Exhibit 10.1
 
 DEVELOPMENT AND COMMERCIALIZATION LICENSE AGREEMENT
 This Development and Commercialization License Agreement Agreement Signing Date Ardea Biosciences,
Inc. Ardea Bayer Schering Pharma AG, Bayer
 Recitals
 Whereas,
 Whereas,
 Whereas,
 Agreement
 Now, Therefore,
 1. Definitions
 1.1 Affiliate
 1.2 Ardea Know-How




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 1.3 Ardea Patents Exhibit A
 1.4 Ardea Technology
 1.5 Business Day
 1.6 Change of Control Acquired Entity
 1.7 Co-Development Term
 1.8 Commercially Reasonable Efforts
 1.9 Confidential Information
  2




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 1.10 Control Controlled
 1.11 Effective Date
 1.12 EMEA
 1.13 FDA
 1.14 Field
 1.15 First Commercial Sale
 1.16 Generic Product
 1.17 GMP
 1.18 HSR Act
 1.19 IND
 1.20 Indication
 1.21 Information
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  1.22 Inventions
 1.23 JDC
 1.24 Joint Invention
 1.25 Joint Patents
 1.26 Licensed Compound
 1.27 MEK
 1.28 NDA et
seq.
 1.29 Net Sales
 (a)
 (b)
 (c)
 (d)
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 (e)
 (f)
 (g)
 (h)
 (i)
 (j) IFRS
  Combination Product
 1.30 Ongoing Trials
 1.31 Patents
 1.32 Phase 1 Trial
 1.33 Phase 2 Trial
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 1.34 Phase 3 Trial
 1.35 Preclinical Compound
 1.36 Preclinical Product
 1.37 Product
 1.38 RDEA119 Product
 1.39 RDEA436 Product
 1.40 Regulatory Approval
 1.41 Regulatory Authority
 1.42 Term
 1.43 Therapeutically Active
 1.44 Third Party
 1.45 Valeant
 1.46 Valeant Agreement
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 1.47 Valid Claim
 2. Joint Development Committee
 2.1 Formation; Composition. JDC
 2.2 Responsibilities.
 2.3 Meetings; Decision Making. provided, however
 3. License; Technology Transfer; Retained Rights
 3.1 License Grant.
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  3.2 Technology and Materials Transfer.
 (a)
 (b) Materials
 3.3 Retained Rights.
 3.4 No Implied Licenses.
 4. Development and Commercialization of Products
 4.1 Ardea Responsibilities.
 (a) Initial Documents Transfer.
 (b) Initial Materials Transfer.
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  (c) Technical Assistance.
 (d) Ongoing Clinical Trials of Licensed Compounds. Exhibit B Ongoing Trials Exhibit C
 (e) Manufacturing Activities.
 (f) Audits.
 (g) Documentation of Third Party Manufacturers.
 (h) Compliance with Law.
 (i)
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 (j)
 (k) FDC Act
 4.2 Bayer Responsibilities.
 4.3 Regulatory.
 4.4 Diligence.
 4.5 Disclosure Regarding Bayer Efforts.
 (a)
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 (b)
 (c)
 (d)
 4.6 Adverse Events.
 5. Fees and Payments
 5.1 Upfront License Fee.
 5.2 Development and Non-Sales-Based Milestone Payments.
  11




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Confidential
 MilestoneDevelopment and Non-Sales-Based Milestones
    
    Payment (US$)Milestones for first Indication for which a Product is developed[***]
    
    [***][***]
    
    [***][***]
    
    [***]Milestones for second Indication for which a Product is developed[***]
    
    [***][***]
    
    [***][***]
    
    [***]
 
 
    
    Regardless of the Indication for which [***].  5.3 Sales-Based Milestone Payments.
 MilestoneSales-Based Milestones
    
    Payment (US$)[***]
    
    [***][***]
    
    [***][***]
    
