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Exhibit 10.32    
    

 
 

Execution Copy    
    

 
 

TERMINATION AGREEMENT    
    

        This Termination Agreement (the "Termination Agreement") is effective as of the latest date of signature appearing
below (the "Effective Date") by and between Valeant Pharmaceuticals North America, a Delaware corporation and successor in interest to Valeant
Research & Development, ("Valeant"), Metabasis Therapeutics, Inc., a Delaware corporation
("Metabasis"), and Schering Corporation, a New Jersey corporation ("Schering"). (Valeant, Metabasis and
Schering are each from time to time referred to individually as a "Party" and collectively as the  "Parties".) 

 
 

Recitals    
    

        A.    Valeant
and Schering entered into a Development and License Agreement dated as of December 12, 2006 and effective as of January 9, 2007, for the product
known as Pradefovir (the "Valeant/Schering Agreement"). 

        B.    Metabasis
and Schering entered into an Amended and Restated Development and License Agreement, dated December 12, 2006 and effective as of January 9, 2007,
for Pradefovir (the "Metabasis/Schering Agreement"). 

        C.    Valeant,
Metabasis and Schering entered into an Assignment and Assumption Agreement, having an effective date of January 9, 2007, in connection with the
Valeant/Schering Agreement and the Metabasis/Schering Agreement (the "Assignment"). 

        D.    Valeant,
Metabasis and Schering desire to terminate the Valeant/Schering Agreement and the Metabasis/Schering Agreement on the terms and conditions set forth in this
Termination Agreement. 

        In
consideration of the foregoing premises and the mutual covenants set forth below, the Parties to this Agreement agree as follows: 

Article 1 — Definitions  

        Except as otherwise expressly set forth in this Termination Agreement, all capitalized terms used in this Termination Agreement (whether used in the plural or
singular) shall have the respective meanings set forth in the Valeant/Schering Agreement and the Metabasis/Schering Agreement. 

"Schering License Term" shall mean the period of time during which Schering held the licenses to the Product, which began on the effective date of the
Transaction Agreements and expires on the Termination Date. 

"Termination Date" shall mean the date which is five (5) Business Days after the Effective Date. 

"Transaction Agreements" shall mean, collectively, the Valeant/Schering Agreement, the Metabasis/Schering Agreement and the Assignment. 

Article 2 — Termination  

        The Parties hereby agree that the Valeant/Schering Agreement and the Metabasis/Schering Agreement are hereby terminated effective as of the Termination Date. The
Parties further agree that notwithstanding anything in the Transaction Agreements to the contrary, and except as otherwise expressly set forth herein: 

 

        (i)    the
provisions of sections 12.5.2, 12.5.3, 12.5.4 and 12.7 of the Metabasis/Schering Agreement and section 12.7 of the Valeant/Schering Agreement, together
with the terms and conditions of the Assignment, shall govern the rights and obligations of the Parties throughout the entire Territory on and after the Termination Date in the same manner as if the
Metabasis/Schering Agreement and the Valeant/Schering Agreement had each been terminated in its entirety pursuant to, respectively, sections 12.5.1 and 12.2 of those agreements; and 

        (ii)   the
terms and conditions of section 2.6 of the Valeant/Schering Agreement and section 2.7 of the Metabasis/Schering Agreement shall have no force or
effect on and after the Termination Date. 

Article 3 — Clarification of Rights after Termination  

        3.1    Transfer of INDs by Valeant.    The Parties acknowledge that as of the Effective Date
(i) Valeant remained the registered owner of the INDs for the Product throughout the Territory but had otherwise transferred all rights in and to such INDs to Schering pursuant to the terms of
the Valeant/Schering Agreement, and (ii) no NDAs, MAAs or other applications for Regulatory Approval of the Product have been filed by or on behalf of Valeant, Schering or their respective
Affiliates for the Product in any country. The Parties shall cooperate to complete the transfer of ownership of and all responsibility for all of the INDs for the Product from Valeant to Metabasis as
soon as practicable after the Effective Date, and in any event no later than the Termination Date. 

