Document:

EX-10.2

 Exhibit 10.2 
 CONFIDENTIAL 
 CERTAIN MATERIAL (INDICATED BY ASTERISKS) HAS BEEN OMITTED FROM THIS DOCUMENT
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 
 RESEARCH LICENSE AND OPTION AGREEMENT 
 Dated April 27, 2012

 By and Between 
 Ligand Pharmaceuticals Incorporated 
 and 

Ares Trading SA 
 THIS
RESEARCH LICENSE AND OPTION AGREEMENT (the “Agreement”) is dated as of April 27, 2012 (the “Effective Date”) by and between Ligand Pharmaceuticals Incorporated, a corporation organized under the laws
of the US state of Delaware having its place of business at 11085 North Torrey Pines Road, La Jolla, California 92037, USA (“Ligand”), and ARES Trading SA, a corporation organized under Swiss law having a place of business at Zone
Industrielle de l’Ouriettaz, 1170 Aubonne SWITZERLAND (“Merck”). Ligand and Merck may be referred to herein as a “Party” or, collectively, as “Parties”. 

  
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 WHEREAS, Merck is engaged in the research, development, manufacturing and
commercialization of pharmaceutical products; and 
 WHEREAS, Ligand is engaged in the research and development of
pharmaceutical products and Controls rights to proprietary technology known as [***] and to the Compounds (as hereinafter defined); and 
 WHEREAS, Ligand is seeking a partner with the objective to out-license the Compounds; 
 WHEREAS, Merck desires to undertake a Feasibility Study pertaining to Ligand’s proprietary Compounds, for the purpose of determining whether to enter into a license agreement with Ligand
pertaining to such technology and Compounds; 
 NOW, THEREFORE, it is agreed as follows: 

ARTICLE 1 Definitions 

 

	1.1	“Affiliate” means a Person or entity that controls, is controlled by or is under common control with a Party, but only for so long as
such control exists. For the purposes of this Section 1.1, the word “control” (including, with correlative meaning, the terms “controlled by” or “under common control with”) means the actual power, either directly
or indirectly through one or more intermediaries, to direct the management and policies of such Person or entity, whether by the ownership of [***] of the voting stock of such entity, or by contract or otherwise. 

 

	1.2	“Completion of Compound Transfer Date” has the meaning set forth in Section 3.1. 

 

	1.3	 “Compounds” means Ligand’s proprietary [***] set forth on Schedule 1.3 and any other [***] of
such compounds. Compounds not listed on Schedule 1.3 but delivered by Ligand as provided in Section 3.1 shall be included in the definition of Compounds. 

 

	1.4	“Confidential Information” of a Party means information relating to the business, operations and products of a Party or any of its Affiliates,
including but not limited to, any technical information, Know-How, trade secrets, or inventions (whether patentable or not), not known or generally available to the public, that such Party discloses to the other Party under this Agreement, or
otherwise becomes known to the other Party by virtue of this Agreement or that relates to this Agreement. Feasibility Study Results shall be regarded as Confidential Information of Merck. 

  

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	1.5	“Controlled” or “Controls” means, with respect to (a) Patent Rights, (b) Know-How or (c) biological, chemical or
physical material, that a Party or one of its Affiliates owns or has a license or sublicense to such Patent Rights, Know-How or material (or in the case of material, has the right to physical possession of such material) and has the ability to grant
a license or sublicense to, or assign its right, title and interest in and to, such Patent Rights, Know-How or material as provided for in this Agreement without violating the terms of any agreement or other arrangement with any Third Party.

  

	1.6	“Feasibility Study Results” means all data generated by Merck in the conduct of the Feasibility Study. 

 

	1.7	“Feasibility Study” means the activities set forth in the Research Plan. 

 

	1.8	“Feasibility Study Term” has the meaning set forth in Section 2.3. 

 

	1.9	“Field” means all prophylactic, palliative, therapeutic or diagnostic uses in humans or animals, in connection with Compounds and Research Plan
(as set forth on Exhibit A). 

  

	1.10	“Governmental Body” means any: (a) nation, principality, state, commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi-governmental authority of any nature (including any governmental division, subdivision, department, agency, bureau,
branch, office, commission, council, board, instrumentality, officer, official, representative, organization, unit, body or entity and any court or other tribunal); (d) multi-national or supranational organization or body; or
(e) individual, entity, or body exercising, or entitled to exercise, any executive, legislative, judicial, administrative, regulatory, police, military or taxing authority or power of any nature. 

 

	1.11	 “Know-How” means any scientific or technical information, results and data of any type whatsoever, in any tangible or
intangible form whatsoever, that is not in the public domain or otherwise publicly known, including, without limitation, discoveries, inventions, trade secrets, databases, practices, protocols, regulatory filings, methods, processes, techniques,
software, works of authorship, plans, concepts, ideas, biological and other materials, reagents, specifications, formulations, formulae, data (including, but not limited to, pharmacological, biological, chemical, toxicological, clinical and
analytical information, quality control, trial and stability data), case reports forms, data analyses, reports, studies and procedures, designs for experiments and tests and results of experimentation and testing (including results of research or
development), summaries and information contained in submissions to and information from ethical committees, 

  
  

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the FDA or other Regulatory Authorities, and manufacturing process and development information, results and data, whether or not patentable, all to the extent not claimed or disclosed in a patent
or patent application. The fact that an item is known to the public shall not be taken to exclude the possibility that a compilation including the item, and/or a development relating to the item, is (and remains) not known to the public.
“Know-How” includes any rights including copyright, trade-secret, database or design rights protecting such Know-How. “Know-How” excludes Patent Rights. 

 

	1.12	“Law” or “Laws” means all applicable laws, statutes, rules, regulations, ordinances and other pronouncements having the binding
effect of law of any Governmental Body. 

  

	1.13	“License Agreement” has the meaning set forth in Section 4.2. 

 

	1.14	“Ligand Know-How” means all the Know-How that relates to the Compounds and (a) is Controlled by Ligand and any of its Affiliates as of the
Effective Date, including but not limited to the Know-How listed on Schedule 1.14 hereto or, (b) is developed or acquired by Ligand and any of its Affiliates during the Feasibility Study Term, but not in connection with the Feasibility Study.

  

	1.15	“Ligand Patent Rights” means all Patent Rights that are Controlled by Ligand claiming or covering or relating to the Compounds including but not
limited to the patent applications listed on Schedule 1.15 hereto. 

  

	1.16	“Option” has the meaning set forth in Section 4.1. 

 

	1.17	“Option Expiration Date” has the meaning set forth in Section 4.1. 

 

	1.18	“Option Fee” has the meaning set forth in Section 5.2. 

 

	1.19	“Patent Right” means: (a) an issued or granted patent, including any extension, supplemental protection certificate, registration,
confirmation, reissue, reexamination, or renewal thereof; (b) a pending patent application, including any continuation, divisional, continuation-in-part, substitute or provisional application thereof; and (c) all counterparts or foreign
equivalents of any of the foregoing issued by or filed in any country or other jurisdiction. 

  

	1.20	“Person” means any natural person, corporation, firm, business trust, joint venture, association, organization, company, partnership or other
business entity, or any government or agency or political subdivision thereof. 

  

	1.21	“Product” means any pharmaceutical product, in any dosage form, formulation, presentation or package configuration that is commercialized or
undergoing research or pre-clinical or clinical development that contains, incorporates or comprises, in part or in whole, a Compound. 

  
  

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	1.22	“Research License” has the meaning set forth in Section 2.1. 

 

	1.23	“Research Plan” has the meaning set forth in Section 2.2. 

 

	1.24	“Tax” or “Taxes” means any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration,
value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not. 

 

	1.25	“Term” has the meaning set forth in Section 8.1. 

 

	1.26	“Third Party” means any Person other than Merck and its Affiliates or Ligand and its Affiliates. 

ARTICLE 2 Research License and Feasibility Study 

 

	2.1	Research License.  

a) Subject to the terms and conditions of this Agreement, Ligand hereby grants to Merck and its Affiliates an exclusive, worldwide,
royalty-free license, with a right to sublicense to Third Parties, under the Ligand Patent Rights and the Ligand Know-How to perform or have performed experiments in the Field in compliance with the Research Plan during the Feasibility Study Term
(the “Research License”). 
 b) For the avoidance of doubt, nothing in this Agreement shall be
construed as precluding Merck, during and after the Feasibility Study Term, to separately conduct (without use of Ligand Patent Rights and Ligand Know-How, and subject to limitations imposed by Sections 3.2 and 7) other projects with compounds with
mode of action similar to the Compound. 
  

	2.2	 Research Plan. The activities of Merck for the Feasibility Study are set forth in a preclinical research plan (the “Research
Plan”), which is set forth as Exhibit A hereto. The Parties acknowledge that Merck formulated and will conduct the Research Plan at its own decision, at its own costs and under its sole responsibility and will assume all effects and
consequences except for those arising from Ligand’s
[***]. 

  

	2.3	 Feasibility Study Term. The Feasibility Study shall be deemed complete at the earlier to occur of (a) the date by which Merck or one of its
Affiliates has 

  

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completed its activities under the Research Plan and its evaluation of the Compounds (in this case, Merck will provide written notice of such completion to Ligand within [***] days) and
(b) [***] months from the [***] which can be extended by up to [***] months, upon both Parties’ agreement; such agreement being not unreasonably withheld or delayed by a Party (the “Feasibility Study
Term”). 
  

	2.4	Exclusivity. During the Term, Ligand [***]. 

 ARTICLE 3 Research License Fee and Transfer of the Compounds 
  

	3.1	Transfer of the Compounds. Within [***] days following the Effective Date, Ligand shall transfer to Merck, [***] of each Compound and any
Ligand Know-How required in order to conduct the Feasibility Study as set out in the Research Plan. [***]. Merck shall confirm in writing, within a reasonable time [***] days after the transfer, the receipt of all of such Compounds and
Ligand Know-How (such date of confirmation, the “Completion of Compound Transfer Date”). [***]. Except as otherwise provided under this Agreement, all Compounds delivered to Merck [***], will be used and consumed only
in the furtherance of the activities expressly contemplated by this Agreement, will not be used or delivered to or for the benefit of any Third Party without the prior written consent of Ligand, and will be stored, used and disposed of in compliance
with all Laws, including environmental Laws. Merck [***] request that Ligand provides[***]. Ligand shall deliver the [***] but no longer than [***] months from receipt of Merck’s request. In case, because of
[***], the actual delivery date of the [***] exceeds [***] months from receipt of Merck’s request and is not compatible with the planning of the Feasibility Study conducted by Merck, Parties will agree in good faith on the
extension of the Feasibility Study Term (i.e. in no event shall such request or compliance therewith extend the feasibility period of [***] months except if agreed by the Parties). [***]. 

 

	3.2	Merck shall not attempt to reverse engineer, derivatize, deconstruct or in any way determine the structure or composition of the Compounds during the Feasibility
Study Term or after the Feasibility Study Term until and unless the License Agreement is executed by the Parties and remains in effect. Merck expressly acknowledges that the Compounds are supplied in circumstances imparting an obligation of
confidence and are subject to Article 7 hereunder. Merck agrees to keep the Compounds secure and safe from loss, damage, theft, misuse and unauthorized access and shall procure that the Compounds shall be made available only to employees on a need
to know basis 

  

	3.3	Disposition and Use of Compounds. In the event that Merck fails to execute the Option, the Compounds may no longer be used by Merck for any purpose, and
shall be destroyed by Merck, or at Ligand’s option returned to Ligand, at Ligand’s cost and expense. 

  

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 ARTICLE 4 Option for a license 

 

	4.1	Grant of Option. Ligand hereby grants to Merck an exclusive option to a license under the Ligand Patent Rights and Ligand Know-How to research, develop
and commercialize Products in the Field (the “Option”). Merck may exercise the Option by written notice to Ligand at any time before the end of the Feasibility Study Term (the “Option Expiration Date”). In the event
that Merck fails to exercise the Option on or prior to the Option Expiration Date, the Option shall automatically terminate without any further obligations for the Parties except as provided in Section 8.5. 

 

	4.2	License Agreement. In the event that Merck exercises the Option on or prior to the Option Expiration Date, the Parties shall execute the license agreement
(“License Agreement”) attached as Exhibit B within [***] from the date on which Ligand receives the Option exercise notice issued by Merck. 

 

	4.3	Standstill. Anything to the contrary notwithstanding, Ligand agrees that it will not, during the Term, negotiate and/or execute an agreement with any
Third Party with respect to the granting of any rights under the Ligand Patent Rights and Ligand Know-How. 

ARTICLE 5 Financial Provisions 

 

	5.1	 Research License Fee. Within [***] days of the Effective Date and the receipt of a
corresponding invoice from Ligand Merck shall pay, or cause to be paid, to Ligand: 

 (i)
[***]; and 
 (ii) [***] corresponding to the [***]. 

 

	5.2	Option Fee. In case of exercise of the Option by Merck as provided in Section 4.1, Merck shall pay, or cause to be paid to Ligand a one-time,
non-refundable fee of [***] (the “Option Fee”), within [***] days following the date of execution of the License Agreement by the Parties. Payment of the Option Fee shall include any withholding tax obligations set
forth in Section 5.3. 

  

	5.3	Taxes. 

 (a)
Withholding Tax. Ligand shall be responsible for the payment of any and all Taxes levied on account of the royalties and other payments paid to Ligand by Merck under this Agreement. If applicable Law requires that Taxes be deducted and withheld
from royalties or other payments paid under this Agreement, Merck shall (i) deduct those Taxes from the payment; (ii) pay the Taxes to the proper Governmental Body; (iii) send 

  

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evidence of the obligation together with proof of Tax payment to Ligand within [***] days following such payment; (iv) remit the net amount, after deductions or withholding made under
this Section 5.3(a) and (v) cooperate with Ligand in any way reasonably requested by Ligand, to obtain available reductions, credits or refunds of such Taxes; provided, however, [***]. Assuming that Ligand is the beneficial owner of the
Ligand Patent Rights and Ligand Know-How, the cooperation referred to in subparagraph (v) of the foregoing sentence shall include, without limitation, that Ligand shall provide Merck with a written confirmation from the competent tax authority
that Ligand has its residence in USA together with any required tax application form which would allow the Parties to benefit from the reduced withholding Tax rate set forth in the Double Taxation Convention existing between USA and Switzerland or
in case of any assignments with the respective country of residence of the company to which the contract has been assigned. 
 (b) Value Added Tax. Without prejudice to Article 5.1 (ii), all remuneration amounts set under this Agreement are net amounts. Value added tax, if applicable, will have to be added on those
amounts. Merck is entitled to receive a proper tax invoice if value added tax is applicable. 
 ARTICLE 6
Representations and Warranties; Intellectual Property 
  

	6.1	Representations and Warranties of the Parties. 

  

	 	(a)	Corporate Power. Each Party hereby represents and warrants that such Party is duly organized and validly existing under the laws of the state of its
incorporation. 

  

	 	(b)	Due Authorization. Each Party hereby represents and warrants that such Party is duly authorized to execute and deliver this Agreement and to perform its
obligations hereunder. 

  

	 	(c)	Binding Agreement. Each Party hereby represents and warrants that this Agreement is a legal and valid obligation binding upon it and is enforceable in accordance
with its terms; and that the execution, delivery and performance of this Agreement by such Party does not conflict with any agreement, instrument or commitment, oral or written, to which it is a Party or by which it may be bound, nor violate any
Law. 

  

	6.2	Further Representations of Ligand. Ligand hereby represents and warrants, as of the Effective Date that: 

(a) the Compounds, the Ligand Patent Rights and the Ligand Know-How are Controlled by Ligand; 

  

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 (b) Ligand will not transfer the Compounds, the Ligand Patent Rights or the Ligand
Know-How to any Third Party during the Term of the Agreement; 
 (c) Ligand has not received written notice from any Third Party
claiming that the research, manufacture, use or sale of the Compounds infringes the Patent Rights or Know-How of any Third Party; 
 (d) the exercise of the rights granted to Merck hereunder will not to the best of the knowledge of Ligand infringe any intellectual property rights of any Third Party such as but not limited to [***];

 (e) Ligand is not, to the best of its knowledge, party to any legal action, suit or proceeding relating to the
Compounds, Ligand Patent Rights or the Ligand Know-How; and 
 (f) Ligand has the full right to grant to Merck the licenses and
rights granted to Merck hereunder and has not granted any rights to the Compounds, the Ligand Patent Rights and the Ligand Know-How to any Third Party as of the Effective Date. 

