Exhibit
        10.1

      

        
          	 	
                  Dr.
                    Knut Sturmhoefel

                	
                  Novartis
                    Pharma AG

                
	 	
                  Global
                    BD&L

                	
                  Lichtstrasse
                    35

                
	 	
                  Head
                    Alliance Mgmt NSO

                	
                  WSJ-790.322.11

                
	    	
                   

                	
                  CH-4056
                    Basel, Switzerland 

                
	
                   

                	
                  Tel.:
                    +41 61 624 1165

                
	
                   

                	
                  Fax.:
                    + 41 61 324 5151 

                
	 	Email:
	
                   

                	
                  knut..sturmhoefel@novartis.com

                


        

      

    

     

    

      26
        June
        2008

       

      Hem
        Pandya

      Chief
        Operating Officer 

      NexMed
        Inc. 

      89
        Twin
        Rivers Drive 

      East
        Windsor, NJ 08520

      

         

        Side
          Letter
          re: Early
          Payment of Phase III Milestone Payment according to the
          License Agreement
          dated September 13, 2005.

         

        


        Dear
          Hem:

        


        Novartis
          Pharma AG is exclusively developing NM100060 (Lamisil
          NSO) pursuant
          to Section 16.2 (Extension to Affiliates) of that certain License Agreement
          (“Agreement”) entered into September
          13, 2005 by and between Novartis International Pharmaceutical Ltd., NexMed,
          Inc.,
          and
NexMed
          International
          Ltd. Capitalized terms used in this Side Letter that are not otherwise
          defined herein shall have the
          meaning provided for in the Agreement.

         

        In
          accordance with Section 7.2 (Milestone Payments) of the Agreement, the
          one-time,
          non-refundable, non-creditable Milestone Payment of six
          million
          US
          dollars
          ($6 mUSD),
          pursuant
          to
          Section 7.2(a) and subject to Section 7.2(b) of the Agreement, shall become
          payable to NexMed upon the occurrence of the Phase III Completion Milestone,
          as
          defined in the Agreement
          as follows:

        


        


        “Phase
          III Completion Milestone” means
          the
          positive outcome of the first Phase III Clinical
          Trial for a Product based on the final study report for such trial and
          demonstrating a safety and efficacy profile sufficient to warrant preparation
          and filing of
          an NDA
          as determined by Novartis, such safety and efficacy profile to be provided
          to
          NexMed
          by Novartis prior to the initiation of the Phase III Clinical
          Trial.

        


        


        Notwithstanding
          the foregoing, Novartis agrees that the Phase III Completion Milestone
          payment
          will be based on Novartis’ review and approval
          of the first
          interpretable results of
          the
final
          study report, provided
          however that
          NexMed:
          (a) has promptly within thirty (30) days of the date of this Side Letter
          transferred the IND
          for
          the Product (IND No. 67,826) to Novartis; and
          (b)
          agrees to provide
          full and timely support for Novartis'
          preparation of the NDA for the Product.

        


        
          
            
            

          

          
            1/2

            
              

            

          

          
            
            

          

        

        

         

        
 

         

        Upon
          triggering of the Phase III Completion Milestone, Novartis will endeavor
          to make
payment
          within five (5) business days of its receipt of NexMed’s
          invoice
          but in any event not later
          than thirty (30) days.

         

        To
          indicate your acceptance of the foregoing, kindly return one original of
          the
          enclosed duplicate
          of this Side Letter,
          duly executed,
          to the above address.

         

        Sincerely
          yours, 

         

        Novartis
          Pharma AG

        


        

          
            	
                    /s/
                      Dr. Knut Sturmhoefel

                  	 	
                    /s/
                      Liouba Laederich

                  	 
	
                    Dr.
                      Knut Sturmhoefel

                  	 	
                    Liouba
                      Laederich

                  	 
	
                    Global
                      BD&L, Head Alliance Mgmt NSO

                  	 	
                    Legal
                      Counsel

                  	 


          

          




        AGREED
          & ACCEPTED:

         

         NexMed,
          Inc.

         

        


        
          	/s/
                  Vivian Liu	 	/s/
                  Hemanshu Pandya	 
	Name: Vivian Liu	 	Name: Hemanshu Pandya	 
	Title: President and Chief Executive
                  Officer	 	Title: Vice President and
                  Chief Operating Officer	 


        

         

         

        
          
            
            

          

          
            2/2