##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K/A
 (Amendment No. 1)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from     to
 Commission file no. 0-19591
 IDM PHARMA, INC.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    33-0245076(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 9 Parker, Suite 100, Irvine, CA 92618
 (Address of Principal executive offices)
 Registrants telephone number, including area code:
 (949) 470-4751
 Securities registered pursuant to Section 12(b) of the Act:
 Common Stock, $0.01 par value
 (Title of class)
 The Nasdaq Stock Market LLC
 (Name of Each Exchange on Which Registered)
 Securities registered pursuant to Section 12(g) of the Act:
 None
 o þ
 o þ
 þ o
 o o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company þ
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE
  
 *
    
    Excludes 10,118,455 shares of Common Stock held by directors and
officers and stockholders whose ownership exceeds 10% of the Common
Stock outstanding on June 30, 2008. Exclusion of shares held by any
person should not be construed to indicate that such person possesses
the power, direct or indirect, to direct or cause the direction of the
management or policies of the registrant, or that such person is
controlled by or under common control with the registrant.




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TABLE OF CONTENTS  PART IIIItem 10. Directors, Executive Officers and Corporate GovernanceItem 11. Executive CompensationItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13. Certain Relationships and Related Transactions, and Director IndependenceItem 14. Principal Accountant Fees and ServicesPART IVItem 15. Exhibits and Financial Statement SchedulesSIGNATURESEX-31.1EX-31.2    Table of Contents  EXPLANATORY STATEMENT
   
 PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance
 Current Directors And Executive Officers
  Principal Occupation/Name
    
    Age
    
    Position Held With the CompanyTimothy P. Walbert
    
    
    42
    
    
    President, Chief Executive Officer and DirectorRobert J. De Vaere
    
    
    51
    
    
    Senior Vice President, Finance and
Administration, Chief Financial Officer and
SecretaryTimothy C. Melkus
    
    
    49
    
    
    Senior Vice President, Business Development
and OperationsJeffrey W. Sherman, M.D.
    
    
    54
    
    
    Senior Vice President, Research and
Development, Chief Medical OfficerMichael G. Grey
    
    
    56
    
    
    Non-Executive Chair and DirectorRobert Beck, M.D.
    
    
    55
    
    
    DirectorJohn P. McKearn, Ph.D.
    
    
    55
    
    
    DirectorGregory J. Tibbitts
    
    
    42
    
    
    Director
 Mr. Walbert ®




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Mr. De Vaere
 Mr. Melkus
 Dr. Sherman
 Mr. Grey
 2




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Dr. Beck
 Dr. McKearn
 Mr. Tibbitts
 Section
16 (a) Beneficial Ownership Reporting Compliance
   Code Of Business Conduct and Ethics
 www.idm-pharma.com
 3




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##### Table of Contents



Audit Committee Members and Financial Expert
 www.idm-pharma.com.
 
 Item 11. Executive Compensation
 Compensation Discussion And Analysis
  Executive compensation philosophy and objectives
   Primary components of executive compensation
  Base salary
 4




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Discretionary cash bonuses
 Cash retention and bonus plans.
 5




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Long-term equity incentive awards
 Severance benefits
  Other benefits
  Material tax and accounting implications of executive compensation policies
  6




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Executive compensation review process
  2008 Executive compensation decisions
 December 2007 and March 2008 Compensation Committee meetings
  
    
    2008 base salaries:In arriving at its recommendations regarding base
salaries, the Compensation Committee reviewed the Companys executive
officers compensation relative to the 50th percentile in base
salaries for comparable positions at comparable companies, according
to the Radford Survey, as well as reviewing base salaries paid to
executive officers at peer biotechnology companies which compete in
the oncology and/or immunotherapy sector. Following its review, in
order to bring the base salaries of the Companys executive officers
(in the context of overall compensation to executive officers) in line
with the comparable measures described above, the Compensation
Committee recommended to the Board an increase of $20,000, or 5.1%, in
Mr. Walberts base salary, an increase in Mr. De Vaeres base salary
of $11,000, or 2.6%, an increase in
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Mr. Melkus bases salary of
$15,000, or 6.8% and an increase in Dr. Shermans base salary of
$11,000, or 2.6%. All of the recommended increases were to take
effect on April 1, 2008. The Board ratified the recommendation of the
Compensation Committee with regard to executive officer base salaries
for 2008. The 2008 base salaries for our named executive officers are
as follows:
 Jan-Mar 2008
    
    Apr-Dec 2008Executive Officer
    
    Base Salary
    
    Base SalaryTimothy P. Walbert,
President and Chief Executive Officer
    
    $
    390,000
    
    
    $
    410,000Robert J. De Vaere,
Senior Vice President and Chief Financial Officer
    
    $
    300,000
    
    
    $
    311,000Timothy C. Melkus,
Senior Vice President,
Business Development and Operations
    
    $
    220,000
    
    
    $
    235,000Jeffrey W. Sherman, M.D.,
Senior Vice President, Research and
Development, Chief Medical Officer
    
    $
    300,000
    
    
    $
    311,000
 
    
    Equity compensation.The Compensation Committee also recommended, and the Board
approved, the grant of performance or milestone based deferred issuance restricted stock
units of 98,000 shares for Mr. Walbert, 54,000 shares for Mr. De Vaere, 43,000 shares for
Dr. Sherman, and 43,000 shares for Mr. Melkus. The milestone based shares only vest upon
achievement of the related performance objective. In reaching its decision to provide
multiple stock grants to the Companys executive officers as part of total compensation for
2008, the Board considered several factors. The initial stock grant was made in connection
with a retention plan aimed at providing incentives to retain the services of the executive
officers through August 2008 in order to assess alternatives available to the Company and
potentially complete a strategic transaction during that time. The second stock grant was
made to provide added incentive to the executive officers to achieve a specific milestone
and the shares would only vest if the Committee for Human Medicinal Products (CHMP)
issued a positive opinion with respect to MEPACT by December 31, 2008, provided that the
vesting of the shares would be accelerated in connection with a change of control of the
Company or termination without cause of the specified executive officer prior to the date
the CHMP issues a positive opinion with respect to MEPACT or December 31, 2008. The Board
also considered the number of shares included in prior grants to the executive officers,
the current value and potential value of those shares, the number of shares awarded in
stock grants to non-executive employees at the same time and with the same vesting terms,
and the expense to the Company relative to other options available to it in making its
decision to provide multiple stock grants, as well as survey data and equity compensation
at comparable companies. In November 2008, the CHMP issued a positive opinion with respect
to MEPACT and the milestone based deferred issuance restricted stock units related to that
milestone vested in full.
 June 2008 Compensation Committee meeting.
 
