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Exhibit 10.1 June 15, 2004 Shire US Inc.
One Riverfront Place
Newport, Kentucky 41071
Attention: Gregory Flexter Re:
    
    Transaction Agreement, dated as of February 26, 2003, by and
among NovenPharmaceuticals, Inc., Shire US Inc. and Shire
Pharmaceuticals Group plc(the Transaction Agreement)
 Dear Greg: This letter agreement (together with the Exhibits hereto, this
Agreement) sets forth the mutual agreement and understanding of Noven
Pharmaceuticals, Inc. (Noven) and Shire US Inc. (Shire US), acting on
behalf of itself and its affiliate Shire Pharmaceuticals Ireland Limited
(Shire Ireland and, together with Shire US, Shire) with respect to Shires
performance of product studies of Novens transdermal methylphenidate drug
delivery system (the Product), for which New Drug Application 21-514 (the
Product NDA) is currently pending. This Agreement amends and replaces the
agreement between the parties dated November 5, 2003. Capitalized terms used
and not defined in this Agreement shall have the meanings set forth in the
Transaction Agreement. The parties acknowledge the following background facts. The closing of
the transactions contemplated by the Transaction Agreement took place on April
7, 2003, at which time Noven and Shire Ireland entered into a license agreement
(the License Agreement) for the license of certain intellectual property of
Noven to Shire Ireland for the purpose of the development and sale of the
Product by Shire Ireland, as well as a Toll Conversion and Supply Agreement
(the Toll Conversion and Supply Agreement) pursuant to which Noven agreed to
manufacture the Product for Shire Ireland. The Transaction Agreement provides
that upon receipt of Regulatory Approval of the Product by the FDA, the Product
NDA, along with related regulatory materials, will be transferred to Shire US. On April 25, 2003, Noven received a letter from the FDA notifying Noven
that the Product NDA was not approvable under Section 505(d) of the FDC Act
(the FDA Notice). Since Novens receipt of the FDA Notice, Noven and Shire
have cooperated in good faith in exploring various ways in which Regulatory
Approval of the Product NDA may be obtained despite the FDA Notice. On October
10, 2003, Noven requested a special protocol assessment and submitted a
jointly-prepared protocol to the FDA for a pivotal controlled study of the
Product. On November 15, 2003, Noven received a letter from the FDA (the
Second FDA Letter) informing Noven that the study protocol submitted would
not address all of the concerns raised in the FDA Notice, and suggesting a
clinical study design that would address the FDAs




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concerns. Since that time, the parties have continued to cooperate in
good faith to develop a clinical strategy, and to conduct other activities,
that would address the FDAs concerns raised in the FDA Notice and the Second
FDA Letter. On May 26, 2004, the parties met with the FDA to review their
strategy for approval, and following such meeting, the parties have agreed to
continue to work together to seek Regulatory Approval of the Product. The parties hereby agree that the study protocol synopses attached as
Exhibit A hereto, which shall serve as preliminary outlines for finalized
protocols (as such finalized protocols may be subsequently amended or
supplemented as contemplated herein, the Protocols, and individually, the
applicable Protocol as required by context), reflects the agreement of the
parties regarding the terms of additional studies of the Product, including a
Phase II analog classroom study, a Phase III naturalistic study and a Phase III
open-label study (such studies together with the SPD485-102 defined below
constituting the Product Studies, and individually, the applicable Product
Study as required by context), which Product Studies shall be conducted by
Shire in accordance with the terms and conditions set forth herein. Shire
agrees to use reasonable efforts to commence the Product Studies as soon as
practicable, and in any event within three (3) months following the date
hereof; provided that Noven has fulfilled its obligations with regard to
Clinical Supplies as set forth below. As soon as practicable prior to the
commencement of a Phase I pharmacokinetic study as discussed with the FDA in
the May 26, 2004 meeting (the SPD485-102 Study), Shire shall submit to Noven
the proposed protocol for such study, which protocol shall be agreed upon by
the parties in good faith and in conjunction with the FDA. The Product Studies
shall be designed and managed by Shire, performed in accordance with the
applicable Protocol and conducted by the individuals listed in Exhibit B
hereto. Any material deviation from the applicable Protocol prior to the date of
commencement of the applicable Product Study shall require the prior written
approval of Noven. Any material deviation from a Protocol after the
commencement of the applicable Product Study shall be made in accordance with
Shire SOPs; provided, that Shire shall provide at least three (3) days written
notice of any such proposed deviation to Noven, during which time Noven shall
have the opportunity to submit an objection to such deviation. In the event
that Noven does not object within such three (3) day period, the deviation
proposed by Shire shall automatically take effect. In the event that Noven
does object to any such proposed deviation, Shire shall have the option to
implement such deviation notwithstanding Novens objection, subject to Shires
indemnification obligation as contemplated below. Shire agrees to provide
monthly reports to Noven during the performance of the Product Studies
regarding the activities undertaken to date and the status of the Product
Studies. Noven shall (a) reimburse Shire for all of Shires reasonable
out-of-pocket expenses actually incurred by Shire and paid to a third party in
connection with the Product Studies as set forth in Exhibit C including,
without limitation except as otherwise contemplated below, costs related to
contract research organizations, laboratory services, document control,
protocol development, investigator meetings, study conduct and close out, drug
safety monitoring and reporting, data retrieval and management, statistical
analysis and reporting, investigator grants, expenses and preparation and
storage and distribution of study materials, and (b) absorb all costs with
respect to the manufacture by Noven of the Product for the Product Studies
including, without limitation, the cost of the active ingredient and all
inactive ingredients of the Product, 2




