<PAGE>
                                                                   Exhibit 10.18

November 24, 2004

Mr. Peter L. Lanciano
66 White Wood Road
Milford, MA 01757

Dear Peter:

     The purpose of this letter agreement ("Agreement") is to set forth the
terms of your separation from Altus Pharmaceuticals Inc. (the "Company"). The
Company's provision of Separation Pay and Benefits (as defined in Section 5
below) is subject to the terms and conditions set forth in this Agreement. In
consideration of the promises, conditions and representations set forth herein,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged by you and the Company, you and the Company agree as
follows:

     1. SEPARATION OF EMPLOYMENT. Your employment with the Company ended on
October 29, 2004 (the "Separation Date"). Effective as of the Separation Date,
you resigned from your positions as Chairman of the Board, Chief Executive
Officer of the Company ("CEO") and President of the Company. You hereby resign,
also effective as of the Separation Date, from all committees of the Board of
Directors of the Company (the "Board") and from all other positions held in the
Company or any Company subsidiary, other than as set forth in Section 2 below.
You acknowledge that from and after the Separation Date, you will have no
authority to, and will not, represent yourself as an officer or employee of the
Company.

     2. BOARD DESIGNATION AND MEMBERSHIP. As of the Effective Date (as defined
in Section 5 below), you will be appointed as Vice-Chairman of the Board, to
provide Services (as defined in Section 3 below), and, in your capacity as
Vice-Chairman of the Board, you will report to the Chairman of the Board. In
addition, you will continue as a member of the Board, subject to the provisions
of Section 4 below.

     3. SERVICES. As may be requested by the Chairman of the Board or the CEO
from time to time, you will provide the following services (collectively, the
"Services"): (i) supporting the Company's management transition internally, and
externally to all constituents, including, but not limited to, the Company's
investors, partners, customers, suppliers and affiliates; (ii) supporting the
Chairman of the Board, (iii) successfully maintaining and transitioning the
Amano, Cystic Fibrosis Foundation, and Dr. Falk Pharma relationships, (iv)
otherwise fulfilling the obligations of this Agreement, and (v) such other
services as may be reasonably requested by the Chairman or the CEO. In
connection with performing the Services and serving on the Board, you agree to
abide by all applicable Company policies and procedures as in effect from time
to time, including, but not limited to, the Company's Code of Conduct and other
similar policies.
<PAGE>
Mr. Peter L. Lanciano
November 24, 2004
Page -2-


     4. SERVICE TERM AND TERMINATION.

          (i)  You and the Company agree that your service to the Company will
               continue from the Effective Date through October 31, 2005, unless
               otherwise earlier terminated by the Company pursuant to the terms
               of this Agreement (this period, as it may be reduced in
               accordance with Section 9 below, being hereinafter referred to as
               the "Service Term"). The Chairman of the Board, in his sole
               discretion, may at any time following the Effective Date request
               that you resign from the Board, and you hereby agree to resign
               from the Board upon such request. Notwithstanding any provision
               of this Agreement to the contrary, in the event you are requested
               to resign from the Board, you will continue to provide Services
               as may be reasonably requested from time to time until October
               31, 2005 in exchange for continued payment of the Separation Pay
               and Benefits, subject to earlier termination in accordance with
               Section 9 below.

          (ii) At the end of the Service Term, the Company may consider, in its
               sole discretion, extending the Service Term for an additional
               period, upon terms and conditions to be agreed upon at such time.

     5. SEPARATION PAY AND BENEFITS. In exchange for your performance of the
Services and your promises set forth in this Agreement, and beginning as soon as
practicable after the eighth (8th) day following your submission of a signed
version of this Agreement in accordance with Section 10 below (the "Effective
Date"), the Company agrees to provide you with the following payments and
benefits (the "Separation Pay and Benefits"):

          (i)  Fee payments at a rate equal to your most recent monthly base
               salary amount in effect prior to the Separation Date, which
               amounts will be paid during the Service Term in monthly
               installments on the last business day of each month commencing on
               November 30, 2004.

