Exhibit 10.26

Amendment No. 2 to
Amended and Restated Distribution and License Agreement

     This Amendment No. 2, dated December 3, 2004, to the Amended and Restated
Distribution and License Agreement, dated as of November 16, 2001 (the “Supply
Agreement”), by and between Pharmion GmbH, a Swiss limited liability company
(“Pharmion”), and Celgene UK Manufacturing II Limited (formerly, Penn T
Limited), a corporation organized under the laws of England and Wales (“CUK”),
as amended by Amendment No. 1 to the Amended and Restated Distribution and
License Agreement, dated March 4, 2003, by and between Pharmion and CUK
(“Amendment No. 1”), and as supplemented by the Supplementary Agreement to the
Amended and Restated Distribution and License Agreement, dated June 18, 2003, by
and between Pharmion and CUK (the “Supplementary Agreement”).

     WHEREAS, Pharmion desires to reduce its future cost of purchasing Products
under the Supply Agreement and is willing to make a one-time payment to CUK in
consideration of such reduction: and

     WHEREAS, in connection with such reduction in cost and one-time payment,
Pharmion and CUK desire to effect certain other changes in their relationship
and, accordingly, Pharmion and CUK wish to amend the Supply Agreement as
provided below.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, CUK and Pharmion hereby agree as follows:

     1. Definitions. All capitalized terms not otherwise expressly defined in
this Amendment shall have the meanings ascribed to such terms in the Agreement.

     2. Effectiveness. This Amendment shall become effective on the date hereof.

     3. Payment. Concurrently with the execution and delivery of this Amendment,
and in consideration therefor, Pharmion shall pay Seventy Seven Million U.S.
Dollars ($77,000,000) to CUK by wire transfer in immediately available funds (in
accordance with written instructions heretofore provided by CUK).

     4. Termination of Amendment No. 1 and Supplementary Agreement. Amendment
No. 1 and the Supplementary Agreement are hereby terminated and, except for
amounts due and owing thereunder for periods prior to the effective date of this
Amendment, shall be of no further force or effect.

     5. Amendments to the Supply Agreement. The Supply Agreement is hereby
amended as follows:

 

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(a)   The heading is amended and restated in its entirety to read as follows:
“Product Supply Agreement”.   (b)   All references to “Penn” are deleted and
replaced by “CUK”.   (c)   The seventh recital paragraph is hereby amended and
restated in its entirety to read as follows:

          “WHEREAS, Pharmion and Celgene Corporation (“Celgene”) have entered
into a License Agreement dated March 7, 2001, pursuant to which Pharmion has
acquired a license to register, distribute, market, use and sell Celgene’s
formulation of Thalidomide in a territory including all countries in the world
except the United States, Canada, Mexico, Japan, and all provinces of China,
other than Hong Kong.”

(d)   Article I is hereby amended as follows:

     (i) The definition of “Celgene Territory” is hereby amended to provide for
the addition of Korea, Taiwan and Hong Kong and restated in its entirety to read
as follows:

          “ ‘Celgene Territory’ shall mean all the countries of the world except
the United States, Canada, Mexico, Japan, and all the provinces of China other
than Hong Kong.”

     (ii) A definition for “Contract Purchase Price” reading as follows is
hereby added to Article I:

          “ ‘Contract Purchase Price’ shall, as to each calendar quarter (or
period of less than a quarter either at inception or termination), be equal to
(a) fifteen and one half percent (15.5%) of Net Sales of Products in the
Territory during such period, less (b) the Initial Invoice Price paid by
Pharmion for units of Products sold during such period (as charged to Pharmion
by CUK in accordance with Section 6.1(a) based upon a “first-in/first-out”
accounting of Pharmion’s Products inventory).”

     (iii) A definition for “Initial Invoice Price” reading as follows is hereby
added to Article I:

          “ ‘Initial Invoice Price’ shall have the meaning set forth in Section
6.1(a).”

     (iv) The definition of “Minimum Royalty” is hereby deleted in its entirety.

