Document:

SCREENING AND EVALUATION AGREEMENT BETWEEN THE REGISTRANT AND PFIZER INC

 Exhibit 10.31 
  
 Execution Form 031005 
  
 SCREENING AND EVALUATION AGREEMENT 
  
 BETWEEN 
  
 PFIZER INC. 
  
 AND 
  
 COLEY PHARMACEUTICAL GROUP, INC. 
  
  

 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant
to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act. 

 SCREENING AND EVALUATION AGREEMENT 
  
 THIS SCREENING AND EVALUATION AGREEMENT (this “Agreement”) is made as of March 16th, 2005, by and between
COLEY PHARMACEUTICAL GROUP, INC., a Delaware corporation having a place of business at Wellesley Gateway, 93 Worcester Street, Suite 101, Wellesley, Massachusetts 02481 and its Affiliates (“Coley”) and PFIZER INC, a Delaware
corporation having a place of business at 235 East 42nd Street, New York, New York 10017 and its Affiliates
(“Pfizer”), (each individually a “Party” and collectively the “Parties”). 
  
 WHEREAS, Coley is the owner or licensee of certain rights, title, and interests in, and know-how related to technologies involving Immunomodulatory
Oligodeoxynucleotides useful for modulation of an immune response and the treatment and prevention of cancer; and 
  
 WHEREAS, Pfizer is the owner of certain rights, title, and interests in, and know-how related to the treatment and prevention of cancer; and 

 
 WHEREAS, Coley and Pfizer, having entered into the License Agreement for
the development and commercialization by Pfizer of certain Compounds and Research Compounds (as defined in the License Agreement) in the Field (as defined in the License Agreement), desire to enter into this Agreement for the design and screening of
certain Research Compounds by Coley pursuant to the Program. 
  
 NOW, THEREFORE, in consideration of the covenants and obligations expressed herein and intending to be legally bound, and otherwise bound by proper and reasonable conduct, the Parties agree as follows: 
  
 1.    DEFINITIONS. 
  
 1.1 “Affiliate” shall mean, with respect to any Party to
this Agreement, any entity directly or indirectly Controlled by, Controlling, or under common Control with, that Party but only for so long as such Control shall continue. “Control” (including, with correlative meanings, “Controlled
by,” “Controlling” and “under common Control with”) of an entity means possession, direct or indirect, of (a) the power to direct or cause direction of the management and policies of such entity (whether through ownership of
securities or partnership or other ownership interests, by contract or otherwise) or (b) at least 50% of the voting securities (whether directly or pursuant to any option, warrant or other similar arrangement) or other comparable equity interests of
such entity. 
  
 1.2 “[************************************************************************************************** ***********************************************************************************************************
*********************************************************************************************************** **********************************]. 
  

 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant
to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act. 

 1.3 “[********************************************************************************************************** *********************************************************************************************************************
***************************************************************************************************************** *****************************************************************************************************
***************************************************************************************]. 
  
 1.4 “Coley Screening Invention” shall mean (a) any Technology conceived or reduced to practice in the course of the Program solely by Coley and (b) any Technology relating to any ODN (other than a
specific Research Compound) and/or associated in vitro assays where such Technology is (i) conceived or reduced to practice in the course of the Program and during the Program Term (1) solely by Pfizer; or (2) jointly by Coley and Pfizer or (ii)
derived directly by Pfizer during the Program Term from the data provided to Pfizer pursuant to Section 2 hereof. As used herein, “Coley” shall include any third party acting on behalf of Coley, and “Pfizer” shall include any
third party acting on behalf of Pfizer. 
  
 1.5
“Confidential Information” shall mean any technical information furnished by one Party (the “Disclosing Party”) to the other Party (the “Receiving Party”) in connection with this Agreement. Such
Confidential Information may include, without limitation, the identity, nucleotide sequence, or structure of an Immunomodulatory Oligodeoxynucleotide, the applicability or use of any Immunomodulatory Oligodeoxynucleotide for a particular oncology
indication, information relating to the mechanism of immune stimulation for a particular Immunomodulatory Oligodeoxynucleotide, information about the composition of, or modifications to the nucleotides or backbone, as well as any product
specifications, trade secrets, know-how, inventions, intellectual property, technical data or specifications, discovery methods, screening assays or other testing methods, research and development activities and data and information developed in the
course of activities pursuant to this Agreement, Screening Committee reports, and the Plan. In the case of information supplied in writing, the Disclosing Party will mark it “Confidential”. In the case of information first supplied orally,
the Disclosing Party will outline it in a written summary declaring it to be confidential and delivering such summary to the Receiving Party within 30 days of the original disclosure. “Confidential Information” shall not include any
information that (a) is already known to the Receiving Party when furnished by the Disclosing Party, (b) enters the public domain without fault of the Receiving Party or (c) is received by the Receiving Party from a third party not under an
obligation of confidentiality to the Disclosing Party. 
  
 1.6
“Effective Date” shall have the meaning set forth in the License Agreement. 
  
 1.7 “Final Selection ODNs” shall have the meaning set forth in Section 2.2 (c). 
  
 1.8 “Immunomodulatory Oligodeoxynucleotide” or “ODN” shall mean a molecule [*********************************
********************************************************************************************************** ********************************************************************************************* 

  

 2 
  
 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 406 of the Securities Act. 

 
*******************************************************************************]. 
  
 1.9 “License Agreement” shall mean the License Agreement between the Parties dated March 16, 2005.

  
 1.10 “Option Term” shall have the meaning set
forth in Section 2.2(d). 
  
 1.11 “Patent Rights”
shall mean all United States and foreign patents and patent applications, including any substitute, divisional, continuation and continuation in-part applications, and the patents issuing therefrom, and further including patents issuing from reissue
or re-examination proceedings claiming any invention employed or made in the course of performing the Program. 
  
 1.12 “Program ODNs” shall have the meaning set forth in Section 2.2(a). 
  
 1.13 “Program Term” shall mean the period beginning on the Effective Date and ending on the first to occur
of (a) the [*****] anniversary of the Effective Date or (b) the date on which [***************************************************** *****************************************]. 
  
 1.14 “Research Compound” shall mean any of up to [*******] Immunomodulatory Oligodeoxynucleotides designed
and screened by Coley specifically for Pfizer in the course of the Program and delivered to, and selected by, Pfizer pursuant to Section 2.2(d) hereof. “Research Compound” shall also have the meaning set forth in Section 1.63 of the
License Agreement. 
  
 1.15 “Research Compound Patent
Rights” shall mean any Patent Rights insofar as they contain (a) composition of matter claims limited to the specific sequence of a Research Compound or (b) claims limited to the use of the foregoing composition of matter claims within the
Field. 
  
 1.16 “Rejected Program ODN”
shall have the meaning set forth in Section 2.2(f). 
  
 1.17
“Plan” shall mean the written plan describing and governing the performance of work to be conducted under this Agreement for the design, screening and evaluation of Immunomodulatory Oligodeoxynucleotides from which Pfizer may select
Research Compounds. The initial Plan is attached as Exhibit A. The Plan may be amended from time to time as provided in Section 2.1(c) and any such amendments shall be attached hereto as successively numbered supplements to Exhibit A.

  
 1.18 “Program” shall mean the program of
designing, screening and evaluating Immunomodulatory Oligodeoxynucleotides pursuant to the Plan and this Agreement, from which Pfizer may select Research Compounds for use by Pfizer under the License Agreement. 
  
 1.19 “Screening Committee” shall mean the committee which
oversees and facilitates the obligations of the Parties hereunder, as established in Section 5.1 of this Agreement. 
  

 3 
  
 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 406 of the Securities Act. 

 1.20 “Step 1” shall have the meaning set forth in the Plan, attached as Exhibit A.

  
 1.21 “Step 2” shall have the meaning set
forth in the Plan, attached as Exhibit A. 
  
 1.22 “Step
3” shall have the meaning set forth in the Plan, attached as Exhibit A. 
  
 1.23 “Technology” shall mean all data, technology, know-how, discoveries, inventions whether or not patented or patentable, methods, procedures, technical information and trade secrets relating to the
Program ODNs, used or developed during the Term. 
  
 1.24
“Term” shall mean the period beginning on the Effective Date and ending at the expiration of the Option Term. 
  
 1.25 “Withholding Taxes” shall have the meaning set forth in Section 6.2. 
  
 2.    PERFORMANCE OF THE PROGRAM. 
  
 2.1 Plan. 
  
 (a) General. Subject to the terms and conditions of this Agreement, during the Program, Coley shall design [************************] ODNs
specifically for Pfizer as sponsored research, shall screen such ODNs using the screening cascade set forth in the Plan, shall provide Pfizer with information on such ODNs, shall permit Pfizer to select [*******] ODNs as Research Compounds and shall
grant to Pfizer an exclusive worldwide license in the Field in the ODNs except for those which become Rejected Program ODNs as provided in Section 2.2 below, which license is governed by the License Agreement. For the avoidance of doubt, the parties
agree that the Program constitutes sponsored research and as such, during the Program Term and Option Term, Coley shall not provide to any third party or convey to any third party any right, title or interest in any Program ODN or any data relating
to any Program ODN. 
  
 (b) Efforts. Pfizer and Coley each
shall use reasonably diligent efforts to achieve the objectives of the Plan. 
  
 (c) Amendment of Program. During the course of the Program, the Screening Committee may reevaluate the Plan and propose to the Parties that they amend the Plan. The Parties may amend the Plan by written
agreement setting forth the specific changes. If any such change will result in a material increase or decrease to work to be done by Coley under the Plan theretofore in effect, the amendment shall increase or decrease the cost-based compensation
payable by Pfizer to Coley. 
  
 2.2 Delivery and Selection of
Research Compounds. 
  
 (a) General. At the initial
meeting of the Screening Committee (described in Section 5.1), the Parties will agree upon the assays to be conducted in the Step 1 screens and the desired characteristics of the ODNs. Any ODN designed and synthesized by Coley pursuant to the
Program shall be a “Program ODN.” Coley cannot guarantee that the actual profile and characteristics of any ODN screened and synthesized in the Program shall meet the desired 

  

 4 
  
 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 406 of the Securities Act. 

 
characteristics set forth in the Plan. The testing periods for each Step of the screening cascades in the Plan are Coley’s good faith estimates and the
actual time required for such work may be shorter or longer than such estimates. 
  
 (b) Sequence Information. No later than the completion of Step 1 for each Program ODN, Coley will provide Pfizer with the sequence information for such Program ODN. At no time during or after the Term shall
Pfizer disclose such sequence information on any Program ODN, nor shall Pfizer use such sequence information on any Program ODN except pursuant to this Agreement, unless and until it selects the Program ODN as a Research Compound provided in Section
2.2(d). All such sequence information shall be Pfizer Confidential Information (as defined in the License Agreement) and shall be governed by Section 9 of the License Agreement unless and until the Program ODN to which such sequence information
relates, becomes a Rejected Program ODN pursuant to Section 2.2(f), whereupon it shall become Coley Confidential Information (as defined in the License Agreement). After the Option Term expires Pfizer shall neither make any Rejected Program ODN nor
conduct any research thereon (other than that described in the Plan). 
  
 (c) Use of Program ODNs During Program Term. During the Program Term Pfizer may select [**********************************] Program ODNs as candidates for further selection as Research Compounds. Each of such Program ODNs selected by
Pfizer shall be a “Final Selection ODN.” During the Term, Coley (i) may use any Program ODN for its own research purposes outside the Program at its own expense and shall promptly provide Pfizer with the results of any such research
but (ii) shall not provide to any third party, or convey to any third party any right, title or interest in, any Program ODN or any data relating to any Program ODN. 
  
 (d) Option Term. The “Option Term” shall be a period commencing at the end of the Program Term and
continuing until the [*****] to occur of (i) the [*****************] of the end of the Program Term or (ii) [********************************************************************************************************* *****]. During the Option Term,
Coley shall not provide to any third party, or convey to any third party any right, title or interest in or to, any Final Selection ODNs or any data relating to any Final Selection ODNs and Pfizer shall have the exclusive right (even as to Coley) to
conduct research on and with the Final Selection ODNs as may be reasonably necessary or appropriate to enable Pfizer to select the Research Compounds. During the Option Term, Pfizer may select [***] of such Final Selection ODNs as Research
Compounds, by giving Coley written notice, and any Research Compound shall thereupon be governed by the License Agreement. 
  
 (e) Upon selection of the Research Compounds, Coley shall grant to Pfizer an exclusive worldwide license to the Research Compounds in the Field, which
license is governed by the License Agreement. For the avoidance of doubt, Coley shall not have any right to make, use, or sell the Research Compounds inside or outside the Field. 
  
 (f) Any Program ODN not selected by Pfizer as a Final Selection ODN before the end of the Program Term and any Final
Selection ODN not selected by Pfizer as a Research Compound before the end of the Option Term shall be deemed irrevocably rejected by Pfizer under this Agreement and shall be a “Rejected Program ODN.” As of the date on which any

  

 5 
  
 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 406 of the Securities Act. 

 
Program ODN becomes a Rejected Program ODN, all Confidential Information respecting such Rejected Program ODN shall become Coley Confidential Information (as
defined in the License Agreement). 
  
 (g) Coley and Pfizer shall,
during the Term, as a matter of course as described in the Plan, or upon each other’s written or oral request, furnish to each other reasonable amounts of samples of biochemical, biological or synthetic chemical materials which are necessary
for each Party to carry out its responsibilities under the Plan. In addition, at Pfizer’s request and at no additional charge, Coley shall deliver to Pfizer up to [*************] of each Final Selection ODN to allow Pfizer to conduct additional
studies. If at Pfizer’s request Coley supplies Pfizer with materials in amounts greater than those set out in the Plan, Pfizer will reimburse Coley for the reasonable cost of such materials beyond the amount set out in the Plan. 
  
 2.3 Compliance with Law. Each Party agrees to comply with all laws and
regulations applicable to the use, storage, disposal, and transfer of the Program ODNs, including, without limitation, the Research Compounds. Each Party assumes sole responsibility for any violation of such laws or regulations by such Party or any
of its Affiliates; provided, however, each Party shall be responsible for and indemnify the other Party or any of its Affiliates, in accordance with Section 13 of the License Agreement, to the extent any violation occurs as a result of the other
Party following such Party’s instructions relating to the use, storage, disposal or transfer of such ODNs. 
  
 2.4 Technology Transfer. Coley will provide Pfizer, at Coley’s expense, with all information and materials reasonably useful for Pfizer to
continue development of each Research Compound after the Term. Coley’s obligations in this regard will be defined by a protocol developed by the Screening Committee regarding the deliverables and the procedure for their delivery to Pfizer.

  
 3.    GRANT OF RIGHTS. 
  
 3.1 Research License. Coley and Pfizer each grants to the other a
nonexclusive, irrevocable, world-wide, royalty-free, perpetual license, including the right to grant sublicenses to Affiliates, to make and use for all research purposes the other Party’s Confidential Information and Technology; provided,
however, that this license does not include and Pfizer shall not acquire, by virtue of this Section 3.1, any rights to make or use any Rejected Program ODNs. For clarity, neither Party shall have any right to make and use the other’s
Confidential Information and Technology for the sale or manufacture for sale of products or processes. 
  
 3.2 Treatment of Program ODNs by Coley. Subject to the terms and conditions of this Agreement and the License Agreement, and subject to any
contractual obligations of Coley as of the Effective Date under any of the agreements listed in Schedule 10.1(g)(ii) of the License Agreement and in consideration of the payment of the fees pursuant to Section 6.1 hereof, Coley hereby agrees that
(a) Coley shall not use the Program ODNs for any purpose except as expressly set forth in this Agreement, the License Agreement and any other agreement between Coley and Pfizer and (b) Coley shall not provide to any third party, or convey to any
third party any right, title or interest in, any Research Compound. Nothing herein shall be construed as limiting Coley’s right to file and prosecute any other Patent Rights relating to the Program ODNs 

  

 6 
  
 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 406 of the Securities Act. 

 
including, without limitation, Patent Rights that claim [***************] (including [*******] in which a Program ODN is a member), a formulation, or any use
of ODNs. 
  
 3.3 Ownership of Rejected Program ODNs by
Coley. Pfizer hereby agrees that when any Program ODN becomes a Rejected Program ODN pursuant to Section 2.2(f) then (a) Pfizer shall not thereafter use the Rejected Program ODNs for any purpose, (b) Pfizer shall not transfer the Rejected
Program ODNs to any third parties, and (c) Pfizer shall not thereafter file or prosecute any Patent Rights with respect to the Rejected Program ODNs, including, without limitation, Patent Rights that claim the specific composition of matter of any
Rejected Program ODN. Coley shall be free to develop and/or commercialize any Rejected Program ODN, itself or with any third party subject to the limitations set forth in this Agreement and in the License Agreement. Furthermore, upon expiration of
the Option Term, Pfizer shall either return or destroy any material containing the Rejected Program ODNs. 
  
