SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event Reported): November 15, 2022
Amphastar Pharmaceuticals, Inc.
(Exact Name of Registrant as Specified in Charter)
(State or Other Jurisdiction of
(Commission File Number)
(IRS Employer Identification
11570 6th Street
Rancho Cucamonga, California
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (909) 980-9484
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Name of each exchange on which registered
Common Stock, par value $0.0001 per share
The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement
On November 15, 2022 (the “Effective Date”) Amphastar Nanjing Pharmaceuticals, Inc. (“ANP”), a wholly owned subsidiary of Amphastar Pharmaceuticals, Inc. (the “Company”), entered into a supply agreement (the “Agreement”) with Nanjing Letop Biotechnology Co., Ltd. (“Letop”). Pursuant to the Agreement, Letop will manufacture and deliver chemical intermediates (“Intermediates”) for ANP according to the requirements of the purchase orders confirmed by Letop (collectively, the “Transaction”). ANP is entitled to decide the quantity of the Intermediates that it purchases from Letop at its own discretion, and ANP has no obligation to purchase any minimum quantity of the Intermediates from Letop. ANP will retain ownership of all confidential information ANP shares with Letop during the term of this Agreement. Each of ANP and Letop have made customary representations, warranties and covenants in the Agreement. This Agreement will remain in full force and effect for a period of three (3) years from the Effective Date.
Payments under the Agreement will be made in Chinese yuan. The total cost of the Agreement to ANP for the three (3) year period of the agreement shall not exceed approximately $1.5 million, with payments adjusted based on actual currency exchange rates.
As previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, Henry Zhang is an immediate family member of Dr. Jack Zhang, Chief Executive Officer, President, and Director of the Company, Dr. Mary Luo, Chairman, Chief Operating Officer, and Director of the Company. Henry Zhang beneficially owns a majority of the equity interest in Letop, and the Agreement with Letop represents a related party transaction. Accordingly, the independent and disinterested members of the Audit Committee of the Board of Directors of the Company evaluated and approved the Transaction and entry into the Agreement following their review of applicable considerations.
The foregoing is a brief description of the material terms of the Agreement, does not purport to be a complete description of the rights and obligations of the parties thereunder, and is qualified in its entirety by reference to the copies of the Agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
Cover Page Interactive Data File (embedded within the Inline XBRL document).
Certain confidential information contained in this Exhibit was omitted by means of marking such portions with brackets because the identified confidential information (i) is not material and (ii) would be competitively harmful if publicly disclosed.
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.
AMPHASTAR PHARMACEUTICALS, INC.
Date: November 18, 2022
/S/WILLIAM J. PETERS
William J. Peters
Chief Financial Officer, Executive Vice President and Treasurer
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS ([***]), HAS BEEN OMITTED BECAUSE
THE INFORMATION (I) IS NOT MATERIAL AND
(II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED
This Supply Agreement (this “Agreement”) is entered into by and between the following parties on November 15, 2022 (the “Effective Date”):
本供应协议（“本协议”）由以下双方于 2022年 11 月 15 日（“生效日”）签订：
(1) Amphastar Nanjing Pharmaceuticals, Inc., a limited liability company duly incorporated and validly existing under the laws of PRC, with the unified social credit code: [***] (the “Customer”); and
(2) Nanjing Letop Biotechnology Co., Ltd., a limited liability company duly incorporated and validly existing under the laws of PRC, with the unified social credit code: [***] (the “Supplier”).
The Supplier and the Customer are sometimes referred to herein collectively as the “Parties” and individually as a “Party”.
Whereas, the Customer intends to purchase certain Products (as defined below) which are manufactured by the Supplier in the Territory based on Specifications and formula provided by the Customer, and the Supplier intends to accept such purchase order.
