Exhibit 10.1

LOGO [g77843img001.jpg]

Revised Letter of Payment Authorization

June 17, 2008

Dr. Jay Lichter

Akesis Pharmaceuticals, Inc.

888 Prospect Street

Suite 320

La Jolla, CA 92037

E: jlichter@avalon-ventures.com

Dear Dr. Lichter,

We thank you for your interest in Charles River Laboratories and hope the
attached proposal meets with your approval. For your convenience, we have
provided the following summary of the titles and prices of the studies and/or
study components under discussion. If you would like us to proceed with animal
orders resource allocation, please initial the studies and components you wish
to authorize at this time and sign and date the authorization line below. These
prices are valid for 60 days, but may be modified by mutual agreement if changes
to the scope of work are made.

 

Authorization

Initial’s

  

Study Number and Title

  

Price

(US Dollars)

  

LTC00013

13-Week Toxicity Study in Sprague-Dawley Rats with 4 Weeks Recovery

(Reference scope of work dated: 06/17/2008 version 1)

      Core Study Price:   

$446,500

(price includes 5% discount)

  

210935

Dose Solution Analysis of Vanadium (AKP-020) by GFAAS in support of LTC00013

  

$7,000

1 st occasion

$3,600 subsequent occasions

  

665350

Biomechanical Testing on Rat Femur in support of LTC00013

   $36,000   

141426

Analysis of rat whole blood samples from study LTC00013 for the determination of
Vanadium by GFAAS

   $165.00/samples (Minimum batch size of 50 samples)   

141427

Analysis of rat tissue samples from study LTC00013 for the determination of
Vanadium by GFAAS

   $250.00/samples (Minimum batch size of 50 samples)   

480075

TK Interpretation, linked to 141426 in support of LTC00013

   $6,700

 

Charles River Laboratories

   Page 1 of 11

--------------------------------------------------------------------------------

Authorization

Initial’s

  

Study Number and Title

  

Price

(US Dollars)

  

LTC00014

13-Week Toxicity Study in Beagle Dogs with 4 Weeks Recovery

(Reference scope of work dated: 06/17/2008 version 1)

      Core Study Price:   

$613,605

(price includes 5% discount)

  

210936

Dose Solution Analysis of Vanadium (AKP-020) by GFAAS in support of LTC00014

  

$7,000

1 st occasion

$3,600 subsequent occasions

  

141428

Analysis of dog whole blood Samples from study LTC00014 for the determination of
Vanadium by GFAAS

   $165.00/samples (Minimum batch size of 50 samples)   

141429

Analysis of dog tissue samples from study LTC00014 for the determination of
Vanadium by GFAAS

   $250.00/samples (Minimum batch size of 50 samples)   

480076

TK Interpretation, liked to 141428

   $25,000

In order to minimize the impact of study delays and cancellations for all
sponsors, Charles River allocates resources at the time a signed Letter of
Payment Authorization is received. Please note that scheduling is not considered
confirmed until a signed copy of this document is received. By providing
authorization via signature below, you will allow us to confirm a schedule for
each authorized study. Your signature further constitutes acceptance of the
price and payment schedule.

Price and Payment Schedule for Study LTC00013

The payment schedule and price of this study are as follows:

 

  •  

30%       Due upon Authorization*

 

  •  

30%       Due upon Study Initiation

 

  •  

30%       Due upon Completion of In-Life

 

  •  

10%       Due upon Submission of Draft Report

 

* Invoice(s) will be sent no more than 60 days prior to scheduled study start.

Price and Payment Schedule for Study LTC00014

The payment schedule and price of this study are as follows:

 

  •  

30%       Due upon Authorization*

 

  •  

30%       Due upon Study Initiation

 

  •  

30%       Due upon Completion of In-Life

 

  •  

10%       Due upon Submission of Draft Report

 

* Invoice(s) will be sent no more than 60 days prior to scheduled study start.

 

Date Created: June 17, 2008

Sponsor: Akesis Pharmaceuticals, Inc.

   Page 2 of 11

--------------------------------------------------------------------------------

In the event Charles River does not receive comments pertaining to the draft
report within 60 days after submission to the Sponsor, the final invoice will be
due and payable.

We understand that occasionally you may request to delay or to cancel a study
due to unforeseen circumstances. Charles River will make every reasonable effort
to accommodate requested schedule changes. However, as significant costs are
incurred related to study initiation, cancellation/delay fees will apply in
proportion to the number of days’ notice given (please see attached Cancellation
and Delay Policy). Cancellation/delay fees may be assessed separately for each
postponement prior to the study being cancelled or initiated. The Cancellation
and Delay Policy becomes effective upon execution of this Letter of
Authorization.

