CONSULTING AGREEMENT

THIS AGREEMENT, effective as of October 26, 2007 (this “Agreement”) between
Alexey L. Margolin, Ph.D. (“Consultant”) and ALTUS PHARMACEUTICALS INC.
(“Altus”), a Delaware corporation.

WHEREAS, upon the execution of this Agreement, Dr. Margolin has informed Altus
of his intention to resign from his position as Senior Vice President and Chief
Scientific Officer effective December 31, 2007; and

WHEREAS, Altus desires to retain the services of Dr. Margolin in a consulting
capacity effective following his resignation with respect to certain activities
as described in this Agreement, and Consultant is willing to so act;

NOW, THEREFORE, Consultant and Altus agree as follows:

1. Description of Services. Altus hereby retains Consultant as a consultant to
Altus and Consultant hereby agrees to use diligent efforts to perform such
services as described in the Project Order attached hereto as Exhibit A
(“Services). Consultant shall use sound and professional principles and
practices in the performance of Services in accordance with normally accepted
industry standards and shall comply with all applicable laws and regulations,
including, without limitation, any regulatory requirements applicable to the
work performed for Altus hereunder.

2. Term and Termination. This Agreement shall become effective as of the date
first set forth above and the term of the consulting relationship shall begin on
January 1, 2008 and shall remain in effect for six (6) months until June 30,
2008. Either party may terminate this Agreement upon not less than thirty
(30) days prior written notice. Any termination of this Agreement shall be
without prejudice to any obligation by either party which shall have accrued and
then be owing. The obligations of the Consultant under Section 5, 6, and 7 of
this Agreement shall survive the expiration or any termination of this
Agreement.

3. Compensation. For Services provided and rights granted hereunder, Altus will
pay the Consultant a fee as specified in the corresponding Project Order
provided that the relevant invoice is not disputed. In addition, (a) all
unvested options to purchase Altus Common Stock previously granted by Altus to
the Consultant shall continue to vest in accordance with the vesting schedule(s)
set forth in the applicable Stock Option Agreements between the Consultant and
Altus (the “Stock Option Agreements”) and (b) all vested but unexercised options
owned by the Consultant as of the date of this Agreement shall continue to be
exercisable by the Consultant until the expiration of this Agreement, in
accordance with the terms of the Amended and Restated 2002 Stock Plan and your
Stock Option Agreements.

4. Expenses. Altus will reimburse Consultant for any actual documented
out-of-pocket expenses incurred by Consultant at Altus’ request while rendering
Services under this Agreement so long as the expenses are reasonable. Requests
for reimbursement shall be in a form reasonably acceptable to Altus.

5. Intellectual Property. The Consultant hereby agrees that any and all data,
results, information, inventions, improvements, ideas, trademarks, formulae,
processes, experimental protocols, techniques, know-how and innovations, whether
patentable or not, which the Consultant may create, invent, discover, originate,
make or conceive during the course of or in connection with Consultant’s
performance of Services hereunder, whether or not reduced to writing or
practice, either solely or jointly with others, which result from (a) tasks
assigned to Consultant by Altus or otherwise performed by Consultant pursuant to
this Agreement, (b) tasks funded by Altus, or (c) use of materials or premises
owned, leased or contracted for by Altus (collectively, “Intellectual Property”)
shall be the sole and exclusive property of Altus and the Consultant hereby
assigns the same to Altus. The Consultant shall promptly and fully disclose all
such Intellectual Property to Altus. The Consultant further agrees at any time,
upon the request and at the expense of Altus, for the benefit of Altus or Altus’
nominees, to execute any and all applications, assignments, instruments and
papers, including patent applications, which Altus shall deem necessary or
desirable to protect or perfect its entire right, title and interest in and to
any of the Intellectual Property, to testify in any proceeding in the Patent
Office or in the courts, and generally to do everything lawfully possible to aid
Altus, its successors, assigns and nominees to obtain, enjoy and enforce proper
patent or other protection for the Intellectual Property.

