Document:

Exhibit 10.17 

EXECUTIVE OFFICER CASH COMPENSATION ARRANGEMENTS 

Annual salaries for Avigen’s “named
executive officers” are, as of March 15, 2009, as follows: 

	Name 	         	Position 	         	Salary 
	Kenneth Chahine, J.D., Ph.D.  		President, Chief Executive  		$ 	       443,251 
	  		Officer and Director  		  	  
	  
	Michael Coffee  		Chief Business Officer  		$ 	313,903 
	  
	Kirk Johnson, Ph.D.  		Vice President, Research and  		$ 	278,528 
	  		Development  		  	  
	  
	Andrew Sauter  		Chief Financial Officer  		$ 	267,931 
	  
	M. Christina Thomson, J.D.  		Vice President, General  	 	$ 	267,931 
	  		Counsel and Secretary  		  	 

The Compensation Committee has not yet
established target bonuses for 2009, nor has it established criteria for
corporate and individual performance objectives that are intended to be used to
determine actual bonuses to be paid for serviced rendered in 2009.EXHIBIT 10.59

{ * } = Certain confidential
information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended. 

AMENDMENT

     This
AMENDMENT (the
“Amendment”) is entered into as of and to have effect July 22, 2008 (the
“Amendment Effective Date”), by and between SDI Diagnostics International Ltd, a
limited liability company organized under the laws of Switzerland with offices
at Baarerstrasse 96/PF 2252 CH-6302 Zug, Switzerland (“SDI”), and Avigen, Inc., a
Delaware corporation with offices at 1301 Harbor Bay Parkway, Alameda,
California 94502, USA (“Avigen”). 

     WHEREAS, SDI and Avigen are parties to that certain Patent and Know-How License,
Development and Commercialization Agreement dated January 12, 2006 (the
“Agreement”);

     WHEREAS, the
Agreement relates to a license and supply arrangement for SDI to license
Avigen IR
Products (as defined in the Agreement) and CR Products (as defined in the
Agreement) for North America (the Territory, more particularly defined in the
Agreement) and to supply Avigen with IR Products and CR Products for this
Territory; 

     WHEREAS,
certain changes to the specifications for IR Product (as defined in the
Agreement), and to the specifications for the API used to make IR Product, are
necessary for there to be the potential for U.S. approval (which is in the
interest of both parties), and these changes relate specifically to ensuring
that no more than acceptable levels of the Trace Substance (defined below) are
present; 

     WHEREAS,
there will be certain costs associated with the specifications changes for API
and IR Product and related process development work;

     WHEREAS,
while Avigen believes that the Agreement as originally executed contemplates
this situation and requires SDI to perform the work associated with the
specifications changes, SDI takes a view that the Agreement as originally
executed did not contemplate that new API and Finished Product could be required
as in the current situation; 

     WHEREAS,
regardless of which party is right or wrong, in the spirit of collaboration and
the best interests of both parties, the parties have reached certain
understandings to amend the Agreement to provide near-term relief to SDI for the
costs of the additional process and formulation development work that SDI will
perform, in exchange for later-term relief for Avigen as to the amount of
development milestones that may later become due under the Agreement, as well as
other related amendments, all as more particularly provided for in this
Amendment;

     NOW, THEREFORE, in consideration of the mutual covenants set forth below, SDI and
Avigen agree (and hereby amend the Agreement) as follows: 

1. Definitions. All initially capitalized
terms used but not defined in this Amendment have the meanings given in the
Agreement, except that where explicitly stated, as used in this Amendment,
“Sections” will refer to the sections of this Amendment rather than those of the
Agreement. As used in this Amendment and the Agreement, the terms “include,”
“includes,” “including” and derivative forms of them shall be deemed followed by
the phrase “without limitation” (and with no implication being drawn from
inconsistent usage as to the actual inclusion of such words in the text in some
places but not others). In addition, the following initially capitalized terms
shall have the following meanings (with derivative forms being interpreted
accordingly):

     (a) “Achievement 1” shall mean SDI provides documentation that accurately
demonstrates that API that has been produced in a commercial batch size (meaning
a batch size with a yield of at least approximately { * }; “approximately” in
this context means within plus-or-minus { * }) conforms to the Working API
Specification throughout (including at each testing point during) and at the end
of a { * } month Stability test in which the samples are stored at { * } under
conditions of { * } relative humidity for { * } months. Further details as to
stability testing in connection with this definition are as set forth in Exhibit
C. “Accurately” in this context means that { * }. 

     (b) “Achievement 1 Deadline” means { * } (i.e., means { * }). 

     (c) “Achievement 2” shall mean SDI provides documentation that accurately
demonstrates that Finished Product that: (a) is an IR Product the dosage of
which is equal to { * } of API (not more not less), (b) has been produced in a
batch size sufficient such that no bridging for commercial batch size will be
required (and in any event no less than { * } tablets as the batch size) under
GMP requirements, and (c) has been packaged in { * }; conforms to the Working
Finished Product Specification throughout (including at each testing point
during) and at the end of a { * } month Stability test in which the samples are
stored at { * } and { * } relative humidity for { * } months. Further details as
to stability in connection with this definition are as set forth in Exhibit C.
“Accurately” in this context means that { * }. 

