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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): MAY 9, 1996
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CREATIVE BIOMOLECULES, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-19910 94-2786743
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
45 SOUTH STREET, HOPKINTON, MASSACHUSETTS 01748
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (508) 435-9001
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ITEM 5. OTHER EVENTS.
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On May 9, 1996, the Registrant publicly disseminated a press release
announcing that it has entered into an agreement for approximately $12 million
of new funding from Stryker Corporation under the ongoing collaboration to
develop and commercialize OP-1 for orthopedic reconstruction.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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(c) Exhibits.
99.1 The Registrant's Press Release dated May 9, 1996.
99.2 Amendment Agreement, dated May 13, 1994, between the Registrant and
Stryker Corporation.
99.3 Amendment Agreement, dated April 30, 1996, between the Registrant and
Stryker Corporation.
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Creative BioMolecules, Inc.
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(Registrant)
Date: May 9, 1996 /s/ Wayne E. Mayhew III
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Wayne E. Mayhew III
Vice President, Chief Financial
Officer, Treasurer and Secretary
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EXHIBIT 99.1
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CONTACTS: STEPHANIE K. MARRUS
V.P., CORPORATE DEVELOPMENT
CREATIVE BIOMOLECULES, INC.
(508) 435-9001
ROBERT GOTTLIEB
FEINSTEIN PARTNERS INC.
(617) 577-8110
FOR IMMEDIATE RELEASE
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CREATIVE BIOMOLECULES AND STRYKER EXTEND OP-1 DEVELOPMENT AND
COMMERCIALIZATION AGREEMENT
Hopkinton, Mass., May 9, 1996. Creative BioMolecules, Inc. (Nasdaq:CBMI) today
announced that it has entered into an agreement for approximately $12 million of
new funding from Stryker Corporation (Nasdaq:STRY) under the ongoing
collaboration to develop and commercialize OP-1 for orthopedic reconstruction.
This agreement expands the scope of CBM's work under the collaboration,
providing support related to Stryker's PMA filing anticipated in late 1997 and
research and development support over the next two years.
"This extension of our agreement underscores the depth of commitment by Stryker
to the program and continued development of OP-1, not only through this first
PMA filing planned for late 1997 but also into the future," said Michael M.
Tarnow, President and CEO of CBM. "Along with Stryker's internal investment in
the current clinical trials, this agreement will help to accelerate development
of a broad clinical platform for OP-1 in additional orthopedic indications.
Given the level of activity both in clinical development and in research, we are
at the point where it is appropriate to expand our efforts, as represented by
this agreement."
Target patient accrual in the pivotal trial of OP-1 for non-union fractures was
completed in January 1996 and treated patients are in the required follow-up
period. In fall 1995, Stryker began a study under an FDA approved supplemental
treatment arm of the pivotal trial, expanding the study to test OP-1 in all long
bone non-union fractures. Four clinical studies are in progress in Europe and
treatment is expected to be completed this year. Additional human studies in a
broadening array of orthopedic indications are expected to be initiated in the
U.S. and other countries over the next twelve months.
(more)
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OP-1 is a naturally occurring protein known as a morphogen, and is capable of
inducing tissue formation in bone and a variety of other tissue types. In
addition to the program in orthopedic reconstruction, the Company is evaluating
the use of OP-1 in other indications such as renal disorders, as well as
exploring the use of other morphogens.
Creative BioMolecules is a discovery and development company focused on
proprietary protein-based therapeutics for human tissue regeneration. The
Company's therapeutics are based on proteins that act as signals in initiating
and regulating the cellular events involved in cell and tissue formation.
The statements in this news release that are not historical facts include
forward-looking statements that involve risks and uncertainties. Factors which
could cause actual results to differ from Company expectations include, without
limitation, the achievement of product development milestones by the Company's
collaborative partner, the impact of competitive products, the timely receipt of
regulatory clearances required for clinical testing, manufacturing and marketing
of products and the other risks and uncertainties detailed from time to time in
the Company's periodic reports.
# # #
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EXHIBIT 99.2
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AMENDMENT AGREEMENT
This agreement by and between CREATIVE BIOMOLECULES, INC., a Delaware
corporation with its office and place of business at 45 South Street, Hopkinton,
Massachusetts 01748 ("CBM"), and STRYKER CORPORATION, a Michigan corporation
with its office and place of business at 2725 Fairfield Road, P.O. Box 4085,
Kalamazoo, Michigan 49003-4085 ("Stryker").