Therefore, based on the principle of good faith, the Parties hereby agree as follows:
|1.1||Headings or titles of this Agreement are used solely for convenience and shall be given no effect in the construction or interpretation of this Agreement.|
|1.2||Additional agreements necessary to effectuate this Agreement may be executed between the Parties. In the event of conflicting terms, the terms of this Agreement shall prevail.|
|1.3||When used in this Agreement, the following terms shall have the meanings set forth in this section:|
|(a)||“Affiliate” means any person or entity which controls, is controlled by or is under the common control of a Party. As used in this Agreement, “control” means (i) in the case of corporate entities, direct or indirect ownership of at least fifty percent (50%) of the stock or shares having the right to vote for the election of directors, or (ii) in the case of non-corporate entities, the direct or indirect power to manage, direct or cause the direction of the management and policies of the non-corporate entity.|
|(b)||“Applicable Law” means all ordinances, rules, regulations, laws, and requirements of any authority applicable to the Manufacture, supply, use of the Products and/or other activities under this Agreement, as amended from time-to-time, including cGMP.|
|(c)||“Confidential Information” means technical and business information relating to inventions, proprietary ideas and/or patentable ideas, patent applications, background intellectual property, techniques, scientific knowledge, know-how processes, existing and/or contemplated products and services, software, biological material, schematics, research and development, production, costs,|
|profit and margin information, finances and financial projections, customers, clients, licensees, marketing, and current or future business plans and models, regardless of whether such information is designated as “Confidential Information” at the time of disclosure. The term “Confidential Information” does not include such information which:|
|(i)||is or becomes generally available to the public, other than through the receiving party’s disclosure,|
|(ii)||was within the receiving party’s possession prior to it being furnished by or on behalf of the disclosing party, provided that receiving party’s source had no obligation of confidentiality to the disclosing party,|
|(iii)||becomes available to the receiving party on a non-confidential basis from an information provider other than the disclosing party, provided that the information provider did not have a duty of confidentiality to the disclosing party, or|
|(iv)||is or becomes independently developed by an employee of the receiving party without access to the Confidential Information and without violating any of the receiving party’s obligations under this Agreement, as can be demonstrated by the receiving party’s written records.|
|(d)||“Contract Year” means each consecutive twelve (12) month period during the Term, the first of which shall commence on the Effective Date and shall end on the first anniversary thereof.|
|(e)||“Force Majeure” means an event beyond the reasonable control of a Party including but not limited to, a breakdown of machinery or equipment, fire, flood, sabotage, shipwreck, embargo, strike, explosion, labor trouble, pandemic and related restrictions, accident, riot, act of governmental authority (including without limitation, acts relating to raw material or product allocation, and government drug files), acts of God, acts of war and delays or failures in obtaining materials, supplies, equipment or transportation.|
|(f)||“NMPA” means the National Medical Products Administration and any successor agency having substantially the same functions.|
|(g)||“Manufacture” and “Manufacturing” means any steps, processes and activities necessary to produce the Products, including without limitation, the manufacturing, processing, bulk packaging and labeling, quality control testing, release and storage of the Products.|
|(h)||“PRC” means the People’s Republic of China, but solely for the purposes of this Agreement, excluding the Hong Kong Special Administrative Region, the Macau Special Administrative Region and the islands of Taiwan.|
|(i)||“Products” mean any or all of the products listed in Appendix A hereof.|
|(j)||“Regulatory Dossiers” means all registration, permits, licenses, authorizations, approvals, presentations, notifications or filings (together with all applications therefore), which are filed with|
|or granted by the governing health authority of any country, and which are required to develop, make, use, or sell the Products.|
|(k)||“Specifications” means the specifications set forth in Appendix B hereof, as such specifications may be adjusted from time to time by mutual written consent of the Parties.|
|(l)||“Term” means the period during which this Agreement is in effect as set forth in Section 11.|
|(m)||“Territory” means the PRC.|
|(n)||“Contract Price” means, with respect to each Product, the Selling Price for each Product as provided in Appendix A, as such Selling Price may be adjusted based on the terms and conditions of this Agreement.|
|2.||The Customer’s Rights and Obligations|
|2.1||The Customer shall issue purchase orders to the Supplier. The purchase order shall specify the quantity, standard, expected delivery date and other matters mutually agreed by the Parties. The Parties hereby agree that the Customer shall provide the Supplier with a delivery period of no less than ninety (90) days. The Supplier shall confirm within ten (10) business days after receipt of the purchase order.|