     (d) “Achievement 2 Deadline” means { * } (i.e., means { * }). 

     (e) “Working API Specification” shall mean the standards for API (including both release and
shelf life specifications) set forth in Exhibit A (as they may be updated in
accordance with the Agreement, including Sections 3.3 and 4.5 of the Supply
Terms).

     (f) “Working Finished Product
Specification” shall mean the standards for
Finished Product (including both release and shelf life specifications) set
forth in Exhibit A (as they may be updated in accordance with the Agreement,
including Sections 3.3 and 4.5 of the Supply Terms).

     (g) “Stability” under “low,” “intermediate,” “Room Temperature” and “accelerated”
conditions shall have the meanings given in Exhibit C, respectively, and as to
the testing to be done as to each of API and Finished Product shall be as each
is described in Exhibit C.

     (h) “Success Payment” shall have the meaning given in Section 7. 

{ * } = Certain confidential
information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended. 

2

     (i) “Trace Substance” shall mean the compound referred to as “{ * },” the formula
and chemical structure of which is set forth in Exhibit D. 

2. API Work/Deliverables by
SDI. SDI shall develop -- to the extent not
already developed -- batch records and a process to produce API conforming to
the Working API Specification, subject to Section 4 of this Amendment. By way of background,
SDI has developed batch records and a process to produce API, and using them has
produced quantities of API that SDI believes meets the Working API
Specification. Quantities of the API thus produced are currently on Stability.
However, it is not yet known whether the quantities of API on Stability will
conform to the Working API Specification throughout all Stability testing.
Further, SDI and Avigen recognize that until Finished Product development is
completed, API process validation is performed, and Finished Product process
validation is performed, the Working API Specification for the commercial
product cannot be finally set; therefore, the current specification is referred
to as a “working” specification, and is subject to updates in accordance with
the Agreement (including under Sections 3.3 and 4.5 of the Supply Terms). SDI
represents and warrants that the ongoing Stability studies conform to ICH
guidelines. SDI shall continue such ongoing Stability studies to completion
using Commercially Reasonable Efforts. SDI shall disclose the full results of
such Stability studies to Avigen in writing promptly (and in any event within {
* } Business Days) after the results of testing at each time point become
available to SDI (and whether or not a time point required under Exhibit C or
another time point at which additional testing is done over and above the
required time points). 

3. Finished Product
Work/Demonstration by SDI. SDI shall develop
batch records and a process to produce an IR Product in Finished Product form
conforming to the Working Finished Product Specification, subject to Section 4
of this Amendment. SDI shall be responsible to conduct the Stability testing of Finished
Product necessary to show whether Achievement 2 has been met. SDI shall commence
and continue such Stability studies to completion using Commercially Reasonable
Efforts. SDI shall disclose the full results of such Stability studies to Avigen
in writing promptly (and in any event within { * } Business Days) after the
results of testing at each time point become available to SDI (and whether or
not a time point required under Exhibit C or another time point at which
additional testing is done over and above the required time points). As is the
case with the Working API Specification, currently, the specifications for
Finished Product are working specifications (the Working Finished Product
Specifications). They, too, remain subject to updates in accordance with the
Agreement (including under Sections 3.3 and 4.5 of the Supply
Terms). 

4. “Stop” Decision
Opportunity of SDI. SDI retains the right to
make a “Stop” decision based on the technical feasibility of each project (the
“projects” being the work directed at achieving each of Achievement 1 and
Achievement 2). SDI must use Commercially Reasonable Efforts to complete
Achievements 1 and 2 prior to any “Stop” decision. Any decision by SDI to “Stop”
is irreversible. SDI must notify Avigen within { * } business days after the
“Stop” decision has been made. If SDI does so, or fails to devote Commercially
Reasonable Efforts towards achieving each of Achievements 1 and 2 prior to and
without notifying Avigen formally in writing of the “Stop” decision, then Avigen
will immediately have available to it all remedies and rights under Section 10.4
of the Agreement with respect to both API and Finished Product (if the “Stop”
decision occurs before Achievement 1 is completed) or with respect to Finished
Product alone (if the “Stop” decision occurs after Achievement 1 is completed).
In this latter case, SDI remains responsible to supply API in accordance with
the Agreement (including Section 6.4 of the Supply Terms as it applies for API
supply after a Significant Supply Failure).

{ * } = Certain confidential
information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended. 