          (ii) Eligibility for 2004 annual bonus, as determined by the
               Compensation Committee of the Board in its sole discretion, the
               amount of which will be based on the Compensation Committee's
               assessment of (a) your performance in relation to previously
               agreed CEO objectives for the period from January 1, 2004 through
               October 29, 2004, and (b) your performance as Vice-Chairman for
               the period from the Effective Date through December 31, 2004. To
               the extent the Compensation Committee of the Board determines to
               award you a 2004 annual bonus, such bonus will be paid to you at
               the same time that 2004 annual bonuses are paid to senior
               executives of the Company.

          (iii) Continuation of vesting of your stock options during the Service
               Term; all vested options will remain exercisable for a period of
               3 months after the Service Term.
<PAGE>
Mr. Peter L. Lanciano
November 24, 2004
Page -3-


          (iv) Upon completion of the appropriate COBRA(1/) forms, and subject
               to all the requirements of COBRA, during the Service Term,
               continuation of your participation in the Company's medical
               insurance plans at the Company's cost. After the Service Term,
               you will have the right to continue your medical insurance,
               subject to the requirements of COBRA, at your own cost. The
               "qualifying event" under COBRA shall be deemed to have occurred
               on the Separation Date.

     You acknowledge that, except for (x) the specific financial consideration
set forth in this Agreement, and (y) your final wages and any pay for accrued
but unused vacation, which have been paid to you in accordance with the
Company's regular payroll practices and applicable law, you are not now and will
not in the future be entitled to any other compensation from the Company,
including, without limitation, other wages, commissions, bonuses, vacation pay,
holiday pay, paid time off or any other form of compensation or benefit.

     6. REIMBURSEMENT OF EXPENSES. You hereby acknowledge receipt of all expense
reimbursements due to you in connection with all services performed, and
expenses incurred, prior to the Separation Date. Upon presentation of proper
documentation submitted to the Company on a timely basis, the Company will
reimburse you, in accordance with Company policy with respect thereto as in
effect from time to time, for all ordinary and reasonable out-of-pocket business
expenses incurred by you in performing the Services after the Separation Date.

     7. EQUITY. You expressly agree to the following:

          (i)  to modify your existing option agreements with the Company to the
               extent necessary to comply with Section 5(iii) above; and

          (ii) to be bound by any standard underwriter "lock up" provisions that
               may be requested of the directors, officers or stockholders of
               the Company at any time.

     8. COVENANTS BY YOU. You expressly acknowledge and agree to the following:

          (i)  that for a period of two years following the Effective Date, you
               will not, without the prior written consent of the Company:

               (a)  for yourself or on behalf of any other person or entity,
                    directly or indirectly, either as principal, partner,
                    stockholder, officer, director, member, employee,
                    consultant, agent, representative or in any other capacity,
                    own, manage, operate or control, or be connected with or
                    employed by, or otherwise associate in any manner with,
                    engage in or have a financial interest in, any business or
                    business activity which is related to the research,
                    development, manufacture, marketing, selling or servicing of
                    products or services that are competitive with the products
                    or services being

----------
(1/) "COBRA" is the Consolidated Omnibus Budget Reconciliation Act of 1985, as
     amended.
<PAGE>
Mr. Peter L. Lanciano
November 24, 2004
Page -4-


                    marketed, sold, serviced or under research or development by
                    or on behalf of the Company, including, but not limited to,
                    services and products related to the crystallization of
                    proteins or antibodies (the "Restricted Business"), except
                    that nothing contained herein will preclude you from
                    purchasing or owning securities of any such business if such
                    securities are publicly traded, and provided that your
                    holdings do not exceed one percent (1%)of the issued and
                    outstanding securities of any class of securities of such
                    business; or

               (b)  either individually or on behalf of or through any third
                    party, directly or indirectly, solicit, divert or
                    appropriate, or attempt to solicit, divert or appropriate,
                    for the purpose of competing with or disrupting the
                    relationship with the Company or any present or future
                    parent, subsidiary or other affiliate of the Company that is
                    engaged in the Restricted Business, any persons or entities
                    that are, or were, customers, clients, collaborative
                    partners, or vendors of the Company, or any prospective
                    customers, clients, collaborative partners, or vendors with
                    respect to which the Company has developed, made or received
                    a presentation for the purpose of offering or obtaining
                    services or engaging in a collaborative relationship at any
                    time in the 12-month period immediately preceding the
                    Effective Date or during the Service Term; or

