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Exhibit 10.5    
    


 
 

*** Text Omitted and Filed Separately
  CONFIDENTIAL TREATMENT REQUESTED
  Under 17 C.F.R. §§ 200.80(b)(4) and 230.406    
    


 
 

FIRST AMENDMENT TO LICENSE AGREEMENT
  
    Between
  Optimer Pharmaceuticals, Inc.
  and
  Sloan-Kettering Institute for Cancer Research    



        This
First Amendment confirms the mutual understanding between Optimer Pharmaceuticals, Inc., a corporation, having a place of business at 10110 Sorrento Valley Road,
Suite C, San Diego, California 92121 ("LICENSEE") and the Sloan-Kettering Institute for Cancer Research, a not-for-profit corporation organized under the laws of New York State,
having a place of business at 1275 York Avenue, New York, New York 10021 ("SKI"). 


WHEREAS,
LICENSEE and SKI have entered into a license agreement (SK#6637) related to carbohydrate cancer vaccines with an Effective Date of July 31, 2002 ("Agreement"), a copy of which
is attached hereto; and 


WHEREAS,
the parties wish to amend the Agreement as LICENSEE no longer desires to develop Licensed Products II, effective as of June 30, 2005 ("Amendment Effective Date"), 


NOW,
THEREFORE, the parties, intending to be legally bound, hereby amend the Agreement as follows: 


	1.
	Definitions.
All capitalized terms used and not otherwise defined herein shall have the respective meanings set forth in the Agreement.



	2.
	Article
2.1 of the Agreement is hereby replaced in its entirety to read: 



SKI
hereby grants to LICENSEE: 


	(i)
	an
exclusive, worldwide license, to SKI Patents A in Field I, to make, have made, use, sell, have sold, import and develop Licensed Products I, with the
right to grant and authorize sublicenses;



	(ii)
	a
nonexclusive, worldwide license to SKI Patents D in Field I, to make, have made, use, sell, have sold, import and develop Licensed Products I, with the
right to grant and authorize sublicenses; and



	(iii)
	a
non-exclusive, worldwide, royalty-free license, without the right to grant and authorize sublicenses, to SKI's entire interest in and to the Know-How pursuant to the
licenses granted in this Section 2.1.






	3.
	Articles
4.1(d), 4.1(e), 4.1(g), and 4.1(h) of the Agreement are hereby made void.



	4.
	LICENSEE's
responsibility to pay for all costs and expenses incurred for the preparation, filing, prosecution, issuance, and maintenance of SKI Patents B under
Article 6.1 of the Agreement shall be limited to such costs and expenses incurred up to and including the Amendment Effective Date. Such costs and expenses incurred subsequent to the Amendment
Effective Date shall be done by SKI.



	5.
	All
other terms and conditions of the Agreement not specifically modified by this First Amendment shall remain in full force and effect. 







	6.
	On
and after the Amendment Effective Date, each reference in the Agreement to this "Agreement", "hereunder", "herein", "hereof" or words of like import referring to the Agreement shall
mean and be a reference to the Agreement as amended by this First Amendment.



	7.
	This
First Amendment may be executed in two counterparts, each of which will be deemed an original, but both of which shall constitute but one and the same instrument. 




IN
WITNESS WHEREOF, the parties have caused this First Amendment to the Agreement to be executed by their duly authorized representatives. 



	OPTIMER PHARMACEUTICALS, INC.	 	SLOAN-KETTERING INSTITUTE FOR CANCER RESEARCH
	
 /s/  MICHAEL N. CHANG      
 Michael N. Chang, Ph.D.



CEO	
 	

/s/  G. BERNHARDT      
 James S. Quirk



Senior Vice President,

Research Resources Management
	
 Date:    11-16-05
	
 	

Date:    12/22/05











  



 
 

LICENSE AGREEMENT
  
    for SKI's technology
  
    "Carbohydrate Cancer Vaccines"
  (SK#6637)    



 
 

TABLE OF CONTENTS    
    



	PREAMBLE

ARTICLES:


	 	 
	 	 

	I	 	DEFINITIONS	 	2
	II	 	GRANT	 	3
	III	 	DUE DILIGENCE, REGULATORY MATTERS	 	4
	IV	 	PAYMENTS	 	5
	V	 	REPORTS AND RECORDS	 	7
	VI	 	PATENT PROSECUTION	 	8
	VII	 	INFRINGEMENT	 	8
	VIII	 	INDEMNIFICATION, PRODUCT LIABILITY, WARRANTIES	 	9
	IX	 	EXPORT CONTROLS	 	10
	X	 	NON-USE OF NAMES	 	10
	XI	 	ASSIGNMENT	 	10
	XII	 	TERMINATION	 	10
	XIII	 	PAYMENTS, NOTICES AND OTHER COMMUNICATIONS	 	12
	XIV	 	MISCELLANEOUS PROVISIONS	 	12





        This
Agreement is effective on the date last subscribed below (the "Effective Date"), and is by and between Sloan-Kettering Institute for Cancer
Research (hereinafter referred to as "SKI"), a New York membership corporation with principal offices at 1275 York Avenue, New York, New York 10021,
and Optimer Pharmaceuticals, Incorporated, a corporation with principal offices located at 10110 Sorrento Valley Road, Suite C, San Diego,
California 92121 (hereinafter referred to as "LICENSEE"). 


 
 

WITNESSETH    
    


        WHEREAS, SKI is the owner of certain SKI Patents (as later defined herein) and has the right to grant licenses under said SKI Patents; and 


        WHEREAS,
SKI desires to have the SKI Patents utilized in the public interest and is willing to grant a license to its interest thereunder; and 


        WHEREAS,
LICENSEE seeks to commercially develop the SKI Patents through a thorough, vigorous and diligent program of exploiting the SKI Patents whereby public utilization shall result
therefrom. 