 

	6.3	Feasibility Study Results. [***]. 

  

	6.4	Intellectual Property Generated in Conduct of Feasibility Study. [***]. 

 

	6.5	Exclusion of Liability. Except if arising from a breach by Ligand of any of its obligations (including its representations under Section 6.2) under this
Agreement or from the negligence or willful misconduct from Ligand, [***]. For the avoidance of doubt, in case the same damage arises from both parties’ breach, negligence or willful misconduct, each party will be responsible in
proportion of its contribution in such damage. The terms of this clause shall survive termination of this Agreement for whatever reason. 

 ARTICLE 7 Confidentiality 
  

	7.1	Use of Confidential Information. During the Term and for [***] years thereafter, unless otherwise agreed upon by the Parties, neither Party shall
use the other Party’s Confidential Information except solely for the purposes contemplated in this Agreement. 

  

	7.2	 Disclosure of Confidential Information. During the Term and for [***] years thereafter, except as set forth in this Section 7.2,
neither Party shall directly or indirectly publish, disseminate or otherwise disclose, deliver or make available to any person outside its organization any of the other Party’s Confidential Information. Each Party may disclose the other
Party’s Confidential Information 

  

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to Affiliates and persons within its organization and to consultants who have a need to receive such Confidential Information in order to further the purposes of this Agreement, provided that
such persons are bound to protect the confidentiality of such Confidential Information. 

  

	7.3	Release from Restrictions. Notwithstanding the provisions of Section 7.1 and 7.2, a Party shall not be prevented from using or disclosing Confidential
Information of the other Party which (a) was known by the receiving Party or its Affiliates other than under an obligation of confidentiality, prior to its date of disclosure to the receiving Party, as demonstrated by competent written records,
(b) either before or after its date of disclosure to the receiving Party is lawfully disclosed to the receiving Party or its Affiliates by Third Party rightfully in possession of the Confidential Information, but only to the extent of the
rights obtained from such Third Party, (c) either before or after the date of disclosure to the receiving Party becomes published or otherwise part of the public domain through no fault or omission on the part of the receiving Party or its
Affiliates or its authorized disclosees as set forth under Section 7.2, or (d) is independently developed by the receiving Party or its Affiliates without any use of the Confidential Information of the disclosing Party as demonstrated by
competent written records. In addition, the receiving Party may make such disclosures as are reasonably necessary to comply with Laws, provided that the receiving Party provides written notice of such disclosure to the other Party and takes all
reasonable actions to avoid and/or minimize the degree of such disclosure. 

  

	7.4	 Publicity. Parties may make public announcements with respect to this Agreement solely to the extent mandatorily required by applicable
Laws. For the avoidance of doubt, the Parties agree that [***] shall not be disclosed by any Party. However the structure or type of the Agreement (e.g. Research Licence/Feasibility Study and Option Agreement) may be disclosed if required by applicable Laws. Such
announcement shall be provided in advance to the other Party for prompt review and comment and shall also not contain confidential technical or business information or, if disclosure of confidential technical or business information is required by
Law, shall make reasonable efforts to minimize such disclosure and obtain confidential treatment for any such information which is disclosed to a Governmental Body. Ligand shall be authorized to make the public announcement set forth in Exhibit 7.4
(Form 8-K) and to repeat its content in other acceptable contexts notified to Merck. 

  

	7.5	Return of Confidential Property. In addition to the requirements of Section 3.2, all physical material containing Confidential Information shall be
returned to the disclosing Party, at the disclosing Party’s cost, or at the disclosing Party’s option destroyed by the receiving Party, prior to or immediately upon the termination of this Agreement, provided however, that the receiving
Party may retain one copy of written materials containing Confidential Information strictly for use as a record of information disclosed by the disclosing party, and to be used for no other purpose without the disclosing Party’s written
consent. 

  

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 ARTICLE 8 Term and Termination 

 

	8.1	Term. The term of this Agreement shall commence on the Effective Date and, unless earlier terminated as provided in this Article 8, shall continue in
force and effect until the earlier of (a) Merck’s failure to exercise the Option on or prior to the Option Expiration Date; or (b) the execution of the License Agreement (the “Term”). 

 

	8.2	Termination For Convenience. Merck may terminate this Agreement upon a sixty (60) days’ prior written notice to Ligand at any time during the Term.
Upon any such termination, Merck shall have no further obligation to Ligand, other than as expressly provided under Section 8.5. In addition, the provisions of Articles 2 and 4 and Section 3.1 shall terminate immediately and Merck shall
promptly return to Ligand, or at Ligand’s option destroy, the remaining quantities of the Compounds provided by Ligand to Merck. 

  

	8.3	Termination For Material Breach. Upon any material breach of this Agreement by a Party, the other Party may terminate this Agreement by providing a thirty
(30) days’ written notice to the breaching Party, specifying the material breach. The termination shall become effective at the end of the thirty (30) days’ period unless the breaching Party cures such breach during such thirty (30)
days’ period. 

  

	8.4	Consequence of Termination. In case of termination of this Agreement, (a) Merck shall promptly return to Ligand, or at Ligand’s option destroy,
the remaining quantities of the Compounds provided by Ligand to Merck and (b) the Research License granted to Merck, as well as the rights granted to Merck under Article 4 shall terminate. 

 

	8.5	Survival. Upon expiration or termination of this Agreement for any reason, nothing in this Agreement shall be construed to release either Party from any
obligations that matured prior to the effective date of expiration or termination. Articles 6 and 7 and Sections 2.1 b), 3.2, 3.3, 5.3 and 9.8 shall expressly survive any such expiration or termination. 

ARTICLE 9 Miscellaneous 
  

	9.1	Relationship of Parties. Nothing in this Agreement or in the course of business between Merck and Ligand shall make or constitute either Party a partner,
employee or agent of the other. Neither Party shall have any right nor authority to commit or legally bind the other Party in any way whatsoever including, without limitation, the making of any agreement, representation or warranty and each Party
agrees to not purport to do so. 

  

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	9.2	Notices and Deliveries. Any notice, request, approval or consent required or permitted to be given under this Agreement shall be in writing and shall be deemed
to have been sufficiently given if delivered in person, transmitted by facsimile (receipt verified) or by express courier service (signature required) to the Party to which it is directed at its address or facsimile number shown below or such other
address or facsimile number as such Party shall have last given by notice to the other Party. 

 If to Merck:

 Merck Serono SA 
 9 chemin des Mines 
 1202 Geneva 

Switzerland 

Attn: Pascale Gaillard 
 Facsimile: +41 22 4149565 
 With a copy to: 

Merck Serono S.A.-Geneva 
 9, Chemin des Mines 
 1202 Geneva 

Switzerland 

Attn: Legal Department 
 Facsimile: +41 22 414 3070 
 If to Ligand: 

Ligand Pharmaceuticals Incorporated 
 Attention: General Counsel 
 11085 North Torrey Pines Road 

La Jolla, CA 92037 
 Facsimile: 858-550-5658 
  

	9.3	 Assignment. This Agreement may not be assigned by either Party without the prior written consent of the other Party, except that either Party
may assign this Agreement to any of its Affiliates or to a successor in connection with the merger, consolidation, or sale of all or substantially all of its assets or that portion of its business pertaining to the subject matter of this Agreement,
with prompt written notice to the other Party of any such assignment. Notwithstanding the foregoing, without Merck’s prior written consent (which Merck agrees that it shall not unreasonably withhold or delay), [***]. This Agreement shall inure to the benefit of and be binding upon the
Parties and their respective lawful successors and assigns. 

  

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	9.4	Waiver. A waiver by either Party of any of the terms and conditions of this Agreement in any instance shall not be deemed or construed to be a waiver of
such term or condition for the future, or of any other term or condition hereof. All rights, remedies, undertakings, obligations and agreements contained in or available upon violation of this Agreement shall be cumulative and none of them shall be
in limitation of any other remedy, right, undertaking, obligation or agreement of either Party. 

  

	9.5	Performance by Affiliates. Merck shall have the right to have any of its obligations hereunder performed, or its rights hereunder exercised, by, any of
its Affiliates and the performance of such obligations by any such Affiliate(s) shall be deemed to be performance by Merck; provided, however, that Merck shall be responsible for ensuring the performance of its obligations under this Agreement and
that any failure of any Affiliate performing obligations of Merck hereunder shall be deemed to be a failure by Merck to perform such obligations. 

  

	9.6	Entire Agreement. This Agreement and the schedules and exhibits hereto constitute and contain the entire understanding and agreement of the Parties
respecting the subject matter hereof and cancel and supersede any and all prior or contemporaneous negotiations, correspondence, understandings and agreements between the Parties, whether oral or written, regarding such subject matter; provided that
any existing nondisclosure/nonuse agreement shall remain unchanged and in full force and effect for confidential information exchanged before the Effective Date. No waiver, modification or amendment of any provision of this Agreement shall be valid
or effective unless made in writing referencing this Agreement and signed by a duly authorized officer of each Party. 

  

	9.7	Severability. When possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable Law, but if
any provision of this Agreement is held to be prohibited by or invalid under applicable Law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement. The Parties
shall make a good faith effort to replace the invalid or unenforceable provision with a valid one which in its economic effect is most consistent with the invalid or unenforceable provision. 

 

	9.8	 Force Majeure. Neither Party shall be liable to the other Party or be deemed to have breached or defaulted under this Agreement for
failure or delay in the performance of any of its obligations under this Agreement for the time and to the extent such failure or delay is caused by or results from any reason which is reasonably unforeseeable and unpreventable and beyond the
control of the respective Party. The Party affected by force majeure shall provide the other Party with full particulars thereof as soon as it becomes aware of the same 

  
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(including its best estimate of the likely extent and duration of the interference with its activities), and will use diligent efforts to overcome the difficulties created thereby and to resume
performance of its obligations hereunder as soon as practicable. 

  

	9.9	Governing Law and Jurisdiction. This Agreement shall be governed by and interpreted in accordance with the Laws of New York, excluding application of any
conflict of Laws principles that would require application of the Law of a jurisdiction outside of New York and will be subject to the exclusive jurisdiction of the courts of New York. 

 

	9.10	No Implied License. No right or license is granted to Merck hereunder by implication, estoppel, or otherwise to any know-how, patent or other intellectual
property right owned or controlled by Ligand or its Affiliates. No right or license is granted to Ligand hereunder by implication, estoppel, or otherwise to any know-how, patent or other intellectual property right owned or controlled by Merck or
its Affiliates. 

  

	9.11	Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original, and all of which together will be
deemed to be one and the same instrument. A facsimile or a portable document format (PDF) copy of this Agreement, including the signature pages, will be deemed an original. 

  
 14 

 CONFIDENTIAL 
  

 IN WITNESS WHEREOF, Merck and Ligand have caused this Agreement to be signed and
executed under seal by its duly authorized officers as of the Effective Date. 
  

									
	LIGAND PHARMACEUTICALS INCORPORATED	  		  	ARES TRADING SA
					
	By:	  	 /s/ Charles Berkman
	  		  	By:	  	 /s/ Cedric Hyde

	Name:	  	Charles Berkman	  		  	Name:	  	  

	Title:	  	 Vice President, General Counsel

and Secretary
	  		  	Title:	  	  

									
					
		  		  		  	By:	  	 /s/ Cedric Hyde

		  		  		  	Name:	  	  

		  		  		  	Title:	  	  

  
 15 

 CONFIDENTIAL 
  

 EXHIBIT A: 

RESEARCH PLAN 
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the omitted portions. 

  
 16 

 CONFIDENTIAL 
  

 EXHIBIT B 

TERMS OF LICENSE AGREEMENT (“LICENSE AGREEMENT”) 

  
 17 

 SCHEDULE 1.3 

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 SCHEDULE 1.14 

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 SCHEDULE 1.15 

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the omitted portions. 

 EXHIBIT 7.2 
 Form of Announcement 
 On April     , 2012, Ligand
Pharmaceuticals Incorporated licensed certain rights to an undisclosed anti-inflammatory research program to Merck KGaA. Ligand will receive [***]. Additional future potential payments and other terms of the agreement are not disclosed. 

  

	*** 	 Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to
the omitted portions. 

 Exhibit B of 10.2 
 CERTAIN MATERIAL (INDICATED BY ASTERISKS) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. 
 LICENSE AGREEMENT 
 Dated             , 201 

By and Between 

Ligand Pharmaceuticals Incorporated 
 And 
 ARES Trading SA 

 CONFIDENTIAL 
  

 LICENSE AGREEMENT 

THIS LICENSE AGREEMENT (the “Agreement”) is dated as of
            , 201 (the “Effective Date”) by and between Ligand Pharmaceuticals Incorporated, a corporation organized under the laws of the US state of Delaware having its place of
business at 11085 North Torrey Pines Road, La Jolla, CA 92037, USA (“Licensor”), and ARES Trading SA, an organization organized under Swiss law having a place of business at Zone Industrielle de l’Ouriettaz, 1170 Aubonne, acting
through its pharmaceutical division Merck Serono Switzerland(including all of its Affiliates, “Merck”). Licensor and Merck may be referred to herein as a “Party” or, collectively, as “Parties.” 

RECITALS: 

WHEREAS, Licensor is a pharmaceutical company engaged in the discovery and development of the Compound (as
hereinafter defined); 
 WHEREAS, Merck, through its Merck Serono division and its Affiliates (as
hereinafter defined) are engaged in the research, development, manufacturing and commercialization of pharmaceuticals products, and Merck is interested in developing and commercializing products containing or comprising the Compound; and 

WHEREAS, Merck desires to license from Licensor and Licensor wishes to license to Merck, on an exclusive basis, the
right to develop and commercialize products comprising the Compound. 
 NOW,
THEREFORE, in consideration of the various promises and undertakings set forth herein, the Parties agree as follows: 
 ARTICLE 1 
 DEFINITIONS 

Unless otherwise specifically provided herein, the following terms shall have the following meanings: 

 

	 	1.1	“Adverse Event” means any serious untoward medical occurrence in a patient or subject who is administered a Licensed Product, but only if and to the
extent that such serious untoward medical occurrence is required under applicable Laws to be reported to the FDA or any other Regulatory Authority. For the purpose of Section 4.3 of this Agreement, Adverse Events are limited to those
culminating in death or permanent disability of a patient or subject to which is administered a Licensed Product. 

  
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 CONFIDENTIAL 
  

	 	1.2	“Affiliate” means a Person or entity that controls, is controlled by or is under common control with a Party, but only for so long as such control
exists. For the purposes of this Section 1.2, the word “control” (including, with correlative meaning, the terms “controlled by” or “under common control with”) means the actual power, either directly or indirectly
through one or more intermediaries, to direct the management and policies of such Person or entity, whether by the ownership of at [***] of the voting stock of such entity, or by contract or otherwise. 

 

	 	1.3	“[***]” means [***] provided however that [***]. 

 

	 	1.4	“[***]” means [***], provided however that [***]. 

 

	 	1.5	“Change of Control” means 

 (a) a transaction or series of related transactions that results in the sale or other disposition of all or substantially all of a Party’s assets; or 

(b) a merger or consolidation in which a Party is not the surviving corporation or in which, if a Party is the surviving
corporation, the shareholders of such Party immediately prior to the consummation of such merger or consolidation do not, immediately after consummation of such merger or consolidation, possess [***] of the voting power of all of the
Party’s outstanding stock and other securities and the power to elect [***] of the members of the Party’s board of directors; or 
 (c) a transaction or series of related transactions (which may include without limitation a tender offer for a Party’s stock or the issuance, sale or exchange of stock of a Party) if the
shareholders of such Party immediately prior to the initial such transaction do not, immediately after consummation of such transaction or any of such related transactions, own stock or other securities of the entity that possess [***] of the
voting power of all of the Party’s outstanding securities and the power to elect [***] of the members of the Party’s board of directors. 
  

	 	1.6	“Clinical Trial” means a clinical trial in human subjects that has been approved by a Regulatory Authority and is designed to measure the safety and/or
efficacy of a Licensed Product. Clinical Trials shall include Phase I Trials, Phase II Trials and Phase III Trials. 

  

	 	1.7	“[***]” means a product containing the [***] together with [***], or with [***]. 

 

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	 	1.8	“Commercialization” or “Commercialize” means any and all activities undertaken at any time for a particular Licensed Product and that
relate to the marketing, promoting, distributing, importing or exporting for sale, offering for sale, and selling of the Licensed Product, and interacting with Regulatory Authorities regarding the foregoing. 