3

5. Avigen Parallel
Development. Notwithstanding anything express
or implied in the Agreement as originally executed, Avigen shall have the full
right (including both inside of and outside of the Territory) to conduct process
and other development with respect to each of API and Finished Product in
parallel with SDI. (To avoid doubt, to conduct such process and other technical
development with respect to API and Finished Product, Avigen will (or its
contractor will) be producing API and Finished Product.) Avigen shall use any
API and Finished Product produced as part of its parallel development effort
(and the process(as) that Avigen develops (as well as any resulting API or
Finished Product)) in the Territory only for testing as part of the parallel
development effort itself; for purposes of conducting clinical trials directed
at obtaining Regulatory Approvals (and/or label expansions for Licensed Products
that have already been approved), or for use in marketing studies; and in the
manufacture of commercial supply of API or Finished Product in the case of an
interruption in SDI’s API or Finished Product supply or -- as regards such API
and its use -- in the case of SDI’s failure to meet Achievement 1 by the
Achievement 1 Deadline (or earlier “Stop” decision), or -- as regards such
Finished Product and its use -- SDI’s failure to meet Achievement 2 by the
Achievement 2 Deadline (or earlier “Stop” decision). In all other cases SDI
shall retain the exclusive right to supply API and Finished Product to Avigen in
the Territory to the full extent provided for in the Agreement. Avigen has no
intention to become a competitive API or Finished Product manufacturer; rather,
it is intended that Avigen would only have the right to use API and Finished
Product manufactured by it using any process(es) developed in the Territory
under this Section 5 of the Amendment in the limited circumstances described
above in this Section 5 of the Amendment and in connection with Avigen’s
existing rights under the Agreement in the circumstances in which they apply
(including as provided under Sections 4.5.5 and 10.4 of the Agreement (and
Sections 6.3-6.6 and 8.3 of the Supply Terms) under the circumstances described
in such Sections) and otherwise only after SDI’s applicable supply rights under
the Agreement (including the Supply Terms) have expired. 

6. Costs. Each Party shall bear the costs of its own activities under
Sections 2-5 of this Amendment. Without limitation, this means that SDI’s costs
to perform its process and other development and Stability testing obligations
under Sections 2 and 3 of this Amendment shall be at SDI’s sole expense. Avigen
shall not be required to reimburse SDI such costs. It is anticipated that if SDI
is successful in its efforts and meets Achievements 1 and/or 2 on a timeline
that leads to a Success Payment being due under Section 7 of this Amendment,
SDI’s costs may be partially or wholly recouped out of such Success Payment.
However, whether or not any Success Payments become due under Section 7 of this
Amendment, and whether or not any such Success Payments exceed or are less than
SDI’s costs to achieve the accomplishments leading to any such Success Payments,
Avigen shall not owe any further or other amounts other than any that may become
due under Section 7 of this Amendment. Similarly, SDI shall have no
responsibility for any of the costs of Avigen’s parallel development effort
under Section 5 of this Amendment. Avigen may choose to run (itself or through a
contractor) its own Trace Substance assay that it (or its contractor) has
developed, in parallel to the Stability testing being done by or for SDI. In
that case, SDI shall provide the API or Finished Product materials to Avigen for
testing at no charge, and Avigen shall be solely responsible for all other costs
of the in-parallel testing (as and to the extent it chooses to conduct such
testing). In connection with the provision of such API and Finished Product
materials for testing, Avigen shall be entitled to make the shipping
arrangements. In that case, SDI shall fully cooperate with Avigen in connection
with such shipping arrangements. Further detail as to arrangements and
obligations in connection with the in-parallel duplicate testing is provided in
Section 7(c).

{ * } = Certain confidential
information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended. 

4

7.
Success Payments.

     (a) If SDI achieves the corresponding event by the corresponding deadline,
Avigen shall pay SDI the corresponding payment (“Success Payments”) in the following
chart: 

	Success
      Event  	Latest Deadline
      Met (i.e., latest  	Success Payment
      Amount  
	  	date by which Success
      Event  	  
	  	achieved)  	  
	Achievement 1 (on
      time)  	{ * }  	{ * } 
    
	Achievement 1 (up
      to { * })	{ * }  	{ * }  
	Achievement 1 (any  	{ * } 
    	{ * }  
	(including any number of 
    	  	 
	days) more than { * } and 
    	  	  
	up to { *
      })  	  	  
	Achievement 1 (any  	{ * } 
    	{ * }  
	(including any number of 
    	  	  
	days) more than { * } and 
    	 	  
	up to { *
      })  	  	  
	Achievement 1 (any  	{ * } 
    	{ * }  
	(including any number of 
    	  	  
	days) more than {
      * })  	  	  
	Achievement 2 (on
      time)  	{ * }  	{ * }  
	Achievement 2 (up
      to { * })	{ * }  	{ * }  
	Achievement 2 (any  	{ * } 
    	{ * }  
	(including any number of 
    	  	  
	days) more than { * } and 
    	  	  
	up to { *
      })  	  	  
	Achievement 2 (any  	{ * } 
    	{ * }  
	(including any number of 
    	  	  
	days) more than { * } and 
    	  	  
	up to { * })  		
	Achievement 2 (any  	{ * }  	{ * }  
	(including any number of  		
	days) more than { *
      })  		

 

{ * } = Certain confidential
information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended. 

5

To avoid doubt, only one Success
Payment may become due in respect of Achievement 1 (and then only if it is
achieved by one of the deadlines set forth above). Similarly to avoid doubt,
only one Success Payment may become due in respect of Achievement 2 (and then
only if it is achieved by one of the deadlines set forth above). 

     (b) As is consistent with Section 4 of this Amendment, if SDI makes a “Stop”
decision as to its work with respect to API under this Amendment or its work
with respect to Finished Product under this Amendment prior to achieving
Achievement 1 or Achievement 2 (respectively), then all obligations for Avigen
to pay Success Payments under this Section 7 of this Amendment, which Success
Payments have not already accrued and become due under this Section as of the
time of the “Stop” decision, shall immediately, automatically and irreversibly
expire and be excised from this Amendment and the Agreement, and any remaining
Success Payments shall not ever become due, regardless of whether SDI
subsequently restarts any activities directed at achieving Achievement 1 or
Achievement 2 or any similar accomplishment. 