        3.2    Transfer of Data by Schering.    As soon as practicable after the Effective Date (and
in any event on or before the Termination Date) Schering and Valeant each shall deliver to Metabasis copies of all data, information and documentation (in hard copy and electronic format, to the
extent available) in its or its Affiliates' possession related to the development of the Product, including without limitation any draft and/or final reports from the recently completed
24-month carcinogenicity studies (the "CARC Studies"), all clinical studies, and any and all other pre-clinical and clinical data and all submissions and correspondence with
any regulatory agencies worldwide. Schering shall transfer the sponsorship of the CARC Studies to Metabasis as of the Effective Date, provided that the
cost of the final reports for the CARC Studies shall be paid by Schering and Valeant as set forth below in Section 4.2. Schering and/or Valeant (as appropriate) shall also provide Metabasis
with copies of all final reports from the CARC Studies promptly after such final reports become available, provided that prior to Valeant finalizing and
executing any such final reports, Metabasis shall have the right to review and approve such final reports and Valeant shall not execute any such final reports without the prior written approval of
Metabasis. If and to the extent that Schering or its Affiliates' retain any rights, title or interests in or to any pre-clinical data, clinical data and/or regulatory data related to the
Product after the termination of the Metabasis/Schering Agreement and the Valeant/Schering Agreement, Schering hereby grants to Metabasis an irrevocable, exclusive, worldwide, paid-up,
license (with the right to grant sublicenses) for the use of all such data solely to develop, make, have made, use, import, export, have imported, have exported, offer to sell, sell and have sold the
Licensed Compound and Products; provided, however, that with respect to any Product which is a Combination Product, such license shall not include any
rights to data that relates to any active pharmaceutical ingredient other than the Licensed Compound. Schering hereby confirms that as of the Termination Date there are no Program Improvements or
Program Patents that are Controlled by Schering or its Affiliates, and that the data and information to be provided to Metabasis pursuant to this Section 3.2 will encompass all
know-how related to the Product that has been developed by or on behalf of Schering during the Schering License Term and that is necessary for and or material to the continued development
of the Product. 

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        3.3    Existing Inventory.    On or before the Termination Date, Schering shall inform
Metabasis in writing of all quantities of Licensed Compound and/or Product (including any work in progress) in its or its Affiliates' possession. Except as otherwise expressly set forth in this
Section 3.3, neither Schering nor its Affiliates shall sell or otherwise dispose of any quantities of Licensed Compound and/or Product (including any work in progress) in its or its Affiliates'
possession or control, without the prior written consent of Metabasis. Metabasis shall have the right to purchase any and all quantities of such Licensed Compound and/or Product from Schering pursuant
to section 12.5.4(e) of the Metabasis/Schering Agreement. Schering shall reasonably cooperate with any requests by Metabasis to enable it to evaluate the quality of such inventory of Licensed
Compound and/or Product. Metabasis shall notify Schering within sixty (60) days of the Termination Date as to whether or not Metabasis will purchase the Licensed Compound and/or Product. Any
such purchases by Metabasis shall be completed as soon as practicable thereafter and shall be at a price (not to exceed Schering's Fully Burdened Manufacturing Costs) to be mutually agreed upon by
Schering and Metabasis. Schering shall deliver any such quantities of Licensed Compound and/or Product (together with any existing documentation in Schering's possession with respect to the quality of
such materials) to Metabasis (or its designee)
F.C.A. (Incoterms 2000). For clarity, the Parties acknowledge that Schering and its Affiliates did not manufacture or control the manufacturing of any quantities of Licensed Compound and/or Product in
its or its Affiliates' possession, and Schering shall not have any obligation to test, assay, analyze or otherwise generate any additional data or documentation with regard to the quality and/or
specifications of any quantities of Licensed Compound and/or Product to be purchased by Metabasis pursuant to this Section 3.3. ANY PURCHASES OF LICENSED COMPOUND AND/OR PRODUCT BY METABASIS
PURSUANT TO THIS SECTION 3.3 SHALL THEREFORE BE MADE "AS IS", AND WITHOUT ANY WARRANTY OR REPRESENTATION (EXPRESS OR IMPLIED) BEING MADE BY SCHERING OR ITS AFFILIATES WITH RESPECT TO SUCH
LICENSED COMPOUND OR PRODUCT, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF NON-INFRINGEMENT AND ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE. In the event
that Metabasis notifies Schering that it does not wish to purchase the existing inventory of Licensed Compound and/or Product, or fails to notify Schering within sixty (60) days after the
Termination Date of its decision, then Schering shall have the right to dispose of all of its existing inventory of Licensed Compound and/or Product in the manner determined by it in its sole
discretion; provided that Schering complies with all applicable laws, rules and regulations in connection therewith. 