Charles River shall perform these services in accordance with the Service
Agreement (the “Agreement”) executed between Charles River Laboratories and
Akesis Pharmaceuticals, Inc. Once fully executed, this Letter of Payment
Authorization shall be incorporated into and made part of the Agreement.

REPEAT OF SAMPLE ANALYSIS. If applicable, the parties agree that as of
commencement of work, in some instances, repeat of sample analysis will be
required. If this arises, Charles River must notify the Sponsor as soon as
possible and determine, between the parties, if these repeats are required by
Sponsor. Consequently, the price per sample analysis/occasion will apply to any
additional repeats requested by the Sponsor, as well as any samples above the
analytical range, which require dilution. However, in the event that additional
sample analysis/occasions are required, Charles River shall submit a written
estimate to the Sponsor for the Sponsor’s written approval, and the Sponsor
shall respond to Charles River within five (5) business days, or within the
specified time period sanctioned by the Sponsor for receipt of such estimates.
Once authorization is received, Charles River will endeavor, when possible, to
proceed with current batches of sample analysis. Both parties acknowledge that
Charles River will be reimbursed for any amount which relates to the repeats if
the difference between the original result of the sample analysis and the repeat
result of the sample analysis, is within a 30% range.

SHIPMENT OF TEST ARTICLES. Sponsor and Charles River agree that all costs
associated with shipping test article to Charles River shall be the
responsibility of the Sponsor. Charles River shall not be responsible for any
direct or indirect damages sustained by the Sponsor resulting from any loss,
destruction or damage to the test article(s).

In the event of a conflict between the terms set forth in this letter and the
Master Service Agreement, the terms of the Master Service Agreement shall
control, unless specifically agreed upon to the contrary in this letter.

Please sign and return this document via facsimile or email (contact information
below). Should you have any questions or require any additional information,
please do not hesitate to call me. We look forward to being of service.

 

Best Regards,   LOGO [g77843img003.jpg]   /s/ Jay B. Lichter Ph.D.   Authorized
Sponsor Representative  

 

President and CEO

  Print (Name and Title)

Christina Fox

 

 

6/18/08

Account Manager

Charles River Laboratories, Inc.

Preclinical Services

Phone:   508.925.6270

Fax:        508.925.6701

E-Mail: Christina.Fox@crl.com

  Date    

If a PO is required, please submit PO with Letter of Payment Authorization or
fax to Corporate Finance at 978.657.4242.

 

Date Created: June 17, 2008

Sponsor: Akesis Pharmaceuticals, Inc.

   Page 3 of 11

--------------------------------------------------------------------------------

Title:    13-Week Toxicity Study in Sprague-Dawley Rats with 4 Weeks Recovery
Study Number:    LTC00013 Version 1 Charles River Facility:    Charles River
Laboratories Preclinical Services Massachusetts Compliance:    GLP
Species/Strain:    Rat, Sprague-Dawley Dose Formulation Preparation (assumes
basic dose preparation):    Suspension Dose Formulation Analysis:    Dose
Solution Analysis of Vanadium (AKP-020) by GFASS Dosing Regimen:    1x/day, for
13 weeks Route of Administration    Oral Gavage Test System:            Main
Study Animals:    10/sex/group       Recovery Animals:    5/sex/group Recovery:
   Included         Test Article:    AKP-020 (monotherapy) Control Article:   
1% carboxymethylcellulose Study Design:   

Group

  Dose
(mpkpd)   

Number of Animals

       

M

  

F

   1 (Control)   0    15 MS + 3 TK    15 MS + 3 TK    2   2.5    15 MS + 9 TK   
15 MS + 39 TK    3   5    15 MS + 9 TK    15 MS + 9 TK    4   10    15 MS + 9 TK
   15 MS + 9 TK    MS = main study; TK = toxiccokinetic

10 spars/sex

In-Life:            Mortality:    MS and TK animals, 2x daily (AM, PM) Clinical
Observation:    MS animals, 1x daily Body Weight:    MS and TK animals, pretest,
weekly

MS animals, prior to necropsy (fasted)

Food Consumption:    MS animals, weekly Ophthalmology:    MS and TK animals,
pretest

MS animals, prior to necropsy

Evaluations by a board-certified veterinary ophthalmologist

Toxicokinetics:    For 3/sex/group, Days 1 and 91 at the following timepoints:
0.5, 1, 2, 3, 6, 12 and 24 hours; Samples collected and analyzed for
determination of Vanadium by GFAAS: Whole Blood

 

Date Created: June 17, 2008

Sponsor: Akesis Pharmaceuticals, Inc.

