Commercial expenses
Commercial expenses means those expenses incurred for the Commercialization of the Finished Product which is consistent with the budget outlined in the Commercialization Plan and are specifically attributable to the Commercialization of Finished Products and shall consist of (i) Cost of Goods Sold, (ii) Pre-Marketing Expenses, (iii) Marketing Expenses, (iv) Distribution Expenses, (v) Clinical Phase IV and Related Expenses, (vi) Regulatory Expenses, (vii) the Launch Expenses, (viii) Medical Science Liaison Expenses, and (ix) amounts paid to Third Parties licensors as described in Section 8.4 (as such terms are defined in Exhibit H). Commercial Expenses shall exclude Development Expenses, even if incurred after the first commercial launch of a Finished Product, and shall exclude any costs deductible from Net Sales under the definition thereof (e.g., distributor fees). For the avoidance of doubt, any cost deducted in the calculation of Net Sales shall not be included in the calculation of the Commercial Expenses [Law Insider].
An expense is the cost of operations a company incurs to generate revenue. It is simply defined as the cost one is required to spend on obtaining something. The popular saying goes, “it costs money to make money.”
Typical expenses include supplier payments, employee wages, factory leases, and equipment depreciation. Businesses are allowed to write off tax-deductible expenses on their income tax returns to lower their taxable income and thus their tax liability; however, the Internal Revenue Service (IRS) has strict rules on which expenses businesses are allowed to claim as a deduction [Investopedia].
Expense: Definition, Types, and How Expenses Are Recorded. Investopedia. Retrieved from: https://www.investopedia.com/terms/e/expense.asp
Commercial Expenses definition. Law Insider. Retrieved from: https://www.lawinsider.com/dictionary/commercial-expenses