Exhibit 10.1

InKine Pharmaceutical Company, Inc. Long-Term Incentive Plan

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1. Plan Objective

The InKine Pharmaceutical Company, Inc. Long-Term Incentive Plan (the “Plan”) is
designed to encourage results-oriented actions on the part of members of the
executive management team and other key employees of InKine Pharmaceutical
Company, Inc. (the “Company”). The Plan is intended to align closely financial
rewards to executive employees with the achievement of specific performance
objectives by the Company.

2. Definitions

 
     (a)     “Administrator” shall mean the Committee.

 
     (b)     “Award” shall mean the incentive award earned by a Participant
under the Plan for a Performance Period, if any.

 
     (c)     “Code” shall mean the Internal Revenue Code of 1986, as amended and
the regulations promulgated thereunder.

 
     (d)     “Committee” shall mean the Compensation Committee of the Board of
Directors of the Company.

 
     (e)     “Company” shall mean InKine Pharmaceutical Company, Inc.

 
     (f)     “Officer” shall mean an employee who is an officer of the Company
for purposes of section 162(m) of the Code.

 
     (g)     “Participant” shall mean members of the executive management team
and other key employees of the Company designated by the Administrator as
eligible to participate in the Plan for a Performance Period.

 
     (h)     “Performance Goals” shall mean the specific performance objectives
established by the Administrator for a Performance Period in accordance with
Section 5.

 
     (i)     “Performance Period” shall mean, unless the Administrator
determines otherwise, a period of three calendar years beginning on January 1 of
the first calendar year and ending on December 31 of the third calendar year.

 
     (j)     “Plan” shall mean the InKine Pharmaceutical Company, Inc. Long-Term
Incentive Plan, as set forth herein and as may be amended from time to time.

 
     (k)     “Target Award” shall have the meaning as defined in Section 5
below.

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3. Eligibility

Members of the executive management team of the Company and other key employees
of the Company are eligible to participate in the Plan. The Administrator shall
designate which employees shall participate in the Plan for each Performance
Period.

4. Administration

 
     (a)     The Plan shall be administered by the Committee. The Committee
shall be comprised of at least two outside directors, as that term is defined in
section 162(m) of the Code.

 
     (b)     The Administrator shall have full power and authority to establish
the rules and regulations relating to the Plan, to interpret the Plan and those
rules and regulations, to select Participants for the Plan, to determine each
Participant’s Target Award, Performance Goals and actual Award, to make all
factual and other determinations in connection with the Plan, and to take all
other actions necessary or appropriate for the proper administration of the
Plan, including the delegation of such authority or power, where appropriate.

 
     (c)     All powers of the Administrator shall be executed in its sole
discretion, in the best interest of the Company, not as a fiduciary, and in
keeping with the objectives of the Plan and need not be uniform as to similarly
situated individuals. The Administrator’s administration of the Plan, including
all such rules and regulations, interpretations, selections, determinations,
approvals, decisions, delegations, amendments, terminations and other actions,
shall be final and binding on the Company and all employees of the Company,
including the Participants and their respective beneficiaries.

    5. Target Awards and Performance Goals

 
     (a)     At the beginning of each Performance Period as designated by the
Administrator, the Administrator shall establish for each Participant a Target
Award, which shall be expressed as a percentage of base salary. Target Awards
will be based on a number of factors, including, but not limited to, (i) market
competitiveness of the position, (ii) job level, (iii) base salary level, (iv)
past individual performance, and (v) expected contribution to future Company
performance and business impact. The Administrator shall also establish for each
Officer a maximum Award that may be paid for the Performance Period. The maximum
amount for Officers shall remain fixed for the entire Performance Period.

 
     (b)     At the beginning of each Performance Period, the Administrator
shall establish for each Participant Performance Goals that must be met in order
for an Award to be payable for the Performance Period. The Administrator shall
establish in writing: (i) the Performance Goals that must be met, (ii) the
threshold, target and maximum amounts that may be paid if the Performance Goals
are met, and (iii) any other conditions that the Administrator deems appropriate
and consistent with the Plan and, in the case of Officers, section 162(m) of the
Code. The Administrator shall establish objective Performance Goals for each
Participant related to the Participant’s business unit or the performance of the
Company and its parents, subsidiaries and affiliates as a whole, or any
combination of the foregoing. The Administrator may also establish subjective
Performance Goals for Participants; provided that, for Officers, the subjective
Performance Goals may only be used to reduce, and not increase, the Award
otherwise payable under the Plan.