 3.4 Limitation on Use and Transfer. Nothing in this Agreement shall be construed as in any way altering the rights and obligations of and
restrictions on Pfizer under the License Agreement. 
  
 3.5
Confidentiality. Until the [*****] anniversary of the end of the Term, neither Party, in its capacity as a Receiving Party, shall (a) disclose any Confidential Information of a Disclosing Party or (b) use any Confidential Information of a
Disclosing Party except as provided hereunder. 
  
 3.6 No Other
Technology Rights. Except as otherwise expressly provided in this Agreement or the License Agreement, under no circumstances shall a Party hereto, as a result of this Agreement, obtain any ownership interest in, or other right to, any
technology, know-how, patents, pending patent applications, products, or chemical or biological materials of the other Party, including items owned, controlled or developed by the other Party, or transferred by the other Party to said Party at any
time during the Term. 
  
 4.    OWNERSHIP AND PROSECUTION
OF PATENT RIGHTS. 
  
 4.1 Program ODN Patent Rights

  
 (a) During the Program Term and/or Option Term, Coley may file
at Pfizer’s expense one or more patent applications encompassing Program ODNs (“Program ODN Patent Rights”) and may at Pfizer’s expense prepare, file and prosecute the Program ODN Patent Rights. Coley will own all right,
title and interest in and to such Program ODN Patent Rights. 
  
 (b) As and when Pfizer rejects any Program ODN pursuant to Section 2.2(f) above, Pfizer shall retain an interest in the Rejected Program ODN Patent Rights only to the extent that there remains within the Rejected Program ODN Patent Rights a
claim, pending or issued, that relates to the Program ODNs not rejected by Pfizer (including without limitation any Research Compounds), and such claim(s) shall be included in the Coley Patent Rights (as defined in the License Agreement).

  
 (c) Coley will communicate fully with Pfizer and allow Pfizer
to comment on the preparation, filing and prosecution of any Program ODN Patent Rights. Such communication 

  

 7 
  
 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 406 of the Securities Act. 

 
shall include without limitation (i) providing Pfizer at its request with all necessary files, papers and documents relating to such Program ODN Patent
Rights; (ii) providing Pfizer with all application drafts and allowing Pfizer to provide meaningful comment on such drafts sufficiently in advance of filing; and (iii) promptly informing Pfizer of any matters that come to Coley’s attention that
may affect the prosecution of any such application, and allowing Pfizer to provide meaningful comment on all prosecution matters. 
  
 (d) Coley will provide Pfizer with a copy of any patent application included in the Program ODN Patent Rights or any paper or instrument to be filed in
connection therewith that could affect prosecution, sufficiently in advance of filing in order for Pfizer to verify Coley’s compliance with this Agreement. Notwithstanding the foregoing, if and when Coley grants to Pfizer a license to the
Research Compounds, then the parties’ rights and obligations with respect to Research Program Patent Rights shall be governed solely by the License Agreement. 
  
 4.2 Coley Screening Inventions. 
  
 (a) Subject to the research license under Section 3.1 hereof, Coley shall own as against Pfizer all right, title and
interest in and to any Coley Screening Invention and Patent Rights therein and Pfizer shall take such actions, including executing documents of assignment, as may be reasonably necessary to vest title to all Coley Screening Inventions with Coley.

  
 (b) Coley shall be responsible, at its sole expense, for the
preparation, filing, and prosecution of any Patent Right claiming any Coley Screening Invention. Pfizer agrees to cooperate fully with Coley in the preparation, filing, and prosecution of any Patent Rights claiming any Coley Screening Inventions.
Such cooperation shall include, but is not limited to: (i) providing Coley with all necessary files, papers and documents relating to such Coley Screening Inventions at the request of Coley; (ii) executing all papers and instruments, or requiring
its employees or agents to execute such papers and instruments, so as to effectuate the ownership of the Patent Rights claiming Coley Screening Inventions with Coley at the request of Coley, and to enable Coley to apply for and to prosecute
applications in any country; and (iii) promptly informing Coley of any matters coming to Pfizer’ attention that may affect the prosecution of any such application. 
  
 4.3 Employee Obligations. Each Party shall ensure that its employees, consultants, agents, and representatives are
contractually required to assign to such Party all right, title, and interest to any inventions conceived or reduced to practice in the course of activities pursuant to this Agreement, and to promptly disclose to such Party all such inventions,
whether patentable or otherwise. 
  
 4.4 Enforcement of Patent
Rights. Coley shall immediately notify Pfizer in writing if it becomes aware of activities by a third party that may constitute infringement of the Research Compound Patent Rights and Pfizer’s rights to enforce the Patent Rights shall be in
accordance with Section 7 of the License Agreement. 
  
 4.5
Infringement Claims. If the use of an ODN designed and screened by Coley specifically for Pfizer pursuant to this Agreement, including, without limitation, a Research 

  

 8 
  
 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 406 of the Securities Act. 

 
Compound, results in any claim, suit or proceeding filed by a third party alleging any infringement by Coley or Pfizer (or their respective Affiliates) of
any third party patent, such Party shall promptly notify the other Party hereto in writing. The Parties’ rights to defend any such claim, suit or proceeding shall be in accordance with Section 13 of the License Agreement. 
  
 5.    MANAGEMENT OF SCREENING AND EVALUATION PROGRAM. 

 
 5.1 Screening Committee Formation and Composition. The Parties
shall form a committee (the “Screening Committee”) comprised of four (4) named representatives of Coley and four (4) named representatives of Pfizer, each of whom shall be knowledgeable and experienced with respect to the issues to
be discussed by the Screening Committee from time to time. Within 30 days after the Effective Date, each Party will name its representatives for the Screening Committee (designating one as its co-chair) and the Screening Committee shall hold its
first meeting. Each Party shall be permitted to substitute and/or replace its named representatives from time to time, as it deems appropriate, by providing the other Party with notice thereof. In addition, each Party shall be permitted to invite
additional participants to meetings of the Screening Committee on an as-needed basis. 
  
 5.2 Screening Committee Functions and Powers. The Screening Committee shall oversee and supervise the overall performance of the Program. The principal functions of the Screening Committee shall be, inter alia,
to: 
  
 (a) monitor the progress of the Program; 
  
 (b) determine the desired characteristics for Program ODNs, establish methods
to be used to measure whether a given Program ODN possesses such desired characteristics and set forth such characteristics and methods in the Plan; 
  
 (c) review the data and information generated in the performance of the Program; 
  
 (d) outline the assays and timelines for the assays to be performed by Coley in the Plan; 
  
 (e) agree to adjust the allocation of ODNs to be run through Step 1, Step 2
or Step 3 screening assays; 
  
 (f) agree to change or delete the
work otherwise to be performed in the Plan; 
  
 (g) facilitate the
transfer of technology between the Parties including by developing a protocol for the delivery to Pfizer of materials, know-how and information known to Coley that will enable Pfizer’s production and development of the Research Compounds;

  
 (h) identify and discuss potential new inventions; and

  
 (i) maintain a list of all ODNs delivered to Pfizer pursuant
to Section 2 and all Research Compounds assigned to Pfizer. 
  

 9 
  
 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 406 of the Securities Act. 

 5.3 Frequency of Meetings. The Screening Committee shall meet (a) at least once per calendar
quarter during the Program Term; (b) at the completion of each of Steps 1, 2 and 3 for [******************]; and (c) on such other occasions as the Parties may agree. Either Party may call a meeting on fifteen (15) days written notice unless the
Parties waive such notice. 
  
 5.4 Place of Meetings.
Unless the Screening Committee decides otherwise, its meetings will alternate between the offices of Coley and Pfizer, with the meeting chaired by the co-chair designated by the Party in whose offices the meeting is held. The time and form of such
meetings, including by videoconference or teleconference, shall be as the Screening Committee decides. Each Party shall independently bear the expenses of that Party’s participation in such meetings. 
  
 5.5 Minutes. The Screening Committee shall keep accurate minutes of
its deliberations, including recording all proposed decisions and all actions recommended or taken. The Screening Committee shall designate at each meeting, a member to act as secretary to prepare draft minutes for such meeting. Draft minutes shall
be sent to each member of the Screening Committee within twenty (20) working days of each meeting. The draft minutes shall be edited by the secretary based on the comments of each member, and the edited draft shall be distributed in advance of the
next meeting to each member for review and final approval at that meeting. 
  
 5.6 Decisions of the Screening Committee. A quorum of the Screening Committee shall consist of at least one (1) Coley member and at least one (1) Pfizer member participating by telephone or in person. A quorum
of the Screening Committee shall be present in order for a meeting to take place. Coley and Pfizer shall each have one vote for all matters requiring a vote of the Screening Committee. If a quorum exists at any meeting, then the unanimous vote of
Pfizer and Coley is necessary to take any action on behalf of the Screening Committee. Notwithstanding the foregoing, the approval of both parties shall be required to amend the Plan so as to revise [*******************************] or to revise
materially the nature or extent of the work done under any Step. No individual Party shall purport to act on behalf of the other Party unless and then only to the extent authorized to do so by the Screening Committee. 
  
 5.7 Reports. During the Program Term, Coley shall furnish to the
Screening Committee summary written reports describing its progress under the Plan. Such reports shall be due within thirty (30) days after the completion of each of Steps 1 through 3 for [**********] of ODNs. 
  
 5.8 Disagreements. If any matter within the decision-making authority
of the Screening Committee is presented for its decision and the Screening Committee cannot reach agreement on that decision within fifteen (15) days, or as mutually agreed by the Parties, then it shall refer such matter to dispute resolution in
accordance with the procedures set forth in Section 14 of the License Agreement. 
  
 6.    PAYMENTS. 
  
 6.1
Screening Fees. In consideration for Coley’s performance of its activities in the Program and in consideration for Pfizer’s acquisition of rights in the Program ODNs as provided herein, Pfizer shall pay Coley the amounts listed in
the payment schedule attached as Exhibit C to this Agreement subject to any amendments in such amount resulting from the operation of 

  

 10 
  
 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 406 of the Securities Act. 

 
Section 2.1(c). The fees payable pursuant to this Section 6.1 shall not be refundable and shall not be creditable against any payment due under the License
Agreement. 
  
 6.2 Withholding and Payment in U.S. Dollars.
Any payments made by Pfizer to Coley under Section 6.1 shall be reduced by the amount that Pfizer is required to withhold pursuant to any applicable United States, federal, state or local tax (“Withholding Taxes”). Pfizer shall
submit reasonable proof of payment of the Withholding Taxes to Coley within a reasonable period of time after such Withholding Taxes are remitted to the proper taxing authority. Any payments due under Section 6.1 of this Agreement shall be made in
United States Dollars. Such payments shall be made without deduction of exchange, collection, and other charges. 
  
 7.    TERM AND TERMINATION. 
  
 7.1 Term of the Program. The Program shall commence on the Effective Date of this Agreement and, unless earlier terminated pursuant to this Section
7, shall continue until the third anniversary of the Effective Date (the “Program Term”). The Parties may extend the Program Term for additional one (1) year periods on such terms as they may agree upon in writing. 
  
 7.2 Termination By Pfizer For Scientific Reasons. Pfizer may terminate
this Agreement on ten (10) days prior written notice to Coley if Pfizer determines in its reasonable judgment following discussion with Coley, that the Program is unlikely to produce a Research Compound with sufficiently attractive properties to
warrant clinical development. If Pfizer so terminates, [**********************************************************************************************************]. 
  
 7.3 Termination for Failure to Perform Program. Pfizer may terminate this Agreement upon sixty (60) days prior
written notice to Coley, if (a) Coley fails to perform the Step 1 screening cascade set forth in the Plan or (b) fails to use reasonable efforts to perform the Step 2 screening cascade during the applicable two calendar quarter testing periods or
(c) fails to use reasonable efforts to perform the Step 3 screening cascade in the applicable three calendar quarter testing period (provided that in either (b) or (c) such period shall be extended by the period if any during which any act or
omission of Pfizer caused Coley to be unable to perform such screening); provided, however, if Coley completes such activities within such sixty (60) day notice period, such notice of termination will be of no force or effect. The
Parties acknowledge and agree that Coley’s obligations to perform the Step 1 screening cascade and to use reasonable efforts to perform Step 2 and Step 3 screening cascade pursuant to Section 2.2, and/or to cure any failure within sixty (60)
days as contemplated herein, shall be tolled (i.e. suspended) during such time as the Parties are in any dispute resolution procedure in accordance with Section 14.2. If Pfizer provides notice of termination to Coley pursuant to this Section
7.3 before the first anniversary of the Effective Date, then unless and until either (i) Coley prevails in the dispute resolution procedure in accordance with Section 14.2, or (ii) Coley remedies such default during the applicable sixty (60) day
cure period, Pfizer shall not be obligated to pay any amount otherwise due under Section 6.1. 
  
 7.4 Termination Upon Coley Change of Control or Upon Termination of License Agreement. (a) If Coley undergoes a Change of Control (as defined in the License Agreement) 

  

 11 
  
 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 406 of the Securities Act. 

 
Pfizer shall have the right to terminate this Agreement on ten business days’ notice in writing to Coley. (b) If the License Agreement terminates for
any reason, this Agreement shall automatically terminate simultaneously with the effective date of the termination of the License Agreement. (c) If Pfizer terminates pursuant to Section 7.4(a) or (b), [******************************************
****************************************************************]. 
  
 7.5 Termination by Either Party. 
  
 (a)
Termination for Material Breach. Upon a material breach of this Agreement by either Party (other than as described in Section 7.3 above), the non-breaching Party may provide written notice to the breaching Party specifying the material
breach. If the breaching Party fails to cure the material breach during such sixty (60) day period following the date on which the notice of breach is provided, then the non-breaching Party shall have the right to terminate this Agreement.

  
 7.6 Effect of Termination. 
  
 (a) The expiration or termination of the Agreement shall not relieve the
Parties of any obligation accruing prior to such expiration or termination. 
  
 (b) Upon the expiration or termination of this Agreement, any obligation which by its nature is intended to survive expiration or termination of the Agreement shall survive, including without limitation, Sections 2.4,
3.1, 3.2, 3.3, 3.4, 3.5, 4.1, 4.2, 4.3, 4.4, 4.5 and Section 6 (subject to Section 7). 
  
 (c) Notwithstanding anything to the contrary contained herein, if this Agreement is terminated by Pfizer pursuant to Section 7.5 or pursuant to Section 7.3 where such termination of the License Agreement is a result
of Coley’s material breach or insolvency, then in addition to all rights that may be available to Pfizer at law or in equity, Pfizer may include in its claim for damages, all amounts paid to Coley pursuant to Section 6. 
  
 8.    INCORPORATION BY REFERENCE 
  
 Section 8 and Sections 12 through 15 of the License Agreement are hereby
incorporated by reference. 
  

 12 
  
 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 406 of the Securities Act. 

 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above.

  

			
	 COLEY PHARMACEUTICAL
 GROUP,
INC.
	 	PFIZER INC.
		
	 By: /s/ Robert L. Bratzler

 Name: Robert L. Bratzler
 Title: President & CEO
	 	 By: Lisa Ricciardi

 Name: Lisa Ricciardi
 Title: Sr. Vice President

  

 13 
  
 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 406 of the Securities Act. 

 
EXHIBIT A 
  

			
	DRAFT PROPOSAL	 	 CONFIDENTIAL
 6 January 2005

  
 Development Of Back-up And Next
Generation Immunomodulatory ODN For The Treatment Of Cancer 
  
 Summary: ProMune (CPG 7909) appears to be an excellent drug candidate, with many desirable drug features and encouraging clinical data in a randomized trial in advanced NSCLC. The objectives of this Research Collaboration between
Pfizer and Coley will be to [****************************************************************************************** *************************************] designed for cancer immunotherapy, with potentially improved potency, tolerability/safety
or other differentiating factors compared to ProMune; and [****************************** ******************************************************************************************************************
*************************************************************************************************************************************
********************************************************************************************************************** *******************************************************************************************************************************
*************************************************************************************************************************** ********************************************************************************************************] 
  
 The screening and evaluation portion of the program would run for
approximately [******************************************************************************************************* 
 ***************] will reach the
proposed Go/ No Go decision point for development [************] from the start of the program, at which point [**************************] could be chosen to move forward into pre-IND development. [***************] program will commence
approximately [********] after the [*******], and will reach the proposed Go/ No Go decision point for development [******************], at which point [*************************] could be chosen to move forward into pre-IND development. At the Go/
No Go decision points Pfizer and Coley will review the data on the candidate molecules and Pfizer will have the right to choose [**********] candidate molecules to progress into Pre-IND development in preparation for entering early stage clinical
evaluation of these compounds. The pre-IND development step will be collaborative, with both companies contributing to the IND package. 
  
