Exhibit 10.43
PROPOSAL NUMBER: 2006-115
Cyclosporin Method Validation and Analytical Testing
PORTIONS OF THIS EXHIBIT MARKED “[* * *]” HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, AND THE OMITTED PORTIONS HAVE BEEN FILED
SEPARATELY IN PAPER FORM WITH THE SECURITIES AND EXCHANGE COMMISSION.
PROPOSAL FOR:
Cyclosporin Method Validation and Analytical Testing
for Sirion Therapeutics
SUBMITTED TO:
Bill Stringer
Manufacturing and Compliance
Sirion Therapeutics
August 3, 2006
FROM:
ENCOMPASS PHARMACEUTICAL SERVICES, INC.

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PROPOSAL NUMBER: 2006-115
Cyclosporin Method Validation and Analytical Testing
August 3, 2006

     
Attention:
  Bill Stringer
 
  Vice President
 
  Manufacturing and Compliance
 
  Sirion Therapeutics

Subject: Cyclosporin Method Validation and Analytical Testing
This proposal will include the following sections:

         
 
  - Section I   (Company Information)
 
       
 
  - Section II   (Project Overview and Scope)
 
       
 
  - Section III   (Responsibilities, Standard Terms and Conditions, Cost
Proposal, Statement of Commitment, Proposal Acceptance Sheet)
 
       
 
  - Section IV   (Attachments)

Encompass Pharmaceutical Services, Inc., hereafter referred to as Encompass, is
pleased to present to Sirion Therapeutics in Tampa, Florida, the estimated
prices for the execution of Cyclosporin Method Validation and Analytical
Testing. We have had extensive experience in these types of projects, especially
with Ophthalmics, and working in a global environment. We are confident that the
expertise of Encompass professionals will exceed your expectations for the
project completion and we look forward to developing a strong working
relationship with Sirion Therapeutics.
If you have any questions or need additional information, do not hesitate to
contact me at:
(770) 248-4501
Sincerely,
/s/ T. Rowe
T.Rowe
President

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PROPOSAL NUMBER: 2006-115
Cyclosporin Method Validation and Analytical Testing

          TABLE OF CONTENTS        
 
       
Introduction
    4  
 
       
Corporate Information
    4  
 
       
Business Justification
    4  
 
       
Section 1
    5  
 
       
1.1 Project Overview
    5  
 
       
1.2 Project Scope
    5  
 
       
Section 2
    6  
 
       
2.1 Responsibilities
    6  
 
       
2.2 Standard Terms and Conditions
    7  
 
       
2.3 Cost Proposal
    8  
 
       
2.4 Invoicing and Payments
    9  
 
       
2.5 Statement of Commitment
    10  
 
       
2.6 Proposal Acceptance Sheet
    11  
 
       
Section 3
    12  
 
       
Attachments
       
 
       
1. Cost assessment
       

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PROPOSAL NUMBER: 2006-115
Cyclosporin Method Validation and Analytical Testing
COMPANY INFORMATION
     Encompass Pharmaceutical Services, Inc.
Corporate Information:
Encompass Pharmaceutical Services Inc is a Georgia based service company with a
focus on providing commercialization support to the Pharmaceutical Industry.
Currently the Organization consists of two major segments, the analytical
services division and the quality and validation services division. Encompass
Pharmaceutical Services, Inc. is mostly comprised of former employees of the
Ophthalmics division of Novartis Pharmaceuticals, although the individual
expertise ranges across many formulation types.
Our analytical personnel are experienced in the testing of liquid dosage forms
as well other dosage forms including solids, powders, lyophilized products, etc.
Our Validation and Quality Services division strengths are in the area of
sterile liquid and Freeze dried products. In addition, Encompass personnel have
significant experience in the management of both quality improvement and
development projects.
Notable is our strength and experience with method and product transfers on a
global project level. Encompass is comprised of a team of former Novartis
personnel who were responsible for global method and transfer activities
As an organization of personnel whose former responsibilities included the
quality oversight of contract manufacturing, we recognize the importance of
building trust with our customers by insuring the integrity in all of our
interactions and in supplying a service whose quality provides significant
benefit to our customers.
Business Justification:
The expertise of Encompass is a perfect fit for the Cyclosporin Project. With
competitive prices, Encompass provides much more than an analytical lab whenever
necessary. This expertise will help to ensure the successful launch of the
product.

