**Exhibit 10.2**

 

**EXECUTIONCOPY**

** **

*****TextOmitted and Filed Separately**

**with theSecurities and Exchange Commission.**

**ConfidentialTreatment Requested**

**Under 17C.F.R. Sections 200.80(b)(4)**

**and 240.24b-2.**

 

**AMENDMENTAGREEMENT**

 

This Amendment Agreement (the “**AmendmentAgreement**”)****iseffective as of the latest date of signature appearing below (the “**EffectiveDate**”)****by andbetween Valeant Pharmaceuticals North America, a Delaware corporation andsuccessor in interest to Valeant Research & Development, (“**Valeant**”), Metabasis Therapeutics, Inc., a Delawarecorporation (“**Metabasis**”), and ScheringCorporation, a New Jersey corporation (“**Schering**”).(Valeant, Metabasis, and Schering are each from time to time referred toindividually as a “**Party**”****andcollectively as the “**Parties**”.)

 

**Recitals**

 

A.           Valeant,Schering, and Metabasis entered into a Termination Agreement effective as of September 19,2007 (the “**Termination Agreement**”)**.**

 

B.           Valeantand Schering entered into a Development and License Agreement dated as of December 12,2006 and effective as of January 9, 2007, for the product known asPradefovir (the “**Valeant/Schering Agreement**”)**,**which was terminated by theTermination Agreement.

 

C.           Metabasisand Schering entered into an Amended and Restated Development and LicenseAgreement, dated December 12, 2006 and effective as of January 9,2007, for Pradefovir (the “**Metabasis/Schering Agreement**”)**,**which was terminated by theTermination Agreement.

 

D.           Valeant,Metabasis, and Schering entered into an Assignment and Assumption Agreement,having an effective date of January 9, 2007, in connection with theValeant/Schering Agreement and the Metabasis/Schering Agreement (the “**Assignment**”)**.**

 

E.            Valeant,Metabasis, and Schering desire to amend the Termination Agreement and theAssignment on the terms and conditions set forth in this Amendment Agreement.

 

In consideration of the foregoing premises and themutual covenants set forth below, the Parties to this Agreement agree asfollows:

 

**Article 1- Definitions**

 

1.1            Exceptas otherwise expressly set forth in this Amendment Agreement, all capitalizedterms used in this Amendment Agreement (whether used in the plural or singular)shall have the respective meanings set forth in, as applicable, the TerminationAgreement, Assignment, Valeant/Schering Agreement, and/or theMetabasis/Schering Agreement.

 

“**Amendment Date**”****shallmean July 1, 2008.

 

“**Transaction Agreements**”****shall mean, collectively, the Valeant/Schering Agreement, theMetabasis/Schering Agreement, the Assignment, and the Termination Agreement.

 

1.2            Forclarity and avoidance of doubt, in the event of any conflict among the terms ofthe Transaction Agreements, the terms of the Termination Agreement and theAssignment, as amended by this Amendment Agreement, shall control.

 

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**Article 2 - Amendment ofAssignment**

 

The Parties hereby agree that the Assignment ishereby amended effective as of the Amendment Date as set forth herein.

 

2.1            Section 11of the Assignment is amended in its entirety to read in its entirety as setforth below:

 

“11.   Valeant, Schering and Metabasis acknowledgethat the Amended Metabasis Agreement was terminated pursuant to a TerminationAgreement entered into by Valeant, Schering, and Metabasis effective as of September 19,2007 (the “Termination Agreement”) and all of the rights to develop andcommercialize compounds and products in the Territory have reverted toMetabasis.  The Parties furtheracknowledge and agree that, effective as of the Termination Date (as defined inthe Termination Agreement) and subject to the terms of Section 12,Metabasis has assumed all of Schering’s rights and obligations under theValeant/Schering Agreement in Territory and all references to “LICENSEE” in theValeant/Schering Agreement shall mean Metabasis.

