Exhibit 10.2

EXECUTION COPY

Purdue Pharmaceutical Products L.P.

One Stamford Forum

Stamford, CT 06901

July 31, 2009

Glenn A. Oclassen, President

Transcept Pharmaceuticals, Inc.

1003 W. Cutting Blvd., Suite #110

Point Richmond, CA 94804

Dear Mr. Oclassen:

This letter agreement sets out the understanding of the undersigned concerning a
proposed license agreement between Purdue Pharmaceutical Products L.P. or one of
its affiliates (“Purdue”) and Transcept Pharmaceuticals, Inc. (“Transcept”),
under which Purdue would receive an exclusive license to seek regulatory
approval of and commercialize Intermezzo® in the territory of Mexico (the
“Proposed Transaction”). Transcept has agreed to grant Purdue (i) the exclusive
right to review, study and determine, in Purdue’s sole discretion, the
feasibility of developing and commercializing Intermezzo® in Mexico, and
(ii) the exclusive option to negotiate the Proposed Transaction with Transcept
((i) and (ii) collectively, the “Option”), subject to the terms and conditions
set forth below.

1) Purdue will pursue the Proposed Transaction if, in its sole judgment, Purdue
determines that (i) [***] and (ii) [***]. If Purdue decides to pursue the
Proposed Transaction and notifies Transcept of its decision in writing before
the expiration of the Option Period (as defined below), then Purdue and
Transcept will negotiate in good faith to agree upon a non-binding term sheet
for the Proposed Transaction (the “Term Sheet”). Upon agreement of the Term
Sheet, each party will request its counsel to begin working in good faith with
the other party’s counsel as soon as reasonably practicable on the definitive
transaction agreement and related documents containing the terms set forth in
the Term Sheet and such other provisions as are customary in transactions of
this nature. If Purdue decides not to pursue the Proposed Transaction before the
expiration of the Option Period, it shall confirm and notify Transcept of its
decision in writing. Upon Transcept’s receipt of Purdue’s written notification
indicating that Purdue has decided not to pursue the Proposed Transaction, the
Option shall automatically terminate and Transcept shall be permitted to
negotiate a license agreement for Intermezzo® as it relates to the territory of
Mexico with another party. Upon the expiration or termination of the Option
pursuant to the terms of this letter agreement without the parties entering into
a definitive transaction agreement in respect of the Proposed Transaction, a
copy of the notice attached hereto as Exhibit A that has been duly executed by
Purdue shall be delivered to Transcept.

2) The initial period of the Option shall be the [***] period beginning on the
date of this letter agreement (the “Initial Option Period”, and together with
any Renewal Period as

 

 

[***] Confidential treatment has been requested for portions of this exhibit.
These portions have been omitted from this exhibit and have been filed
separately with the Securities and Exchange Commission.

