Provision Language
5. MANUFACTURE AND SUPPLY
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5.3 Forecasts and Management of Supply
(a) GARDP and the Sublicensee shall consult with each other from time to time and in any case at least quarterly concerning estimated dates at which Commercial Sublicensees will file applications for and obtain regulatory approvals to Commercialize Licensed Product in various countries in the Territory and estimated requirements for Licensed Product in countries in which an application for a regulatory approval has been filed. The estimates exchanged in such consultations shall be indicative only, and neither Party shall have any liability in respect thereof.
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(d) The Sublicensee and GARDP shall discuss and agree on specific key performance indicators to assess and track the Sublicensee’s Manufacturing and delivery performance under this Sublicense Agreement. The Sublicensee shall report all such key performance indicators agreed by the Parties to GARDP on a quarterly basis in accordance with Section 9.1, which shall include at least the following: (a) the latest forecasts received from each Customer (and shall in such report provide a corresponding forecast for Licensed Product to be Manufactured for Commercialization by the Sublicensee in countries for which the Sublicensee has a Commercial Sublicense); (b) all indicative and firm orders received from each Customer and if applicable by the Sublicensee and corresponding contractual delivery dates; (c) all deliveries of Licensed Product made (whether to a Customer or to the Sublicensee for Commercialization in countries for which it has a Commercial Sublicense); (d) any delays in Licensed Product deliveries as compared with the contractual delivery dates; and (e) any rejections by Customers or by the Sublicensee of Licensed Product deliveries or other concerns raised by Customers or identified by the Sublicensee as to the conformity of Licensed Product deliveries with specifications or other Manufacturing obligations, and updates to any such rejections or concerns; in each case (a) through (e) occurring during the corresponding reporting period.
9. AUDITS AND REPORTS
9.1 Reports. The Sublicensee will send to GARDP, following the end of each calendar quarter, a report setting out all information required to be reported to GARDP pursuant to this Sublicense Agreement, including in particular the information set out in Schedule J hereto. The specific timeframes for reporting each category of information is specified in Schedule J. The Sublicensee and GARDP agree to confer on a quarterly basis regarding such reports the activities and information contained therein. GARDP agrees that information contained in quarterly and other such reports shall be treated as Confidential Information. The Sublicensee agrees that GARDP may share such information and reports with Shionogi and that GARDP and Shionogi may share all such information and reports with their Affiliates or with Third Parties for the purposes of pursuing the Access and Stewardship Objectives (subject to confidentiality and non-use obligations substantially similar to those set out in Section 10 hereof).
9.2 Records. The Sublicensee shall keep at its principal place of business true and accurate records of all the information underlying the reports made to GARDP pursuant to Section 9.1, including without limitation proper and comprehensive books of account of all costs used to calculate the cost of goods to Manufacture Licensed Product. Records must be maintained for at least ten (10) years, or such longer period as may be required by applicable laws or regulations.
9.3 Audits and Inspections
(a) The Sublicensee agrees at all reasonable times to permit Shionogi’s and/or GARDP’s auditor to access, inspect and review the accounts, books and records referred to in Section 9.2. Such examination shall be conducted at Shionogi’s or GARDP’s, as applicable, expense by an independent accountant, subject to execution of a customary confidentiality agreement with the Sublicensee. The accountant may take copies of or extracts from the accounts, books and records, subject to the confidentiality agreement entered into by the accountant. Such audits may not be conducted more than once each calendar year and shall be conducted with reasonable prior notice and during normal office hours. The Sublicensee agrees to give Shionogi’s and/or GARDP’s representatives reasonable assistance, access and facilities to enable them to verify such accounts, books and records and supply such other information as may be necessary or proper to enable the Sublicensee’s compliance with this Sublicense Agreement to be verified. If an audit conducted in accordance with this Section 9.3(a) identifies an overstatement by the Sublicensee of more than ten percent (10%) as compared with the actual cost of goods incurred in any consecutive period of four quarters, the costs of the audit are to be reimbursed to Shionogi and/or GARDP by the Sublicensee on demand. In any such case, the Sublicensee shall if applicable credit or reimburse to the relevant Commercial Sublicensees any excess price that may have been invoiced by the Sublicensee as compared with the maximum sales price defined in Section 5.2. Shionogi’s and GARDP’s rights under this Section 9.3(a) above apply during the Term and for four (4) years thereafter.