    [***]
  5.4 Royalties.
 (a)
 (b)
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 (c)
 (d)
  5.5 Royalty Term.
 5.6 Generic Product.
 5.7 Third Party Licenses. Third Party Patent
Licenses provided, however,
 6. Payment; Records; Audits
 6.1 Royalty Payment; Reports.
 6.2 Exchange Rate; Manner and Place of Payment.
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  6.3 Income Tax Withholding.
 6.4 Audits.
 6.5 Late Payments. provided, however
 7. Intellectual Property
 7.1 Ownership of Inventions. Inventions
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  7.2 Patent Prosecution and Maintenance.
 7.3 Cooperation of the Parties.
 7.4 Infringement by Third Parties.
 (a) Competitive Activity
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  (b)
 7.5 Infringement of Third Party Rights.
 7.6 Trademarks and Domain Names.
 (a)
 (b)
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 (c)
 (d)
 8. Representations and Warranties; Covenants
 8.1 Mutual Representations and Warranties.
 8.2 Ardea Representations and Warranties.
 8.3 Disclaimer.
  17




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  8.4 Limitation of Liability. provided, however,
 8.5 HSR Act Filing. FTC DOJ
 9. Confidentiality
 9.1 Confidential Information. Receiving Party Disclosing
Party Confidential Information
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  9.2 Exceptions.
 9.3 Authorized Disclosure.
 (a)
 (b)
 (c)
 (d)
  9.4 Public Communications
 (a) General Provisions
 (b) Press Releases
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Confidential
 Exhibit D
 (c) Publications and Presentations
 (i)
 (ii)
 (iii)
 10. Term and Termination
 10.1 Term. Term Effective Date
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 10.2 Termination for Cause.
 10.3 Termination without Cause.
 10.4 Termination for Election Not to Pursue MEK Program.
 10.5 Effect of Termination; Surviving Obligations.
 (a)
 (b)
 (i) Blocking Patents
 (ii)
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  (iii)
 (c) provided, however
 (d)
 (e)
 
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 (f)
 10.6 Exercise of Right to Terminate.
 10.7 Damages; Relief.
 10.8 Bankruptcy Code.
 11. Indemnification
 11.1 Indemnification by Bayer. Ardea Indemnitees Losses Covered Activity Valeant Party Valeant Parties
 11.2 Indemnification by Ardea. Bayer Indemnitees
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  11.3 Control of Defense. Indemnifying Party
 12. Dispute Resolution
 12.1 Dispute Resolution.
 12.2 Court Actions.
 13. General Provisions
 13.1 Governing Law.
 13.2 Entire Agreement; Modification.
 13.3 Relationship between the Parties.
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 13.4 Non-Waiver.
 13.5 Assignment. provided, however,
 (a)
 (b)
  13.6 No Third Party Beneficiaries.
 13.7 Severability.
 13.8 Notices.
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Confidential
 If to Bayer, notices must be addressed to:Bayer HealthCare Pharmaceuticals Inc.Attention: Head, Specialty Medicine Business UnitIf by US Mail:
    
    If by Other Courier:PO Box 1000
    
    340 ChangebridgeRoadMontville, New Jersey 07045
    
    Pine Brook, NJ 07058USA
    
    USAWith a copy to:Bayer Schering Pharma AGAttention: Head of Law& PatentsMuellerstrasse 178D-13353 BerlinGermanyandBayer HealthCare Pharmaceuticals Inc.Attention: Law &PatentsIf by US Mail:
    
    If by Other Courier:PO Box 1000
    
    340 Changebridge RoadMontville, New Jersey 07045
    
    Pine Brook, NJ 07058USA
    
    USAIf to Ardea, notices must be addressed to:Ardea Biosciences, Inc.4939 Directors PlaceSan Diego, CA 92121Attention: Chief Business OfficerTelephone: (858) 652-6500
 13.9 Force Majeure.
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  13.10 Interpretation.
 13.11 Counterparts.
 [Remainder of this page intentionally left blank.]
  27




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Confidential
 In Witness Whereof, Development and
Commercialization License Agreement
 Ardea Biosciences, Inc.
    
    
    
    Bayer Schering Pharma AGBy: 
Name:
    
    /s/ Barry D. Quart, Pharm.D.

Barry D. Quart, Pharm.D.
    