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defined below, the “Option Period”). The Option will renew for [***] periods
following the Initial Option Period (each, a “Renewal Period”) if Purdue pays
the Option Fee (as defined below) prior to the expiry of the then-current Option
Period. Purdue shall be obligated to pay a fee of [***] to Transcept at the
commencement of the Initial Option Period and prior to the commencement of each
Renewal Period, if any (the “Option Fee(s)”). Notwithstanding the foregoing,
prior to the date that Purdue gives Transcept notice of its acceptance of the
United States New Drug Application for Intermezzo® following such New Drug
Application’s final approval by the United States Food and Drug Administration
(the “NDA Acceptance Date”), the Option will automatically renew for successive
Renewal Periods on the [***] of the date of this letter agreement, unless the
Option is terminated by Purdue as set forth in paragraph 1, and no Option Fees
shall be payable by Purdue but instead shall accrue upon the commencement of
each Option Period. All accrued Option Fees shall be paid to Transcept within
[***] after the NDA Acceptance Date. Transcept shall be required to negotiate
the Proposed Transaction, if so requested by Purdue, at any time during the
Option Period, so long as Purdue has paid to Transcept the Option Fee(s)
required to be paid to Transcept as of such time. For the avoidance of doubt,
(i) if, (A) following the NDA Acceptance Date, Purdue fails to pay the accrued
Option Fee(s) required to be paid to Transcept by the deadline set forth above
and Purdue does not make such payment within [***] of Purdue receiving written
notice from Transcept that Purdue has failed to pay such Option Fee(s) by the
deadline set forth above, or (B) after the NDA Acceptance Date, Purdue elects
not to pay any subsequent yearly renewal Option Fee within [***] of Purdue
receiving written notice from Transcept that Purdue has failed to pay such
Option Fee, then the restrictions described in paragraph 5 below shall no longer
apply and Transcept shall be free to negotiate with third parties regarding the
Proposed Transaction and to enter into a definitive agreement with one or more
third parties with respect to the Proposed Transaction, (ii) no Option Fee(s)
will be paid to Transcept prior to the NDA Acceptance Date, and (iii) if the NDA
Acceptance Date does not occur or the Option expires pursuant to paragraph 3
below prior to the NDA Acceptance Date, then Purdue will not owe Transcept any
accrued Option Fee(s).

3) If, at any time after the date hereof, the United States License and
Collaboration Agreement, dated as of July 31, 2009, by and between Transcept and
Purdue expires or terminates, then the Option shall be terminable upon thirty
(30) days’ prior written notice from Transcept to Purdue.

4) On the date the approved NDA No. 22-328 for Intermezzo® is transferred to
Purdue (the “NDA Transfer Date”), Transcept shall assign or cause its affiliates
to assign to Purdue or Purdue’s designee, the mark “INTERMEZZO™”, together with
any registrations or applications for registration therefor, in Mexico, and all
other marks confusingly similar thereto, all variations of such marks, all
members of any families of any of the foregoing marks, all designs and styles
used by Transcept in the depiction of the foregoing marks and any copyrights
therein, and all goodwill appurtenant to any of the foregoing, that are owned or
controlled by Transcept as of the NDA Transfer Date, in all respects free and
clear of any and all liens, hypothecations, mortgages, charges, security
interests, pledges and other encumbrances and claims of any nature. In
connection with the foregoing, on the date the assignment of said trademark(s)
occurs, Transcept shall take all reasonable actions and execute all
documentation necessary to effect such assignment, including an Assignment of
Trademark, substantially in the form of assignment attached hereto as Exhibit B
and suitable for recordation with the Instituto Mexicano de la

 

 

[***] Confidential treatment has been requested for portions of this exhibit.
These portions have been omitted from this exhibit and have been filed
separately with the Securities and Exchange Commission.

 

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Propiedad Industrial (Mexican Patent and Trademark Office) and/or any other
applicable governmental or regulatory authority in Mexico and thereafter shall
take all reasonable actions requested by Purdue to perfect Purdue’s rights in
the assigned trademark(s) throughout Mexico at the expense of Purdue, including
the execution and delivery of any additional documents of assignment.

5) In order to provide a reasonable period for Purdue to evaluate and for the
parties to reach a definitive agreement in respect of the Proposed Transaction,
the parties agree that during the Option Period, unless Purdue shall have
notified Transcept in writing that it has decided not to pursue the Proposed
Transaction, neither Transcept nor any of its affiliates, or any of its or their
respective directors, officers, employees, financial advisors or counsel, agents
or representatives or any other party retained or engaged by Transcept or any
affiliate of Transcept to assist in the analysis, the arranging, brokering,
financing, negotiation or consummation of the Proposed Transaction at any time
will (either directly or through any intermediary) solicit, entertain offers or
bids from, respond to, negotiate with or consider any offer, bid or proposal of
any other person for a transaction that would conflict with or impede the
Proposed Transaction in any respect, or provide any non-public information to
any third party in connection with such an offer, bid or proposal. Nothing
herein shall preclude Transcept from responding to inquiries from prospective
licensees regarding the Proposed Transaction by informing such prospective
licensees that Transcept is contractually prohibited from negotiating or
granting licenses to Intermezzo® in Mexico.