        3.4    Future Supply Obligations.    The Parties acknowledge that as of the Effective Date
Schering and its Affiliates have not established any manufacturing capabilities or other sources of supply for the Licensed Compound and/or Product. Except for the delivery of any existing inventory
of Licensed Compound and/or Product that may be purchased by Metabasis pursuant to Section 3.3 of this Termination Agreement, Schering and its Affiliates shall not have any obligations to
manufacture, supply, or procure the supply of, any quantities of Licensed Compound or Product whatsoever to Metabasis or its Affiliates and/or licensees. 

        3.5    Trademarks.    The Parties acknowledge that as of the Effective Date Schering and its
Affiliates do not own, and have not filed any applications to register, any Trademarks for the Product in the Territory. 

        3.6    Patents and Patent Applications.    As soon as practicable after the Effective Date
(and in any event on or before the Termination Date) Schering shall deliver to Metabasis copies of all documentation in its or its Affiliates' possession or Control related to the preparation, filing,
prosecution, maintenance, enforcement or defense of Licensed Patents. Effective as of the Termination Date, Metabasis shall be solely responsible, at its own expense, for all aspects of the
preparation, filing, prosecution, maintenance, enforcement or defense of Licensed Patents. Any and all powers of attorney granted by or on behalf of Metabasis to Schering or its Affiliates related to
the preparation, filing, 

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prosecution,
maintenance, enforcement or defense of Licensed Patents shall be deemed revoked effective as of the Termination Date. For clarity, Schering shall remain responsible for any costs and
expenses of preparing, filing, prosecuting, maintaining, enforcing or defending the Licensed Patent that are incurred during the Schering License Term. 

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        3.7    Availability of Personnel.    Schering confirms that it will make a reasonable number
of appropriate personnel available to Metabasis in accordance with Section 12.5.4(f) of the Metabasis/Schering Agreement to assist in the orderly transition of information and rights related to
the Licensed Compound and the Product. For clarity, Schering shall provide access to such personnel, pursuant to reasonable requests by Metabasis, for a period of ninety (90) days after the
Termination Date. Schering will thereafter give good faith consideration to any requests for access to its personnel, such access to be at Metabasis' cost and expense;  provided that under no
circumstances will Schering be obligated to make any of its personnel available to Metabasis more than one hundred and eighty
(180) days after the Termination Date. 

Article 4 — Post Termination Liabilities  

        4.1    Liability and Indemnification.    The Parties acknowledge and agree that as among
Valeant, Schering, Metabasis, and their respective Affiliates, all liabilities and indemnification obligations arising in connection with the development, manufacture, use and/or commercialization of
the Licensed Compound and/or the Product will continue to be governed by the applicable terms and conditions of the Transaction Agreements together with the terms of this Article 4. 