|2.2||The Customer is entitled to decide the quantity of Products that it purchases from the Supplier at its own discretion, and the Customer has no obligation to purchase any minimum quantity of|
|Products from the Supplier.|
|3.||The Supplier’s Rights and Obligations|
|3.1||The Supplier shall deliver the Products to the Customer according to the requirements of the purchase orders confirmed by the Supplier, and FCA rules under International Rules for the Interpretation of Trade Terms 2020 (Incoterms 2020) shall apply to such delivery. The Parties hereby agree that the Supplier’s additional costs arising from such delivery (including but not limited to, costs for transportation, customs and late receipt of the Customer’s designated carrier) shall be borne by the Customer.|
|3.2||The Supplier shall Manufacture and deliver the Products in conformance with the Applicable Law and regulations and Specifications.|
|4.||Contract Price, Invoice and Payment|
|4.1||The Supplier shall issue invoices within five (5) business days after shipment, unless the Parties determine that the Products do not conform to the Specifications, payment shall be due thirty (30) days after the date of an invoice from the Supplier.|
|4.2||During the Term of this Agreement and not more than once during any twelve (12) month period, the Contract Price may be subject to an adjustment, provided that Supplier provides the Customer with two (2) months prior written notice of such proposed Contract Price adjustment and Customer agrees with such adjustment.|
|4.3||If the Supplier’s manufacturing costs rise due to increased costs (e.g., due to increased power or labor costs, increased standards on environmental protection), the Parties shall separately agree on the Contract Price change after the Customer’s verification of the increased costs using information supplied by the Supplier. During the negotiation of Contract Price change, the Supplier shall provide the relevant staff salary information, power cost invoices, environmental protection expenditure information, or other supporting materials. If the Customer adjusts the Specifications or relevant requirements unilaterally, or direct the Supplier to purchase designated raw materials and packaging materials, the Contract Price shall be adjusted accordingly.|
|5.||Supply of the Products|
|5.1||The Supplier shall promptly notify the Customer of any circumstances that result or are likely to result in any failure or delay in the supply or delivery of any Product in writing. If the Parties have a good faith belief, after mutual communication, that such circumstances may result in the failure or delay in the supply or delivery of such Product for more than ninety (90) days from the date of the Supplier’s written notice, the Customer shall have the right to terminate such delivery after the full payment of costs and expenses of such Product to the Supplier.|
|6.||Inspection of the Products|
|6.1||All Products received by the Customer will be subject to inspection and testing by the Customer, in accordance with the Customer’s quality assurance program, within a period of thirty (30) days|
|from the date of receipt of such Products (“Inspection Period”). The Customer will notify the Supplier if the results of any inspection or testing indicate that the Products do not conform to the applicable Specifications or the other requirements under this Agreement. The Supplier will have ten (10) business days to respond to the Customer’s notice of non-conformance. Disputes between the Parties not resolved within ten (10) business days will be resolved by an independent laboratory selected by mutual consent of the Parties. A laboratory will be appointed not later than fifteen (15) business days after the expiry of the ten (10) business day period. If the laboratory finds the Products to be nonconforming, then at the Customer’s sole discretion, the Supplier shall (a) promptly deliver, at the Supplier’s sole expense, the replacement Products that conform to the requirements under this Agreement, or (b) refund or credit to the Customer all payments made by the Customer with respect of such nonconforming shipment. The Customer will, at the Supplier’s sole discretion, return or destroy the nonconforming Products at the Supplier’s sole expense, including without limitation transportation and handling costs.|
|7.1||The Supplier shall, take all commercially reasonable actions to qualify (and thereafter to maintain qualification of) the facility at which the Supplier Manufactures the Products, as required under Applicable Law, to enable the Customer to obtain and maintain all applicable Regulatory Dossiers in relation to the Products. The Supplier will permit the Customer and its agents, at the Customer’s expense, during normal business hours and upon reasonable prior notice to the Supplier, and no more than once per year, to inspect the Facility where the Products are Manufactured, handled, stored, or tested, as well as all batch records (without making any copies) and processes relating|
|to the Manufacture, storage, handling, or testing of the Products and all Manufacturing, handling, storage, and test records regarding the Products. The Supplier will respond to any non-conformances noted by the Customer, within thirty (30) business days of the written notification of such non-conformances, by submitting to the Customer a written report stating causes and corrective actions planned, and providing a timetable for the correction.|