WHEREAS, CBM and Stryker are parties to that certain Second Amended and
Restated Research, Development and Supply Agreement dated as of May 17, 1991, as
amended to the date hereof (the "Agreement"), concerning research and
development on OP (capitalized terms used but not defined herein shall have the
meaning provided therefor in the Agreement);
WHEREAS, CBM and Stryker desire to amend the Agreement in certain respects
as more fully set forth herein, including to establish the terms and conditions
on which the Research Project shall continue and for the payments to be made to
CBM by Stryker in connection therewith; and
WHEREAS, CBM and Stryker deem it appropriate in this agreement to
consolidate the changes made to the Agreement by the Amendment Agreement dated
November 19, 1992 and the Amendment Agreement dated August 13, 1993
(collectively, the "1992 and 1993
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Amendments") insofar as they relate to actions to be taken from and after the
date hereof;
NOW, THEREFORE, in consideration of the foregoing and the agreements set
forth herein and in the Agreement, the parties hereto agree that, effective as
of the date hereof, the 1992 and 1993 Amendments shall, insofar as they relate
to the performance of the parties on and subsequent to the date hereof, be
replaced by the following provisions of this agreement:
1. Stryker agrees that it will supply at no cost to CBM a quantity of the
matrix component of OP Devices ("Matrix") that meets the specifications set
forth in a document (the "Matrix Certificate of Analysis") agreed upon in
writing by CBM's Chairman and Chief Scientific Officer and Stryker's Project
Officer, or such other persons as may be designated by CBM or Stryker,
respectively (such persons being referred to herein as the "Designated
Officers"). CBM agrees that the Matrix so supplied by Stryker shall be used
solely for the production of OP Devices for delivery to Stryker as provided
herein. The specific quantity of Matrix to be delivered by Stryker to CBM and
the delivery dates applicable thereto shall be as agreed upon from time to time
by the Designated Officers. Each delivery of Matrix shall be accompanied by a
completed Matrix Certificate of Analysis and copies of the applicable batch
records and shall constitute a representation and warranty by Stryker that such
Matrix meets the specifications set forth in the Matrix
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Certificate of Analysis and that it has been manufactured in accordance with
outline of the Matrix Manufacturing Protocol (the "Matrix Manufacturing
Protocol") agreed upon in writing by the Designated Officers, which outline
shall be the basis for the preparation of the Matrix Manufacturing Protocol to
be agreed upon in writing by the Designated Officers. Stryker agrees that CBM
may from time to time upon reasonsable advance written request and during normal
business hours inspect and audit the production facilities at which the Matrix
is produced and review applicable batch records.
2. CBM shall initiate production of OP Devices that meet the specifications
set forth in documents (the "Device and OP-1 Certificates of Analysis") agreed
upon in writing by the Designated Officers at its plants in Lebanon,
New Hampshire and Hopkinton, Massachusetts, utilizing processes and facilities
that meet the descriptions thereof contained in the outline of the manual (the
"OP-1 Clinical Device Manufacturing Protocol") agreed upon in writing by the
Designated Officers, which outline shall be the basis for the preparation of
the OP-1 Clinical Device Manufacturing Protocol that will be submitted by
Stryker to the FDA as an amendment to the IDE for OP Devices. No changes shall
be made in the processes and facilities utilized by CBM for the production of
OP Devices hereunder that deviate from the descriptions thereof contained in
the OP-1 clinical Device Manufacturing Protocol unless the same shall have been
approved
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by Stryker's Project Officer and incorporated in the OP-1 Clinical Device
Manufacturing Protocol. The number of OP Devices to be delivered to Stryker, the
delivery dates applicable thereto and the price to be paid therefor shall be as
agreed upon from time to time in writing by the Designated Officers. CBM shall
use reasonable efforts to deliver to Stryker on or before each of the delivery
dates so agreed upon such number of OP Devices that are subsequently accepted by
Stryker. In the event that any Matrix to be supplied by Stryker pursuant to
paragraph 1 is delivered after the agreed upon date, the delivery date for each
OP Device to be made from such Matrix shall be extended by the number of days by
which the Matrix delivery was late. In addition to any other remedy that Stryker
may have under the Agreement, the price to be paid by Stryker to CBM for any OP
Device that is delivered more than 45 days after the agreed upon date therefor
and subsequently accepted shall be reduced by fifty percent. In order to
facilitate acceptance by Stryker of the OP Devices delivered by CBM, CBM agrees
that Stryker may from time to time upon reasonable advance written request and
during normal business hours inspect and audit CBM's production facilities and
processes and review the applicable batch records. Delivery of OP Devices shall
be accompanied by completed Device and OP-1 Certificates of Analysis and a copy
of the relevant Matrix Certificate of Analysis previously furnished by Stryker
and copies of the applicable batch records and shall constitute a
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representation and warranty by CBM that such OP Devices meet the specifications
set forth in the Device and OP-1 Certificates of Analysis, that the Matrix used
in such OP Devices is Matrix that was furnished by Stryker with the Matrix
Certificate of Analysis that is being delivered with such OP Devices and that
they have been manufactured utilizing facilities and processes that meet the
descriptions set forth in the OP-1 Clinical Device Manufacturing Protocol.