   Page 4 of 11

--------------------------------------------------------------------------------

Bioanalytical Sample Analysis:    Included (whole blood and tissue samples
collected and analyzed for determination of Vanadium by GFAAS) Toxicokinetic
Data Evaluation (blood):    12 runs Clinical Pathology    Serum Chemistry:    MS
animals, Pre study (limited panel), 1 month, 3 month and recovery prior to
necropsy (fasted) Hematology:    MS animals, pre study, 1 month, 3 month and
recovery (prior to necropsy) Coagulation:    MS animals, Prior to MS and
recovery necropsy Urinalysis:    All animals, pre study, 1 month, 3 months and
recovery Urine collected via metabolism cage    Urine parameters: NAG   
Calculate and report electrolyte data (Ca, P, K, Na and Cl) using ratios and
fractional excretion as appropriate. Anatomical Pathology    Gross Necropsy:   
MS animals, end of dose necropsy, and recovery Organ Weights:    Organ Weights:
MS animals, end of dose necropsy, and recovery Histopathology:    All animals,
histopathologic evaluation (Kidney, Liver, Lung, Heart, Pancreas, adipose)
control and high dose animals, read down as necessary with additional pricing.
Bone marrow smears collected, slides made, evaluated if necessary Special
Assessments:    Kidney Cortex collected and possible evaluated for EM (40
samples)    Kidney & Pancreas collected and possibly evaluated for IHC (80
samples)    Femur collected and analyzed by DXA, pQCT and 3-point bending (40
samples)    Tabulated results and report    GLP    Samples collected and
analyzed for determination of Vanadium by GFAAS: Bone, Kidney, Liver, Pancreas,
Heart, Lung, Muscle, and Fat Data Analysis:    Qualitative and quantitative as
appropriate Report Requirements:    Draft and Final    Standard reporting
requirements include one draft and one final report in the Charles River format.
Issuance of additional drafts, reports, amended reports or a custom format
request may result in an additional fee.

 

Date Created: June 17, 2008

Sponsor: Akesis Pharmaceuticals, Inc.

   Page 5 of 11

--------------------------------------------------------------------------------

Archiving:    One Year    After dispatch of the draft report, all raw data,
samples/specimens (except for those sent to Sponsor or Sponsor designated
laboratory and resultant data which are the responsibility of Sponsor) and
documents generated at Charles River during this study, together with the
original or copy of the protocol (including amendments) and the draft report (if
available), will be retained in the secure storage area of Charles River for one
(1) year. After this one (1) year period, Sponsor will be contacted prior to the
end of the year to authorize continued storage or return to Sponsor, at
additional cost (extended storage may be at another Charles River location). At
finalization, the final report and any stored materials will be transferred to
the scientific archives of Charles River. Subsequently, storage details will be
documented in the raw data.    Any additional storage, archiving or retention
will require an Extended Archiving Agreement

 

* For the recovery phase, Charles River Laboratories reserves the right to house
the animals in a smaller room which may or may not house recovery animals from
other studies. Should the Sponsor not want the animals to be moved, an
additional charge may be applied.

Modifications or alterations can be made to the study design to suit specific
test article and client needs. Modifications may alter pricing and scheduling.

 

Date Created: June 17, 2008

Sponsor: Akesis Pharmaceuticals, Inc.

   Page 6 of 11

--------------------------------------------------------------------------------

Title:    13-Week Toxicity Study in Beagle Dogs with 4 Weeks Recovery Study
Number:    LTC00014 Version 1 Charles River Facility:    Charles River
Laboratories Preclinical Services Massachusetts Compliance:    GLP   
Species/Strain:    Dogs, Beagle    Dose Formulation Preparation (assumes basic
dose preparation):    PO= Per OS, Once daily capsule formulation Dose
Formulation Analysis:    Dose Solution Analysis of Vanadium (AKP-020) by GFASS
Dosing Regimen:    1x/day, for 13 weeks Route of Administration    Capsule Test
System:    Main Study Animals:    3/sex/group Recovery Animals:    3/sex/group
Recovery:    4 Weeks Test Article:    AKP-020 Control Article:    TBD Study
Design:    Group   Dosage
(mpkpd)   