               (c)  either individually or on behalf of or through any third
                    party, directly or indirectly, (1) hire, retain, solicit,
                    entice, encourage or persuade, or attempt to hire, retain,
                    solicit, entice, encourage or persuade any director or
                    employee of, or consultant to, the Company to leave the
                    service of the Company for any reason, or (2) employ, cause
                    to be employed, or solicit the employment or service of, any
                    director or employee of, or consultant to, the Company, in
                    each case while any such person is providing services to the
                    Company or within six months after any such person has
                    ceased providing services to the Company; or

               (d)  either individually or on behalf of or through any third
                    party, directly or indirectly, interfere with, or attempt to
                    interfere with, the relations between the Company and any
                    collaborative partner of, or vendor or supplier to, the
                    Company;

          (ii) that, as soon as reasonably possible following the Effective
               Date, you will provide to the Company an inventory of all Company
               property in your possession and that on the last day of the
               Service Term you will return to the Company all material Company
               documents (and any copies thereof) and all Company property
               (regardless how such documents (or copies thereof) or property
               are maintained, including whether or not in electronic form or
               otherwise), and that you will abide by the provisions of the
<PAGE>
Mr. Peter L. Lanciano
November 24, 2004
Page -5-


               Company's Non-Disclosure and Assignment of Inventions Agreement
               (copy attached) previously signed by you, the terms of which are
               hereby incorporated by reference and which shall survive the
               signing of this Agreement; further, you agree that you will abide
               by any and all common law and/or statutory obligations relating
               to protection and non-disclosure of the Company's trade secrets
               and/or confidential and proprietary documents and information;

          (iii) that all information relating in any way to the negotiation of
               this Agreement, including the terms and amount of financial
               consideration provided for in this Agreement, shall be held
               confidential by you and shall not be publicized or disclosed to
               any person (other than an immediate family member, legal counsel
               or financial advisor, provided that any such individual to whom
               disclosure is made agrees to be bound by these confidentiality
               obligations), business entity or government agency (except as
               mandated by state or federal law), except that nothing in this
               paragraph will prohibit you from participating in an
               investigation with a state or federal agency if requested by the
               agency to do so;

          (iv) that you will perform and make yourself generally available to
               the Company during the Service Term to perform the Services; you
               further agree that you will cooperate fully with the Company in
               the defense or prosecution of any claims or actions now in
               existence or which may be brought or threatened in the future
               against or on behalf of the Company, its directors, shareholders,
               officers, or employees; the Company will reimburse you for
               reasonable, documented expenses incurred should your presence be
               required in person, in accordance with Company policy and as
               determined by the Chairman of the Board, in his discretion; you
               further agree that should you be contacted by any individual or
               any person representing an individual or entity that is or may be
               legally or competitively adverse to the Company in connection
               with any claims or legal proceedings, you will promptly notify
               the Chairman of the Board (or the Chairman's designee) of that
               fact in writing; and

          (v)  you further recognize and acknowledge that (a) the types of
               employment which are prohibited by this Section 8 are narrow and
               reasonable in relation to the skills which represent your
               principal salable asset both to the Company and to your other
               prospective employers and (b) the time period and scope of the
               provisions of this Section 8 are reasonable, legitimate and fair
               to you in light of the Company's need to continue its therapeutic
               product research and development efforts, including seeking
               collaborative partnerships, and in light of the limited
               restrictions on the type of employment prohibited herein compared
               to the types of employment for which you are qualified to earn
               your livelihood.

     Your acknowledgements and agreements set forth in this Section 8 supersede
any acknowledgements and agreements related to the same subject matter contained
in any other
<PAGE>
Mr. Peter L. Lanciano
November 24, 2004
Page -6-


agreement that you have previously entered into with the Company, and this
Section 8 will survive the termination of the Service Term or of this Agreement
for any reason or for no reason.