     (v) The definition of “Penn Territory” is hereby amended and restated in
its entirety to read as follows:

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          “ ‘CUK Territory’ shall mean all countries throughout the world, with
the exception of the United States and Canada.”

     (vi) A definition for “Special Authorizations” reading as follows is hereby
added to Article I:

          “ ‘Special Authorizations’ shall have the meaning set forth in Section
7.3.”

(e)   The last sentence of Section 2.1 is hereby amended and restated in its
entirety to read as follows:

          “Without limiting the foregoing, during the term of this Agreement,
CUK will not manufacture (or cause to be manufactured) any formulation of
Thalidomide for distribution or sale by any Person other than Pharmion within
the CUK Territory, provided that, CUK may manufacture formulations of
Thalidomide using the Celgene Technology for distribution or sale by Celgene (or
a distributor or licensee of Celgene) within Mexico, Japan and all provinces of
China other than Hong Kong.”

(f)   Section 2.4 is hereby deleted in its entirety.   (g)   The last sentence
of Section 3.6 is hereby amended and restated in its entirety to read as
follows:

          “Correspondingly, CUK shall not actively export any Products into the
Territory except (a) to Pharmion and (b) to Celgene (or one of its
subdistributors or licensees) as provided in Section 2.1 with respect to Mexico,
Japan and all provinces of China other than Hong Kong.”

(h)   Sections 11.3, 12.1 and 13.3 are amended to replace, unless the context
otherwise requires, each reference therein to “Pharmion” with “Pharmion and its
Affiliates”.   (i)   Article VI is hereby amended and restated in its entirety
to read as follows:

“Article VI

PRODUCT PRICING; PAYMENT

     Section 6.1 Purchase Price. Pharmion shall pay for the purchase of Products
from CUK in the manner described below:

  (a)   Initial Invoice Price. For each shipment of Products, CUK shall invoice
Pharmion and Pharmion shall pay to CUK the then applicable Minimum Price times
the number of units of Product included in such shipment (the “Initial Invoice
Price”). Pharmion shall pay for each shipment of Products at the Initial Invoice
Price within thirty (30) days from the date of invoice for each shipment, which
shall not be earlier than the date of shipment.

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      Such invoicing shall be subject to annual audit by Pharmion, and
adjustment, if appropriate, as provided in Section 15.3.     (b)   Quarterly
Payments. Pharmion shall pay the Contract Purchase Price for Products sold by
CUK to Pharmion (except as specifically provided in Section 7.4(b)), based upon
Pharmion’s Net Sales of Products, as follows:

  (i)   Quarterly Payments. Payments in respect of the Contract Purchase Price
shall be calculated and paid to CUK quarterly, and shall be due as to Net Sales
within any of the United Kingdom, Germany or Australia forty-five (45) days
following the end of each calendar quarter and as to Net Sales elsewhere within
ninety (90) days following the end of each calendar quarter.     (ii)   Net
Sales Reports. Pharmion shall submit quarterly Net Sales reports to CUK within
forty-five (45) days following the end of each calendar quarter. Such reports
shall include, but not be limited to:

  (1)   An accounting of Net Sales within the Territory during such quarter on a
country by country basis;     (2)   An accounting of the purchase price of the
units of Products sold during such quarter; and     (3)   An accounting of Net
Sales set out in clauses (1) and (2) above (in U.K. Pounds Sterling) and the
calculation of the Contract Purchase Price owing to CUK pursuant to this
Section 6.1 (in U.K. Pounds Sterling), including, if applicable, the exchange
rates used in determining the amount of U.K. Pounds Sterling.

