Dynavax for theAdditional Amount.

6.4 Royalties. For any Quarter in which Net Sales Per Unit of Customer Product(s) (other than Customer Product(s) sold under any COVAX Supply Agreement or GAVI Customer Agreement) exceed the Unit Threshold Price, Customer shall pay to Dynavax a royalty equal to [***]% of the amount determined by multiplying (x) Adjusted Net Sales Per Unit in such Quarter, by (y) Units Sold in such Quarter. For clarity, no royalties shall be payable under this Section 6.4 (a) for any portion of Net Sales Per Unit of CustomerProduct(s) that does not exceed the Unit Threshold Price, or (b) on any sales of Customer Product(s) under any COVAX Supply Agreement or GAVI Customer Agreement.

[…]

6.9 Audits

(a) Customer shall keep, and shall cause its affiliates and Licensees to keep, complete and accurate records pertaining to the sale of Customer Product(s) in sufficient detail to permit Dynavax to confirm(i) the country in which each Unit of Customer Product(s) is Disposed of (if sales are made to a specific country); and (ii) the accuracy of all royalties paid hereunder; in each case, for at least three (3) full calendar years following the end of the calendar year to which they pertain. Dynavax shall have the right, once annually, to cause an independent, certified public accountant of international standing and reasonably acceptable to Customer to audit such records to confirm Additional Amounts, Net Sales, Units Sold, Net Sales Per Unit, Adjusted Net Sales per Unit and royalties for a period covering not more than the preceding three (3) full calendar years. No calendar year shall be subject to audit under this section more than once. Such audits may be exercised during normal business hours upon ten (10) days prior written notice to Customer. The auditor will execute a reasonable written confidentiality agreement with Customer and will disclose to Dynavax only such information as is reasonably necessary to provide Dynavax with information regarding any discrepancies between (i) amounts reported and actually paid, and (ii) amounts payable under the Supply Agreement. The auditor will send a copy of the report to Customer at the same time it is sent to Dynavax. The report sent to both Parties will include the methodology and calculations used to determine the results. If such audit reveals that Customer has failed to accurately report information pursuant to Section 6.3 or Section 6.5 or to make any Additional Amount or royalty payment (or portion thereof) when due under the Supply Agreement, then Customer, within thirty (30) days after receipt of the final audit report, shall pay to Dynavax any underpaid amounts due under the SupplyAgreement, together with interest on such underpaid or late amounts calculated in accordance with Section 6.6. Dynavax shall bear the full cost of such audit unless such audit discloses an underpayment by Customer of more than 5% of the amount due for any calendar year under the Supply Agreement, in which case Customer shall bear the full cost of such audit. If such audit discloses an overpayment by Customer, then Dynavax, within thirty (30) days after receipt of the final audit report, shall pay to Customer any overpaid amounts under the Supply Agreement. […]

Annex A: Scope and Pricing Schedule

Adjuvant Price per Dose

LMIC Price. For Dynavax Adjuvant in Customer Product(s) sold in countries supported by the Advance Market Commitment of the COVAX Facility as listed at the following website: https://www.gavi.org/news/media-room/92-low-middle-income-economies-eligible-access-covid 19-vaccines-gavi-covax-amc [external link] (“LMICs”); but excluding Dynavax Adjuvant in Customer Product(s) sold in private markets within LMICs: 

  • USD [***] per Dose [***]; and 
  • USD [***] per Dose [***]; 

in each case, the LMIC Pricefor the applicable Dose. 

UMIC Price. For Dynavax Adjuvant in Customer Product(s) sold in countries listed at the following website (and as updated from time to time) as “upper middle income” countries: https://data.worldbank.org/income-level/upper-middle-income [external link] (“UMICs”) or in private markets within LMICs; but excluding Dynavax Adjuvant in Customer Product(s) sold in private markets within UMICs: 

  • USD [***] per Dose [***]; and 
  • USD [***] per Dose [***]; 

in each case, the UMIC Pricefor the applicable Dose. 

HIC Price. For Dynavax Adjuvant in Customer Product(s) sold in countries that are neither LMICs nor UMICs (“HICs”) or in private markets within UMICs: 

  • USD [***] per Dose [***]; and 
  • USD [***] per Dose [***]; 

in each case, the HIC Pricefor the applicable Dose. 

Dynavax shall [***] quantity of Dynavax Adjuvant [***] in each of the categories listed above. In the event Dynavax [***] the Dynavax Adjuvant [***] quantity of Dynavax Adjuvant [***], then Dynavax shall [***]. For clarity, the foregoing [***] in case Dynavax [***], and shall [***] quantity ofDynavax Adjuvant [***]. 

For avoidance of doubt, if any country categorized as an LMIC also qualifies as a UMIC as defined above, then, the LMIC Price shall apply for the Price per Dose in such an event. 

Royalty. As per Section 6.4 of Annex B of the Supply Agreement, a royalty of [***]% will be payable to Dynavax on any Net Sale of Customer Product(s) under a Bilateral Agreement exceeding a Net Sale Per Unit of $[***]. For clarity, no royalty will be payable with respect to Customer Product(s) sold under any COVAX Supply Agreement or GAVI Customer Agreement.