 

	 	1.9	“Commercially Reasonable Efforts” means, (a) with respect to the efforts to be expended by any Party with respect to any objective, such
reasonable, diligent, and good faith efforts as any Party would normally use to accomplish a similar objective under similar circumstances, and (b) with respect to any objective relating to Development or Commercialization of a Licensed Product
by Merck, the application [***], consistent with the exercise of its prudent scientific and business judgment, of diligent efforts and resources to fulfill the obligation in issue, [***] would devote to a product at a similar stage in
its product life as the Licensed Product and having profit potential and strategic value comparable to that of the Licensed Product, taking into account, without limitation, commercial, legal and regulatory factors, target product profiles, product
labeling, past performance, the regulatory environment and competitive market conditions in the therapeutic area, safety and efficacy of the Licensed Product, the strength of its proprietary position and such other factors [***]. Commercially
Reasonable Efforts will not mean that Merck commits that it will actually accomplish the applicable task. 

  

	 	1.10	“Competing Product” means any pharmaceutical product in any dosage form, formulation, presentation or package configuration which exhibits
therapeutic or prophylactic activity which is similar to that exhibited by the Licensed Product and the method of action of which is [***]. 

  

	 	1.11	“Compounds” means [***]. 

  

	 	1.12	“Compulsory License” means a compulsory license under Licensor Technology obtained by a Third Party through the order, decree, or grant of a
competent Governmental Body or court, authorizing such Third Party to develop, make, have made, use, sell, offer to sell or import a Competing Product or Licensed Product in any country. 

 

	 	1.13	“Confidential Information” of a Party means information relating to the business, operations and products of a Party or any of its Affiliates,
including but not limited to, any technical information, Know-How, trade secrets, or inventions (whether patentable or not), not known or generally available to the public, that such Party discloses to the other Party under this Agreement, or
otherwise becomes known to the other Party by virtue of or that relates to this Agreement. 

  

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	 	1.14	“Controlled” means, with respect to (a) Patent Rights, (b) Know-How or (c) biological, chemical or physical material, that a Party or
one of its Affiliates owns or has a license or sublicense to such Patent Rights, Know-How or material (or in the case of material, has the right to physical possession of such material) and has the ability to grant a license or sublicense to, or
assign its right, title and interest in and to, such Patent Rights, Know-How or material as provided for in this Agreement without violating the terms of any agreement or other arrangement with any Third Party. 

 

	 	1.15	“Cover”, “Covering” or “Covered” means, with respect to a Licensed Product, that the manufacturing, importing, using,
selling, or offering for sale of such Licensed Product would, but for a license granted under this Agreement to the relevant Patent Rights, infringe a Valid Claim of the relevant Patent Rights in the country in which the activity occurs.

  

	 	1.16	“Development” or “Develop” means, with respect to a Licensed Product, [***]. 

 

	 	1.17	“EMA” means the European Medicines Agency or any successor agency. 

 

	 	1.18	“European Commission” means the authority within the European Union that has the legal authority to grant Regulatory Approvals in the European Union
based on input received from the EMA or other competent Regulatory Authorities. 

  

	 	1.19	“Executive Officers” means, together, each member of the senior management of the pharmaceutical division of Merck/executive management board of
the pharmaceutical division reporting to the executive board of Merck (“Geschäftsleitung”) and each member of the senior management of Licensor. 

 

	 	1.20	“FDA” means the United States Food and Drug Administration, or a successor federal agency thereto. 

 

	 	1.21	“Field” means all prophylactic, palliative, therapeutic or diagnostic uses in humans or animals. 

 

	 	1.22	“First Commercial Sale” means, with respect to a Licensed Product in any country, the first commercial transfer or disposition for value of such
Licensed Product in such country to a Third Party by Merck, an Affiliate of Merck or a Sublicensee after Regulatory Approval therefor has been obtained in such country. 

 

	 	1.23	“Governmental Body” means any: (a) nation, principality, state, commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi-governmental authority of any nature (including any 

 

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 CONFIDENTIAL 
  

	 	
governmental division, subdivision, department, agency, bureau, branch, office, commission, council, board, instrumentality, officer, official, representative, organization, unit, body or entity
and any court or other tribunal); (d) multi-national or supranational organization or body; or (e) individual, entity, or body exercising, or entitled to exercise, any executive, legislative, judicial, administrative, regulatory, police,
military or taxing authority or power of any nature. 

  

	 	1.24	“IFRS” means the International Financial Reporting Standards, the set of accounting standards and interpretations and the framework in force on the
Effective Date and adopted by the European Union as issued by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC), as such accounting standards may be amended from time to
time. 

  

	 	1.25	“Indication” means a generally acknowledged disease or condition, a significant manifestation of a disease or condition, or symptoms associated with a
disease or condition or a risk for a disease or condition. For the avoidance of doubt, all variants of a single disease or condition (whether classified by severity or otherwise) shall be treated as the same Indication. 

 

	 	1.26	“Initiation” of a Clinical Trial means the date of the first dosing of the Licensed Product to the [***] subject/patient in such Clinical
Trial. 

  

	 	1.27	“IND” means an investigational new drug application submitted to the FDA or the equivalent application or submission filed with any equivalent agency
or Governmental Body outside the United States (including any supra-national entity such as in the European Union) for approval to commence Clinical Trials in such jurisdiction. 

 

	 	1.28	“IND Submission” means the submission of an IND for the Licensed Product with the relevant Regulatory Authority. 

 

	 	1.29	“IND Submission Acceptance” means the receipt of notice from the relevant Regulatory Authority that an IND for the Licensed Product has met all the
criteria for submission acceptance. 

  

	 	1.30	“Know-How” means any scientific or technical information, results and data of any type whatsoever, in any tangible or intangible form whatsoever, that
is not in the public domain or otherwise publicly known, including, without limitation, discoveries, inventions, trade secrets, databases, practices, protocols, regulatory filings, methods, processes, techniques, software, works of authorship,
plans, 

  

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the omitted portions. 

  
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 CONFIDENTIAL 
  

	 	
concepts, ideas, biological and other materials, reagents, specifications, formulations, formulae, data (including, but not limited to, pharmacological, biological, chemical, toxicological,
clinical and analytical information, quality control, trial and stability data), case reports forms, data analyses, reports, studies and procedures, designs for experiments and tests and results of experimentation and testing (including results of
research or development), summaries and information contained in submissions to and information from ethical committees, the FDA or other Regulatory Authorities, and manufacturing process and development information, results and data, whether or not
patentable, all to the extent not claimed or disclosed in a patent or patent application. The fact that an item is known to the public shall not be taken to exclude the possibility that a compilation including the item, and/or a development relating
to the item, is (and remains) not known to the public. “Know-How” includes any rights including copyright, trade-secret, database or design rights protecting such Know-How. “Know-How” excludes Patent Rights.

  

	 	1.31	“Knowledge” means with respect to a matter that is the subject of a given representation or warranty of Licensor, the knowledge, information or belief
that [***]. 

  

	 	1.32	“Law” or “Laws” means all applicable laws, statutes, rules, regulations, ordinances and other pronouncements having the binding effect of law
of any Governmental Body. 

  

	 	1.33	“Licensed Product” means any pharmaceutical product, in any dosage form, formulation, presentation or package configuration that is commercialized or
undergoing research or pre-clinical or clinical development that contains or comprises, in part or in whole, a Compound. 

  

	 	1.34	.”Licensor Bankruptcy Event” means (a) voluntary or involuntary proceedings by or against Licensor are instituted in bankruptcy or under any
insolvency law, which proceedings, if involuntary, shall not have been dismissed within [***] days after the date of filing; (b) a receiver or custodian is appointed for Licensor; (c) proceedings are instituted by or against
Licensor for corporate reorganization, dissolution, liquidation or winding-up of Licensor, which proceedings, if involuntary, shall not have been dismissed within [***] days after the date of filing; or (d) substantially all of the
assets of Licensor are seized or attached and not released within [***] days thereafter. 

  

	 	1.35	“Licensor Know-How” means all Know-How that is Controlled by Licensor or any of its Affiliates as of the Effective Date or at any time thereafter
during the Term and is necessary in the research, Development, manufacture, use, or Commercialization of the Licensed Products. The Licensor Know-How shall include, but not be limited to, all Know-How set forth on Schedule 2 hereto [***].

  

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 CONFIDENTIAL 
  

	 	1.36	“Licensor Materials” means all chemical or biological materials that are Controlled by Licensor or any of its Affiliates as of the Effective Date or at
any time thereafter during the Term and are necessary in the research, Development, manufacture, use or Commercialization of the Licensed Products. The Licensor Materials set forth on Schedule 3 hereto (less those already transferred to Merck)
constitute all Licensor Materials Controlled by Licensor or any of its Affiliates as of the Effective Date. 

  

	 	1.37	“Licensor Patents” means all Patent Rights, that are Controlled by Licensor or its Affiliates as of the Effective Date or at any time thereafter during
the Term and are necessary for the research, Development, manufacture, use, or Commercialization of the Licensed Products. Subject to the last paragraph of section 8.3, the Patent Rights set forth on Schedule 4 hereto constitute all such Patent
Rights Controlled by Licensor or any of its Affiliates as of the Effective Date. 

  

	 	1.38	“Licensor Technology” means the Licensor Patents, the Licensor Know-How and the Licensor Materials. 

 

	 	1.39	“[***]” [***]. 

  

	 	1.40	“Merck Cost of Goods” shall have the meaning set forth on Exhibit A hereto. 

 

	 	1.41	“NDA” means a New Drug Application submitted pursuant to the requirements of the FDA, as more fully defined in 21 U.S. CFR §314.3 et seq., a
Biologics License Application submitted pursuant to the requirements of the FDA, as more fully defined in 21 U.S. CFR §601, and any equivalent application submitted in any country, including a European Marketing Authorization Application,
together, in each case, with all additions, deletions or supplements thereto. 

  

	 	1.42	“NDA Acceptance” means the receipt of notice from the relevant Regulatory Authority that an NDA for a Licensed Product has met all the criteria for
filing acceptance. 

  

	 	1.43	“Net Sales” means the [***] 

 [***] 
 [***] 

[***] 
 [***]

 [***] 
  

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[***] 
 [***] 

[***]. 

[***]. 

[***]. 

[***] 
 [***]

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

[***] 
  

	 	1.44	“Out-of-Pocket Expenses” means [***]. 

  

	 	1.45	“Patent Right” means: (a) an issued or granted patent, including any extension, supplemental protection certificate, registration, confirmation,
reissue, reexamination, extension or renewal thereof; (b) a pending patent application, including any continuation, divisional, continuation-in-part, substitute or provisional application thereof; and (c) all counterparts or foreign
equivalents of any of the foregoing issued by or filed in any country or other jurisdiction. 

  

	 	1.46	“Person” means any natural person, corporation, firm, business trust, joint venture, association, organization, company, partnership or other business
entity, or any government or agency or political subdivision thereof. 

  

	 	1.47	“Phase I Trial” means a Clinical Trial in which a Licensed Product is administered to human subjects at single and/or multiple dose levels with the
primary purpose of determining safety, metabolism, and pharmacokinetic and pharmacodynamic properties of the Licensed Product, and which is consistent with 21 U.S. CFR §312.21(a). For the purposes of the milestone payments in Section 5.2,
a “Phase I Trial” shall be a Clinical Trial which is submitted by Merck (or its Affiliate or Sublicensee) to the Regulatory Authority as a Phase I Trial or as a Phase I/II Clinical Trial. 

 

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	 	1.48	“Phase II Trial” means a Clinical Trial of a Licensed Product in human patients, the principal purposes of which are to make a preliminary
determination that the Licensed Product is safe for its intended use, to determine its optimal dose, and to obtain sufficient information about the Licensed Product’s efficacy to permit the design of Phase III Trials, and which is consistent
with 21 U.S. CFR §312.21(b). For the purposes of the milestone payments in Section 5.2, a “Phase II Trial” shall be a Clinical Trial which is submitted by Merck (or its Affiliate or Sublicensee) to the Regulatory Authority
expressly as a Phase II Trial or a Phase II/III Clinical Trial. 

  

	 	1.49	“Phase III Trial” means a Clinical Trial of a Licensed Product in human patients, which trial is designed (a) to establish that the Licensed
Product is safe and efficacious for its intended use; (b) to define warnings, precautions and adverse reactions that are associated with the Licensed Product in the dosage range to be prescribed; and (c) to be, either by itself or together
with one or more other Clinical Trials having a comparable design and size, the final human Clinical Trial in support of Regulatory Approval of an NDA of the Licensed Product, and (d) consistent with 21 U.S. CFR §312.21(c). For the
purposes of the milestone payments in Section 5.2, a “Phase III Trial” shall be a Clinical Trial which is submitted by Merck to the Regulatory Authority as a Phase III. 

 

	 	1.50	“Price Approvals” means in those countries where Regulatory Authorities may approve or determine pricing and/or pricing reimbursement for
pharmaceutical products, such approval or determination. 

  

	 	1.51	“Research License and Option Agreement” shall mean the agreement, so named and dated April     , 2012, entered between the
Parties in order for Merck to evaluate the Compounds. This agreement also contains an option for Merck to be granted an exclusive license under the terms of the Agreement, which Merck has exercised. 

 

	 	1.52	“Regions” means [***]. 

  

	 	1.53	“Regulatory Authority” means (a) the FDA, (b) the EMA or the European Commission, or (c) any regulatory body with similar regulatory
authority over pharmaceutical or biotechnology products in any other jurisdiction anywhere in the world. 

  

	 	1.54	“Regulatory Approval” means any and all approvals, licenses, registrations, or authorizations of the relevant Regulatory Authority, including Price
Approvals, necessary for the Development, manufacture, use, storage, import, transport or Commercialization of the Licensed Product in a particular country or jurisdiction. For the avoidance of doubt, Regulatory Approval to Commercialize the
Licensed Product shall include Price Approval. 

  

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	 	1.55	“Royalty Term” means, on a Licensed Product-by-Licensed Product and country-by-country basis, the period from the First Commercial Sale of a given
Licensed Product in such country until the last date on which the Licensed Product is Covered by a Valid Claim within the Licensor Patents in such country. In a country where a Valid Claim of a Licensor Patent Covering the Licensed Product has never
existed, the Royalty Term means on a Licensed Product-by-Licensed Product and country-by-country basis, the period from the First Commercial Sale of such Licensed Product in such country until [***]. 

 

	 	1.56	“Senior Executive” means a member of senior management of a Party who is designated by such Party to resolve disputes under this Agreement.

  

	 	1.57	“Subcontract” means any contract entered between Merck and a Third Party (“Subcontractor”) and that relates to services to be
provided by the Subcontractor on Merck’s behalf and at Merck’s request in connection with the research, Development, manufacture, Commercialization, sale or importation of the Licensed Product. 

 

	 	1.58	“Sublicensee” means a Person other than an Affiliate of Merck to which Merck (or its Affiliate) has, pursuant to Section 2.2, granted sublicense
rights under any of the license rights granted under Section 2.1. “Sublicense” shall be construed accordingly. 

  

	 	1.59	“Tax” or “Taxes” means any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value
added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not. 

 

	 	1.60	“Territory” means worldwide. 

  

	 	1.61	“Third Party” means any Person other than Licensor, Merck or Affiliates of either of them, or any Sublicensees. 

 

	 	1.62	“Third Party Action” means any claim or action made by a Third Party against either Party that claims that a Licensed Product, or its use, Development,
manufacture or sale infringes such Third Party’s intellectual property rights within the scope of the Licensed Technology.  

  

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	 	1.63	“Third Party License Agreement” means any agreement entered into with a Third Party, or any amendment or supplement thereto, whereby royalties,
fees or other payments are to be made to such Third Party in connection with the grant of rights under intellectual property rights Controlled by a Third Party, which rights are necessary and/or useful to research, Develop, manufacture, have made,
import, export, use or Commercialize a Licensed Product. 

  

	 	1.64	“United States” or “US” or “USA” means the United States of America, its territories and possessions.

  

	 	1.65	“Valid Claim” means a claim of an issued and unexpired patent which has not lapsed or been revoked, abandoned or held unenforceable or invalid
by a final decision of a court or governmental or supra-governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been disclaimed, denied or admitted to be invalid or
unenforceable through reissue, reexamination or disclaimer or otherwise. 

  

	 	1.66	Other Terms. The definition of each of the following terms is set forth in the section of the Agreement indicated below: 

“Action” has the meaning set forth in Section 6.5(b). 

“Controlling Party” has the meaning set forth in Section 6.6(c). 

“Cure Period” has the meaning set forth in Section 10.3(b). 

“Development Plan” has the meaning set forth in Section 3.1. 

“Licensor Indemnitees” has the meaning set forth in Section 9.1. 