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manufacturing costs, testing, quality-related costs, packaging and
labeling costs, shipment, delivery, storage and handling costs and costs of
insurance for the Product; provided however, that notwithstanding the
foregoing, Noven shall have no obligation to pay or reimburse Shire for (i)
Shires creation, design, development, implementation, management, monitoring
or documentation of the Product Studies which are not performed by a third
party or any similar internal costs of Shire associated with the Product
Studies, (ii) any labor or other costs related to Shires employees, or (iii)
any costs or expenses incurred by Shire in connection with executing this
Agreement (including without limitation attorneys fees and expenses); and
provided further, that the aggregate costs and expenses to be paid to Shire
under this Agreement shall not exceed $12,940,000 (plus the costs actually
incurred by Shire for any API used in Clinical Supplies) without the prior
written approval of Noven (it being understood that, except for its
indemnification obligations set forth herein and any obligations undertaken by
Noven directly, all such costs shall be paid directly to Shire and that Noven
shall have no liability to any third party pursuant to this Agreement). ***. Noven shall defend, indemnify and hold harmless Shire and its Affiliates
and each of their respective officers, directors, agents, employees and
shareholders (collectively Shire Indemnitees) from and against any all
Damages which Shire Indemnitees may incur or suffer arising out of the Product
Studies or arising out of Novens breach of the terms hereof, except to the
extent that those Damages arise out of (i) any material deviation from the
Protocols after commencement of the Product Studies to which Noven shall have
submitted an objection during the three (3) day period contemplated above, or
(ii) the misconduct or negligence of, or a violation of any Applicable Law by,
Shire or Shire Indemnitees; provided, that Noven shall have no obligation to
indemnify Shire for any Damages incurred by Shire in connection with Shires
indemnification of third parties with respect to performance of the Product
Studies, other than Shires indemnification of third parties for Damages
relating to the Product. Shire shall defend, indemnify and hold harmless Noven
and its Affiliates and each of their respective officers, directors, agents,
employees and shareholders (collectively Noven Indemnitees) from and against
any and all Damages which Noven Indemnitees may incur or suffer arising out of
(i) any material deviation from the applicable Protocol after commencement of
the applicable Product Study to which Noven shall have submitted an objection
during the three (3) day period contemplated above, (ii) Shires breach of the
terms hereof, or (iii) Shires misconduct or negligence in the conduct of the
Product Studies or a violation of any Applicable Law by Shire or Shire
Indemnitees. Shire agrees that in connection with its performance of the Product
Studies, including without limitation the negotiation of agreements or other
arrangements with third parties in connection therewith, Shire shall conduct
the Product Studies as if Shire were solely responsible for all costs and
expenses, as well as any potential liabilities or obligations, associated with
the Product Studies. Shire shall submit invoices to Noven monthly to the Finance Contact listed
below, together with supporting documentation for each expense for which Shire
seeks reimbursement; provided that Shire shall review each third party invoice
for accuracy before submitting it to Noven. Shires review shall be conducted
as if Shire were solely responsible for payment of the invoice. Noven shall
pay each invoice received from Shire within thirty (30) days of receipt. In
the event that Noven breaches any of its payment obligations set forth herein,
in addition to any 3