 Background: The TLR9 receptor can be stimulated in quite different ways leading to distinct patterns of immune activation, depending on the
structure of the ligand. [************************************************************************ 
 ***************************************************************************************************** 
 ***************************************************************************************************** 
 ***************************************************************************************************** 
  

 A-1 
  
 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 406 of the Securities Act. 

 
********************************************************************************************************************************
******************************************************************************************************************************
***********************************************************************************************************************************
******************************************************************************************************************************
***************************************************************************************************************************** ******************************************************************************************]. Since Coley already has
extensive experience in the synthesis and in vitro and in vivo characterization of these compounds, there is minimal development risk associated with their incorporation into the program. 
  
 Work plan: Using its know-how and propriety methods in oligo design,
Coley will design [********************** *******************] for Pfizer. Prior to designing each batch of ODN, Coley will ask for Pfizer’s input as to any particularly desired features (such as shorter or longer length, more or less in vivo
stability, etc). All ODN will be designed based on Coley’s extensive experience in producing and testing ODN using various modules and algorithms. Because of this experience, all ODN are expected to be active, but their exact level and pattern
of immune stimulation will be identified by Coley using a series of in vitro and in vivo tests known as a Screening Cascade. A relatively simple set of assays would be performed in the first step to de-select compounds that fail to
meet the agreed-upon criteria. Compounds giving satisfactory results in an assay will move to the next step of the Screening Cascade and so on. [************************************************************************* **********************],
relatively little method and assay development work will be required. Nevertheless as the position shift of a single nucleotide has the potential to significantly influence activity, all screening steps and the performed assays are designed to allow
identification of the optimal molecules. 
  
 Coley has selected
assays for step 2 screening that based on our experience, should provide the best ability to discriminate the desired ODN characteristics and show differences among the ODN synthesized. If Coley develops new assays that appear to be superior, or
finds that certain assays do not give reproducible results, are not technically feasible, or do not help to distinguish ODN with different levels of activity, then those assays will be switched in future screens or deleted from the panel of assays.
Step 1 and Step 2 will partly be performed in parallel whereby [********************] are screened in separate groups. Starting with the [*****************] will allow Coley to very quickly get this program going, filling the pipeline for subsequent
screening steps which are depending on the completion of the first two Steps. 
  
 The third step of the screening would be [******************************************************************* 
 ********************************************************************************************************* 
 ****** ***************************
*********************] 
  

 A-2 
  
 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 406 of the Securities Act. 

 Proposed Screening Cascade: 
  
 Note that all assays are in human cells unless otherwise indicated. 
  
 Step 1 assays to be performed on all ODN [(************************************** ************************) – estimated
***************** to complete *************: 
  

	1.	[****************************************************************************************************** ***********************************] 

  

	2.	[****************************************************************************************************** ******************************] 

  

	3.	[***************************************************************************************************** *******************************] 

  

	4.	[***************************************************************************************************** *******************************] 

  

	5.	[***************************************************************************************************** *******************] 

  

	6.	[************************************************************************************************] 

  

	7.	[******************************************************************************************************
*****************************************************************************************] 

  

	8.	Coley to provide data in an Excel spreadsheet or other standard format to Pfizer as it becomes available. 

  

	9.	Pfizer to select ODNs for advancement to Step 2. 

  
 Step 2 assays to be performed on ODN that have passed Step 1 [*******************************************] – estimated [*] month to complete
[***********]: 
  

	1.	[*****************************************************************************************************] 

  

	2.	[*****************************************************************************************************] 

  

	3.	[*****************************************************************************] 

  

	4.	[**********************************************************************] 

  

 A-3 
  
 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 406 of the Securities Act. 

	5.	[***************************************************************************************************** ********************] 

  

	6.	[***************************************************************************************************** *************************************] 

  

	7.	[***************************************************************************************************** * **********] 

  

	8.	[***************************************************************************************************** *************************] 

  

	9.	[*****************************************************************************************************
************************************************************************************************ *********************************************************************************************** ***********]. 

  

	10.	Coley to provide data in an Excel spreadsheet or other standard format to Pfizer as it becomes available 

  

	11.	Pfizer to select ODNs for advancement to Step 3. 

  
 Step 3 assays to be performed on ODN that have passed Step 2 [*************************] – estimated [********] to complete [*************]: 
  

	1.	[***************************************************************************************************** *******************************] 

  

	2.	[******************] 

  

	3.	[***********************************] 

  

	4.	[*****************************************************************************************************
************************************************************************************************ *********************************************************************************************** ******************************************************].

  

	5.	[*****************************************************************************************************
************************************************************************************************ **************************]. 

  

	6.	[*****************************************************************************************************
****************************************************************************************************** 

 *****************************************]. 
  

 A-4 
  
 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 406 of the Securities Act. 

	7.	[*****************************************************************************************************
************************************************************************************************* *************************************]. 

  

	8.	Provide data in an Excel spreadsheet or other standard format to Pfizer as it becomes available. 

  

	9.	Pfizer to conduct additional studies during Option Period and select Research Compound. 

  
  

 A-5 
  
 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 406 of the Securities Act. 

 EXHIBIT B 
  

[****************************************************************************************************************************
******************************************************************************** ********************* 
 *************************] 
  
  

 B-1 
  
 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 406 of the Securities Act. 

 EXHIBIT C 
  

COSTS 
  

									
	 	 	 [************]

	 	 [************]

	 [****]
	 	[****************** ****************]	 	[****]	 	[****************** ****************]	 	[****]
	 [******]
	 	[*]	 	[********]	 	[*]	 	[********]
	 [******]
	 	[*]	 	[********]	 	[*]	 	[********]
	 [******]
	 	[*]	 	[*********]	 	[*]	 	[*********]
	 [*****]
	 	[*]	 	[*********]	 	[*]	 	[*********]

  
 [*****************************************************] 
  
 PAYMENT SCHEDULE 
  

					
	 [****************]

	 	 [************]

	 	 [************]

	 [**************]
	 	 [********]
	 	 [********]

	 [*******************]
	 	 [*******]
	 	 [********]

	 [*******************]
	 	 [*********]
	 	 [*********]

	 [*******************]
	 	 [********]
	 	 [********]

	 [*****]
	 	 [*********]
	 	 [*********]

  

 C-1 
  
 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 406 of the Securities Act.DEFENSE ADVANCE RESEARCH PROJECTS AGENCY CONTRACT AWARD

 Exhibit 10.34 
  
 2003537 
 EFFECTIVE
DATE: 9-DEC-02 
 ORIGINAL CONTRACT AWARD 
  

													
	AWARD/CONTRACT	  	 1.     THIS CONTRACT IS A RATED ORDER
UNDER DPAS (15 CFR 350)
	  	RATING	  	PAGE Of PAGES
	  	  	  	        1	  	        7
				
	2. CONTRACT (proc. Inst. Ident.) NO. DAAD19-03-C-0002	  	 3.     EFFECTIVE DATE
	  	06 Dec 2002	  	4. REQUISITION/PURCHASE REQUEST/PROJECT NO. P-444498-LS-02248-1
						
	 5. ISSUED BY
 U.S. ARMY ROBERT MORRIS
ACQUISITION
 P.O. BOX 12211
 RESEARCH TRIANGLE PARK NC
27709-2211
	 	 CODE
	  	DAAD19	  	 6. ADMINISTERED BY (If other than Item 5)
  

See Item 5
	  	CODE	  	 
		
	7. NAME AND ADDRESS OF CONTRACTOR (No:, street, city, country, state and zip code)	  	 8. DELIVERY
  ̈  FOB ORIGIN    x  OTHER (See below)

			
	 COLEY PHARMACEUTICALS
 93 WORCESTER
ST
 WELLESLEY MA 02481-3609
	  	 	  	9. DISCOUNT FOR PROMPT PAYMENT N/A
					
	 	  	 	  	 	  	 10. SUBMIT INVOICES (4 copies unless otherwise specified)
 TO THE ADDRESS
 SHOWN IN:
	  	 ITEM
  
 Section G

	CODE 38G55	 	 	  	FACILITY CODE	  	 	  	 	  	 	  	 
						
	11. SHIP TO/MARK FOR	 	CODE	  	DAAD19	  	12. PAYMENT WILL BE MADE BY	  	CODE	  	HQ0303
	 U. S. ARMY RESEARCH OFFICE
 RECEIVING
 P. O. BOX 12211
 RESEARCH TRIANGLE PARK NC
27709-2211
	  	 	  	 DEFENSE FINANCE AND ACCOUNTING SERVICE
 ROCK
ISLAND OPERATING LOCATION
 ATTN: DFAS-RI-FPV
 BUILDING
68
 ROCK ISLAND IL 61299-8000
	  	 	  	 
				
	 13. AUTHORITY FOR USING OTHER THAN FULL AND OPEN COMPETITION:
 [        ] 10 U.S.C. 2304(c) (        ) [        ]
41.U.S.C.253(c)(        )
	  	14. ACCOUNTING AND APPROPRIATION DATA See Schedule	  	 	  	 
						
	15A. ITEM NO.	  	15B. SUPPLIES/ SERVICES	  	15C. QUANTITY	  	15D. UNIT	  	15E. UNIT PRICE	  	15F. AMOUNT
						
	 	  	SEE SCHEDULE	  	 	  	 	  	 	  	 
				
	 	  	 	  	15G. TOTAL AMOUNT OF CONTRACT	  	$6,000,001.00

															
	
	16. TABLE OF CONTENTS
								
	x	  	SEC	  	DESCRIPTION	  	PAGE(S)	  	x	  	SEC	  	DESCRIPTION	  	PAGE(S)
	PART I—THE SCHEDULE	  	PART II—CONTRACT CLAUSES
	x	  	A	  	SOLICITATION/ CONTRACT FORM	  	1-1	  	x	  	I	  	CONTRACT CLAUSES	  	5-7
	x	  	B	  	SUPPLIES OR SERVICES AND PRICES/ COSTS	  	2	  	PART III—LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACHMENTS
	x	  	C	  	DESCRIPTION/ SPECS/WORK STATEMENT	  	2	  	 	  	J	  	LIST OF ATTACHMENTS	  	 
	x	  	D	  	PACKAGING AND MARKING	  	2	  	PART IV—REPRESENTATIONS AND INSTRUCTIONS
	x	  	E	  	INSPECTION AND ACCEPTANCE	  	2-3	  	 	  	K	  	REPRESENTATIONS, CERTIFICATIONS AND OTHER STATEMENTS OF OFFERORS	  	 
	x	  	F	  	DELIVERIES OR PERFORMANCE	  	3	  	 	  	 	  	 	  	 
	x	  	G	  	CONTRACT ADMINISTRATION DATA	  	3-4	  	 	  	L	  	INSTRS, CONDS, AND NOTICES TO OFFERORS	  	 
	x	  	H	  	SPECIAL CONTRACT REQUIREMENTS	  	4-5	  	 	  	M	  	EVALUATION FACTORS FOR AWARD	  	 

											
	CONTRACTING OFFICER WILL COMPLETE ITEM 17 OR IS AS APPLICABLE	  	 
	 17. x  CONTRACTOR’S NEGOTIATED AGREEMENT Contractor is required to sign this
document and return copies to issuing office.) Contractor agrees to furnish and deliver all items or perform all the services set forth or otherwise identified above and on any continuation sheets for the consideration stated herein. The rights
and obligations of the parties to this contract shall be subject to and governed by the following documents: (a) this award/contract, (b) the solicitation, if any and (c) such provisions, representations, certifications, and specifications, as are
attached or incorporated by reference herein.
 (Attachments are listed herein.)
	  	 I8.  ̈  AWARD
(Contractor is not required to sign this document.) Your offer on Solicitation Number
  
 Including the additions or changes made by you which additions or changes are set forth in full above, is hereby accepted as to the items listed above and on any continuation sheets. This award consummates the
contract which consists of the following documents: (a) the Government’s solicitation and your offer, and (b) this award/contract. No further contractual document is necessary.

		
	 19A. NAME AND TITLE OF SIGNER (Type or print)
 Charles E. Yon, Vice President, General Counsel
	  	 20A. NAME AND TITLE OF CONTRACTING OFFICER
 PATSY. S ASHE/ GRANTS/CONTRACTING OFFICER

				
	19B. NAME OF CONTRACTOR	  	19C. DATE SIGNED	  	20B. UNITED STATES OF AMERICA	  	20C. DATE SIGNED
						
	BY	 	 /s/ Charles E. Yon

	  	12-3-02	  	BY	  	 /s/ Patsy S. Ashe

	  	03-Dec-2002
	(Signature of person authorized to sign)	  	 	  	(Signature of Contracting Officer)	  	 

  
 Portions of this
Exhibit were omitted and have been filed separately with the Secretary of the Commission 
 pursuant to the Company’s application
requesting confidential treatment under Rule 406 of the Securities Act. 

 DAAD19-03-C-0002 
  
  Page
 2
 of 7 
  

 SECTION B Supplies or Services and Prices 
  

							
	ITEM NO 0001	  	SUPPLIES/SERVICES
		
	 	  	PROPOSAL NO. 44498-I.S
	 	  	COST - The research to be accomplished is identified in the recipient’s proposal, “Enhancement of Anthrax AVA Vaccine with CpG ODN’s” dated 5 August:2002 which
is incorporated by reference. The estimated costs of the research are set forth in the cost proposal dated September 5, 2002 and identified on the contract line item 0001.	  	 
				
	 	  	 	  	ESTIMATED COST	  	$6,000,001.00
				
	ITEM NO 000101	  	SUPPLIES/SERVICES	  	 	  	 
				
	 	  	COST	  	 	  	 
				
	 	  	 	  	ESTIMATED COST	  	 
				
	 	  	ACRN AA Funded Amount	  	 	  	$6,000,001.00

  

	B.1	The type of contract is Cost Reimbursable 

  

	B.2	The estimated Total Cost of performance of this contract is as follows: 

  
 Estimated Cost: $6,000,001 
  
 The final price of this contract shall be the total of all costs determined reimbursable in accordance with the general provision of the contract entitled’
“Allowable Cost and Payment” but not exceeding the estimated cost plus the fixed fee, if any, both of which are specified above. 
  
 SECTION C Descriptions and Specifications 
  
 C. 1 The research to be performed under this contract will be in accordance with details in the contractor’s proposal and modifications thereto, if any, described
below. (A copy of the proposal including revisions, are on file at the Army Research Office.) 
  
 Proposal Title: “Enhancement of the Anthrax AVA Vaccine with CpG ODN’s” 
 Proposal No: 44498-LS

 Proposal Date: 5 August 2002, for a 4-Month Effort. 
 Cost
Proposal: dated, 2 August 2002, Revised: 5 September 2002, & 26 November 2002. 
 Principal investigator: Dr. Arthur Kreig 
  
 The Principal Investigator shall be closely involved and continuously responsible for the
conduct of the work. The contractor must obtain the contracting officer’s approval to change the principal investigator or acquire the approval of the contracting officer to change plans to devote substantially less effort to the work than
anticipated. 
  
 SECTION D Packaging and Marking 
  
 D.l Reports delivered under this contract shall be afforded the degree of packaging
(preservation and packing) required to prevent damages due to the hazards of shipment and handling. 

  

 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant
to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act. 

 DAAD19-03-C-0002 
  
  Page
 3
 of 7 
  

 
SECTION E Inspection and Acceptance 
  
 E.1 The contractor will submit all scientific reports to the office specified in ARO Form l8 located at www.aro.army.mil/forms/forms2.htm/frm18 for inspection and
acceptance. This contract takes precedence for email address identified in ARO Form 18. 
  
 SECTION F Deliveries or Performance 
  
 F.1 Research called for by this
contract shall be performed during the period of 06 December 2002 – 05 March 2003. This contract contains no options. 
  
 F.2 ARO Reports called for by this contract shall be submitted electronically in PDF format when possible. You may download the electronic Form SF298 and SF298
continuation sheet from the ARO’s home page at www.aro.army.mil/forms/forms2.html/frm18. The forms were created in MS Word and MS Word 97. Refer to ARO Form 18 for specific reporting requirements for each type of report. If you are not
able to submit reports electronically you should submit as indicated in ARO Form 18. The use of color in reports is discouraged for both electronic documents and hard copy documents. 
  
 F.3 DARPA requires Financial and progress reporting at the end of every quarter; in the format to be provided Reports shall contain a brief
summary of that period’s progress, plans for the upcoming period, major accomplishments or problems, and shows the planned-versus-actual expenditures; other reports including the final will follow normal ARO requirements. The DARPA technical
POC for this effort is Dr. John Carney, (703) 696-4641; the DARPA Business POC for this effort as Claire Ricaurte, (703) 696-4641. The special report is to be submitted to DARPA by E-mail address: jearney@darpa.mil, or physical address; Defense
Advanced Research Project DSO, ATTN: Dr. John Carney, 3701 N. Fairfax Drive, Arlington, VA 22203-1714. 
  
