Exhibit 10.1
Execution Copy
AMENDMENT N° 1 TO THE SECOND AMENDED AND RESTATED
LICENSE AND SUPPLY AGREEMENT
THIS AMENDMENT N° 1 TO THE SECOND AMENDED AND RESTATED LICENSE AND SUPPLY AGREEMENT
(the “Amendment”) effective as of April 4, 2013 (the “Effective Date”), is made and entered into by and between Columbia Laboratories (Bermuda) Limited, a corporation organized and existing under the laws of Bermuda (“Licensor”) and Ares Trading S.A., a corporation organized and existing under the laws of Switzerland (“Licensee”). Licensor and Licensee may be referred to herein as a “Party” or, collectively, as “Parties.”
RECITALS:
WHEREAS
, the Parties entered into a Second Amended and Restated License and Supply Agreement on May 14, 2010, effective as of May 19, 2010 (the “Agreement”), amending and restating the License and Supply Agreement entered into between the Parties on May 20, 1999, as such agreement was amended and restated as of June 4, 2002, and further amended as of December 21, 2006;
WHEREAS
, the Parties wish to enter into this Amendment;
WHEREAS
, capitalized terms used and not otherwise defined in this Amendment are used as defined in the Agreement.
NOW, THEREFORE
, in consideration of the various promises and undertakings set forth herein, the Parties agree to amend the Agreement as follows:
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1.
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The definition of “Base Price” as set forth in Section 1(b) of the Agreement shall be amended to provide that Base Price shall mean Direct Cost plus 20%,
subject to
any further adjustments pursuant to Section 5(a) to reflect the impact of Cost Initiatives.
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2.
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Section 5(a) of the Agreement shall be amended by inserting the following paragraph at the end of such section:
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“The Parties agree to undertake commercially reasonable efforts to identify and implement manufacturing efficiencies and cost reduction opportunities to contain or reduce Direct Cost (each a “Cost Initiative”). The Parties will mutually agree a protocol and budget for each Party's out-of-pocket costs to accomplish a Cost Initiative. In order to benefit and incentivize Licensor, Licensee agrees that following implementation of a Cost Initiative, the Licensor shall be “kept whole” with respect to Licensor's margin (i.e. the difference between the Base Price and Direct Cost) as calculated as if no impact from the Cost Initiative had been realized (the “Make Whole Margin”). The difference between (x) Direct Cost, as calculated as if no impact from the Cost Initiative had been realized; and (y) Direct Cost, as calculated with the impact of the Cost Initiative (the “Cost Initiative Savings”), will initially be credited to the Parties on a pro rata basis according to each Party's out-of-pocket costs for the Cost Initiative until such out-of-pocket cost have been offset. Subsequently, Licensor shall receive [***] percent ([***]%) of the Cost Initiative Savings. The new Base Price, as adjusted for a Cost Initiative, shall equal (a) the Direct Cost reflecting the benefit of the Cost Initiative; plus (b) the Make Whole Margin; plus (c) Licensor's share of the Cost Initiative Savings. An illustrative example of such adjustment is set forth in Exhibit 1 of this Amendment.”
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3.
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Effective January 1, 2014, Sections 4(i) and (q) and Section 5(a) of the Agreement are amended to replace each reference in such Sections to “[***] percent ([***]%) of Net Sales” with “[***] percent ([***]%) of Net Sales.” Effective January 1, 2015, this rate will further decrease to “[***] percent ([***]%) of Net Sales.”.
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4.
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Effective January 1, 2014, Section 5(b) of the Agreement is amended in its entirety to read as follows: An illustrative example of calculation of the quarterly transfer price pertinent to this section is set forth in Exhibit 2 of this Amendment
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(b )The following quantity discounts will be applied to purchases in each calendar year of the Product by Licensee, its Affiliates, or sublicensees:
[***] A CONFIDENTIAL PORTION OF THE MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.
(i) For the portion of purchases in a calendar year greater than [***] ([***]) Units and less than or equal to [***] ([***]) Units [***] percent ([***]%) of Net Sales or the Base Price, whichever is greater.
(ii) For the portion of purchases in a calendar year greater than [***] ([***]) Units and less than or equal to [***] ([***]) Units percent ([***]%) of Net Sales or the Base Price, whichever is greater.
(iii) For the portion of purchases in a calendar year greater than [***] ([***]) Units [***] percent ([***]%) of Net Sales or the Base Price, whichever is greater.
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5.
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Section 13 of the Agreement is amended to replace the date “May 19, 2015” with the date “May 19, 2020.”
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6.
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Effectiveness
. This Amendment shall enter into effect as of the Effective Date, provided however that from the Effective Date until December 31, 2013, the provisions of Section 4(i), Section 4(q), Section 5(a) and Section 5 (b) of the Agreement shall remain in full force and effect as originally set forth in the Agreement. The amendments and modifications to Section 4(i), Section 4(q), Section 5(a) and Section 5 (b) of the Agreement set forth in this Amendment shall only take effect commencing on January 1, 2014.
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7.