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     The Administrator shall notify each Participant of his or her Target Award
and the Performance Goals for the Performance Period. In addition, unless the
Administrator determines otherwise, at the time the Administrator communicates
to a Participant the amount of his Target Award, the Participant may elect to
receive up to 50% of the payment of his or her Award for the Performance Period,
if any, in cash. If the Participant fails to make an election, the entire amount
of the Participant’s Award, if any, shall be made in shares of common stock of
the Company as described in Section 5.

     (c)     The objectively determinable Performance Goals shall be based on
one or more of the following criteria related to the Participant’s business unit
or the performance of the Company and its parents, subsidiaries and affiliates
as a whole, or any combination of the foregoing: stock price, earnings per
share, EBITDA (earnings before interest, taxes, depreciation and amortization),
net earnings, operating or other earnings, profits, revenues, net cash flow,
financial return ratios, return on assets, shareholder return, return on equity,
growth in assets, unit volume, sales, market share, drug discovery or other
scientific goals, pre-clinical or clinical goals, regulatory approvals, or
strategic business criteria consisting of one or more objectives based on
meeting specified revenue goals, market penetration goals, geographic business
expansion goals, cost targets, goals relating to acquisitions or divestitures,
or strategic partnerships as well as industry indices.

 
     (d)     For Officers, the Administrator must establish the Target Awards
and Performance Goals no later than the earlier of (i) 90 days after the
beginning of the Performance Period or (ii) the date on which 25% of the
Performance Period has been completed, or such other date as may be required or
permitted under applicable regulations under section 162(m) of the Code. The
Performance Goals for each Officer for each Performance Period are intended to
satisfy the requirements for “qualified performance-based compensation” under
section 162(m) of the Code, including the requirement that the achievement of
the Performance Goals be substantially uncertain at the time they are
established and that the Performance Goals be established in such a way that a
third party with knowledge of the relevant facts could determine whether and to
what extent the Performance Goals have been met and the amount of the Award
payable to the Participant under the Plan, if any.

 
     (e)     Each Participant will earn an Award for a Performance Period based
on the level of achievement of the Performance Goals established by the
Administrator. The Administrator may adjust, upward or downward, the Award for
each Participant who is not an Officer, based on the Administrator’s
determination of the Participant’s achievement of personal and other Performance
Goals established by the Administrator and other factors as the Administrator
determines. The Administrator may reduce (but not increase) the Award for each
Officer based on the Administrator’s determination of the Participant’s
achievement of personal and other Performance Goals established by the
Administrator and other factors as the Administrator determines. The
Administrator shall not be authorized to increase the amount of any Award of an
Officer that would otherwise be payable pursuant to the terms of the Plan.

 
     (f)     The maximum Award that may be paid to an Officer for a Performance
Period shall not exceed two times the Officer’s Target Award. The Administrator
may establish a lower maximum Award for an Officer as it deems necessary or
appropriate.

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6. Payment of Incentive Awards

 
     (a)     The Administrator shall certify and announce to the Participants
the Awards that will be paid by the Company as soon as practicable following the
final determination of the Company’s financial results for the Performance
Period. Payment of the Awards certified by the Administrator shall be made in
cash, in shares of Company common stock, or a combination of the two, if elected
by the Participant in accordance with Section 4(b), as soon as practicable
following the close of the Performance Period, but in any event within two and
one-half months after the close of the Performance Period. Prior to the payment
of any Award under the Plan, the Administrator shall certify in writing that the
Performance Goals and other material terms were satisfied. The distribution of
Company common stock shall be made in accordance with the InKine Pharmaceutical
Company, Inc. 2004 Equity Compensation Plan.

 
     (b)     Participants must be employed on the last day of the Performance
Period to be eligible for an Award from the Plan, except as described in
subsection (c) below. Participants who terminate employment prior to the last
day of the Performance Period will not be eligible for any Award payment for
that Performance Period, except as the Administrator may otherwise determine.

