EXHIBIT 10.40

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

AMENDMENT TO RESEARCH

AND LICENSE AGREEMENT

This Amendment (“Amendment”) to the Research and License Agreement (“Agreement”)
dated August 25, 2000, as amended by the Consent and Amendment dated
September 16, 2002, is entered into this 2nd day of October, 2007 by and between
Kosan Biosciences Inc., having an address at 3832 Bay Center Place, Hayward,
California 94545 (“Licensee”) and the Sloan-Kettering Institute for Cancer
Research, having a place of business at 1275 York Avenue, New York, New York
10021 (“SKI”).

RECITALS

WHEREAS, SKI owns U.S. Application Serial No. 10/435,408 (“‘408 application”)
that is exclusively licensed to Licensee in accordance with this Agreement;

WHEREAS, the ‘408 application is involved in Interference 105,557 declared by
the United States Patent and Trademark Office on June 29, 2007;

WHEREAS, also involved in the interference is U.S. Patent No. 7,145,018 (“‘018
patent”) owned by the State of Oregon (“University”) that is exclusively
licensed to Licensee under the terms of the Exclusive License Agreement dated
April 4, 2005 and related amendment;

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WHEREAS, Licensee, SKI and University on October 2, 2007 entered into a
Settlement Agreement setting forth the agreed upon plan to conduct, and resolve
all issues in, Interference No. 105,557 and;

WHEREAS, in furtherance of the resolution of Interference No. 105,557, Licensee
and SKI wish to make certain amendments to the Agreement.

NOW THEREFORE, Licensee and SKI agree as follows:

1. Article 1 is hereby amended by the addition of the following new definitions:

1.45 “OSU AGREEMENT” shall mean that certain Exclusive License Agreement between
LICENSEE and the State of Oregon dated April 4, 2005.

1.46 “OSU PATENT RIGHTS” shall mean any claim of any issued patents licensed to
LICENSEE by the State of Oregon under the OSU AGREEMENT that have any
composition of matter, method of use or administration or formulation claims
covering LICENSEE’s trans-9,10-dehydroepothilone D compound designated KOS-1584
(or R1645), unless such claim has lapsed, expired, been canceled, been abandoned
or been held invalid by a court or other appropriate body of competent
jurisdiction in a decision that is unappealable or unappealed within the time
allowed for appeal or been admitted to be invalid or unforceable through reissue
or disclaimer or otherwise.

2. Article 6 is hereby amended by the addition of new Section 6.5 as follows:

6.5 LICENSEE hereby agrees to reimburse SKI for its actual out-of pocket
expenses incurred after [ * ] for conducting Interference No. 105,557 up to a
total of [ * ]. Within sixty

 

2

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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(60) days after receipt by LICENSEE of an invoice detailing such expenses,
LICENSEE shall pay to SKI or its designee all amounts directly related to
Interference No. 105,557 up to [ * ]. Notwithstanding anything to the contrary
herein, if any SKI PATENT RIGHTS become involved in any interference proceeding
or priority contest with any patent application or patent directed to
epothilones, their use or manufacture, that is controlled by the State of
Oregon, whether such proceeding is before the United States Patent and Trademark
Office or any U.S. federal court, SKI shall be responsible for its own costs and
LICENSEE shall have no obligation whatsoever to pay for such proceeding or
reimburse SKI.

3. Article 7 is hereby amended by the addition of new Section 7.1.7 as follows.

7.1.7 Notwithstanding anything to contrary under Sections 7.1.1, 7.1.2 and 7.1.3
above, if there is no [ * ] in [ * ] within SKI PATENT RIGHTS covering
LICENSEE’S compound designated KOS-1584 or products containing such compound
requiring payment of a royalty to SKI, but products containing KOS-1584, the use
of such product, or the method of manufacture of such product is covered by at
least one [ * ] of a [ * ] patent within OSU PATENT RIGHTS, LICENSEE agrees to
pay SKI the applicable royalty on NET SALES of such products in accordance with
Section 7.1.1, 7.1.2 or 7.1.3, as the case my be. Royalties payable under this
Section 7.1.7 shall be due to SKI from the period beginning with the first
commercial sale of LICENSEE’S KOS-1584 products.

4. Article 7 is hereby amended by the addition of new Section 7.14 as follows:

Notwithstanding anything to contrary under Sections 7.1.1, 7.1.2 and 7.1.3 above
no monies payable to SKI under this AGREEMENT shall be subject to an offset,
reduction or deduction on account of royalties paid by LICENSEE or SUBLICENSEE
to the State of Oregon on NET SALES of KOS-1584.

 

3

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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5. Except as specifically amended herein, the terms of the Agreement shall
remain in full force and effect. The Agreement (including the exhibits and
schedules thereto) and this Amendment and the Settlement Agreement constitute
the entire agreement between SKI and Licensee with respect to the subject matter
within and therein and supersede all revisions, agreements and understandings
between the parties whether written or oral. If there is a conflict between the
terms of the Agreement and this Amendment, the terms of the Amendment shall
govern.

IN WITNESS WHEREOF, Licensee and SKI by their duly authorized officers have
amended this Amendment to the Agreement as of the date of the first written
above.

 

SLOAN-KETTERING INSTITUTE FOR CANCER RESEARCH     KOSAN BIOSCIENCES INC. By:  
/s/ G. J. Bernhardt     By:   /s/ Robert G. Johnson Jr.   (Signature)      
(Signature) Name:   Gustave J. Bernhardt     Name:   Robert G. Johnson, Jr.  
(Please Print)       (Please Print) Title:   Director, Research Resources
Management     Title:   President & CEO Date:   10/2/07     Date:   2 October
2007

 

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[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.