 

2.2           Section 12 ofthe Assignment is amended in its entirety to read in its entirety as set forthbelow:

 

“12.   Valeant and Metabasis agree that:

 

(a)             if Metabasis advances the development or commercializesa Product in the Territory on its own or sublicenses a Third Party to do so,then Metabasis will pay Valeant in any calendar year during the RoyaltyObligation Period, royalties in the aggregate amounts as follows on aProduct-by-Product and country-by-country basis (for purposes of clarity, theamounts set forth below constitute the full amount of the royalties due Valeantunder the Amendment Agreement, the Transaction Agreements, or otherwise):

 

(1)             (i)      in any country where there is a Valid Claim of a Licensed Patent, aroyalty on Net Sales (as defined in the Valeant/Schering Agreement) in suchcountry as provided below:

 

(A)          on Net Sales of Products where annual worldwideaggregate Net Sales of all Products are lessthan or equal to [*******], a royaltyof [*******] on Net Sales;

 

(B)          on Net Sales of Products where annualworldwideaggregate NetSales of all Products are greater than [*******] a royaltyof (i) [*******] on the first [*******] of annual worldwide aggregate Net Sales and (ii) [*******] on the annual worldwide aggregate of Net Sales inexcess of [*******].

 

(ii)       on Net Sales of each Product in anycountry in which there is no Valid Claim of a Licensed Patent, [*******] of the amounts set forth in Section 12(a)(l)(i) above.

 

(2)           Metabasis may obtain a license under anyissued patent from one or more Third Parties which patent, but for suchlicense, would be infringed by the manufacture or sale of the Products.  For any such Third Party licenses, Metabasismay reduce 

 

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the royalties otherwise due to Valeanthereunder by an amount equal to [*******] of thetotal cumulative consideration paid by Metabasis to such Third Party or ThirdParties to the extent attributable to such license, including any upfrontpayments, milestone payments and royalties; provided, however,that the total such reduction for all such Third Party licenses shall not causethe royalties due to Valeant in any calendar year to fall below [*******] of the royalties which would otherwise be due (i.e.without reference to the reduction due to Third Party license royalties) toValeant in such year.  Any portion ofsuch reduction which is unused in any year because of the foregoing proviso maybe applied to Metabasis in one or more subsequent years; and further providedthat no reduction in royalties will result from a license to a Third Partypatent thatclaims aformulation, method of treatment (or Swiss-type equivalent), method ofmanufacturing, method of packaging, or packaging system that are not necessaryin order to develop, manufacture or commercialize the Licensed Compound, unlessentering into such license was expressly approved in advance in writing byValeant in its sole discretion; and further provided that no reductionin royalties will result from a license to a Third Party patent where suchlicense covers a Combined Product and where no actual or alleged infringementby the claims of such patent would result from activities relating to a Productwhose only active pharmaceutical ingredient is a Licensed Compound, unlessentering into such license was expressly approved by Valeant in its solediscretion.

 

(3)      If a Third Party sells a product which is a Generic Equivalentto a Product in any country in which Metabasis, an Affiliate or Sublicensee isselling such Product,  the royalty payableby Metabasis to Valeant under this Agreement with respect to such Product ineach such country will be reduced to [*******] of theroyalty set forth in Section 12(a)(l) for the time period duringwhich such Generic Equivalent is sold by or on behalf of such Third Party insuch country.

 

(4)      Royalties on Net Sales will be calculated every AccountingPeriod. Within forty-five (45) days after the last day of each such AccountingPeriod during the term of this Agreement following the First Commercial Sale ofa Product, Metabasis will provide to Valeant the Sales & RoyaltyReport and pay the royalties due to Valeant as set forth above within thirty(30) days after providing the Sales & Royalty Report to Valeant.

 

(b)            The remaining schedule of milestone paymentsdue to Valeant by Metabasis upon achievement by Metabasis of certain eventsunder the assumed Valeant Schering Agreement shall be modified as set forthherein:

 

(1)      Upon the first to occur of (A) Regulatory Approval by theEMEA in respect of the EU Major Market, (B) Regulatory Approval in the US,or (C) Regulatory Approval in Japan, Metabasis will make a one-timepayment (“Milestone Payment”) to Valeant in the amount of [*******].

 

(2)      This Milestone Payment will be due only once regardless of thenumber of Products or indications that may receive Regulatory Approval and willbe paid within ten (10) Business Days of the occurrence of the Milestone.For purposes of clarity, except as set forth above, no milestone or otherpayments are due to Valeant pursuant to the Transaction Agreements orotherwise.”

 

2.3           Except as expresslyset forth in Sections 2.1 and 2.2 and subject to the terms of the TerminationAgreement (as amended below), all of the remaining terms of the Assignmentshall continue in full force and effect.