    
    if an executive officer (other than the CEO, and following his decision to move to
part-time status in October 2008, our CFO) eligible under the plan were terminated without
cause after August 31, 2008 but prior to December 31, 2008, they would be entitled to
receive a lump sum cash payment equal to such executive officers base salary, less
standard deductions and withholding, for the period from the date of termination through
December 31, 2008, which amounts equaled $103,667 for Mr. De Vaere (which was subsequently
reduced to $0 following his decision to move to part-time status in October 2008), $103,667
for Dr. Sherman and $78,333 for Mr. Melkus. As none of the executives were terminated
without cause before December 31, 2008, none of these bonuses
were awarded;
    
    our executive officers (other than our CEO, and following his decision to move to
part-time status in October 2008, our CFO) were also eligible for a bonus under the
retention and bonus plan upon the earlier of the filing of an amended NDA with the FDA for
mifamurtide prior to December 31, 2008 or a change of control (as defined in the executive
plan) prior to December 31, 2008. The bonus eligibility amounts were $103,667 for Mr. De
Vaere (which was subsequently reduced to $0 following his decision to move to part-time
status in October 2008), $103,667 for Dr. Sherman and $78,333 for Mr. Melkus. Because we
did not file the amended NDA by December 31, 2008, this milestone was not achieved. As
such, no such compensation was awarded related to this bonus; and
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
    
    our executive officers were also eligible for a bonus under the retention and bonus plan
upon the earlier of our receipt of a positive opinion for MEPACT from the CHMP of the EMEA
prior to December 31, 2008, or a change of control prior to December 31, 2008. The bonus
eligibility amounts were $136,667 for Mr. Walbert, $103,667 for Mr. De Vaere (which
continued in effect following his decision to move to part-time status in October 2008),
$103,667 for Dr. Sherman and $78,333 for Mr. Melkus. As we received the positive opinion
from the CHMP on November 17, 2008, this bonus was paid out as of December 31, 2008. All
benefits payable to the executive officers under this retention and bonus plan are in
addition to severance benefits in accordance with their respective employment agreements.
 December 2008 Compensation Committee Meeting.
 
    
    Amended NDA filing bonus plan: in recognition of the fact that the Company would be
unable to file the amended NDA by December 31, 2008 and that the bonuses related to such a
filing approved at the June 2008 Compensation Committee and Board meetings would not be
achieved, the Board adopted a revised version of the June 2008 retention and bonus plan for
certain of our executive officers (applicable to executive officers other than our CEO and
CFO) primarily providing for a cash bonus payable in connection with the filing of an
amended NDA with the FDA for mifamurtide on or prior to March 31, 2009. Under the terms of
this plan, upon the earlier of (i) the filing of an NDA amendment with the FDA for
mifamurtide prior to March 31, 2009 or (ii) a change of control of the Company prior to
March 31, 2009, a lump sum cash bonus payment would have been payable to certain of our
specified executive officers, provided such executive officer was an employee of the
Company immediately prior to the closing of such change of control or filing of such NDA
amendment. These bonuses were $125,000 for Dr. Sherman and $50,000 for Mr. Melkus. This
cash payment would have been in addition to any payment the specified executive officer is
entitled to under such officers employment agreement or any other compensation
arrangement. As we have placed the U.S. mifamurtide NDA amendment submission on hold until
we complete our review of strategic alternatives available to the Company, this milestone
was not achieved. As such, no compensation was awarded related to this bonus in 2008 or
2009;
    
    2008 discretionary cash bonuses: In determining the 2008 discretionary cash bonus
amounts for our executive officers, the Compensation Committee reviewed performance
assessments and compensation recommendations made by our Chief Executive Officer. After
completing its review, our Compensation Committee recommended and our Board of Directors
approved final bonus payments to be made to certain of our executive officers based upon
the achievement of target corporate goals in 2008, which goals included:
 Ø
    
    completion of the shutdown of our Paris, France operations;Ø
    
    receipt of a positive opinion for MEPACT from the CHMP of the EMEA on
or before the 3rd quarter of 2008;
 Ø
    
    completion of a strategic transaction on or before the 3rd quarter of
2008;
 Ø
    
    raising additional capital (with a target of $7 million or greater) following the
occurrence of a positive corporate event related to mifamurtide and/or the trading of our
common stock above $3.00 per share;
 Ø
    
    filing of an amended NDA with the FDA for mifamurtide in the 2nd half of
2008; and
 Ø
    
    finishing 2008 with a cash balance of at least $10 million, taking into account the
costs of obtaining a positive opinion for MEPACT from the CHMP and the filing of an
amended NDA with the FDA.
  
    
    2009 Transaction Bonus Plan:Our Board also adopted a plan for certain of our executive
officers providing for a cash bonus payable in connection with closing of a change of
control of the Company (the 2009 Transaction Bonus Plan). Under this bonus plan, upon
the closing of a change of control of the Company on or prior to June 30, 2009, a lump sum
cash bonus payment will be payable to those specified executive officers, provided such
executive officer is an employee of the Company immediately prior to the closing of such
change of control. The bonus eligibility amounts are $300,000 for Mr. Walbert, $225,000
for Mr. De Vaere, $100,000 for Dr. Sherman and $75,000 for Mr. Melkus. This cash payment
would be in addition to any payment to which the specified executive officer is entitled to
under such officers employment agreement or any other compensation arrangement.
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Compensation of former Vice President, Clinical Operations
  Summary Compensation Table
  10




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Summary Compensation Table for Fiscal 2008, 2007 and 2006
 Stock
    
    
    OptionBonus ($)
    
    
    Awards ($)
    
    
    Awards ($)
    
    
    All OtherName
    
    
    
    
    
    Salary ($)
    
    
    (1)
    
    
    (2)
    
    
    (2)
    
    
    Compensation $
    
    
    Total ($)(a)
    
    Year
    
    
    (b)
    
    
    (c)
    
    
    (d)
    
    
    (e)
    
    
    (f)
    
    
    (g)Mr. Timothy P.
Walbert, President
and Chief Executive
Officer
    
    
    2008
    
    
    
