**Exhibit 10.40**

**CONFIDENTIAL TREATMENT REQUESTED**

[Note: Certain portions of this document have beenmarked to indicate that Confidential Treatment has been requested for suchportions by ImClone Systems Incorporated. These portions have been marked withone asterisk enclosed in brackets (i.e. [*]). The confidential portions havebeen omitted and filed separately with the Securities and Exchange Commission.]

Letter Agreement

 

From:                                    ImClone Systems Incorporated180 Varick StreetNew York, NY 10014USA

To:                                                UCB Pharma S.A..Allée de la Recherche60 1070 BrusselsBelgiumAttn: General Counsel

 

Re:                                      Collaboration and License Agreement dated 15th August 2005Among UCB, S.A. (“UCB”) and ImClone Systems Incorporated(“ImClone”), and any and all amendments thereto (the “Agreement”)

Dear Sirs

All capitalised terms not otherwise defined hereinshall have the meaning given such terms in the Agreement.  This letter agreement (the “Letter Agreement”)shall memorialise the settlement and compromise reached between UCB and ImClone(each a “Party”, and together the “Parties”) with respect to the Agreement.

**WHEREAS**, UCB and ImClone are parties to the Agreement;

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**WHEREAS**, on 20th December 2006, the business of UCB S.A. was transferred to UCBPharma S.A.  As a result of such transfer,the Agreement was assigned to UCB Pharma S.A.;

**WHEREAS**, ImClone desires to voluntarily terminate the Agreement at this time;and

**WHEREAS**, the Parties have agreed to settle and fully resolve UCB’s claimsagainst ImClone for reimbursement of certain costs in connection with theAgreement.

 

**NOW THEREFORE**, in consideration of the mutual covenants and obligations set forthherein, and for other good and valuable consideration, the receipt andsufficiency of which is hereby acknowledged, and intending to be bound hereby,the Parties agree as follows:

1.                                       When used in this Letter Agreement, the following terms shall have themeanings set out in this paragraph 1:

**Dispute** means the dispute betweenthe Parties concerning the payment of, and their respective responsibility for,any and all costs under the Agreement, including development costs incurredprior to the Effective Date, Development Costs for Agreed Indications,Development Costs for Independent Indications, Manufacturing costs with respectto Antibody Products and the costs of Commercialisation of the AntibodyProducts.

2.                                       ImClone hereby gives UCB notice that it is terminating the Agreementunder Article 12.2 thereof.  UCBacknowledges and agrees that such termination notice is valid, timely andbinding upon UCB.  Upon termination, UCBshall be designated as the Remaining Party under Article 12 of the Agreement.

3.                                       Notwithstanding the terms of paragraph 2 above and subject to paragraph4 below, the Parties agree that the articles of the Agreement listed in Article12.11(b) of the Agreement shall survive termination of the Agreement.

4.                                       The Parties agree that the words “(with consent not to be unreasonablywithheld or delayed)” shall be deleted from Article 12.8(c)(ii) of theAgreement.  UCB shall however providewritten notice to ImClone of the identity of any such sublicense within five(5) business days of any such sublicense having been entered into pursuant toArticle 12.8(c)(ii), together with confirmation that such sublicense containsall of the restrictions that apply to UCB, including without limitation thoseunder Article 11 of the Agreement (Confidentiality and Non-Use).

5.                                       The Parties each acknowledge and agree that neither Party owes to theother Party any monetary consideration with respect to the Agreement nor anyother amount relating to costs under the Agreement, including development costsincurred prior to the Effective Date, Development Costs for Agreed Indications,Development Costs for Independent Indications, Manufacturing costs with respectto Antibody Products or the costs of Commercialisation of the AntibodyProducts, except as follows:

a.                                       withinten (10) days of the date UCB countersigns this Letter Agreement, ImClone shallpay to UCB the total sum of Four Hundred Fifty Thousand Dollars and Zero Cents(US $450,000.00); and

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b.                                      UCB shall pay to ImClone the post-termination royalty required underArticle 12.9(b) of the Agreement, but at the amended royalty rate of [*] ratherthan [*].

For the avoidance of doubt, the provisions of Article2.3(g) of the Agreement shall apply to payments or portions due under thisLetter Agreement that are not paid on the date such payments are due.