“Merck Indemnitees” has the meaning set forth in Section 9.2. 

“Non-Escalable Dispute” has the meaning set forth in Section 11.1. 

“Right of First Refusal” has the meaning set forth in Section 10.5(b). 

“Right of First Refusal Notice Period” has the meaning set forth in Section 10.5(b). 

“Term” has the meaning set forth in Section 10.1. 

ARTICLE 2 

LICENSES AND OTHER RIGHTS 
  

	 	2.1	 Grant of License to Merck. Subject to the terms and conditions of this Agreement, Licensor hereby grants to Merck and its Affiliates an
exclusive (even 

  
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as to Licensor), worldwide, royalty-bearing right and license (with the right to sublicense, and to further sublicense, subject to the provisions of Section 2.2) under the Licensor
Technology to research, Develop, manufacture, have manufactured, use and Commercialize the Licensed Products. For the avoidance of doubt, with respect to the part of the Licensor Technology which becomes Controlled by the Licensor after the
Effective Date, in cases where such Licensor Technology consists of a non-exclusive license granted to Licensor by a Third Party, Merck will be only granted a non-exclusive license. 

 

	 	2.2	Grant of Sublicense by Merck. Merck shall have the right, in its sole discretion, to grant sublicenses, in whole or in part, under the license granted in
Section 2.1, provided however that the granting by Merck of a Sublicense shall not relieve Merck of any of its obligations hereunder; and Merck shall impose upon its Sublicensees obligations which are consistent with this Agreement.

  

	 	2.3	Technology Transfer. As soon as reasonably practicable after the Effective Date, but in no event later than [***] days following the Effective Date,
Licensor will communicate and transfer to Merck, at Licensor’s cost and expense, all Licensor Know-How and Licensor Materials. Merck shall confirm in writing having received all of the Licensor Know-How and Licensor Materials.

  

	 	2.4	Procedures for Technology Transfer. The technology transfers set forth in Section 2.3 shall occur in an orderly fashion and in a manner such that the
value, usefulness and confidentiality of the transferred Licensor Know-How and Licensor Materials are preserved in all material respects. During the Term, Licensor shall provide to Merck full and prompt disclosure, but in no event less frequently
than semi-annually, of any Licensor Know-How or Licensor Materials that become Controlled by Licensor or any of its Affiliates after the Effective Date and shall promptly following such disclosure transfer and in an orderly fashion, communicate to
Merck such Licensor Know-How and such Licensor Materials. 

  

	 	2.5	Merck Exclusivity. Licensor and its Affiliates shall not during the Term develop, manufacture, have manufactured, use, sell, offer for sale, import or
export a Competing Product nor enter into any relationship with any Third Party with respect thereto. The aforementioned restriction shall remain in effect in the event of Change of Control of Licensor and shall also apply to the successor and
assignee of Licensor (other than to any activities of such successor/assignee already in existence as of the date of the Change of Control). [***]. 

 

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 ARTICLE 3 
 DEVELOPMENT, MANUFACTURE AND COMMERCIALIZATION OF LICENSED 
 PRODUCTS

  

	 	3.1	Development of the Licensed Product by Merck. Merck shall have the exclusive right, and sole responsibility and decision-making authority, to research and
Develop any Licensed Products and to conduct (either itself or through its Affiliates, agents, Subcontractors and/or Sublicensees) all Clinical Trials and non-clinical studies Merck believes appropriate to obtain Regulatory Approval for the Licensed
Products in any Indication. The Development of each Licensed Product shall be governed by a Merck development plan that accurately describes the proposed overall program of Development (the “Development Plan”), which Development
Plan shall be updated by Merck [***]. Merck shall provide Licensor a copy of the Development Plan and all updates thereto within [***] days of creation. Merck shall have the sole right and responsibility for preparing the Development Plan for
each Licensed Product, and shall in all events have the sole decision-making authority regarding each Development Plan and the Development of the Licensed Product, including the determination of the Indications in which to pursue Development. Merck
shall, [***], provide to Licensor an update report regarding the progress of the Development program. 

  

	 	3.2	Commercialization. Merck shall have the sole decision-making authority and responsibility and the exclusive right, to Commercialize any Licensed
Products itself or through one or more Sublicensees or other Third Parties selected by Merck and shall have the sole decision-making authority and responsibility in all matters relating to the Commercialization of the Licensed Products. Merck shall,
[***], provide to Licensor an update report regarding the progress of the Commercialization program. 

  

	 	3.3	Clinical and Commercial Manufacturing. Merck shall have the exclusive right to manufacture any Licensed Product itself or through one or more Sublicensees
or Subcontractors selected by Merck. 

  

	 	3.4	Diligence by Merck. Subject to Licensor’s fulfillment of its obligations under this Agreement, Merck shall use Commercially Reasonable Efforts to
[***]. Merck shall have the exclusive right to determine, in its sole discretion, [***], subject to its exercise of Commercially Reasonable Efforts and the availability of any necessary Third Party licenses or other rights. Activities
by Merck’s Affiliates and Subcontractors and Sublicensees will be considered as Merck’s activities under this Agreement for purposes of determining whether Merck has complied with any obligation to use Commercially Reasonably Efforts.

  

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	 	3.5	Right to Subcontract of Merck. Merck may exercise any of the rights or obligations that Merck may have under this Agreement (including, without
limitation, any of the rights licensed in Section 2.1 hereof) by entering into Subcontracts or Sublicenses relating to the exercise or performance of all or any portion of such rights and obligation. Any Subcontract or Sublicense granted or
entered into by Merck as contemplated by this Section 3.5 or the exercise or performance of all or any portion of the rights or obligations that Merck may have under this Agreement shall not relieve Merck from any of its obligations under this
Agreement. 

  

	 	3.6	Trade Marks. As between Licensor and Merck, Merck shall have the sole authority to select trademarks for the Licensed Products and shall own all
such trademarks. This Section 3.6 does not grant Merck the right to use any Licensor trademarks. 

 ARTICLE
4 
 REGULATORY MATTERS 
  

	 	4.1	Regulatory Filings. As between Merck and Licensor, Merck shall own and maintain all regulatory filings and Regulatory Approvals for the Licensed Products,
including all INDs and NDAs. Licensor shall provide reasonable assistance to Merck, its Affiliates and any Merck Sublicensee in the preparation and filing for any INDs or NDAs with respect to Licensed Products. 

 

	 	4.2	Communications with Authorities. Merck (or one of its Affiliates or Sublicensees) shall be responsible for and act as the sole point of contact for
communications with Regulatory Authorities in connection with the Development, Commercialization, and manufacturing of Licensed Products. Following the Effective Date, Licensor shall not initiate, with respect to any Licensed Product, any meetings
or contact with Regulatory Authorities without Merck’s prior written consent. To the extent Licensor receives any written or oral communication from any Regulatory Authority relating to a Licensed Product, Licensor shall (i) refer such
Regulatory Authority to Merck, and (ii) as soon as reasonably practicable, notify Merck and provide Merck with a copy of any written communication received by Licensor or, if applicable, complete and accurate minutes of such oral communication.
At the request of Merck, Licensor shall make available to Merck, at no more than a reasonable charge, a qualified representative who shall, together with the representatives of Merck, participate in and contribute to meetings with the Regulatory
Authorities with respect to regulatory matters relating solely to the Licensor Technology. 

  

	 	4.3	 Adverse Event Reporting. Each Party agrees to comply with any and all Laws that are applicable to it as of the Effective Date and
thereafter during the Term in connection with the Licensed Product safety data collection and reporting (and, if applicable, recalls). If the Licensor has or receives any information regarding

  
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any Adverse Event, the Licensor shall provide Merck with all such information in English within such reasonable timelines which enable Merck to comply with the relevant regulations and
requirements applicable in the relevant country. Merck shall report to Licensor any Adverse Event. The information exchanged between the Parties pursuant to this Section 4.3 shall be transmitted by e-mail or overnight courier to the following
address (provided, that either Party may change such address by notice given pursuant to Section 12.12): 

Transmission to Licensor: 
 Ligand Pharmaceuticals Incorporated 
 11085 North Torrey Pines
Road 
 La Jolla, CA 92037 

USA 
 Attention: General Counsel 
 Email: cberkman@ligand.com

 Transmission to Merck: 
 Global Drug Safety 
 Merck KGaA 

Frankfurter Strasse 250 
 D-64293 Darmstadt 
 Germany 

Drug Safety mailbox: 
 GlobalDrugSafety@merckserono.net 

  
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 ARTICLE 5 
 FINANCIAL PROVISIONS 
  

	 	5.1	DPO Milestone Payment. In partial consideration of Licensor’s grant of the rights and licenses to Merck, Merck shall pay, or cause to be paid, to
Licensor [***] within [***] days following the [***]. For avoidance of doubt, this Section 5.1 milestone payment shall in no event be due later than the date of achievement of Section 5.2 milestone event n° 1.

  

	 	5.2	Development And Commercial Milestone Payments. As further partial consideration for Licensor’s grant of the rights and licenses, to Merck hereunder,
Merck shall pay, or cause to be paid, to Licensor [***]. Merck shall promptly but in no event later than [***] days following each achievement of a milestone event, notify Licensor in writing of the achievement of any such milestone
event, and shall pay the relevant milestone payment within [***] days following receipt of a corresponding invoice from Licensor. 

  

					
	 	  	 Milestone event [***]
	  	Milestone Payment
(USD)
	1	  	[***]	  	[***]
	2	  	[***]	  	[***]

  

					
	 	  	 Milestone event payable [***]
	  	Milestone Payment
(USD)
	3	  	[***]	  	[***]
			
	4	  	[***]	  	[***]
			
	5	  	[***]	  	[***]
			
	6	  	[***]	  	[***]
			
	7	  	[***]	  	[***]
			
	8	  	[***]	  	[***]
			
	9	  	[***]	  	[***]

 For the avoidance of doubt, the total maximum milestone payments payable under this Section 5.2 for
all Licensed Products and [***]. 
 *A milestone event that occurs in or with respect to [***]. 

With respect to each milestone event, the milestone payments to be made under this Agreement shall be due and payable only once
([***]) as indicated, even if [***]. 
  

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	 	5.3	[***] Payments. As further partial consideration for Licensor’s grant of rights and licenses to Merck hereunder, Merck shall pay Licensor the
following [***] for the first achievement of the following [***] milestones by the first Licensed Product to achieve such milestones: 

 (a) [***] for the [***] in which the aggregate annual worldwide Net Sales [***] to achieve such milestone exceed [***]; 

(b) [***] for the [***] in which the aggregate worldwide annual Net Sales [***] to achieve such milestone
exceed [***]; 
 (c) [***] for the [***] in which the aggregate annual worldwide Net Sales [***] to
achieve such milestone exceed [***]. 
 Merck shall deliver written notice to Licensor within [***] days of the
end of the [***] in which a [***] milestone occurs. Merck shall deliver the corresponding [***] milestone payment to Licensor within [***] days of receipt of a corresponding invoice from Licensor for the [***]
milestone payment set forth in the aforementioned written notice. 
 For the avoidance of doubt, each aforementioned
commercial event milestone payment shall be made only once, regardless of the number of Licensed Products and Indications, or [***] in which the first Licensed Products achieve such commercial event milestone. [***]. 

The achievement of a higher commercial event milestone shall trigger the payment of a lower commercial event milestone in the event such
lower commercial event milestone had not been triggered prior to achievement of the higher commercial event milestone. [***]. 
 For the avoidance of doubt, the total maximum milestones payable under this Section 5.3 shall not exceed [***]. 
  

	 	5.4	Royalty Payments for Licensed Products. 

  

	 	(a)	As further consideration for Licensor’s grant of the rights and licenses to Merck hereunder, Merck shall, during each applicable Royalty Term, pay to
Licensor a royalty on aggregate annual worldwide Net Sales [***] for each [***], on [***] at the percentage rates set forth below (subject to Sections 5.4(b), 5.5, and 5.6 below): 

 

					
	 Annual worldwide Net Sales of [***]
	  	[***] Royalty Rate	 
	 [***]
	  	 	[	***] % 
	 [***]
	  	 	[	***] % 
	 [***]
	  	 	[	***] % 

  

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 These royalty rates shall be decreased by [***], for Net Sales of any Licensed
Product in any country in which a Valid Claim does not exist at the time the payment of royalties is due; and such [***] decrease shall persist for such Licensed Product in such country until [***]. For the avoidance of doubt, if for
any Licensed Product in any country a Valid Claim does not exist at the time the payment of royalties is due, [***], in such country ([***]), [***]. 
 [***]  
 By way of illustration, assume in a [***] that
(i) aggregate worldwide annual Net Sales [***] in U.S. Dollars total USD [***] and (ii) no adjustments or deductions to payments under this Article 5 apply. The total royalties due and payable by Merck to Licensor for such
Net Sales would be [***] U.S. Dollars (USD[***]), calculated as follows: 
 [***] 

[***] 
 [***]

 Total Royalty = USD [***] 
  

	 	(b)	For purposes of determining whether a royalty threshold or a [***] milestone described in Section 5.3 above, has been attained, [***]. In
addition, in no event shall the manufacture of a Licensed Product give rise to a royalty obligation until the particular unit of Licensed Product is sold by Merck, its Affiliates or Sublicensees to an unaffiliated Third Party purchaser. For clarity,
Merck’s obligation to pay royalties to Licensor under this Article 5.4 is imposed [***]. 

 In the
event certain Net Sales are subject to the royalty reductions set forth in Section 5.4(a) above or Section 5.6 below, Merck shall calculate the royalty rates as follows: [***]. 

 

	 	5.5	Compulsory License. In the event that Licensor or Merck receives a request for a Compulsory License anywhere in the world, it shall promptly notify the
other Party. If any Third Party obtains a Compulsory License in any country, then Licensor or Merck (whoever has first notice) shall promptly notify the other Party. For the avoidance of doubt, for purposes of calculating the royalties due to
Licensor under Section 5.4 with respect to sales of the Licensed Product by any compulsory licensee, [***]. In addition, should Merck grant a Sublicense to 

  

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a Third Party in any country to avoid the imposition of such a Compulsory License, the Parties will agree in good faith on the [***]. 

 

	 	5.6	Reductions, Deductions and Reimbursements. Subject to the terms herein, if Merck or its Affiliates enter into a Third Party License Agreement(s), or if a
Merck Sublicensee enters into a Third Party License Agreement(s) under which Merck is directly financially responsible to reimburse the Sublicensee for such amounts, Merck will be entitled [***]. If the Third Party License Agreement also
covers products other than the Licensed Product, Merck shall [***]. 

  

	 	5.7	Timing of Payment. Royalties payable under Section 5.4(a) shall be payable on [***] Net Sales and shall [***]. Royalty obligations that
have accrued during a particular [***] shall be paid, on a [***] basis, within [***] days after the end of each [***] during which the royalty obligation accrued. 

 

	 	5.8	Mode of Payment and Currency. 

  

	 	(a)	All payments to Licensor hereunder shall be made by deposit of US Dollars in the requisite amount to such bank account as Licensor may from time to time designate by
written notice to Merck. With respect to sales not denominated in US Dollars, Merck shall convert each applicable [***] sales in foreign currency into US Dollars by using the then current and reasonable standard exchange rate methodology
applied to its external reporting. Based on the resulting sales in US Dollars, the then applicable royalties shall be calculated. The Parties may vary the method of payment set forth herein at any time upon mutual agreement, and any change
shall be consistent with the local Law at the place of payment or remittance. 

  

	 	(b)	Invoices of Licensor shall be addressed to: 

 ARES Trading SA 
 Accounts Payable 

Zone Industrielle 
 Case Postale 29 
 CH-1267 Coinsins 

Attn: Mr Glyn Harris Email: glyn.harris@merckgroup.com 

 

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 With a copy to: 

Merck Serono S.A.-Geneva 
 9, Chemin des Mines 
 1202 Geneva 

Switzerland 

Attn: Pascale Gaillard 
 Email: 
  

	 	5.9	Royalty Reports and Records Retention. Within [***] days after the end of each [***] during which the Licensed Products have been
sold, Merck shall deliver to Licensor, together with the applicable royalty payment due, a written report, on a Licensed Product-by-Licensed Product and a country-by-country basis, of (i) [***] Licensed Product subject to royalty
payments for such [***], (ii) [***], (iii) Net Sales subject to royalty payments for such [***] and [***] to date and (iv) corresponding royalty. Such report shall be deemed “Confidential
Information” of Merck subject to the obligations of Article 7 of this Agreement. For [***] years after each sale of the Licensed Product, Merck shall keep (and shall ensure that its Affiliates and Sublicensees shall keep) complete and
accurate records of such sale in sufficient detail to confirm the accuracy of the royalty calculations hereunder. 