    405,000
    
    
    
    280,167
    
    
    
    518,687
    
    
    
    141,213
    
    
    
    25,444
    (3)
    
    
    1,370,5112007
    
    
    
    216,000
    
    
    
    
    
    
    
    80,338
    
    
    
    76,454
    
    
    
    19,833
    (3)
    
    
    392,6252006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mr. Robert J. De
Vaere, Senior Vice
President, Finance
and Administration,
Chief Financial
Officer and
Secretary (4)
    
    
    2008
    
    
    
    264,192
    
    
    
    190,747
    
    
    
    270,427
    
    
    
    146,173
    
    
    
    7,320
    (5)
    
    
    878,8592007
    
    
    
    186,923
    
    
    
    
    
    
    
    41,892
    
    
    
    95,707
    
    
    
    5,919
    (5)
    
    
    330,4412006
    
    
    
    84,224
    
    
    
    141,000
    
    
    
    79,385
    
    
    
    
    
    
    
    113,218
    (6)
    
    
    417,827Dr. Jeffrey W.
Sherman, Senior
Vice President,
Research &
Development and
Chief Medical
Officer
    
    
    2008
    
    
    
    308,250
    
    
    
    179,862
    
    
    
    157,709
    
    
    
    31,162
    
    
    
    7,404
    (5)
    
    
    684,3872007
    
    
    
    117,692
    
    
    
    
    
    
    
    5,530
    
    
    
    9,118
    
    
    
    2,804
    (5)
    
    
    135,1442006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mr. Timothy C.
Melkus, Senior Vice
President, Business
Development and
Operations
    
    
    2008
    
    
    
    231,250
    
    
    
    127,683
    
    
    
    137,591
    
    
    
    30,761
    
    
    
    7,270
    (5)
    
    
    534,5552007
    
    
    
    128,996
    
    
    
    
    
    
    
    
    
    
    
    14,806
    
    
    
    
    
    
    
    143,8022006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dr. Bonnie Mills,
Vice President,
Clinical Operations
(7)
    
    
    2008
    
    
    
    100,619
    
    
    
    
    
    
    
    
    
    
    
    52,166
    
    
    
    151,208
    (8)
    
    
    303,9932007
    
    
    
    231,789
    
    
    
    50,000
    
    
    
    14,826
    
    
    
    105,755
    
    
    
    6,750
    (5)
    
    
    409,1202006
    
    
    
    230,000
    
    
    
    45,500
    
    
    
    11,949
    
    
    
    35,664
    
    
    
    6,600
    (5)
    
    
    329,713
 
 (1)
    
    The Compensation Committee approved a bonus to the Companys executives for 2006
performance in February 2007 upon the completion of the February 20, 2007 financing. 2008 bonus
compensation includes bonuses earned in connection with the Companys receipt of a positive opinion
for MEPACT by the CHMP of the EMEA and bonuses for achieving 70% of the Companys 2008 corporate
goals, which were approved by the Compensation Committee in June 2008 and in December 2008,
respectively.(2)
    
    Amounts are calculated utilizing the provisions of SFAS No. 123R, Share-based Payments. See
Note 7 to the Consolidated Financial Statements for a discussion of the assumptions underlying
valuation of our equity awards.(3)
    
    This amount represents reimbursement for temporary living expenses and life insurance premiums.(4)
    
    Mr. De Vaere served as our Vice President, Finance and Chief Financial Officer beginning in May
2000 and resigned effective March 31, 2006. He worked as a consultant for the Company from April
to June 2006. Mr. De Vaere rejoined the company in May 2007 as Senior Vice President, Finance and
Administration and Chief Financial Officer.(5)
    
    This amount represents a 401(k) matching contribution and life insurance premiums.(6)
    
    Includes $94,418 paid in connection with a retention plan and $18,800 in consulting fees.(7)
    
    Dr. Mills terminated employment with the Company on June 2, 2008.(8)
    
    This amount includes severance from June to December 2008 of $122,200, vacation payout in
connection with termination of $25,045, 401(k) matching contribution of $3,766 and life insurance
premiums of $197. 11




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Grants of Plan-Based Awards.
  Grants of Plan-Based Awards in Fiscal 2008
 Estimated Future Payouts Under
    
    
    
    
    
    
    
    
    
    
    
    
    
    All Other Stock
    
    All Other Option
    
    Exercise or
    
    Grant DateNon-Equity Incentive Plan
    
    Estimated Future Payouts Under
    
    Awards: Number
    
    Awards: Number of
    
    Base Price
    
    Fair ValueAwards
    
    Equity Incentive Plan Awards
    
    of Shares of
    
    Securities
    
    of Option
    
    of StockThreshold
    
    Target
    
    Maximum
    
    Threshold
    
    Target
    
    Maximum
    
    Stock or Units
    
    Underlying Options
    
    Awards
    
    and OptionName
    
    Grant Date
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    (#)
    
    (#)
    
    ($/Sh)
    
    Awards ($)(a)
    
    (b)
    
    (c)
    
    (d)
    
    (e)
    
    (f)
    
    (g)
    
    (h)
    
    (i)
    
    (j)
    
    (k)
    
    (l)Mr. Timothy

P. Walbert
    
    
    1/10/08
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    135,000
    
    
    
    
    
    
    
    
    
    
    
    102,6004/3/08
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    98,000
    
    
    
    
    
    
    
    
    
    
    
    271,460Mr. Robert J. 
De Vaere
    
    
    1/10/08
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,000
    
    
    
    
    
    
    
    
    
    
    
    45,6004/3/08
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54,000
    
    
    
    
    
    
    
    
    
    
    
    149,580Dr. Jeffrey W. 
Sherman
    
    
    1/10/08
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,000
    
    
    
    
    
    
    
    
    
    
    
    22,8004/3/08
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,000
    
    
    
    
    
    
    
    
    
    
    
    119,110Mr. Timothy 
C. Melkus
    
    
    1/10/08
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    
    
    
    
    
    
    
    
    
    19,0004/3/08
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,000
    
    
    
    
    
    
    
    
    
    
    
    119,110Dr. Bonnie 
Mills
    
    
    4/3/08
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    27,700
 
 (1)
    
    Amounts are calculated utilizing the provisions of SFAS No. 123R, Share-based Payments. See
Note 7 to Consolidated Financial Statements for a discussion of the assumptions underlying
valuation of our equity awards. Employment, Change of Control and Severance Agreements
 Current Agreements.
  