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rights or remedies that Shire may have at law or under the Transaction
Agreement, Shire may in its sole discretion complete the Product Studies at
Shires cost and may seek reimbursement from Noven for any costs and expenses
incurred by Shire and contemplated to be paid to Shire or absorbed by Noven in
accordance with this Agreement; provided, that the failure of Noven to perform
its payment obligations hereunder shall not give rise to a right of termination
of any party (not otherwise existing) under any of the Transaction Documents. Accounts Payable
Noven Pharmaceuticals, Inc.
11960 SW 144th Street
Miami, Florida 33186 Shire shall submit to Noven orders for supply of the Product and placebos
necessary for the Product Studies (the Clinical Supplies). The manufacture
of Clinical Supplies shall be pursuant to and in accordance with the terms and
conditions set forth in Section 5.01 of the Toll Conversion and Supply
Agreement. Notwithstanding anything to the contrary in the Toll Conversion and
Supply Agreement, (i) Noven agrees that it has sufficient quantities of Active
Ingredient on hand to manufacture all Clinical Supplies, (ii) with regard to
quality releases of Clinical Supplies, Noven shall provide a release of bulk,
packaged Clinical Supplies to Shire, Shire shall arrange for the labeling of
such bulk Clinical Supplies and Shire shall release the final Clinical Supplies
for use in the Product Studies and (iii) Noven shall conduct any and all
testing necessary for the manufacture, packaging or release of Clinical
Supplies. The parties covenant and agree that, at the conclusion of the Product
Studies, if Shire does not exercise its termination option set forth in the
next paragraph, each party shall cooperate in good faith with the other to
submit the results of the Product Studies, along with the Product NDA, to the
FDA for the purpose of seeking Regulatory Approval of the Product NDA, and
shall continue to cooperate in good faith with each other and with the FDA to
pursue diligently Regulatory Approval of the Product until the earlier of (i)
receipt of Regulatory Approval, (ii) receipt of a Non-Approval Notice, or (iii)
such time as the parties shall reach mutual agreement to abandon pursuit of
Regulatory Approval (Abandonment), and that neither party shall have the
right to terminate this Agreement without the prior written consent of the
other party prior to such time. With respect to the Product Studies, and
except as otherwise contemplated in the following paragraph, Noven shall
appoint Shire as the agent for the Product IND and Shire shall assume a
leadership role with respect to all registration strategies, communication,
correspondence and meeting attendance with the FDA; provided, that Noven shall
at all times remain the sponsor of the Product IND and the Product NDA and
shall be represented in all such communications, correspondence and meetings
with the FDA. In the event that after the unblinding of the data from the Product
Studies (excluding the Phase III open-label study), Shire determines in its
reasonable opinion based upon such data that the submission of the Product
Studies and the Product NDA to the FDA will not render a commercially viable
Product, Shire shall have the option to terminate this Agreement, the
Transaction Agreement and the other Transaction Documents upon written notice
to Noven; provided, that all assets purchased by Shire pursuant to the
Transaction Agreement shall thereupon be repurchased by Noven for an aggregate
consideration of $1.00, the License Agreement shall be automatically terminated
and Shire shall forfeit any remedies otherwise 4




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available to it under the Transaction Documents, including without
limitation the right to receive $5,000,000 in consideration for the repurchase
of such assets. Shires option to terminate this Agreement, the Transaction
Agreement and the other Transaction Documents shall expire sixty (60) days
after the unblinding of the data from the Product Studies. In the event Shire
shall exercise such right of termination, Noven shall have the right to make
any submission to, and to engage in necessary correspondence and meetings with,
the FDA in an effort to obtain Regulatory Approval of the Product without the
participation or approval of Shire. ***. Shire hereby covenants and agrees that from and after the date hereof and
until the termination of this Agreement, whether by (i) receipt of Regulatory
Approval, (ii) receipt of a Non-Approval Notice, (iii) Abandonment or (iv)
Shires termination of this Agreement in accordance with the foregoing
paragraph (the Product Study Period), Shire shall not exercise any right
under the Transaction Agreement or any of the other Transaction Documents,
including without limitation Section 9.02(c) of the Transaction Agreement, to
terminate the Transaction Agreement or any of the other Transaction Documents
or to demand that Noven repurchase the assets purchased by Shire under the
Transaction Agreement. To the extent required, the foregoing constitutes an
express waiver of Shires rights under Section 9.02(c) of the Transaction
Agreement for and during the Product Study Period in accordance with Section
13.07 of the Transaction Agreement. The parties acknowledge and agree that
except as otherwise contemplated above, Shire is not waiving any rights it may
have under Section 9.02(c) for any period after the conclusion of the Product
Study Period. The parties further acknowledge and agree that Shire has no right under
Section 9.02(c) of the Transaction Agreement to demand that Noven repurchase
the assets purchased by Shire under the Transaction Agreement or to terminate
the License Agreement by reason of Novens receipt of the FDA Notice. The
parties acknowledge and agree that other than with respect to the FDA Notice
and except as otherwise contemplated above, Section 9.02(c)(i) of the
Transaction Agreement remains in full force and effect. The parties agree that Section 11.01(a) of the Transaction Agreement is
hereby amended such that the rights of the respective parties to make a claim
for breach of any of the representations or warranties made in the Transaction
Agreement shall survive the date of the first commercial sale of Product for a
period of one year thereafter. To the extent required, the parties acknowledge and agree that this
Agreement constitutes an amendment to the Transaction Documents in accordance
with the terms and conditions thereof, and that except as the context of this
Agreement requires to give effect to the intent and purposes hereof, the
Transaction Documents shall remain in full force and effect without any further
amendments or modifications. This Agreement shall be construed in accordance
with and governed by the substantive laws of the State of Delaware, without
giving effect to the conflict of laws principles thereof. This Agreement shall
become binding when any one or more counterparts hereof, individually or in the
aggregate, shall bear the signatures of each of the parties hereto. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original as against the party whose signature appears thereon, but
all of which taken together shall constitute one and the same instrument.
Facsimile signatures of authorized signatories of the parties shall constitute
the due execution and delivery of this Agreement. This Agreement shall inure
to the benefit of and be binding upon the parties hereto 5




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and their successors and permitted assigns. Any disputes arising under
this Agreement shall be resolved in accordance with the dispute resolution
mechanism provided in the Transaction Agreement. Very truly yours,/s/ Robert C. StraussRobert C. StraussPresident, CEO and Chairman ACKNOWLEDGED AND AGREED THIS15 DAY OF JUNE, 2004: SHIRE US INC. /s/ Gregory Flexter  
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