  

	 	5.10	Legal Restrictions. If at any time applicable Laws prevent the remittance by Merck of all or any part of royalties on Net Sales in any country, Merck
shall have the right and option to [***]. 

  

	 	5.11	Late Payments. All payments under this Agreement shall earn interest [***]. 

 

	 	5.12	Audits. 

  

	 	(a)	During the Royalty Term and for [***] thereafter, upon the written request of Licensor, and not more than [***], Merck shall permit, and shall
cause its Affiliates or Sublicensees to permit, an independent certified public accounting firm of (US,German or Swiss) nationally recognized standing selected by Licensor, and reasonably acceptable to Merck or such Affiliate or Sublicensee, to have
access to and to review, during normal business hours upon reasonable prior written notice, the applicable records of Merck and its Affiliates or Sublicensees to verify the accuracy of the royalty reports and payments under this Article 5. Such
review may cover the records for sales made in any [***] ending not more than [***] years prior to the date of such request. The accounting firm shall disclose to Licensor and Merck only whether the royalty 

 

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reports are correct or incorrect and the specific details concerning any discrepancies. No other information shall be provided to Licensor. 

 

	 	(b)	If such accounting firm concludes that additional royalties were owed during such period, and Merck agrees with such calculation, Merck shall [***]. If
such accounting firm concludes that an overpayment was made, such overpayment shall [***]. If Merck disagrees with such calculation, it may retain an independent certified public accounting firm of recognized standing accepted by Licensor,
which consent shall not be unreasonably withheld or delayed, to conduct a review, and if such firm concurs with the other accounting firm, Merck shall [***]. If Merck’s accounting firm does not concur, Merck and Licensor shall meet and
negotiate in good faith a resolution of the discrepancies between the two firms. Licensor shall [***]. 

  

	 	(c)	Each Party shall treat all information that it receives under this Section 5.12 in accordance with the confidentiality provisions of Article 7 of this
Agreement, and shall cause its accounting firm to enter into an acceptable confidentiality agreement with the other Party obligating such firm to retain all such financial information in confidence pursuant to such confidentiality agreement, except
to the extent necessary for such Party to enforce its rights under the Agreement. 

  

	 	5.13	Taxes. 

  

	 	(a)	Withholding Tax. Licensor shall be responsible for the payment of any and all Taxes levied on account of the royalties and other payments paid to Licensor
by Merck or its Affiliates or Sublicensees under this Agreement. If applicable Law requires that Taxes be deducted and withheld from royalties or other payments paid under this Agreement, Merck shall [***]; provided, however, that
[***]. Assuming that Licensor is the beneficial owner of Licensor Technology, the cooperation referred to in subparagraph (v) of the foregoing sentence shall include, without limitation, that Licensor shall provide Merck with a written
confirmation from the competent tax authority that Licensor has its residence in USA together with any required tax application form which would allow the Parties to benefit from the reduced withholding Tax rate set forth in the Double Taxation
Convention existing between USA and Switzerland or in case of any assignments with the respective country of residence of the company to which the contract has been assigned. 

 

	 	(b)	Value Added Tax. All remuneration amounts set under this Agreement are net amounts. Value added tax, if applicable, will have to be added on those
amounts. Merck is entitled to receive a proper tax invoice if any value added tax is applicable. 

  

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 ARTICLE 6 
 INVENTIONS AND PATENTS 
  

	 	6.1	Certification Under Drug Price Competition and Patent Restoration Act. Each Party shall immediately give written notice to the other Party of any
certification of which they become aware filed pursuant to 21 U.S.C. Section 355(b)(2)(A) (or any amendment or successor statute thereto) claiming that any Licensor Patents covering a Compound or a Licensed Product, or the manufacture or use of
each of the foregoing, are invalid or unenforceable, or that infringement will not arise from the manufacture, use or sale in the US of a Licensed Product by a Third Party. 

 

	 	6.2	Listing of Patents. Merck shall have the sole right to determine which of the Licensor Patents, if any, shall be listed for inclusion in the Approved Drug
Products with Therapeutic Equivalence Evaluations pursuant to 21 U.S.C. Section 355, or any successor Law in the United States, together with any comparable Laws in any other country. 

 

	 	6.3	Further Assurances. Licensor shall require all of its employees, and use its Commercially Reasonable Efforts to require its contractors and agents, and
any Affiliates and Third Parties working on its behalf under this Agreement (and their respective employees, contractors and agents), to assign to Licensor any Licensor Technology. 

 

	 	6.4	Patent Prosecution and Maintenance. 

  

	 	(a)	Licensor Patents. Licensor shall have the first right, and (subject to Section 6.4(b)) shall have the obligation, to file, prosecute and maintain
Licensor Patents in Licensor’s name. Licensor shall [***]. Licensor shall keep Merck informed of the course of the filing and prosecution of Licensor Patents or related proceedings (e.g. interferences, oppositions, reexaminations, reissues,
revocations or nullifications) in a timely manner. Merck shall have the right to give advice and recommendations in the course of filing and prosecution of Licensor Patents or related proceedings (e.g. interferences, oppositions, reexaminations,
reissues, revocations or nullifications). [***]. At Licensor’s request, Merck will provide Licensor with reasonable free-of-charge assistance in prosecuting Licensor Patents to the extent possible. 

 

	 	(b)	Election not to file and prosecute Licensor Patents. If Licensor elects not to file, prosecute or maintain a Licensor Patent in Licensor’s name in
any jurisdiction in the Territory, then it shall notify Merck in writing at least [***] before any deadline applicable to the filing, prosecution or maintenance of such Licensor Patent, as the case may be, or any other date by which an action
must 

  

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be taken to establish or preserve such Licensor Patent in such jurisdiction. In such case, Merck shall have the option to pursue the filing or support the continued prosecution or maintenance of
such Licensor Patent in such jurisdiction, [***]. 

  

	 	(c)	Patent Term Extension. Licensor shall (subject to Section 6.4(b)) have the obligation and be responsible, in Licensor’s name, for obtaining patent term
extensions wherever available for Licensor Patents. Merck shall provide Licensor free-of-charge with all relevant information, documentation and assistance in this respect as may reasonably be requested by Licensor. Any such assistance, supply of
information and consultation shall be provided promptly and in a manner that will ensure that all patent term extensions for Licensor Patents are obtained wherever legally permissible, and to the maximum extent available. In the event that any
election with respect to obtaining patent term extensions is to be made, Licensor shall have the right to make such elections but shall be obliged to consult Merck for its advice and recommendations which Licensor covenants to take into account.

  

	 	6.5	Enforcement of Patents. 

  

	 	(a)	Notice. If either Party believes that a Licensor Patent is being infringed by a Third Party or if a Third Party claims that any Licensor Patent is invalid
or unenforceable, the Party possessing such knowledge or belief shall notify the other Party and provide it with details of such infringement or claim that are known by such Party. 

 

	 	(b)	Right to bring an Action. [***] shall have the exclusive right to attempt to resolve such infringement or claim, including by filing an
infringement suit, defending against or bringing a declaratory judgment action as to such claim or taking other similar action (each, “initiation” of an “Action”) and (subject to Section 6.5(d)) to compromise or
settle such infringement or claim. At [***] request, [***] shall immediately provide [***] with all relevant documentation (as may be requested by [***]) evidencing that [***] is validly empowered by [***]
to initiate an Action. [***] does not initiate an Action with respect to such an infringement or claim within [***] days following notice thereof, [***] shall have the right to attempt to resolve such infringement or claim,
including by initiating an Action, and (subject to Section 6.5(d)) to compromise or settle such infringement or claim. The Party initiating such Action shall have the sole and exclusive right to select counsel for any suit initiated by it
pursuant to this Section 6.5. If a Party initiates an Action but then elects not to pursue the Action, it shall so notify the other Party, and such other Party shall have the right (but not the obligation) to take over the Action, in which case
such other Party shall be deemed to have been the initiating Party. 

  

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	 	(c)	Costs of an Action. Subject to the respective indemnity obligations of the Parties set forth in Article 9, [***]; provided that if [***] is
the Party who is taking such Action, [***]. Each Party shall have the right to join at its own expense an Action relating to a Licensor Patent, initiated by the other Party. 

 

	 	(d)	Settlement. [***]. The settlement will be treated, for the purposes of Section 5.13, in accordance with the Law of the country to which the
settlement relates. 

  

	 	(e)	Reasonable Assistance. The Party not enforcing or defending Licensor Patents shall provide reasonable assistance to the other Party, including providing
access to relevant documents and other evidence and making its employees available, subject to the other Party’s reimbursement of any out-of-pocket expenses incurred on an on-going basis by the non-enforcing or non-defending Party in providing
such assistance. 

  

	 	(f)	Distribution of Amounts Recovered. Any amounts recovered by the Party initiating an Action pursuant to this Section 6.5, whether by settlement or
judgment, shall be allocated in the following order: [***]. 

  

	 	6.6	Third Party Actions Claiming Infringement. 

  

	 	(a)	Notice. If a Party becomes aware of any Third Party Action, such Party shall promptly notify the other Party of all details regarding such claim or action
that is reasonably available to such Party. 

  

	 	(b)	Right to Defend. [***] shall have the right, at its sole expense, but not the obligation, to defend a Third Party Action described in
Section 6.6(a) and (subject to Section 6.6(f)) to compromise or settle such Third Party Action. If Merck declines or fails to assert its intention to defend such Third Party Action within [***] days of receipt/sending of notice
under Section 6.6(a), then [***] shall have the right to defend such Third Party Action and (subject to Section 6.6(f)) to compromise or settle such Third Party Action. The Party defending such Third Party Action shall have the sole
and exclusive right to select counsel for such Third Party Action. 

  

	 	(c)	Consultation. The Party defending a Third Party Action pursuant to Section 6.6(b) shall be the “Controlling Party”. The Controlling
Party shall consult with the non-Controlling Party on all material aspects of the defense. The non-Controlling Party shall have a reasonable opportunity for meaningful participation in decision-making and formulation of defense strategy. The Parties
shall reasonably cooperate with each other in all such actions or proceedings. The non-Controlling Party will be entitled to be represented by independent counsel of its own choice at its own expense. 

 

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	 	(d)	Appeal. In the event that a judgment in a Third Party Action is entered against either Party and an appeal is available, the Controlling Party shall have
the first right, but not the obligation, to file such appeal. In the event the Controlling Party does not desire to file such an appeal, it will promptly, in a reasonable time period (i.e. with sufficient time for the non-Controlling Party to take
whatever action may be necessary) prior to the date on which such right to appeal will lapse or otherwise diminish, permit the non-Controlling Party to pursue such appeal at such non-Controlling Party’s own cost and expense. If applicable Law
requires the other Party’s involvement in an appeal, the other Party shall be a nominal party of the appeal and shall provide reasonable cooperation to such Party at such Party’s expense. 

 

	 	(e)	Costs of an Action. Subject to the respective indemnity obligations of the Parties set forth in Article 9, the Controlling Party shall pay all costs
associated with such Third Party Action other than the expenses of the other Party if the other Party elects to join such Third Party Action (as provided in the last sentence of Section 6.6(c)). [***]. Each Party shall have the right to join a
Third Party Action defended by the other Party, at its own expense. 

  

	 	(f)	No Settlement Without Consent. Neither Party shall settle or otherwise compromise any Third Party Action by admitting that any Licensor Patent is to any
extent invalid or unenforceable without the other Party’s prior written consent, and, [***]. 

ARTICLE 7 

CONFIDENTIALITY 
  

	 	7.1	Confidentiality Obligations. Each Party agrees that, for the Term and for [***] years thereafter, such Party shall, and shall ensure that its
officers, directors, employees and Subcontractors shall keep completely confidential and not publish or otherwise disclose and not use for any purpose except as expressly permitted hereunder any Confidential Information disclosed to it by the other
Party pursuant to this Agreement. The foregoing obligations shall not apply to any Confidential Information disclosed by a Party hereunder to the extent that the receiving Party can demonstrate that such Confidential Information:

 (a) was already known to the receiving Party or its Affiliates, other than under an obligation of
confidentiality, at the time of disclosure; 
 (b) was generally available to the public or otherwise part of the public
domain at the time of its disclosure to the receiving Party; 
  

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 (c) became generally available to the public or otherwise part of the public
domain after its disclosure and other than through any act or omission of the receiving Party (or its Subcontractors) in breach of this Agreement; 
 (d) was subsequently lawfully disclosed to the receiving Party or its Affiliates by a Third Party without an obligation of confidentiality other than in contravention of a confidentiality
obligation of such Third Party to the disclosing Party; or 
 (e) was developed or discovered by employees or agents of
the receiving Party or its Affiliates who had no access to the Confidential Information of the disclosing Party. 

Notwithstanding the above obligations of confidentiality and non-use, a Party may disclose information to the extent that such disclosure
is reasonably necessary in connection with: 
 (i) filing or prosecuting patent applications, subject to the terms
of Section 6.4; 
 (ii) prosecuting or defending litigation; 

(iii) conducting pre-clinical studies or Clinical Trials pursuant to this Agreement; 

(iv) seeking Regulatory Approval of the Licensed Product; or 

(v) complying with applicable Law, including securities Law and the rules of any securities exchange or market on which a
Party’s securities are listed or traded. 
 In addition to the foregoing, Merck may, in furtherance of its rights under
this Agreement, disclose Confidential Information of Licensor to any Third Party, provided that such Third Party is bound by obligations of confidentiality/nonuse at least as stringent as the ones herein. Merck shall be responsible to Licensor for
any breach of confidentiality/nonuse by such Third Parties. 
 In making any disclosures set forth in clauses (i) through
(v) above, the disclosing Party shall, where reasonably practicable, give such advance notice to the other Party of such disclosure requirement as is reasonable under the circumstances and will use its reasonable efforts to cooperate with the
other Party in order to secure confidential treatment of such Confidential Information required to be disclosed. In addition, in connection with any permitted filing by either Party of this Agreement with any Governmental Body, included but not
limited to the U.S. Securities and Exchange Commission, the filing Party shall endeavor to obtain confidential treatment of economic, trade secret information and such other information as may be requested by the other Party, and shall provide the
other Party with the proposed confidential treatment request with reasonable time for such other Party to provide comments, and shall include in such confidential treatment request all reasonable comments of the other Party. 

  
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 A breach after the Effective Date by a Party (or for which a Party undertook
responsibility) of the surviving confidentiality/nonuse provisions of the Research License and Option Agreement shall be deemed also to be a breach of this Agreement. 
  

	 	7.2	Publications. Licensor shall not publish any information relating to the Licensed Products without the written consent of Merck (which consent may be withheld or
given in Merck’s sole discretion), unless such information has already been publicly disclosed either prior to the Effective Date or after the Effective Date through no fault of Licensor or otherwise not in violation of this Agreement. Merck
shall have the right to make such publications as it chooses, in its sole discretion, without the approval of Licensor. Licensor shall submit to Merck for Merck’s written approval (which approval be granted or denied in Merck’s sole
discretion) any publication or presentation (including, without limitation, in any seminars, symposia or otherwise) of information related directly or indirectly to the Licensed Products for review and approval at least [***] days prior to
submission for the proposed date of publication or presentation. For the avoidance of doubt, Merck shall not disclose in any publication or presentation (including, without limitation, in any seminars, symposia or otherwise) the Licensor’s
Confidential Information. For avoidance of doubt any press release or disclosure mentioned in Section 7.3 shall not be considered as “Publications” governed by such Section 7.2. 

 

	 	7.3	Press Releases and Disclosure. 

 Except as required to comply with applicable Law, Licensor may not make press releases or public announcements regarding this Agreement or any matter covered by this Agreement, including the Development
or Commercialization of Licensed Products, without the prior written consent of Merck. 
 Merck shall have the right to make
such press releases as it chooses, in its sole discretion, without the approval of Licensor; provided, that Merck shall provide Licensor with at least [***] hours’ advance notice of any such press release and Merck covenants to take into
account any reasonable advice and recommendations of Licensor. 
 ARTICLE 8 

REPRESENTATIONS, WARRANTIES AND COVENANTS 
  

	 	8.1	Representations and Warranties. Each Party represents and warrants to the other Party that, as of the Effective Date: 

 

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	 	(a)	such Party is duly organized and validly existing under the Laws of the jurisdiction of its incorporation or organization; 

 

	 	(b)	such Party has taken all action necessary to authorize the execution and delivery of this Agreement and the performance of its obligations under this Agreement;

  

	 	(c)	this Agreement is a legal and valid obligation of such Party, binding upon such Party and enforceable against such Party in accordance with the terms of this
Agreement, except as enforcement may be limited by applicable bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and other laws relating to or affecting creditors’ rights generally and by general equitable principles; and
the execution, delivery and performance of this Agreement by such Party does not conflict with, breach or create in any Third Party the right to accelerate, terminate or modify any agreement or instrument to which such Party is a party or by which
such Party is bound, and does not violate any Law of any Governmental Body having authority over such Party; and 

  

	 	(d)	such Party has all right, power and authority to enter into this Agreement, and to perform its obligations under this Agreement. 