(b) The Sublicensee also agrees to permit appropriate representatives of Shionogi and/or GARDP to inspect, at their cost, the Sublicensee’s facilities and those of any Sublicensee Contractors involved in any Licensed Compound or Licensed Product Manufacturing activities (including any storage facilities) in order to verify the Sublicensee’s compliance with this Sublicense Agreement, including without limitation compliance with GMP and with the standards and requirements set out in Schedule K. At least ten (10) Business Days’ advance notice of any such inspection will be given and such inspection shall be conducted with reasonable prior notice, during normal office hours and in a manner to minimize disruption of manufacturing operations. The Sublicensee may require such representatives to sign a customary confidentiality agreement and may limit their access to facilities and documents that are reasonably necessary to verify that the Manufacture of Licensed Compound and Licensed Product are compliant with the Sublicense Agreement. The Sublicensee shall implement at its cost any required actions to remediate any noncompliance identified in any such inspections. The Sublicensee shall discuss in good faith and agree with GARDP (including with respect to timing) an action plan to remediate any such noncompliance, and the Sublicensee shall diligently and in good faith implement the action plan and provide GARDP a periodic progress report.
(c) The Sublicensee shall promptly inform GARDP of any SRA or WHO audits or findings, including any of such that relate to the Facility generally, that could have an adverse effect on the Sublicensee’s Manufacture of Licensed Compound and/or Licensed Product or on their availability.
(d) The Sublicensee shall share and discuss with GARDP its plans for the design, installation and operation of the Facility for the Manufacture of Licensed Product, and shall keep GARDP regularly informed of the implementation thereof.
SCHEDULE J. Information to be Included in Quarterly Sublicensee Reports to GARDP
I. Manufacturing Development and Regulatory Activities – 30 Days after End of Quarter
➢ Manufacturing development and Manufacturing Approval filing, obtaining, or maintaining activities conducted during the preceding quarter
➢ status / expected timing of the milestones set out in the Sublicense Access Plan
II. Commercial Sublicensee Contracting – 30 Days after End of Quarter
➢ Commercial Sublicensee contracting activities conducted during the preceding quarter
➢ status / expected timing of Supply Agreements
III. Manufacturing Activities – 30 Days after End of Quarter
➢ number of units of Licensed Compound and Licensed Product Manufactured
➢ quantities of Licensed Product sold per Customer and intended country of final sale, if known
in each case itemized by batch number, strength, presentation and formulation and applicable stock keeping unit
IV. Inventory Control – 75 Days after End of Quarter
➢ remaining inventory of Licensed Compound and Licensed Product at the end of the calendar quarter
➢ raw materials used and inventory at the end of the calendar quarter
in each case itemized by batch number, strength, presentation and formulation and applicable stock keeping unit
V. Forecasting and Order / Delivery Management– 30 Days after End of Quarter
➢ Key Performance Indicators agreed by the Parties pursuant to Section 5.3(d)
➢ Updated forecasts received from each Customer during the calendar quarter and updated forecast of Licensed Product to be Manufactured for Commercialization by the Sublicensee in countries for which the Sublicensee has a Commercial Sublicense
➢ all indicative and firm orders received from each Customer and if applicable by the Sublicensee and corresponding contractual delivery dates
➢ all deliveries of Licensed Product made (whether to a Customer or to the Sublicensee for Commercialization in countries for which it has a Commercial Sublicense), and for each delivery the actual lead time between firm order and delivery
➢ any delays in Licensed Product deliveries as compared with the contractual delivery dates
➢ any rejections by Customers or by the Sublicensee of Licensed Product deliveries or other concerns raised by Customers or identified by the Sublicensee as to the conformity of Licensed Product deliveries with specifications or other Manufacturing obligations, and updates to any such rejections or concerns
VI. Cost of Goods– 75 Days after End of Quarter
➢ Itemized list and calculation of Cost of Goods incurred during the preceding quarter
➢ quantities of Licensed Product delivered and corresponding amounts invoiced during the preceding quarter, itemized by Customer and intended country of final sale
VI. Business Continuity– 30 Days after End of Quarter
➢ update on status of business continuity plan contemplated by Section 12.9 and actions taken in implementation of the business continuity plan