1







 



        NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows: 


 
 

ARTICLE I—DEFINITIONS    
    


        For the purpose of this Agreement, the following words and phrases shall have the following meanings: 


	1.1
	"LICENSEE"
shall include Affiliates, that is, any person, firm, corporation or other entity controlling, controlled by, or under common control with a party hereto. The term "control"
wherever used throughout this Agreement shall mean ownership, directly or indirectly, of more than 50% of the equity capital. With regard to SKI, "Affiliate" shall mean the Memorial Sloan-Kettering
Cancer Center and the Memorial Hospital for Cancer and Allied Diseases.



	1.2
	"SKI
Patents A", "SKI Patents B", "SKI Patents C", and "SKI Patents D" shall have meanings as defined in Exhibit A. "SKI
Patents" shall mean SKI Patents A, SKI Patents B, SKI Patents C, and SKI Patents D.



	1.3
	"Field
I" shall mean the treatment or prevention of human cancer with a carbohydrate vaccine comprising Globo H as the sole antigen. Specifically excluded from Field I are
(i) vaccines comprising mixtures of more than one type of carbohydrate antigen, one of which may be Globo H, and (ii) vaccines comprising Clustered Carbohydrate Antigens (defined as an
immunogenic molecule consisting of two or more identical or different carbohydrate antigens attached to a common peptide backbone).



	1.4
	"Field
II" shall mean the treatment or prevention of human cancer with a vaccine comprising Clustered Carbohydrate Antigens wherein the carbohydrate antigens have been synthesized
using Optimer's OPopSTM Technology.



	1.5
	"Know-How"
shall mean any technical information, know-how, processes, procedures, compositions, devices, methods, formulas, protocols, techniques, designs,
data or other subject matter owned or controlled by SKI which is necessary for the manufacture, sale and/or use of Licensed Products I and Licensed Products II (collectively, "Licensed Products"), in
each case, which is not in the public domain.



	1.6
	"Licensed
Products I" shall mean any and all products which fall within Field I and which would either (i) infringe a Valid Claim of SKI Patents A but for this agreement, or
(ii) are produced or used using a process or method that would infringe a Valid Claim of SKI Patents A but for this agreement.



	1.7
	"Licensed
Products II" shall mean any and all products which fall within Field II and which would either (i) infringe at least one Valid Claim of SKI Patents A, B, C or D but
for this agreement, or (ii) are produced or used using a process or method that would infringe at least one Valid Claim of SKI Patents A, B, C or D but for this agreement.



	1.8
	"Net
Sales" of a product shall mean LICENSEE's or sublicensee's, as indicated, billings for sales of that product less the sum of the following:



	a)
	Discounts
allowed in amounts customary in the trade;



	b)
	Sales,
tariff duties and/or use taxes directly imposed and with reference to particular sales;



	c)
	Outbound
transportation prepaid or allowed;



	d)
	Amounts
allowed or credited on returns; and 





2







 



	e)
	Bad
debts and uncollectible receivables provided that, in any calendar year, such deduction will not exceed four percent (4%) of the total billings for sales of Licensed
Products and Licensed Services sold in that year. 




No
deductions shall be made for commissions paid to individuals whether they be with independent sales agencies or regularly employed by LICENSEE or its Affiliates and on its payroll, or for cost of
collections. Licensed Products shall be considered "sold" when billed or invoiced. As LICENSEE agrees to pay royalties in countries where patent protection has not been sought, and SKI is willing to
forgo its rights to seek patent protection in such countries, Net Sales of a product shall explicitly include billings for sales of that product in such countries. 



	1.9
	"Royalty
Year" shall mean each twelve month period commencing January 1 and ending December 31 during the term of this Agreement. For the first year of this Agreement,
the Royalty Year shall be the period of time between the signing of the Agreement and December 31.



	1.10
	"Foreign
Major Market Countries" shall mean the United Kingdom, Germany, France, Italy, Spain and Japan.



	1.11
	"Net
Royalty" shall mean the total royalty compensation received by LICENSEE from a sublicensee in a given Royalty Year.



	1.12
	"Valid
Claim" shall mean a claim of an issued and unexpired patent, or a claim of a pending patent application, which has not been held unpatentable, invalid or unenforceable by a
court or other government agency of competent jurisdiction in a final decision from which no appeal may be taken, and has not been admitted to be invalid or unenforceable through reissue,
re-examination, disclaimer or otherwise. Should any issued Valid Claim be challenged and held invalid or unenforceable by a court or other government agency of competent jurisdiction from
which appeal may be taken, royalty payments that, but for the holding of invalidity or unenforceability would be due under this Agreement, shall be made by LICENSEE and shall be held in escrow by SKI
until no further appeals are available. If the claim is finally held to be valid and enforceable, the amounts held in escrow, including interest, shall be released to SKI and the relevant claim shall
be reinstated as a Valid Claim hereunder. If it is finally held to be invalid or unenforceable, the amounts held in escrow, including interest, shall be released to LICENSEE. 


 
 

ARTICLE II—GRANT    
    


	2.1
	SKI
hereby grants to LICENSEE: 
	(i)
	an
exclusive, worldwide license, to SKI Patents A in Field I, to make, have made, use, sell, have sold, import and develop Licensed Products I, with the right to grant
and authorize sublicenses;



	(ii)
	an
exclusive, worldwide license, to SKI Patents B in Field II, to make, have made, use, sell, have sold, import and develop Licensed Products II, with the right to
grant and authorize sublicenses;



	(iii)
	a
nonexclusive, worldwide license to SKI Patents A and SKI Patents C in Field II, and to SKI Patents D in Field I and Field II, to make, have made, use, sell, have
sold, import and develop Licensed Products I and Licensed Products II with the right to grant and authorize sublicenses; and



	(iv)
	SKI
hereby grants to LICENSEE a non-exclusive, worldwide, royalty-free license, without the right to grant and authorize sublicenses, to SKI's
entire interest in and to the Know-How pursuant to the licenses granted in this Section 2.1. 