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PROPOSAL NUMBER: 2006-115
Cyclosporin Method Validation and Analytical Testing
     SECTION 1
PROJECT OVERVIEW AND SCOPE
1.1 Project Overview
The overall scope of this project is to complete the Cyclosporin Method
Validations and other Analytical Testing as described in the cost assessment in
Attachment 1.
1.2 Project Scope:
Encompass will provide the testing and evaluation services described in the cost
assessment included in Attachment 1. This document lists the activities required
for performing the necessary analytical activities.

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PROPOSAL NUMBER: 2006-115
Cyclosporin Method Validation and Analytical Testing
     SECTION 2
2.1 RESPONSIBILITIES

  1.1.1   Encompass Pharmaceutical Services, Inc     1.1.1.1   Upon acceptance
of this proposal and contract, Encompass agrees to provide the following:

  —   Develop protocols for the execution of the method validations,
extraction/migration study, and dosing study     —   Execution of the signed
protocols     —   Writing and approving the final reports     —   Qualification
of Equipment will be complete prior to being used in the performance of the
testing activities     —   Personnel will be adequately trained and qualified to
perform the testing.     —   Encompass will be in compliance with all applicable
laws and regulations including cGMPs.     —   Data will be retained by Encompass
and a copy of the final results of each test interval provided to Sirion
Therapeutics at its completion.     —   Personnel will manage all information
received from Sirion Therapeutics or its affiliates under strict confidentiality
in accordance with the Confidential Disclosure Agreement by and between the
parties.     —   Updates on the project’s execution will be provided to Sirion
Therapeutics or its designee on a regular scheduled basis, as agreed upon.

  1.1.2   Sirion Therapeutics (Sirion)     1.1.2.1   Upon acceptance of this
proposal and contract, Sirion Therapeutics agrees to provide the following:

  —   Timely supply of the samples, raw. materials, and reference standards
required for the performance of the activities defined by this proposal.     —  
Any information, documentation, and specifications available, as deemed
necessary in order to facilitate the execution of the scope of work.     —  
Timely Review and approve all protocols and Reports generated by Encompass in
the execution of this agreement.     —   Training on any Sirion Therapeutics
applicable contractor procedures in order to facilitate the execution of the
scope of work.

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PROPOSAL NUMBER: 2006-115
Cyclosporin Method Validation and Analytical Testing
2.2 STANDARD TERMS AND CONDITIONS
Approval of this document, associated protocols, or an approved purchase Order
number document will serve as acceptance to initiate the project. Any
out-of-scope change order requires the written approval of an authorized
representative of both parties.
Encompass will not be held liable for any claims related to the products or
activities of Sirion Therapeutics as a result of their performance of the
testing as defined by this agreement and the protocols signed by Sirion
Therapeutics , unless such claim is a result of the gross negligence, willful
misconduct or lack of adherence to cGMP’s of Encompass. If the testing performed
hereunder has been demonstrated to be not in accordance with the testing
procedures and protocols developed pursuant to this agreement, Encompass’s only
liability to Sirion Therapeutics is to repeat testing as required.
Sirion Therapeutics will indemnify and hold harmless Encompass for all claims
arising out of the sale or distribution of any Sirion Therapeutics products
covered by this agreement.
Encompass will manage and monitor activities to assure timely completion of
project, however, any delay or failure of Encompass during the execution of the
project caused by change of scope, lack of support from Sirion Therapeutics,
delays from Sirion Therapeutics due to a submission of required documentation,
reviews or approval of documentation, changes in priorities, acts of God,
strike, fire, storm, flood, windstorm, hurricane, war, or any other cause or
causes beyond the reasonable control of Encompass, shall be excused. If
necessary and appropriate, the time for performing the required activities shall
be extended or re-negotiated for a period of time reasonably necessary to
overcome the effect of such delays and applicable costs should be assigned to
project budget.
In the event that Sirion Therapeutics decides to cancel this contract for
convenience before the negotiated activities are completed, Sirion Therapeutics
agrees to pay a cancellation fee of [* * *] of the total contract amount yet to
be completed, as well as expenses incurred through the cancellation date
specific to the activities being performed.