Stryker may reject such OP Devices if they fail to meet the specifications set
forth in the Device and/or OP-1 Certificates of Analysis or if they are not
manufactured utilizing, facilities and processes that meet such descriptions,
and for no other reason. OP Devices not rejected by Stryker within thirty days
of delivery thereof by CBM will be deemed accepted. Any rejection shall be
accompanied by a reasonably detailed explanation of the basis therefor. Stryker
shall pay CBM the applicable price for each OP Device accepted by Stryker during
any month on or before the tenth day of the following month. In order to avoid
any misunderstanding, it is specifically agreed that none of the OP Devices to
be supplied to Stryker hereunder are for commercial sales, that Article II of
the Agreement is not applicable thereto and that the sale of any of such OP
Devices shall not be deemed to be the commercial sale thereof for purposes of
Section 1.6 of the Agreement.
3. CBM understands that Stryker, acting on its own and through third
parties with which it has contracted, is developing
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alternate research and production facilities to conduct research on and engage
in the manufacture of OP Products and OP Devices and the components thereof in
order to assure an adequate supply thereof for clinical trials and other
research-related and test marketing purposes in the OP Field other than the Bone
Disease Field. CBM agrees that Stryker or such third parties may continue to
utilize the Manufacturing Technology to do so, it being understood that nothing
in this paragraph 3 affects Stryker's obligation under the terms of the
Agreement to purchase OP Products and OP Devices for commercial sale from CBM.
In order to assist Stryker and/or such third parties in such efforts and to
otherwise assist in the transfer of the Manufacturing Technology, CBM agrees to
make available to Stryker and/or such third parties the services of such
employees of CBM as the Designated Officers shall periodically agree in advance
in writing, which employees shall spend the amount of time and perform the
particular services therein specified at the locations therein specified.
Stryker shall pay CBM for the services (including travel time outside the
greater Boston area) of such employees at the rate per man month (which term
shall mean 160 hours) agreed upon in writing by the Designated Officers prior to
the performance of such services and shall reimburse CBM for the reasonable
out-of-pocket expenses incurred by such employees if such services are performed
other than in the greater Boston area. Such payments shall be made by Stryker
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within ten days of receipt by Stryker of an invoice specifying in detail the
employees who performed such duties during the preceding month, the hours worked
by each of them in connection therewith and the expenses for which reimbursement
is sought. CBM further agrees upon request to provide to Stryker, without
additional charge, such reasonable quantities of biological materials not
otherwise commercially available developed by CBM for the production of OP
Products and OP Devices as are necessary in order to enable the current state of
development of OP Products and OP Devices to be readily reproduced.
4. CBM confirms that all techniques, processes and know-how relating to the
manufacture and production of OP Products and OP Devices, including any
improvements therein, that have been or may be developed by CBM or which it owns
or in which it acquires any rights prior to the expiration of the Research
Project shall constitute the Manufacturing Technology that may be utilized by
Stryker or third parties with which it may contract as provided in paragraph 3
hereof and that is the subject of the Manufacturing License. Stryker hereby
agrees that any improvements in the Manufacturing Technology that are developed
by Stryker or by third parties acting under paragraph 3 hereof prior to the
expiration of the Research Project shall, to the extent of Stryker's rights
therein, be the subject of an irrevocable, worldwide royalty-free license
granted hereby to CBM.