  (c)   Invoices for Contract Purchase Price. If required by Pharmion, CUK shall
submit a written invoice addressed to Pharmion for the quarterly Contract
Purchase Price to be paid by Pharmion under this Agreement. CUK shall submit
these written invoices to Pharmion within a reasonable period following the
request from Pharmion and based upon the last quarterly Net Sales report from
Pharmion provided to CUK in accordance with Section 6.1(b)(ii).     (d)   Unit
Price Reports. Pharmion shall provide Celgene on a quarterly basis with a report
showing the average price at which it sold Products on a per unit, country by
country basis within forty-five (45) days following the end of each calendar
quarter.     (e)   Withholding Tax. Any tax that Pharmion is required to pay or
withhold from payments in respect of the Contract Purchase Price to be paid to
CUK under this Agreement shall be deducted from the amount otherwise due,
provided that, in regard to any such deduction, Pharmion shall give

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      CUK such assistance as may be reasonably necessary to enable or assist CUK
to claim exemption therefrom or a reduction thereof and shall provide CUK with
an official tax certificate as soon as possible.     (f)   Currency. All prices
for Products shall be quoted by CUK to Pharmion, and payments by Pharmion to CUK
under this Agreement shall be made, in U.K. Pounds Sterling.”     (g)   Pricing.
CUK has expressed a concern that as a result of macroeconomic conditions it
could, at some point, potentially be at risk of experiencing increases in its
costs that were beyond its control, thereby causing its fully allocated cost of
manufacture of the Product to exceed 3% of Net Sales (a “Macroeconomic Cost
Increase”), and correspondingly reducing CUK’s net margin on the Contract
Purchase Price below 12.5% of Net Sales. Pharmion hereby acknowledges that it
would take such Macroeconomic Cost Increases into account and would make a
reasonable effort to increase its pricing of the Products to compensate CUK for
any such cost increases, to the extent feasible and after taking into
consideration relevant pricing factors which include, but are not limited to,
customer demand, competition, regulatory requirements and third-party
reimbursement. Notwithstanding the foregoing, CUK acknowledges that Pharmion
retains the sole right to make pricing decisions regarding the Products in the
Territory.

(j)   Article VII is hereby amended and restated in its entirety to read as
follows:

“Article VII

BELGIUM AND FRANCE

     Section 7.1 Current Sales in Belgium and France. Pharmion’s subsidiary,
Pharmion Développement (“Développement”) currently sells in Belgium and France a
formulation of Thalidomide produced by and purchased from its former affiliate
Laphal Industrie (“Industrie”). Such purchases and sales have been made pursuant
to previously agreed upon concessions from CUK to Pharmion set out in Amendment
No. 1.

     Section 7.2 Commercially Reasonable Efforts. Pharmion shall continue to use
commercially reasonable efforts (i) to cause the existing ATU (autorisation
temporaire d’utilisation), as well as any other temporary, specials or
named-patient authorizations pursuant to which Développement sells Thalidomide
purchased from Industrie in Belgium and France to be amended to provide for the
substitution of a Thalidomide formulation produced by CUK (preferably the
Celgene Product, but otherwise the CUK Product) for the formulation being
produced by Industrie, and (ii) consistent with regulatory constraints, to cause
such amendments to be effective as early as possible, consistent with Pharmion’s
non-terminable obligations under the supply contract between Pharmion and
Industrie.

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     Section 7.3 Purchases From Industrie. Until the earlier of (a) the
effectiveness of the amendments described in Section 7.2 above, and (b) the
Approval Date with respect to Belgium and France, and notwithstanding the
contrary provisions of Sections 3.1 and 5.1 of this Agreement, Développement
shall have the right to continue to purchase its requirements of Thalidomide
from Industrie and to distribute Thalidomide under Développement’s ATUs and
other temporary, specials or named-patient authorizations (collectively,
“Special Authorizations”) in Belgium and France. From and after the earlier of
such dates, Pharmion shall cause Développement to sell only Products originally
sourced from CUK.

     Section 7.4 Payments. In respect of sales of Thalidomide by Développement
in Belgium and France:

