Exhibit 10.16

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

SUBLICENSING CONSENT AND AMENDMENT

This SUBLICENSING CONSENT AND AMENDMENT (the “Consent”) is entered this
August 2, 2006 (the “Consent Date”) by BioDelivery Sciences International, Inc.
(“Parent”), its wholly-owned subsidiary Arius Pharmaceuticals, Inc. (“Arius”;
with Parent, “BDSI”), and CDC IV, LLC (“CDC”)

WHEREAS, BDSI and CDC are parties to that certain Clinical Development and
License Agreement, dated July 14, 2005, as amended February 15, 2006 and May 16,
2006 (as amended, the “CDC License”), and Security Agreement, dated February 15,
2006, as amended May 16, 2006 (the “Security Agreement”), under which CDC has
certain rights with respect to certain intellectual property rights and assets
of Arius related to Arius’ BEMA Fentanyl product;

WHERAS, Arius and Parent intend to enter into a licensing agreement with Meda
AB, a Swedish corporation (“Meda”), granting Meda rights to develop and
commercialize the BEMA Fentanyl product in Europe as will be described in a
license agreement to be executed between Arius, Parent, and Meda in a form
substantially similar to that attached hereto as Exhibit A (the “Meda License”),
such license to be executed simultaneously with or following the execution of
this Consent;

WHEREAS, the Meda License requires (i) Meda to be granted the right under the
Program Data (as defined in the CDC Agreement) to (1) develop the Licensed
Product (as defined in the Meda License) for use and sale in the Territory (as
defined in the Meda License) and (2) make or have made Licensed Product for such
development purposes, including, with respect to (1) and (2), a right of
reference to all Program Data solely for purposes of developing and obtaining
regulatory approval of the Licensed Product in the Territory (as defined in the
Meda License), (ii) Meda to be granted the right under the Program Data,
effective upon the initial Governmental Approval (as defined in the Meda
License) of the Licensed Product in the Territory (as defined in the Meda
License), to make and have made Licensed Product for sale in the Territory (as
defined in the Meda License) and use, have used, market, advertise, promote,
distribute, offer for sale, and sell Licensed Product in the Territory (as
defined in the Meda License), and (iii) that Meda’s rights shall survive any:
(1) termination of the CDC License by CDC pursuant to Section 10.2, 10.3, or
10.4 thereof for which Arius does not exercise its continuation rights under
Section 10.7 of the CDC License, (2) grant of an exclusive license to CDC
pursuant to Section 10.5.3 of the CDC License and/or Section 2.04(d) of that
certain BEMA License Agreement, between Arius and Arius Two, Inc. (“Arius Two”),
dated August 2, 2006, as amended (the “Arius Two License”), and (3) assignment
of certain Arius assets to CDC under the CDC License and/or Security Agreement
(such termination, license grant, and assignment, a “CDC Termination Event”),
with such rights granted to Meda pursuant to the Meda License surviving such CDC
Termination Event in order to permit Meda to continue the undisturbed enjoyment
of such rights under the Meda License; provided, however that BDSI, Arius and
their respective affiliates shall automatically assign (without the need for any
further act on the part of any person or entity), and hereby do assign to CDC
free and clear of any and all liens and

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***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential

treatment are being requested are denoted with “***”.

 

other encumbrances, upon the occurrence of such CDC Termination Event, all of
the rights and benefits of Parent, Arius and any of their respective affiliates
under the Meda License (subject to any (i) rights and benefits of an Arius Two
Assignee (as such term is defined in that certain BEMA Acquisition Consent,
Amendment, and Waiver dated as of the date hereof between Parent, Arius, Arius
Two, and CDC) under the Arius Two License (or any subsequent license entered
into by an Arius Two Assignee and CDC pursuant to Section 2.04(d) of the Arius
Two License) and (ii) subsequent assignment of rights and benefits under the
Meda License to an Arius Two Assignee from CDC upon an Arius Two Termination
Event, as defined in the Arius Two License; provided further, however, that in
no event shall the foregoing assignment impose any costs or other obligations on
CDC in excess of those imposed on CDC under the CDC License.

WHEREAS, the CDC License and Security Agreement do not currently contemplate or
permit Arius’ grant to Meda of the rights referenced above;

WHEREAS, CDC wishes to enable Arius to enter into the Meda License in order to
maximize the commercial success of the Licensed Product by executing this
Consent; and

WHEREAS, the parties desire to amend the CDC License as set forth herein.

NOW THEREFORE, in consideration of the foregoing premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Consent agree as follows:

1. Definitions. Any capitalized terms not separately defined in this Consent or
by reference to the Meda License shall have the meaning provided in the CDC
License.

2. Executed Meda License. Attached hereto as Exhibit A is a final and complete
copy of the Meda License, together with final and complete copies of all other
agreements entered into between Parent, Arius or any of their affiliates and
Meda in connection with the Meda License (the “Collateral Documents”, and
together with the Meda License, the “Meda Transaction Documents”). Except for
the Meda Transaction Documents attached as Exhibit A, there are no other
agreements, side letters or other understandings between Parent, Arius, or any
of their affiliates and Meda related to the subject matter of the Meda License.
The parties acknowledge and agree that the consent of CDC is subject to the
foregoing statements being true and correct.