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5. Paragraph B of Section 1.1 of the Agreement is hereby amended by
deleting it in its entirety and replacing it with the following:
B. The Research Project shall continue through April 30, 1996 unless
extended by agreement of the parties or terminated as provided herein. The
specific projects that shall be funded by Stryker as part of the Research
Project shall be divided into two areas -- those related to ongoing
research ("Research Related") and those related to the obtaining of
pre-market approval from the FDA ("PMA Related"). The specific projects on
which CBM will work shall be determined in advance by one or more written
documents (each a "Research Related Current Scope of Work" or a "PMA
Related Current Scope of Work," as the case may be, and collectively the
"Current Scopes of Work") signed by the Designated Officers. In addition,
the Designated Officers shall agree in writing from time to time, in the
Current Scopes of Work or in supplements thereto, as to the specific tasks
to be performed in any period, the employees to be assigned to the
performance thereof (subject to such substitutions as shall be acceptable
to Stryker's Project Officer) and the percentage of their normal working
hours that shall be devoted to such tasks during such period. CBM shall
employ such reasonable efforts as are necessary to diligently attempt to
accomplish the projects set forth in
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each Current Scope of Work and shall devote the time set forth in each
Current Scope of Work or the supplements thereto to the efficient conduct
of the tasks set forth therein.
In addition, CBM will fund and perform certain other projects relating
to the manufacture of OP Devices, which projects shall be described in one
or more written documents (each a "Current CBM Project List") signed by the
Designated Officers setting forth, in addition to a brief description of
the specific projects to be funded and performed by CBM, a projected time
schedule for their completion. CBM shall employ such reasonable efforts as
are necessary to diligently attempt to accomplish the projects set forth in
each Current CBM Project List and shall devote reasonable resources to the
efficient conduct thereof.
CBM agrees that Stryker may from time to time upon reasonable advance
written request and during normal business hours inspect and review CBM's
production facilities and processes and review applicable records in order
to monitor and audit CBM's performance under the Current Scopes of Work and
the CBM Project List.
6. Paragraph C of Section 1.1 of the Agreement is hereby amended by
deleting the phrase "on or prior to June 15,
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1994" in the first sentence thereof and replacing it with "on or prior to April
15, 1996."
7. Paragraph E of Section 1.1 of the Agreement is hereby amended by adding
the following text thereto:
Stryker agrees that it will fund and perform certain projects relating to
the clinical testing of Op Devices and the filing of the application with
the FDA to market the OP Devices, which projects shall be described in
one or more written documents (each a "Current Stryker Project List")
signed by the Designated Officers setting forth, in addition to a brief
description of the specific projects to be funded and performed by Stryker,
a projected time schedule for their completion. Stryker shall employ such
reasonable efforts as are necessary to diligently attempt to accomplish the
projects set forth in each Current Stryker Project List and shall devote
reasonable resources to the efficient conduct thereof.
8. Section 1.3 of the Agreement is hereby amended to read in its entirety
as follows:
1.3 Stryker shall pay CBM for the performance of the Current Scopes of
Work at the rate per man month agreed upon in writing by the Designated
Officers for the services of the CBM employees assigned to the performance
thereof and
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shall reimburse CBM for costs of material and other reasonable out-of-pocket
expenses incurred by it in connection therewith. Such payments shall be made by
Stryker within ten days of receipt of an invoice for the preceding month that
shall specify in detail the number of hours that each employee assigned to the
performance of the Current Scopes of Work devoted to the performance thereof
during the preceding month and any expenses for which CBM seeks reimbursement,
which invoice shall be accompanied by a brief written summary of the results of
the Research Project during the preceding month. At the time that the Designated
Officers agree on the Current Scopes of Work to be performed during any period,
the maximum monthly funding commitment by Stryker shall be established. CBM may
carry over into subsequent months the amount by which the invoiced amount is
less than the maximum monthly funding commitment in any month, provided that in
no event may any monthly invoice exceed the maximum monthly funding commitment
by more than 25%. Otherwise, Stryker shall not be responsible for the payment of
any amount in addition to the maximum monthly funding commitment for any month
unless the advance written approval of its Project Officer or other designee
shall have been obtained therefor.
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9. The last sentence of Section 2.1 of the Agreement as in effect on
the date hereof is hereby amended to read as follows:
This Article II shall only apply to the purchase and supply of OP
Products and OP Devices for commercial distribution and shall not
apply to the purchase and supply of OP Products and OP Devices for
any other purpose, including without limitation for research, for
clinical trials or for test marketing purposes.