 

	 	8.2	Additional Representations and Warranties of Licensor As of the Effective Date of this Agreement. Licensor represents and warrants to Merck that, as of
the Effective Date: 

  

	 	(a)	No consent by any Third Party or Governmental Body is required with respect to the execution and delivery of this Agreement by Licensor or the consummation by
Licensor of the transactions contemplated hereby; 

  

	 	(b)	Licensor has not developed, subcontracted or licensed to a Third Party the right to develop a Competing Product; 

 

	 	(c)	it has the full right to provide the Licensor Materials to Merck and to transfer to Merck the Licensor Materials to be provided to Merck pursuant to this
Agreement; 

  

	 	(d)	all employees of Licensor who have performed any activities on its behalf in connection with research regarding the Compounds have assigned to Licensor the whole
of their rights in any intellectual property made, discovered or developed by them as a result of such research, and no Third Party has any rights to any such intellectual property; and 

 

	 	(e)	Licensor has all right, title and interest in and to the Licensor Technology. Licensor has not previously licensed, assigned, transferred, or otherwise conveyed
any right, title or interest in and to the Licensor Technology to any Third Party, including but not limited to any rights to any Licensed Products; the Licensor Technology is free and clear of any liens, charges encumbrances or rights of others to
possession or use. 

  
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	 	8.3	Additional Representations and Warranties of Licensor. As of the effective date of the Research License and Option Agreement, Licensor represents and
warrants to Merck that, as of the effective date of the Research License and Option Agreement: 

  

	 	(a)	[***]; 

  

	 	(b)	[***]; 

  

	 	(c)	[***]; 

  

	 	(d)	[***]; 

  

	 	(e)	[***]; 

  

	 	(f)	[***]; 

  

	 	(g)	[***]; 

  

	 	(h)	[***]; and 

  

	 	(i)	[***]. 

 Licensor shall
notify Merck before executing this Agreement of which representations and warranties listed under this Section 8.3 would be untrue or incorrect in any material respect if made on and as of the Effective Date (of this Agreement), and stating
why. Upon such notification, such representations and warranties shall automatically be deemed to be amended and updated, and the corresponding schedules and annexes of the Agreement shall automatically be deemed to be amended and updated
accordingly. If such notification is given after Merck exercises the Option under the Research License and Option Agreement but before Merck executes and delivers this Agreement, Merck will be entitled to refuse to execute and deliver this
Agreement, or else negotiate in good faith amendments to some terms of the Agreement. 
  

	 	8.4	Licensor Covenants. Licensor covenants to Merck that Licensor shall not amend or waive, or take any action or omit to take any action that would alter,
any of Licensor’s rights under any agreement with any Third Party in any manner that adversely affects, or would reasonably be expected to adversely affect, Merck’s rights and benefits under this Agreement. Licensor shall promptly notify
Merck of any default under, termination or amendment of, any agreement with any 

  

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Third Party which default, termination or amendment would reasonably be expected to adversely affect Merck’s rights and benefits under this Agreement. 

ARTICLE 9 

INDEMNIFICATION AND INSURANCE 
  

	 	9.1	Indemnification by Merck. Merck shall indemnify, defend and hold Licensor and its Affiliates and each of their respective employees, officers, directors
and agents (the “Licensor Indemnitees”) harmless from and against any and all actions, judgments, settlements, liability, damage, loss, cost or expense (including reasonable attorneys’ fees) to the extent arising out of Third
Party claims or suits related to (a) [***]; provided, however, that Merck’s obligations pursuant to this Section 9.1 shall not apply (i) to the extent such claims or suits result from the [***], or (ii) with respect
to claims or suits arising out of breach by Licensor of its representations, warranties or covenants set forth in Article 8. 

  

	 	9.2	Indemnification by Licensor. Licensor shall indemnify, defend and hold Merck and its Affiliates and each of their respective agents, employees, officers
and directors (the “Merck Indemnitees”) harmless from and against any and all actions, judgments, settlements, liability, damage, loss, cost or expense (including reasonable attorney’s fees) to the extent arising out of Third
Party claims or suits related to (a) [***]; or (b) [***]; provided, however, that Licensor’s obligations pursuant to this Section 9.2 shall not apply (i) to the extent that such claims or suits result from the
[***] or (ii) with respect to claims or suits arising out of a breach by Merck of its representations or warranties set forth in Article 8 or (iii) [***]. 

 

	 	9.3	No Consequential Damages. IN NO EVENT SHALL EITHER PARTY OR ANY OF ITS AFFILIATES BE LIABLE TO THE OTHER PARTY OR ANY OF ITS AFFILIATES FOR SPECIAL,
INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, INCLUDING LOSS OF PROFITS, WHETHER IN CONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREIN OR
ANY BREACH HEREOF. 

  

	 	9.4	Notification of Claims; Conditions to Indemnification Obligations. As a condition to a Party’s right to receive indemnification under this Article 9,
it shall (a) promptly notify the other Party as soon as it becomes aware of a claim or suit for which indemnification may be sought pursuant hereto, (b) cooperate, and cause the individual indemnitees to cooperate, with the indemnifying
Party in the defense, settlement or compromise of such claim or suit, and (c) permit the 

  

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indemnifying Party to control the defense, settlement or compromise of such claim or suit, including the right to select defense counsel. Without prejudice to Section 12.1, in no event,
however, may the indemnifying Party compromise or settle any claim or suit without the prior written consent of the indemnified Party; provided, that [***]. The indemnifying Party shall have no liability under this Article 9 with respect to
claims or suits settled or compromised without its prior written consent. 

  

	 	9.5	Insurance. During the Term, each Party shall obtain and maintain, at its sole cost and expense, product liability insurance (including any self-insured
arrangements) in amounts, that are reasonable and customary in the United States pharmaceutical and biotechnology industry for companies engaged in comparable activities. It is understood and agreed that this insurance shall not be construed to
limit either Party’s liability with respect to its indemnification obligations hereunder. Each Party will, except to the extent self-insured, provide to the other Party upon request a certificate evidencing the insurance such Party is required
to obtain and keep in force under this Section 9.5. 

 ARTICLE 10 

TERM AND TERMINATION 
  

	 	10.1	Term and Expiration. The term of this Agreement (the “Term”) shall commence on the Effective Date and, unless earlier terminated as
provided in this Article 10, shall continue in full force and effect, on a country-by-country and Licensed Product-by-Licensed Product basis until the Royalty Term in such country with respect to such Licensed Product expires, at which time this
Agreement shall expire in its entirety with respect to such Licensed Product in such country and the terms of Section 10.4(b)(i) shall apply. 

  

	 	10.2	Termination of the Agreement by Merck for Convenience. At any time during the Term, Merck may, at its convenience, terminate this Agreement in its
entirety upon sixty (60) days’ prior written notice to Licensor. During the aforementioned notice period, Merck shall be relieved from its obligations under Section 3.4. 

 

	 	10.3	Termination upon Material Breach. 

  

	 	(a)	If a Party breaches any of its material obligations under this Agreement, the Party not in default may give to the breaching Party a written notice specifying
the nature of the default, requiring it to cure such breach, and stating its intention to terminate this Agreement if such breach is not cured within ninety (90) days. If such breach is not cured within ninety (90) days after the receipt
of such notice, the Party not in default shall be entitled to terminate this Agreement immediately by written notice to the other Party. 

  

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	 	(b)	If Licensor is the defaulting party and a material breach by Licensor is not cured within ninety (90) days of receipt of a notice from Merck as provided
under this Section 10.3(a) (the “Cure Period”), Merck may elect not to terminate this Agreement, and Merck may : 

 - [***], and 
 - [***]. 

 

	 	(c)	In the event that Merck fails to fulfill its obligations under Section 3.4 (and does not cure such failure as provided in Section 10.3(a)),
Licensor’s sole and exclusive remedy shall be to terminate this Agreement as provided in Section 10.3(a). 

  

	 	(d)	Any dispute regarding an alleged material breach of this Agreement shall be resolved in accordance with Article 11 hereof. 

 

	 	10.4	Effects of termination 

  

	 	(a)	Survival. 

 (i)
Articles 1 (Definitions), 9 (Indemnification and Insurance) and 11 (Dispute Resolution), and Sections 5.5 (Compulsory License), 5.9 (Royalty Reports and Records Retention), 5.10 (Legal Restrictions), 5.11 (Late Payments), 5.12 (Audits),
5.13 (Taxes), 7.1 (Confidentiality Obligations), 10.4 (Effects of Termination), 12.11 (Governing Law) and 12.12 (Notices and Deliveries) hereof shall survive the expiration or termination of this Agreement for any reason. 

(ii) Termination or expiration of this Agreement shall not relieve the Parties of any liability that accrued hereunder prior to the
effective date of such termination or expiration. In addition, except as set forth in Section 10.3(c), termination or expiration of this Agreement shall not preclude either Party from pursuing all rights and remedies it may have hereunder or at
law or in equity with respect to any breach of this Agreement nor prejudice either Party’s right to obtain performance of any obligation. 
  

	 	(b)	Licenses. 

 (i)
Upon expiration of the Royalty Term with respect to any Licensed Product in any country, then as of the effective date of such expiration and on a country-by-country basis, the license from Licensor to Merck under Section 2.1 shall convert
to a fully paid, royalty free, irrevocable, perpetual, exclusive, and sublicensable license under the Licensor Technology to research, develop, manufacture, have manufactured, use and Commercialize such Licensed Product. 

 

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 (ii) Upon termination of this Agreement by Merck pursuant to Section 10.2 or
by Licensor pursuant to Section 10.3: 
 (1) all licenses granted to Merck under Sections 2.1 and 10.4(b)(i) shall
terminate; 
 (2) Merck shall, upon written request by Licensor and subject to Licensor assuming legal responsibility for
any Clinical Trials of the Licensed Product then ongoing, transfer to Licensor (a) at [***], all regulatory documentation and Regulatory Approvals prepared or obtained by or on behalf of Merck prior to the date of such termination, to
the extent solely related to Licensed Products and transferable, and Merck shall have the right to retain one copy of such transferred documentation and Regulatory Approvals for record-keeping purposes; 

(3) Merck shall, upon written request of Licensor, return to Licensor or, at Merck’s option, destroy, (a) [***], all
relevant records and materials in its possession or control containing or comprising the Licensor Know-How and the Licensor Materials, and all other Confidential Information of Licensor, and Merck shall have the right to retain one copy of such
Licensor Know-How and one sample of Licensor Materials and such other Confidential Information of Licensor for record-keeping purposes. 
 (4) Upon Licensor’s request made [***] days after the termination date of the Agreement, Merck shall [***]. Any clinical supplies of Licensed Products or other materials
[***]. If Licensor has made no such written request within [***] days after such termination, Merck may, at its sole option and discretion, (i) destroy or retain any and all chemical, biological or physical materials relating to
or comprising the Licensed Products, including clinical supplies of Licensed Products, that are controlled by Merck, or (ii) sell such materials to a Third Party, subject to Section 10.4(b)(ii)(6). 

(5) To the extent not prohibited by Law, Merck shall wind down any ongoing clinical trials with respect to each Licensed Product,
or at Licensor’s option, transfer such Clinical Trials to Licensor (or to an Affiliate or Subcontractor of Licensor as Licensor may direct and if this request is reasonable for Merck), (a) [***]. In the event of such transfer,
Licensor shall [***]. Also, in the event of such transfer, Merck shall assign and transfer to Licensor (or to an Affiliate or Subcontractor of Licensor as Licensor may direct and if this request is reasonable for Merck) the clinical trials
data and analyses and regulatory filings. 
  

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 (6) If Licensor does not [***]
Section 10.4(b)(ii)(4), Merck and its Affiliates shall be entitled, during the [***] month period following such termination, to sell on the normal business terms in existence prior to such termination, any commercial inventory of
Licensed Products which remains on hand as of the date of the termination, provided that Merck shall pay to Licensor the royalties and commercial milestone payments applicable to said subsequent sales in accordance with the terms and conditions set
forth in this Agreement. Any commercial inventory remaining following such [***] month period shall then be [***], as near as may be as provided for in Section 10.4(b)(ii)(4). It is understood that if Licensor does not accept such
offer Merck may, at its sole option and discretion, destroy or retain such commercial inventory remaining following such
[***] month period, but shall have no license enabling it to sell such materials to a Third Party. 
 (7) Merck shall, at Licensor’s option, assign the trademarks owned by Merck relating to the Licensed Products (but not including any trademarks which contain the words “Merck” or
“Serono”) to Licensor or otherwise transfer rights to such trademarks to Licensor, upon commercially reasonable terms. 
 (8) At Licensor’s request, Merck shall grant to the Licensor upon commercially reasonable terms [***]. For the avoidance of doubt, such obligation to negotiate in good faith does not
impose on either Party an obligation to enter into an agreement for the grant of such a license if the Parties cannot agree through such good faith negotiations on the terms and conditions of such license. 

(9) If the parties cannot agree as to the terms for a Section 10.4(b)(ii)(7) or 10.4(b)(ii)(8) transaction, the Parties shall
submit their respective proposed terms to final and binding arbitration in New York with an independent expert (who shall be a retired pharmaceutical industry executive) agreed upon by both Parties or, failing such agreement, designated by the
International Chamber of Commerce. Such arbitrator shall select verbatim whichever of such submissions is decided by him to be nearer to commercially reasonable terms or, as the case may be, to customary terms, and such determination shall be final
and binding upon the Parties. The arbitrator shall not be empowered to apply any terms other than one or the other of the respective Parties’ entire submissions. 
 (iii) Upon termination of this Agreement by Merck pursuant to Section 10.3, subsections (1) through (6) of Section 10.4(b)(ii) shall apply as if set forth in full in this
Section 10.4(b)(iii), except that in subsection (4) the figure [***]. In addition to that upon termination of this Agreement by Merck pursuant to Section 10.3 subsections (7) through 9) of Section 10.4(b)(ii) shall
not apply. 
  

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 (iv) Upon any termination of this Agreement, each of Merck’s Sublicensees
shall continue to have the rights and license set forth in its sublicense agreements, which agreements shall be automatically assigned to Licensor, provided however, that such Sublicensee is not then in breach of any of its material obligations
under its sublicense agreement. 
 (v) Immediately following Merck’s notification of termination to Licensor, the
diligence obligations in Section 3.4 shall no longer apply and Merck shall have the right to wind-down all then on-going Development, manufacturing and/or Commercialization activities.  

 

	 	10.5	Bankruptcy or Insolvency. 

  

	 	(a)	All rights and licenses granted under or pursuant to this Agreement by Licensor are, and shall otherwise be deemed to be, for purposes of Section 365(n) of
the U.S. Bankruptcy Code, if applicable, licenses of right to “intellectual property” as defined under Section 101 of the U.S. Bankruptcy Code. The Parties agree that Merck, as licensee of such rights under this Agreement, shall
retain and may fully exercise all of its rights and elections under the U.S. Bankruptcy Code. To the extent allowed by Law, Merck shall be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and
all embodiments of such intellectual property, which, if not already in Merck’s possession, shall be promptly delivered to it (i) upon any such commencement of a bankruptcy proceeding upon Merck’s written request therefor, unless
Licensor elects to continue to perform all of its obligations under this Agreement or (ii) if not delivered under clause (i), following the rejection of this Agreement by Licensor upon written request therefor by Merck.

  

	 	(b)	In addition to the foregoing, in the event of a Licensor Bankruptcy Event, Merck shall, to the extent allowed by Law, have [***] as follows:

 [***] 
 [***] 
 ARTICLE 11 

DISPUTE RESOLUTION 
  

	 	11.1	Disputes. The Parties recognize that disputes as to certain matters may from time to time arise during the Term which relate to either Party’s rights and/or
obligations hereunder. It is the objective of the Parties to establish under this Article 11 procedures to facilitate the resolution of disputes arising under this Agreement (other than any disputes relating to matters which under this

  

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Agreement Merck has sole decision-making authority and/or discretion (a “Non-Escalable Dispute”), in which case, such matter shall be determined by Merck and shall not be part of
the dispute resolution procedure set forth in Article 11) in an expedient manner by mutual cooperation and without resort to litigation. In the event that the Parties are unable to resolve such dispute through diligent review and deliberation by the
Senior Executives within [***] days from the day that one Party had designated the issue as a dispute in written notice to the other Party’s Senior Executive, then either Party shall have the right to escalate such matter to senior
management as set forth in Section 11.2. 