 **** A Final Patent Report (DD Form 582) is required to be submitted within sixty (60) days after completion of the contract.**** 
  
 SECTION G Contract Administration Data 
  
 G.1 Delegation of Administrative Functions; 
  
 All contract administration functions are retained by the Army Research Office (ARO). 
 All vouchers, both interim and final, shall be submitted for approval to the following office: 
  
 Defence Contract Audit Agency 
 Boston Branch Office 
 101 Merrimac Street, Suite 820A 
 Boston, Massachusetts 
 Phone Number (617) 450-0450 
 FAX (617) 450-0475 
 E-mail Address dcaa-fao2171@dcaa.mil 
  
 G.2
Payment Information and Inquiries: The Contractor should contact the DFAS Office indicated in Block 12 of the SF 26 for information or inquiries regarding payments on this contract. Telephonic inquires may be made on 1-888-332-7742 or electronic
inquiries on http://www.dfas.mil/money/vendor/index.htm in the event DFAS cannot answer the Contractor’s inquiry, the Contracting Officer may be contacted for assistance. 
  
 G.3 Invoicing. The government shall make payments to the Contractor when requested as work progresses, but not more often that once every 2
weeks, in the amounts determined to be allowable by DCAA in accordance with SubPart 31.2 of the Federal Acquisition Regulation in effect on the date of this contract and terms of the contract. 
  

 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant
to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act. 

 DAAD19-03-C-0002 
  
  Page
 4
 of 7 
  

 G.4 ACCOUNTING AND APPROPRIATION DATA 
  

			
	AA.	  	972040013012RPAROD2310N9270PU255Y2XTA012AR44498LSTA012XTA01S18129
	AMOUNT:	  	$6,000,001.00

  
 G.5 Payment Instructions for Multiple
Accounting Classification Citations: Payments are to be made from the earliest available fiscal year funding source across accounting classification citations assigned to the line item. 
  
 G.6 Pre-Contract Costs: Pre-Contract costs are limited to $5,410,080. Costs incurred before the effective date of the contract directly
pursuant to the negotiation and in anticipation of the contract award were necessary to comply with the proposed contract delivery schedule. These costs are allowable to the extent that they would have been allowable if incurred after the date of
the contract 
  
 G.7 The Contracting Officer’s Representative for this
contract is as follows: 
  
 Dr. Micheline Strand

 US Army Research Office 
 P.O. Box 12211 
 Research Triangle Park, NC 27709-2211 
 Phone; (9l9) 549-4343 
 FAX: (919) 549-4310 
 Email:strandmk@afo.arl.army.mil 
  
 G.8 Ceiling Provisional Indirect Rates: (1) The Government will not be obligated to pay any additional amount should the final indirect cost
rates exceed the negotiated ceiling rates and (2) In the event the Final indirect cost rates are less than the negotiated ceiling rates, the negotiated rates will be reduced to conform with the lower rates. Ceilings in the indirect cost rates are
hereby established to prevent the acceptance of an unreasonable amount of indirect costs to the contract. 
  
 The ceiling rate for the duration of performance of the contract is as follows: 
  

					
	 Line Item

	  	 Over head Rate

	  	 General Administrative Rate

	 0001
	  	.23	  	.13

  
 Indirect costs are to include all
fringe benefits, over head, facilities, general and administrative bardens. 
  
 SECTION H Special Contract Requirements 
  
 H.1 Acknowledgment of
Sponsorship 
  
 The contractor agrees that in the release of information relating
to this contract, such release shall include a statement to the effect that the project or effort depicted was or is sponsored by DARPA and the U.S. Army Research Office, and that the content of the information does not necessarily reflect the
position or the policy of the Government, and no official endorsement should be inferred. 
  
 For the purpose of this provision, “information” includes news releases, articles, manuscripts, brochures, advertisements, still and motion pictures, speeches, trade association proceedings, symposia, etc
The contractor further agrees to include this provision if any subcontract awarded as a result of this contract. 
  
 H.2 Publications 
  
 Publication of results of the research project in appropriate professional journals is encouraged as an important method of recording and reporting scientific information. One copy of each paper planned for
publication will be 

  

 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant
to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act. 

 DAAD19-03-C-0002 
  
  Page
 5
 of 7 
  

 
submitted to the Contracting Officer’s Representative simultaneously with its submission for publication. Following publication, copies of published
papers shall be submitted to the Contracting Officer’s representative, or to the other addresses in quantities publication. Following publication, copies of published papers shall be submitted to the Contracting Officer’s Representative,
or to the other addressees in quantities as may be directed by the Contracting Officer. 
  
 H.3 The contractor is to note acknowledgements in publications or other media that support is from DARPA as well as technical/contract support from ARO. 
  
 H.4 Research Responsibility 
  
 The contractor shall bear responsibility for the conduct of the research specified in the contractor’s proposal identified in the contract. The contractor will
exercise judgment in obtaining the stated research objectives within the limits of the terms and conditions of the contract: provided, however, that the contractor will obtain the contracting officer’s approval to change the Statement of Work.
Consistent with the foregoing the contractor shall conduct the work as set forth in his proposal and accepted by the contract award. 
  
 The principal investigator identified in the proposal shall be continuously responsible for the conduct of the research project, and shall be closely involved with the
research efforts. 
  
 The contractor shall advise the contracting officer if the
principal investigator(s) identified in the contract plan to devote less effort to the work than set forth in the proposal. The contractor shall obtain the contracting officer’s approval prior to changing the principal investigator’s
identified in the proposal. 
  
 H.5 Restriction on Printing 
  
 The Government authorizes the reproduction of reports, data or other written material, if
required, provided the material produced does not exceed 5,000 production units of any page, and items consisting of multiple pages do not exceed 25,000 production units in the aggregate. The contractor shall obtain the express prior written
authorization of the contracting officer to reproduce material in excess of the quantities cited above. 
  
 H.7 Human Use 
  
 The contractor proposes to use
human subjects in the performance of this research. In accordance with 32 CFR 219.103 each contractor shall have a Federally approved, written assurance of compliance for the research proposed prior to the signing this contract. 
  
 H.6 Animal Use 
  
 The contractor proposes to use animal subjects in the performance of this research. In accordance with (7 USC 2131et seq.) and regulations
pertaining to it, the contractor has provided a copy of their Institutional Approval for Protocols Using Animal Subjects (IACUC). The contractor is expected to ensure that the guidelines described in the DFARS Clause 252.235-7002. Animal Welfare
(Dec 1991) are complied with. 
  
 PART II – GENERAL PROVISIONS

  
 SECTION I – General Provisions 
  
 FEDERAL ACQUISITION REGULATION (48 CFR CHAPTER 1)
CLAUSES 
  
 FAR 52.252-1 Clauses
Incorporated by Reference (FEB 1998) 
  
 This contract incorporates one or more
clauses by reference, with the same force and effect as if they were given in full text. Upon request, the Contracting Officer will make their full text available. Also, the full text of a clause may be accessed electronically at this/these
address(es): http://web2.deskbook.osd.mil/default.asp? or http://farsire.hill.af.mil/YFFARa.htm 
  

 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant
to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act. 

 DAAD19-03-C-0002 
  
  Page
 6
 of 7 
  

 CAUSES INCORPORATED BY REFERENCE: 
  

					
	 52.203-3
	 	Gratuities	  	APR 1984
	 52.203-5
	 	Covenant Against Contingent Fees	  	APR 1984
	 52.203-6
	 	Restrictions On Subcontractor Sales To The Government	  	JUL 1995
	 52.203-7
	 	Anti-Kickback Procedures	  	JUL 1995
	 52.203-8
	 	Cancellation, Rescission, and Recovery of Funds for Illegal or Improper Activity	  	JAN 1997
	 52.203-10
	 	Price Or Fee Adjustment For Illegal Or Improper Activity	  	JAN 1997
	 52.203-12
	 	Limitation On Payments To Influence Certain Federal Transactions	  	JUN 1997
	 52.204-4
	 	Printing/Copying Double-Sided on Recycled Paper	  	JUN 1996
	 52.209-6
	 	Protecting the Government’s Interest When Subcontracting With Contractors Debarred, Suspended, or Proposed for Debarment	  	JUL 1995
	 52.215-8
	 	Order of Precedence—Uniform Contract Format	  	OCT 1997
	 52.215-14
	 	Integrity of Unit Prices	  	OCT 1997
	 52.215-10
	 	Price Reduction for Defective Cost or Pricing Data	  	OCT 1997
	 52.215-11
	 	Price Reduction for Defective Cost or Pricing Data–Modifications	  	OCT 1997
	 52.215-12
	 	Subcontractor Cost or Pricing Data (OCT 1997)	  	OCT 1997
	 52.215-13
	 	13 Subcontractor Cost or Pricing Data Modifications	  	OCT 1997
	 52.215-14
	 	Integrity of Unit Prices	  	OCT 1997
			
	 52.215-18
	 	Reversion or Adjustment of Plans for Postretirement Benefits (PRB) Other than Pensions	  	OCT 1997
	 52.215-19
	 	Notification of Ownership Changes	  	OCT 1997
	 52.215-21
	 	Requirements for Cost or Pricing Data or Information Other Than Cost or Pricing Data—Modifications	  	OCT 1997
	 52.216-7
	 	Allowable Cost And Payment	  	MAR 2000
	 52.217-8
	 	Option to Extend Services	  	NOV 1999
	 52.217-9
	 	Option to Extend the Term of the Contract	  	NOV 1999
	 52.219-8
	 	Utilization of Small Business Concerns	  	OCT 1999
	 52.222-2
	 	Payment for Overtime Premiums	  	JUL 1990
	 52.222-3
	 	Convict Labor	  	AUG 1996
	 52.222-21
	 	Prohibition Of Segregated Facilities	  	FEB 1999
	 52.222-22
	 	Previous Contracts and Compliance Reports	  	FEB 1999
	 52.222-26
	 	Equal Opportunity	  	FEB 1999
	 52.222-35
	 	Affirmative Action For Disabled Veterans And Veterans of the Vietnam Era	  	APR 1998
	 52.222-36
	 	Affirmative Action For Workers With Disabilities	  	JUN 1998
	 52.222-37
	 	Employment Reports on Disabled Veterans And Veterans Of The Vietnam Era	  	JAN 1999
	 52.223-6
	 	Drug Free Workplace	  	JAN 1997
	 52.223
	 	II Ozone-Depleting Substances	  	MAY 2001
	 52.225-13
	 	Restrictions on Certain Foreign Purchases	  	JUL 2000
	 52.225-16
	 	Sanctioned European Union Country Services	  	FEB 2000
	 52.227-1 Alt I
	 	Authorization And Consent (Jul 1995) - Alternate I	  	JUL 1995
	 52.227-2
	 	Notice And Assistance Regarding Patent And Copyright Infringement	  	AUG 1996
	 52.227-11
	 	Patent Rights-Retention by the Contractor (Short Form)	  	JUN 1997
	 52.228-7
	 	Insurance—Liability To Third Persons	  	MAR 1996
	 52.232-9
	 	Limitation on Withholding of Payments	  	APR 1984
	 52.232-17
	 	Interest	  	JUN 1996
	 52.232-20
	 	Limitation Of Cost	  	APR 1984
	 52.232-22
	 	Limitation of Funds	  	APR 1984
	 52.232-23
	 	Assignment Of Claims	  	JAN 1986
	 52.232-25
	 	Prompt Payment	  	JUN 1997
	 52.232-33
	 	Payment of Electronic Funds Transfer–Central Contractor Registration	  	MAY 1999
	 52.233-1
	 	Disputes	  	DEC 1998

  

 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant
to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act. 

 DAAD19-03-C-0002 
  
  Page
 7
 of 7 
  

					
	52.233-3	 	Protest After Award (AUG 1996) - Alternate I	  	JUN 1985
	52.223-3	 	Hazardous Material Identification And Material Safety Data	  	JAN 1997
	52.242-1	 	Notice of Intent to Disallow Costs	  	APR 1984
	52.242-3	 	Penalties for Unallowable Costs	  	OCT 1995
	52.242-4	 	Certification of Final Indirect Costs	  	JAN 1997
	52.242-13	 	Bankruptcy	  	JUL 1995
	52.243-2 Alt V	 	Changes—Cost-Reimbursement (Aug 1987) - Alternate V	  	APR 1984
	52.244-2 Alt I	 	Subcontracts (Aug 1998) - Alternate I	  	AUG 1998
	52.244-5	 	Competition In Subcontracting	  	DEC 1996
	52.244-6	 	Subcontracts For Commercial Items	  	MAY 2001
	52.245-5	 	Government Property (Cost-Reimbursement Time-And-Materials, Or Labor Hour Contracts)	  	JAN 1986
	52.245-18	 	Special Test Equipment	  	FEB 1993
	52.246-9	 	Inspection Of Research And Development (Short Form)	  	APR 1984
	52.247-1	 	Commercial Bill Of Lading Notations	  	APR 1984
	52.249-6	 	Termination (Cost Reimbursement)	  	SEP 1996
	52.251-1	 	Government Supply Sources	  	APR 1984
	52.253-1	 	Computer Generated Forms	  	JAN 1991
	252.201-7000	 	Contracting Officer’s Representative	  	DEC 1991
	252.203-7001	 	Prohibition On Persons Convicted of Fraud or Other Defense-Contract-Related Felonies	  	MAR 1999
	252.204-7002	 	Payment For Subline Items Not Separately Priced	  	DEC 1991
	252.204-7003	 	Control Of Government Personnel Work Product	  	APR 1992
	252.209-7000	 	Acquisition From Subcontractors Subject To On-Site Inspection Under The Intermediate Range Nuclear Forces (INF) Treaty	  	NOV 1995
	252.209-7004	 	Subcontracting With Firms That Are Owned or Controlled By The Government of a Terrorist Country	  	MAR 1998
	252.215-7000	 	Pricing Adjustments	  	DEC 1991
	252.215-7002	 	Cost Estimating System Requirements	  	OCT 1998
	252.219-7003	 	Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan (DoD Contracts)	  	APR 1996
	252.223-7006	 	Prohibition on Storage and disposal of Toxic and Hazardous Materials	  	APR 1993
	252.225-7012	 	Preference for Certain Domestic Commodities	  	MAY 1999
	252.225-7031	 	Secondary Arab Boycott of Israel	  	JUN 1992
	252.227-7013 Alt I	 	Rights in Technical Data—Noncommercial Items	  	NOV 1995
	252.227-7014	 	Rights in Noncommercial Computer Software and Noncommercial Computer Software Documentation (JUN 1995) - Alternate I	  	JUN 1995
	252.227-7016	 	Rights in Bid or Proposal Information	  	JUN 1995
	252.227-7030	 	Technical Data—Withholding Of Payment	  	MAR 2000
	252.227-7034	 	Patents—Subcontracts	  	APR 1984
	252.227-7036	 	Declaration of Technical Data Conformity	  	JAN 1997
	252.227-7037	 	Validation of Restrictive Markings on Technical Data	  	SEP 1999
	252.227-7039	 	Patents—Reporting Of Subject Inventions	  	APR 1990
	252.231-7000	 	Supplemental Cost Principles	  	DEC 1991
	252.235-7010	 	Acknowledgment of Support and Disclaimer	  	MAY 1995
	252.235-7011	 	Final Scientific or Technical Report	  	SEP 1999
	252.235-7002	 	Animal Welfare	  	DEC 1991
	252.242-7004	 	Material Management And Accounting System	  	SEP 1996
	252.243-7002	 	Requests for Equitable Adjustment	  	MAR 1998
	252.245-7001	 	Reports Of Government Property	  	MAY 1994
	252.247-7022	 	Representation of Extent of Transportation by Sea	  	AUG 1992
	252.247-7024	 	Notification of Transportation of Supplies by Sea	  	MAR 2000
	242.249-7002	 	Notification of Anticipated Contract Termination or Reduction	  	DEC 1996
	252.251-7000	 	Ordering From Government Supply Sources	  	MAY 2005
	Taxpayer Identification Number: 06-1506689	  	 

  

 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant
to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act. 

  

																	
	AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT	  	 1. CONTRACT ID CODE
 S
	  	PAGE OF
PAGES
	  	  	1	  	3
				
	 2. AMENDMENT/MODIFICATION NO.
 P00003
	  	 3. EFFECTIVE DATE
 05-Jun-2003
	  	 4. REQUISITION/PURCHASE REQ. NO.
 P-444498-LS-02248-1
	  	5. PROJECT NO.(If applicable)
					
	6. ISSUED BY CODE	  	DAAD19	  	 7. ADMINISTERED BY (If other than item 6)
	  	CODE	  	DAAD19
					
	U.S. ARMY ROBERT MORRIS ACQUISITION CTR P.O. BOX 12211 RESEARCH TRIANGLE PARK NC 27709-2211	  	 	  	U.S. ARMY ROBERT MORRIS ACQUISITION P.O. BOX 12211 RESEARCH TRIANGLE PARK NC 27709-2211	  	 	  	 

  

																			
	 8.     NAME AND ADDRESS OF CONTRACTOR (No., Street, County, State and
Zip Code)
 COLEY PHARMACEUTICALS GROUP INC
 93 WORCESTER ST
 WELLESLEY MA 02481-3609
	  	 	  	9A. AMENDMENT OF SOLICITATION NO.
	 	  	 	  	 	  	9B. DATED (SEE ITEM 11)
	 	  	 	  	x	  	 10A. MOD. OF CONTRACT/ORDER NO.
 DAAD19-03-C-0002

	 CODE 3BG55
	  	FACILITY CODE	  	x	  	 10B. DATED (SEE ITEM 13)
 03-Dec-2002

																			
	11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
	 ̈	  	 The above numbered solicitation is amended as set forth in Item 14. The hour and date specified for receipt of Offer
  ̈  is extended,  ̈  is not extended.