3







 




	2.2
	Notwithstanding
any other provisions of this Agreement, it is agreed that SKI and its Affiliates shall retain the right to practice the licensed rights granted under
Section 2.1 for its own teaching, research and patient care activities.



	2.3
	All
rights reserved to the United States Government and others under 35 USC §§200-212, as amended, shall remain and shall in no way
be affected by this Agreement.



	2.4
	LICENSEE
hereby agrees that every sublicensing agreement to which it shall be party and which shall relate to the rights, privileges and license granted hereunder shall contain a
statement describing the date upon which LICENSEE'S exclusive rights, privileges and license hereunder shall terminate.



	2.5
	LICENSEE
agrees that any sublicenses granted by it shall provide that the obligations to SKI of Article III, Sections 3.1 and 3.3, V, VII, VIII, IX, X, XI, XII,
and XIV of this Agreement shall be binding upon the sublicensee as if it were a party to this Agreement. LICENSEE further agrees to attach copies of these Articles to sublicense agreements.



	2.6
	LICENSEE
agrees to forward to SKI a copy of any and all fully executed sublicense agreements, and further agrees to timely forward to SKI a copy of sublicensing revenue reports
received by LICENSEE from its sublicensees during the preceding Royalty Year.



	2.7
	If
LICENSEE receives from sublicensees anything of value in lieu of cash payments based upon payment obligations of any sublicense under this Agreement, LICENSEE shall pay SKI royalty
or other payments as required by Section 4.1, based on the fair market value of such payment, unless SKI waives in writing such payment obligation.



	2.8
	The
license granted hereunder shall not be construed to confer any rights upon LICENSEE by implication, estoppel or otherwise as to any technology not included in the SKI Patents,
except as expressly set forth herein.



	2.9
	All
rights not specifically granted herein are reserved to SKI. SKI explicitly retains the right to grant to third parties (i) exclusive licenses to SKI Patents A outside of
Field I and Field II, (ii) exclusive licenses to SKI Patents B outside of Field II, (iii) exclusive licenses to SKI Patents C outside of Field II, and (iv) exclusive licenses to
SKI Patents D outside of Field II.



	2.10
	SKI
shall cooperate to transfer to LICENSEE all Know-How, and all data, reports, analyses and other information necessary for the manufacture, use, and sale of Licensed
Products I and/or Licensed Products II in its possession or control, in a format reasonably acceptable to LICENSEE. 


 
 

ARTICLE III—DUE DILIGENCE, REGULATORY MATTERS    
    


	3.1
	LICENSEE
and its sublicensees shall use commercially reasonable efforts to bring Licensed Products to market through a thorough, vigorous and diligent program for exploitation of the
SKI Patents and to continue active, diligent marketing efforts for one or more Licensed Products or throughout the life of this Agreement.



	3.2
	Within
sixty (60) days of the Effective Date, SKI and Licensee shall mutually agree upon a timeline for clinical development of Licensed Products I and research development of
Licensed Products II ("Timeline"). Such Timeline shall be appended as Exhibit B to this Agreement, and may be amended from time to time as
necessary and by mutual consent. In the event that agreement cannot be reached on the Timeline within sixty (60) days of the Effective Date, or any developmental milestone specified in the
Timeline are not met by LICENSEE, SKI shall have the right to terminate this Agreement in accordance with Section 12.4. 


4







 
	3.3
	In
addition, LICENSEE shall adhere to the following milestones:



	(a)
	LICENSEE
shall have delivered to SKI prior to the execution of this Agreement, its detailed business, research and development plan including, for example, relevant schedules of
capital investments needed to implement the plan, financial, equipment, facility plans, number and kind of personnel and time planned for each phase of development of the SKI Patents for a three year
period, to the extent formed by LICENSEE. Similar reports shall be provided to SKI annually to relay update and status information on LICENSEE's business, research and development progress, including
projections of activity anticipated for the next reporting year.



	(b)
	LICENSEE
shall be responsible for diligently and promptly taking all reasonable steps to secure all required and/or necessary governmental approvals to sell, exploit, or market any
and all Licensed Products. LICENSEE shall advise SKI, through annual reports described in Section 3.3(a) above of its program of development for obtaining said approvals.






	3.4
	LICENSEE's
failure to perform in accordance with Sections 3.1 and 3.2 above shall be grounds for SKI to terminate this Agreement pursuant to Section 12.4 below.



	3.5
	SKI
shall cooperate, at its sole discretion, with LICENSEE before the Food and Drug Administration, and any other regulatory agencies in all matters regarding to Licensed Products I
and Licensed Products II. 


 
 

ARTICLE IV—PAYMENTS    
    


	4.1
	For
the rights, privileges and licenses granted hereunder, LICENSEE shall pay to SKI, in the manner hereinafter provided, until the end of the last to expire patent of the SKI Patents
or until this Agreement shall be terminated, as hereinafter provided, whichever occurs first:



	(a)
	A
license issue fee of fifty thousand dollars ($[***]) payable on the Effective Date of this Agreement.



	(b)
	One
hundred and twenty thousand (120,000) shares of Optimer Pharmaceuticals, Inc. common stock, par value $0.001 per share (the "Shares"), issuable immediately on the
Effective Date of this Agreement. In connection with the issuance of the Shares, SKI shall enter into the Common Stock Issuance Agreement, attached hereto as  Exhibit C ("Common Stock Issuance
Agreement").



	(c)
	For
Licensed Products I, a royalty in an amount equal to [***] percent ([***]%) of the Net Sales of Licensed Products I by
LICENSEE or any sublicensee.



	(d)
	Subject
to Section 4.1(e), for Licensed Products II, (a) for sales made by LICENSEE, a royalty in an amount equal to [***] percent
([***]%) of the Net Sales of Licensed Products II and (b) for sales made by a sublicensee, the greater of (i) twenty percent
([***]%) of the Net Royalty received by LICENSEE from the sublicensee or (ii) [***] percent of Net Sales of Licensed Products II by the
sublicensee.