    
    the stock options vest daily over four years, subject to continuous employment with us;
    
    the stock options are subject to accelerated vesting if Mr. Walbert is terminated
without cause by the Company or voluntarily terminates service with the Company for
good reason (as good reason is defined in the employment agreement); and
    
    the stock options were granted at an exercise price equal to the closing price of the
Companys common stock as quoted on the Nasdaq Global Market on the date of the grant.The restricted stock grant was subject to the following terms:
    
    half of the restricted shares, or 40,000 shares, shall vest on the one
year anniversary of the date of the employment agreement and the
remaining half, or 40,000 shares shall vest on the two year
anniversary of the employment agreement, subject to continuous
employment with us;
    
    the restricted stock is subject to accelerated vesting if Mr. Walbert
is terminated without cause (as cause is defined in the employment
agreement) by the Company or voluntarily terminates service with the
Company for good reason; and
    
    shares subject to the restricted stock grant that become vested will
be issued on the earlier of (i) the executives termination, or (ii)
60 months from the date of the employment agreement.
 12




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
    
    severance payments, consisting of Mr. Walberts base salary in effect at the time of
termination, paid for a period of 12 months;
    
    reimbursement for a portion of COBRA health insurance premiums for a period of up to 12 months;
    
    accelerated vesting of the restricted stock such that 40,000 of the restricted stock shares
shall be fully vested, and accelerated vesting of the stock options such that 25% of the stock
option shares shall be deemed vested and immediately exercisable in the event Mr. Walbert is
terminated before the first anniversary of the effective date of the agreement, and such
termination is not in connection with a change in control (as change in control is defined
in the employment agreement), or accelerated vesting of the restricted stock such that 100% of
the restricted stock shall be fully vested in the event Mr. Walbert is terminated on or after
the first anniversary of the effective date of this Agreement, and such termination is not in
connection with a change in control; and
    
    accelerated vesting of the stock options and restricted stock such that on the effective date
of such termination 100% of the stock options and restricted stock shares shall be fully
vested and immediately exercisable in the event Mr. Walbert is terminated within the 90 days
immediately preceding or the 12 months immediately following a change in control of the
Company.
  
    
    the stock options vest daily over four years, subject to continuous employment with us;
    
    the stock options are subject to accelerated vesting if Mr. De Vaere is terminated
without cause (as cause is defined in the employment agreement) by the Company or
voluntarily terminates service with the Company for good reason (as good reason is
defined in the employment agreement); and
    
    the stock options were granted at an exercise price equal to the closing price of the
Companys common stock as quoted on the Nasdaq Global Market on the date of the grant.The restricted stock grant was subject to the following terms:
    
    half of the restricted shares, or 20,000 shares, shall vest on the one
year anniversary of the date of the employment agreement and the
remaining half, or 20,000 shares shall vest on the two year
anniversary of the employment agreement, subject to continuous
employment with us;
    
    the restricted stock is subject to accelerated vesting if Mr. De Vaere
is terminated without cause by the Company or voluntarily terminates
service with the Company for good reason; and
    
    shares subject to the restricted stock grant that become vested will
be issued on the earlier of (i) the executives termination, or (ii)
60 months from the date of the employment agreement.
 13




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##### Table of Contents




    
    reimbursement for a portion of COBRA health insurance premiums for a period of up to 12 months;
    
    accelerated vesting of the restricted stock such that 20,000 of the restricted shares shall be
fully vested and immediately exercisable in the event that Mr. De Vaere is terminated before
the first anniversary of the effective date of this agreement, and such termination is not
effected within the ninety (90) days immediately preceding or the 12 months immediately
following a change in control (as defined in the agreement); and
    
    accelerated vesting of the stock options and the restricted stock such that on the effective
date of such termination 100% of the stock options and restricted stock shall be fully vested
and immediately exercisable in the event that Mr. De Vaere is terminated immediately preceding
or the 12 months immediately following a change in control (as change in control is defined
in the employment agreement), of the Company, which change in control is consummated after the
first anniversary of the effective date of this agreement, or accelerated vesting of the stock
options and restricted stock such that on the effective date of such termination 50% of the
stock options and restricted stock that are unvested as of the effective date of such
termination shall be fully vested and immediately exercisable in the event that Mr. De Vaeres
employment is terminated within the 90 days immediately preceding or the 12 months immediately
following a change in control of the Company which change in control is consummated on or
before the first anniversary of the effective date of the agreement.
   
    
    the stock options vest daily over four years, subject to continuous employment with us;
    
    the stock options are subject to accelerated vesting if Dr. Sherman is terminated
without cause (as cause is defined in the employment agreement) by the Company or
voluntarily terminates service with the Company for good reason (as good reason is
defined in the employment agreement); and
    
    the stock options were granted at an exercise price equal to the closing price of the
Companys common stock as quoted on the Nasdaq Global Market on the date of the grant.  
    
    half of the restricted shares, or 10,000 shares, shall vest on the one
year anniversary of the date of the employment agreement and the
remaining half, or 10,000 shares shall vest on the two year
anniversary of the employment agreement, subject to continuous
employment with us;
    
    the restricted stock is subject to accelerated vesting if Dr. Sherman
is terminated without cause by the Company or voluntarily terminates
service with the Company for good reason, as defined in the employment
agreement; and
    
    shares subject to the restricted stock grant that become vested will
be issued on the earlier of (i) the executives termination, or (ii)
60 months from the date of the employment agreement.
 14




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##### Table of Contents




    
    severance payments, consisting of Dr. Shermans base salary in effect at the time of
termination, paid for a period of 6 months if such termination occurred before the one year
anniversary of the agreement, or for a period of 12 months if such termination occurred after
the one year anniversary of the agreement;
    
    reimbursement for a portion of COBRA health insurance premiums for a period of up to 12 months;
    
    accelerated vesting of the restricted stock such that 20,000 of the restricted shares shall be
fully vested and immediately exercisable in the event that Dr. Sherman is terminated before
the first anniversary of the effective date of this agreement, and such termination is not
effected within the 90 days immediately preceding or the 12 months immediately following a
change in control (as defined in the agreement); and
    
    accelerated vesting of the stock options and the restricted stock such that on the effective
date of such termination 100% of the stock options and restricted stock shall be fully vested
and immediately exercisable in the event that Dr. Sherman is terminated immediately preceding
or the 12 months immediately following a change in control (as change in control is defined
in the employment agreement), of the Company, which change in control is consummated after the
first anniversary of the effective date of this agreement, or accelerated vesting of the stock
options and restricted stock such that on the effective date of such termination 50% of the
stock options and restricted stock that are unvested as of the effective date of such
termination shall be fully vested and immediately exercisable in the event that Dr. Shermans
employment is terminated within the 90 days immediately preceding or the 12 months immediately
following a change in control of the Company which change in control is consummated on or
before the first anniversary of the effective date of the agreement.
   