6. Confidential Information. The Consultant shall hold all of Altus’
Confidential Information (as defined below) in confidence and shall not disclose
any Confidential Information to any third party. The Consultant shall use the
same level of care to prevent any unauthorized use or disclosure of such
Confidential Information as the Consultant exercises in protecting the
Consultant’s own information of similar nature. The Consultant shall not use
Altus’ Confidential Information for any purpose except as may be necessary in
the ordinary course of performing Consultant’s duties hereunder, without the
prior written consent of Altus. For purposes hereof, Altus’ “Confidential
Information” shall mean (a) all Intellectual Property, as defined above, and
(b) all data, protocols, manufacturing processes and techniques, clinical
development plans, pre-clinical and clinical studies, know-how, trade secrets,
patent applications, strategic and marketing information, financial information,
forecasts and plans, research and business terms with customers and suppliers,
and other information of a confidential or proprietary nature about the business
of Altus or otherwise belonging to Altus or third parties with whom Altus may
have business dealings, disclosed or otherwise made available to the Consultant
by Altus. In addition, Altus’ “Confidential Information” shall include any
information derived or generated as a result of the Contractor performing its
Services for Altus, written summaries of confidential oral information, and any
information provided that is intended, and reasonably understood, to be treated
as confidential. Confidential Information shall not include information the
Consultant receives from Altus which (i) is in the public domain at the time of
disclosure; (ii) after disclosure, becomes part of the public domain by
publication or otherwise, except by breach of this Agreement; (iii) was in the
Consultant’s possession prior to the time of disclosure by Altus; or (iv) which
the Consultant shall receive from a third party who to the knowledge of the
Consultant disclosed it to the Consultant without violating any obligation of
confidentiality to Altus.

7. Documents and Records. All documents, data, records, apparatus, equipment and
other physical property, whether or not pertaining to Intellectual Property or
Confidential Information, furnished to Consultant by Altus or produced by
Consultant or others in connection with Consultant’s retention hereunder shall
be and remain the sole property of Altus and shall be returned promptly to Altus
as and when requested by Altus. In any event, Consultant shall return and
deliver all such property, including any copies thereof, upon termination of his
or her retention as a consultant hereunder for any reason.

8. No Conflict. Consultant represents that his or her performance of the terms
of this Agreement and that his or her retention as a consultant by Altus does
not and will not breach or conflict with any other agreements or arrangements to
which Consultant is a party, including agreement to keep in confidence any
proprietary information acquired by Consultant in confidence or in trust prior
to his or her retention by Altus. Consultant has not entered into nor is subject
to, and agrees Consultant will not enter into nor become subject to, any
agreement or policy, either written or oral, in conflict herewith. Consultant
represents that the Consultant has not brought and will not bring with him or
her to Altus or use in the performance of the Consultant’s responsibilities at
Altus any equipment, supplies, facility or trade secret information of any
current or former employer which are not generally available to the public,
unless the Consultant has obtained written authorization for their possession
and use. Consultant also understands that, in connection with his or her
retention as a consultant to Altus, he or she is not to breach any obligations,
including any obligations of confidentiality, that he or she has to others.
Consultant represents and warrants to Altus that it has not been debarred from
performing Services under the provisions of the US Food and Drug Laws. If
Consultant is debarred or receives notice of an action or threat of action of
debarment, Consultant shall promptly notify Altus of same.

9. Independent Contractor. Altus and Consultant agree that Consultant will be an
independent contractor for all purposes including, without limitation, payroll
and tax purposes, and that Consultant shall not in any way represent himself or
herself to be an officer or employee of Altus. Consultant shall not have the
authority to bind Altus in any manner whatsoever by reason of this Agreement.

10. Notices. Any notice given under this Agreement shall be deemed delivered
when delivered by hand or by certified mail or overnight courier addressed to
the parties at their respective addresses set forth below or at such other
address as either party may provide to the other in writing from time to time:

         
Altus:
  Altus Pharmaceuticals Inc.
 
  125 Sidney Street
 
  Cambridge, MA 02139
 
  Attention: Legal Department
Consultant:
  Alexey L. Margolin, Ph.D
 
  193 Upland Avenue
 
  Newton, MA 02461

11. Assignment. The rights and obligations of the parties hereunder shall inure
to the benefit of, and shall be binding upon their respective successors and
assigns, provided, however, that the Consultant may not assign this Agreement
without the prior written consent of Altus.

12. Specific Performance. Consultant acknowledges that Altus will have no
adequate remedy at law if Consultant violates the terms of Sections 5, 6, or 7
hereof. In such event, Altus shall have the right, in addition to any other
rights it may have, to seek in any court of competent jurisdiction, injunctive
or other relief to restrain any breach or threatened breach of this Agreement.