	(e)
	For
any product in Field II that is not covered by a Valid Claim of SKI Patents B, (a) for sales made by LICENSEE, a royalty in an amount equal to [***]
percent ([***]%) of the Net Sales of such product and (b) for sales made by a sublicensee, the greater of (i) [***] percent
([***]%) of the Net Royalty received by LICENSEE from the sublicensee or (ii) [***] percent of Net Sales of such product by the sublicensee.



	(f)
	For
each of Licensed Products I, milestone payments as follows in the event that such milestone is achieved by LICENSEE and not a sublicensee:



	•
	[***]
dollars ($[***]) upon commencement of Phase III clinical studies; 








5







 


	•
	[***]
dollars ($[***]) upon first New Drug Application (NDA) filing;



	•
	[***]
dollars ($[***]) upon marketing approval in the United States;



	•
	[***]
dollars ($[***]) upon market approval in each and any of the Foreign Major Market Countries.






	(g)
	Subject
to Section 4.1(h), for each of Licensed Products II, milestone payments as follows in the event that such milestone is achieved by LICENSEE and not a
sublicensee:



	•
	[***]
dollars ($[***]) upon commencement of Phase I clinical studies;



	•
	[***]
dollars ($[***]) upon commencement of Phase II clinical studies;



	•
	[***]
dollars ($[***]) upon commencement of Phase III clinical studies;



	•
	[***]
dollars ($[***]) upon first New Drug Application (NDA) filing;



	•
	[***]
dollars ($[***]) upon marketing approval in the United States;



	•
	[***]
dollars ($[***]) upon market approval in each and any of the Foreign Major Market Countries.






	(h)
	For
any product in Field II that is not covered by a Valid Claim of SKI Patents B, milestone payments as follows in the event that such milestone is achieved by LICENSEE and not a
sublicensee:



	•
	[***]
dollars ($[***]) upon commencement of Phase I clinical studies;



	•
	[***]
dollars ($[***]) upon commencement of Phase II clinical studies;



	•
	[***]
dollars ($[***]) upon commencement of Phase III clinical studies;



	•
	[***]
dollars ($[***]) upon first New Drug Application (NDA) filing;



	•
	[***]
dollars ($[***]) upon marketing approval in the United States;



	•
	[***]
dollars ($[***]) upon market approval in each and any of the Foreign Major Market Countries.






	(i)
	LICENSEE
shall pay SKI [***] percent ([***]%) of all income from sublicensees including (i) sublicense fees,
(ii) sublicense maintenance fees, (iii) milestone payments and (iv) premiums over fair market value in the sale of LICENSEE's equity pursuant to Article 2.7, but excluding
(i) verifiable research and development support and expense reimbursement, (ii) royalties, (iii) sale of equity at fair market value, and, (iv) in cases where SKI Patents
are sublicensed in combination with non-SKI technology, the pro-rata contribution of the non-SKI technology.



	(j)
	Annual
minimum royalty payments, starting in the Royalty Year commencing January 1 after the Execution Date, in the amount of [***] dollars
($[***]). The minimum royalty payments shall be credited against the earned royalty payments required in Section 4.1(c), 4.1(d) and 4.1(e) above for
the same Royalty Year, and shall be paid within thirty days following the end of the Royalty Year.



	(k)
	Patent
expenses according to the terms of Article VI.






	4.2
	No
multiple royalties shall be payable because any Licensed Products, its manufacture, use, lease or sale are or shall be covered by more than one of the SKI Patents patent
applications or SKI Patents patents licensed under this Agreement. 


6







 
	4.3
	Royalty
payments shall be paid in United States dollars in New York, NY, or at such other place as SKI may reasonably designate consistent with the laws and regulations
controlling in any foreign country, but not in any other currency. If any currency conversion shall be required in connection with the payment of royalties hereunder, such conversion shall be made by
using the exchange rate prevailing at the J.P. Morgan Chase Bank (N.A.) on the last business day of the calendar quarterly reporting period to which such royalty payments relate.



	4.4
	Interest



	(a)
	LICENSEE
shall pay to SKI interest on any amounts not paid when due. Such interest will accrue from the forty-fifth (45th) day after the payment was due at a rate two
percent (2%) above the daily prime interest rate, as determined by J.P. Morgan Chase or its successor entity, on each day the payment is delinquent, and the interest payment will be due and
payable on the first day of each month after interest begins to accrue, until full payment of all amounts due SKI is made.



	(b)
	SKI's
rights to receive such interest payments shall be in addition to any other rights and remedies available to SKI.



	(c)
	If
the interest rate required in this Subsection exceeds the legal rate in a jurisdiction where a claim for such interest is being asserted, the required interest rate shall be
reduced, for such claim only, to the maximum interest rate allowable in the jurisdiction. 





 
 

ARTICLE V—REPORTS AND RECORDS    
    


	5.1
	LICENSEE
shall keep full, true and accurate books of account containing all particulars that may be necessary for the purpose of showing the amounts payable to SKI hereunder. Said
books and records shall be maintained for a period of no less than five (5) years following the period to which they pertain. For the term of this Agreement, upon thirty (30) days prior
written notice, LICENSEE shall allow SKI's own accountants or independent accountants selected by SKI, which independent accountants shall be reasonably acceptable to LICENSEE and after entering into
a confidentiality agreement with LICENSEE, to inspect such books and records for the sole purpose of verifying LICENSEE's royalty statement or compliance in other respects with this Agreement. In the
case of independent accountants, such accountants shall report to SKI only whether there has been a royalty underpayment and, if so, the amount thereof. Such inspections shall be during normal working
hours of LICENSEE, and shall occur no more frequently than once per calendar year. Should such inspection lead to the discovery of a greater than ten percent (10%) discrepancy in reporting to SKI's
detriment, LICENSEE agrees to pay the full cost of such inspection.