     (c) The respective Achievement is considered achieved when SDI presents
Avigen with the required documentation accurately demonstrating such
Achievement. (The documentation required to show each Achievement is set forth
in Exhibit B to this Amendment.) However, Avigen is entitled to verify that the
documentation is correct by either itself testing or engaging a Third Party laboratory
to test independently samples of the quantities of API or Finished Product that
were part of the same Stability testing as those quantities analyzed in the
documentation provided by SDI to show achievement of the relevant Achievement.
To enable Avigen if it chooses to conduct such testing in parallel to SDI’s own
testing, SDI shall provide, as samples are pulled for each time point in the
Stability test and if Avigen requests, a duplicate sample from each time point
for Final Product or a sample of the bulk stored under controlled room
temperature storage for the API to Avigen (or Avigen’s contractor as designated
by Avigen) at no additional charge. The sample from each { * } time point is
deemed requested from the outset and Avigen will not be required to request
these separately; instead SDI will automatically provide the sample from the { *
} time point. Avigen is entitled to make the shipping arrangements for each
sample; SDI shall fully cooperate with Avigen in connection with such shipping
arrangements; and { * } is required to pay the costs of such shipping. SDI shall
provide its documentation as to each Achievement being met promptly after the
relevant Stability testing at { * } time point has been completed (and in any
event no less than { * } Business Days after such completion). SDI will provide
additional samples if requested for further testing. Provided that SDI has
Substantially (defined in the last paragraph of this Section 7(c)) complied with
its obligations under Section 14 of this Amendment (relating to assistance in
establishing the relevant testing methods at Avigen’s contractor and providing
adequate quantities of reference standards in advance), and has timely provided
to Avigen (for Avigen’s or its contractor’s testing should Avigen choose to
test), then Avigen shall have { * } days from receipt of the last required such
sample to verify the result set forth in the documentation proffered
(ultimately) by SDI (or if later receipt of such documentation from SDI) and in
that case Avigen will have the sole responsibility for any delays beyond the { *
} days. If SDI has not Substantially complied with any of the foregoing obligations, then Avigen
shall have such time as is needed to establish the test methods in a repeatable,
validated fashion or obtain the reference standards (as applicable), plus
additionally { * } days from the time that Avigen receives the last samples to
be tested, in order to verify any Stability results asserted by
SDI. 

{ * } = Certain confidential
information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended. 

6

     If the results of the testing under
this Section on behalf of Avigen disagree with SDI’s results, and SDI -- within
{ * } days after Avigen notifies SDI in writing of its disagreement -- disputes
Avigen’s result in writing, then an independent Third-Party laboratory selected
by both Parties shall verify the results within { * } days after SDI disputes
Avigen’s results in writing. SDI shall provide the necessary samples from each
time point and needed reference standards, as well as complete disclosure of the
analytical methods referred to in Section 14, to such laboratory. Such
laboratory shall not be affiliated with either of the Parties and shall not have
as a major customer either of the Parties (unless they agree otherwise in their
sole discretions). If the Parties cannot agree as to such a laboratory, then one
shall be appointed by the arbitral body referred to in Section 12.9.1 of the
Agreement. Such laboratory shall be under contract with the Parties jointly and
shall disclose its results in writing simultaneously to both Parties. The
determination by such laboratory shall be final, conclusive and not disputable
by either Avigen or SDI. If such laboratory determines that SDI did achieve the
respective Achievement, then SDI’s results shall be considered verified in
accordance with this Section 7(c). Otherwise, SDI’s results shall be considered
as not verified for purposes of this Agreement. If SDI’s results are considered
verified in accordance with the foregoing sentences, then, for purposes of
determining the amount of Success Payment due to SDI under Section 7(a), the
respective Achievement shall be deemed to have occurred on the day of receipt by
Avigen of the last required sample to verify the result set forth in the
documentation proffered (ie, the beginning of the { * } verification period
referred to in the paragraph above) (“Actual Delivery Date for Testing”) and SDI
shall be entitled to payment of the respective “Success Payment” in the amount
that would be due based on achievement of the respective Achievement being
verified as of the Actual Delivery Date for Testing. 

     “Substantially” complied with SDI’s
obligations under Section 14 means that { * }. 

     (d) The corresponding Success Payment is due within { * } days after SDI
provided its documentation (if Avigen does not choose to verify or have verified
the results), or thirty (30) days after the results are verified as described in
Section 7(c) of this Amendment (if Avigen does choose verification). 

8. API Supply by
SDI. SDI shall provide { * } of the API that
is currently (as of the Amendment Effective Date)
on Stability (or, if the quantities that are currently on Stability fail
Stability testing, then other quantities of API that have passed the same
Stability testing), within { * } Business Days after Avigen pays to SDI the
first Success Payment. SDI shall provide these { * }. Avigen will be responsible
to make the shipping arrangements. SDI shall fully cooperate with Avigen in
connection with these shipping arrangements. { * } will be responsible for the
shipping costs with respect to these { * }. Along with these { * }, SDI shall
provide to Avigen (at no charge) the physical characterization information and
data as outlined in Exhibit E. If Avigen requests additional amounts of the API
that was on Stability as of the Amendment Effective Date, then SDI shall provide
the additional amounts requested by Avigen { * } (and with Avigen making the
shipping arrangements with SDI’s full cooperation and { * } paying the shipping
costs), promptly after (and in any event no more than { * } days after) Avigen’s
written request. 