Number of Animals (Including Recovery)

       

M

  

F

   1 (Control)   0    6    6    2   0.3    6    6    3   1    6    6    4   3   
6    6    3 spares/sex In-Life:            Mortality:    All animals, 2x daily
(AM, PM) Clinical Observation:    All animals, 1x daily cageside obs including 1
week prior to dosing, detailed obs weekly Body Weight:    All animals, 2x
pretest including, weekly, prior to necropsy (fasted) Food Consumption:    All
animals, daily including 1 week prior to dosing Veterinary Exams:    Pretest and
prior to necropsy Electrocardiography:    All animals, pretest, prior to
necropsy, no blood pressure Qualitative data evaluation by a Board-certified
veterinary cardiologist Opthamology:    All animals, pretest, prior to necropsy
Exams conducted by a Board-certified ophthalmologist

 

Date Created: June 17, 2008

Sponsor: Akesis Pharmaceuticals, Inc.

   Page 7 of 11

--------------------------------------------------------------------------------

Title:    13-Week Toxicity Study in Beagle Dogs with 4 Weeks Recovery Study
Number:    LTC00014 Version 1 Toxicokinetic Collection/Frequency:    All
animals, Days 1, 28 and 91 at the following timepoints: Pre-dose(Days 28 and 91
only), 0.5, 1, 2, 3, 6, 12 and 24 hours; Recovery animals Day 112 prior to
necropsy. Whole blood and tissue samples collected and analyzed for
determination of Vanadium by GFAAS. Toxicokinetic Sample Analysis:    Included
(Samples collected and analyzed for determination of Vanadium by GFAAS)
Toxicokinetic Data Evaluation (bloods):    108 Runs Clinical Pathology    Serum
Chemistry:    All animals, pretest, and Week 4, Week 13 (fasted), Recovery Week
17 Hematology:    Coagulation:    Urinalysis:    All animals, pretest, 1 month,
3 months and recovery Urine collected by pan collection or cystocentesis (prior
to necropsy) Special Assessments:    Urine parameters: NAG, GGT,
Beta-2-Microglobulin, Protein, Creatinine, Ca++, and Phosphate    Calculate and
report data using ratios and fractional excretion as appropriate. All animals,
comprehensive Anatomical Pathology    Gross Necropsy:    All animals,
comprehensive Organ Weights:    All animals, standard list Histopathology:   
All animals, full gross histopathologic evaluation (Kidney, Liver, Heart,
Pancreas, adipose) control and high dose animals, read down as necessary with
additional pricing. Bone marrow smears collected, slides made, evaluated if
necessary Special Assessments:    Kidney Cortex collected and possibly evaluated
for EM (40 samples)    Kidney & Pancreas collected and possibly evaluated for
IHC (80 samples)    Samples collected and analyzed for determination of Vanadium
by GFAAS: Bone, Kidney, Liver, Pancreas, Heart, Lung, Muscle, and tissues TBD
Data Analysis:    Qualitative and quantitative as appropriate Draft and Final
Report Requirements:    Draft and Final    Standard reporting requirements
include one draft and one final report in the Charles River format. Issuance of
additional drafts, reports, amended reports or a custom format request may
result in an additional fee.

 

Date Created: June 17, 2008

Sponsor: Akesis Pharmaceuticals, Inc.

   Page 8 of 11

--------------------------------------------------------------------------------

Title:    13-Week Toxicity Study in Beagle Dogs with 4 Weeks Recovery Study
Number:    LTC00014 Version 1 Archiving:    One Year    After dispatch of the
draft report, all raw data, samples/specimens (except for those sent to Sponsor
or Sponsor designated laboratory and resultant data which are the responsibility
of Sponsor) and documents generated at Charles River during this study, together
with the original or copy of the protocol (including amendments) and the draft
report (if available), will be retained in the secure storage area of Charles
River for one (1) year. After this one (1) year period, Sponsor will be
contacted prior to the end of the year to authorize continued storage or return
to Sponsor, at additional cost (extended storage may be at another Charles River
location). At finalization, the final report and any stored materials will be
transferred to the scientific archives of Charles River. Subsequently, storage
details will be documented in the raw data.    Any additional storage, archiving
or retention will require an Extended Archiving Agreement

 

* For the recovery phase, Charles River Laboratories reserves the right to house
the animals in a smaller room which may or may not house recovery animals from
other studies. Should the Sponsor not want the animals to be moved, an
additional charge may be applied.