	5.2
	LICENSEE,
within thirty (30) days after June 30 and December 31 of each year, shall deliver to SKI true and accurate reports, giving such particulars of the
business conducted by LICENSEE and its sublicensees during the preceding three-month period under this Agreement as shall be pertinent to a royalty accounting hereunder. These shall include at least
the following, to be itemized per Licensed Product:



	(a)
	Number
of Licensed Products commercially used, manufactured and sold, rented or leased.



	(b)
	Total
billings for Licensed Products commercially used, sold, rented or leased.



	(c)
	Deductions
applicable as provided in Paragraph 1.8.



	(d)
	Total
royalties due.



	(e)
	Names
and addresses of all sublicensees of LICENSEE.



	(f)
	Total
royalty income from all revenues subject to sublicensees' royalties. 





7







 



	(g)
	Total
sublicensing fee income.






	5.3
	With
each such report submitted, LICENSEE shall pay to SKI the royalties due and payable under this Agreement. If no royalties shall be due, LICENSEE shall so report.



	5.4
	Milestone
payments shall be reported and paid with each such report submitted. 


 
 

ARTICLE VI—PATENT PROSECUTION    
    


	6.1
	LICENSEE
shall be responsible for and pay all past and future costs and expenses incurred by SKI for the preparation, filing, prosecution, issuance, and maintenance of SKI Patents A
and SKI Patents B. Such costs and expenses incurred prior to December 31, 2001 shall be reimbursed to SKI by LICENSEE in four equal semiannual payments beginning on July 1, 2002. Such
costs and expenses incurred subsequent to January 1, 2002 and prior to the Effective Date of this Agreement shall be paid by LICENSEE within forty-five (45) days of the
Effective Date. Such costs and expenses incurred after the Effective Date shall be paid by LICENSEE as they are incurred. SKI shall be solely responsible for all past and future costs and expenses
incurred for the preparation, filing, prosecution, issuance, and maintenance of SKI Patents C and SKI Patents D.



	6.2
	SKI
shall diligently prosecute and maintain the SKI Patents in the United States and in such countries as are determined by SKI and agreed to by LICENSEE, using counsel of its
choice. If LICENSEE declines in writing to bear the expense of filing patent applications in any foreign countries in which SKI wishes to obtain patent protection, then SKI may file and prosecute such
applications at its own expense and any license granted hereunder shall exclude such countries.



	6.3
	SKI
shall provide LICENSEE with copies of all relevant documentation so that LICENSEE may be informed and to give LICENSEE reasonable opportunity to advise SKI and comment on the
continuing prosecution. LICENSEE agrees to keep this documentation confidential. 


 
 

ARTICLE VII—INFRINGEMENT    
    


	7.1
	LICENSEE
shall assume primary responsibility for enforcing SKI Patents A and SKI Patents B within relevant commercial markets in Field I and Field II, respectively. In exercising
these responsibilities, LICENSEE shall promptly contact alleged third party infringers and take all reasonable steps to persuade such third parties to desist from infringing the SKI Patents, including
initiating and prosecuting an infringement action if necessary, or defending a challenge to the validity of the SKI Patents. LICENSEE also shall notify SKI of each instance of alleged infringement and
shall keep SKI informed of all stages of SKI Patents enforcement. LICENSEE may use the name of SKI as party plaintiff. All costs of any action to enforce SKI Patents A and SKI Patents B taken by
LICENSEE shall be borne by LICENSEE and LICENSEE shall keep any recovery of damages derived therefrom, the excess of such recovery over such costs shall be included in LICENSEE's Net Sales. No
settlement, consent judgment or other voluntary final disposition of the suit may be entered into without the prior written consent of SKI, which consent shall not unreasonably be withheld.



	7.2
	In
the event LICENSEE becomes aware of unlicensed infringement of SKI Patents A or SKI Patents B, either through notice from SKI or by other means, and does not, within six
(6) months (a) secure cessation of the infringement; or (b) enter suit against the infringer; or (c) provide SKI with evidence of pendency of a bona fide negotiation for
sublicensing the infringer, then, thirty (30) days after giving written notice to LICENSEE, SKI shall have the right to (a) sue for the infringement at SKI's own expense, and to collect
for its own use any damages, profits and awards of whatever nature that it may recover for such infringement; and (b) terminate this Agreement according to terms of Article XII. 


8







 
	7.3
	Each
party shall promptly notify the other in writing in the event that a third party shall bring a claim of infringement against SKI or LICENSEE, either in the United States
or in any foreign country in which there are SKI Patents.



	7.4
	In
the event LICENSEE is sued for patent infringement, threatened with such suit, or enjoined from exercising its license rights granted hereunder, LICENSEE may terminate this
Agreement according to Article XII or contest the action against it. In any such action, LICENSEE shall be fully responsible for all its costs, including expenses, judgements and
settlements, and shall be entitled to proceeds that it may recover, including judgements, settlements and awards, the excess of such recovery over such costs shall be included in LICENSEE's Net Sales.



	7.5
	In
any infringement suit as either party may institute to enforce the SKI Patents against third parties pursuant to this Agreement, or in any infringement action brought against
either party by a third party, each party hereto shall, at the request and expense of the other party, cooperate in all respects and, to the extent possible, have its employees testify when requested
and make available relevant records, papers, information, samples, specimens, and the like. 


 
 

ARTICLE VIII—INDEMNIFICATION, PRODUCT LIABILITY, WARRANTIES    
    


	8.1
	LICENSEE
shall at all times during the term of this Agreement and thereafter, indemnify, defend and hold SKI and its Affiliates, their Board of Managers, officers, employees and
affiliates, harmless against all claims and expenses, including legal expenses and reasonable attorneys' fees, arising out of the death of or injury to any person or persons or out of any damage to
property and against any other claim, proceeding, demand, expense and liability of any kind whatsoever resulting from the production, manufacture, sale, use, lease, consumption or advertisement of the
Licensed Products arising from any obligation of LICENSEE hereunder, except to the extent such claims or expenses are caused by the gross negligence or willful misconduct of SKI, and its Affiliates,
their Board of Managers, officers, or employees.