{ * } = Certain confidential
information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended. 

7

9. Changes to Working API
Specification as Finished Product Development Proceeds.
As Finished Product
development proceeds, it is possible that the Working API Specification may need
to be tightened (i.e., that it may need to be modified in order to provide for
lower levels of the Trace Substance than the Working API Specification attached
at signing of this Amendment) in order to achieve an ultimate Finished Product
with a level of the Trace Substance that is sufficiently low as to be acceptable
to the FDA. (This is because the Trace Substance forms { * } under certain
conditions and depends on the technically feasible conditions of the process for
Finished Product production and how much those conditions lead to the formation
of the Trace Substance.) In that case, and subject to Section 4 of this
Amendment, SDI
will do the necessary development work to develop API to the new specification,
at no additional charge. This Amendment (including this Section 9 of the
Amendment) shall not be read, used or deemed to modify or limit (or used to
interpret) in any way Avigen’s rights under Sections 3.3 and 4.5 of the Supply Terms as
originally executed (rather, this Section 9 of the Amendment describes one
potential situation circumstance under which a change to the specification for
API could be necessary and describes SDI’s responsibilities under that
circumstance).

10. Amendments to Milestones
Under the Agreement. 

     (a) The amount of the first milestone payment listed in Section 4.2 of the
Agreement (“{ * }”) is hereby reduced by { * } so that the amount that will be
due if such milestone is achieved shall be { * }.

     (b) The amount of the fifth milestone payment in Section 4.2 of the Agreement
(“{ * }”) shall be reduced by { * } so that the amount that will be due if such
milestone is achieved shall be { * }.

11. Remedies. SDI agrees that it will not seek further changes to the
Agreement (as amended by this Amendment and including as regards work to seek to
develop a CR Product Finished Product with sufficiently low levels of Trace
Substance so as to be acceptable to FDA) and will honor and substantially
perform its commitments with reasonably commercial efforts under the Agreement
(as amended by this Amendment and including as regards work to seek to develop a
CR Product Finished Product with sufficiently low levels of Trace Substance so
as to be acceptable to FDA) without requesting additional compensation to
perform such commitments. 

12. Commitments. If SDI does not
“substantially
honor and perform” (as described at the end of this Section 12) its supply and related
commitments (including its commitments for market authorization and commercial
product (including its commitments in connection with process development in
order ultimately to be able to supply API or Finished Product to standards
acceptable to FDA, and with regard to supply as required of each API and Finished Product)),
then Avigen shall immediately have available to it all rights and remedies under
Section 10.4 of the Agreement. In addition, all royalty rates specified in the
Agreement shall be lowered by { * } of Net Sales. This reduction shall occur
automatically without the need for further action by the parties. To “substantially honor and perform,” in the context of this
Section 12, means that { * }. As applied to supply commitment in the Agreement,
to “substantially honor and perform” means to { * }.

{ * } = Certain confidential
information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended. 

8

13. Audit. Avigen is entitled to audit SDI’s records as to conformity
of API and Finished Product to the Working API Specification and Working
Finished Product Specification, respectively, and Stability data (i.e., data as
to Stability testing conducted in connection with the work provided for in this
Amendment). SDI shall provide Avigen with copies of (or access to) the relevant
finished and approved records promptly upon Avigen’s written request.

14. Assay Establishment at
Contractor.
In order to support Third Party verification
of laboratory data in order to demonstrate whether or not Achievement 1 and
Achievement 2 are met, SDI shall provide, upon request from Avigen, and to the
extent it is in SDI`s possession or control, all reference, impurity and degradation standards, detailed
test methods (in writing), and support for and participation in formal method
transfer of critical assays (including at a minimum { * }). To avoid doubt, this
includes SDI being reasonably available to answer questions and provide guidance
while the methods are being established (and validated as working in the same
manner as in SDI’s or its contractor’s hands) at Avigen’s contractor.

15. Product Development
Team. 

     (a) The Parties shall establish a “Product Development Team” with members
from both Parties, who shall communicate regularly (at least { * }) to promote a
team effort and so as for both parties to be fully informed of all development
strategies, work, progress and data of each Party. The Product Development Team
shall also produce a { * } written report, which will include the
then-most-current Stability data and progress of the clinical program. The
Product Development Team shall continue to meet until the earlier of SDI’s
achievement of Achievement 2 (or earlier “Stop”
decision) or termination or expiration of the Agreement and this Amendment.

     (b) Members of Avigen’s Product Development Team may visit SDI’s
manufacturing/process development facilities on a regular basis with reasonable
advance notice and without undue interruptions. SDI will use its commercially
reasonable efforts so that Avigen may also, on advanced notice (not to be
required to exceed { * } calendar days), visit and/or audit Catalent or other
critical contract research organizations engaged by SDI. 