     9. MATERIAL BREACH. Notwithstanding any other provision of this Agreement
to the contrary, if the Board determines in its sole discretion that you (a) are
not, or have not been, performing (or are not, or have not been, generally
available to perform) the Services in good faith, or (b) have otherwise
materially breached the terms of this Agreement, then, in addition to any other
legal or equitable remedy that may be available to the Company, (x) if such
determination is made during the Service Term, the Company may terminate the
Service Term at any time thereafter, and all Separation Pay and Benefits
hereunder will immediately cease, and (y) regardless of whether such
determination is made during or after the Service Term, you will immediately
refund to the Company all Separation Pay and Benefits already paid to you, and
you will immediately forfeit any additional vesting of your stock options (or
stock received upon exercise of the additionally vested portion thereof)
following the Separation Date, without, in all cases, any consideration paid to
you (other than the Company's repayment to you of the exercise price of any
shares purchased by you upon exercise of the additionally vested portion of your
options).

     10. RELEASE OF CLAIMS. You hereby agree and acknowledge that by signing
this Agreement and accepting the Separation Pay and Benefits and for other good
and valuable consideration, you are waiving your right to assert any and all
forms of legal Claims (as defined below) against the Company(2/) of any kind
whatsoever, whether known or unknown, arising from the beginning of time through
the date you execute this Agreement (the "Execution Date"). Except as set forth
below, your waiver and release herein is intended to bar any form of legal
claim, charge, complaint or any other form of action (jointly referred to as
"Claims") against the Company seeking any form of relief, including, without
limitation, equitable relief (whether declaratory, injunctive or otherwise), the
recovery of any damages, or any other form of monetary recovery whatsoever
(including, without limitation, back pay, compensatory damages, emotional
distress damages, punitive damages, attorneys fees and any other costs) against
the Company, for any alleged action, inaction or circumstance existing or
arising through the Execution Date.

     Without limiting the foregoing general waiver and release, you specifically
waive and release the Company from any Claim arising from or related to your
relationship with the Company or the termination thereof, including, without
limitation:

          (i)  Claims under any state or federal discrimination, fair employment
               practices or other employment-related statute, regulation or
               executive order (as they may have been amended through the
               Execution Date) prohibiting discrimination or harassment based
               upon any protected status, including, without limitation, race,
               national origin, age, gender, marital status, disability, veteran
               status or sexual orientation. Without limitation, specifically
               included in this paragraph are any

----------
(2/) For purposes of this Section, the "Company" includes Altus Pharmaceuticals
     Inc. and any of its divisions, affiliates (which means all persons and
     entities directly or indirectly controlling, controlled by or under common
     control with the Company), subsidiaries and all other related entities, and
     its and their directors, officers, employees, shareholders,
     representatives, and their respective assigns.
<PAGE>
Mr. Peter L. Lanciano
November 24, 2004
Page -7-


               Claims arising under the federal Age Discrimination in Employment
               Act, the Older Workers Benefit Protection Act, the Civil Rights
               Acts of 1866 and 1871, Title VII of the Civil Rights Act of 1964,
               the Civil Rights Act of 1991, the Equal Pay Act, the Americans
               With Disabilities Act, and any similar Massachusetts or other
               federal, state or local statute.

          (ii) Claims under any other federal, state or local employment-related
               statute, regulation or executive order (as they may have been
               amended through the Execution Date) relating to wages, hours or
               any other terms and conditions of employment. Without limitation,
               specifically included in this paragraph are any Claims arising
               under the Fair Labor Standards Act, the Family and Medical Leave
               Act of 1993, the National Labor Relations Act, the Employee
               Retirement Income Security Act of 1974, the Consolidated Omnibus
               Budget Reconciliation Act of 1985 ("COBRA"), and any similar
               Massachusetts or other federal, state or local statute.

          (iii) Claims under any federal, state or local common law theory
               including, without limitation, wrongful discharge, breach of
               express or implied contract, promissory estoppel, unjust
               enrichment, breach of a covenant of good faith and fair dealing,
               violation of public policy, defamation, interference with
               contractual relations, intentional or negligent infliction of
               emotional distress, invasion of privacy, misrepresentation,
               deceit, fraud or negligence.

          (iv) Claims under any federal, state or local securities law,
               including, without limitation, the Securities Act of 1933, as
               amended, the Securities Exchange Act of 1934, as amended, and any
               Massachusetts, Delaware or other federal, state or local
               securities statutes and regulations.

          (v)  Any other Claim arising under federal, state or local law.