    
    severance payments, consisting of Mr. Melkus base salary in effect at the time of
termination, paid for a period of 6 months if such termination occurred before the one year
anniversary of the agreement, or for a period of 12 months if such termination occurred after
the one year anniversary of the agreement;
    
    reimbursement for a portion of COBRA health insurance premiums for a period of up to 12 months;
    
    accelerated vesting of the stock award such that 100% of the stock award shall be fully vested
and immediately exercisable in the event that Mr. Melkus is terminated before the first
anniversary of the effective date of this agreement, and such termination is not effected
within the 90 days immediately preceding or the 12 months immediately following a change in
control (as defined in the agreement); and
    
    accelerated vesting of the stock award such that on the effective date of such termination
100% of the stock award shall be fully vested and immediately exercisable in the event that
Mr. Melkus is terminated immediately preceding or the 12 months immediately following a change
in control (as change in control is defined in the employment agreement), of the Company,
which change in control is consummated after the first anniversary of the effective date of
this agreement, or accelerated vesting of the stock award such that on the effective date of
such termination 50% of the stock award that is unvested as of the effective date of such
termination shall be fully vested and immediately exercisable in the event that Mr. Melkus
employment is terminated within the 90 days immediately preceding or the 12 months immediately
following a change in control of the Company which change in control is consummated on or
before the first anniversary of the effective date of the agreement.
 15




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##### Table of Contents



Prior Agreements.
 
    
    the restricted stock vests as to 100% of the underlying shares on the
date 42 months after the effective date of the employment agreement;
    
    the restricted stock is subject to accelerated vesting upon the
closing of one or more transactions providing a specified level of
financing to us, the timely filing of a marketing approval application
with the appropriate agency with respect to MEPACT (mifamurtide), and
the regulatory approval in the U.S. or Europe of MEPACT (mifamurtide);
and
    
    shares subject to the restricted stock grant that become vested will
be issued to Dr. Mills on the earlier of (i) Dr. Mills termination,
or (ii) 48 months from the effective date of the agreement.
    
    
    severance payments, consisting of her base salary in effect at the time of termination, paid for a period of 12 months (or,
at her option, payment in a lump sum of such amount), in the case of termination without cause, and, in the case of
termination by Dr. Mills with good reason, such severance shall be paid from the date of termination until the earlier of 12
months or until the date she begins full time employment with another entity;
    
    reimbursement for a portion of COBRA health insurance premiums, for up to 12 months in the case of termination with good
reason or termination without cause, or until the date she begins full time employment with another entity, up to the maximum
period permitted under COBRA;
    
    full acceleration, as of the date of termination, of vesting and exercisability of any outstanding options granted before the
effective date of the agreement; and
    
    full acceleration of vesting and exercisability of any unvested restricted stock or options granted pursuant to the agreement.
  16




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##### Table of Contents




  
    
    severance payments, consisting of his base salary in effect at the
time of termination, paid for a period of 12 months in one lump sum
payment at the end of the legal 3-month notice period, in the case of
termination by the Company without cause or at Mr. Duchesne de
Lamottes initiative with specific reason (such specific reason is
defined in the agreement) further to a change of control of IDM Pharma
S.A. or IDM Pharma, and,
    
    in the case of termination by Mr. Duchesne de Lamotte with specific
reason (such specific reason is defined in the agreement), such
severance shall be paid by monthly installments from the date of
termination until the earlier of 12 months thereafter or until the
date he begins full time employment with another entity; and
    
    benefit from the same health insurance plan that is provided by the
Company to its employees until the earlier of 12 months after
termination or until the date Mr. Duchesne de Lamotte begins full time
employment with another entity.
 
 Outstanding Equity Awards at Fiscal Year end.
 .
 17




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##### Table of Contents



Outstanding Equity Awards At December 31, 2008
 EquityIncentive
    
    EquityPlan
    
    IncentiveEquity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Awards:
    
    Plan Awards:Incentive Plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    Market
    
    Number of
    
    Market orAwards:
    
    
    
    
    
    
    
    
    
    
    
    
    
    Value of
    
    Unearned
    
    Payout ValueNumber of
    
    Number of
    
    Number of
    
    
    
    
    
    
    
    
    
    Number of
    
    Shares or
    
    Shares,
    
    of UnearnedSecurities
    
    Securities
    
    Securities
    
    
    
    
    
    
    
    
    
    Shares or
    
    Units of
    
    Units or
    
    Shares, UnitsUnderlying
    
    Underlying
    
    Underlying
    
    
    
    
    
    
    
    
    
    Units of
    
    Stock That
    
    Other Rights
    
    or OtherUnexercised
    
    Unexercised
    
    Unexercised
    
    Option
    
    Option
    
    Stock That
    
    Have Not
    
    That Have
    
    Rights ThatOptions (#)
    
    Options (#)
    
    Unearned
    
    Exercise
    
    Expiration
    
    Have Not
    
    Vested ($)
    
    Not Vested
    
    Have NotName
    
    Exercisable
    
    Unexercisable
    
    Options (#)
    
    Price ($)
    
    Date
    
    Vested
    
    (1)
    
    (#)
    
    Vested (#)(a)
    
    (b)
    
    (c)
    
    (d)
    
    (e)
    
    (f)
    
    (g)
    
    (h)
    
    (i)
    
    (j)Mr. Timothy P. Walbert (2)
    
    
    57,879
    
    
    
    86,424
    
    
    
    
    
    
    
    3.18
    
    
    
    5/25/17
    
    
    
    40,000
    
    
    
    63,200
    
    
    
    
    
    
    
    22,340
    
    
    
    33,357
    
    
    
    
    
    
    
    3.18
    
    
    
    6/14/17
    
    
    
    135,000
    
    
    
    213,300
    
    
    
    
    
    
    