     (c) Avigen will provide SDI with any information Avigen develops during its
own API and Finished Product development, unless SDI fails to supply Avigen with
API after completing Achievement 1, in which case Avigen shall be under no such
obligation to provide SDI with information developed during Avigen’s API and
Finished Product development. If SDI fails to supply Avigen with API after
having completed Achievement 1, Avigen is not required to provide SDI with any
information Avigen gains from its own API and Finished Product development.
Similarly, if SDI makes a “Stop” decision, then Avigen is not required to
provide SDI with any information Avigen gains from its own Finished Product
development (in the case of a “Stop” decision after Achievement 1 but before
Achievement 2) or from its own API and Finished Product development (in the case
of a “Stop” decision before Achievements 1 and 2). 

{ * } = Certain confidential
information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended. 

9

16. Confidentiality. Section 3.7 of the
Agreement applies to this Amendment in the same manner as it applies to the
Agreement. The Parties agree that the initial public announcement of this
Amendment shall be made by each Party in the form of such Party’s press release
attached as Exhibit F-1 (in Avigen’s case) or Exhibit F-2 (in SDI’s case).

17. Legal
Miscellany. 

     (a) This Amendment shall come into effect on the Amendment Effective Date and
shall terminate or expire concurrently with the termination or expiration of the
Agreement. This Amendment (and the amendments that it effects) shall not
separately or independently terminate or expire under any circumstances.

     (b) This Amendment (including the amendments to the Agreement that it
effects) shall remain in full force and effect regardless of any change in
regulatory policies by FDA or any other Regulatory Body. 

     (c) This Amendment amends and supersedes
the Agreement to the extent -- and solely to the
extent -- explicitly provided in this Amendment.
Obligations of each party and of the parties under this Amendment are deemed to
be obligations under the Agreement. Any breach of this Amendment shall be
considered a breach of the Agreement (including for purposes of Article 10 of
the Agreement). This Amendment and its subject matter shall not be used to
interpret the Parties’ original obligations under the Agreement or the meaning
of the Agreement as originally executed, including the obligations set forth in
and meaning of Sections 3.3 and 4.5 of the Supply Terms. This Amendment only
amends the Agreement as explicitly stated in this Amendment, and does not
otherwise affect the Agreement or its meaning as originally executed. Both
parties reserve their rights as to the meaning of the Agreement as originally
executed and make no admission as to any given interpretation by the negotiation
and execution of this Agreement.
This Amendment is not and shall not be
interpreted as an admission by either party as to any particular interpretation
of the Agreement (without limitation, Avigen continues to believe that the
current circumstances were fully contemplated by the Agreement as originally
executed and that the Agreement as originally executed required SDI to do the
work described in this Amendment to implement Required Proposed Specifications
Changes; SDI continues to assert this in not the case). Nothing in this
Amendment shall be deemed to amend Sections 3.3 and 4.5 of the Supply Terms as
originally executed, to waive a party’s rights under its interpretation of such
Sections of the Supply Terms, or to make any admission as to any interpretation
of such Sections of the Supply Terms (nor shall this Amendment be used to
interpret such Section). The Agreement remains in full force and effect except
as amended by this Amendment.  

{ * } = Certain confidential
information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended. 

10

     It is understood and agreed,
however, that for any failure to perform an API or Finished Product process
development activity or Specifications change prior to the Amendment Effective
Date, and any obligation to implement a Proposed Specification Change that is
Required based on the Trace Substance requirement of FDA disclosed to the
Parties before the Amendment Effective Date, SDI’s obligations shall be as set
forth in this Amendment, not as set forth in the Agreement (to the extent there
is a difference, and with each Party reserving all rights as to its
interpretation of the requirements of the Agreement as executed) and SDI shall
not be subject to damages claims by Avigen on the Agreement as originally
executed as regards any such failure to perform or obligation (to be clear, as
each of the foregoing is described in this sentence). Without limitation, this
last paragraph of Section 17(c), to avoid any shadow of a doubt, does not apply
to SDI’s obligations with respect to other Proposed Specification Changes that
may be Required, that are based on new requirements of FDA (and each Party
reserves all rights as to its interpretation of the Agreement as applied to that
situation), and SDI if its fails to perform in connection with such Proposed
Specifications Changes that may be Required, shall be subject to damages claims
by Avigen to the extent available under the Agreement (or at law or in equity)
and nothing in this Amendment shall be read to derogate in any way from Avigen’s
rights in such a situation to the extent provided by the Agreement (or at law or
in equity). 

     (d) Article 12 of the Agreement shall apply to this Amendment as if set forth
herein in its entirety. 

IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate.

	AVIGEN, INC.  	SDI
      DIAGNOSTICS  
	  		       	INTERNATIONAL LTD  
				 	
	      /s/
      	Kenneth G. Chahine    		      /s/
      	Hope Maximillian    
	Name: 	Kenneth G. Chahine 
      		Name:     	Hope Maximillian    
	Title:     	CEO  		Title:     	General Manager    
	Date: 	22 July, 2008    		Date:     	15 July, 2008    
					 
	  		  	      /s/
      	Herbert Frantses    
	  		  	Name: 	Herbert Frantses    
	  		  	Title:     	CEO/CFO    
	  		  	Date: 	15 July, 2008    

 

{ * } = Certain confidential
information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended. 