6) Except as otherwise agreed between the parties, during the period from the
date hereof until the earlier of (i) the expiration or termination of the Option
Period and (ii) the date on which Purdue provides Transcept with written notice
that negotiations towards a definitive agreement are terminated, Transcept will
(a) reasonably cooperate with Purdue to provide access to Purdue of Transcept’s
books and records, and all other relevant documents and data, in each case, to
the extent related to the Proposed Transaction, (b) prepare, file, prosecute and
maintain all of its patents related to the Intermezzo® product in Mexico, and
(c) keep Purdue informed, in a timely manner, of material communications,
notifications or other information which it receives or provides (directly or
indirectly) with respect to the Intermezzo® product or related patents and
intellectual property with any regulatory authority in Mexico, including,
without limitation, the Instituto Mexicano de la Propiedad Industrial (Mexican
Patent and Trademark Office) and Federal Commission for Sanitary Risk Protection
(COFEPRIS). Notwithstanding the foregoing subsections (b) and (c) above,
Transcept agrees that it shall not, during the Option Period, develop
Intermezzo® for Mexico or contact any regulatory authority in Mexico regarding
Intermezzo® without obtaining Purdue’s prior written consent.

7) Except as and to the extent required by law, without the prior written
consent of the other party, neither Purdue nor Transcept will, and each will
direct and cause its officers, directors, employees, attorneys, accountants and
other agents and representatives not to, directly or indirectly, make any public
comment, statement or communication with respect to, or otherwise publicly
disclose or permit the public disclosure of this letter agreement or any of the
terms, conditions or other aspects of the Proposed Transaction between the
parties. If a party is required by law to make any such disclosure, it shall
first provide to the other party the content of the proposed disclosure, the
reasons such disclosure is required by law and the time and place the disclosure
will be made and the opportunity to consult with respect thereto. Disclosure
shall be

 

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made only of that part of information that counsel advises that the party is
legally required to disclose. All disclosures are subject to the terms of the
Confidentiality Agreement (as defined in paragraph 10).

8) Transcept represents and warrants that Transcept has not and will not incur
any liability in connection with the Proposed Transaction to any third party
with whom Transcept has had discussions regarding any other transaction or the
Proposed Transaction, and Transcept shall indemnify and hold harmless Purdue and
its affiliates and any of their respective successors and assigns from any and
all such claims.

9) Each party will be responsible for and bear all of its own fees and expenses
(including any broker’s or finder’s fees and the fees and expenses of its
attorneys and other advisors) incurred at any time in connection with pursuing
or consummating the Proposed Transaction.

10) Except for the Confidentiality Agreement, dated July 31, 2009, by and
between Transcept and Mundipharma International Corporation Limited, an
affiliate of Purdue (the “Confidentiality Agreement”), the provisions of this
letter agreement constitute the entire agreement between the parties and
supersede all prior oral or written agreements, understandings, representations
and warranties and courses of conduct or dealings between the parties on the
subject matter set forth herein. The provisions of this letter agreement may
only be amended or modified by a writing executed by each of the parties. This
letter agreement will be governed by and construed under the laws of the State
of New York, without regard to conflict of laws principles. This letter
agreement may be executed in one or more counterparts, each of which will be
deemed to be an original and all of which, taken together, will constitute one
and the same agreement. This letter agreement will be binding on each party’s
successors or assigns. Any successor of a party or assignee of a party’s rights
and/or obligations hereunder will expressly assume performance of such rights
and/or obligations.