	8.2
	For
the term of this Agreement, upon the commencement of clinical use, production, sale, or transfer, whichever occurs first, of any Licensed Products, LICENSEE shall obtain and carry
in full force and effect general liability insurance which shall protect LICENSEE and SKI in regard to events covered by Section 8.1 above. Such insurance shall be written by a reputable
insurance company, shall list SKI as an additional named insured thereunder, shall be endorsed to include liability coverage, and shall require thirty (30) days written notice to be given to
SKI prior to any cancellation or material change thereof. The limits of such insurance shall not be less than one million dollars ($1,000,000) per occurrence with an annual aggregate of three million
dollars ($3,000,000) for personal injury, death or property damage. LICENSEE shall provide SKI with Certificates of Insurance evidencing the same.



	8.3
	SKI
represents and warrants that: (i) it is a New York membership corporation duly organized validly existing and in good standing under the laws of New York;
(ii) the execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on the part of SKI; (iii) to SKI's best knowledge, SKI is the
sole and exclusive owner of all right, title and interest in and to the SKI Patents and Know-How, with the exception of SK625B, listed in Exhibit A, which is jointly owned with the
Trustees of Columbia University in the City of New York; (iv) SKI has the right to grant the rights and licenses granted herein; (v) the SKI Patents and Know-How are
free and clear of any lien, encumbrance, or security interest; (viii) there are no threatened or pending actions, suits, investigations, claims or proceedings in any way relating to the SKI
Patents or Know-How.



	8.4
	In
the event that any indemnitee intends to claim indemnification under this Article VIII it shall promptly notify the other party in writing of such potential liability. The
indemnifying party shall have the right to control the defense thereof. The affected indemnitees shall cooperate fully with 


9







 

the
indemnifying party and its legal representatives in the investigation and conduct of any liability covered by this Article VIII. Notwithstanding the foregoing, neither party shall have
indemnity obligations for any claim if the indemnitee seeking indemnification makes any admission, settlement or other communication regarding such claim without the prior written consent of the
indemnifying party. 



	8.5
	Except
as otherwise expressly set forth in this Agreement, NEITHER PARTY MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND VALIDITY OF SKI PATENTS CLAIMS, ISSUED OR PENDING. 


 
 

ARTICLE IX—EXPORT CONTROLS    
    


        It is understood that SKI is subject to United States Laws and regulations controlling the export of technical data, computer software, laboratory
prototypes and other commodities (including the Arms Export Control Act, as amended and the Export Administration Act of 1979), and that its obligations hereunder are contingent on compliance with
applicable United States export laws and regulations. The transfer of certain technical data and commodities may require a license from the cognizant agency of the United States
Government and/or written assurances by LICENSEE that LICENSEE shall not export data or commodities to certain foreign countries without prior approval of such agency. SKI neither represents that a
license shall not be required nor that, if required, it shall be issued. 


 
 

ARTICLE X—NON-USE OF NAMES    
    


        LICENSEE shall not use the names of SKI or its Affiliates, nor any of their employees, nor any adaptation thereof, in any advertising, promotional or sales
literature without prior written consent obtained from SKI in each case; provided that once a particular disclosure has been approved, further disclosures which do not differ materially therefrom may
be made by LICENSEE without obtaining any further consent of SKI. 


 
 

ARTICLE XI—ASSIGNMENT    
    


	11.1
	This
Agreement may not be assigned by LICENSEE without prior written consent from SKI.



	11.2
	Notwithstanding
the foregoing prohibition, LICENSEE may without SKI's consent assign this Agreement to any entity that it may merge into, consolidate with, or transfer substantially
all of its assets ("substantially" being EIGHTY PERCENT (80%) or more thereof) to which this Agreement relates, so long as the successor surviving corporation in any such merger, consolidation,
transfer or reorganization assumes in writing the obligations of this Agreement. Such merger, consolidation, transfer or reorganization shall not in itself be a breach of this Article XI,
nor be any default under this Agreement. 


 
 

ARTICLE XII—TERMINATION    
    


	12.1
	Unless
earlier terminated pursuant to this Article XII, this Agreement shall terminate upon the later to occur of (a) the last to expire of the SKI Patents or
(b) twenty (20) years.



	12.2
	SKI
may terminate this Agreement if LICENSEE becomes insolvent or, a petition in bankruptcy is filed against LICENSEE and is consented to, acquiesced in or remains undismissed for
thirty (30) days; or makes a general assignment for the benefit of creditors, or a receiver is appointed for LICENSEE, and LICENSEE does not return to solvency before the expiration of a thirty
(30) day period. 


10







 
	12.3
	Should
LICENSEE fail to pay SKI license fees, royalties and patent expenses due and payable hereunder for more than thirty (30) days, SKI shall have the right to terminate
this Agreement on thirty (30) days written notice, unless LICENSEE shall pay SKI within the thirty (30) day period, all such license fees, royalties and patent expenses and interest due
and payable. Upon the expiration of the thirty (30) day period, if LICENSEE shall not have paid all such royalties, patent expenses and interest due and payable, the rights, privileges and
license granted hereunder shall terminate.



	12.4
	As
set out in Section 3.2, should the parties fail to agree upon a Timeline within sixty (60) days of the Effective Date, of if LICENSEE should fail to meet a
development milestone as specified in the Timeline, SKI shall have the right to terminate this Agreement and the rights, privileges and license granted hereunder by sixty (60) days' notice to
LICENSEE. Such termination shall become effective unless mutual agreement is reached, or LICENSEE shall have reached the necessary milestone prior to the expiration of the sixty (60) day
period.