  (a)   Thalidomide Purchased From Industrie. In consideration of (i) the
concession from CUK to allow Pharmion to continue to utilize Thalidomide
purchased from Industrie and (ii) to induce CUK to maintain an adequate
manufacturing capacity to permit the shift contemplated by Section 7.2, Pharmion
shall pay to CUK the following amounts in respect of Net Sales of Thalidomide by
Développement in Belgium and France until the earlier of (x) the effectiveness
of the amendments described in Section 7.2 and (y) the Approval Date with
respect to Belgium and France: as to all Net Sales in Belgium or France for
Thalidomide, Pharmion shall pay to CUK the Contract Purchase Price in a manner
consistent with Section 6.1; provided, that, for purposes of computing the
Contract Purchase Price and the Initial Invoice Price applicable to this
Section 7.4(a), the relevant fully allocated cost of product sold shall be the
lesser of (A) Développement’s purchase price of product sold for the quarter, or
(B) one hundred twenty percent (120%) of the equivalent cost of units sold
during the quarter as if such units had been purchased from CUK, and “Territory”
shall mean Belgium and France.     (b)   Thalidomide Purchased From CUK. During
the period commencing on the effectiveness of the amendments described in
Section 7.2 and ending on the Approval Date, Pharmion shall pay to CUK in
respect of Net Sales the Contract Purchase Price in a manner consistent with
Section 6.1.”

(k)   The notice address for Pharmion Corporation contained in Section 15.9
shall be replaced with the following:

Pharmion Corporation
2525 28th Street
Boulder, CO 80301
Attention: Chief Executive Officer
Fax No.: (720) 564-9191

     6. Additional Provisions. Pharmion and CUK each hereby agree to negotiate
in good faith a further amendment to the Supply Agreement that will provide a
greater level of

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detail with regard to a number of manufacturing, production, capacity and
scheduling issues, including (a) Pharmion’s desire to incorporate the following
contractual commitments into the Agreement: (i) a formal recognition by CUK of
the applicable manufacturing standards (including, but not limited to, ICH, EC
Directives and cGMP) for Products sold in the Territory; (ii) an obligation on
the part of CUK to make available a minimum manufacturing capacity for
production of Products under the Agreement, as well as provisions dealing with
reasonable allocations among customers of CUK in the event of shortages of
supply; (iii) a formalization of standards for a minimum remaining shelf life of
the Products at the time of delivery to Pharmion; (iv) a requirement on the part
of CUK to maintain a mutually agreed upon level of safety stock of the active
pharmaceutical ingredient, raw materials and components; (v) a process by which
CUK will accept Pharmion purchase orders; (vi) a requirement on the part of CUK
to notify Pharmion of the manufacturing and delivery schedule; (vii) an
expansion of Pharmion’s right to secure a second source of thalidomide in the
event of a failure by CUK to supply Products; (viii) clarifications to the
procedures for implementing changes to the manufacturing process and allocation
of costs for required and discretionary changes to such process;
(ix) responsibility for environmental, safety and health aspects of
manufacturing thalidomide and (x) obligations of CUK to perform additional
services, such as stability testing programs, management of sample retention and
package design; and (b) CUK’s desire to incorporate the following contractual
commitments into the Agreement: (i) the sourcing of Product by CUK from one or
more manufacturers other than PPSL, and (ii) to the extent permitted by
applicable law, a requirement of Pharmion to safeguard that Product supplied to
it by CUK or Industrie is not distributed in the United States, Canada, Mexico,
Japan or any of the provinces of China other than Hong Kong. Notwithstanding the
preceding sentence, Pharmion acknowledges that CUK procures the supply of
Products from an unaffiliated entity, PPSL, pursuant to the terms of a Technical
Services Agreement dated October 21, 2004 between CUK and PPSL (the “TSA”) and
that the negotiation of the foregoing contractual commitments are subject to the
rights and obligations of CUK as provided in the TSA. It is the intention of the
parties that such further amendment be entered into no later than six (6) months
from the date hereof.

     7. Unmodified Provisions. Except as expressly modified by this Amendment
and Amendment No. 1, all terms and conditions of the Supply Agreement shall
remain in full force and effect.

     8. Governing Law; Choice of Forum. The parties agree that this Agreement
shall be governed by and construed in accordance with the laws of England and
Wales.

     9. Captions. All captions herein are for convenience only and shall not be
interpreted as having any substantive meaning.

[Signature page follows.]

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     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their authorized representatives, in duplicate on the dates written
herein below.

              Pharmion GmbH   Celgene UK Manufacturing II, Limited
 
           
By
  /s/ Patrick J. Mahaffy

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  By   /s/ Sol J. Barer

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