Exhibit
10.1


Portions of this Exhibit were omitted and filed
separately with the Secretary of the Commission pursuant to an application for
confidential treatment filed with the Commission pursuant to Rule 24b-2 under
the Securities Exchange Act of 1934.  Such
omissions are designated as **.


 


Execution Copy


AMENDMENT NO. 2


This Amendment No. 2 (this “Amendment No. 2”) to the
Collaboration and License Agreements effective as of July 9, 2003 between (i)
Pharmacopeia Drug Discovery, Inc. (f/k/a Pharmacopeia, Inc.) and Schering
Corporation and (ii) Pharmacopeia Drug Discovery, Inc. and Schering-Plough Ltd.
(collectively, as each has been amended by Amendment No. 1 dated July 27, 2006,
the “2003 Agreements”), is effective as of September 22nd 2006 (the “Amendment
No. 2 Effective Date”).  By agreement of
the Parties, as of the Amendment No. 2 Effective Date, this Amendment No. 2
amends the 2003 Agreements as follows:


1.             All capitalized terms
not defined in this Amendment No. 2 shall have the meanings given to them in
the 2003 Agreements.


2.             The Parties agree
that as of the Amendment No. 2 Effective Date, and notwithstanding anything in
the 2003 Agreements to the contrary:


(a)                                  The
term of the Collaboration is extended and shall continue until April 7, 2007,
on which date it shall terminate.


(b)                                 For
the period from October 8, 2006 until April 7, 2007, Pharmacopeia shall provide
ten (10) chemistry FTEs for the performance of the Collaboration.  During such period, each of Schering and SPL
shall pay to Pharmacopeia research funding for the Collaboration at a rate of **
Dollars ($**) ** (an aggregate ** Dollars ($**) **).  All such FTEs shall be dedicated to work full
time on the Collaboration.


(c)                                  The
FTEs that Pharmacopeia provides under Section 2(b) above shall work on Optimization
Programs designated by the Collaboration Committee.  For the avoidance of doubt, such FTEs shall
not be required to work on Screening Programs.


(d)                                 Payments
by each of Schering and SPL under Section 2(b) above shall be made in
accordance with Section 5.2.3 of the Agreements. 


3.             The Parties agree
that the last sentence of Section 2.2.4 of the Agreements shall not apply to
any Optimization Programs based upon Lead Compounds that are Schering Compounds
(“Extension Programs”) that Pharmacopeia works on during the period set forth
in Section 2(b) above.  For the avoidance
of doubt, the Parties agree that with respect to any Agreement Compounds
resulting from such Extension Programs, Pharmacopeia shall be entitled to
receive milestone payments under Section 5.4.1(a) of the Agreements and royalty
payments under Section 5.5 of the Agreements.


4.             The Parties agree that
from October 8, 2006 until April 7, 2007, senior management representatives of
each Party (from Pharmacopeia the Chief Scientific Officer, or equivalent; from
Schering and SPL the global head of chemistry, or equivalent) and each Party’s
primary project managers shall convene a monthly meeting or teleconference, to
discuss overall









 



performance under the Agreements in order to ensure
effective communication among the Parties.


5.             The remaining terms
of the 2003 Agreements, except to the extent modified by the terms of this
Amendment No. 2, shall remain in full force and effect.


IN WITNESS WHEREOF, the parties hereto have caused
this Amendment No. 2 to be duly executed by their authorized representatives
and delivered in triplicate originals on the Amendment No. 2 Effective Date.


	
  SCHERING CORPORATION

  	
  PHARMACOPEIA
  DRUG DISCOVERY,

  INC. (F/K/A PHARMACOPEIA, INC.)

  
	
   

  	
   

  
	
  By:

  	
  /s/ Michael
  DuBois

  	
   

  	
   

  
	
  Name: Michael
  DuBois

  	
  By:

  	
  /s/ Brian M.
  Posner

  	
   

  
	
  Title: Vice
  President

  	
  Name: Brian M.
  Posner

  
	
   

  	
  Title: Executive
  Vice President,

  
	
   

  	
  Chief Financial
  Officer and Treasurer

  
	
   

  	
   

  
	
  SCHERING-PLOUGH,
  LTD.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Michael
  DuBois

  	
   

  	
   

  
	
  Name: Michael
  DuBois

  	
   

  
	
  Title: Vice
  President

  	
   

  



 



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