10. The provisions set forth in paragraphs 1 through 4 hereof shall be
deemed to be added to Article I of the Agreement effective as of the date
hereof and the specific amendment of certain provisions of the Agreement
set forth in paragraphs 5 through 9 hereof shall be effective as of the
date hereof. Except as specifically provided above, the terms and
provisions of the Agreement shall continue in full force and effect in all
respects and are hereby confirmed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
Agreement this 13th day of May, 1994.
CREATIVE BIOMOLECULES, INC. STRYKER CORPORATION
Charles M. Cohen, Ph.D John W. Brown
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Charles M. Cohen, Ph.D John W. Brown
Chairman of the Board and Chairman of the Board,
Chief Scientific Officer President and Chief
Executive Officer
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EXHIBIT 99.3
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AMENDMENT AGREEMENT
This agreement by and between CREATIVE BIOMOLECULES, INC., a Delaware
corporation with its office and place of business at 45 South Street, Hopkinton,
Massachusetts 01748 ("CBM"), and STRYKER CORPORATION, a Michigan corporation
with its office and place of business at 2725 Fairfield Road, P.O. Box 4085,
Kalamazoo, Michigan 49003-4085 ("Stryker").
WHEREAS, CBM and Stryker are parties to that certain Second Amended and
Restated Research, Development and Supply Agreement dated as of May 17, 1991, as
amended to the date hereof (the "Agreement"), concerning research and
development on OP (capitalized terms used but not defined herein shall have the
meaning provided therefor in the Agreement); and
WHEREAS, CBM and Stryker desire to amend the Agreement in certain respects
as more fully set forth herein, including to establish the terms and conditions
on which the Research Project shall continue and for the payments to be made to
CBM by Stryker in connection therewith; and
NOW, THEREFORE, in consideration of the foregoing and the agreements set
forth herein and in the Agreement, the parties hereto agree that, effective as
of the date hereof, the provisions of the Amendment Agreement dated May 13,
1994, other than paragraphs 3, 4, 9 and 10, to the extent paragraph 10
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applies to paragraph 3, 4 and 9, which shall continue to be effective from and
after the date hereof, shall, insofar as they relate to the performance of the
parties on and subsequent to the date hereof, be deleted from the Agreement and
replaced by the following provisions of this agreement:
1. Paragraph B of Section 1.1 of the Agreement is hereby amended by
deleting it in its entirety and replacing it with the following:
B. The Research Project shall continue as provided herein unless
further extended by agreement of the parties or terminated as provided
herein. The specific projects that shall be funded by Stryker as part of
the Research Project shall be divided into three areas -- those related to
ongoing research ("R&D Related"), those related to formulation of OP and/or
OP Devices ("Formulation Related") and those related to the obtaining of
pre-market approval from the FDA ("PMA Related"). The specific projects on
which CBM will work and the maximum number of full-time equivalents to be
allocated to them in any month shall be determined in advance by one or
more written documents (each a "R&D Related Current Scope of Work," a
"Formulation Related Current Scope of Work" or a "PMA Related Current Scope
of Work," as the case may be, and collectively the "Current Scopes of
Work") signed by the Designated Officers. The term of the R&D Related
Current Scope of Work shall
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expire on April 30, 1998 and the terms of the Formulation Related Current
Scope of Work and the PMA Related Current Scope of Work shall expire on
April 30, 1997 and November 30, 1997, respectively. CBM shall employ such
reasonable efforts as are necessary to diligently attempt to accomplish the
projects set forth in each Current Scope of Work and shall devote the time
set forth in each Current Scope of Work or supplement thereto to the
efficient conduct of the tasks set forth therein.
In addition, CBM will fund and perform certain other projects relating
to the manufacture of OP Devices, which projects shall be described in one
or more written documents (each a "Current CBM Project List") signed by the
Designated Officers setting forth, in addition to a brief description of
the specific projects to be funded and performed by CBM, a projected time
schedule for their completion. CBM shall employ such reasonable efforts as
are necessary to diligently attempt to accomplish the projects set forth in
each Current CBM Project List and shall devote reasonable resources to the
efficient conduct thereof.
CBM agrees that Stryker may from time to time upon reasonable advance
written request and during normal business hours inspect and review CBM's
production facilities and processes and review applicable records in
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order to monitor and audit CBM's performance under the Current Scopes of
Work and the Current CBM Project List.
2. Paragraph C of Section 1.1 of the Agreement is hereby amended by
deleting the phrase "on or prior to June 15, 1994" in the first sentence thereof
and replacing it with "on or prior to April 15, 1998."
