Replies to post #338642 on Innovation Pharmaceuticals Inc (IPIX)

[olden_grumpini]

I'm curious as to where the part about "if CRO fails to carry out its mission...it does not get paid." comes from?

I found a Master Services Agreement between Corcept Therapeutics (biotech company) and ICON Clinical Research (CRO) from 2007 that was posted to the SEC website. There is an upfront payment and monthly payments thereafter.

Payment Terms – Any invoices submitted by ICON to CORCEPT shall include documentation and/or detail agreed upon by the Parties, and shall be due and payable within thirty (30) days after receipt by CORCEPT. Invoices may reference milestones and/or deliverables completed, including dates completed, as specified in the Project Contract. All pass-through costs shall be itemized in a form and in such detail as is agreed between the Parties as set forth in the Project Contract. Taxes (and any penalties thereon) imposed on any payment made by CORCEPT to ICON shall be the responsibility of ICON. Invoices will be submitted to CORCEPT’s representative as specified in the Project Contract.


(a) CORCEPT shall provide an upfront payment of *** set forth in the budget. CORCEPT shall not be obligated to make any upfront payments for pass-through costs, which shall be invoiced monthly as costs are incurred, or for investigator grants, which shall be wired by CORCEPT as needed. ICON shall submit to CORCEPT an invoice describing the Services provided and costs incurred during a particular month on a monthly basis and CORCEPT shall pay all invoiced amounts within thirty (30) days after receipt of such invoice. Interest may be charged in the amount of one percent (1%) per month (or part thereof) with respect to all invoices paid later than thirty (30) days after receipt by CORCEPT. Within sixty (60) days after the end of each Project, any funds in excess of the amounts set forth in the budget for such Project paid to ICON by CORCEPT with respect to such Project shall be returned to CORCEPT.


(b) If any portion of an invoice is disputed, the Parties shall use good faith efforts to reconcile differences or discrepancies with regard to any disputed amount of such invoice as soon as practicable. For clarity, CORCEPT shall pay all undisputed amounts under such invoice in accordance with Section 4.2(a) of this Master Agreement within thirty (30) days after receipt by CORCEPT of such invoice.

MASTER SERVICES AGREEMENT

[sunspotter]

1) "CRO supervises ALL aspects of trials...from strategy, to regulatory compliance"

No. The responsibility for every aspect of the study rests with the Sponsor of the study, in this case IPIX:

"Sponsors are responsible for selecting qualified investigators, providing them with the information they need to conduct an investigation properly, ensuring proper monitoring of the investigation(s), ensuring that the investigation(s) is conducted in accordance with the general investigational plan and protocols"

https://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfcfr/cfrsearch.cfm?fr=312.3

The CRO is contracted (the clue is in the term Contract Research Organisation) to perform some of these aspects for the Sponsor, but the Sponsor remains legally responsible for every aspect of the study - the CRO can be audited by FDA in its conduct of the study, but any findings are applied to the Sponsor as it is the Sponsor's responsibility to ensure the CRO complies with all necessary rules and regulations.

2) "They also interact with the FDA re: compliance with the trial requirements...and validated lab results done in U.S."

Actually they can't. All these matters remain the sponsor's sole responsibility. They can and do prepare documentation for the Sponsor, but that's about as far as it goes.

3) "If CRO does not perform according to their function...they do not get paid. Great incentive to do it right."

Worded so vaguely as to be meaningless, but essentially if you're Pfizer, AZ or GSK you might get some kind of rebate if things don't go to plan.

OTOH if you're IPIX you pay most of the costs upfront, with a few downstream milestones and the contract has so many loopholes for the CRO to worm through they'd have to completely screw it up to give any kind of refund.

I've signed literally dozens of such contracts on behalf of my pharmaceutical employers, so I know whereof I speak.

Other than those gross factual errors JTFM's post was spot on.

BTW if you want me to address a post of yours, you should use the Reply button so I see it in my mailbox.

[Empiricst1]

Nice job, LilyGDog. You show that though it is far from rocket science, you have to know what you are doing to set up a study site and monitor it.