Exhibit 10.1

November 2, 2006

Rene Belder, M.D.

Dear Rene:

I am pleased to offer you the following opportunity with Pharmacopeia Drug
Discovery, Inc.  It is my sincere hope that you will choose to join our
organization, as it is our belief that you possess the ability to make
significant contribution toward our future growth and innovation.  The following
will confirm the terms of our offer of employment to you:

Position/Location: You will assume the position of Vice President, Clinical and
Regulatory Affairs (the “Position”), based in our Cranbury, NJ headquarters and
in this position will report directly to me.  The Position shall be part of the
Company’s senior management team (SMT) and shall require you to assume
responsibility for duties generally associated with the Vice President, Clinical
and Regulatory Affairs position.

Compensation: Your compensation in the Position will include an annual base
salary of $275,000.00, paid semi-monthly at the rate of $11,458.33 per pay
period.  This will be your base salary through 2006 and 2007 and until our 2007
Salary Review, effective March 1, 2008.

Effective November 13, 2006, or upon your actual start date, whichever is later,
you will participate in our annual management incentive program and will be
eligible to earn, at target, an additional 25% of your base salary based upon
the achievement of corporate and individual objectives.  You will be eligible to
earn a bonus for 2006 performance in 2007, prorated for the number of months you
are employed by us in 2006.

In addition, you will be paid a one-time bonus of $30,000 upon commencement of
your employment with us.

Employment and Benefits: As an employee of Pharmacopeia, you will participate in
our comprehensive employee benefits package.  We are committed to maintaining a
competitive position in the employment marketplace and in doing so make
available to you the standard employee benefits package provided to employees.
This will include, but is not limited to, health, disability, and life
insurance; participation in our 401(k) retirement plan; vacation benefits, and
participation in our equity compensation plan.  Additionally, you will be
eligible to participate in our Executive Life and LTD plans.  Please find a
complete summary of our benefits enclosed for your review.

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Severance Provisions: We will provide a separate agreement that details our
mutual obligations and commitments upon the termination of your employment.

Incentive Stock Option Grant: Upon joining the Company, you will be given an
option for 100,000 shares of Company common stock pursuant to the terms of the
Company’s 2004 Stock Incentive Plan (the “Plan”).  The option will be
memorialized in an option agreement with standard terms consistent with this
letter agreement and your severance agreement.  The option will vest over a
4-year period, 25% at the end of the first year and monthly thereafter.  The
option will be priced at the market close price on your first day of employment
with us.  In the event of a consolidation, merger, reorganization, or sale of
all, or substantially all, of the assets or capital stock of the Company or
other business combination in which the Plan is not either continued or assumed,
the above option will vest in full.

Vacation:  You will receive four weeks vacation annually, prorated in 2006 for
the number of months you are employed by the Company.

Reimbursement of Expenses:  The Company shall reimburse you for all normal items
of travel, entertainment and other business expenses reasonably incurred by you
on behalf of the Company.  Such expenses shall be documented and submitted to
the Company in accordance with the reimbursement policies of the Company in
effect from time to time.

Attorney Fees:  The Company agrees to pay the reasonable legal fees you incur in
the negotiation and execution of this agreement, in an amount not to exceed
$3,000.

Confidentiality:  Due to the nature of your responsibilities, you will be
required to execute the Company’s Invention and Non-Disclosure Agreement upon
commencement of your employment with us.  We enclose a copy of that agreement
for your review.

Consideration and Response Times: We would appreciate a response to this offer
as soon as possible.

Start Date: We will mutually agree to a start date and propose it to be November
13, 2006.

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This letter supersedes any prior or contrary representations that may have been
made by Pharmacopeia Drug Discovery, Inc.  The terms of this offer may be
amended only in writing and signed by you and an authorized officer of the
company.  This offer is subject to satisfactory documentation with respect to
your identification and right to work in the United States.  Please sign and
return one copy of the letter.

We look forward to your participation as a member of the Pharmacopeia team and
your involvement in what we are confident represents an exciting and
professionally rewarding venture.

On Behalf of Pharmacopeia Drug Discovery, Inc.:

 

 /s/ Leslie J. Browne, Ph.D.

 

 

 Leslie J. Browne, Ph.D.

 

 President and Chief Executive Officer

 

 

 

 

 

 Signed and agreed by:

 

 

 

 

 

 /s/ Rene Belder, M.D.

 

 

 Rene Belder, M.D.

 

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