	12.5
	Upon
any material breach of this Agreement by LICENSEE, other than those occurrences set out in Sections 12.1, 12.2 and 12.3, hereinabove, which shall always take
precedence in that order over any material breach or default referred to in this Section 12.3, SKI shall have the right to terminate this Agreement and the rights, privileges and license
granted hereunder by sixty (60) days' notice to LICENSEE. Such termination shall become effective unless LICENSEE shall have cured any such breach prior to the expiration of the sixty
(60) day period.



	12.6
	Upon
written notice to the LICENSEE for the material breach of the Common Stock Issuance Agreement by the LICENSEE and the failure to cure such material breach within sixty
(60) days, the licenses granted under this Agreement may be terminated by SKI.



	12.7
	LICENSEE
shall be entitled to terminate this Agreement upon (i) sixty (60) days advance written notice to SKI, (ii) in the event of SKI's material breach of any
of the provisions of this Agreement, which breach is not cured (if capable of being cured) within this sixty (60) day period, or (iii) if conditions of Section 7.4 apply.



	12.8
	Upon
termination of this Agreement for any reason, nothing herein shall be construed to release either party from any obligation that matured prior to the effective date of such
termination.



	12.9
	Other
than any claim arising from LICENSEE's failure to pay undisputed license fees or patent expenses due under this contract, any controversy or bona fide disputed claim arising
between the parties to this Agreement, which dispute cannot be resolved by mutual agreement shall, by the election of either party, be resolved by submitting to dispute resolution before a
fact-finding mediation body composed of one or more experts in the field, selected by mutual agreement within thirty days of written request by either party. Said dispute resolution shall
be held in New York at such place as shall be mutually agreed upon in writing by the parties. The fact-finding body shall determine who shall bear the cost of said resolution. In
the event that the parties cannot mutually agree within said thirty (30) days on the dispute resolution body, the parties will go to arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association.



	12.10
	In
the event of any termination of this Agreement any sublicenses granted by LICENSEE shall remain in force and effect and shall be assigned by LICENSEE to SKI, provided, that such
sublicensee is currently in good standing with regard to its obligations under the sublicense or has cured any default or breach within the period provided in such sublicense, and further provided,
that the financial obligations of each such sublicensee shall be limited to those due SKI hereunder for the practice of such a sublicense.



	12.11
	Article VIII,
and Article X of this Agreement shall survive termination. 


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ARTICLE XIII—PAYMENTS, NOTICES AND OTHER COMMUNICATIONS    
    


        Any payment, notice or other communication pursuant to this Agreement shall be sufficiently made or given when delivered by courier or other means providing proof
of delivery to such party at its address below or as it shall designate by written notice given to the other party: 



        In
the case of SKI: 



Sloan-Kettering
Institute for Cancer Research

1275 York Avenue

New York, New York 10021 



Attention:
James S. Quirk

Senior Vice President

Research Resources Management 





        In
the case of LICENSEE: 



Optimer
Pharmaceuticals, Inc.

10110 Sorrento Valley Road, Suite C

San Diego, California, 92121

Attention: Michael N. Chang, CEO 



 
 

ARTICLE XIV—MISCELLANEOUS PROVISIONS    
    


	14.1
	This
Agreement shall be construed, governed, interpreted and applied in accordance with the laws of the State of New York, except that questions affecting the construction and
effect of any patent shall be determined by the law of the country in which the patent was granted.



	14.2
	Except
as expressly provided in this Agreement, neither party shall use for its own benefit or the benefit of any third party, or disclose to any third party, any confidential,
proprietary or trade secret information (the "Confidential Information") received from the other party hereto, during the term of this Agreement and for five (5) years thereafter. All
Confidential Information must be designated as such by disclosing party in writing at or before the disclosure is made in writing, or within thirty (30) days of such disclosure.



	14.3
	Notwithstanding
Section 14.2 above, Confidential Information shall not include any of the following information which the receiving party can demonstrate by contemporaneous
written evidence:



	a)
	was
already known to the receiving party, other than under an obligation of confidentiality, at the time of disclosure;



	b)
	was
generally available to the public or otherwise part of the public domain at the time of disclosure to the receiving party;



	c)
	became
generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving party in breach of this
Agreement;



	d)
	was
independently developed by the receiving party without reference to any information or materials disclosed by the disclosing party; or



	e)
	was
subsequently disclosed to the receiving party by a person other than a party without breach of any legal obligation to the disclosing party. 






In
addition, either party may disclose Confidential Information of the other (i) to their legal representatives, employees and Affiliates, and legal representatives and employees of Affiliates, 



12







 

consultants
and sublicensees, to the extent such disclosure is reasonably necessary to achieve the purposes of this Agreement; (ii) in connection with the filing and support of patent
applications as necessary; or (iii) if disclosure is compelled to be disclosed by a court order or applicable law or regulation, provided that the party compelled to make such disclosure
(x) requests confidential treatment of such information, and (y) provides the other party with reasonable advance notice of the compelled disclosure to provide adequate time to seek a
protective order. 



	14.4
	The
provisions of this Agreement are severable, and in the event that any provisions of this Agreement shall be determined to be invalid or unenforceable under any controlling body
of the law, such invalidity or unenforceability shall not in any way affect the validity or enforceability of the remaining provisions hereof.



	14.5
	The
failure of either party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or
excuse a similar subsequent failure to perform any such term or condition by the other party.



	14.6
	The
relationship of the parties hereto is that of independent contractors. The parties hereto are not deemed to be agents, partners or joint ventures of the other for any purpose as
a result of this Agreement or the transactions contemplated thereby.



	14.7
	Neither
party shall lose any rights hereunder or be liable to the other party for damages or losses (except for payment obligations) on account of failure of performance by the
defaulting party if the failure is occasioned by war, strike, fire, Act of God, earthquake, flood, lockout, embargo, governmental acts or orders or restrictions, failure of suppliers, or any other
reason where failure to perform is beyond the reasonable control and not caused by the negligence, intentional conduct or misconduct of the nonperforming party and the nonperforming party has exerted
all reasonable efforts to avoid or remedy such force majeure; provided, however, that in no event shall a party be required to settle any labor dispute or disturbance.



