Master Alliance Provisions Guide (MAPGuide)

Population Council – TherapeuticsMD, Nestorone Contraceptive Ring, License Agreement

  • Business model | Payment Structures

Definitions

Generic Equivalent” means, with respect to the Licensed Product which has received Regulatory Approval in the United States of America, a generic version of the Licensed Product which has received Regulatory Approval from the FDA (x) under an abbreviated NDA which refers to the Licensed Product as the Reference Listed Drug (as defined in 21 C.F.R. 314.3(b)), (y) under an NDA described in Section 505(b)(2) of the Act as to which information necessary for approval is contained in the NDA filed as part of the Program for the Licensed Product but as to which the applicant in the NDA for such potential Generic Equivalent does not have a right of reference, or (z) by any means by which such generic version can obtain Regulatory Approval based, in part, on information contained in the NDA filed for the Licensed Product but as to which the applicant in the application for Regulatory Approval for such potential Generic Equivalent does not have a right of reference.

Net Sales” means the amount of gross invoiced sales of the Licensed Product in the Territory for a specified period less the following amounts actually and reasonably incurred by LICENSEE, its sublicensees or any of their respective Affiliates selling such Licensed Product: (a) customer directed commissions and quantity, trade and cash discounts actually allowed or given; (b) discounts, replacements, credits or refunds actually allowed for the return of rejected, outdated, damaged or returnedLicensed Product; (c) rebates, chargebacks and price adjustments actually allowed or given; (d) sales or similar taxes (including duties or other governmental charges or assessments) levied, absorbed or otherwise imposed on the sale of Licensed Product; and (e) charges for freight, handling, postage, transportation, insurance and other shipping charges; (f) a reasonable allowance for bad debts to the extent actually written off and not to exceed 5% of such gross invoiced sales during the applicable period; (g) provided, however, that: (h) sales or transfers of Licensed Product between or among LICENSEE, any permitted sublicensee or any Affiliate of LICENSEE will be excluded from Net Sales calculations for all purposes; (i) Licensed Product that is made, sold or used in connection with any pre-clinical or clinical trials, or for any testing, quality control, evaluation or other development purposes, or distributed as samples, will be excluded from Net Sales calculations for all purposes; (j) LICENSEE will not, and will cause its Affiliates and permitted sublicensees to not, apply any discount to the price of theLicensed Product for bundled sales of the Licensed Product with any other product Commercialized by LICENSEE its Affiliates and permitted sublicensees; and (k) amounts relevant to the determination of Net Sales, and the timing of sales, will be determined from the books and records of LICENSEE (or, as applicable, any permitted sublicensee or any Affiliate of LICENSEE) which will be maintained in accordance with generally accepted accounting principles (GAAP) in the United States.

III. CONSIDERATION

As partial consideration for the rights and licenses granted to LICENSEE in this Agreement, LICENSEE will pay to Council the following amounts by wire transfer in immediately available funds to an account designated by Council in the United States.

3.1 Milestone Payments. In addition to (and not in lieu of) the royalty payments due under this Agreement, LICENSEE will pay to Council each of the following one-time milestone non-refundable, non-creditable and no-recourse payments (each a “Milestone Payment”) no later than thirty (30) days following the occurrence of each of the following events:

3.1.1 upon the first Regulatory Approval by the FDA of the Licensed Product, twenty million United States Dollars (US $20,000,000) provided that LICENSEE has not terminated the Agreement in accordance with, and within the applicable time period specified in, Section 4.2.2(c), and further provided that, if LICENSEE has made the five million United States Dollars (US $5,000,000) payment to Council set forth in Section 4.2.2(c)iv, then such Milestone Payment shall be reduced to fifteen million United States Dollars (US $15,000,000);

3.1.2 upon the First Commercial Batch Release of a Licensed Product by LICENSEE, a Milestone Payment of twenty million United States Dollars (US $20,000,000);

3.1.3 upon first achieving two-hundred million United States Dollars (US $200,000,000) in cumulative Net Sales in the aggregate for all Licensed Product sold by LICENSEE, its sublicensees and their respective Affiliates selling the Licensed Product in the Territory, a Milestone Payment of forty million United States Dollars (US $40,000,000); and

3.1.4 upon first achieving four-hundred million United States Dollars (US $400,000,000) in cumulative Net Sales in the aggregate for all Licensed Product sold by LICENSEE, its sublicensees and their respective Affiliates selling the Licensed Product in the Territory, a Milestone Payment of forty million United States Dollars (US $40,000,000).

3.1.5 upon first achieving one billion United States Dollars (US $1,000,000,000) in cumulative Net Sales in the aggregate for all Licensed Product sold by LICENSEE, its sublicensees and their respective Affiliates selling the Licensed Product in the Territory, a Milestone Payment of forty million United States Dollars (US $40,000,000).

IV. JOINT PRODUCT COMMITTEE, PRODUCT DEVELOPMENT, CLINICAL TRIALS AND REGULATORY APPROVALS

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4.2 Licensed Product Development

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4.2.4 Except as provided in Sections 4.2.1 and 4.2.2, as between the Parties, LICENSEE will be responsible for all development costs with respect to the Licensed Product incurred after the Effective Date by or on behalf of LICENSEE, provided that any costs incurred by Council for development activities under this Agreement shall only be reimbursable by LICENSEE to the extent agreed to by LICENSEE in advance in writing.

VIII. INFRINGEMENT OF THIRD PARTY RIGHTS

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8.2 Payments to Third Parties. If a Third Party has or receives a patent in the United States that covers the development, manufacture, sale, importation, or use of the Licensed Product as the License Product was manufactured and composed as of the Effective Date, and the LICENSEE reasonably determines, after reasonable consultation with the Council and reasonable consideration of any arguments with respect thereto raised by the Council, that LICENSEE is required to obtain a license to such patent as to such Licensed Product for a royalty or other payment to such Third Party (including that any Licensed Product at issue cannot be reasonably manufactured differently so as to avoid the requirement), then LICENSEE may enter into such a license agreement and will pay all costs and expenses associated therewith, provided that LICENSEE will be entitled to deduct from royalties owed to [Council] hereunder an amount not to exceed [***] of the royalties actually paid to such Third Party up to a maximum deduction of [***] of the royalties otherwise owed by LICENSEE to Council in the aggregate for all such royalties for which LICENSEE is entitled to make such deduction. To the extent Council has, prior to the Effective Date, entered into any agreement with any Third Party for rights under such Third Party’s intellectual property, Council will be solely responsible for payment of any amounts owed under such agreement to such Third Party as a result of sales of Licensed Product pursuant to this Agreement.