11

EXHIBITS LIST 

	Exhibit
      A  	– 
	Detailed
      Specifications for API and Finished Product  
			 
	Exhibit
      B  	– 
	Documentation
      Details  
			 
	Exhibit
      C  	– 
	Stability Study
      Details  
			 
	Exhibit
      D  	– 
	Formula and
      Structure of Trace Substance.  
			 
	Exhibit
      E  	– 
	Physical
      Characterization Information and Data  
			 
	Exhibit
      F-1  	– 
	Avigen’s Form of
      Press Release  
			 
	Exhibit
      F-2    	–       	SDI’s Form of
      Press Release  

 

{ * } = Certain confidential
information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended. 

12

EXHIBIT A

DETAILED SPECIFICATIONS
FOR API AND FINISHED
PRODUCT

{ * }

 

 

{ * } = Certain confidential
information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended. 

13

EXHIBIT B 
DOCUMENTATION DETAILS

{ * }

 

 

{ * } = Certain confidential
information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended. 

14

EXHIBIT C 
STABILITY
STUDY DETAILS

{ * }

 

 

{ * } = Certain confidential
information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended. 

15

EXHIBIT D
FORMULA AND  STRUCTURE OF TRACE SUBSTANCE.

{ * } 

 

 

{ * } = Certain confidential
information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended. 

16

EXHIBIT E
PHYSICAL CHARACTERIZATION INFORMATION AND DATA

{ * }

 

 

{ * } = Certain confidential
information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended. 

17

EXHIBIT F-1
AVIGEN’S
FORM OF PRESS RELEASE

 

Avigen’s AV650 Patent Strategy Leads
to Expanded Development Agreement 

ALAMEDA, Calif., July XX, 2008 (PRIME
NEWSWIRE) -- Avigen, Inc. (Nasdaq:AVGN), a biopharmaceutical company innovating
the rapeutics for neurological care, today announced an amendment to the
company’s contract with Sanochemia Pharmazeutika AG, Avigen’s development
partner for AV650 (tolperisone). Under the terms of the amendment, Avigen has
agreed to share up to $5 million of the incremental costs to develop a
proprietary, purer form of AV650. Avigen and Sanochemia have filed
composition-of-matter patents in the United States for a purer form of AV650
that is expected to provide exclusivity through 2027. Avigen is developing AV650
for commercialization in the North American market for the treatment of
disabling neuromuscular spasticity and spasm under a license and supply
agreement with Sanochemia. Avigen expects to announce the results of its Phase
IIb clinical trial for AV650 in patients with spasticity associated with
multiple sclerosis in the fourth quarter of 2008. AV650 is a new chemical entity
(NCE) in the United States and therefore must comply with all current U.S. Food
and Drug Administration (FDA) regulatory requirements for clinical research and
marketing. During the clinical development of AV650, Avigen and Sanochemia
identified an impurity in tolperisone products commercialized in Europe that
exceed the FDA’s standards for the purity of chronically used medicines in the
United States. Over the last year, Avigen and Sanochemia reduced the levels of
the impurity in the active pharmaceutical ingredient (API) of AV650 below the
FDA’s standards. Finished product using this purer API is expected to be used in
Avigen’s Phase III clinical trials in 2009. Avigen’s ongoing AV650 trials use
drug product that complies with the FDA’s purity standards. Kenneth G. Chahine, Ph.D., J.D., Avigen's President and Chief
Executive Officer commented “There is a long-standing precedent in the
pharmaceutical industry for the filing and granting of new composition-of-matter
patents on purer versions of existing medicines. Our purer form of AV650 has
allowed us to file multiple composition-of-matter patents that we believe will
significantly enhance the value of this program by extending exclusivity of
AV650 in the United States through 2027. The first of our filed patents is
expected to be published later in 2008. The additional development costs were
anticipated and are reflected in our previous cash burn forecasts.” Tolperisone
is an orally administered, centrally acting small molecule marketed for the
treatment of neuromuscular spasticity and spasm in Europe and Asia. Avigen's
U.S. development program is designed to build on the extensive ex-U.S. safety
and efficacy experience with this compound. Versions of tolperisone have been
approved for marketing in Germany for over 10 years. Sanochemia and its European
marketing partner, Orion Pharma, have recently launched a proprietary 150mg
tablet formulation of tolperisone in Germany under the brand name
Viveo®.

About Avigen

Avigen is a biopharmaceutical company
focused on developing and commercializing small molecule therapeutics to treat
serious neurological disorders, including neuropathic pain and neuromuscular
spasm and spasticity. Avigen's strategy is to complete the requirements of
clinical development for each of the candidates in its product pipeline, and
continue to look for opportunities to expand its pipeline through a combination
of internal research, acquisitions, and in-licensing, with the goal of becoming
a fully integrated commercial biopharmaceutical company that remains committed
to its neurology products. Avigen is currently developing AV650 for spasticity
and neuromuscular spasm and AV411 for neuropathic pain. Additionally, the
company is advancing AV513, a novel therapy for the treatment of multiple
bleeding disorders, including hemophilia A and B, toward clinical trials. For
more information about Avigen, consult the company’s website at
www.avigen.com.

{ * } = Certain confidential
information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended. 