  

	 	11.2	Escalation to Executive Officers. Either Party may, by written notice to the other Party, request that a dispute (other than a Non-Escalable Dispute) that
remained unresolved by the Senior Executives for a period of [***] days as set forth in Section 11.1 arising between the Parties in connection with this Agreement, or a dispute relating to material breach, be resolved by the
Parties’ respective Executive Officers, within [***] days of their first consideration of such dispute. If the Executive Officers cannot resolve such dispute within [***] days of their first consideration of such dispute,
then, at any time after such [***] days period, either Party may proceed to enforce by application of Section 12.11 any and all of its rights with respect to such dispute. Notwithstanding the foregoing, nothing in this Section 11.2
shall be construed as precluding a Party from bringing an action for injunctive relief or other equitable relief prior to the initiation or completion of the above procedure. 

ARTICLE 12 

MISCELLANEOUS PROVISIONS 
  

	 	12.1	Relationship of the Parties. Nothing in this Agreement is intended or shall be deemed to constitute a partnership, agency, joint venture or employer-employee
relationship between the Parties. Except as otherwise expressly set forth in the Agreement, neither Party shall have any right nor authority to commit or legally bind the other Party in any way whatsoever including, without limitation, the making of
any agreement, representation or warranty and each Party agrees to not purport to do so. 

  

	 	12.2	Assignment. 

  

	 	(a)	Except as expressly provided herein, neither this Agreement nor any interest hereunder shall be assignable, nor any other obligation delegable, by Licensor without the
prior written consent of Merck (not to be unreasonably withheld or delayed). Notwithstanding the foregoing, Licensor may assign this Agreement or delegate its obligations in whole without the consent of Merck to a successor 

 

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to substantially all of the business of Licensor to which this Agreement relates, or in connection with any merger, sale of stock, sale of assets or other similar transaction.

  

	 	(b)	Merck may assign this Agreement, in whole or in part, to any Affiliate or Third Party without the consent of Licensor. Merck shall give written notice to Licensor
promptly following any such assignment. 

  

	 	(c)	No assignment under this Section 12.2 shall relieve the assigning party of any of its responsibilities or obligations hereunder and provided, further, that
as a condition of such assignment, the assignee shall agree in writing to be bound by all obligations of the assigning party hereunder. 

  

	 	(d)	This Agreement shall be binding upon the successors and permitted assigns of the Parties. 

 

	 	(e)	Any assignment not in accordance with this Section 12.2 shall be void. 

 

	 	(f)	Licensor shall not assign or transfer any Licensed Technology to any of its Affiliates without the prior written consent of Merck. 

 

	 	(g)	If, as a result of any assignment of any rights or interest in this Agreement, any payment by or on behalf of the assigning Party to the other Party is subject to an
increased level of withholding tax than would have been the case otherwise under this Agreement and the other Party demonstrates that it cannot use any related tax credit to offset against its obligation to pay tax in the [***] in which the
withholding is effected, the assigning Party shall pay the other Party an amount such that after deduction of any amount required to be withheld the other Party receives the same amount that it would have received before the assignment. If the other
Party uses a related tax credit in a subsequent [***], the other Party shall reimburse the assigning Party for the amount paid to the other Party by the assigning Party as a result of the withholding giving rise to such tax credit.

  

	 	12.3	Performance by Affiliates. Merck shall have the right to have any of its obligations hereunder performed, or its rights hereunder exercised, by, any of its
Affiliates and the performance of such obligations by any such Affiliate(s) shall be deemed to be performance by Merck; provided, however, that Merck shall be responsible for ensuring the performance of its obligations under this Agreement and that
any failure of any Affiliate performing obligations of Merck hereunder shall be deemed to be a failure by Merck to perform such obligations. 

  

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	 	12.4	Change of Control. In the event of a Change of Control of Licensor by a [***], then as from the date of such Change of Control, Licensor or its successor
entity shall [***]. 

  

	 	12.5	Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments and to do all such other acts as may be necessary or appropriate
in order to carry out the purposes and intent of this Agreement. 

  

	 	12.6	Accounting Procedures. Each Party shall calculate all amounts hereunder and perform other accounting procedures required hereunder and applicable to it in
accordance with either, as applicable (a) United States generally accepted accounting principles (US GAAP) or (b) IFRS, whichever is normally used by such Party to calculate its financial position, and in each case, consistently applied by
such Party. 

  

	 	12.7	Force Majeure. Neither Party shall be liable to the other Party or be deemed to have breached or defaulted under this Agreement for failure or delay in the
performance of any of its obligations under this Agreement for the time and to the extent such failure or delay is caused by or results from acts of God, earthquake, riot, civil commotion, terrorism, war, strikes or other labor disputes, fire,
flood, failure or delay of transportation, omissions or delays in acting by a governmental authority, acts of a government or an agency thereof or judicial orders or decrees or restrictions or any other reason which is beyond the control of the
respective Party. The Party affected by force majeure shall provide the other Party with full particulars thereof as soon as it becomes aware of the same (including its best estimate of the likely extent and duration of the interference with its
activities), and will use Commercially Reasonable Efforts to overcome the difficulties created thereby and to resume performance of its obligations hereunder as soon as practicable. 

 

	 	12.8	No Trademark Rights. No right, express or implied, is granted by this Agreement to a Party to use in any manner the name or any other trade name or trademark of
the other Party in connection with the performance of this Agreement or otherwise. 

  

	 	12.9	Entire Agreement of the Parties; Amendments. This Agreement and the Schedules and Exhibits hereto constitute and contain the entire understanding and
agreement of the Parties respecting the subject matter hereof and cancel and supersede any and all prior or contemporaneous negotiations, correspondence, understandings and agreements between the Parties, whether oral or written, regarding such
subject matter (provided, that any and all previous nondisclosure/nonuse obligations are not superseded and remain in full force and effect in addition to the nondisclosure/nonuse provisions hereof). No waiver, 

 

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modification or amendment of any provision of this Agreement shall be valid or effective unless made in a writing referencing this Agreement and signed by a duly authorized officer of each Party.

  

	 	12.10	Captions. The captions to this Agreement are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of
this Agreement. 

  

	 	12.11	Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of New York, excluding application of any conflict of laws
principles that would require application of the Law of a jurisdiction outside of New York, and will be subject to the exclusive jurisdiction of the courts of New York, USA. 

 

	 	12.12	Notices and Deliveries. Any notice, request, approval or consent required or permitted to be given under this Agreement shall be in writing and shall be deemed
to have been sufficiently given if delivered in person, transmitted by email (receipt verified) or by express courier service (signature required) to the Party to which it is directed at its physical or email address shown below or such other
physical or email address as such Party shall have last given by notice to the other Party. 

  
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 If to Merck, addressed to: 

Merck Serono S.A.-Geneva 
 9, Chemin des Mines 
 1202 Geneva 

Switzerland 

Attn: Pascale Gaillard 
 Email: pascale.gaillard@merckgroup.com 
 With a copy to: 

Merck Serono S.A.-Geneva 
 9, Chemin des Mines 
 1202 Geneva 

Switzerland 

Attn: Legal Department 
 If to Licensor, addressed to: 
 Ligand Pharmaceuticals Incorporated 

11085 North Torrey Pines Road 
 La Jolla, CA 92037 
 USA 

Attention: General Counsel 
 Email: cberkman@ligand.com 
  

	 	12.13	Waiver. A waiver by either Party of any of the terms and conditions of this Agreement in any instance shall not be deemed or construed to be a waiver of
such term or condition for the future, or of any other term or condition hereof. All rights, remedies, undertakings, obligations and agreements contained in or available upon violation of this Agreement shall be cumulative and none of them shall be
in limitation of any other remedy, right, undertaking, obligation or agreement of either Party. 

  

	 	12.14	Severability. When possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable Law, but if any
provision of this Agreement is held to be prohibited by or invalid under applicable Law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement. The Parties shall
make a good faith effort to replace the invalid or unenforceable provision with a valid one which in its economic effect is most consistent with the invalid or unenforceable provision. 

  
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	 	12.15	No Implied License. No right or license is granted to Merck hereunder by implication, estoppel, or otherwise to any know-how, patent or other intellectual
property right owned or controlled by Licensor or its Affiliates, except by an express license granted hereunder. No right or license is granted to Licensor hereunder by implication, estoppel, or otherwise to any know-how, patent or other
intellectual property right owned or controlled by Merck or its Affiliates except by an express license granted hereunder. 

  

	 	12.16	Interpretation. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without
limitation.” All references herein to Articles, Sections, Schedules and Exhibits shall be deemed references to Articles and Sections of, and Schedules and Exhibits to, this Agreement unless the context shall otherwise require. Except as
otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with IFRS, as in effect from time to time. Unless the context otherwise requires, countries shall include territories.

  

	 	12.17	Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original, and all of which together will be deemed to
be one and the same instrument. A facsimile or a portable document format (PDF) copy of this Agreement, including the signature pages, will be deemed an original. 

  
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 IN WITNESS WHEREOF, the Parties
have caused this License Agreement to be executed and delivered by their respective duly authorized officers as of the day and year first above written, each copy of which shall for all purposes be deemed to be an original. 

 

									
	 LIGAND PHARMACEUTICALS
 INCORPORATED
	 		 	ARES TRADING SA
					
	By:	 	 	 		 	By:	 	 
					
	Name:	 	 	 		 	Name:	 	 
					
	Title:	 	 	 		 	Title:	 	 
					
	By:	 	 	 		 	By:	 	 
					
	Name:	 	 	 		 	Name:	 	 
					
	Title:	 	 	 		 	Title:	 	 

  
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 Schedule 1 

Compounds 
 [***]

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

[***] 

[***] 

[***] 

[***] 

[***] 

[***] 

[***] 

[***] 
  

 

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 Schedule 2 

Licensor Know-How 

[***]: 
  

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

  

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

  

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

  

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 Schedule 3 

Licensor Materials 
 [***]

  

					
	[***]	 	[***]	 	[***]
			
	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]
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 Schedule 4 

Licensor Patent Rights 
  

					
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 Exhibit A 
 Merck Cost of Goods 
 “Merck Cost of Goods” shall mean the
following costs of Merck but only to the extent those costs are [***] in the way outlined below: 

(1) [***] 

[***]; 

[***]; 

[***] 

[***]; 

[***] 

[***]: 

[***] 
 [***]

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

[***] 
 [***]

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

 

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 [***]: 
 [***] 
 [***] 

[***] 

[***]. 

[***]: 

[***]; 

[***]; 

[***]; 

[***]; 

[***] 
  

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 Exhibit B 
 Royalty Calculation Example 
 By way of illustration, assume in a [***]
that (i) [***]: 
 [***] 

 

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 Exhibit C 
 Third Party Necessary Intellectual Property 
 [***] 
  

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 Page 59EX-10.3

 Exhibit 10.3 
 SEPARATION AGREEMENT 
 This Separation Agreement (this
“Agreement”) is entered into between Syed M. I. Kazmi, Ph.D., an individual (“Executive”), and Ligand Pharmaceuticals Incorporated, (the “Company”), effective as of the Effective Date (as defined
below). 
 WHEREAS, Executive is currently employed by the Company as its Vice President, Business Development and Strategic
Planning; 
 WHEREAS, Executive and the Company desire to set forth the terms and conditions of the foregoing arrangement.

 NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties agree as follows: 

1. Effective Date; Termination of Employment. 
 (a) Effective Date. This Agreement shall become effective upon the occurrence of both of the following events: (i) execution of the Agreement by the Parties; and (ii) expiration of the
revocation period applicable under the Release (as defined in Section 2(g) below) without any party thereto having given notice of revocation. The date of the last to occur of the foregoing events shall be referred to in this Agreement as the
“Effective Date.” Until and unless both of the foregoing events occur, this Agreement shall be null and void. 

(b) Termination of Employment Status. Executive’s employment by the Company shall terminate effective as of August 31,
2012 or such earlier date as Executive shall specify upon two (2) week’s prior written notice to the Company (the “Termination Date”), including his position as Vice President, Business Development and Strategic Planning
(and any other titles or officer positions he may hold) of the Company (and any of its affiliates and subsidiaries). 
 (c)
Consulting Agreement. On the Termination Date, Executive and the Company intend to enter into a consulting agreement (the “Consulting Agreement”) pursuant to which Executive will continue to provide certain services to the
Company, on the terms and conditions set forth therein. 
 2. Compensation. 

(a) Compensation Through Termination Date. On the Termination Date, the Company shall issue Executive his final paycheck,
reflecting (i) his earned but unpaid base salary through the Termination Date, and (ii) all accrued, unused vacation due Executive through the Termination Date. Subject to Sections 2(b) and (c) below, Executive acknowledges and agrees
that with his final check, the payment of any outstanding expense reimbursements, and the payment of any amounts payable under any of the employee benefit plans of the Company in accordance with the terms of such plans, Executive will have received
all monies, bonuses (including for any work performed in 2012), commissions, expense reimbursement, vacation pay, or other compensation he earned or was due during his employment by the Company. 

(b) COBRA. Except as set forth in the Consulting Agreement, Executive shall be solely responsible for all matters relating to his
continuation of coverage pursuant to COBRA, including, without limitation, his election of such coverage and his timely payment of any COBRA premiums. 

 (c) Exclusive Remedy. Except as otherwise expressly required by law (e.g., COBRA) or
as specifically provided herein, all of Executive’s rights to compensation, benefits, and other amounts hereunder (if any) accruing after the termination of Executive’s employment by or service to the Company shall cease upon such
termination. In addition, Executive acknowledges and agrees that he is not entitled to any reimbursement by the Company for any taxes payable by him as a result of the payments and benefits received by him pursuant to this Section 2, including,
without limitation, any excise tax imposed by Section 4999 of the Code. 
 (d) Company Property. Executive shall
immediately surrender to the Company all lists, books and records of, or in connection with, the Company’s business, and all other property belonging to the Company, it being distinctly understood that all such lists, books and records, and
other documents, are the property of the Company, other than any such property or access to emails and files that the Company determines is necessary for Executive’s provision of consulting services pursuant to the Consulting Agreement.

 (g) Release. Executive’s right to receive any of the payments or other compensation to be made to Executive
pursuant to the Consulting Agreement shall be contingent on Executive providing to the Company (and failing to revoke) a full and complete general release in the form attached hereto as Exhibit A (the “Release”) within
twenty-one (21) days following the Termination Date. In the event the Release does not become effective (and the revocation period thereunder expired) within the thirty (30) day period following the Termination Date, Executive shall not be
entitled to the aforesaid payments and benefits. 
 3. Certain Covenants. Executive hereby expressly reaffirms his
obligations under the Company’s Confidentiality and Proprietary Rights Agreement, a copy of which is attached to this Agreement as Exhibit B and incorporated herein by reference, and agrees that such obligations shall survive the
Termination Date and any termination of his services to the Company. The Company shall be entitled to cease all payments to Executive in the event of his breach of this Section 3. 

4. Nondisparagement; Confidentiality. Executive agrees that neither he nor anyone acting by, through, under or in concert with him
shall disparage or otherwise communicate negative statements or opinions about the Company, its board members, officers, employees or business. The Company agrees that neither its board members nor officers shall disparage or otherwise communicate
negative statements or opinions about Executive. Except as may be required by law, neither Executive, nor any member of Executive’s family, nor anyone else acting by, through, under or in concert with Executive will disclose to any individual
or entity (other than Executive’s legal or tax advisors) the terms of this Agreement. 
 5. Dispute Resolution.

 (a) Mediation. In the event of any dispute, claim or controversy based on, arising out of or relating to
Executive’s employment or this Agreement (a “Dispute”), the parties shall attempt to resolve the dispute in non-binding mediation in accordance with the National Rules for the Resolution of Employment Disputes (the
“Rules”) of the American Arbitration Association (“AAA”). If the parties are unable to agree upon a mediator, one shall be appointed by the AAA in accordance with its Rules. Each party shall pay the fees of its own
attorneys and all other expenses connected with presenting its case. Other costs of the mediation, including the cost of any record or transcripts of the mediation, AAA’s administrative fees, the fee of the mediator, and all other fees and
costs, shall be borne by the Company. If the matter has not been resolved pursuant to the aforesaid mediation procedure within thirty (30) days of the commencement of such procedure, or such other period as the parties agree, either party may
submit the dispute to arbitration pursuant to Section 5(b) below. 