    Mr. Robert J. De Vaere (2)
    
    
    36,716
    
    
    
    51,366
    
    
    
    
    
    
    
    8.02
    
    
    
    5/1/17
    
    
    
    20,000
    
    
    
    31,600
    
    
    
    
    
    
    
    4,968
    
    
    
    6,950
    
    
    
    
    
    
    
    8.02
    
    
    
    6/12/17
    
    
    
    60,000
    
    
    
    94,800
    
    
    
    
    
    
    
    Dr. Jeffrey W. Sherman (2)
    
    
    33,539
    
    
    
    66,461
    
    
    
    
    
    
    
    1.64
    
    
    
    8/28/17
    
    
    
    10,000
    
    
    
    15,800
    
    
    
    
    
    
    
    Mr. Timothy C. Melkus (3)
    
    
    22,731
    
    
    
    39,769
    
    
    
    
    
    
    
    2.59
    
    
    
    7/15/17
    
    
    
    25,000
    
    
    
    39,500
    
    
    
    
    
    
    
    Dr. Bonnie Mills
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    Based on $1.58 per share, using the closing price of the Companys common stock on December 31,
2008, the last trading day of the year.(2)
    
    These options vest over four year from the date of grant in equal daily installments.(3)
    
    One quarter of the option vests on the one-year anniversary of the grant date with the
remaining shares vesting in equal daily installments over the remaining three years. Option Exercises and Stock Vested
  OPTION EXERCISES AND STOCK VESTED IN FISCAL 2008
 Option Awards
    
    Stock AwardsNumber ofNumber of
    
    
    
    
    
    Shares
    
    ValueShares
    
    Value Realized
    
    Acquired on
    
    Realized onAcquired on
    
    on Exercises
    
    Vesting
    
    VestingName
    
    Exercises (#)
    
    ($)
    
    (#) (1)
    
    ($) (2)Mr. Timothy P. Walbert
    
    
    
    
    
    
    
    
    
    
    138,000
    (3)
    
    
    235,500Mr. Robert J. De Vaere
    
    
    
    
    
    
    
    
    
    
    74,000
    (4)
    
    
    126,100Dr. Jefferey W.
Sherman
    
    
    
    
    
    
    
    
    
    
    53,000
    (5)
    
    
    102,850Mr. Timothy C. Melkus
    
    
    
    
    
    
    
    
    
    
    43,000
    (6)
    
    
    66,650Dr. Bonnie Mills
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    Receipt of these shares is deferred until the earlier of separation from service to the Company
or the 5th anniversary of grant date.(2)
    
    Represents the number of shares vested multiplied by the market value of the underlying shares
on the vesting date. 18




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##### Table of Contents



(3)
    
    Includes 20,000 shares under a restricted stock unit award granted June 14, 2007 which vests
50% on the first anniversary of the grant date and 50% on the second anniversary of the grant date.
Also includes 98,000 shares under a restricted stock unit award
granted April 3, 2008 which vested
upon the Companys receipt of a positive opinion from CHMP with respect to MEPACT in November 2008.(4)
    
    Includes 20,000 shares under a restricted stock unit award granted June 13, 2007 which vests
50% on the first anniversary of the grant date and 50% on the second anniversary of the grant date.
Also includes 54,000 shares under a restricted stock unit award
granted April 3, 2008 which vested
upon the Companys receipt of a positive opinion from CHMP with respect to MEPACT in November 2008.(5)
    
    Includes 10,000 shares under a restricted stock unit award granted August 29, 2007 which vests
50% on the first anniversary of the grant date and 50% on the second anniversary of the grant date.
Also includes 43,000 shares under a restricted stock unit award
granted April 3, 2008 which vested
upon the Companys receipt of a positive opinion from CHMP with respect to MEPACT in November 2008.(6)
    
    Represents 43,000 shares under a restricted stock unit award
granted April 3, 2008 which
vested upon the Companys receipt of a positive opinion from CHMP with respect to MEPACT in
November 2008. Pension Benefits
  Nonqualified Deferred Compensation
  NONQUALIFIED DEFERRED COMPENSATION FOR FISCAL YEAR 2008
 Aggregate Balance at Last FYE ($)Name
    
    Aggregate Earnings in Last FY ($) (1)
    
    (2)Mr. Timothy P. Walbert
    
    
    (17,460
    )
    
    
    218,040Mr. Robert J. De Vaere
    
    
    (9,180
    )
    
    
    116,920Dr. Jefferey W. Sherman
    
    
    (19,110
    )
    
    
    83,740Mr. Timothy C. Melkus
    
    
    1,290
    
    
    
    67,940Dr. Bonnie Mills
    
    
    (4,536
    )
    
    
    5,642
 
 (1)
    
    The amount shown represents the gain/(loss) in share value from the share vesting date to
December 31, 2008, for shares vested in 2008 and deferred past 2008.(2)
    
    Amount represents the market value of vested but unreleased shares multiplied by the closing
price for the Companys Common Stock of $1.58 on December 31, 2008, the last trading day of the
year. Potential Payments upon Termination or Change-in-Control
  19




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##### Table of Contents



Mr. Walbert
  
    
    severance payments, consisting of his base salary in effect at the time of
termination, paid for a period of 12 months. As of December 31, 2008, Mr. Walberts annual
base salary was $410,000. Assuming a termination effective December 31, 2008 he would be
entitled to receive $410,000, less standard deductions and withholdings, to be paid in a
lump sum promptly following termination;
    
    reimbursement for a portion of COBRA health insurance premiums, for up to the shorter
of (i) 12 months, or (ii) the date he begins full time employment with another entity.
Currently, Mr. Walbert also serves as the President and Chief Executive Officer of Horizon
Therapeutics, Inc., a privately held biopharmaceutical company and his health benefits are
not currently paid by IDM Pharma. As such, Mr. Walbert would not be eligible for COBRA
reimbursement;
    
    in the event the termination is not in connection with a change in control,
acceleration of vesting and exercisability of 40,000 restricted shares. Assuming a
termination effective December 31, 2008, Mr. Walbert would be entitled to the acceleration
of vesting of $63,200 related to restricted stock and;
    
