ALKERMES INC
EX 10.19(A) LETTER AGREEMENT AND EXHIBITS
<DOCUMENT>
<TYPE>EX-10.19(A)
<SEQUENCE>4
<FILENAME>b43437aiexv10w19xay.txt
<DESCRIPTION>EX 10.19(A) LETTER AGREEMENT AND EXHIBITS
<TEXT>
<PAGE>
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND HAS BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.

                                                                EXHIBIT 10.19(a)

                    Alkermes Controlled Therapeutics Inc. II
                                64 Sidney Street
                             Cambridge, MA 02139 USA


February 1, 2002



JPI Pharmaceutica International,
a division of Cilag AG International Zug
CH-6300 Zug
Kollerstrasse 38
Switzerland

Janssen Pharmaceutica Inc.
11125 Trenton-Harbourton Road
Titusville, NJ  08560  USA

       Re:    Exhibits to Manufacturing and Supply Agreement, dated August 6,
              1997

Gentlemen:

              Pursuant to that certain Manufacturing and Supply Agreement (the
"Agreement"), dated August 6, 1997, among Alkermes Controlled Therapeutics Inc.
II ("ACT II"), JPI Pharmaceutica International, a division of Cilag AG
International Zug, a company organized under the laws of Switzerland ("JPI"),
and Janssen Pharmaceutica Inc. ("Janssen US") (JPI and Janssen US collectively
referred to herein as "Janssen"), as supplemented by that certain Addendum to
Manufacturing and Supply Agreement (the "Addendum"), dated August 1, 2001, among
ACT II, JPI and Janssen, certain exhibits referred to in the Agreement would be
agreed to by the parties in the future. Those exhibits are Exhibits A, B, E, F,
G and H. This letter sets forth the agreement by the parties as to such
Exhibits.

              1.     Exhibit A (Specifications) shall be in the form attached
                     hereto as Exhibit A.

              2.     Exhibit B (Equipment: Capital Items) is, at the current
                     time, intentionally left blank because there are no capital
                     items owned by Janssen.

              3.     Exhibit E (Forecast mechanism) shall be in the form
                     attached hereto as Exhibit E.

              4.     Exhibit F (Specification of Compound) shall be in the form
                     attached hereto as Exhibit F.
<PAGE>
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND HAS BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


              5.     Exhibit G [***] shall be in the form attached hereto as
                     Exhibit G.

              6.     Exhibit H (Manufacturing Readiness Plan) shall cease to
                     apply from December 1, 2001 in view of the commencement of
                     the commercial manufacture of Product.

              To the extent that the provisions of Exhibit E are in conflict
with Sections 2.3, 2.4, 2.11 or 4.1 of the Agreement, such Sections shall be
deemed to be amended by Exhibit E. To the extent that the provisions of Exhibit
G are in conflict with Sections 2.7 or 4.2 of the Agreement, such Sections shall
be deemed to be amended by Exhibit G.

              If you are in agreement with the foregoing, please have this
letter agreement executed by a duly authorized officer and return one fully
executed copy to me.

                                        Sincerely,
                                        ALKERMES CONTROLLED
                                        THERAPEUTICS INC. II


                                        By:  /s/ Michael Landine
                                             ------------------------
                                        Name:          Michael Landine
                                        Title:         Vice President

Agreed to:

JPI PHARMACEUTICA INTERNATIONAL,
A DIVISION OF CILAG AG INTERNATIONAL ZUG


By:  /s/ Erik Rombouts                                /s/ Heinz Schmid
     -----------------                                ----------------
Name:   Erik Rombouts                                Heinz Schmid
Title:  Vice President Alliance Management           General Manager

JANSSEN PHARMACEUTICA INC.


By:   /s/ Alex Gorsky
     --------------------------
Name:  Alex Gorsky
Title: President
<PAGE>
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND HAS BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.

                                    EXHIBIT A
                                 SPECIFICATIONS

               The specifications for "RISPERDAL CONSTA(tm)" as found in NDA #
21-346 submitted by Janssen on August 31, 2001, all applicable MAA filings, all
applicable supplements to the filings and all subsequent revisions to these
specifications.
<PAGE>
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND HAS BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.

