GARDP – Orchid, Cefiderocol Manufacturing Sublicense and Technology Transfer Agreement

Business model | Product supply

Summary of Approaches

What are the specific commitments made by the parties to supply and purchase the products?
- Orchid must enter a written Supply Agreement with each Customer. The terms of each agreement must be consistent with the Sublicense Agreement and must be reviewed and approved by GARDP prior to signature.
- Orchid will also enter into a Quality Agreement with each Customer setting out the Parties’ respective responsibilities for all quality and regulatory matters.
What actions must be taken by the supplier to ensure that it can fulfil the committed supply volume?
- Orchid must implement a manufacturing and business continuity plan to ensure the delivery of a sufficient or adequate supply to meet the needs of countries within the Territory. Orchid shall devote adequate facilities and equipment, order and maintain a sufficient buffer stock of materials, and manufacture and maintain a sufficient buffer stock of Licensed Compound.
- Orchid must make reasonable best efforts to fill all orders within 120 days. Orders must be filled on an equitable first come, first served basis.
What are the remedies for actual or potential supply failures?
- In event of a supply failure, the parties shall consult in good faith to remedy the situation. If requested by GARDP, the Parties will agree to a manufacturing action plan, which will be implemented in good faith by Orchid.

Annotations

This Manufacturing Sublicense and Technology Transfer Agreement (“Sublicense Agreement”) is between the Global Antibiotic Research and Development Partnership (“GARDP”), a Swiss nonprofit antibiotic R&D organization, and Orchid Pharma Ltd. (“Orchid”), an Indian public limited company that specializes in manufacturing antibiotics. The Sublicense Agreement is effective as of September 7, 2023. It follows a prior License and Technology Transfer Agreement (“License Agreement”) between GARDP and Shionogi, a public pharmaceutical company located in Japan, relating to the antibiotic drug cefiderocol (“Licensed Compound”).

The Sublicense Agreement governs a non-exclusive sublicense and transfer of Shionogi technology to Orchid including proprietary know-how such as manufacturing data, ingredient specifications, the manufacturing process, specifications, assays, quality control, and testing procedures (“Sublicensed Manufacturing Know-How”), all related to manufacturing the Licensed Compound. GARDP will facilitate the transfer of the Sublicensed Manufacturing Know-How and Orchid will manufacture the Licensed Compound and subsequent finished products containing cefiderocol as an active ingredient (“Licensed Products”).

Orchid is granted the right to manufacture the Licensed Compound and Licensed Products for sale only to organizations with commercialization authorization from Shionogi and GARDP (“Commercial Sublicensees”), and to GARDP (together “Customers”). The Licensed Products will be for use and distribution in the treatment of infections due to aerobic Gram-negative organisms (“Field”) in a list of high-, middle-, and low-income countries (“Territory”). GARDP may not grant any further manufacturing sublicenses for five years following the effective date of the Sublicense Agreement, provided that Orchid meets its obligations under the agreement. This exclusivity period will be extended for a further two years if demand for cefiderocol in the Territory does not exceed 1.5 million doses per year.

The parties must adhere to “Access and Stewardship Objectives” that balance affordable and sustainable access to medicines with preserving antimicrobial efficacy and good antimicrobial stewardship. To meet these Objectives, Orchid will: (i) use its best efforts to meet manufacturing objectives set out in a “Sublicense Access Plan”; and (ii) use its reasonable best efforts to manufacture sufficient and affordable quantities of the product to make timely supplies that meet the needs of patients in the Territory. Orchid will sell the Licensed Products at a price equal to the cost of goods plus a maximum agreed profit margin of 25%. Any subsequent reduction in cost of goods will be shared equitably between a reduction in the price and an increase in the Orchid’s margin. GARDP has open book audit rights related to Orchid’s cost of goods calculation.

Provision Language

Definitions

Supply Agreement means each agreement for the supply of Licensed Product for use in the Territory entered into by the Sublicensee with a Commercial Sublicensee or with GARDP, as applicable, for the supply of Licensed Product to such Customer.