    in the event the termination is in connection with a change in control, acceleration of
vesting and exercisability of 175,000 restricted shares, and acceleration of vesting and
exercisability of 100% of Mr. Walberts unvested, outstanding stock options, or 119,781
stock option shares. Assuming a termination effective December 31, 2008, Mr. Walbert would
be entitled to the acceleration of vesting of $276,500 related to restricted stock and $0
related to stock subject to outstanding unvested stock-options as of December 31, 2008,
based on the spread between the $1.58 closing price of our common stock on December 31,
2008, and the exercise price of the stock-options.
  Mr. De Vaere
  
    
    in the event the termination is in connection with a change in control, acceleration of
vesting and exercisability of 80,000 restricted shares and acceleration of vesting and
exercisability of 100% of Mr. De Vaeres unvested, outstanding stock options, or 58,286
stock option shares. Assuming a termination effective December 31, 2008, Mr. De Vaere
would be entitled to the acceleration of vesting of $126,400 related to restricted stock
and $0 related to stock subject to outstanding unvested stock-options as of December 31,
2008, based on the spread between the $1.58 closing price of our common stock on December
31, 2008, and the exercise price of the stock-options.
  Dr. Sherman
  
    
    severance payments, consisting of his base salary in effect at the time of termination,
paid for a period of twelve months. As of December 31, 2008, Dr. Shermans annual base
salary was $311,000. Assuming a termination effective December 31, 2008 he would be
entitled to receive $311,000 less standard deductions and withholdings, to be paid over a
period of twelve months following termination;
 20




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##### Table of Contents




    
    reimbursement for a portion of COBRA health insurance premiums, for up to the shorter
of (i) twelve months, or (ii) the date he begins full time employment with another entity.
Currently, Dr. Shermans COBRA health insurance premiums are $2,786 per month, $2,638 being
paid by us and $148 paid by him. He would therefore be entitled to receive a total of
$16,716 assuming that the longest twelve month period applies;
    
    in the event the termination is not in connection with a change in control,
acceleration of vesting and exercisability of 10,000 restricted shares. Assuming a
termination effective December 31, 2008, Dr. Sherman would be entitled to the acceleration
of vesting of $15,800 related to restricted stock; and
    
    in the event the termination is in connection with a change in control, acceleration of
vesting and exercisability of 40,000 restricted shares, and acceleration of vesting and
exercisability of 100% of Dr. Shermans unvested, outstanding stock options, or 66,461
stock option shares. Assuming a termination effective December 31, 2008, Dr. Sherman would
be entitled to the acceleration of vesting of $63,200 related to restricted stock and $0
related to stock subject to outstanding unvested stock-options as of December 31, 2008,
based on the spread between the $1.58 closing price of our common stock on December 31,
2008, and the exercise price of the stock-options.
  Mr. Melkus
  
    
    severance payments, consisting of his base salary in effect at the time of termination,
paid for a period of twelve months. As of December 31, 2008, Mr. Melkus annual base salary
was $235,000. Assuming a termination effective December 31, 2008 he would be entitled to
receive $235,000, less standard deductions and withholdings, to be paid over a period of
twelve months following termination; and
    
    reimbursement for a portion of COBRA health insurance premiums, for up to the shorter
of (i) twelve months, or (ii) the date he begins full time employment with another entity.
Currently, Mr. Melkus COBRA health insurance premiums are $981 per month, $884 being paid
by us and $97 paid by him. He would therefore be entitled to receive a total of $5,886
assuming that the longest twelve month period applies; and
    
    in the event the termination is in connection with a change in control, acceleration of
vesting and exercisability of 25,000 restricted shares, and acceleration of vesting and
exercisability of 100% of Mr. Melkus unvested stock options, or 39,769 stock option
shares. Assuming a termination effective December 31, 2008, Mr. Melkus would be entitled
to the acceleration of vesting of $39,500 related to restricted stock and $0 related to
stock subject to outstanding unvested stock-options as of December 31, 2008, based on the
spread between the $1.58 closing price of our common stock on December 31, 2008, and the
exercise price of the stock-options
  Compensation Of Directors
  21




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##### Table of Contents



Annual FeeEffectiveBefore June
    
    June 25,Director Position
    
    25, 2008
    
    2008Member of the Board of Directors
    
    $
    20,000
    
    
    $
    30,000Audit Committee Chairman
    
    $
    8,000
    
    
    $
    15,000Audit Committee Member
    
    $
    4,000
    
    
    $
    7,500Compensation Committee Chairman
    
    $
    4,000
    
    
    $
    10,000Compensation Committee Member
    
    $
    2,000
    
    
    $
    5,000Nominating Committee Chairman
    
    $
    3,000
    
    
    $
    5,000Nominating Committee Member
    
    $
    1,500
    
    
    $
    2,500
     22




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##### Table of Contents



Director Compensation for Fiscal 2008
 Change in PensionValue andNonqualifiedFees Earned
    
    Stock
    
    Option
    
    Non-Equity
    
    Deferredor Paid in
    
    Awards ($)
    
    Awards ($)
    
    Incentive Plan
    
    Compensation
    
    All Other
    
    TotalName
    
    Cash ($)
    
    (1)
    
    (1)
    
    Compensation ($)
    
    Earnings
    
    Compensation
    
    ($)(a)
    
    (b)
    
    (c)
    
    (d)
    
    (e)
    
    (f)
    
    (g)
    
    (h)Dr. Robert Beck
    
    
    47,080
    
    
    
    
    
    
    
    32,176
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    79,256Dr. Jean Deleage (2)
    
    
    18,989
    
    
    
    
    
    
    
    11,642
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,631Dr. Sylvie Gregoire (2)
    
    
    14,420
    
    
    
    
    
    
    
    11,791
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,211Mr. Michael G. Grey
    
    
    48,104
    
    
    
    16,637
    (3)
    
    
    32,176
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    96,917Dr. John P. McKearn
    
    
    33,665
    
    
    
    
    
    
    
    26,355
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,020Dr. Edward Penhoet (4)
    
    
    35,964
    
    
    
    
    
    
    
    27,550
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    63,514Mr. Gregory J.
Tibbitts (5)
    
    
    35,488
    
    
    
    
    
    
    
    17,839
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53,327
 
 (1)
    
    Amounts are calculated utilizing the provisions of Statement of Financial Accounting Standards
(SFAS) No. 123R, Share-based Payments. See Note 7 to the Consolidated Financial Statements for
a discussion of the assumptions underlying valuation of our equity awards.(2)
    
    Dr. Deleage and Dr. Grégoire chose not to stand for re-election as member of the Board in
connection with the 2008 Annual Meeting held in June 2008.(3)
    