                                    EXHIBIT E
                               FORECAST MECHANISM



1.     EFFECTIVE TIME OF THIS EXHIBIT. This Exhibit E (Forecast Mechanism) shall
       only be in effect until December 31, 2002 at which time the parties shall
       review and modify (if needed) the forecast mechanism, which shall then be
       in effect for the remainder of the term of the Agreement, unless the
       parties agree otherwise.

2.     DEFINITIONS. For purposes of this Exhibit E, the following terms shall
       have the following meanings. Any capitalized term not defined below shall
       have the meaning set forth in the Manufacturing and Supply Agreement to
       which this Exhibit is appended (the "Agreement").

       (a)    "Batch" shall mean the quantity produced from one operation of the
              emulsion phase of the manufacturing process.

       (b)    "Dose" shall mean the amount of active ingredient included in each
              Vial of Product. There shall only be three Dose sizes: 25 mg, 37.5
              mg and 50 mg.

       (c)    For purposes of this Exhibit E only, "Janssen" shall include any
              designee of Janssen.

       (d)    "Region" shall mean the geographic region in which certain Vials
              are to be distributed and sold. There shall only be two Regions:
              (i) the United States and (ii) the rest of the world.

       (e)    "Vial" shall mean the primary container filled with finished
              Product in a single dosage form. Vials will be the final Product
              to be shipped by ACT II to Janssen for final packaging into a kit
              before distribution and sale.

3.     FULL BATCHES. ACT II shall Manufacture Product and prepare Vials for
       shipment only in Batches and not in less than a full Batch size.

4.     FORECASTS. On or before the 25th calendar day of each month, Janssen will
       provide to ACT II a rolling forecast of Product for the [***] following
       the month in which such forecast is submitted. Each forecast shall
       include the quantity of Vials forecasted in Batch quantity amounts based
       on the estimated Vials per Batch set forth below. The forecast shall also
       state the quantities of Vials by Dose and Region and the estimated Batch
       quantities (by Dose and Region) needed to produce such Vials based on the
       estimated Vials per Batch set forth below.

<TABLE>
<CAPTION>
       Dose Size:                               25 mg             37.5 mg        50 mg
<S>                                             <C>               <C>            <C>
</TABLE>

                                       E-
<PAGE>
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND HAS BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.

<TABLE>
<S>                                             <C>               <C>            <C>
       Estimated Yield of Vials per Batch       [***]              [***]         [***]
</TABLE>

5.     BINDING FORECASTS; SEMI-FIRM FORECASTS. Months [***] (the "Firm Months")
       of each forecast shall be binding on Janssen and shall constitute a firm
       order. Months [***] (the "Semi-Firm Months") of each forecast shall not
       be binding, but shall be semi-firm, meaning that in any subsequent
       forecast, Janssen may only increase the Batches forecasted in the
       Semi-Firm Months within the limits set forth below, provided, however,
       that ACT II shall use commercially reasonable efforts to meet Janssen's
       requirements for Product. For the avoidance of doubt, Janssen shall be
       entitled to decrease its forecast for the Semi-Firm Months in an
       unlimited fashion. Months [***] of each forecast shall be neither binding
       nor semi-firm, but shall be good faith estimates of Janssen's anticipated
       requirements for Product.

<TABLE>

        Previously                  Allowable Monthly Increase            Allowable Monthly
Forecasted Batch Quantity                                              Forecasted Batch Quantity
<S>                                 <C>                                <C>
          [***]                                [***]                             [***]
</TABLE>

6.     PURCHASE ORDERS. JPI and Janssen US may issue to ACT II formal purchase
       orders for the Regions they are responsible for; provided that the
       aggregate of purchase orders submitted by JPI and Janssen US shall not
       exceed the amount forecasted for the applicable period, unless
       specifically allowed hereunder or agreed by the parties. Even in the
       absence of one or more purchase orders, ACT II may Manufacture and
       prepare for shipment the quantity of Vials, in Doses and for the Regions,
       called for in the forecast for any Firm Month.

7.     MONTHLY FORECAST MAXIMUM; MANUFACTURING SHUT-DOWNS. No forecast may
       require the Manufacture of more than [***] per week. ACT II will be
       allowed up to two (2) manufacturing shut-downs each year and each
       manufacturing shut-down shall last not longer than two (2) weeks. ACT II
       shall provide to Janssen the schedule for manufacturing shut-downs at the
       beginning of each calendar year. The parties will work together to
       schedule delivery of Product in accordance with both the forecasts and
       scheduled shut-downs.