     You acknowledge and agree that, but for providing this waiver and release,
you would not be receiving the economic benefits being provided to you under the
terms of this Agreement. Notwithstanding the foregoing, this Section 10 does not
release the Company from any obligation expressly set forth in this Agreement.

     You explicitly acknowledge that because you are over forty (40) years of
age, you have specific rights under the Age Discrimination in Employment Act
("ADEA") and the Older Workers Benefit Protection Act ("OWBPA"), which prohibit
discrimination on the basis of age, and that the releases set forth in this
Section 10 are intended to waive any right that you may have to file a claim
against the Company alleging discrimination on the basis of age.

     It is the Company's desire and intention to make certain that you fully
understand the provisions and effects of this Agreement. To that end, you have
been encouraged and given the opportunity to consult with legal counsel for the
purpose of reviewing the terms of this Agreement. Also, consistent with the
provisions of the OWBPA and ADEA, the Company is providing you with twenty-one
(21) days in which to consider and accept the terms of this
<PAGE>
Mr. Peter L. Lanciano
November 24, 2004
Page -8-


Agreement by signing below and returning it to Jonathan L. Kravetz, Esq., c/o
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., One Financial Center,
Boston, MA 02111, or such other address as the Company may designate by written
notice to you. In addition, you may rescind your acceptance of this Agreement
if, within seven (7) days after you sign and return this Agreement, you deliver
by hand or by facsimile a notice of rescission to Jonathan L. Kravetz, Esq. at
the above-referenced address, or, if by facsimile, to (617) 542-2241.

     Also, consistent with the provisions of the ADEA and other federal
discrimination laws, nothing in this release shall be deemed to prohibit you
from challenging the validity of this release under the federal age or other
discrimination laws (the "Federal Discrimination Laws") or from filing a charge
or complaint of age or other employment related discrimination with the Equal
Employment Opportunity Commission ("EEOC"), or from participating in any
investigation or proceeding conducted by the EEOC. Further, nothing in this
release or Agreement shall be deemed to limit the Company's right to seek
immediate dismissal of such charge or complaint on the basis that your signing
of this Agreement constitutes a full release of any individual rights under the
Federal Discrimination Laws, or to seek restitution to the extent permitted by
law of the economic benefits provided to you under this Agreement in the event
that you successfully challenge the validity of this release and prevail in any
claim under the Federal Discrimination Laws.

     11. SUPPLEMENTAL RELEASE OF CLAIMS. In consideration of the promises,
conditions and representations set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which you hereby acknowledge, at
the end of the Service Term, you agree to execute an additional release in which
you waive your right to assert any and all forms of legal Claims against the
Company (as specifically defined in Section 10 above) of any kind whatsoever,
whether known or unknown, arising from the Execution Date through the date on
which the Service Term terminates. You acknowledge and agree that such release
shall be substantially similar in form and substance to Section 10 of this
Agreement.

     12. ATTORNEY FEES. The Company will reimburse you up to a maximum of $2,500
for review of this Agreement (and any drafts hereof) by your legal counsel,
payable upon presentation of an applicable invoice for services rendered.

     13. NO CONFLICT. By signing this Agreement, you represent that you have no
agreement with or other legal obligation to any prior employer or any other
person or entity that restricts your ability to enter into this Agreement, or to
perform the Services hereunder.

     14. ASSIGNMENT. The Company may assign its rights and obligations under
this Agreement at its sole discretion. As this Agreement is personal to you, you
may not assign your rights and obligations under this Agreement. This Agreement
shall be binding on you and the Company, and shall inure to the benefit of any
successors and/or permitted assigns of you and the Company.

     15. HEADINGS. The headings in this Agreement are for convenience only, and
you and the Company agree that they shall not be construed or interpreted to
modify or affect the construction or interpretation of any provision of this
Agreement.
<PAGE>
Mr. Peter L. Lanciano
November 24, 2004
Page -9-


     16. INJUNCTIVE RELIEF. You acknowledge and agree that a breach or
threatened breach by you of any terms of this Agreement, including, but not
limited to, your covenants and/or obligations under Sections 7 and 8 above,
would pose the risk of irreparable harm to the Company, and that in the event of
a breach or threatened breach of any of such terms, in addition to such other
remedies that the Company may have at law, without posting any bond or security,
the Company shall be entitled to seek and obtain equitable relief in the form of
specific performance, or temporary, preliminary or permanent injunctive relief,
or any other equitable remedy which then may be available, and that the seeking
of such injunction or order shall not affect the Company's right to seek and
obtain damages or other equitable relief on account of any such actual or
threatened breach.