		
	 	  	Offer must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation or as amended by one of the following methods: (a) By completing Items 8
and 15, and returning copies of the amendment; (b) By acknowledging receipt of this amendment on each copy of the offer submitted; or (c) By separate letter or telegram which includes a reference to the solicitation and amendment numbers. FAILURE OF
YOUR ACKNOWLEDGMENT TO BE REJECTION OF YOUR OFFER. If by virtue of this amendment you desire to change an offer already submitted, such change may be made by telegram or letter, provided each telegram or letter makes reference to the solicitation
and this amendment, and is received prior to the opening hour and date specified.
	 12. ACCOUNTING AND APPROPRIATION DATA (If required)
       See Schedule

	 13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS.
 IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.

		
	x	  	 A.     THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority)
THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.
 FAR 52.243-2 Alt V

		
	 	  	 B.     THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMINISTRATIVE CHANGES (such as
changes in paying office, appropriation date, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR 43.103(B).

		
	 	  	 C.     THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:

		
	 	  	 D.     OTHER (Specify type of modification and authority)

	
	E. IMPORTANT: Contractor  ̈  is not, x  is required to sign this document and return 1 copies to the issuing office.
	
	 14.    DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section
headings, including solicitation/contract subject matter where feasible.)
   The purpose of this modification is to increase funding to the
contract, add additional work, and extend the period of performance 9 months.
   This modification is also authorization the purchase the following
equipment:
   A. Amersham FineLine 75 Column including a Source 15Q anion-exchanger packing: Estimated at $10,000.
   B. Millipore Ultra filtration Equipment: Estimated at $10,000.
   C. Buchi Mini Spray Dryer B-290 Advanced: Estimated at $22,000.
  
 See Summary of Changes for details.
  
 Except as provided herein, all
terms and conditions of the document referenced in Item 9A or 10A, as heretofore changed, remains unchanged and in full force and effect.

									
	15A. NAME AND TITLE OF SIGNER (Type or print)	  	16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)
				
	 	  	 	  	TEL:	  	EMAIL:
				
	15B. CONTRACTOR/OFFEROR	  	15C. DATE SIGNED	  	16B. UNITED STATES OF AMERICA	  	16C. DATE SIGNED
					
	  

	  	 	  	BY	  	  

	  	 
	(Signature of person authorized to sign)	  	 	  	 	  	(Signature of Contracting Officer)	  	 
			
	EXCEPTION TO SF 30 APPROVED BY OIRM 11-84	  	30-105-04	  	STANDARD FORM 30 (Rev. 10-83) Prescribed by GSA FAR (48 CFR) 53.243

  
 Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act. 

 DAAD19-03-C-0002 
 P00003 
 Page 2 of 3 
  

SECTION SF 30 BLOCK 14 CONTINUATION PAGE 
  
 SUMMARY OF CHANGES 
  
 SECTION A - SOLICITATION/CONTRACT FORM 
  
 The total cost of this contract was increased by $6,000,000.00 from $6,000,001.00 to $12,000,001.00. 
  
 SECTION B - SUPPLIES OR SERVICES AND PRICES 
  
 CLIN 0001 
  
 The estimated/max cost has increased by $6,000,000.00 from $6,000,001.00 to $12,000,001.00. 
 The total cost of this line item has increased by $6,000,000.00 from $6,000,001.00 to $12,000,001.00. 
  
 SUBCLIN 000102 is added as follows: 
  

												
	 ITEM NO

	  	 SUPPLIES/SERVICES

	  	QUANTITY

	  	UNIT

	  	UNIT PRICE

	  	AMOUNT

	 000102
	  	 COST
 Add-On Proposal entitled:
“Prevention of Anthrax Infection by CpG Oligodeoxynucleotices” is hereby incorporated and made a part of this contract.

				
	 	  	 	  	ESTIMATED COST	  	$	6,000,000.00
			
	 	  	ACRN AB Funded Amount	  	$	5,998,693.00
	 	  	ACRN AC Funded Amount	  	$	1,307.00

  
 SECTION F - DELIVERIES OR PERFORMANCE

  
 The period of performance in Section F.1 of this contract is amended to
reflect an increase of an additional nine months of performance. 
  
 Amend Section
F1, Period of Performance: 
  
 FORM: 6 December 2003 – 5 June 2003

  
 TO: 6 December 2003 – 4 March 2004 
  
 SECTION G - CONTRACT ADMINISTRATION DATA 
  
 Accounting and Appropriation 
  
 Summary for the Payment Office 
  
 As a result of this modification, the total funded amount for this document was increased by $6,000,000.00 from $6,000,001.00 to $12,000,001.00.

  
 SUBCLIN 000102: 
 Funding on SUBCLIN 000102 is initiated as follows: 
  
 ACRN: AB 
  
 Acctng Data:
970304040013010181293RPAROD3310M9270PU255Y3AR44498LSVC013XVC01018129 
  
 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act. 

 DAAD19-03-C-0002 
 P00003 
 Page 3 of 3 
  

Increase: $5,998,693.00 
  
 Total: $5,998,693.00 
  
 ACRN: AC 
  
 Acctng Data: 970203040013010181292RPAROD2310P1480PU255Y2AR44498LSTE012XTE01018129 
  
 Increase: $1,307.00 
  
 Total: $1,307.00 
  
 (End of Summary of Changes) 
  
 Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the
Securities Act. 

																													
	AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT	  	 1.     CONTRACT ID CODE
	  	PAGE OF PAGES
	 	  	                    S	  	    1	  	  1
				
	 2.     AMENDMENT/MODIFICATION NO.
 P00008
	  	 3.     EFFECTIVE DATE
  
 28-Feb-2005
	  	 4.     REQUISITION/PURCHASE REQ. NO.
  
 P-444498-LS-02248-1
	  	 5.     PROJECT NO. (If applicable)

						
	 6.     ISSUED BY
  
 US ARMY RDECOM ACO CTR - W911NF
 4300 S. MIAMI BLVD
 DURHAM NC
27703-
	  	CODE	  	W911NF	  	 7.     ADMINISTERED BY (If other than item 6)
  
 U.S. ARMY ROBERT MORRIS ACQUISITION
 P.O. BOX 12211
 RESEARCH TRIANGLE PARK NC 27709-2211
	  	CODE	  	DAAD19
			
	 8.     NAME AND ADDRESS OF CONTRACTOR (No., Street, County, State and Zip Code)
COLEY PHARMACEUTICALS
GROUP INC
93 WORCESTER ST
WELLESLEY MA 02481-3609
	  	 	  	 9A.  AMENDMENT OF SOLICITATION NO.

			
	 	  	 	  	 9B.   DATED (SEE ITEM 11)

			
	 	  	x	  	 10A.MOD. OF CONTRACT/ORDER NO.
 DAAD19-03-C-0002

			
	 	  	x	  	 10B.DATED (SEE ITEM 13)
 03-Dec-2002

				
	CODE 3BG55	  	FACILITY CODE 3BG55	  	 	  	 
	
	11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
					
	  ̈      The above numbered solicitation is amended as set forth in item 14. This hour and date specified for receipt of Offer
	  	 ̈	  	is extended,	  	 ̈	  	is not extended.
	
	 Offer must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation or as amended by one of the following
methods:
(a) By completing Items 8 and 15, and returning ______ copies of the amendment; (b) By acknowledging receipt of this amendment on each copy of the offer submitted; or (c) By separate letter or telegram which includes a reference to the
solicitation and, amendment numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this amendment you
desire to change an offer already submitted, such change may be made by telegram or letter, provided each telegram or letter makes reference to the solicitation and this amendment, and is received prior to the opening hour and date
specified.

	
	 12.   ACCOUNTING AND APPROPRIATION DATA (If required)

	
	13.    THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS. IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
		
	 x
	  	 A.    THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES SET FORTH IN ITEM 14 ARE
MADE IN THE CONTRACT ORDER NO. IN ITEM 10A. FAR 52.243-2ALT V

		
	 	  	 B.    THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMINISTRATIVE CHANGES (such as changes
in paying office, appropriation date, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR 43.103(B)

		
	 	  	 C.    THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:

		
	 	  	 D.    OTHER (specify type of modification and authority)

				
	 E.    IMPORTANT:   Contractor
	  	 x       
	  	is not,	  	  ̈        is required to sign this document and return                  copies to the issuing
office.

	
	 14.   DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings, including solicitation/contract
subject matter where feasible.)

	
	The purpose of this modification is to extend the performance period of this contract for six months at no additional cost to the government, and to approve a revised scope of work
dated, February 2005 Entitled: “Prevention of Anthrax Infection by CPG Oligodeoxynucleotides”, pages 1 through 15.
		
	 1.     Amend Section F.1, Period of Performance:
	  	FROM: 6 December 2002 – 28 February 2005
	 	  	TO: 6 December 2002 – 28 August 2005.
	
	 2.     The revised scope of work as proposed by Coley Pharmaceuticals has been reviewed and approved by
the Technical Monitor on 16 February 2005 and will become effective upon the date of this modification. See attachment A.

	
	 3.     All else remains the same.

	
	Except as provided herein, all terms and conditions of the document referenced in Item 9A or 10A, as heretofore changed, remains unchanged and in full force and
effect.
		
	 15A.NAME AND TITLE OF SIGNER (Type or print)
	  	 16A.NAME AND TITLE OF CONTRACTING OFFICER (Type or print)
 DIANE C. HODOR / GRANTS/CONTRACTING OFFICER

	 	  	TEL: (919) 549-4301	  	EMAIL: hodord@aro-ernh1.army.mil
				
	 15B.CONTRACTOR/OFFEROR
	  	 15C.DATE SIGNED
	  	 16B.UNITED STATES OF AMERICA
	  	 16C.DATE SIGNED

								
	  

	  	 	  	 BY /s/ Diane C. Hodor

	  	 	  	 	  	 	  	 	  	28-Feb-2005
					
	(Signature of person authorized to sign)	  	 	  	            (Signature of Contracting Officer)	  	 	  	 
			
	EXCEPTION TO SF 30 APPROVED BY OIRM 11-84	  	30-105-04	  	STANDARD FORM 30 (Rev. 10-83) Prescribed by GSA FAR (48 CFR) 53.243

  
 Portions of this
Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act. 

			
	 Protection from Anthrax Infection Using
	 	Program Director: Krieg
	 CpG Oligodeoxynucleotides
	 	Coley Pharmaceutical Group

  

 PREVENTION OF ANTHRAX INFECTION BY CPG OLIGODEOXYNUCLEOTIDES 
  
 EXECUTIVE SUMMARY 
  
 The [******************] vaccine against anthrax [*****************] has been demonstrated
to be safe and effective in its approved regimen of [*] injections over [**] months. However, there is great interest in further improving the safety and efficacy of the vaccine by reducing the number of doses that need to be given in order to
achieve protective antibody levels against the anthrax toxin proteins. Human and animal data suggest that combining a Coley TLR9 agonist with [***] would offer the following advantages compared to the current vaccine: i) much faster seroconversion
with induction of protective antibody levels in most subjects within [*] weeks; ii) reduced number of [***] doses required, to no more than [***********************] dose vaccination; iii) generation of higher affinity antibodies targeted against a
broader range of epitopes to give improved protection against mutant strains; and iv) improved duration of protective serum antibodies and memory responses. 
  
 Coley Pharmaceutical Group proposes to make available to DARPA CPG 7909 for lead development as an adjuvant for co-formulation in the anthrax vaccine
[********************] by [***********************]. Coley has CPG 7909 in phase II clinical development in oncology and has demonstrated proof-of-concept of the drug as a vaccine adjuvant in human vaccine studies. The advanced stage of development
of CPG 7909 makes this molecule the best candidate for further rapid development and approval as a vaccine adjuvant. Further, Coley proposes to develop a second TLR9 agonist, differentiated from CPG 7909 in its immuno-pharmacological and metabolic
profile, as a back-up compound. 
  
 The final part of this proposal is to develop
a different TLR9 agonist as a prophylactic that would be given to activate immune resistance to an anticipated BW attack. The human innate immune system encompasses a remarkable array of pathogen defenses that may be able to protect a non-immune
individual from anthrax infection acquired as a consequence of a BW attack. A TLR9 agonist delivered by aerosol administration may be able to activate the innate immune system in the lungs and thus induce broad-spectrum resistance against inhaled
pathogens including B. anthracis. Coley has identified three classes of TLR9 agonist, each with distinct structures and immune effects. The innate immune defenses activated by certain A-Class or B-Class TLR9 agonists can protect rodents
against several different viral, bacterial, and parasitic pathogens. The work in this proposal will support determining which of these 3 TLR9 agonist classes will be best for protecting against an inhaled anthrax challenge in animal models, and will
initiate development of that product for military use. 
  

					
	 Contact: Iain Sim
	 	1/11	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

			
	 Protection from Anthrax Infection Using
	 	Program Director: Krieg
	 CpG Oligodeoxynucleotides
	 	Coley Pharmaceutical Group

  

 BACKGROUND 
  
 This program proposal is a request for a re-direct of funds previously awarded to Coley Pharmaceutical Group under contract DAAD19-03-C-0002. The overall rationale and
approach remains unchanged and are not repeated in this document. In this current proposal, Coley offers a more advanced drug development candidate, CPG 7909, for use as an adjuvant in combination with [*******] anthrax vaccine. In addition, Coley
proposes to DARPA the development of a representative of a new class of TLR9 agonists, exemplified by [*********], as a back-up molecule to CPG 7909. 
  
 Development Of CPG 7909 
  
 CPG 7909 is a B-Class TLR9 agonist that is a potent activator of B cells as well as of plasmacytoid dendritic cells. Coley has demonstrated the adjuvant activity of CPG
7909 in clinical studies in combination with Engerix B®, a commercially approved hepatitis B vaccine. CPG 7909 substantially enhanced the antibody response to Engerix B in both normal subjects and in immunoincompetent HIV-infected individuals when compared to controls
receiving Engerix B vaccine alone. In addition, it has been shown that the co-administration of CPG 7909 [********] to monkeys enhances the anti-PA antibody response when compared to the controls. Coley has offered to make CPG 7909, now in phase II
clinical development, available to DARPA for the purposes of improving the performance of the anthrax vaccine. CPG 7909 is the most advanced TLR9 agonist currently in development at Coley and offers the opportunity to fast track a development
program of such an agonist in combination with the anthrax vaccine. Coley has made substantial investments in the manufacturing and analysis of CPG 7909, in the characterization of its safety in rodents and non-human primates, and in the
understanding of its pharmacodynamics and anti-cancer activity in human subjects. Coley is preparing to file an IND with the DVRPA, CBER, FDA to support the immediate conduct of a proof-of-concept clinical study of CPG 7909 in combination
[********]. The Coley IND will be available to [*******] for [***********] and will support a more extensive clinical development program under a [********************]. 
  
 Development of a Back-Up Molecule as a Vaccine Adjuvant 
  
 It is Coley’s understanding that DARPA wishes Coley to develop and offer to DARPA and the vaccine-manufacturing partners a second TLR9
agonist that will serve as a back-up to the lead molecule. DARPA has suggested that the back-up molecule be [*********]. Whereas [*******] shows immunomodulatory activity similar to CPG 7909 while at the same time being different in nucleotide base
sequence Coley wishes to propose for DARPA consideration the selection of a new type of immunomodulatory TLR9 agonist with a unique set of properties. 
  