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PROPOSAL NUMBER: 2006-115
Cyclosporin Method Validation and Analytical Testing
2.3 COST PROPOSAL
Project Cost
A detailed breakdown of the costs to perform the analytical activities is
presented in Attachment 1.
Sirion Therapeutics will pay Encompass on a [* * *] basis as each test interval
is completed. Encompass will use commercially reasonable efforts to complete the
Services and Deliverables within the estimated timelines
The total estimate for these activities is [* * *] for the activities set forth
in the attachment.
This estimate does not cover methods development. If further development of any
of the methods is required, once mutually agreed upon by Sirion Therapeutics and
Encompass, a rate of [* * *] will be billed to cover these costs. The estimate
also does not cover laboratory investigations where the conclusion is a root
cause assignable to the product, its manufacture, componentry, etc. In this
case, Sirion Therapeutics will be billed for the activities associated with the
investigation.
In most cases, supplies, such as columns and reagents required to perform the
activities associated with this proposal are included in the cost assessment
provided to Sirion Therapeutics. If any column or reagent is required that
represents more than [* * *] of the total price for that method’s activity, the
difference will be billed to Sirion Therapeutics upon prior notice with
appropriate documentation. These supplies and columns will be returned to Sirion
Therapeutics at the completion of the project, as appropriate.
If Encompass has reason to believe that the expected final price to Sirion
Therapeutics will differ from the Estimated Budget, Encompass shall immediately
notify Sirion Therapeutics and provide a revised Estimated Budget for performing
the work. Sirion Therapeutics shall have the option to:

  (i)   Accept the revised Estimated Budget.     (ii)   Revise the Scope of Work
so that the Services can be performed at the current Estimated Budget.     (iii)
  Terminate this Agreement, without any cancellation fee provided the change in
final price is not due to scope changes or new requirements imposed by Merial
[sic].

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PROPOSAL NUMBER: 2006-115
Cyclosporin Method Validation and Analytical Testing
2.4 INVOICING AND PAYMENTS
[* * *]
Sirion Therapeutics will be invoiced on a [* * *] basis for analytical services
as they are completed. The details of completed services will be included in
each invoices.
If travel is required for the completion of this project, travel expenses will
be pre-approved by Sirion Therapeutics and charged to Sirion Therapeutics as a
pass through as incurred.
Payments will be made in accordance with invoices presented to Sirion
Therapeutics at each invoice period; Payments are due and payable [* * *] of
invoice date. A penalty charge of 1.5% per month will be applied for any late
payments.
Payment shall be made to the following address:

     
 
  ENCOMPASS PHARMACEUTICAL SERVICES, INC.
 
  150 Technology Parkway NW
 
  Norcross, GEORGIA 30092
 
  770-248-4501 / FAX: 770-248-4501
 
   
 
  Attention: Customer Accounts

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PROPOSAL NUMBER: 2006-115
Cyclosporin Method Validation and Analytical Testing
2.5 STATEMENT OF COMMITMENT
Encompass certifies that our associates are in conformance with the U.S. Code of
Federal Regulations Subpart 211. Our facilities and personnel are qualified to
perform the testing services described and experienced to advise on the subject
for which they are retained. Encompass did not and will not use in any capacity
the services of any person debarred under section 306 of the Federal Food, Drug,
and Cosmetic Act as published in the Federal Register.
To indicate your acceptance of the terms and conditions of this proposal, please
sign the attached Proposal Acceptance Sheet and return to my attention Or, if
you prefer, please submit a purchase order for our immediate execution which
states that it is subject to Encompass proposal 2006-115 for Sirion
Therapeutics.
Encompass is ready to begin work upon your authorization to proceed. Thank you
for your interest in Encompass Pharmaceutical Services and for the opportunity
to present this proposal. You can be assured that Encompass Pharmaceutical
Services will give your project the attention, dedication, and professionalism
that it deserves.

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PROPOSAL NUMBER: 2006-115
Cyclosporin Method Validation and Analytical Testing
2.6 PROPOSAL ACCEPTANCE SHEET
PROPOSAL NUMBER: 2006-115
PROPOSAL FOR Cyclosporin Method Validation and Analytical Testing
Proposal Submitted By: ENCOMPASS PHARMACEUTICAL SERVICES, INC.
Name: Thomas Rowe;
Title: President
Date: August 3, 2006
Attention: Bill Stringer
This is to confirm the acceptance of Encompass Pharmaceutical Services, Inc.
Proposal No. 2006-115 for the Cyclosporin Method Validation and Analytical
Testing
Proposal Accepted By:

                      Name: William Stringer       /s/ William Stringer
 
      Print       Signature
 
               
 
      Print       Signature
 
                    Title: VP Manufacturing & Compliance        
 
                    Date: August 9, 2006        

Please return one (1) copy of this Proposal Acceptance Sheet to:

     
 
  ENCOMPASS PHARMACEUTICAL SERVICES, INC.
 
  150 Technology Parkway NW
 
  Norcross, GEORGIA 30092
 
  770-248-4501 / FAX: 770-248-4501

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PROPOSAL NUMBER: 2006-115
Cyclosporin Method Validation and Analytical Testing
SECTION IV
Attachments
Attachment Detailed cost analysis for Sirion Therapeutics proposal 2006-115
[* * *]

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