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Item 1.01.
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Entry into a Material Definitive Agreement.
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On December 20, 2017, Keryx Biopharmaceuticals, Inc.
(“Keryx”) and Siegfried Evionnaz SA, together with its affiliates and subsidiaries (collectively, “Siegfried”), entered into a Master Manufacturing Services and Supply Agreement (the “Agreement”) for Siegfried to
perform, directly or through its local affiliate, certain manufacturing expansion services at its manufacturing facilities in Saint Vulbas, France and Pennsville, New Jersey (the “Manufacturing Facilities”) as well as to manufacture and
supply
GMP-grade
quantities of the proprietary active pharmaceutical ingredient (the “Product”) for Keryx’s drug product, Auryxia.
Siegfried is responsible for procuring, commissioning and validating certain equipment at the Manufacturing Facilities in order to expand its operational
capacity (the “Expansion Services”), and Keryx will make a fixed lump sum payment (the “Service Payment”) to support such Expansion Services. Any amounts required to finance the Expansion Services above the Service Payment will
be paid by Siegfried.
Pursuant to the Agreement, Keryx has agreed to order a minimum quantity of Product annually. Siegfried has committed to achieve
timely delivery of Product and to accept all orders of Product from Keryx up to its operational capacity. After a specified time, Siegfried will issue a credit to Keryx if it has failed to deliver a minimum percentage of the quantity of Product
scheduled to be delivered monthly.
The Agreement has an initial term ending on December 31, 2021 and will automatically renew after the initial term
for successive terms of one year each, unless either party gives notice of its intention to terminate the Agreement within a specified time prior to the end of the then current term.
Keryx may terminate the Agreement upon sixty (60) days’ prior written notice due to certain regulatory authority action that prevents Keryx from
developing, importing, exporting, purchasing, selling or otherwise commercializing Auryxia in the United States.
Either Party may terminate the Agreement
in the event of: (i) the cessation of all or substantially all of the other party’s business operations immediately upon written notice, or (ii) a material breach or default, provided that such party has provided written notice and an
opportunity to cure and the other party has not cured such material breach or default within sixty (60) days of receipt of the notice. After a specified period, late delivery of Product for a certain number of times within any
12-month
period, which has not been cured within a specified time frame, constitutes a material breach by Siegfried. Additionally, either party may terminate the Agreement upon thirty (30) days’ prior
written notice if the other party (the “Bankrupt Party”) has become bankrupt or made an assignment for the benefit of creditors, or there has been appointed a trustee for all or substantially all of the Bankrupt Party’s property, or
any case or proceeding has commenced or other action taken by or against the Bankrupt Party in bankruptcy or seeking reorganization, liquidation, dissolution,
winding-up,
arrangement, composition or
readjustment of its debts or any other relief under any bankruptcy, insolvency or reorganization or other similar act of law.
The Agreement contains
certain representations, warranties, limitations of liabilities, confidentiality and indemnity obligations, and other provisions customary for agreements of this type.
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by the full text of the Agreement, a copy of which
Keryx expects to file as an exhibit to Keryx’s Annual Report on Form
10-K
for the year ended December 31, 2017.