|8.1||The Supplier shall Manufacture the Products in conformance with the Specifications. The Supplier shall provide the Customer with such information, including analytical and manufacturing documentation, requested by the Customer regarding quality control of the Products supplied hereunder. The Supplier will solely be responsible for keeping proper records and documentation of the manufacturing and testing of the Products, intermediates, and starting materials, including batch records, testing records, laboratory notebooks, equipment usage, starting material batch numbers, and certifications. The Supplier will be responsible for investigating any test results or in-process testing of the Products that do not conform with the Specification. The Supplier will conduct such laboratory investigation, which must be approved by the Supplier’s quality unit, and the Supplier will promptly notify the Customer of any adverse reactions or other safety or toxicity problems known to or reasonably suspected by the Supplier regarding the Products or its use. The Supplier will promptly notify the Customer of the results of any regulatory inspection, comments, responses or notices received from the NMPA or other applicable regulatory authorities, which relate to or may impact the Manufacture and supply of the Products to the Customer.|
|9.1||During the Term, if either Party believes that it may be necessary to conduct a recall, field correction, market withdrawal, stock recovery, or other similar actions with respect to any Product (a “Recall”), the Supplier and the Customer shall consult with each other as to how best to proceed. The Parties hereby agree that the final decision as to any Recall of any such Products shall be made by the Customer; provided, however, that the Supplier will not be prohibited hereunder from taking any action that is required by Applicable Law. The Customer shall be in charge of the Recall and establish a product recall system and recall management procedures, and the Supplier shall cooperate with the Customer as required by Applicable Law. In the event of a Recall, the Parties shall jointly find out and confirm reasons for the Recall, and except for reasonable costs borne by the Supplier if a Recall is incurred attributable to it, the Customer shall bear all costs incurred thereby.|
|10.||Certificate of Analysis|
|10.1||The Supplier shall supply the same information on the certificate of analysis as is listed in the Specifications incorporated as Appendix B. No changes in Specifications will be made unless the Customer and the Supplier have agreed to such changes in writing prior to adoption of the modified Specifications.|
|11.||Term, Amendment and Termination|
|(a)||The Terminated Party breaches this Agreement and (i) does not rectify its default within thirty (30) days on the date of receiving written notice from the Terminating Party requiring for rectification; or (ii) there is no realistic possibility to rectify such default; or (iii) such default has resulted in the inability to achieve the purpose of this Agreement;|
|(b)||The Terminated Party suffers a Force Majeure event which makes it impossible to achieve the purpose of this Agreement;|
|(c)||The Terminated Party expresses clearly or by behavior that it will not perform its obligations hereunder, or delays the performance of its obligations and has not fully performed the obligations after being notified;|
|(d)||The Terminated Party loses the ability to perform its obligations hereunder, including but not limited to, entering bankruptcy proceedings, liquidation proceedings, being dissolved, being winding up, being revoked, or losing appropriate qualifications.|
|(a)||被解除方违反本协议约定且(i) 在收悉解除方书面通知要求其纠正违约行为之日起三十（30）日内未纠正其违约行为的；或(ii) 实际上已不存在纠正违约行为的可能；或(iii) 存在违约行为导致不能实现协议目的；|
|12.||Intellectual Property Rights|
If to the Customer:
If to the Supplier:
Address: Amphastar Nanjing Pharmaceuticals, Inc.
No. 5 Xinghe Road
Nanjing Economic and Technological Development Zone
Attn: General Manager
Post Code: 210038
Address: Nanjing Letop Biotechnology Co., Ltd.
Building C5,No.9 Weidi Road,Xianlin University Town,Xianlin Street,Qixia District,Nanjing City,Jiangsu Province
Post Code: 210033
|19.||Governing Law and Dispute Resolution|
|26.||Counterparts and Language|
|26.1.||This Agreement may be executed in several duplicates, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. For the avoidance of doubt, this Agreement is concluded both in Chinese version and English version. In the event of any discrepancy between the Chinese version and the English version, the English version shall prevail.|
In Witness whereof, the Parties have executed this Agreement by their duly authorized representatives.
Amphastar Nanjing Pharmaceuticals, Inc.
Nanjing Letop Biotechnology Co., Ltd.
/s/ Eric Xu
邱银华 Perky Qiu
徐勇刚 Eric Xu
总经理 General Manager
总经理 General Manager
APPENDIX A: PRODUCTS AND CONTRACT PRICE
Selling Price/Unit (RMB)
Epinephrine Bitrartrate 酒石酸肾上腺素
1-(2, 2-dimethyl-4h-1,3-benzodioxin--6-yl)-2-(1-phenylethylamine)ethanol （SM-8）
17-BETA CARBOXYLIC ACID; 6a,9a-difluoro-l1~-hydroxy-l6a-methyl-l7apropionyloxy-3-oxo （F6B-A0 ）
“Selling Price” means, with respect to each Product, an amount equal to the sum of (i) the Direct Costs to manufacture such Product, plus (ii) [***]% of the amount of such Direct Costs plus any applicable taxes.
“Direct Costs” means, with respect to a Product, the actual cost of raw materials, packaging components, overhead expense applied on a consistent basis with other products manufactured by ANP, and direct labor used to produce such Product. In no event will Direct Costs include expenses related to unutilized facility capacity, or allocations for corporate overheads.
APPENDIX B: SPECIFICATIONS