<PAGE>

                                                                   EXHIBIT 10.16


         FIRST AMENDMENT AGREEMENT ("First Amendment Agreement") dated August
20, 2003, between

         SCHERING AKTIENGESELLSCHAFT, a company registered in Germany and having
its principal place of business at 13342 Berlin, Germany ("Schering"), and

         PHARMION GMBH, a company registered in Switzerland and having its
Registered Office at Centralbahnstrasse 7, Basel 4010, Switzerland ("Pharmion")

                                    RECITALS

         WHEREAS, Schering and Pharmion are parties to both an Interim Sales
Representation Agreement (the "Interim Agreement") and a Distribution and
Development Agreement (the "Final Agreement"), each dated May 29, 2002
(collectively, the "2002 Agreements"); and

         WHEREAS, Schering is willing to accommodate Pharmion's desire to
restructure the 2002 Agreements to reflect changes in the market conditions for
the Product (as defined in the 2002 Agreements).

         NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows.

         1. All capitalized terms not herein defined shall have the meanings
ascribed to such terms in the Final Agreement.

         2. The Manufacturing Milestone Date shall be deemed to have occurred on
receipt of the amount set out in Section 6.1 (b) of the Final Agreement as
amended pursuant to Section 3 (c) hereof, and the Effective Date shall therefore
occur on the first calendar day of the month following receipt of such payment.

         3. The Final Agreement is hereby amended as follows:

         (a) The definition of "Recapture Amount" in Section 1.1 of the Final
Agreement is hereby amended to be and read as follows:

                  "RECAPTURE AMOUNT" means, at any point in time, the aggregate
                  amount of payments made by Pharmion from time to time to
                  Schering pursuant to Sections 6.1 and 6.2 hereof.

                  Without limiting or changing the scope of Section 13.2 of the
Final Agreement, the definition of "Manufacturer's Supply Price" in Section 1.1
of the Final Agreement is hereby amended to be and read as follows:


<PAGE>


                  "MANUFACTURER'S SUPPLY PRICE" means the amount(s) payable by
                  Schering to the Manufacturer with respect to Product plus the
                  price increase/reduction as invoiced to Schering by Aventis
                  for the respective preceding year pursuant to Section 7.1.4 of
                  the Aventis Supply Agreement.

         (b) A definition of "Key Countries" is hereby added to Section 1.1 of
the Final Agreement, which definition shall be and read as follows:

                  "KEY COUNTRIES" means Germany and the United Kingdom.

         (c) Sections 6.1, 6.2, 6.3 and 6.4 (a) of the Final Agreement are
hereby deleted in their entirety and replaced by the following:

         6.1      Purchase Price Payments: Pharmion shall pay to Schering the
                  sum of US$13,000,000 (thirteen million US dollars), which
                  together with the additional purchase price payments provided
                  for in Section 6.2 and the royalties provided for in Section
                  6.3 hereof, shall constitute payment of the purchase price for
                  the rights granted under this Agreement, as follows

                  (a)      US$3,000,000 (three million US dollars) which
                           Pharmion has previously paid to Schering under the
                           Interim Agreement, receipt of which is hereby
                           acknowledged by Schering;

                  (b)      US$1,000,000 (one million US dollars) via wire
                           transfer within five (5) Business Days from the
                           execution of the First Amendment Agreement;

                  (c)      US$1,000,000 (one million US dollars) via wire
                           transfer no later than ten (10) Business Days before
                           the end of the calendar quarter ending on December
                           31, 2003;

                  (d)      US$1,000,000 (one million US dollars) via wire
                           transfer no later than ten (10) Business Days before
                           the end of each of the four (4) calendar quarters of
                           2004; and

                  (e)      US$1,000,000 (one million US dollars) via wire
                           transfer no later than ten (10) Business Days before
                           the end of each of the four (4) calendar quarters of
                           2005.