6.                                       This Letter Agreement is in full and final settlement of, and each Partyhereby releases and forever discharges, all and/or any actions, claims, rights,demands and set-offs, whether in this jurisdiction or any other, whether or notpresently known to the Parties or to the law, and whether in law or equity,that it, its parent, subsidiaries, assigns, transferees, representatives,principals, agents, officers and directors or any of them ever had, may have orhereafter can, shall or may have against the other Party or any other of itsparent, subsidiaries, assigns, transferees, representatives, principals,agents, officers or directors arising out of or connected with:

(a)           theDispute; and

(b)           theunderlying facts relating to the Dispute,

collectively the **Released Claims**.  The Parties each acknowledge and agree thatthe foregoing releases do not extend to the Parties’ rights and obligationsunder this Letter Agreement.

7.                                       Each Party agrees, on behalf of itself and on behalf of its parent,subsidiaries, assigns, transferees, representatives, principals, agents,officers or directors, not to sue, commence, voluntarily aid in any way,prosecute or cause to be commenced or prosecuted against the other Party or itsparent, subsidiaries, assigns, transferees, representatives, principals,agents, officers or directors, any action, suit or other proceeding concerningthe Released Claims, in any jurisdiction.

8.                                       The Parties shall each bear their own legal costs in relation to theDispute and this Letter Agreement.

9.                                       Each Party warrants and represents that it has not sold, transferred,assigned or otherwise disposed of its interest in the Released Claims.

10.                                 Each Party warrants and represents to the other with respect to itselfthat it has the full right, power and authority to execute, deliver and performthis Letter Agreement.

11.                                 This Letter Agreement is entered into in connection with the compromiseof the Released Claims. It is not, and shall not be represented or construed bythe Parties as, an admission of liability or wrongdoing on the part of eitherParty.

12.                                 If any provision of this Letter Agreement is found to be void orunenforceable, that provision shall be deemed to be deleted from this LetterAgreement and the remaining provisions of this Letter Agreement shall continuein full force and effect and the parties shall use their respective reasonableendeavours to procure that any such provision is replaced by a provision whichis valid and enforceable, and which gives effect to the spirit and intent ofthis Letter Agreement.

13.                                 The Parties agree that the terms of this Letter Agreement are notenforceable by any third party, including under the Contracts (Rights of ThirdParties) Act 1999.

14.                                 The provisions of Article 11 (Confidentiality and Non-Use) of theAgreement shall apply mutatis mutandis to this Letter Agreement.

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* Omitted pursuant to a request for confidentialtreatment submitted to the Securities and Exchange Commission.

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15.                                 The Parties shall deliver or cause to be delivered such instruments andother documents at such times and places as are reasonably necessary ordesirable, and shall take any other action reasonably requested by the otherParty for the purpose of putting this Letter Agreement into effect.

16.                                 This Letter Agreement may be signed in any number of counterparts, eachof which, when signed, shall be an original and all of which together evidencethe same agreement.

17.                                 Any variation of this Letter Agreement shall be in writing and signed byor on behalf of each Party.

18.                                 This Letter Agreement contains the entire Agreement among the Partiesconcerning to its subject matter.  Alldiscussions and agreements previously entered between the Parties concerningthe subject matter of this Letter Agreement are merged into this LetterAgreement.  Each Party acknowledges thatit has not entered into this Letter Agreement in reliance wholly or partly onany representation or warranty made by or on behalf of the other Party (whetherorally or in writing) other than as expressly set out in this Letter Agreement.

19.                                 This Letter Agreement shall be governed by and construed in accordancewith the laws of the State of New York, without application of any conflict oflaws principles.

Please indicate UCB’sagreement and acceptance of the foregoing terms by countersigning this LetterAgreement below.

Very truly yours,

Daniel J. O’ConnorSenior Vice President, Interim General Counsel
| ACKNOWLEDGED AND AGREED:  |       |                     |
|---------------------------|------------|--------------------------|
| UCB Pharma S.A.           |       |                     |
|                      |       |                     |
|                      |       |                     |
| /s/****William Robinson   | ** ** |                     | /s/ Robert J.  Trainor | ** ** |
| Signature                 |       | Signature                |
|                      |       |                     |
| ** **                | ** ** | ** **               | ** ** | ** ** |
| William ROBINSON          |       | Robert J. TRAINOR        |
|                      |       |                     |
| ** **                | ** ** | ** **               | ** ** | ** ** |
| Executive Vice  President |       | Executive Vice President |
| Global  Operations        |       | & General Counsel    |
|                      |       |                     |
| ** **                | ** ** | ** **               | ** ** | ** ** |
| February 1, 2007          |       | January 31, 2007         |

 

 

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