13. General; Relationship to Prior Employment. This Agreement embodies the
entire agreement between the parties and supersedes any prior or contemporaneous
understandings with respect to the subject matter hereof with the exception of
(a) Section 8 of your Severance and Change of Control Agreement dated May 17,
2007 (the “Severance and Change of Control Agreement”), which survives for the
term of this Agreement, as may be earlier terminated pursuant to Section 2, and
(b) your prior employee Non-Competition, Non-Solicitation and Non-Disclosure
Agreement dated June 16, 2000 (the “Employee Obligations Agreement”), as amended
by your Severance and Change and Control Agreement and as further amended by
this Agreement to only apply with respect to services performed through the last
date of his employment, December 31, 2007. Without limiting the foregoing, Altus
acknowledges and agrees that Section 3 of the Employee Obligations Agreement was
terminated upon the execution of the Severance and Change of Control Agreement,
and further, that the Employee Non-Disclosure & Inventions Agreement, dated
June 21, 1993, was terminated upon the execution of the Employee Obligations
Agreement. In addition, Altus agrees that in the event Dr. Margolin remains
employed by Altus through December 31, 2007 in his role as Senior Vice President
and Chief Scientific Officer, he will remain eligible for his discretionary
target bonus as described in the compensation section of the Altus 2007 Proxy.
It is understood that the amount of his bonus will be dependent on the
performance of the Company and his individual performance during 2007 as
determined in the discretion of the Compensation Committee of Altus Board of
Directors. Neither this Agreement nor any term, covenant, condition or other
provision hereof may be changed, waived, discharged or terminated except by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.

14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.

1

15. Execution. This Agreement may be executed in counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an original,
and all of which counterparts, taken together, shall constitute one and the same
instrument even if the parties have not executed the same counterpart.
Signatures provided by facsimile transmission shall be deemed to be original
signatures.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first written above.

              CONSULTANT       ALTUS PHARMACEUTICALS INC. /s/ Alexey L. Margolin
  By: /s/ Jonathan I. Lieber  
   
Name:
  Alexey L. Margolin, Ph.D   Title:   Name: Jonathan I. Lieber
Vice President, Chief Financial
Officer and Treasurer

SS# or Tax ID#: [Social Security Number]

2

Exhibit A

ALTUS PHARMACEUTICALS INC.

PROJECT ORDER NO. 1

THIS PROJECT ORDER NO. 1 (the “Project Order”) is by and between Altus
Pharmaceuticals, Inc. (“Altus”) and Alexey L. Margolin, Ph.D (“Consultant”), and
upon execution shall be incorporated into the Consulting Agreement between Altus
and Consultant dated November 1, 2007 (the “Agreement”). Capitalized terms in
this Project Order shall have the same meaning as set forth in the Agreement.

Altus hereby engages Consultant to provide Services, as follows:

1. Services. The Consultant shall make himself available for up to 16 hours per
month to render to Altus such scientific and research advisory services as Altus
may from time to time request and as are reasonably acceptable to Consultant.

2. Project Term. The Project Term will be for an initial period of six
(6) months beginning on the date of execution of this Project Order, and may be
extended for additional periods, by mutual written consent of the parties, and
shall be subject to earlier termination accordance with Section 2 of the
Agreement.

3. Altus Contact. Sheldon Berkle, Chief Executive Officer

  4.   Compensation. The total compensation due Consultant for Services under
this Project Order consists of $8,333.33 per month plus a six month completion
bonus of $50,000 payable upon fulfillment of the twelve (12) days of consulting
services during the six (6) month term. Such compensation shall be paid within
thirty days after the end of each month. Consultant shall invoice Altus to the
attention of Accounts Payable Dept., 640 Memorial Drive for Services rendered
hereunder. In addition, Altus agrees to pay the continuation costs of
Consultant’s family health and dental insurance coverage under COBRA for such
six (6) month period which is estimated to be approximately $5700 for the six
(6) month period. The amount required to be paid to Consultant hereunder is in
consideration for his making himself available to provide Services in accordance
with the terms hereof and will be payable whether or not the Services are
utilized.

All other terms and conditions of the Agreement shall apply to this Project
Order.

PROJECT ORDER AGREED TO AND ACCEPTED BY:

              CONSULTANT       ALTUS PHARMACEUTICALS INC. By: /s/ Alexey L.
Margolin
  By: /s/ Jonathan I. Lieber  
   
duly authorized
          duly authorized Print Name: Alexey L. Margolin, Ph.D
  Print Name: Jonathan I. Lieber
 
      Title:   Vice President, Chief Financial
Officer and Treasurer
Date:
  October 26, 2007   Date:   October 26, 2007

3