     17. ENTIRE AGREEMENT/MODIFICATION/WAIVER/CHOICE OF LAW/ENFORCEABILITY. You
acknowledge and agree that this Agreement supersedes the terms and provisions of
the term sheet, dated and delivered to you on October 28, 2004 (the "Term
Sheet"), and any and all prior or contemporaneous oral or written agreements,
representations, covenants or understandings between you and the Company with
respect to the subject matter of the Term Sheet. All other agreements to which
you are a party shall continue in full force and effect, except to the extent
otherwise provided herein. No variations or modifications hereof shall be deemed
valid unless reduced to writing and signed by the parties hereto. The failure of
either party to this Agreement to seek enforcement of any provision of this
Agreement in any instance or for any period of time will not be construed as a
waiver of such provision or of such party's right to seek enforcement of such
provision in the future. This Agreement shall be deemed to have been made in
Massachusetts, shall take effect as an instrument under seal within
Massachusetts, and shall be governed by and construed in accordance with the
laws of Massachusetts, without giving effect to conflict of law principles. You
agree that any action, demand, claim or counterclaim relating to the terms and
provisions of this Agreement, or to its breach, will be commenced in
Massachusetts in a court of competent jurisdiction, and you further acknowledge
that venue for such actions will lie exclusively in Massachusetts and that
material witnesses and documents would be located in Massachusetts. Both parties
hereby waive and renounce in advance any right to a trial by jury in connection
with such legal action. The provisions of this Agreement are severable, and if
for any reason any part hereof shall be found to be unenforceable, the remaining
provisions shall be enforced in full.

     18. MUTUAL NON-DISPARAGEMENT.

          (i)  You agree that you will not make any statements that are
               professionally or personally disparaging about, or adverse to,
               the interests of the Company (including, but not limited to, its
               current or former officers, directors, employees, shareholders,
               consultants, collaborative partners, vendors, representatives and
               agents) including, but not limited to, any statements that
               disparage any person, product, service, finances, financial
               condition, capability or any other aspect of the business of the
               Company or such other person or entity, and that you will not
               engage in any conduct which could reasonably be
<PAGE>
Mr. Peter L. Lanciano
November 24, 2004
Page -10-


               expected to harm professionally or personally the reputation of
               the Company (including, but not limited to, its current or former
               officers, directors, employees, shareholders, consultants,
               collaborative partners, vendors, representatives and agents); and

          (ii) The Company agrees that neither it or any officer or director
               will make any statements that are professionally or personally
               disparaging about, or adverse to, your interests including, but
               not limited to, any statements that disparage you, your
               capabilities or any other aspect of your performance for the
               Company, and that neither the Company nor its officers or
               directors will engage in any conduct which could reasonably be
               expected to harm your personal or professional reputation. You
               may refer any reference requests to either the Chairman of the
               Board or any member of the Compensation Committee, who shall
               respond to any such inquiry in a manner consistent with the
               requirements of this subsection (ii).

          (iii) Nothing in this Section 18 shall prevent the parties from (A)
               complying with compulsory legal process or otherwise making
               disclosures in connection with litigation or administrative
               proceedings, (B) making such disclosures as are necessary to
               obtain legal advice, (C) making disclosures as are required by
               federal, state or local regulatory authorities, and (D) making
               disclosures which by law are required or cannot be prohibited.

     By executing this Agreement, you are acknowledging that you have been
afforded sufficient time to understand the terms and effects of this Agreement,
that your agreements and obligations hereunder are made voluntarily, knowingly
and without duress, and that neither the Company nor its agents or
representatives have made any representations inconsistent with the provisions
of this Agreement.

     If the foregoing correctly sets forth our understanding, please sign and
date the enclosed copy of this Agreement in the spaces provided below, and
return the executed copy to Jonathan L. Kravetz, Esq. at the above-referenced
address.

                                        Sincerely,

                                        ALTUS PHARMACEUTICALS INC.