3. Consents. Effective upon the execution of the Meda License, CDC agrees,
notwithstanding anything to the contrary in the CDC License or Security
Agreement, that (i) Arius shall be entitled to grant Meda rights under the
Program Data to (1) develop the Licensed Product for use and sale in the
Territory (as defined in the Meda License) and (2) make and have made Licensed
Product for such development purposes, including, with respect to (1) and (2), a
right of reference to all Program Data solely for purposes of developing and
obtaining regulatory approval of the Licensed Product in the Territory (as
defined in the Meda License), (ii) Arius shall be entitled to grant Meda the
right under the Program Data, effective upon the initial Governmental Approval
(as defined in the Meda License) of the Licensed Product in the Territory (as
defined in the Meda License), to make and have made Licensed Product for sale in
the Territory (as defined in the Meda License) and use, have used, market,
advertise, promote, distribute, offer for sale, and sell the Licensed Product in
the Territory (as defined in the Meda License), as contemplated and required by
the Meda License, and (iii) upon a CDC Termination Event, such rights granted to
Meda pursuant to

 

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***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential

treatment are being requested are denoted with “***”.

 

the Meda License shall survive such CDC Termination Event, in order to permit
Meda to continue the undisturbed enjoyment of such rights under the Meda
License, and Parent, Arius and their respective affiliates shall automatically
assign (without the need for any further act on the part of any person or
entity), and hereby do assign to CDC free and clear of any and all liens and
other encumbrances, upon the occurrence of such CDC Termination Event, all of
the rights and benefits of BDSI, Arius and any of their respective affiliates
under the Meda License (subject to any (i) rights and benefits of any Arius Two
Assignee (or any subsequent license entered into by any Arius Two Assignee and
CDC pursuant to Section 2.04(d) of the Arius Two License) and (ii) subsequent
assignment of rights and benefits under the Meda License to an Arius Two
Assignee from CDC upon an Arius Two Termination Event); provided further,
however, that in no event shall the foregoing assignment impose any costs or
other obligations on CDC in excess of those imposed on CDC under the CDC
License. Upon an Arius Two Termination Event following a CDC Termination Event,
CDC shall automatically assign, and hereby does assign, all rights and benefits
under the Meda License to Arius Two, free and clear of all liens, claims, and
encumbrances, as contemplated by the Meda License. CDC consents (a) under
Section 8.5.1 of the CDC License to Arius’ granting of rights to Meda under the
Meda License and (b) to the amendment of the Arius Two License pursuant to
amendments thereto in substantially the forms attached hereto as Exhibit B.

4. Amendments to Meda Transaction Documents. Arius and BDSI agree that they will
not enter into any amendment or otherwise modify any of the Meda Transaction
Documents in a manner that would adversely affect the rights of CDC under the
CDC License without the prior written consent of CDC (which consent may be
withheld at CDC’s sole discretion). The parties acknowledge and agree that the
consent of CDC contained herein is subject to Arius and BDSI agreeing to the
foregoing restrictions.

5. Net Sales. Arius and BDSI agree and acknowledge that ***, and CDC agrees and
acknowledges that, notwithstanding anything to the contrary, ***.

6. Amendment to CDC License. The parties hereby agree that Section 10.7 of the
CDC License shall be amended by deleting the parenthetical phrase “(provided,
however, that the royalty obligation shall be prorated and the amounts due shall
be based upon the royalty rates set forth in Sections 6.6.1(a) and 6.6.1(b)
multiplied by the fraction calculated as follows: the numerator shall be the
aggregate Upfront Payment and Periodic Payments advanced CDC to Company and the
denominator shall be $7,000,000)” contained in such Section 10.7.

7. License to Continue in Full Force and Effect. To the extent that the terms of
the CDC License or Security Agreement are varied by this Consent, such
variations shall be deemed to be lawfully made amendments to the CDC License
pursuant to Section 11.5 thereof and to the Security Agreement pursuant to
Section 7.1 thereof. Except as they may be modified by this Consent, the CDC
License and Security Agreement shall remain unchanged and in full force and
effect.

8. Governing Law. This Consent shall be governed by, and construed and enforced
in accordance with, the laws of the State of New York, without regard to its
conflicts of laws rules.

9. Counterparts. This Consent may be executed in two or more counterparts, each
of which shall be deemed and original, but all of which together shall
constitute one and the same instrument. Signatures to the Consent may be
transmitted via facsimile and such signatures shall be deemed to be originals.

10. Third Party Beneficiary. Meda shall be an intended third party beneficiary
to this Consent for the sole purpose of enforcing Section 3 of this Consent.

[Signature page to follow]

 

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***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential

treatment are being requested are denoted with “***”.

 

IN WITNESS WHEREOF, the parties have executed and delivered this Consent as of
the Consent Date.

 

ARIUS PHARMACEUTICALS, INC. By:
 

/s/ Mark A. Sirgo

Name:   Mark A. Sirgo Title:   President BIODELIVERY SCIENCES INTERNATIONAL,
INC. By:  

/s/ Mark A. Sirgo

Name:   Mark A. Sirgo Title:   President and CEO CDC IV, LLC By:  

/s/ David Ramsey

Name:   David Ramsey Title:   Partner

 

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