Exhibit 10.40


CONFIDENTIAL TREATMENT REQUESTED


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


Letter Agreement


 


From:                                    ImClone Systems Incorporated

180 Varick Street

New York, NY 10014

USA


To:                                                UCB Pharma S.A..

Allée de la Recherche

60 1070 Brussels

Belgium

Attn: General Counsel


 


Re:                                      Collaboration and License Agreement dated 15th August 2005

Among 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 herein
shall 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;











 


WHEREAS, on 20th December 2006, the business of UCB S.A. was transferred to UCB
Pharma 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 claims
against ImClone for reimbursement of certain costs in connection with the
Agreement.


 


NOW THEREFORE, in consideration of the mutual covenants and obligations set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency 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 the
meanings set out in this paragraph 1:


Dispute means the dispute between
the Parties concerning the payment of, and their respective responsibility for,
any and all costs under the Agreement, including development costs incurred
prior to the Effective Date, Development Costs for Agreed Indications,
Development Costs for Independent Indications, Manufacturing costs with respect
to Antibody Products and the costs of Commercialisation of the Antibody
Products.


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


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


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


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


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











 


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


For the avoidance of doubt, the provisions of Article
2.3(g) of the Agreement shall apply to payments or portions due under this
Letter 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 Party
hereby releases and forever discharges, all and/or any actions, claims, rights,
demands and set-offs, whether in this jurisdiction or any other, whether or not
presently 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 or
hereafter can, shall or may have against the other Party or any other of its
parent, subsidiaries, assigns, transferees, representatives, principals,
agents, officers or directors arising out of or connected with:


(a)           the
Dispute; and


(b)           the
underlying facts relating to the Dispute,


collectively the Released Claims.  The Parties each acknowledge and agree that
the foregoing releases do not extend to the Parties’ rights and obligations
under 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 its
parent, subsidiaries, assigns, transferees, representatives, principals,
agents, officers or directors, any action, suit or other proceeding concerning
the Released Claims, in any jurisdiction.


8.                                       The Parties shall each bear their own legal costs in relation to the
Dispute 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 itself
that it has the full right, power and authority to execute, deliver and perform
this Letter Agreement.


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


12.                                 If any provision of this Letter Agreement is found to be void or
unenforceable, that provision shall be deemed to be deleted from this Letter
Agreement and the remaining provisions of this Letter Agreement shall continue
in full force and effect and the parties shall use their respective reasonable
endeavours to procure that any such provision is replaced by a provision which
is valid and enforceable, and which gives effect to the spirit and intent of
this Letter Agreement.


13.                                 The Parties agree that the terms of this Letter Agreement are not
enforceable by any third party, including under the Contracts (Rights of Third
Parties) Act 1999.


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






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











 


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


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


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


18.                                 This Letter Agreement contains the entire Agreement among the Parties
concerning to its subject matter.  All
discussions and agreements previously entered between the Parties concerning
the subject matter of this Letter Agreement are merged into this Letter
Agreement.  Each Party acknowledges that
it has not entered into this Letter Agreement in reliance wholly or partly on
any representation or warranty made by or on behalf of the other Party (whether
orally or in writing) other than as expressly set out in this Letter Agreement.


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


Please indicate UCB’s
agreement and acceptance of the foregoing terms by countersigning this Letter
Agreement below.


Very truly yours,


Daniel J. O’Connor

Senior 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