         6.2      Additional Purchase Price. Pharmion shall make the following
                  payments to Schering via wire transfer as additional purchase
                  price for the rights granted under this Agreement:

                  (a)      US$2,500,000 (two million, five hundred thousand US
                           dollars) within twenty (20) Business Days after the
                           end of the calendar quarter in which Pharmion's
                           cumulative Net Sales, measured from January 1, 2004,
                           reach US$ 50,000,000 (fifty million US dollars)


                                      -2-
<PAGE>


                           (such calendar quarter being referred to as the
                           "Milestone Quarter");

                  (b)      US$2,500,000 (two million, five hundred thousand US
                           dollars) on the same payment date as that specified
                           in Section 6.2(a) above, if Net Sales during the
                           twelve month period ending with the Milestone Quarter
                           are US$ 10 million per annum or higher; or if such
                           annualized sales are not then achieved, then on the
                           first anniversary of the payment date specified in
                           Section 6.2(a); and

                  (c)      US$2,500,000 (two million, five hundred thousand US
                           dollars) within 60 days after the closing of the
                           first calendar year in which the Manufacturer Supply
                           Price of Product sold during such year in the
                           aggregate represents 15% (fifteen percent) or less of
                           Pharmion's Net Sales during such calendar year.

                  In order to determine whether the thresholds for payment of
                  the additional purchase price pursuant to Sections 6.2 (a) and
                  (b) hereof are reached, the Euro amounts of the quarterly Net
                  Sales shall be converted into US dollars based on the Euro
                  Foreign Exchange Reference Rates published by the European
                  Central Bank in Frankfurt/Main, Germany on the last Business
                  Day of the applicable calendar quarter. This Euro Foreign
                  Exchange Reference Rate is, as of the effective date,
                  published on Reuters screen <ECB37>.

                  Pharmion shall deliver to Schering, within twenty (20)
                  Business Days after the end of the calendar quarter in which
                  the first achievement of each of the foregoing events occurs
                  (except in the case of (c) which shall be delivered within 60
                  days after the closing of the year described in such clause) a
                  certificate of its chief financial officer setting forth in
                  reasonable detail the data relating to the particular
                  achievement giving rise to the payment of such additional
                  purchase price, together with the payment of the applicable
                  additional purchase price.

         6.3      Royalties: Pharmion shall pay Schering a royalty on all of
                  Pharmion's Net Sales during the term of this Agreement at the
                  rate of (i) eight percent (8%) for Net Sales recorded between
                  the Effective Date and December 31, 2003; and (ii) fourteen
                  percent (14%) for Net Sales recorded from and after January 1,
                  2004 through December 31, 2012, provided, that when and if
                  Pharmion shall have paid Schering an aggregate of US$
                  12,000,000 (twelve million US dollars) in royalties, measured
                  from January 1, 2004 (and calculated upon conversion pursuant
                  to Section 6.2 above), then commencing with the calendar
                  quarter following that in which such milestone was achieved,
                  the royalty rate shall be reduced to six percent (6%) of Net
                  Sales, which rate shall apply from such quarter through
                  December 31, 2012. Such royalties shall be paid as follows:


                                      -3-
<PAGE>


                  (a)      Within twenty (20) Business Days after March 31, June
                           30, September 30 and December 31 of each year during
                           the term of this Agreement, commencing with the
                           calendar quarter ending September 30, 2003 (with the
                           first such period covering the period from the
                           Effective Date through September 30, 2003), Pharmion
                           shall deliver to Schering a true and accurate report
                           setting forth for the preceding calendar quarter (or
                           in the case of the first such period the amount of
                           time between the Effective Date and the end of such
                           calendar quarter): (a) Net Sales and (b) the
                           royalties payable thereon. Except as otherwise
                           provided, simultaneously with the delivery of each
                           such report, Pharmion shall pay to Schering the
                           amount, if any, due for the period of such report, by
                           wire transfer of immediately available funds to a
                           bank account specified by Schering. If no payments
                           are due, it shall be so reported.

                  (b)      Payments under this Section 6.3 shall be made in EUR.
                           Any failure by Pharmion to make a payment when due
                           shall be subject to Section 13.5 of this Agreement.

