Item 1.01 Entry into a Material Definitive Agreement.
On November 13, 2023, Aytu BioPharma, Inc. (the “Company”) entered into a Commercial Manufacturing Services Agreement (the “Agreement”), with Halo Pharmaceutical, Inc. (“Halo”), pursuant to which Halo will manufacture Adzenys XR ODT® and Cotempla XR ODT® products for the Company at Halo’s manufacturing facility. Under the terms of the Agreement, the Company is responsible for supplying the active pharmaceutical ingredients for the products to Halo. Halo is responsible for manufacturing the products, conducting quality control, quality assurance, validation activities, stability testing, packaging and providing related services for the manufacture of the products.
Pursuant to the Agreement, the Company has agreed to order from Halo certain minimum amounts of products based on a forecast provided by the Company, of which a portion is considering binding and the remainder is considered a good-faith estimate to facilitate Halo’s production scheduling. Any purchase orders made by the Company pursuant to the Agreement are subject to minimum order quantities, depending on the products ordered. The Company is required to purchase 100% of its requirements for the products covered by the Agreement, except for products produced in the Company’s own manufacturing facility in the Company’s sole discretion, and to the extent otherwise permitted by the Agreement.
The Agreement has an initial term beginning on November 13, 2023 and ending on November 13, 2028. The Agreement automatically renews after the initial term for successive terms of three (3) years, unless either party gives notice of its intention to terminate the Agreement within at least twenty-four (24) months prior to the end of the then-current term.
The Company may terminate the Agreement with respect to any product upon 30 days’ notice if any governmental agency takes any action that prevents the Company from importing, exporting, purchasing or selling the relevant product.
Either party may terminate the Agreement (a) if the other party has failed to remedy a material breach under the Agreement within sixty (60) days following receipt of a written notice (or fifteen (15) days in respect of a breach involving non-payment), and (b) immediately, (i) for the Company, if Halo is declared insolvent or bankrupt by a court of competent jurisdiction, and such declaration or order remains in effect for a period of sixty (60) days or if Halo files a voluntary petition of bankruptcy in any court of competent jurisdiction, (ii) for Halo, if the Company is liquidated in connection with a bankruptcy filing, or (iii) if the Agreement is assigned by the other party for the benefit of creditors.
The Agreement contains certain representations, warranties, limitations of liabilities, confidentiality and indemnity obligations and other provisions customary for an agreement of its type.
The foregoing description of the terms of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, a copy of which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the fiscal period ending December 31, 2023, with confidential portions redacted.