 CPG 7909 contains a phosphorothioate backbone designed to make the molecule resistant to exo- and endonuclease cleavage. When administered at [*********] (manifold the
expected human dose for a vaccine adjuvant) to experimental animals, CPG 7909 has been [******************] in the [******]of these animals and to be 

  

					
	 Contact: Iain Sim
	 	2/11	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

			
	 Protection from Anthrax Infection Using
	 	Program Director: Krieg
	 CpG Oligodeoxynucleotides
	 	Coley Pharmaceutical Group

  

 
[************ ******] by [****************] to the [********************************]. These [********************] are known to
[***************************]. In addition, it has been [****] in [***************] that administration of CPG 7909 [******] over [******************] and [*******] and [*********************] results in a [****************] including
[*********************] into the [*****] of the test animals. While this [******] has not been [********] with any [*********** **********] in over [************] who have [******] CPG 7909 to date, including a number of [******] who have
[*************************************] Coley believes that a molecule designated as a back-up to CPG 7909 should be devoid of the propensity to [********] in the [****] while retaining the desired B cell stimulating activities of CPG 7909.
[*********] is structurally similar to CPG 7909, contains a phosphorothioate backbone, exhibits similar immunomodulatory activity and is expected to have a similar metabolic profile. On the other hand, Coley has developed a new approach to the
design of TLR9 agonists whereby [*******] of the [****] contains [**] [*************] and [*****************]. By this means the molecule is expected to exhibit increased [***************] and to show [****************] in the [****] as compared to
[*******************] molecules such as CPG 7909 and [*********]. Moreover, by postponing the [***************] between the [**] and the [************], it is expected that the [***********] consequent from [**********] activity will be both much
[*******] in [****] than the parent molecule and devoid of [********************]. These [*************] compounds have been called [***** *******] TLR9 agonists. 
  
 [*********] is a C-Class TLR9 agonist and is an example of this new type of [******] immunomodulatory agent. In general terms the C-Class
TLR9 agonists show good stimulation of B cells (efficient antibody secretion or induction of B cell proliferation) with a potency similar to the B-Class molecules such as CPG 7909. In addition, C-Class oligodeoxynucleotide TLR9 agonists demonstrate
very strong Th1-inducing capacities (efficient induction of secretion of type I interferons or stimulation of NK cells) similar to the TLR9 agonists of the A-Class. This pattern of in vitro immunostimulatory activities places the molecules of
the C-Class between the previously defined B- and A-Classes and demonstrates their potential to induce favorable immune responses in vivo. 
  
 When administered to experimental animals, [*******] shows [**************] in the [****] as compared to the corresponding [***************************] molecule and
there is [*****************] after s.c. administration in mice as compared to [*** *******] analogs. Preliminary [******] studies suggest that [*********] is [*************] through initial cleavage at the [*******] leading to [***** ********] as
would be expected from the placement of the [***************] in the parent molecule. Despite this [**************] of [*******] compounds they appear to be [***********************] than their first generation parent molecules. 
  

					
	 Contact: Iain Sim
	 	3/11	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

			
	 Protection from Anthrax Infection Using
	 	Program Director: Krieg
	 CpG Oligodeoxynucleotides
	 	Coley Pharmaceutical Group

  

 GOALS 
  
 The goals of this proposal are: 
  

	 	1.	To file an IND that will support the conduct of a proof-of-concept clinical study of CPG 7909 administered [********************] to human volunteers. 

  

	 	2.	To conduct manufacturing development and non-clinical safety studies of CPG 7909 that will be adequate to support the comprehensive development of the molecule as an adjuvant in a
clinically superior anthrax vaccine formulation. 

  

	 	3.	To identify a second TLR9 agonist that is differentiated from CPG 7909 and to conduct pre-clinical development studies adequate to support its further clinical development, if
needed, as a back-up to CPG 7909. 

  

	 	4.	To manufacture and support evaluation of representative A-, B- and C-Class TLR9 agonists for their ability to stimulate the innate immune system and protect a non-human primate from
a non-lethal virus infection following administration to the respiratory tract, in order to generate data supporting the testing of the most promising candidates for protection of a primate against a lethal inhaled anthrax challenge.

  
 These goals will be achieved through the completion of the
following tasks: 
  

	 	1.	File an IND to support the conduct of a proof-of-concept clinical study of [*** ***] CPG 7909 

  

	 	2.	Develop an efficient large scale manufacturing process for CPG 7909 

  

	 	3.	Develop and validate analytical methods for the determination of the identity, potency, purity and stability of CPG 7909 

  

	 	4.	Characterize the toxicological profile of CPG 7909 in rodents and non-human primates administered by the intramuscular route. 

  

	 	5.	Develop and qualify methods for the assay of CPG 7909 in biological specimens 

  

	 	6.	Establish the key in vitro and in vivo biological characteristics of additional TLR9 agonists 

  

	 	7.	Manufacture a back-up molecule 

  

	 	8.	Develop and qualify analytical methods for the determination of the identity, potency, purity and stability of the back-up molecule. Determine the stability of the back-up molecule

  

	 	9.	Characterize the toxicological profile of the back-up molecule 

  

	 	10.	Develop and qualify methods for the assay of the back-up molecule in biological specimens 

  

	 	11.	Manufacture and characterize examples of A-, B- and C-Class TLR9 agonists 

  

					
	 Contact: Iain Sim
	 	4/11	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

			
	 Protection from Anthrax Infection Using
	 	Program Director: Krieg
	 CpG Oligodeoxynucleotides
	 	Coley Pharmaceutical Group

  

 Statement of Work 
  
 Task 1. File an IND to Support the Conduct of a Proof-of-Concept Clinical Study of [******] CPG 7909 
  
 Coley, [****************] and DARPA have agreed to conduct a
proof-of-concept clinical study of [********] CPG 7909. This study will be conducted under a Coley-sponsored IND. At a Pre-IND teleconference held on July 1, 2003 with the Division of Vaccine and Related Product Applications, CBER, FDA, the Agency
requested Coley to submit a [***********] IND without [***********] to the existing [******] open in the [****************]. More over, FDA requested the inclusion of additional documentation in the IND that [***] must now prepare. As a result of
the request from FDA, the overall size of the IND submission is now expected to be substantially greater than was originally envisioned and will require extensive work to prepare, collate and distribute. 
  
 In addition, the [***] has requested that Coley conduct a [***************
**********] of [*********************] from a recently completed [************] of the [**************] and CPG 7909 and include the results in the IND [********]. This activity was previously judged not to be required and has not been
budgeted for. 
  
 While the majority of the cost burden of
managing the proof-of-concept clinical study will be borne by others, Coley has agreed to manage the supply of clinical trial products - CPG 7909 and saline – to the study sites. Coley will manage the supply of materials to the clinical sites
using an experienced sub-contractor. 
  
 The following activities
will be conducted: 
  

	 	a.	Draft, compile, review, print, collate, quality assure and ship an IND submission to DVRPA, CBER, FDA. 

  

	 	b.	Conduct a [************************] of [*********] from the [***] [************] of [******] CPG 7909. 

  

	 	c.	Supply CPG 7909 Injection and saline for injection; manage the shipment of these products to clinical study sites. 

  
 Task 2. Develop an efficient large scale manufacturing process for CPG 7909

  
 Approximately [***] g of CPG 7909 active pharmaceutical
ingredient (API) are currently available and assigned to the initial development of the proposed combined [********] CPG 7909 vaccine product (see also Task 3 below). Moreover, the current manufacturing process is adequate for the present stage of
development and is capable of producing drug in lot sizes of [*******] g. However, in the opinion of Coley the manufacturing process is not optimized or sufficiently defined and controlled for it to be used for the routine manufacture of CPG 7909
API for use in an FDA-approved commercial vaccine product. 
  

					
	 Contact: Iain Sim
	 	5/11	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

			
	 Protection from Anthrax Infection Using
	 	Program Director: Krieg
	 CpG Oligodeoxynucleotides
	 	Coley Pharmaceutical Group

  

 Production of GMP CPG 7909 active pharmaceutical ingredient for pivotal studies and for commercial
supplies will be contracted out by Coley to a third party manufacturer. As the sponsor company, Coley remains responsible for ensuring that the contract manufacturer is in GMP compliance and also adheres to the information in Coley’s regulatory
filings. As such, Coley personnel will be integrated into many of the contract manufacturer operations. 
  
 Since CPG 7909 is a pharmacologically active substance it is anticipated that the manufacture of CPG 7909 will be regulated by the FDA in a manner similar
to the manufacture of API for drug products. The following activities must be completed to support the development of a commercially viable, validatable manufacturing process: 
  

	 	a.	Refine the current manufacturing process, both synthetic chemistry and purification, for the efficient production of API on a scale and of a quality adequate to meet the needs of
the future market place 

  

	 	b.	Define, develop and set specifications for in-process controls for the manufacture of API to afford better control of the manufacturing process 

  

	 	c.	Define, develop and set specifications for starting materials used in the manufacturing process 

  

	 	d.	Prepare and maintain an up-to-date Drug Master File for cross-reference 

  

	 	e.	Conduct GMP-compliance audits 

  
 Task 3. Develop and validate analytical methods for the determination of the identity, potency, purity and stability of CPG 7909 
  
 Approximately [***] of CPG 7909 API were manufactured in 2002 at a contract
manufacturer as part of the collaboration between Coley and DARPA. This material did not meet the required specifications when tested initially and was further [******] by additional [************]. It is expected that this material can be
used for [*******] and [*******] of the [************] CPG 7909 product. However, additional analysis of the material is required to ensure that it conforms to release specifications using current, state of the art analytical methodologies; a CMC
amendment must be submitted to the IND to qualify for use. 
  
 Coley has made significant advances in the development and application of analytical methods suitable for the determination of the identity, potency, purity and stability of CPG 7909. The optimization of the analytical methods is in
progress. The development and conduct of such test methods requires the use of reference materials that characterize the performance of the pure compound, as well as the known manufacturing impurities, within the assay. Coley will use its expertise
in the synthetic and analytical chemistry of oligodeoxynucleotides to 

  

					
	 Contact: Iain Sim
	 	6/11	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

			
	 Protection from Anthrax Infection Using
	 	Program Director: Krieg
	 CpG Oligodeoxynucleotides
	 	Coley Pharmaceutical Group

  

 
prepare in part in its own laboratories and in part have prepared by a contract manufacturer samples of such reference materials. Fully optimized methods
must be qualified, validated and the technology transferred from the development laboratory to the qualified contract facility that will have responsibility for the quality control release testing of the API. The methods will also be transferred to
[******************] for their use in the development of the combined [*****] CPG 7909 product. While the analytical methods available at present are judged to be adequate for the development of CPG 7909, it is recognized that as new information is
gained the development of additional analytical techniques may be required to address the detection of new impurities arising from the final manufacturing process. 
  
 Coley has used internal expertise as well as contracts with competent contract laboratories to development sensitive,
reproducible analytical methods. Coley will continue to provide expert advice on the chemistry and detection of CPG 7909 and will closely monitor the work of the contract laboratories to assure the objectives are achieved. The following activities
must be completed before commercialization: 
  

	 	a.	Optimize, qualify, validate and transfer GMP analytical methods 

  

	 	b.	Prepare reference standards and impurity markers 

  

	 	c.	Monitor the of production lots of CPG 7909 for new impurities and development of new analytical methods as the need arises 

  

	 	d.	Perform comparability analysis of production lots 

  

	 	e.	Perform release testing of lots of active pharmaceutical ingredient 

  

	 	f.	Determine the stability of the active pharmaceutical ingredient under a variety of storage conditions 

  

	 	g.	Perform physical/chemical characterization of individual lots of active pharmaceutical ingredient 

  

	 	h.	Develop analytical methods for the qualification of starting materials 

  

	 	i.	Develop analytical methods adapted for application to in-process controls 

  
 Task 4. Characterize the toxicological profile of CPG 7909 in rodents and non-human primates administered by the intramuscular route 
  
 Coley has extensive data on the safety of CPG 7909 in rodents and non-human
primates when administered by the intravenous and subcutaneous routes. [************] has expressed its desire to explore the intramuscular route for administration of a [**************] CPG 7909 vaccine product. Therefore it is important to
understand first the safety of CPG 7909 alone when administered by this route. Coley will place and manage contracts with competent, approved contract research organizations for the performance toxicological studies designed to characterize the
non-clinical safety of CPG 7909 administered by the intramuscular route, and to demonstrate a margin of safety between the proposed adjuvant dose and the doses which caused toxicity in previous CPG 7909 studies. All studies will be conducted
according to the principles of Good Laboratory 

  

					
	 Contact: Iain Sim
	 	7/11	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

			
	 Protection from Anthrax Infection Using
	 	Program Director: Krieg
	 CpG Oligodeoxynucleotides
	 	Coley Pharmaceutical Group

  

 
Practice and will be supported by toxicokinetic analyses. Coley will provide expert toxicological advice on the design and conduct of the studies, the
interpretation of the results and the preparation of the final study reports. Coley will also engage a consultants experienced in oligodeoxynucleotide toxicology and in the regulatory aspects of vaccine adjuvant development. The following studies
are planned: 
  

	 	a.	[***]-month sub-acute i.m. toxicology in the rodent 

  

	 	b.	[***]-month sub-acute i.m. toxicology in the non-human primate 

  
 Task 5. Develop and qualify methods for the assay of CPG 7909 in biological specimens 
  
 Sensitive, reproducible assays are required in order to be able to detect and quantitate the presence of CPG 7909 in
biological specimens. Such specimens may include blood and urine as well as tissue samples. Such assays are required to demonstrate the kinetics of absorption and elimination of CPG 7909 when administered to rodents and non-human primates in
toxicological studies (toxicokinetics) either alone or when formulated with anthrax vaccine antigens in prototype formulations. Such assays may also be used if needed to characterize more thoroughly the absorption, tissue distribution and
elimination of CPG 7909 in animals (ADME studies) and in human subjects. 
  
 Coley has recently made significant efforts to develop and apply a sensitive, reproducible assay for the detection of CPG 7909 in biological specimens. Coley will complete the development and validation of this assay
and provide expert advice during the transfer of the assay to [************]. 
  
 Task 6. Establish the key in vitro and in vivo biological characteristics of additional TLR9 agonists 
  

As discussed, Coley believes that a molecule that is a candidate for designation as a back-up to CPG 7909 should satisfy two principal criteria: (i)
exhibit vaccine adjuvant potency that is at least equivalent to that of CPOG 7909; and (ii) demonstrate pharmocokinetic properties, including metabolic profile, that [****] the [***] of [**********] of the [*************] and of [**************
**********] in the [****] and [*********]. While [********] appears to meet these requirements based on initial experiments, direct comparisons of the adjuvant and pharmacokinetic properties of CPG 7909 and [*********] should be performed. Coley has
other [********] oligodeoxynucleotides TLR9 agonists that may also be candidates for selection as a back-up molecule. To identify a candidate back-up molecule Coley will conduct experiments to: 
  

	 	a.	Define immune cell activation in human cell screens in vitro 

  

	 	b.	Define adjuvant activity in vivo 

  

	 	c.	Define tissue distribution and metabolism in vivo 

  

					
	 Contact: Iain Sim
	 	8/11	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

			
	 Protection from Anthrax Infection Using
	 	Program Director: Krieg
	 CpG Oligodeoxynucleotides
	 	Coley Pharmaceutical Group

  

 Task 7. Manufacture a back-up molecule 
  
 When a candidate back-up compound has been selected and accepted by DARPA, Coley will initiate the production of GMP quality
active pharmaceutical ingredient for non-clinical GLP development studies and for clinical trials. Coley will work closely with a third party manufacturer experienced in the manufacture of Coley CPG molecules. As the sponsor company, Coley remains
responsible for ensuring that the contract manufacturer is in GMP compliance and also adheres to the information in Coley’s regulatory filings. As such, Coley personnel will be integrated into many of the contract manufacturer operations. These
activities include: 
  

	 	a.	Develop and refine the process for the efficient production of active pharmaceutical ingredient on a scale and of a quality adequate to meet the needs of the development program

  

	 	b.	Forecast, schedule, and conduct all drug substance manufacturing operations to ensure adequate drug supplies for non-clinical development and clinical trials

  

	 	c.	Select and evaluate container/closure configuration for API 

  

	 	d.	Conduct of GMP-compliance audits 

  
 Task 8. Develop and qualify analytical methods for the determination of the identity, potency, purity and stability of the back-up molecule. Determine the stability of
the back-up molecule 
  
 Coley will place and manage a
contract with a competent contract laboratory for the development of sensitive, reproducible methods for the measurement of the identity, purity, potency and stability of the back-up molecule active pharmaceutical ingredient. Coley will provide
expert advice on the chemistry and detection of Oligodeoxynucleotides and will closely monitor the work of the contract laboratory to assure the objectives are achieved. Upon successful completion of the test method development, the methods will be
established and qualified in the same or another contract laboratory for the following applications: 
  

	 	a.	Define and perform release testing of lots of active pharmaceutical ingredient 

  

	 	b.	Determine the stability of the active pharmaceutical ingredient under a variety of storage conditions 

  

	 	c.	Perform physical/chemical characterization of individual lots of active pharmaceutical ingredient 

  
 The development and conduct of such test methods requires the use of reference materials that characterize the performance
of the pure compound, as well as the known manufacturing impurities, within the assay. Coley will use its expertise in 

  

					
	 Contact: Iain Sim
	 	9/11	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

			
	 Protection from Anthrax Infection Using
	 	Program Director: Krieg
	 CpG Oligodeoxynucleotides
	 	Coley Pharmaceutical Group

  

 
the synthetic and analytical chemistry of Oligodeoxynucleotides to prepare in part in its own laboratories and in part have prepared by a contract
manufacturer samples of such reference materials. Coley will also use its expertise in analytical chemistry to search for and to characterize other impurities that may occur from time to time in lots of the active pharmaceutical ingredient prepared
by a third party manufacturer. 
  