 

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**Article 3- Amendment of Termination Agreement**

 

3.1        **Transfer of Responsibility for Patient Registries**.  The Parties acknowledge that theresponsibility for Patient Registries as set forth in Section 4.3 of theTermination Agreement is being transferred from Valeant to Metabasis, effectiveas of the Amendment Date.  The Partiestherefore agree that Section 4.3 of the Termination Agreement is herebyamended to provide that, effective as of the Amendment Date, Valeant shall notbe responsible for, and, if required by the FDA or other relevant ApprovalAuthority or under applicable law, Metabasis shall be solely responsible for,the following: (i) obtaining approval from the FDA and all other relevantApproval Authorities of the final protocol for the Patient Registries (and anyamendments thereto); (ii) the implementation and conduct of the PatientRegistries in accordance with such approved protocol, including withoutlimitation the timely preparation of any annual reportsrequired to be submitted to the FDA and/orother Approval Authorities with respect to such Patient Registries; and (iii) identifyingand contracting with a suitable third party for the implementation and conductof the Patient Registries in accordance with the approved protocol and thepreparation of the clinical summary to be included in the annual reports.  The Parties further agree that Valeant andMetabasis shall be solely responsible for any and all costs and expensesarising in connection with the Patient Registries (including without limitationthe costs of any third party contractor engaged to conduct the PatientRegistries and prepare the clinical summaries); provided that suchresponsibility shall be allocated between Valeant and Metabasis as follows: (i) Valeantshall be responsible for and pay up to [*******] of theaggregate total costs and expenses arising in connection with the PatientRegistries, and (ii) Metabasis shall be solely responsible for and pay allsuch costs and expenses in excess of such amount.  For clarity, under no circumstances willSchering have any liability (1) with respect to any costs and expensesarising in connection with the Patient Registries, and/or (2) arising in connectionwith any failure or delay by Metabasis or Valeant in complying with anyrequirements by the FDA or any other relevant Approval Authority or underapplicable law with respect to the implementation or conduct of the PatientRegistries.

 

3.2        Exceptas expressly set forth in Section 3.1, all of the terms of the TerminationAgreement shall continue in full force and effect.

 

**Article 4- Miscellaneous**

 

4.1.        **Governing Law.  **ThisAmendment Agreement shall be governed, interpreted and construed in accordancewith the laws of the State of New York, without giving effect to conflict oflaw principles.

 

4.2.        **Waiver. **Nodelay or failure by a Party to enforce any of its rights and obligationshereunder shall be construed as a waiver of such rights and obligations, unlesssuch waiver is expressly set forth in writing by such Party.   Any written waiver by a Party of its rightsto enforce any provision of this Agreement shall not be construed as acontinuing waiver of such Party’s rights to enforce the same or otherprovisions of this Agreement.

 

4.3.        **Relationship of the Parties. **For purposes of this AmendmentAgreement, the relationship among the Parties is that of an independentcontractor.  Nothing herein containedshall be deemed to create any agency, employment, joint venture or partnershiprelationship between any of the Parties hereto. Except as otherwise expresslyset forth herein, no Party shall have any power to bind or obligate any otherParty in any manner whatsoever

 

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4.4.        **Notice**.  Anynotice, consent, request or waiver required or permitted to be given or sentunder this Agreement shall be in writing and sent by personal delivery,facsimile transmission (with confirmation copy by first-class mail), certifiedor registered mail (postage prepaid), or internationally recognized overnightcourier, to the Parties at the addresses and facsimile numbers indicated below:

 

If to Valeant:

 

Valeant Pharmaceuticals North America One EnterpriseAliso Viejo, California 92656Attention: General CounselFacsimile: 949-461-6641

 

with a copy to:

 

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Attention: Bruce J. Goldner, Esq.

Facsimile: 917-777-2972

 

If to Metabasis:

 

Metabasis Therapeutics, Inc. 11119 North Torrey Pines RoadLa Jolla, CA 92037Attention: Chief Executive Officer Facsimile: 858-458-3504

 

with a copy to:

 

Wilson Sonsini Goodrich & Rosati P.C. 650 PageMill RoadPalo Alto, California 94304-1050 Attention:Michael J. O’Donnell Facsimile: 650-493-6811

 

If to Schering:

 

Schering Corporation

2000 Galloping Hill Road

Kenilworth, NJ 07033

Attn: Senior Vice President, Global Licensing & StrategicAlliances

Facsimile: 908-298-7366

 

with a copy to:

 

Attn: Senior Legal Director, Licensing Facsimile:908-298-2739

 

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4.5.         **Entire Agreement. **This Amendment Agreement togetherwith the surviving provisions of the Transaction Agreements, embodies the entireunderstanding between the Parties relating to the subject matter hereof, and asof the Effective Date supersedes all prior understandings or agreements betweenthe Parties (whether written or oral) with respect thereto.