    
    
    By:
Name:
    
    /s/ Michael Yeomans

Michael YeomansTitle:
    
    President and Chief Executive Officer
    
    
    
    Title:
    
    Head, Global Business Development and LicensingBy:
Name:
    
    /s/ Andreas Busch

Andreas BuschTitle:
    
    Head, Global Drug Discovery
 Exhibit List:
 Exhibit A
    
    Ardea PatentsExhibit B
    
    Ongoing TrialsExhibit C
    
    Development Plan and Budget for Ongoing TrialsExhibit D
    
    Press Release
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 Exhibit A
 Ardea Patents
   29




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 Exhibit B
 Ongoing Trials
 RDEA119-101




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Confidential
 Exhibit C
 Development Plan and Budget for Ongoing Trials
 RDEA119-101
  RDEA119-103
  RDEA119 Phase 1 Study Estimated Completion Costs
 May-December 2009
 RDEA119-101 Single Agent Study
 COSTS (USD)VENDORS (IN HOUSE CRA, MONITOR, DATA MGMT, PHARMACOVIGILANCE, 
STATS, MEDICAL WRITING, CTC BIOMARKERS)
    
    [***]INVESTIGATOR GRANT PAYMENTS
    
    [***]TOTAL (ESTIMATE)
    
    [***]
  
 
    
    [***] RDEA119-103 Sorafenib Combination Study
 COSTS (USD)VENDOR (IN HOUSE CRA, MONITOR, DATA MGMT, PHARMACOVIGILANCE, 
STATS, MEDICAL WRITING)
    
    [***]INVESTIGATOR GRANT PAYMENTS
    
    [***]SORAFENIB
    
    [***]TOTAL (ESTIMATE)
    
    [***]
 
 *
    
    To be provided [***].   Total Costs for Completing Ongoing Phase 1 Trials (excluding RDEA119 drug cost)
 RDEA119-101 (ESTIMATE)
    
    [***]RDEA119-103 (ESTIMATE)
    
    [***]TOTAL (ESTIMATE)
    
    [***]




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 Estimated Cost for RDEA119 to Complete Ongoing Phase 1 Trials
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 Exhibit D
 Press Release




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Bayer HealthCare
    
    (BAYER HEALTHCARE LOGO)Bayer HealthCare AGCorporate Communications51388 LeverkusenNews Release
    
    Final April 28, 2009
    
    GermanyPhone +49 214 30 1www.news.bayer.com
 Bayer and Ardea Biosciences Enter Global Agreement Focused on the Development of MEK Inhibitors for
the Treatment of Cancer
 Berlin, April 28, 2009
 ®
  in vitro
  - 1/1 -




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About MEK Inhibitors, and RDEA119
  About
Ardea Biosciences, Inc.
  About Bayer HealthCare
  - 2/2 -




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www.bayerhealthcare.com
 www.bayerscheringpharma.de
 Contact:Dr. Kerstin Crusius, Phone: +49 30 468-14726E-mail: kerstin.crusius@bayerhealthcare.comRosemarie Yancosek, Phone: +1 973 305-5213E-mail: rosemarie.yancosek.b@bayer.comkc                (2009-0199E)
 Forward-Looking Statements
 . www.bayer.com
 - 3/3 -




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PRESS RELEASE
 Contact:John BeckArdea Biosciences, Inc.(858) 652-6523jbeck@ardeabio.com
 Ardea Biosciences and Bayer HealthCare Enter into Global Agreement Focused on the Development of
MEK Inhibitors for the Treatment of Cancer
 ®
     About RDEA119, RDEA436 and Ardeas Other MEK Inhibitors




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About Ardea Biosciences, Inc.
 ®
 About Bayer HealthCare
   Statements contained in this press release regarding matters that are not historical facts are
forward-looking statements within the meaning of the Private Securities Litigation Reform Act of
1995. Because such statements are subject to risks and uncertainties, actual results may differ
materially from those expressed or implied by such forward-looking statements. Such statements
include, but are not limited to, statements regarding our plans and goals, the expected properties
and benefits of RDEA806, RDEA594, RDEA427, RDEA119, RDEA436 and our other compounds and the timing
and results of our preclinical, clinical and other studies. Risks that contribute to the uncertain
nature of the forward-looking statements include risks related to the outcome of preclinical and
clinical studies, risks related to regulatory approvals, delays in commencement of preclinical and
clinical studies, costs associated with our drug discovery and development programs, and risks
related to the outcome of our business development activities. These and other risks and
uncertainties are described more fully in our most recently filed SEC documents, including our
Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q , under the headings Risk
Factors. All forward-looking statements contained in this press release speak only as of the date
on which they were made. We undertake no obligation to update such statements to reflect events
that occur or circumstances that exist after the date on which they were made.