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Counterparts; Fax; Signatures
. This Amendment may be executed in any two (2) counterparts, including by facsimile, each of which, when executed, shall be deemed to be an original and both of which together shall constitute the one and same document.
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8.
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Full Force and Effect
. Except as set forth in this Amendment, the License and Supply Agreement shall remain in full force and effect.
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[Signature page to follow]
[***] A CONFIDENTIAL PORTION OF THE MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.
IN WITNESS WHEREOF
, the Parties have caused this Amendment to be executed and delivered by their respective duly authorized officers.
ARES TRADING S.A.
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By:
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/s/ James Singleton
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Name:
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James Singleton
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Title:
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Associate General Counsel
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By:
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/s/ Laetitia Pictet
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Name:
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Laetitia Pictet
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Title:
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Senior Corporate Counsel
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COLUMBIA LABORATORIES (Bermuda), Ltd.
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/s/ Frank C. Condella, Jr.
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Name:
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Frank C. Condella, Jr
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Title:
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President
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SIGNATURE PAGE TO AMENDMENT NO. 1
[***] A CONFIDENTIAL PORTION OF THE MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.
Exhibit 1
[***]
[***] A CONFIDENTIAL PORTION OF THE MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.
Exhibit 2
[***]
[***] A CONFIDENTIAL PORTION OF THE MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.
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Contact:
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Jonathan Lloyd Jones
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Seth Lewis
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Vice President & CFO
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Senior Vice President
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Columbia Laboratories, Inc.
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The Trout Group LLC
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(973) 486-8818
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(646) 378-2952
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FOR IMMEDIATE RELEASE
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Columbia Laboratories Extends Agreement with Merck Serono for CRINONE Ex-U.S. into 2020
LIVINGSTON, NJ - April 9, 2013 - Columbia Laboratories, Inc. (Nasdaq: CBRX) has amended its license and supply agreement with Merck Serono, a division of Merck KGaA (XETRA: MRK.DE), Darmstadt, Germany, for CRINONE
®
(progesterone gel) through May 2020, representing an extension of five years beyond the current term, which was due to expire in May 2015. CRINONE is currently approved in over 60 countries, including a number of emerging markets such as China, where it was approved at the end of 2008. Merck Serono has marketing rights worldwide except the United States, where CRINONE is marketed by Actavis, Inc. (NYSE:ACT).
“We are pleased to continue our long-standing partnership with Merck Serono for CRINONE,” said Frank Condella, Columbia's president and chief executive officer. “The early renewal of this agreement through 2020 provides long-term stability for Columbia and surety of supply for Merck Serono as they look to continue their investment in CRINONE globally. We look forward to continued positive cash flow from our core business as Merck Serono builds further sales momentum for CRINONE.”
Under the terms of the amended license and supply agreement, Columbia will remain the sole supplier of CRINONE to Merck Serono and will continue to sell CRINONE to Merck Serono on a country by country basis. From 2014 through 2020, the sourcing conditions for Merck Serono will include incremental volume discounts
to incentivize Merck Serono to continue developing existing markets and investing in entry into new markets.
About Columbia Laboratories
Columbia Laboratories, Inc. is a publicly traded specialty pharmaceutical company with a successful history of developing proprietary, vaginally administered products for women's health indications. The Company receives sales and royalty revenues from CRINONE
®
(progesterone gel), which is marketed by Actavis, Inc. in the United States and by Merck Serono S.A. in over 60 foreign countries.
Columbia's press releases and other company information are available online at www.columbialabs.com.
The use of the name “Merck” and “Merck Serono” in this press release refers to Merck KGaA of Darmstadt, Germany. In North America, Merck KGaA operates under the umbrella brand EMD.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: This communication contains forward-looking statements, which statements are indicated by the words “may,” “will,” “plans,” “believes,” “expects,” “anticipates,” “potential,” “should,” and similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from those projected in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. Factors that might cause future results to differ include, but are not limited to, the following: Actavis' and Merck Serono's success in marketing CRINONE for use in infertility in their respective markets; successful development by Actavis of a next-generation vaginal progesterone product for the U.S. market; difficulties or delays in manufacturing; the availability and pricing of third-party sourced products and materials; successful compliance with FDA and
other governmental regulations applicable to manufacturing facilities, products and/or businesses; changes in the laws and regulations; the ability to obtain and enforce patents and other intellectual property rights; the impact of patent expiration; the impact of competitive products and pricing; the cost of evaluating potential strategic transactions; the cost of the Company's pending relocation to Boston; Columbia's ability to timely regain compliance with the Nasdaq minimum closing bid price rule; the strength of the United States dollar relative to international currencies, particularly the euro; competitive economic and regulatory factors in the pharmaceutical and healthcare industry; general economic conditions; and other risks and uncertainties that may be detailed, from time-to-time, in Columbia's reports filed with the SEC, including, but not limited to, its Quarterly Report on Form 10-K for the period ended December 31, 2012. Columbia does not undertake any responsibility to revise or update any forward-looking statements contained herein, except as expressly required by law.
CRINONE
®
is a registered trademark of Actavis, Inc. in the U.S.