                  (c)      Where Net Sales are generated in another currency
                           than EUR, the amount of such Net Sales expressed in
                           the currency of these countries shall be converted
                           into EUR based on the Euro Foreign Exchange Reference
                           Rates published by the European Central Bank in
                           Frankfurt / Main, Germany, on the last Business Day
                           of the applicable calendar quarter. This Euro Foreign
                           Exchange Reference Rate is, as of the effective date,
                           published on Reuters screen <ECB37>. If no Euro
                           Foreign Exchange Reference Rate is determined for the
                           relevant currency, the parties shall agree upon
                           another reference rate.

                  (d)      Within twenty (20) Business Days from the beginning
                           of each calendar month of each year during the term
                           of this Agreement, commencing with the calendar month
                           following the occurrence of the Effective Date,
                           Pharmion shall deliver to Schering a true and
                           accurate report setting forth for the preceding
                           calendar month the sales of Product in the Territory.

                  (e)      The provisions of Section 30 of this Agreement shall
                           apply to all such reports of Net Sales and the
                           calculation of the royalties due with respect to such
                           Net Sales.

         6.4      (a) Payment of Recapture Amount. Unless Pharmion has exercised
                  its right to obtain Manufacturing rights as set forth in
                  clause (b) below, Pharmion shall have the right and option,
                  exercisable at any time within thirty (30) days following the
                  occurrence of a Supply Interruption Event, by delivering
                  written notice to Schering, to cause Schering to pay by wire


                                      -4-
<PAGE>


                  transfer to a bank account designated by Pharmion that portion
                  of the Recapture Amount as is calculated as set forth below:

<Table>
<Caption>
                   Period of Occurrence of
                  Supply Interruption Event          Percent of Recapture Amount
                  -------------------------          ---------------------------
<S>                                                  <C>

                  Between 1st Anniversary and
                  2nd Anniversary of Inception
                  Date                                          20%

                  Between 2nd Anniversary and
                  3rd Anniversary of Inception
                  Date                                          15%

                  Between 3rd Anniversary and
                  4th Anniversary of Inception
                  Date                                          10%

                  After 4th Anniversary of
                  Inception Date                                 0%
</Table>

                  The payment to Pharmion of the percentage of the Recapture
                  Amount shall be without prejudice to any other rights or
                  remedies that Pharmion may have against Schering under German
                  law under this Agreement. Schering shall, however, not be
                  liable to Pharmion for any indirect, incidental, special or
                  consequential damages (including without limitation any
                  damages arising from lost profits) arising in connection with
                  any short fall or disruption of delivery of Product for which
                  Pharmion had placed a Firm Order. Furthermore, Pharmion shall
                  not be entitled to any duplicative recovery against Schering
                  for damages based upon the same cause of action. Upon the
                  payment to Pharmion of the percentage of the Recapture Amount
                  as set forth above, this Agreement shall terminate and the
                  provisions of Section 21 (Consequences of Termination) shall
                  thereafter apply.

         (d) Section 6.5 of the Final Agreement is hereby deleted in its
entirety and replaced by a new section which shall be and read as follows:

         6.5      Marketing Cessation Penalty: If at any time during the eight
                  (8) year period commencing on the Effective Date: (i) Pharmion
                  ceases to market the Product in either of the Key Countries or
                  (ii) for a period of more than thirty (30) consecutive
                  calendar days, Pharmion does not have any inventory of Product
                  available for sale in either of the Key Countries (either an
                  "Marketing Cessation Event") and if such a Marketing Cessation
                  Event does not arise from, or coincide with the existence of,
                  one of the following events:


                                      -5-
<PAGE>


                  (a)      Pharmion has been required by the Agency in both of
                           the Key Countries to withdraw the Product from the
                           market in such country; or

                  (b)      The Product is not available for sale in the United
                           States; or

                  (c)      Pharmion does not have inventory of the Product
                           available for sale in such Key Country due to the
                           failure of Schering to supply a Firm Order for a
                           period of ninety (90) days for such Key Country; or

                  (d)      During the two consecutive years ending as of the end
                           of the most recently completed calendar quarter prior
                           to the occurrence of the Marketing Cessation Event,
                           annual Net Sales of the Product in the Territory were
                           less than US$1,000,000 (one million US dollars);

                  then, the due date of any purchase price payments described in
                  Section 6.1 of this Agreement or in Sections 6.2(a) and 6.2(b)
                  of this Agreement, which purchase price payments shall not
                  have been previously paid, shall be accelerated, and Pharmion
                  shall pay the aggregate amount of such accelerated purchase
                  price payments to Schering by wire transfer within thirty (30)
                  days following the occurrence of the Marketing Cessation
                  Event. Any further rights of Schering under the Agreement
                  concerning the situations described in (i) and (ii) herein
                  above or otherwise shall remain unaffected.