    Mr. Grey also received a restricted stock award of 20,000 shares on December 11, 2008 for
his service as Non-Executive Chairman of the Board.(4)
    
    Dr. Penhoet resigned from the Board in October 2008.(5)
    
    Mr. Tibbitts was elected to the Board in April 2008. Pursuant to the policy
regarding non-employee director compensation previously adopted by the Board, Mr. Tibbitts received
an initial option grant to purchase 20,000 shares of our common stock under the 2000 Plan upon his
election to the Board. Compensation Committee Report1
   
 Compensation Committee Interlocks and Insider Participation
 
 1
    
    The information contained in this report shall not be
deemed to be soliciting material or to be filed with the SEC nor shall such
information be incorporated by reference into any future filing under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, except to the extent that we specifically incorporate it by reference
into any such filing. 23




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##### Table of Contents



Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
 Equity Compensation Plan Information
  (c)Number of securities(a)
    
    
    
    
    
    remaining available forNumber of securities to be
    
    (b)
    
    issuance under equityissued upon exercise of
    
    Weighted-average
    
    compensation plansoutstanding options,
    
    exercise price of
    
    (excluding securitieswarrants
    
    outstanding options,
    
    reflectedPlan Category
    
    and rights
    
    warrants and rights(1)
    
    in column (a))Equity compensation
plans approved by
security holders
    
    
    1,391,915
    
    
    $
    11.77
    
    
    
    1,171,260Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    1,391,915
    
    
    $
    11.77
    
    
    
    1,171,260
 
 (1)
    
    Calculation of weighted-average exercise price does not include 747,985 shares issuable
pursuant to deferred issuance restricted stock awards, which have no exercise price.  Security Ownership Of Certain Beneficial Owners And Management
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##### Table of Contents



Beneficial Ownership (1)Beneficial Owner
    
    Number of Shares
    
    Percent of TotalPalo Alto Investors, LLC and its
affiliates (2)
    
    
    11,322,662
    
    
    
    43.15
    %470 University Ave.
Palo Alto, CA 94301Medarex, Inc.
    
    
    2,624,279
    
    
    
    10.38
    %707 State Road
Princeton, NJ 08540Mr. Timothy P. Walbert (3)
    
    
    279,026
    
    
    
    1.09
    %Dr. John P. McKearn (3)
    
    
    135,015
    
    
    
    *Mr. Robert J. De Vaere (3)
    
    
    146,088
    
    
    
    *Dr. Jeffrey W. Sherman (3)
    
    
    96,943
    
    
    
    *Mr. Timothy C. Melkus (3)
    
    
    72,238
    
    
    
    *Mr. Michael G. Grey (3)
    
    
    81,443
    
    
    
    *Dr. Robert Beck (3)
    
    
    35,016
    
    
    
    *Mr. Gregory J. Tibbitts (3)
    
    
    14,584
    
    
    
    *All executive officers and directors
as a group (8 persons) (3)
    
    
    860,353
    
    
    
    3.30
    %
 
 *
    
    Less than one percent.(1)
    
    This table is based upon information supplied by officers, directors and principal
stockholders and Schedules 13D and 13G filed with the SEC. Unless otherwise indicated in the
footnotes to this table and subject to community property laws where applicable, the Company
believes that each of the stockholders named in this table has sole voting and investment
power with respect to the shares indicated as beneficially owned. Applicable percentages are
based on 25,273,935 shares outstanding on April 1, 2009, adjusted as required by rules
promulgated by the SEC.(2)
    
    Includes shares held by Palo Alto Healthcare Master Fund, L.P., Palo Alto Healthcare Master
Fund II, L.P., Micro Cap Partners, L.P., Palo Alto Fund II, L.P., Palo Alto Small Cap Master
Fund, L.P., and UBTI Free, L.P. William L. Edwards and A. Joon Yun, M.D. share voting and
investment power with respect to the shares held by Palo Alto Investors, LLC, and one or more
of its affiliates, and each of such individuals disclaims beneficial ownership of these shares
except to the extent of his pecuniary interest therein. Also includes 964,805 shares subject
to warrants of which 539,765 shares will terminate in February 2012 and 425,040 shares will
terminate in June 2012.(3)
    
    Includes shares, which certain executive officers and directors have the right to acquire
within 60 days after April 1, 2009 pursuant to outstanding options, as follows:Mr. Walbert, 279,026 shares;Dr. McKearn, 115,015 shares;Mr. De Vaere, 146,088 shares;Dr. Sherman, 96,943 shares;Mr. Melkus, 72,238 shares;Mr. Grey, 41,443 shares;Dr. Beck, 35,016 shares; andMr. Tibbitts, 14,584 shares. 
 Item 13. Certain Relationships and Related Transactions, and Director Independence
 Related-Person Transactions policy and Procedures
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##### Table of Contents



Certain Related-Person Transactions
    Independence of the Board of Directors
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Item 14. Principal Accountant Fees and Services
 Auditors Fees
  Fiscal Year Ended2008
    
    
    2007Audit Fees (1)
    
    $
    394,000
    
    
    $
    602,000Audit-related Fees
    
    
    
    
    
    
    Tax Fees (2)
    
    
    62,000
    
    
    
    39,000All Other Fees
    
    
    
    
    
    
    Total Fees
    
    $
    456,000
    
    
    $
    641,000
 
 (1)
    
    Audit fees relate to the audit of our consolidated financial statements and
reviews of our consolidated financial statements included in our quarterly reports on
Form 10-Q for 2008, accounting consultations, and review of documents filed with the
SEC.(2)
    
    Tax related fees are for services related to tax compliance, tax advice and tax
planning.  Pre-Approval Policies and Procedures .
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PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
 (a)(3) Listing of Exhibits
 ExhibitNumber
    
    Document Description31.1
    
    Certification of Principal Executive Officer pursuant to Section
302 of the Public Company Accounting Reform and Investor
Protection Act of 2002 (18 U.S.C. § 1350, as adopted).31.2
    
    Certification of Principal Financial Officer pursuant to Section
302 of the Public Company Accounting Reform and Investor
Protection Act of 2002 (18 U.S.C. § 1350, as adopted).
 (b) Exhibits
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SIGNATURES
 th
 IDM Pharma, Inc.By:
    
    /s/ Timothy P. WalbertTimothy P. WalbertPresident and Chief Executive Officer
 29