	14.8
	NEITHER
PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES ARISING OUT OF THE PERFORMANCE OF THIS AGREEMENT, HOWEVER CAUSED, UNDER ANY
THEORY OF LIABILITY, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.



	14.9
	At
any time or from time to time on and after the date of this Agreement, Licensor shall at the written request of LICENSEE (i) deliver to LICENSEE such records, data or other
documents in compliance with the provisions of this Agreement, (ii) execute, and deliver or cause to be delivered, all such consents, documents or further instruments of transfer or license,
and (iii) take or cause to be taken all such actions, as LICENSEE may reasonably deem necessary or desirable in order for LICENSEE to obtain the full benefits of this Agreement and the
transactions contemplated hereby.



	14.10
	This
Agreement sets forth the entire agreement and understanding of the parties with respect to the subject matter hereof, and supersedes all prior discussions, agreements and
writings in relating thereto. This Agreement may not be altered, amended or modified in any way except by a writing signed by both parties.



	14.11
	This
Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be an original and all such counterparts shall together constitute
but one and the same agreement. 


13







 

        IN
WITNESS WHEREOF, authorized representatives of the parties have signed and dated this Agreement below. 



	 	Sloan-Kettering Institute

for Cancer Research	 	 	Optimer Pharmaceuticals, Inc.
	
 	

 	
 	

 	

 
	By:	/s/ James S. Quirk
	 	By:	/s/ Michael N. Chang

	 	James S. Quirk

Senior Vice President

Research Resources Management	 	 	Michael N. Chang

CEO





	
 	

 	
 	

 	

 
	Date:	6/17/02
	 	Date:	7/31/02





14








  



 
 

EXHIBIT A    
    


        SKI Patents A, SKI Patents B, SKI Patents C, and SKI Patents D shall mean the United States patents and patent applications listed under the respective
subheadings below and their continuations, continuations-in-part, divisionals; and other continuing applications; reissues; re-examinations; extensions of any kind;
substitutions; registrations and corresponding foreign patents and patent applications: 



	SKI Patents A
	SK625A	 	US patent 5,708,163 "Synthesis of the Breast Tumor-Associated Antigen Defined by Monoclonal Antibody MBrl and Uses Thereof"
	SK625AZ	 	US patent 6,090,789 "Synthesis of the Breast Tumor-Associated Antigen Defined by Monoclonal Antibody MBrl and Uses Thereof"
	SK625C	 	US patent application 09/017,611 "Synthesis of Glycoconjugates of the Globo-H Epitope and Uses Thereof"
	SKI Patents B
	SK759	 	US patent application 09/083,776 "alpha-O-Linked Glycoconjugates With Clustered (2, 6)-Epitopes, Methods of Preparation and Uses Thereof"
	SK816	 	US patent application 09/276,595 "Trimeric Antigenic O-Linked Glycopeptide Conjugates, Methods of Preparation and Uses Thereof"
	SK 893	 	US patent application 09/641,742 "Novel Glycoconjugates, Glycoamino Acids, Intermediates Thereto, and Uses Thereof"
	SKI Patents C
	SK625	 	US patent 5,543,505 "Synthetic Compounds Which Bind to H. Pylori, and Uses Thereof"
	SK625B	 	US patent 6,303,120 "Synthesis of Glycoconjugates of the Lewis Y Epitope and Uses Thereof," which is jointly owned by SKI and The Trustees of Columbia University in the City of New York.
	SK719	 	US patent 6,238,668 "Colon Cancer KH-1 and N3 Antigens"
	SK719Z	 	US patent application 09/833,327 "Colon Cancer KH-1 and N3 Antigens"
	SK760	 	US patent application 09/534,712 "Fucosyl GM1-KLH Conjugate Vaccine Against Small Cell Lung Cancer"
	SKI Patents D
	SK883	 	US patent application 09/794,905 "Affinity Matrix Bearing Tumor-Associated Carbohydrate- or Glycopeptide-Based Antigens and Uses Thereof"




15







 
 
 

EXHIBIT B
  
    Clinical Development Milestones—Timeline    
    


16







 
 
 

EXHIBIT C
  
    Common Stock Issuance Agreement    
    


17











QuickLinks



Exhibit 10.5

Text Omitted and Filed Separately CONFIDENTIAL TREATMENT REQUESTED Under 17 C.F.R. §§ 200.80(b)(4) and 230.406


FIRST AMENDMENT TO LICENSE AGREEMENT Between Optimer Pharmaceuticals, Inc. and Sloan-Kettering Institute for Cancer Research



LICENSE AGREEMENT for SKI's technology "Carbohydrate Cancer Vaccines" (SK#6637)

TABLE OF CONTENTS

WITNESSETH

ARTICLE I—DEFINITIONS

ARTICLE II—GRANT

ARTICLE III—DUE DILIGENCE, REGULATORY MATTERS

ARTICLE IV—PAYMENTS

ARTICLE V—REPORTS AND RECORDS

ARTICLE VI—PATENT PROSECUTION

ARTICLE VII—INFRINGEMENT

ARTICLE VIII—INDEMNIFICATION, PRODUCT LIABILITY, WARRANTIES

ARTICLE IX—EXPORT CONTROLS

ARTICLE X—NON-USE OF NAMES

ARTICLE XI—ASSIGNMENT

ARTICLE XII—TERMINATION

ARTICLE XIII—PAYMENTS, NOTICES AND OTHER COMMUNICATIONS

ARTICLE XIV—MISCELLANEOUS PROVISIONS


EXHIBIT A

EXHIBIT B Clinical Development Milestones—Timeline

EXHIBIT C Common Stock Issuance Agreement