 

4.6.         **Severability. **If any provision of this AmendmentAgreement is finally determined to be invalid, unlawful or incapable of beingenforced in a jurisdiction, (i) it will be deemed to be severed from thisAmendment Agreement in such jurisdiction, (ii) every other provision ofthis Amendment Agreement will remain in full force and effect in suchjurisdiction, (iii) the Parties will negotiate in good faith to modifythis Amendment Agreement so as to achieve the original intent of the Parties asclosely as possible in an acceptable manner with respect to such jurisdiction and (iv) suchinvalidity, unlawfulness or unenforceability will not affect the interpretationor enforcement of this Amendment Agreement in any other jurisdiction.

 

4.7.         **Amendments. **This Amendment Agreement may notbe altered or otherwise amended except by an instrument in writing signed byauthorized representatives of Metabasis and Valeant but in so far as suchamendment affects only the rights and obligations of Metabasis and Valeant, itshall not require execution by Sobering.

 

4.8.         **Counterparts.  **This Amendment Agreement may beexecuted in any number of counterparts and by facsimile, each of which shall bedeemed to be an original and all of which taken together will constitute oneand the same instrument.

 

4.9.         **Further Assurances. **Each Party will duly execute anddeliver, or cause to be duly executed and delivered, such further instrumentsand do and cause to be done such further actions as any other Party mayreasonably request in connection with this Amendment Agreement in order to giveeffect to the terms and conditions of this Amendment Agreement.

 

4.10.       **Assignment. **Neither this Amendment Agreementnor any interest under this Amendment Agreement may be assigned by any Partywithout the prior written consent of all of the other Parties hereto, exceptthat any Party may assign this Amendment Agreement, in whole or in part, and/ortransfer rights or delegate obligations under this Amendment Agreement, to anAffiliate or to any third party who acquires all or substantially all of thebusiness of the assigning Party and/or substantially all of the business towhich this Amendment Agreement relates (whether by merger, sale of assets orotherwise); provided that such Affiliate or other third party successorin interest promptly agrees in writing to be bound by the terms of thisAmendment Agreement. Any assignment that does not comply with this Section 4.10shall be null and void.

 

**[Remainderof this page intentionally left blank.]**

 

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IN WITNESS WHEREOF, the Parties intending that thisAmendment Agreement be binding on each of the Parties and their respectivesuccessors and assigns have caused this Amendment Agreement to be executed bytheir respective duly authorized representatives as of the dates set forthbelow.

 

 

SCHERINGCORPORATION

 

 
| By:    |      /s/  DAVID A. PIACQUAD |   |
|--------|------------------------------------------------------|--------|
|   |                                                 |
| Name:  |     David  A. Piacquad           |   |
|   |                                                 |
| Title: | Senior Vice President, Business Development          |   |
|   |                                                 |
| Date:  |     9/17/08                      |   |
|        |                                                      |        |  |  |  |

 

 

VALEANT PHARMACEUTICALS NORTH AMERICA

 

 
| By:    |      /s/  RICH MASTERSON       |   |
|--------|---------------------------------------------------------|--------|
|   |                                                    |
| Name:  |     Rich  Masterson                 |   |
|   |                                                    |
| Title: |  Executive Vice President, Commercial  Development |   |
|   |                                                    |
| Date:  |     9/23/08                         |   |
|        |                                                         |        |  |  |  |

 

 

METABASIS THERAPEUTICS, INC

 
| By:    |      /s/  PAUL LAIKIND, PH.D. |   |
|--------|--------------------------------------------------------|--------|
|   |                                                   |
| Name:  |     Paul  Laikind, Ph.D.           |   |
|   |                                                   |
| Title: |     President and CEO              |   |
|   |                                                   |
| Date:  |     9-24-08                        |   |
|        |                                                        |        |  |  |  |

 

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