Exhibit 10.1

Portions of this Exhibit were omitted and filed separately with the Secretary of
the Commission pursuant to an application for confidential treatment filed with
the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of
1934.  Such omissions are designated as **.

 

Execution Copy

AMENDMENT NO. 2

This Amendment No. 2 (this “Amendment No. 2”) to the Collaboration and License
Agreements effective as of July 9, 2003 between (i) Pharmacopeia Drug Discovery,
Inc. (f/k/a Pharmacopeia, Inc.) and Schering Corporation and (ii) Pharmacopeia
Drug Discovery, Inc. and Schering-Plough Ltd. (collectively, as each has been
amended by Amendment No. 1 dated July 27, 2006, the “2003 Agreements”), is
effective as of September 22nd 2006 (the “Amendment No. 2 Effective Date”).  By
agreement of the Parties, as of the Amendment No. 2 Effective Date, this
Amendment No. 2 amends the 2003 Agreements as follows:

1.             All capitalized terms not defined in this Amendment No. 2 shall
have the meanings given to them in the 2003 Agreements.

2.             The Parties agree that as of the Amendment No. 2 Effective Date,
and notwithstanding anything in the 2003 Agreements to the contrary:

(a)                                  The term of the Collaboration is extended
and shall continue until April 7, 2007, on which date it shall terminate.

(b)                                 For the period from October 8, 2006 until
April 7, 2007, Pharmacopeia shall provide ten (10) chemistry FTEs for the
performance of the Collaboration.  During such period, each of Schering and SPL
shall pay to Pharmacopeia research funding for the Collaboration at a rate of **
Dollars ($**) ** (an aggregate ** Dollars ($**) **).  All such FTEs shall be
dedicated to work full time on the Collaboration.

(c)                                  The FTEs that Pharmacopeia provides under
Section 2(b) above shall work on Optimization Programs designated by the
Collaboration Committee.  For the avoidance of doubt, such FTEs shall not be
required to work on Screening Programs.

(d)                                 Payments by each of Schering and SPL under
Section 2(b) above shall be made in accordance with Section 5.2.3 of the
Agreements.

3.             The Parties agree that the last sentence of Section 2.2.4 of the
Agreements shall not apply to any Optimization Programs based upon Lead
Compounds that are Schering Compounds (“Extension Programs”) that Pharmacopeia
works on during the period set forth in Section 2(b) above.  For the avoidance
of doubt, the Parties agree that with respect to any Agreement Compounds
resulting from such Extension Programs, Pharmacopeia shall be entitled to
receive milestone payments under Section 5.4.1(a) of the Agreements and royalty
payments under Section 5.5 of the Agreements.

4.             The Parties agree that from October 8, 2006 until April 7, 2007,
senior management representatives of each Party (from Pharmacopeia the Chief
Scientific Officer, or equivalent; from Schering and SPL the global head of
chemistry, or equivalent) and each Party’s primary project managers shall
convene a monthly meeting or teleconference, to discuss overall

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performance under the Agreements in order to ensure effective communication
among the Parties.

5.             The remaining terms of the 2003 Agreements, except to the extent
modified by the terms of this Amendment No. 2, shall remain in full force and
effect.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to be
duly executed by their authorized representatives and delivered in triplicate
originals on the Amendment No. 2 Effective Date.

SCHERING CORPORATION

PHARMACOPEIA DRUG DISCOVERY,
INC. (F/K/A PHARMACOPEIA, INC.)

 

 

By:

/s/ Michael DuBois

 

 

Name: Michael DuBois

By:

/s/ Brian M. Posner

 

Title: Vice President

Name: Brian M. Posner

 

Title: Executive Vice President,

 

Chief Financial Officer and Treasurer

 

 

SCHERING-PLOUGH, LTD.

 

 

 

 

 

By:

/s/ Michael DuBois

 

 

Name: Michael DuBois

 

Title: Vice President

 

 

2

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