18

 

Forward-looking Statement [TBD]

Contact: Michael Coffee 
Chief
Business Officer 
Avigen, Inc.
1301 Harbor
Bay Parkway, Alameda, CA 94502 
Tel: 510-748-7372
Fax: 510-748-7155

E-mail: ir@avigen.com 

 

{ * } = Certain confidential
information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended. 

19

EXHIBIT F-2
SDI’S FORM OF PRESS RELEASE

Ad hoc Announcement pursuant to Section 15

of the German Securities Trading Act (WpHG) 
Sanochemia Pharmazeutika AG
– ISIN AT0000776307 

SANOCHEMIA receives additional
financing for further development 
of tolperisone for the US market

Vienna, ......July
2008        SANOCHEMIA Pharmazeutika AG, Vienna, listed in the Prime Standard of
the Frankfurt Stock Exchange (ISIN AT0000776307) today announced jointly with
its US partner Avigen Inc. an
amendment to their common agreement. SANOCHEMIA will now receive an additional
payment of up to five million dollars, over and above the agreed sums, for its
development work on a highly pure formulation of tolperisone.

Avigen, which holds the exclusive marketing
and distribution rights for the North American market, is currently developing
tolperisone (AV650) for the treatment of spasticity and painful spasms under a
licensing and production deal with SANOCHEMIA. In the fourth quarter of 2008,
Avigen plans to announce the results of a clinical phase IIb trial on the
efficacy of and tolerance to tolperisone in the treatment of spasticity
associated with multiple sclerosis. 

Highly pure form of tolperisone should extends
marketing exclusivity 

The new development programme of tolperisone
to produce this highly pure form represents a major technical achievement for
Sanochemia and Avigen.. In the US market, tolperisone is classified as a new
chemical entity (NCE) and therefore must meet the regulatory requirements for
clinical development and marketing imposed by the FDA. In terms of the strict
standards for the purity of medicinal products for marketing in the USA,
Sanochemia and Avigen have been successful in meeting these standards for the
active pharmaceutical ingredient (API). 

This newly developed form of tolperisone has
been protected through the filing of several composition of matter patents in
the United States. The first associated patent application is expected to
publish before the end of 2008. The value of this new development is underpinned
by the expected extended marketing exclusivity of Avigen’s AV650 in the USA
(until 2027). 

“This patent strategy is a key element of the
US development cooperation with Avigen,” says CEO of SANOCHEMIA, Herbert
Frantsits, “the development of the highly pure form of tolperisone as an API and
the associated market exclusivity significantly improve the growth and earnings
outlooks for SANOCHEMIA and Avigen." The new formulation of the API will be used
in the finished medicinal product and is intended to form the basis of the
clinical phase III trial scheduled for 2009. Tolperisone
is a substance with a proven track record as a muscle relaxant and has been
available in various presentations, particularly in Eastern Europe, Germany and
Asia, for a number of years. Avigen's development programme in the US is based
on the many years of safety and efficacy data previously obtained with this
substance. Orion Pharma GmbH, SANOCHEMIA’s marketing and distribution partner in
several European markets, has recently launched a 150mg formulation of
tolperisone in Germany under the brand name Viveo®.

 

{ * } = Certain confidential
information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended. 

20

-------End of the announcement

About Sanochemia 

Sanochemia Pharmazeutika AG is a
specialty pharmaceutical company with outstanding development skills and its own
API production facilities. The company has elected to focus on the areas of the
central nervous system, pain, oncology and clinical diagnostics – indication
areas with high therapeutic demands and urgent medical need for new and
innovative drugs as the means to improving patient quality of life. In its
manufacturing activities, Sanochemia concentrates on the development of complex
synthetic APIs. Sanochemia is the exclusive supplier to Janssen-Cilag of
synthetic galantamine – a substance used in the treatment of Alzheimer’s
disease. Tolperisone, a substance used in the treatment of neuromuscular spasms,
has already been approved in Germany in the indication spasticity associated
with neurological disorders such as stroke and multiple sclerosis. Another
development focus lies on PVP hypericin, a development candidate for the
diagnosis of bladder cancer for which Sanochemia recently received US patents
for the formulation and use of the active ingredient. To learn more about
Sanochemia please visit the company’s website at www.sanochemia.at

About Avigen 

Avigen is a biopharmaceutical company
focused on developing and commercializing small molecule therapeutics to treat
serious neurological disorders, including neuropathic pain and neuromuscular
spasm and spasticity. Avigen's strategy is to complete the requirements of
clinical development for each of the candidates in its product pipeline, and
continue to look for opportunities to expand its pipeline through a combination
of internal research, acquisitions, and in-licensing, with the goal of becoming
a fully integrated commercial biopharmaceutical company that remains committed
to its neurology products. Avigen is currently developing AV650 for spasticity
and neuromuscular spasm and AV411 for neuropathic pain. Additionally, the
company is advancing AV513, a novel therapy for the treatment of multiple
bleeding disorders, including haemophilia A and B, toward clinical trials. For
more information about Avigen, consult the company’s website at www.avigen.com.

For further details please contact:

Margarita Hoch, 
Investor Relations 
Phone: +43 / 1 / 3191456 / 335

Fax: +43 / 1 / 3191456 / 344
m.hoch@sanochemia.at

770676 v3/HN

 

{ * } = Certain confidential
information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended. 

21

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