3. Paragraph E of Section 1.1 of the Agreement is hereby amended by adding
the following text thereto:
Stryker agrees that it will fund and perform certain projects relating to
the clinical testing of Op Devices and the filing of the application with
the FDA to market the OP Devices, which projects shall be described in one
or more written documents (each a "Current Stryker Project List") signed by
the Designated Officers setting forth, in addition to a brief description
of the specific projects to be funded and performed by Stryker, a projected
time schedule for their completion. Stryker shall employ such reasonable
efforts as are necessary to diligently attempt to accomplish the projects
set forth in each Current Stryker Project List and shall devote reasonable
resources to the efficient conduct thereof.
4. Paragraph H of Section 1.1 of the Agreement is hereby amended to
substitute James E. Kemler for Samuel Yin as Stryker's Project Officer and to
change the other reference therein to Mr. Yin to Mr. Kemler.
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5. Section 1.3 of the Agreement is hereby amended to read in its entirety
as follows:
1.3 Stryker shall pay CBM for the performance of the Current Scopes of
Work at the rate per full-time equivalent month agreed upon in writing by
the Designated Officers for the services of the CBM employees assigned to
the performance thereof. Stryker shall also reimburse CBM for costs of
materials and other reasonable out-of-pocket expenses incurred by CBM in
connection with the performance of the Research Project as agreed upon in
writing by the Designated Officers. Such payments shall be made by Stryker
within ten days of receipt of an invoice dated not earlier than the first
day of any month covering the estimated full-time equivalents for such
month. Each such invoice shall also specify in detail under the heading
"[specify month] -- Actual" the number of hours that each employee
assigned to the performance of the Current Scopes of Work devoted to the
performance thereof during the preceding month and shall be accompanied by
a brief written summary of the results of the Research Project during the
preceding month. In the event that the actual number of full-time
equivalents worked as shown in the "Actual" portion of the invoice exceeds
or is less than the estimated number previously billed for the specified
month, the difference shall be added to or subtracted from, as the case
may be, the estimated amount
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otherwise payable by Stryker for the current month. At the time that the
Designated Officers agree on the Current Scopes of Work to be performed
during any period, the maximum monthly funding commitments by Stryker shall
be established. CBM may carry over into subsequent months the amount by
which the actual invoiced amount is less than the maximum monthly funding
commitment in any month, provided that in no event may any monthly invoice
exceed the maximum monthly funding commitments by more than 25%. Otherwise,
Stryker shall not be responsible for the payment for any month of an amount
for any Current Scope of Work in respect of a greater number of full-time
equivalents than the maximum number provided in the Current Scopes of Work
unless the advance written approval of its Project Officer or other
designee shall have been obtained therefor. CBM shall also furnish a
reconciliation statement to Stryker as soon as practicable during the month
of May 1998 specifying the information called for in the "Actual" portion
of the invoices referred to above for the month of April 1998. In the event
that the actual number of full-time equivalents worked during the month of
April 1998 exceeds or is less than the budgeted number for such month,
Stryker or CBM, respectively, as the case may be, shall pay the difference
to the other. If CBM owes Stryker in such regard, such payment shall
accompany the reconciliation statement. If
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Stryker owes CBM, such amount shall be paid within ten days of receipt of
the reconciliation statement. Anything in the foregoing to the contrary
notwithstanding, if any task or series of tasks related to the PMA Related
Current Scope of Work is not successfully completed by the target date
established therefor in writing by the Designated Officers, Stryker shall
be entitled to withhold 25% of the budgeted amount otherwise payable for
the PMA Related Current Scope of Work for each month thereafter until such
task or series of tasks has been successfully completed, at which time the
amounts so withheld shall be paid in full to CBM. In the event that the PMA
Related Current Scope of Work has not been completed by the November 30,
1997 expiration date therefor, Stryker and CBM shall, at the request of
either of them, negotiate in good faith, taking into account the reasons
for the delay, an extension of the term of the PMA Related Current Scope of
Work and the funding level for the work remaining to be performed.