 Task 9. Characterize the toxicological
profile of the back-up molecule 
  
 Coley will place and
manage contracts with competent, approved contract research organizations for the performance of a number of studies designed to characterize the non-clinical safety and tolerability of the back-up molecule. All studies will be conducted according
to the principles of Good Laboratory Practice and will be supported by toxicokinetic analyses where appropriate. Coley will provide expert toxicological advice on the design and conduct of the studies, the interpretation of the results and the
preparation of the final study reports. Coley will also engage a consultants experienced in ODN non-clinical toxicology and in adjuvant regulatory development. The following studies are planned: 
  

	 	a.	Safety pharmacology in the non-human primate 

  

	 	b.	[***]-month sub-acute toxicology in the rodent 

  

	 	c.	Mutagenic potential 

  
 Task 10. Develop and qualify methods for the assay of the back-up molecule in biological specimens 
  
 Sensitive, reproducible assays are required in order to be able to detect and quantitate the presence of the back-up molecule in biological specimens.
Such specimens may include blood and urine as well as tissue samples. Such assays are required to demonstrate the kinetics of absorption and elimination of the back-up molecule when administered to rodents and non-human primates in toxicological
studies (toxicokinetics) and in humans in clinical studies. Coley may conduct studies in-house, or may place and manage contracts with a competent contract laboratory, for the development of a sensitive, reproducible assay. Coley will provide expert
advice on the chemistry and detection of oligodeoxynucleotides and will closely monitor the work of the contract laboratory to assure the objectives are achieved. Upon successful completion of the development of a detection assay, the assay will be
established and for use in detecting the back-up molecule in biological specimens in studies conducted according to Good Laboratory Practice standards. The assay will also be transferred to [************] to be available for use in support of future
clinical studies. 
  
 Task 11. Manufacture and characterize examples of A-, B-
and C-Class TLR9 agonists 
  
 Coley will manufacture and
characterize, or supply from inventory, quantities of research grade A-, B- and C-Class TLR9 agonists in amounts adequate to support 

  

					
	 Contact: Iain Sim
	 	10/11	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

			
	 Protection from Anthrax Infection Using
	 	Program Director: Krieg
	 CpG Oligodeoxynucleotides
	 	Coley Pharmaceutical Group

  

 
evaluation as prophylactic agents in a non-human primate model of a respiratory infection. The outcome of the NHP model studies will be used to select the
optimal TLR9 agonist for further development as a prophylactic agent. Coley will direct its contract manufacturer to manufacture a larger quantity of the TLR9 agonist according to the principles of GMP to support further pre-clinical research
studies and non-clinical GLP development studies. 
  
 TRA 2028419vl 
  

					
	 Contact: Iain Sim
	 	11/11	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

			
	 Contract: DAAD19-03-C-002
	 	Program Director: Krieg
	 Revised: February, 2004
	 	Coley Pharmaceutical Group

  

 PREVENTION OF ANTHRAX INFECTION BY CPG OLIGODEOXYNUCLEOTIDES 
  

					
	 Name: Krieg, Arthur, M.
	  	 Title: SVP R&D; CSO
	  	             Institution: Coley Pharmaceutical Group, Inc

	
	 Location: 93 Worcester Street, Wellesley, MA 02481

		
	 Phone: 1-781-431-9000
	  	 E-mail: akrieg@coleypharma.com

	
	 Contract Number: DAAD19-03-C-002

		
	 Contract Start Date: December 6, 2002
	  	 Contract End Date: June 4, 2004

	
	 Total Contract Value: $12,000,001

  
 REVISED STATEMENT OF
WORK 
  
 THIS APPLICATION 
  
 Contract History 
  
 Contract DAAD19-03-C-002, Prevention of Anthrax Infection by CpG oligodeoxynucleotides, was
awarded with an effective date of December 6th, 2002 and a value of $6,000,001. The contract was amended with an
additional award of $6,000,000 to run until March 4th, 2004 subsequently amended with a revised scope of work to run
through June 4th, 2004. This current application proposes a further limited amendment to the scope of work and an
extension of the contract period with a new end date of February 28, 2005. There is no proposal to change the total value of the contract. 
  
 Proposed Change In Scope 
  
 Two changes are proposed to the scope of work as summarized in the table below and detailed in the description of Tasks. 
  

					
	 Task
#

	  	 Description

	  	 Amended Scope

	1	  	File an IND to support the conduct of a proof-of-concept clinical study of [*******] CPG 7909	  	This task is extended to include supporting the conduct of the proposed proof-of-concept clinical study. Coley will provide financial resources to one of the two planned clinical investigational
centers – [********************************].
	11	  	Manufacture and characterize examples of A-, B- and C-Class TLR9 agonists	  	Coley will continue to manufacture or supply from inventory quantities of research grade A-, B- and C-class TLR9 agonists for evaluation in animals. However, the identification of a lead
compound from research testing will only occur after the termination of this current contract. Therefore, the manufacture of a larger quantity of GMP-grade material of a lead compound is now deleted.

  

					
	 Contact: Iain Sim
	 	1/12	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

			
	 Contract: DAAD19-03-C-002
	 	Program Director: Krieg
	 Revised: February, 2004
	 	Coley Pharmaceutical Group

  

 Changes in the scope of Tasks 1 and 11 are also defined in the appropriate sections below. 
  
 Re-direction of Funds 
  
 The program of research designed to identify the optimal class of TLR9 agonist for use in
prevention of disease resulting from exposure to airborne pathogens is underway. However, Coley judges that the large-scale manufacture of a lead TLR9 agonist will not be initiated within the timeframe of this contract. In addition, Coley finds that
it has used less contract labor than originally anticipated in the preparation of the IND submission for the proposed proof-of-concept clinical study of CpG 7909 [*******]. Coley therefore proposes that the funds originally assigned to the
manufacturing activity referenced above, and associated chemical analytical method development, together with the funds not allocated to contract labor, be re-directed to the support the clinical investigation defined in the amended Task 1. No
increase in funds is requested. 
  
 Extension
of Contract Duration 
  
 The duration of the proof-of-concept clinical study
is estimated to be approximately one year. This is driven by the time required to conduct and complete the proof-of-concept clinical study. Volunteers will be recruited for 8 weeks prior to the initial enrollment in the trial, and will be enrolled
over an 8-week period. Follow-up laboratory and safety data will be collected up to 6 months after the last vaccine. Approximately one to two additional months will be required to finalize all of the data collection and to close out the trial.
Volunteer recruitment is planned to start in March 2004. Therefore, Coley requests that the period of the contract be extended to February 28, 2005. 
  
 EXECUTIVE SUMMARY 
  
 The [******************] vaccine against anthrax [*****************] has been demonstrated to be safe and effective in its approved regimen of [*] injections over [**]
months. However, there is great interest in further improving the safety and efficacy of the vaccine by reducing the number of doses that need to be given in order to achieve protective antibody levels against the anthrax toxin proteins. Human and
animal data suggest that combining a Coley TLR9 agonist with [***] would offer the following 

  

					
	 Contact: Iain Sim
	 	2/12	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

			
	 Contract: DAAD19-03-C-002
	 	Program Director: Krieg
	 Revised: February, 2004
	 	Coley Pharmaceutical Group

  

 
advantages compared to the current vaccine: i) much faster seroconversion with induction of protective antibody levels in most subjects within [*] weeks; ii)
reduced number of [***] doses required, to no more than [***], and [**************] dose vaccination; iii) generation of higher affinity antibodies targeted against a broader range of epitopes to give improved protection against mutant strains; and
iv) improved duration of protective serum antibodies and memory responses. 
  
 Coley Pharmaceutical Group proposes to make available to DARPA CPG 7909 for lead development as an adjuvant for co-formulation in the anthrax vaccine [*******************************************]. Coley has CPG 7909 in phase II clinical
development in oncology and has demonstrated proof-of-concept of the drug as a vaccine adjuvant in human vaccine studies. The advanced stage of development of CPG 7909 makes this molecule the best candidate for further rapid development and approval
as a vaccine adjuvant. Further, Coley proposes to develop a second TLR9 agonist, differentiated from CPG 7909 in its immuno-pharmacological and metabolic profile, as a back-up compound. 
  
 The final part of this proposal is to develop a different TLR9 agonist as a prophylactic that would be given to activate immune resistance
to an anticipated BW attack. The human innate immune system encompasses a remarkable array of pathogen defenses that may be able to protect a non-immune individual from anthrax infection acquired as a consequence of a BW attack. A TLR9 agonist
delivered by aerosol administration may be able to activate the innate immune system in the lungs and thus induce broad-spectrum resistance against inhaled pathogens including B. anthracis. Coley has identified three classes of TLR9 agonist,
each with distinct structures and immune effects. The innate immune defenses activated by certain A-Class or B-Class TLR9 agonists can protect rodents against several different viral, bacterial, and parasitic pathogens. The work in this proposal
will support determining which of these 3 TLR9 agonist classes will be best for protecting against an inhaled anthrax challenge in animal models, and will initiate development of that product for military use. 
  
 BACKGROUND 
  
 This program proposal is a request for a re-direct of funds previously awarded to Coley Pharmaceutical Group under contract
DAAD19-03-C-0002. The overall rationale and approach remains unchanged and are not repeated in this document. In this current proposal, Coley offers a more advanced drug development candidate, CPG 7909, for use as an adjuvant in combination with
[*********] anthrax vaccine. In addition, Coley proposes to DARPA the development of a representative of a new class of TLR9 agonists, exemplified by [*******], as a back-up molecule to CPG 7909. 
  
 Development Of CPG 7909 
  
 CPG 7909 is a B-Class TLR9
agonist that is a potent activator of B cells as well as of plasmacytoid dendritic cells. Coley has demonstrated the adjuvant activity of CPG 7909 in clinical studies in combination with Engerix B®, a commercially approved hepatitis B 

  

					
	 Contact: Iain Sim
	 	3/12	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

			
	 .Contract: DAAD19-03-C-002
	 	Program Director: Krieg
	 Revised: February, 2004
	 	Coley Pharmaceutical Group

  

 
vaccine. CPG 7909 substantially enhanced the antibody response to Engerix B in both normal subjects and in immunoincompetent HIV-infected individuals when
compared to controls receiving Engerix B vaccine alone. In addition, it has been shown that the co-administration of CPG 7909 [******] to monkeys enhances the anti-PA antibody response when compared to the controls. Coley has offered to make CPG
7909, now in phase II clinical development, available to DARPA for the purposes of improving the performance of the anthrax vaccine. CPG 7909 is the most advanced TLR9 agonist currently in development at Coley and offers the opportunity to fast
track a development program of such an agonist in combination with the anthrax vaccine. Coley has made substantial investments in the manufacturing and analysis of CPG 7909, in the characterization of its safety in rodents and non-human primates,
and in the understanding of its pharmacodynamics and anti-cancer activity in human subjects. Coley is preparing to file an IND with the DVRPA, CBER, FDA to support the immediate conduct of a proof-of-concept clinical study of CPG 7909 in
[***************]. The Coley IND will be available to [*************] for [***********] and will support a more extensive clinical development program under a [*******************]. 
  
 Development of a Back-Up Molecule as a Vaccine Adjuvant 
  
 It is Coley’s understanding that DARPA wishes Coley to develop and offer to DARPA and the vaccine-manufacturing partners a second TLR9
agonist that will serve as a back-up to the lead molecule. DARPA has suggested that the back-up molecule be CPG 10103. Whereas [********] shows immunomodulatory activity similar to CPG 7909 while at the same time being different in nucleotide base
sequence, Coley wishes to propose for DARPA consideration the selection of a new type of immunomodulatory TLR9 agonist with a unique set of properties. 
  
 CPG 7909 contains a phosphorothioate backbone designed to make the molecule resistant to exo- and endonuclease cleavage. When administered [******] (manifold the expected
human dose for a vaccine adjuvant) to experimental animals, CPG 7909 has been [**************] in the [******] of these animals and to be [*************] by exonuclease cleavage to the so called N-1, N-2, et cetera, metabolites. These
[*********************] are known to [***************************]. In addition, it has been [***] in [*****************] that administration of CPG 7909 [********] over [*******] and [*************************] results in a [****************],
including [*************], into the [****] of the test animals. While this [*****] has not been [******] with any apparent [********* **********] in [*****************] who have [******] CPG 7909 to date, including a number of [******] who have
[*****] drug [******] for [************], Coley believes that a molecule designated as a back-up to CPG 7909 should be devoid of the propensity to [*******] in the [****] while retaining the desired B cell stimulating activities of CPG 7909.
[********] is structurally similar to CPG 7909, contains a phosphorothioate backbone, exhibits similar immunomodulatory activity and is expected to [***] a similar metabolic profile. On the other hand, Coley has developed a new approach to the
design of TLR9 agonists whereby the [*******] of the molecule contains 

  

					
	 Contact: Iain Sim
	 	4/12	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

			
	 Contract: DAAD19-03-C-002
	 	Program Director: Krieg
	 Revised: February, 2004
	 	Coley Pharmaceutical Group

  

 
[**********] and [*****************]. By this means the molecule is expected to exhibit increased susceptibility to endonuclease cleavage and to show
[**********] in the [****] as compared to [************] molecules such as CPG 7909 and [******]. Moreover, by positioning the [*********] between the [**] and the [***********], it is expected that the [*********] consequent from [**********]
activity will be both much [******] in [****] than the parent molecule and devoid of [*********************]. These [**********] compounds have been called [********************]. 
  
 [*******] is a C-Class TLR9 agonist and is an example of this new type of [************] immunomodulatory agent. In general terms the
C-Class TLR9 agonists show good stimulation of B cells (efficient antibody secretion or induction of B cell proliferation) with a potency similar to the B-Class molecules such as CPG 7909. In addition, C-Class oligodeoxynucleotide TLR9 agonists
demonstrate very strong Thl-inducing capacities (efficient induction of secretion of type I interferons or stimulation of NK cells) similar to the TLR9 agonists of the A-Class. This pattern of in vitro immunostimulatory activities places the
molecules of the C-Class between the previously defined B- and A-Classes and demonstrates their potential to induce favorable immune responses in vivo. 
  

When administered to experimental animals [******] shows [****************] in the [****] as compared to the corresponding [***************] molecule and there is
[****************] after s.c. administration in mice as compared to [************] analogs. Preliminary [*****************] studies suggest that [*******] is [*************] through initial cleavage at the [***********] leading to [*************] as
would be expected from the placement of the [****************] in the parent molecule. Despite this [*************] of [********] compounds, they appear to be [********************] than their first generation parent molecules. 
  
 GOALS 
  
 The goals of this proposal are: 
  

	 	1.	To file an IND that will support the conduct of a proof-of-concept clinical study of CPG 7909 administered [***********************] to human volunteers. 

 

	 	2.	To facilitate the execution of a proof-of-concept clinical study. 

  

	 	3.	To conduct manufacturing development and non-clinical safety studies of CPG 7909 that will be adequate to support the comprehensive development of the molecule as an adjuvant in a
clinically superior anthrax vaccine formulation. 

  

	 	4.	To identify a second TLR9 agonist that is differentiated from CPG 7909 and to conduct pre-clinical development studies adequate to support its further clinical development, if
needed, as a back-up to CPG 7909. 

  

					
	 Contact: Iain Sim
	 	5/12	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

			
	 Contract: DAAD19-03-C-002
	 	Program Director: Krieg
	 Revised: February, 2004
	 	Coley Pharmaceutical Group

  

	 	5.	To manufacture and support evaluation of representative A-, B- and C-Class TLR9 agonists for their ability to stimulate the innate immune system and protect experimental animals,
including a non-human primate, from infection following administration of pathogens to the respiratory tract, in order to generate data supporting the testing of the most promising candidates for protection of a primate against a lethal inhaled
anthrax challenge. 