         (e) Section 6.6 of the Final Agreement is hereby deleted in its
entirety and replaced by a new section which shall be and read as follows:

         6.6 Payments; Interest. Except for payments under Subsection 6.3
hereof, payments under this Section 6 of the Agreement shall be made in US$ by
wire transfer of immediately available funds to an account at a commercial bank
designated by the receiving Party at least ten (10) Business Days before such
payment is due. Except for payments under Subsection 6.3 hereof, any payment due
under this Section 6 shall be due on such date as specified herein and, in the
event that such date is not a Business Day, then on the next succeeding Business
Day. Any failure by a Party to make a payment within ten (10) days after the
date when due shall obligate such Party to pay computed interest, the interest
period commencing on the due date and ending on the payment day, to the
receiving Party at a rate per annum equal the Prime Rate as quoted by the Bank
of America on REUTERS screen <USPRIME1> plus a premium of 2%, or the highest
rate allowed by law, whichever is lower. The interest calculation shall be based
on the act / 360 computation method. The interest rate shall be adjusted
whenever there is a change in the Prime Rate quotation on REUTERS screen
<USPRIME1> mentioned above. Interest shall be compounded annually in arrears.
Such interest shall be due and payable on the tender of the underlying principal
payment.

         (f) The address of Pharmion contained in Section 24.1.3 of the Final
Agreement is hereby amended to be and read as follows:


                                      -6-
<PAGE>


                  Pharmion GmbH
                  c/o Pharmion Corporation
                  2525 28th Street
                  Boulder, Colorado 80301 USA
                  Attention:  Chief Executive Officer

                  Fax  +1 720 564-9191

         4. Pharmion herewith agrees that the definition of the term
"Manufacturer's Supply Price" as amended by Section 3 (a) of this First
Amendment Agreement shall apply retroactively from January 1, 2003, and to pay
to Schering from January 1, 2003 for each year the accordingly adjusted price.
Any additional price adjustments pursuant to Section 13.2 of the Final Agreement
shall remain unaffected.

         5. Except as expressly provided herein, the provisions of the Final
Agreement shall continue in full force and effect.

         6. This First Amendment Agreement and the Final Agreement (and prior to
the Effective Date the Interim Agreement) including, but not limited to the
governing law and jurisdiction provisions of the Final Agreement constitute the
entire understandings of the Parties hereto and supersede all prior agreements
or understandings with respect to the subject matter hereof among such Parties.

         7. The paragraph headings in this First Amendment Agreement are for
convenience of reference only and shall not be deemed to alter or affect any
provisions thereof.

         8. By its countersignature of this First Amendment Agreement, Pharmion
Corporation hereby affirms the guarantee contained in the Final Agreement and
agrees that such guarantee shall not be affected by virtue of the amendments
contained in this First Amendment Agreement.

         9. This First Amendment Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different Parties hereto in separate counterparts, each of which when executed
and delivered shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.

         IN WITNESS WHEREOF, the Parties hereto have duly executed this First
Amendment Agreement as of the date first hereinabove written.

Schering Aktiengesellschaft



By:      /s/ ULRICH KOCH                     By:    /s/ HONG CHOW

Name:    Dr. Ulrich Koch                     Name:  Hong Chow

Title:   Head CBD                            Title: Senior Licensing Manager


                                      -7-
<PAGE>


Pharmion GmbH                                Pharmion Corporation



By:    /s/ PATRICK J. MAHAFFY                By:    /s/ PATRICK J. MAHAFFY

Name:  Patrick J. Mahaffy                    Name:  Patrick J. Mahaffy

Title: President & CEO                       Title: President & CEO





                                      -8-