  
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 (b) Arbitration. Any Dispute not settled pursuant to
Section 5(a) above shall be settled by final and binding arbitration in San Diego, California, before a single neutral arbitrator in accordance with the National Rules for the Resolution of Employment Disputes (the “Rules”) of
the American Arbitration Association (“AAA”), and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction. Arbitration may be compelled pursuant to the California Arbitration Act (Code of
Civil Procedure §§ 1280 et seq.). If the parties are unable to agree upon an arbitrator, one shall be appointed by the AAA in accordance with its Rules. Each party shall pay the fees of its own attorneys, the expenses of its
witnesses and all other expenses connected with presenting its case; provided, however, Executive and the Company agree that, to the extent permitted by law, the arbitrator shall award reasonable attorneys’ fees to the prevailing
party; provided, further, that the prevailing party shall be reimbursed for such fees, costs and expenses within sixty (60) days following any such award; provided, further, that the parties’ obligations
pursuant to the foregoing provisos shall terminate on the tenth (10th) anniversary of the Termination Date. Other costs of the arbitration, including the cost of any record or transcripts of the arbitration, AAA’s administrative fees, the fee of the arbitrator,
and all other fees and costs, shall be borne by the Company. 
 (c) Other Relief. This Section 5 is intended to be
the exclusive method for resolving any and all claims by the parties against each other for payment of damages under this Agreement or relating to Executive’s employment; provided, however, that neither this Agreement nor the
submission to mediation or arbitration shall limit the parties’ right to seek provisional relief, including without limitation injunctive relief, in any court of competent jurisdiction pursuant to California Code of Civil Procedure §
1281.8 or any similar statute of an applicable jurisdiction. Seeking any such relief shall not be deemed to be a waiver of such party’s right to compel arbitration. Both Executive and the Company expressly waive their right to a jury trial.

 6. Indemnification Agreement. The Company hereby reaffirms its obligations under that certain Indemnification
Agreement between the Company and Executive attached hereto as Exhibit C (the “Indemnification Agreement”). The Company’s obligations under the Indemnification Agreement shall survive Executive’s termination of
employment by or service to the Company. 
 7. Agreed-Upon Statement; Employment References. Any inquiries regarding
Executive from prospective employers shall be forwarded to the Chief Executive Officer of the Company. Except as required by law or court order, the Company shall not make any additional or inconsistent internal or public statements regarding
Executive’s termination. 
 8. Miscellaneous. 

(a) Entire Agreement. This Agreement and the agreements referenced herein set forth the entire agreement of the parties hereto in
respect of the subject matter contained herein and therein and supersede all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of
any party hereto, and any prior agreement of the parties hereto in respect of the subject matter contained herein, including without limitation, any prior severance agreements, any contrary or limiting provisions in any Company equity compensation
plan, that certain Change in Control Severance Agreement dated as of August 17, 2007, between Executive and the Company, as amended. This Agreement shall not limit in any way any obligation Executive may have under any other agreement with or
promise to the Company relating to confidentiality, proprietary rights in technology or the assignment of interests in any intellectual property. 

  
 3 

 (b) Assignment; Assumption by Successor. The rights of the Company under this
Agreement may, without the consent of Executive, be assigned by the Company, in its sole and unfettered discretion, to any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or
indirectly, acquires all or substantially all of the assets or business of the Company. The Company shall require any successor (whether direct or indirect, by purchase, merger or otherwise) to all or substantially all of the business or assets of
the Company expressly to assume and to agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place; provided, however, that no such
assumption shall relieve the Company of its obligations hereunder. Unless expressly provided otherwise, “Company” as used herein shall mean the Company as defined in this Agreement and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of law or otherwise. Executive shall not be entitled to assign any of Executive’s rights or obligations under this Agreement. This Agreement shall inure to the benefit of
and be enforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. 
 (c) Survival. The covenants, agreements, representations and warranties contained in or made in Sections 2, 3, 4, 5, 6, 7, 8 and 9 of this Agreement shall survive any termination of
Executive’s services or any termination of this Agreement. 
 (d) Third-Party Beneficiaries. This Agreement does not
create, and shall not be construed as creating, any rights enforceable by any person not a party to this Agreement. 
 (e)
Notices. Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows with notice deemed given as indicated: (i) by personal delivery when delivered personally; (ii) by overnight courier
upon written verification of receipt; (iii) by telecopy or facsimile transmission upon acknowledgment of receipt of electronic transmission; or (iv) by certified or registered mail, return receipt requested, upon verification of receipt.
Notice shall be sent to Executive at the address set forth on the signature page below and to the Company at its principal place of business, or such other address as either party may specify in writing. 

(f) Severability. In the event any provision of this Agreement is found to be unenforceable by an arbitrator or court of competent
jurisdiction, such provision shall be deemed modified to the extent necessary to allow enforceability of the provision as so limited, it being intended that the parties shall receive the benefit contemplated herein to the fullest extent permitted by
law. If a deemed modification is not satisfactory in the judgment of such arbitrator or court, the unenforceable provision shall be deemed deleted, and the validity and enforceability of the remaining provisions shall not be affected thereby.

 (g) Governing Law and Venue. This Agreement will be governed by and construed in accordance with the laws of the
United States and the State of California applicable to contracts made and to be performed wholly within such State, and without regard to the conflicts of laws principles thereof. Any suit brought hereon shall be brought in the state or federal
courts sitting in San Diego, California, the Parties hereby waiving any claim or defense that such forum is not convenient or proper. Each party hereby agrees that any such court shall have in personam jurisdiction over it and consents to service of
process in any manner authorized by California law. 
 (h) Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument. 

  
 4 

 (i) Interpretation; Construction. The headings set forth in this Agreement are for
convenience only and shall not be used in interpreting this Agreement. This Agreement has been drafted by legal counsel representing the Company, but Executive has participated in the negotiation of its terms. Furthermore, Executive acknowledges
that Executive has had an opportunity to review and revise the Agreement and have it reviewed by legal counsel, if desired, and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of this Agreement. Either party’s failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such provision, or prevent that party thereafter from
enforcing each and every other provision of this Agreement. 
 (j) Amendment. This Agreement may be amended or modified
only with the written consent of Executive and an authorized representative of the Company. No oral waiver, amendment or modification will be effective under any circumstances whatsoever. 

(k) Taxes. All compensation payable to Executive under this Agreement shall be subject to such deductions as the Company is from
time to time required to make pursuant to law, governmental regulation or order. Executive acknowledges that the payments and benefits provided in this Agreement may have tax ramifications to him. The Company has provided no tax or other advice to
Executive on such matters and Executive is free to consult with an accountant, legal counsel, or other tax advisor regarding the tax consequences he may face. 
 (l) RIGHT TO ADVICE OF COUNSEL. EXECUTIVE ACKNOWLEDGES THAT HE HAS THE RIGHT, AND IS ENCOURAGED, TO CONSULT WITH HIS LAWYER; BY HIS SIGNATURE BELOW, EXECUTIVE ACKNOWLEDGES THAT HE HAS CONSULTED, OR
HAS ELECTED NOT TO CONSULT, WITH HIS LAWYER CONCERNING THIS AGREEMENT. 
 (Signature Page Follows) 

  
 5 

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

			
	LIGAND PHARMACEUTICALS INCORPORATED
		
	 By:
	 	 /s/ Charles Berkman

	 Print Name: Charles Berkman

	 Title: VP, General Counsel & Secretary

		 	
	 Date: May 4, 2012

		 	
	SYED M. I. KAZMI, PH.D.
		 	
	 /s/ Syed M. I. Kazmi

	
	 Address: 10537 Gaylemont Lane

	 San Diego, CA 92130

	
	 Date: May 2, 2012

 EXHIBIT A 
 GENERAL RELEASE OF CLAIMS 
 This General Release of Claims
(“Release”) is entered into as of this             day of             , 2012, between Syed Kazmi, Ph.D.
(“Executive”), and Ligand Pharmaceuticals Incorporated, a Delaware corporation (the “Company”) (collectively referred to herein as the “Parties”). 

WHEREAS, Executive and the Company are parties to that certain Separation Agreement dated as of
            , 2012 (the “Agreement”); 
 WHEREAS,
the Parties agree that it is a condition to the execution of the Consulting Agreement referenced in the Agreement by the Company that Executive execute this Release and that this Release become effective; and 

WHEREAS, the Company and Executive now wish to fully and finally to resolve all matters between them. 

NOW, THEREFORE, in consideration of, and subject to, the benefits payable to Executive pursuant to the Agreement, the adequacy of which
is hereby acknowledged by Executive, and which Executive acknowledges that he would not otherwise be entitled to receive, Executive and the Company hereby agree as follows: 
 1. General Release of Claims by Executive. 
 (a) Executive, on behalf of
himself and his executors, heirs, administrators, representatives and assigns, hereby agrees to release and forever discharge the Company and all predecessors, successors and their respective parent corporations, affiliates, related, and/or
subsidiary entities, and all of their past and present investors, directors, shareholders, officers, general or limited partners, employees, attorneys, agents and representatives, and the employee benefit plans in which Executive is or has been a
participant by virtue of his employment with or service to the Company (collectively, the “Company Releasees”), from any and all claims, debts, demands, accounts, judgments, rights, causes of action, equitable relief, damages,
costs, charges, complaints, obligations, promises, agreements, controversies, suits, expenses, compensation, responsibility and liability of every kind and character whatsoever (including attorneys’ fees and costs), whether in law or equity,
known or unknown, asserted or unasserted, suspected or unsuspected (collectively, “Claims”), which Executive has or may have had against such entities based on any events or circumstances arising or occurring on or prior to the date
hereof or on or prior to the date hereof, arising directly or indirectly out of, relating to, or in any other way involving in any manner whatsoever Executive’s employment by or service to the Company or the termination thereof, including any
and all claims arising under federal, state, or local laws relating to employment, including without limitation claims of wrongful discharge, breach of express or implied contract, fraud, misrepresentation, defamation, or liability in tort, and
claims of any kind that may be brought in any court or administrative agency including, without limitation, claims under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000, et seq.; the Americans with
Disabilities Act, as amended, 42 U.S.C. § 12101 et seq.; the Rehabilitation Act of 1973, as amended, 29 U.S.C. § 701 et seq.; the Civil Rights Act of 1866, and the Civil Rights Act of 1991;
42 U.S.C. Section 1981, et seq.; the Age Discrimination in Employment Act, as amended, 29 U.S.C. Section 621, et seq. (the “ADEA”); the Equal Pay Act, as amended, 29 U.S.C. Section 206(d);
regulations of the Office of Federal Contract Compliance, 41 C.F.R. Section 60, et seq.; the Family and Medical Leave Act, as amended, 29 U.S.C. § 2601 et seq.; the Fair Labor Standards Act
of 1938, as amended, 29 U.S.C. § 201 et seq.; the Employee Retirement Income Security Act, as amended, 29 U.S.C. § 1001 et seq.; and the California Fair Employment and Housing Act, California
Government Code Section 12940, et seq. 

 Notwithstanding the generality of the foregoing, Executive does not release the following
claims: 
 (i) Claims for unemployment compensation or any state disability insurance benefits pursuant to the
terms of applicable state law; 
 (ii) Claims for workers’ compensation insurance benefits under the terms
of any worker’s compensation insurance policy or fund of the Company; 
 (iii) Claims pursuant to the terms
and conditions of the federal law known as COBRA; 
 (iv) Claims for indemnity under the bylaws of the Company,
as provided for by Delaware law or under any applicable insurance policy with respect to Executive’s liability as an employee, director or officer of the Company; 

(v) Claims based on any right Executive may have to enforce the Company’s executory obligations under the Agreement;
and 
 (vi) Claims Executive may have to vested or earned compensation and benefits. 

(b) EXECUTIVE ACKNOWLEDGES THAT HE HAS BEEN ADVISED OF AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH
PROVIDES AS FOLLOWS: 
 “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.” 
 BEING AWARE OF SAID CODE SECTION, EXECUTIVE HEREBY EXPRESSLY WAIVES ANY RIGHTS HE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT. 

(c) Executive acknowledges that this Release was presented to him on the date indicated above and that Executive is entitled to have
twenty-one (21) days’ time in which to consider it. Executive further acknowledges that the Company has advised him that he is waiving his rights under the ADEA, and that Executive may obtain advice concerning this Release from an attorney
of his choice, and Executive has had sufficient time to consider the terms of this Release. Executive represents and acknowledges that if Executive executes this Release before twenty-one (21) days have elapsed, Executive does so knowingly,
voluntarily, and upon the advice and with the approval of Executive’s legal counsel (if any), and that Executive voluntarily waives any remaining consideration period. 
 (d) Executive understands that after executing this Release, Executive has the right to revoke it within seven (7) days after his execution of it. Executive understands that this Release will not
become effective and enforceable unless the seven (7) day revocation period passes and Executive does not revoke the Release in writing. Executive understands that this Release may not be

 
revoked after the seven (7) day revocation period has passed. Executive also understands that any revocation of this Release must be made in writing and delivered to the Company at its
principal place of business within the seven (7) day period. 
 (e) Executive understands that this
Release shall become effective, irrevocable, and binding upon Executive on the eighth (8th) day after my execution of it, so long as Executive has not revoked it within the time period and in the manner specified in clause (d) above. Executive further understands that Executive will
not be given any severance benefits under the Agreement until the effective date of this Release. 
 2. No Assignment.
Executive represents and warrants to the Company Releasees that there has been no assignment or other transfer of any interest in any Claim that Executive may have against the Company Releasees, or any of them. Executive agrees to indemnify and hold
harmless the Company Releasees from any liability, claims, demands, damages, costs, expenses and attorneys’ fees incurred as a result of any such assignment or transfer from Executive. 

3. Severability. In the event any provision of this Release is found to be unenforceable by an arbitrator or court of competent
jurisdiction, such provision shall be deemed modified to the extent necessary to allow enforceability of the provision as so limited, it being intended that the parties shall receive the benefit contemplated herein to the fullest extent permitted by
law. If a deemed modification is not satisfactory in the judgment of such arbitrator or court, the unenforceable provision shall be deemed deleted, and the validity and enforceability of the remaining provisions shall not be affected thereby.

 4. Interpretation; Construction. The headings set forth in this Release are for convenience only and shall not be used
in interpreting this Agreement. This Release has been drafted by legal counsel representing the Company, but Executive has participated in the negotiation of its terms. Furthermore, Executive acknowledges that Executive has had an opportunity to
review and revise the Release and have it reviewed by legal counsel, if desired, and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the
interpretation of this Release. Either party’s failure to enforce any provision of this Release shall not in any way be construed as a waiver of any such provision, or prevent that party thereafter from enforcing each and every other provision
of this Release. 
 5. Governing Law and Venue. This Release will be governed by and construed in accordance with the
laws of the United States of America and the State of California applicable to contracts made and to be performed wholly within such State, and without regard to the conflicts of laws principles thereof. Any suit brought hereon shall be brought in
the state or federal courts sitting in San Diego, California, the Parties hereby waiving any claim or defense that such forum is not convenient or proper. Each party hereby agrees that any such court shall have in personam jurisdiction over it and
consents to service of process in any manner authorized by California law. 
 6. Entire Agreement. This Release and the
Agreement constitute the entire agreement of the Parties in respect of the subject matter contained herein and therein and supersede all prior or simultaneous representations, discussions, negotiations and agreements, whether written or oral. This
Release may be amended or modified only with the written consent of Executive and an authorized representative of the Company. No oral waiver, amendment or modification will be effective under any circumstances whatsoever. 

 7. Counterparts. This Release may be executed in multiple counterparts, each of which
shall be deemed to be an original but all of which together shall constitute one and the same instrument. 

 IN WITNESS WHEREOF, and intending to be legally bound, the Parties have executed the
foregoing Release as of the date first written above. 
  

							
	EXECUTIVE	 		 	LIGAND PHARMACEUTICALS INCORPORATED
				
	 	 		 	By:	 	 
	  
 Syed M. I. Kazmi, Ph.D.
	 		 	Print Name:	 	 
	 		 	Title:	 	 

 EXHIBIT B 
 COMPANY CONFIDENTIALITY AND PROPRIETARY RIGHTS AGREEMENT 

[Attached] 

 EXHIBIT C 
 INDEMNIFICATION AGREEMENT 
 [Attached]

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