11) Neither party will be obligated to proceed with the Proposed Transaction
unless and until it is approved by both parties’ respective boards of directors
and a definitive transaction agreement is signed, it being the express intent of
the parties hereto that neither party shall be bound in the absence of such
board approvals and such definitive agreement. Neither party will have any
obligation of any sort under this letter agreement or in connection with the
Proposed Transaction except (i) as may be agreed in writing by the parties
hereafter in a definitive transaction agreement and (ii) as provided explicitly
in this letter agreement (the “Binding Obligations”). In all other respects,
this letter will not bind any party to enter into the Proposed Transaction.
Except as may be expressly provided in the Binding Obligations, no past or
future action, course of conduct or failure to act relating to the Proposed
Transaction, or relating to the negotiation of, or the failure to negotiate, the
terms of the Proposed Transaction will give rise to any obligation or other
liability on the part of the parties hereto. In the event the parties enter into
a definitive agreement with respect to the Proposed Transaction, such agreement
will supersede this letter agreement in all respects. In the event this letter
agreement is terminated prior to entering into a definitive agreement relating
to the Proposed Transaction, numbered paragraphs 7, 8, 9, 10 and 11 shall
survive such termination.

[remainder of this page intentionally left blank]

 

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If the foregoing correctly sets forth our entire understanding, please sign and
return the enclosed copy of this letter agreement in the space provided below.

 

Very truly yours, PURDUE PHARMACEUTICAL PRODUCTS L.P. By:   Purdue
Pharmaceutical Products Inc., its general partner By:  

/s/ Edward B. Mahony

  Name: Edward B. Mahony   Title: EVP and CFO

 

 

 

Accepted and Agreed to: TRANSCEPT PHARMACEUTICALS, INC. By:  

/s/ Glenn A. Oclassen

  Name: Glenn A. Oclassen   Title: President

 

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EXHIBIT A

[Letterhead of Purdue Pharmaceutical Products L.P.]

[            ], 20[    ]

Transcept Pharmaceuticals, Inc.

1003 W. Cutting Blvd., Suite #110

Point Richmond, CA 94804

Dear [            ]:

The undersigned hereby agrees that the territory of Mexico is deemed to be a
part of the “Transcept Territory” as that term is defined in the license and
collaboration agreement in respect of Intermezzo® between Transcept and the
undersigned. This agreement shall be effective solely upon, and as of the date
of, delivery of this letter to Transcept.

 

 

Very truly yours, Purdue Pharmaceutical Products L.P. By:   Purdue
Pharmaceutical Products Inc., its general partner By:  

 

  Name:   Title:

 

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EXHIBIT B

FORM OF ASSIGNMENT

Transcept Pharmaceuticals, Inc., a Delaware corporation having its principal
offices at 1003 W. Cutting Blvd., Suite # 110, Pt. Richmond, California 94804
(“Transcept”), owning the entire ownership of the INTERMEZZO™ trademarks set
forth on Schedule A hereto, hereby, for good and valuable consideration received
by Transcept, (a) confirms that it has sold and assigned, and does hereby sell
and assign, to PURDUE PHARMACEUTICAL PRODUCTS L.P., a Delaware limited
partnership having a place of business at One Stamford Forum, Stamford,
Connecticut 06901 (“Purdue”), its successors and assigns, the entire ownership
interest in the INTERMEZZO™ trademarks set forth on Schedule A hereto and the
goodwill attached thereto, to be held and enjoyed by Purdue, its successors,
assigns, or other legal representatives, to the full end of the term thereof, as
may be extended by law as fully and entirely as the same would have been held
and enjoyed by Transcept if this assignment and sale had not been made,
including, but not limited to, the right to sue for past infringement, and
(b) authorizes and requests the Instituto Mexicano de la Propiedad Industrial
(Mexican Patent and Trademark Office) and any other granting authority to issue
any trademark, and any extensions or Supplementary Protections, resulting from
or based in whole upon said INTERMEZZO™ trademarks to Purdue.

 

 

TRANSCEPT PHARMACEUTICALS, INC. By:  

 

  Name:   Title:

 

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