                                        By: /s/ Jonathan Root
                                            ------------------------------------
                                        Name: Jonathan Root
                                        Title: Chairman of the Compensation
                                               Committee

Confirmed, Acknowledged and Agreed:

/s/ Peter L. Lanciano
-------------------------------------
Peter L. Lanciano

<PAGE>
Mr. Peter L. Lanciano
November 24, 2004
Page -11-


Dated:
       ---------------
<PAGE>


                                November 22, 2005

Mr. Peter L. Lanciano
66 White Wood Road
Milford, MA 01757

Dear Peter:

      The purpose of this letter agreement (this "Agreement") is to amend that
certain letter agreement between you and Altus Pharmaceuticals Inc. (the
"Company"), dated November 24, 2004 (the "Separation Agreement"), in order to
extend the deadline for exercising your stock options. Capitalized terms used
but not defined herein shall have the meanings ascribed to them in the
Separation Agreement.

      In consideration of your continued service to the Company as a member of
the Board of Directors, and the promises, conditions and representations set
forth herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by you and the Company, you and the
Company hereby agree as follows:

      1. AMENDMENT. The text of Section 5(iii) of the Separation Agreement shall
be deleted in its entirety and replaced with the following:

      "Your stock options will continue to vest during the Service Term but
shall cease vesting on October 31, 2005. Your stock options may be exercised on
or before the earliest of (i) three months after the date that you cease to be a
director of the Company, or (ii) December 31, 2006, but may not be exercised
thereafter. In such event, your stock options shall be exercisable only to the
extent that each such option has become exercisable as of October 31, 2005 and
is in effect at the date of such cessation of service as a director."

      2. BOARD OF DIRECTORS. You agree that, effective as of October 31, 2005,
you have resigned as Vice Chairman of the Board of Directors but not as a member
of the Board of Directors.

      3. NO GUARANTEE OF TAX TREATMENT/WITHHOLDING OBLIGATIONS. You agree and
acknowledge that the Company makes no representations or warranties regarding
the tax treatment or tax consequences of this Agreement or any terms of your
stock options, or benefits or payments to which you may be entitled in
connection with the exercise of your stock options, including, without
limitation, by operation of Section 409A of the Internal Revenue Code of 1986,
as amended, or any successor statute, regulation and guidance thereto. You will
hold the Company and its officers, directors, employees, agents and advisors
harmless from any liability resulting from any tax consequences you may incur in
connection with your stock options. You hereby agree and acknowledge that upon
exercise of any of your stock options, you will be required to reimburse the
Company, on demand, for all amounts the Company deems necessary to satisfy the
Company's federal, state and local withholding obligations to the extent of your
taxable compensation attributable to any such exercise.

<PAGE>
Mr. Peter L. Lanciano
November 22, 2005
Page 2

      4. GOVERNING LAW. This Agreement shall be deemed to have been made in
Massachusetts, shall take effect as an instrument under seal within
Massachusetts, and shall be governed by and construed in accordance with the
laws of Massachusetts, without giving effect to conflict of law principles.

      5. EFFECT ON ORIGINAL AGREEMENT. Except as specifically provided in this
Agreement, no other amendments, revisions or changes are made to the Separation
Agreement. All other terms and provisions of the Separation Agreement shall
remain in full force and effect.

      6. CONFORMING REFERENCES. Upon the effectiveness of this Agreement, each
reference in the Separation Agreement to "this Agreement," "hereunder,"
"herein," or other words of like import, shall mean and be a reference to the
Separation Agreement as amended hereby.

      7. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

      By executing this Agreement, you are acknowledging that you have been
afforded sufficient time to understand, and seek advice from your personal
counsel, on the terms and effects of this Agreement, and that your agreements
hereunder are made voluntarily, knowingly and without duress, and that neither
the Company nor its agents or representatives have made any representations
inconsistent with the provisions of this Agreement.

                                        Sincerely,

                                        ALTUS PHARMACEUTICALS INC.



                                        By: /s/ Jonathan Root
                                            ------------------------------------
                                        Name:  Jonathan Root
                                        Title: Chairman, Compensation Committee

CONFIRMED, ACKNOWLEDGED AND AGREED:

/s/ Peter L. Lanciano
-------------------------------
Peter L. Lanciano

Dated: November 22, 2005
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