8.     DILIGENCE TO MEET FORECAST. ACT II will use commercially reasonable
       efforts to Manufacture and prepare for shipment Product in the Vial
       quantities, in the Doses, for the Regions and in the time periods
       forecasted by Janssen.

9.     SHORTFALLS. There shall be a shortfall at any time that the cumulative
       amount of Vials for any Dose or Region actually prepared for shipment in
       any [***] period falls below [***] of the amount of Vials forecasted by
       Janssen for such Dose or Region for such [***] period (the difference
       between the amount of such Vials prepared for shipment and [***] of the
       forecasted amount of such Vials shall be the "Shortfall").
       Notwithstanding the foregoing, there shall not be a Shortfall if Janssen
       submits a forecast in which the amount of Vials for a Firm Month are
       greater than what was forecasted in the same Firm Month in a previous
       forecast or the amount of Vials for a Firm Month or a Semi-Firm Month are
<PAGE>
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND HAS BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.

greater than the allowable increase over what was forecasted in the same
Semi-Firm Month in a previous forecast. In the event of a Shortfall, Janssen
shall notify ACT II that a Shortfall has occurred, stating in what Dose or
Region the Shortfall occurred and requesting that ACT II cure such Shortfall.
Upon receipt of such notice from Janssen, ACT II will use commercially
reasonable efforts to Manufacture and prepare for shipment an amount of Vials in
the particular Dose or Region in order to cure such Shortfall in the month
following receipt of such notice.

10.    NO BREACH. ACT II shall not be considered to be in breach of its
       obligations to supply the requested quantities of Product under the
       Agreement (including the provisions in this Exhibit E) if:

       (a)    there is any Shortfall during the [***] of commercial Manufacture
              of Product under the Agreement;

       (b)    there is a Shortfall after the initial [***] of commercial
              Manufacture of Product under the Agreement, Janssen requests that
              ACT II cure such Shortfall and ACT II uses or is using
              Commercially Reasonable Efforts to cure such Shortfall, all in
              accordance with Section 9 hereof; or

       (c)    a delay in the Manufacture of Product, preparation for shipment or
              actual delivery of Vials is caused by Janssen (for example, due to
              a failure or delay in the supply of bulk Compound, testing of
              Product by Janssen, validation by Janssen of shipping containers,
              receipt of test results, protocols, reports or approvals from
              Janssen required under the Quality Agreement for Manufacture or
              shipment of Product, receipt of delivery instructions from
              Janssen, release of Product by Janssen, etc.);

       provided that, in each case, ACT II is using commercially reasonable
       efforts to Manufacture and prepare for shipment Vials in accordance with
       the forecast.

11.    INVENTORY; SHELF LIFE OF PRODUCT DELIVERED. ACT II may, at its option,
       Manufacture and hold Product in inventory. All Product, including any
       Product that may have been held in inventory, delivered by ACT II to
       Janssen in accordance with Section 4.1 of the Agreement shall have a
       remaining shelf life of at least [***] at the time it is so delivered by
       ACT II, unless otherwise agreed on an ad hoc basis. Notwithstanding the
       foregoing, ACT II shall not be held responsible for, and Janssen shall be
       obligated to purchase (if otherwise meeting Specifications), Product
       whose remaining shelf-life is less than [***] at the time of such
       delivery, if the delivery of Product has been delayed by more than [***]
       from the time that the Product was filled into Vials if such delay is
       caused by Janssen (for example, due to a failure or delay in the testing
       of Product by Janssen, validation by Janssen of shipping containers,
       receipt of test results, protocols, reports or approvals from Janssen
       required under the Quality Agreement for shipment of Product, receipt of
       delivery instructions from Janssen, release of Product by Janssen, etc.).
       This
<PAGE>
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND HAS BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.

       Section 11 shall be reviewed and modified (if needed) by the parties at
       the end of calendar year 2002.
<PAGE>
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND HAS BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.

                                    EXHIBIT F
                            SPECIFICATION OF COMPOUND

              The specifications for "Risperidone Drug Substance" as found in
NDA # 21-346 submitted by Janssen on August 31, 2001, all applicable MAA
filings, all applicable supplements to the filings and all subsequent revisions
to these specifications.
<PAGE>
                                    EXHIBIT G
                                      [***]
<PAGE>
                                    EXHIBIT H
                          MANUFACTURING READINESS PLAN


</TEXT>
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