 
     (c)     Unless the Administrator determines otherwise, Participants who
die, become disabled under a Company-sponsored disability program, or who retire
under a Company-sponsored retirement program during the Performance Period will
be eligible for a prorated Award based on the achievement of the Performance
Goals for the Performance Period and appropriate adjustment as described in
Section 4. The prorated Award will be calculated from the date when they became
eligible for the Plan to the date of death or retirement. Payment will be made
in a single payment at the same time as all other Awards for the Performance
Period are distributed. In the case of the death of a Participant, any Award
payable to the Participant shall be paid to his or her beneficiary. For this
purpose, the Company will use the beneficiary named under the Company-sponsored
life insurance plan. If no life insurance beneficiary is designated, the
beneficiary will be the decedent’s estate.

 
     (d)     The Administrator may establish appropriate terms and conditions to
accommodate newly hired and transferred employees, consistent, in the case of
Officers, with section 162(m) of the Code.

    7. Changes to Performance Goals and Target Awards

At any time prior to the final determination of Awards for Participants other
than Officers, the Administrator may adjust the Performance Goals and Target
Awards to reflect a change in corporate capitalization (such as a stock split or
stock dividend), or a corporate transaction (such as a merger, consolidation,
separation, reorganization or partial or complete liquidation), or to reflect
equitably the occurrence of any extraordinary event, any change in applicable
accounting rules or principles, any change in the Company’s method of
accounting, any change in applicable law, any change due to any merger,
consolidation, acquisition, reorganization, stock split, stock dividend,
combination of shares or other changes in the Company’s corporate structure or
shares, or any other change of a similar nature. The Administrator may make the
foregoing adjustments with respect to Officers’ Awards to the extent the
Administrator deems appropriate, considering the requirements of section 162(m)
of the Code.

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8. Amendments and Termination

 
     (a)     The Company may at any time amend or terminate the Plan by action
of the Committee; provided, however, that the Committee shall not amend the Plan
without shareholder approval if such approval is required by section 162(m) of
the Code or other applicable legal or regulatory standards. Without limiting the
foregoing, the Company, by action of the Administrator, shall have the right to
modify the terms of the Plan as may be necessary or desirable to comply with the
laws or local customs of countries in which the Company operates or has
employees.

 
     (b)     The Plan must be reapproved by the shareholders no later than the
first shareholders meeting that occurs in the fifth year following the year in
which the shareholders previously approved the Plan, or at such other times, if
any, if required by section 162(m) of the Code or the regulations thereunder.

    9. Miscellaneous Provisions

 
     (a)     This Plan is not a contract between the Company and the
Participants. Neither the establishment of this Plan, nor any action taken
hereunder, shall be construed as giving any Participant any right to be retained
in the employ of the Company or any of its subsidiaries. Nothing in the Plan,
and no action taken pursuant to the Plan, shall affect the right of the Company
to terminate a Participant’s employment at any time and for any or no reason.
The Company is under no obligation to continue the Plan.

 
     (b)     A Participant’s right and interest under the Plan may not be
assigned or transferred, except as provided in Section 5(c) of the Plan upon
death, and any attempted assignment or transfer shall be null and void and shall
extinguish, in the Company’s sole discretion, the Company’s obligation under the
Plan to pay Awards with respect to the Participant. The Company’s obligations
under the Plan may be assigned to any corporation which acquires all or
substantially all of the Company’s assets or any corporation into which the
Company may be merged or consolidated.

 
     (c)     The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund, or to make any other segregation of
assets, to assure payment of Awards. The Company’s obligations hereunder shall
constitute a general, unsecured obligation, Awards shall be paid solely out of
the Company’s general assets, and no Participant shall have any right to any
specific assets of the Company.

 
     (d)     The Company shall have the right to deduct from Awards any and all
federal, state and local taxes or other amounts required by law to be withheld.

 
     (e)     It is the intent of the Company that the Plan and Awards under the
Plan for Officers comply with the applicable provisions of sections 162(m) of
the Code. To the extent that any legal requirement of section 162(m) of the Code
as set forth in the Plan ceases to be required under section 162(m) of the Code,
that Plan provision shall cease to apply.

 
     (f)     The Company’s obligation to pay compensation as herein provided is
subject to any applicable orders, rules or regulations of any government agency
or office having authority to regulate the payment of wages, salaries, and other
forms of compensation.

 
     (g)     The validity, construction, interpretation and effect of the Plan
shall exclusively be governed by and determined in accordance with the laws of
the Commonwealth of Pennsylvania.

    10. Effective Date.

The Plan will become effective as of March 19, 2005, subject to the approval of
shareholders at the 2005 Annual Meeting of Shareholders, and no payments shall
be made pursuant to the Plan until after the Plan has been approved by the
shareholders of the Company.

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