6. CBM shall produce OP Devices that meet the specifications set forth in
documents (the "Device, Matrix and OP-1 Certificates of Analysis") agreed upon
in writing by the Designated Officers at its plants in Lebanon, New Hampshire
and Hopkinton, Massachusetts, utilizing processes and facilities that reflect
the most recent manufacturing protocol submitted by Stryker to the FDA or to any
regulatory authority of a major
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European country or Japan and approved by that authority at the time the OP
Device or components thereof are produced and comply with the cGMP and relevant
ISO standards (the "Most Recent Manufacturing Protocol") applicable at the time
the OP Device or components thereof are produced. No changes shall be made in
the processes and facilities utilized by CBM for the production of OP Devices
hereunder that deviate from the Most Recent Manufacturing Protocol unless the
same shall have been approved by Stryker's Project Officer. The number of OP
Devices ordered by Stryker and the delivery dates applicable thereto shall be as
agreed upon from time to time in writing by the Designated Officers. CBM shall
use reasonable efforts to deliver to Stryker on or before each of the delivery
dates so agreed upon such number of OP Devices that are subsequently accepted by
Stryker. The price to be paid by Stryker for OP Devices shall depend on the
production quantities (50,100 or 200 lots) ordered at any one time and shall be
determined as agreed in writing by the Designated Officers. Stryker may also
order quantities of OP and/or the matrix component of OP Devices ("Matrix"). The
price for OP and Matrix delivered to and accepted by Stryker hereunder shall be
as agreed upon in writing by the Designated Officers. In addition, Stryker
agrees to purchase from CBM the OP inventory produced during the consistency
series production runs conducted as part of the PMA Related Current Scope of
Work, provided that such OP meets the applicable specifications as provided
herein and is otherwise
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suitable for use in devices for clinical trials and/or commercial sale. In no
event shall the cost of such OP inventory exceed a cost per milligram and cost
in aggregate as agreed in writing by the Designated Officers. CBM shall have the
right to repurchase any of such OP inventory that Stryker advises CBM is not
required by Stryker at the cost paid by Stryker therefor. In order to facilitate
acceptance by Stryker of the OP Devices and other materials delivered by CBM
pursuant to this paragraph, CBM agrees that Stryker may from time to time upon
reasonable advance written request and during normal business hours inspect and
audit CBM's production facilities and processes and review the applicable batch
records. Delivery of OP Devices, OP, Matrix and the OP consistency series
production run inventory shall be accompanied by completed Device, Matrix and
OP-1 Certificates of Analysis, if applicable, and copies of the applicable batch
records and shall constitute a representation and warranty by CBM that such OP
Devices, OP, Matrix and OP inventory meet the specifications set forth in the
Device, Matrix and OP-1 Certificates of Analysis, if applicable, and that they
have been manufactured utilizing facilities and processes that reflect the Most
Recent Manufacturing Protocol. Stryker may reject any OP Device, OP, Matrix and
OP inventory if it fails to meet the specifications set forth in the Device,
Matrix and/or OP-1 Certificates of Analysis, if applicable, or if they are not
manufactured utilizing facilities and processes that meet the
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Most Recent Manufacturing Protocol, and for no other reason. OP Devices, OP,
Matrix and OP inventory not rejected by Stryker within thirty days of delivery
thereof by CBM will be deemed accepted. Any rejection shall be accompanied by a
reasonably detailed explanation of the basis therefor. Stryker shall pay CBM the
applicable price for the OP Devices, OP, Matrix and OP inventory accepted by
Stryker during any month on or before the tenth day of the following month. In
order to avoid any misunderstanding, it is specifically agreed that none of the
OP Devices, OP, Matrix and OP inventory to be supplied to Stryker hereunder are
for commercial sales, that Article II of the Agreement is not applicable thereto
and that the sale of any of such OP Devices, OP, Matrix and OP inventory shall
not be deemed to be the commercial sale thereof for purposes of Section 1.6 of
the Agreement.
7. The provisions set forth in paragraph 6 hereof shall be deemed to be
added to Article I of the Agreement effective as of the date hereof and the
specific amendment of certain provisions of the Agreement set forth in
paragraphs 1 through 5 hereof shall be effective as of the date hereof. Except
as specifically provided above, the terms and provisions of the Agreement shall
continue in full force and effect in all respects and are hereby confirmed by
the parties hereto.
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<PAGE> 12
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
Agreement as of the 30th day of April, 1996.
CREATIVE BIOMOLECULES, INC. STRYKER CORPORATION
/s/ Michael M. Tarnow /s/ John W. Brown
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Michael M. Tarnow John W. Brown
President and Chief Chairman of the Board,
Executive Officer President and Chief
Executive Officer
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