5. MANUFACTURE AND SUPPLY

5.1 Manufacture and Supply Obligations

(a) The Sublicensee shall enter into a written Supply Agreement with each Customer for the supply of Licensed Product manufactured under this Sublicense Agreement. Each such Supply Agreement shall be consistent with all the terms and conditions of this Sublicense Agreement. The Sublicensee shall provide to GARDP a copy of each proposed Supply Agreement and of any amendments thereto for GARDP’s review, and shall not enter into any such agreement without GARDP’s prior written consent. The Sublicensee shall provide GARDP with a copy of each signed Supply Agreement and amendment thereto within thirty (30) days following their execution. In the event of any inconsistency between the obligations of this Sublicense Agreement and those set out any Supply Agreement, the terms of this Sublicense Agreement shall prevail for the purposes of this Sublicense Agreement. The Sublicensee shall also enter into a Quality Agreement with each Customer setting out the Parties’ respective responsibilities for all quality and regulatory matters, and shall share a copy thereof with GARDP. For the avoidance of doubt, the Sublicensee shall not transfer, supply or sell Licensed Compound to any Customer or other Third Party (other than Sublicensee Contractors that require such for the Manufacturing activities conducted by them for the account of the Sublicensee).

(b) The Sublicensee shall perform all its obligations under this Sublicense Agreement in compliance with all applicable laws and regulations and with all the obligations and specifications set out in this Sublicense Agreement and its Schedules, together with all applicable obligations set out in the relevant Supply Agreement.

(c) The Sublicensee will be solely responsible at its expense for making or having made Licensed Compound and Licensed Product, including all costs for procuring and qualifying equipment and materials, at the designated Facility(ies) in conformity with all applicable specifications and will hold all relevant authorizations and permits required in this respect. The Sublicensee shall in particular be responsible for obtaining and maintaining throughout the Term all Manufacturing Approvals for the Manufacture of Licensed Compound and Licensed Product at the Facility(ies) and all required certifications, approvals or licenses from national or local authorities for the Facility(ies) involved in the production thereof.

(d) The Sublicensee will use its reasonable best efforts to Manufacture sufficient quantities of the Licensed Compound and the Licensed Product to supply in a timely manner the requirements of all Commercial Sublicensees and GARDP for Licensed Product in the Territory. In furtherance of this objective, the Sublicensee shall in particular devote adequate facilities and equipment, shall order and maintain a sufficient buffer stock of materials, and shall Manufacture and maintain a sufficient buffer stock of Licensed Compound, as required to Manufacture and supply in a timely manner the quantities of Licensed Product forecast and ordered by Customers. The Sublicensee shall use its reasonable best efforts to supply all Customer orders for Licensed Product within one hundred and twenty (120) days from the order at the latest, unless otherwise agreed in the relevant Supply Agreement.

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5.3 Forecasts and Management of Supply

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(c) The Sublicensee shall allocate supply of Licensed Product among its Customers and if applicable itself as a Commercial Sublicense on an equitable first ordered first served basis.

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(e) Should the Sublicensee not have sufficient capacity to Manufacture and supply the Licensed Product requirements of all Customers and of the Sublicensee or should there be any recurrent delays in the deliveries of Licensed Product to one or more Customers or should there be any recurrent rejections of Licensed Product deliveries or other concerns raised as to the quality or conformity of Licensed Product deliveries, the Parties shall consult in good faith to discuss the situation, the causes of any such delays, incidents or concerns and possible actions to address the insufficient capacity or prevent future delays, incidents or concerns. If requested by GARDP, the Parties shall discuss and agree a manufacturing action plan to implement actions to remedy the situation (each a “Manufacturing Action Plan”), and the Sublicensee shall diligently and in good faith implement the Manufacturing Action Plan.

12. TERM AND TERMINATION

12.9 Business Continuity Plan. The Sublicensee shall diligently develop and implement a manufacturing and business continuity plan to ensure the continued supply of Licensed Product to its Customers. This plan shall be shared and discussed with GARDP.

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