Modifications or alterations can be made to the study design to suit specific
test article and client needs. Modifications may alter pricing and scheduling.

 

Date Created: June 17, 2008

Sponsor: Akesis Pharmaceuticals, Inc.

   Page 9 of 11

--------------------------------------------------------------------------------

POSTPONEMENT/CANCELLATION POLICY

Upon receipt of the signed quote letter or correspondence from the Sponsor
confirming formal authorization, Charles River Laboratories Preclinical
Services, hereinafter referred to as (“Charles River”) will order or reserve
animals and allocate other resources for the specified study.

If the study is initiated on the scheduled start date, the most current quoted
price is valid (unless advised otherwise by any revised quote letter) and no
postponement or cancellation charges are applicable.

There will be no charges if the study is rescheduled or cancelled as long as
notice is provided to Charles River in advance of the defined period of time
prior to the animal arrival date, as stipulated below:

 

  •  

Rodents: 28 days

 

  •  

Dogs: 59 days

 

  •  

Non-Human Primates: 59 days

Should any applicable fees be charged from the animal supplier before the
above-mentioned timelines, these would be the responsibility of the Sponsor.

Postponement Terms:

Prior To and Following Animal arrival:

Notice of postponement of the study by the Sponsor for any study with a duration
of 28 days or more, through no fault of Charles River, prior to or following
Animal arrival, shall be charged to the Sponsor at a rate based on the
calculation of the total value of the study divided by the total weeks of the
study duration, including weeks of acclimation period. Should the study be less
than 28 days, Sponsor shall be charged at a rate of $10,500 per week of delay
(“Housing Fees”). If the delay exceeds more than four weeks, it would
automatically be subject to the cancellation terms below.

In any cases, Housing Fees do not include any technical work such as surgical
preparation or other scientific procedures required in order to maintain the
integrity of the study, which will be at additional cost.

Cancellation Terms:

Cancellation of the study by the Sponsor, through no fault of Charles River,
which falls within the defined period of time above, will be assessed as
follows:

Cancellation Charges

 

Days of Notice Given Prior to
Animal Arrival (Rodents)

  Days of Notice Given Prior to
Animal Arrival (Dogs & Non-
Human Primates)   Entire cost of animal fees (if
applicable) + Cancellation
Charge (% of Study Price)   1 – 7   1 – 7   50 % 8 – 14   8 – 14   40 % 15 – 28
  15 – 28   30 % N/A   29 – 59   20 %

 

Date Created: June 17, 2008

Sponsor: Akesis Pharmaceuticals, Inc.

   Page 10 of 11

--------------------------------------------------------------------------------

If sponsor cancels study after animal arrival and before study start the
following charges will apply:

50% of total study price plus animal costs plus husbandry ($10,500 room/week)
until relocation of animals or disposal.

If the Sponsor requests postponement of a study start, we will make every effort
to accommodate the requested change; however, due to resource constraints,
Charles River may not be able to reschedule the study precisely as requested by
the Sponsor. If the new schedule is not acceptable, the Sponsor may elect to
cancel the study, in which case the applicable cancellation charge would apply.

In the event of postponement or cancellation of the study by the Sponsor,
additional compensation may be requested for items procured specifically for the
study (e.g., animal purchases1, dedicated equipment, perishable or non-reusable
supplies) and any non-recoverable expenses incurred by Charles River (e.g.,
equipment lease payments, subcontractor charges or consultant fees to which
Charles is irrevocably committed).

In the event the Sponsor terminates an ongoing study (i.e. early termination
following dosing initiation), the Sponsor will be responsible for all incurred
costs, committed costs and lost opportunity charges.

Exceptions to the above terms may be made on a case-by-case basis at Charles
River sole discretion, if the study cancellation or postponement has little or
no financial impact on Charles River (e.g. if notice that the study is
subsequently cancelled or postponed falls within the defined period of time
above pre-study period but no resources have been expended or costs incurred in
the preparation for the study, and the animals can be readily used in another
study [or exchanged, in the case of postponement]).

In the event of a conflict between the terms set forth in this letter and the
Master Service Agreement, the terms of the Master Service Agreement shall
control, unless specifically agreed upon to the contrary in this letter.

 

1

In order to secure animals, Charles River is required to purchase the animals
upon study authorization. Therefore, should there be a cancellation thereafter
by the Sponsor, the Sponsor will incur the full cost of animals ordered.

 

Date Created: June 17, 2008

Sponsor: Akesis Pharmaceuticals, Inc.

   Page 11 of 11