  
 These goals will be achieved through the
completion of the following tasks: 
  

	 	1.	File an IND and support the conduct of a proof-of-concept clinical study of [*******] CPG 7909 

  

	 	2.	Develop an efficient large scale manufacturing process for CPG 7909 

  

	 	3.	Develop and validate analytical methods for the determination of the identity, potency, purity and stability of CPG 7909 

  

	 	4.	Characterize the toxicological profile of CPG 7909 in rodents and non-human primates administered by the intramuscular route 

  

	 	5.	Develop and qualify methods for the assay of CPG 7909 in biological specimens 

  

	 	6.	Establish the key in vitro and in vivo biological characteristics of additional TLR9 agonists 

  

	 	7.	Manufacture a back-up molecule 

  

	 	8.	Develop and qualify analytical methods for the determination of the identity, potency, purity and stability of the back-up molecule. Determine the stability of the back-up molecule

  

	 	9.	Characterize the toxicological profile of the back-up molecule 

  

	 	10.	Develop and qualify methods for the assay of the back-up molecule in biological specimens 

  

	 	11.	Manufacture and characterize examples of A-, B- and C-Class TLR9 agonists 

  
 Statement of Work 
  
 Task 1. File an IND to Support the Conduct of a Proof-of-Concept Clinical Study of [*******] CPG 7909 
  
 Coley, [*****************] and DARPA have agreed to conduct a
proof-of-concept clinical study of [***************] CPG 7909. This study will be conducted under a Coley-sponsored IND. At a Pre-IND teleconference held on July 1, 2003 with the Division of Vaccine and Related Product Applications, CBER, FDA, the
Agency requested Coley to submit a [***********] IND without [**********] to the existing [*******] open in the [************** ***************]. More over, [***********] the inclusion of additional documentation in the IND that [****] must now
prepare. As a result of the requests from [***], the overall size of the IND submission is now expected to be substantially greater than was originally envisioned and will require extensive work to prepare, collate and distribute. 
  

					
	 Contact: Iain Sim
	 	6/12	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

			
	 Contract: DAAD19-03-C-002
	 	Program Director: Krieg
	 Revised: February, 2004
	 	Coley Pharmaceutical Group

  

  
 In addition, the [***]
has [*******] that Coley [*****] a [*************** *********] of [******************] from a recently completed [****** ************] of the [****************] and CPG 7909 and include the results in the [************]. This activity was previously
judged not to be required and has not been budgeted for. 
  
 The
cost burden of managing the proof-of-concept clinical study will be borne by Coley and by others. Coley will fund an investigator at the [****************** *****************************] to recruit and treat approximately half of the planned number
of study subjects. As the clinical study sponsor (IND holder) Coley will obtain the customary clinical trail insurance. Coley has agreed to manage the supply of clinical trial products - CPG 7909 and saline - to the study sites. Coley will manage
the supply of materials to the clinical sites using an experienced sub-contractor. 
  
 The following activities will be conducted: 
  

	 	a	Draft, compile, review, print, collate, quality assure and ship an IND submission to DVRPA, CBER, FDA. 

  

	 	b	Conduct a [**********************] of [*********] from the [**************] of [*******] CPG 7909. 

  

	 	c.	Supply CPG 7909 Injection and saline for injection; manage the shipment of these products to clinical study sites. 

  

	 	d.	Conduct the proof-of-concept clinical study of CpG 7909 [******] as described in the clinical study protocol and approved by the FDA. 

  
 Task 2. Develop an efficient large scale manufacturing process for CPG 7909

  
 Approximately [***] g of CPG 7909 active pharmaceutical
ingredient (API) are currently available and assigned to the initial development of the proposed combined [*******] CPG 7909 vaccine product (see also Task 3 below). Moreover, the current manufacturing process is adequate for the present stage of
development and is capable of producing drug in lot sizes of [******] g. However, in the opinion of Coley the manufacturing process is not optimized or sufficiently defined and controlled for it to be used for the routine manufacture of CPG 7909 API
for use in an FDA-approved commercial vaccine product. 
  
 Production of GMP CPG 7909 active pharmaceutical ingredient for pivotal studies and for commercial supplies will be contracted out by Coley to a third party manufacturer. As the sponsor company, Coley remains responsible for ensuring that
the contract manufacturer is in GMP compliance and also adheres to the information in Coley’s regulatory filings. As such, Coley personnel will be integrated into many of the contract manufacturer operations. 
  
 Since CPG 7909 is a pharmacologically active substance it is anticipated
that the manufacture of CPG 7909 will be regulated by the FDA in a manner similar to the 

  

					
	 Contact: Iain Sim
	 	7/12	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

			
	 Contract: DAAD19-03-C-002
	 	Program Director: Krieg
	 Revised: February, 2004
	 	Coley Pharmaceutical Group

  

 
manufacture of API for drug products. The following activities must be completed to support the development of a commercially viable, validatable
manufacturing process: 
  

	 	a.	Refine the current manufacturing process, both synthetic chemistry and purification, for the efficient production of API on a scale and of a quality adequate to meet the needs of
the future market place 

  

	 	b.	Define, develop and set specifications for in-process controls for the manufacture of API to afford better control of the manufacturing process 

  

	 	c.	Define, develop and set specifications for starting materials used in the manufacturing process 

  

	 	d.	Prepare and maintain an up-to-date Drug Master File for cross-reference 

  

	 	e.	Conduct GMP-compliance audits 

  
 Task 3. Develop and validate analytical methods for the determination of the identity, potency, purity and stability of CPG 7909 
  
 Approximately [***] g of CPG 7909 API were manufactured in 2002 at a
contract manufacturer as part of the collaboration between Coley and DARPA. This material did not meet the required specifications when tested initially and was further [****] by additional [***********]. It is expected that this material can be
used for [**********] and [********] of the [******* ****] CPG 7909 product. However, additional analysis of the material is required to ensure that it conforms to release specifications using current, state of the art analytical methodologies; a
CME amendment must be submitted to the IND to qualify it for use. 
  
 Coley has made significant advances in the development and application of analytical methods suitable for the determination of the identity, potency, purity and stability of CPG 7909. The optimization of the analytical methods is in
progress. The development and conduct of such test methods requires the use of reference materials that characterize the performance of the pure compound, as well as the known manufacturing impurities, within the assay. Coley will use its expertise
in the synthetic and analytical chemistry of oligodeoxynucleotides to prepare in part in its own laboratories and in part have prepared by a contract manufacturer samples of such reference materials. Fully optimized methods must be qualified,
validated and the technology transferred from the development laboratory to the qualified contract facility that will have responsibility for the quality control release testing of the API. The methods will also be transferred to
[******************] for their use in the development of the [************] CPG 7909 product. While the analytical methods available at present are judged to be adequate for the development of CPG 7909, it is recognized that as new information is
gained the development of additional analytical techniques may be required to address the detection of new impurities arising from the final manufacturing process. 
  

					
	 Contact: Iain Sim
	 	8/12	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

			
	 Contract: DAAD19-03-C-002
	 	Program Director: Krieg
	 Revised: February, 2004
	 	Coley Pharmaceutical Group

  

 Coley has used internal expertise as well as contracts with competent contract laboratories to
development sensitive, reproducible analytical methods. Coley will continue to provide expert advice on the chemistry and detection of CPG 7909 and will closely monitor the work of the contract laboratories to assure the objectives are achieved. The
following activities must be completed before commercialization: 
  

	 	a.	Optimize, qualify, validate and transfer GMP analytical methods 

  

	 	b.	Prepare reference standards and impurity markers 

  

	 	c.	Monitor the of production lots of CPG 7909 for new impurities and development of new analytical methods as the need arises 

  

	 	d.	Perform comparability analysis of production lots 

  

	 	e.	Perform release testing of lots of active pharmaceutical ingredient 

  

	 	f.	Determine the stability of the active pharmaceutical ingredient under a variety of storage conditions 

  

	 	g.	Perform physical/chemical characterization of individual lots of active pharmaceutical ingredient 

  

	 	h.	Develop analytical methods for the qualification of starting materials 

  

	 	i.	Develop analytical methods adapted for application to in-process controls 

  
 Task 4. Characterize the toxicological profile of CPG 7909 in rodents and non-human primates administered by the intramuscular route 
  
 Coley has extensive data on the safety of CPG 7909 in
rodents and non-human primates when administered by the intravenous and subcutaneous route. [****************] has expressed its desire to explore the intramuscular route for administration of a [**************] CPG 7909 vaccine product. Therefore
it is important to understand first the safety of CPG 7909 alone when administered by this route. Coley will place and manage contracts with competent, approved contract research organizations for the performance toxicological studies designed to
characterize the non-clinical safety of CPG 7909 administered by the intramuscular route, and to demonstrate a margin of safety between the proposed adjuvant dose and the doses which caused toxicity in previous CPG 7909 studies. All studies will be
conducted according to the principles of Good Laboratory Practice and will be supported by toxicokinetic analyses. Coley will provide expert toxicological advice on the design and conduct of the studies, the interpretation of the results and the
preparation of the final study reports. Coley will also engage a consultants experienced in oligodeoxynucleotide toxicology and in the regulatory aspects of vaccine adjuvant development. The following studies are planned: 
  

	 	a.	[***]-month sub-acute i.m. toxicology in the rodent 

  

	 	b.	[***]-month sub-acute i.m. toxicology in the non-human primate 

  

					
	 Contact: Iain Sim
	 	9/12	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

			
	 Contract: DAAD19-03-C-002
	 	Program Director: Krieg
	 Revised: February, 2004
	 	Coley Pharmaceutical Group

  

 Task 5. Develop and qualify methods for the assay of CPG 7909 in biological specimens 
  
 Sensitive, reproducible assays are required in order to be able to detect
and quantitate the presence of CPG 7909 in biological specimens. Such specimens may include blood and urine as well as tissue samples. Such assays are required to demonstrate the kinetics of absorption and elimination of CPG 7909 when administered
to rodents and non-human primates in toxicological studies (toxicokinetics) either alone or when formulated with anthrax vaccine antigens in prototype formulations. Such assays may also be used if needed to characterize more thoroughly the
absorption, tissue distribution and elimination of CPG 7909 in animals (ADME studies) and in human subjects. 
  
 Coley has recently made significant efforts to develop and apply a sensitive, reproducible assay for the detection of CPG 7909 in biological specimens.
Coley will complete the development and validation of this assay and provide expert advice during the transfer of the assay to [***************]. 
  
 Task 6. Establish the key in vitro and in vivo biological characteristics of additional TLR9 agonists 
  
 As discussed, Coley believes that a molecule that is a candidate for
designation as a back-up to CPG 7909 should satisfy two principal criteria: (i) exhibit vaccine adjuvant potency that is at least equivalent to that of CPOG 7909; and (ii) demonstrate pharmocokinetic properties, including metabolic profile, that
[****] the [***] of [**********] of the [************] and of [*************** *********] in the [****] and [**********]. While [*******] appears to meet these requirements based on initial experiments, direct comparisons of the adjuvant and
pharmacokinetic properties of CPG 7909 and [*******] should be performed. Coley has other [*******] oligodeoxynucleotides TLR9 agonists that may also be candidates for selection as a back-up molecule. To identify a candidate back-up molecule Coley
will conduct experiments to: 
  

	 	a.	Define immune cell activation in human cell screens in vitro 

  

	 	b.	Define adjuvant activity in vivo 

  

	 	c.	Define tissue distribution and metabolism in vivo 

  
 Task 7. Manufacture a back-up molecule 
  
 When a candidate back-up compound has been selected and accepted by DARPA, Coley will initiate the production of GMP quality active pharmaceutical
ingredient for non-clinical GLP development studies and for clinical trials. Coley will work closely with a third party manufacturer experienced in the manufacture of Coley CPG molecules. As the sponsor company, Coley remains responsible for 

  

					
	 Contact: Iain Sim
	 	10/12	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

			
	 Contract: DAAD19-03-C-002
	 	Program Director: Krieg
	 Revised: February, 2004
	 	Coley Pharmaceutical Group

  

 
ensuring that the contract manufacturer is in GMP compliance and also adheres to the information in Coley’s regulatory filings. As such, Coley personnel
will be integrated into many of the contract manufacturer operations. These activities include: 
  

	 	a.	Develop and refine the process for the efficient production of active pharmaceutical ingredient on a scale and of a quality adequate to meet the needs of the development program

  

	 	b.	Forecast, schedule, and conduct all drug substance manufacturing operations to ensure adequate drug supplies for non-clinical development and clinical trials

  

	 	c.	Select and evaluate container/closure configuration for API 

  

	 	d.	Conduct of GMP-compliance audits 

  
 Task 8. Develop and qualify analytical methods for the determination of the identity, potency, purity and stability of the back-up molecule. Determine the stability of
the back-up molecule 
  
 Coley will place and manage a
contract with a competent contract laboratory for the development of sensitive, reproducible methods for the measurement of the identity, purity, potency and stability of the back-up molecule active pharmaceutical ingredient. Coley will provide
expert advice on the chemistry and detection of oligodeoxynucleotides and will closely monitor the work of the contract laboratory to assure the objectives are achieved. Upon successful completion of the test method development, the methods will be
established and qualified in the same or another contract laboratory for the following applications: 
  

	 	a.	Define and perform release testing of lots of active pharmaceutical ingredient 

  

	 	b.	Determine the stability of the active pharmaceutical ingredient under a variety of storage conditions 

  

	 	c.	Perform physical/chemical characterization of individual lots of active pharmaceutical ingredient 

  
 The development and conduct of such test methods requires the use of reference materials that characterize the performance
of the pure compound, as well as the known manufacturing impurities, within the assay. Coley will use its expertise in the synthetic and analytical chemistry of oligodeoxynucleotides to prepare in part in its own laboratories and in part have
prepared by a contract manufacturer samples of such reference materials. Coley will also use its expertise in analytical chemistry to search for and to characterize other impurities that may occur from time to time in lots of the active
pharmaceutical ingredient prepared by a third party manufacturer. 
  
 Task 9.
Characterize the toxicological profile of the back-up molecule 
  
 Coley will place and manage contracts with competent, approved contract 

  

					
	 Contact: Iain Sim
	 	11/12	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

			
	 Contract: DAAD19-03-C-002
	 	Program Director: Krieg
	 Revised: February, 2004
	 	Coley Pharmaceutical Group

  

 
research organizations for the performance of a number of studies designed to characterize the non-clinical safety and tolerability of the back-up molecule.
All studies will be conducted according to the principles of Good Laboratory Practice and will be supported by toxicokinetic analyses where appropriate. Coley will provide expert toxicological advice on the design and conduct of the studies, the
interpretation of the results and the preparation of the final study reports. Coley will also engage a consultants experienced in ODN non-clinical toxicology and in adjuvant regulatory development. The following studies are planned: 
  

	 	a.	Safety pharmacology in the non-human primate 

  

	 	b.	[***]-month sub-acute toxicology in the rodent 

  

	 	c.	Mutagenic potential 

  
 Task 10. Develop and qualify methods for the assay of the back-up molecule in biological specimens 
  
 Sensitive, reproducible assays are required in order to be able to detect and quantitate the presence of the back-up molecule in biological specimens.
Such specimens may include blood and urine as well as tissue samples. Such assays are required to demonstrate the kinetics of absorption and elimination of the back-up molecule when administered to rodents and non-human primates in toxicological
studies (toxicokinetics) and in humans in clinical studies. Coley may conduct studies in-house, or may place and manage contracts with a competent contract laboratory, for the development of a sensitive, reproducible assay. Coley will provide expert
advice on the chemistry and detection of oligodeoxynucleotides and will closely monitor the work of the contract laboratory to assure the objectives are achieved. Upon successful completion of the development of a detection assay, the assay will be
established and for use in detecting the back-up molecule in biological specimens in studies conducted according to Good Laboratory Practice standards. The assay will also be transferred to [****** **********] to be available for use in support of
future clinical studies. 
  
 Task 11. Manufacture and characterize examples of
A-, B- and C-Class TLR9 agonists 
  
 Coley will manufacture
and characterize, or supply from inventory, quantities of research grade A-, B- and C-Class TLR9 agonists in amounts adequate to support evaluation as prophylactic agents in experimental animal models of disease, including in a non-human primate
model of a respiratory infection. The outcome of the experimental animal model studies will be used to select the optimal TLR9 agonist for further development as a prophylactic agent. 
  

					
	 Contact: Iain Sim
	 	12/12	 	Tel: (781) 431 9000, x1293
	 Coley Pharmaceutical Group
	 	 	 	E-mail: isim@coleypharma.com
	Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 406 of the Securities Act.

				
	2005 Revised Budget	  	 	 
		
	 Contract amount
	  	$	12,000,001
	 Billed to date
	  	$	11,003,662
	 	  	
	

	 Balance remaining
	  	$	996,339
	 	  	
	

	 Costs for CPG [****] activities contracted but not yet billed to Coley
	  	$	67,620
	 Direct costs
	  	$	622,413
	 Coley labor
	  	$	40,000
	 Travel
	  	$	3,000
	 Overhead, G&A @36%
	  	$	263,892
	 	  	
	

	 Total
	  	$	996,925
	 	  	
	

  

				
	 Activity

	  	Cost

	 Patient costs, advertising and materials
	  	$	285,831
	 Study site audit
	  	$	14,000
	 Additional clinical trial supplies
	  	$	585
	 Extended trial insurance
	  	$	40,000
		
	 CPG 7909 analytical method validation and API stability
	  	$	148,997
	 Manufacture API for [*****]
	  	$	133,000
	 	  	
	

	 Total Direct costs
	  	$	622,413
	 	  	
	

  
 Portions of this Exhibit were
omitted and have been filed separately with the secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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