        4.2    Responsibility for Clinical Study Participants.    The Parties acknowledge that all
human clinical studies for the Product that have been undertaken as of the Effective Date were designed and initiated by or on behalf of Valeant prior to the effective date of the Transaction
Agreements using study protocols generated by or on behalf of Valeant. The Parties further acknowledge that during the Schering License Term (i) no new patients were enrolled in any then
ongoing clinical studies for the Product, and (ii) no new clinical studies for the Product were initiated. For clarity, the Parties agree that Valeant is and shall remain responsible for, and
shall indemnify Schering and Metabasis in accordance with the applicable terms and conditions of the Transaction Agreements with respect to, all liabilities arising as a result of the conduct of any
and all clinical studies for the Product prior to the effective date of the Transaction Agreements (including without limitation any liabilities arising at any time thereafter as a result of the
administration prior to the effective date of the Transaction Agreements of the Product to any individuals participating in those studies). The Parties further acknowledge and agree that Metabasis
shall not be responsible for any costs and expenses arising (whether before or after the Termination Date) from (i) the discontinuation of pradefovir treatment for those patients who were
enrolled in ongoing Phase II clinical studies for the Product, and/or (ii) providing alternative treatment (as determined by the responsible clinical investigators at each study site) of
such patients following discontinuation of treatment with pradefovir with certain other therapeutic agents approved for the treatment of hepatitis B virus infection. All such costs and expenses shall
be initially paid by Valeant and will then (except as may otherwise be agreed by Schering and Valeant in writing) be
allocated between Schering and Valeant in accordance with the applicable terms and conditions of the Transaction Agreements. For clarity, Schering will reimburse Valeant for the documented
out-of-pocket costs actually incurred in providing alternative treatment with certain other therapeutic agents approved for the treatment of hepatitis B virus infection
following discontinuation of treatment with pradefovir for patients who were enrolled at any time during the Schering License Term in ongoing Phase II clinical studies for the Product. 

        4.3    Patient Registries.    The Parties acknowledge that as of the Effective Date the FDA,
and certain other Approval Authorities in the Territory, are requiring the implementation of patient registries to monitor those patients who were treated with the Product as a result of their
participation in the Phase II clinical studies for the Product (the "Patient Registries"). Schering and Valeant have been collaborating to design and obtain regulatory approval of a protocol
for the conduct of the Patient Registries and Schering has recently obtained a quote from a third party contractor for the conduct of the Patient Registries. On or before the Termination Date,
Schering shall provide Valeant with contact information and copies of any quotes or other information received by Schering from such third party 

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contractor
with respect to the Patient Registries. The Parties agree that Valeant is and shall remain responsible for: (i) obtaining approval from the FDA and all other relevant Approval
Authorities of the final protocol for the Patient Registries (and any amendments thereto); (ii) the implementation and conduct of the Patient Registries in accordance with such approved
protocol, including without limitation cooperating with Metabasis for the timely preparation of any annual reports required to be submitted to the FDA and/or other Approval Authorities with respect to
such Patient Registries; (iii) identifying and contracting with a suitable third party for the implementation and conduct of the Patient Registries in accordance with the approved protocol and
the preparation of the clinical summary to be included in the annual reports (which clinical summary shall be provided to Metabasis); and (iv) all of the costs and expenses arising in
connection therewith, including without limitation the costs of any third party contractor engaged by Valeant to conduct the Patient Registries and prepare the clinical summaries. On or before the
Termination Date, Valeant shall provide Metabasis a copy of the then current version of the protocol for the Patient Registries, and shall thereafter (1) provide Metabasis with copies of the
final protocol and any updates or amendments to the protocol, and (2) keep Metabasis reasonably informed with respect to the approval, implementation and conduct of the Patient Registries,
including without limitation with respect to communications with the FDA or other Approval Authorities with respect thereto. 

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        4.4    Liabilities Arising from Future Activities.    The Parties acknowledge and agree that
as among the Parties and their respective Affiliates, Metabasis shall be solely responsible for any and all liabilities arising out of or relating to the performance by or on behalf of Metabasis (or
its Affiliates and/or licensees) of any activities on or after the Termination Date in connection with the further development, manufacture and/or commercialization of Licensed Compound and/or
Product, and shall hold harmless the Schering Indemnitees and the Valeant Indemnitees with respect thereto. For clarity,
the Parties acknowledge that Metabasis' responsibilities under this Section 4.4 shall not include any liabilities that are subject to Sections 4.2 or 4.3 of this Termination Agreement. 

Article 5 — Miscellaneous  

        5.1    Governing Law.    This Termination Agreement shall be governed, interpreted and
construed in accordance with the laws of the State of New York, without giving effect to conflict of law principles. 

        5.2    Waiver.    No delay or failure by a Party to enforce any of its rights and obligations
hereunder shall be construed as a waiver of such rights and obligations, unless such waiver is expressly set forth in writing by such Party. Any written waiver by a Party of its rights to enforce any
provision of this Agreement shall not be construed as a continuing waiver of such Party's rights to enforce the same or other provisions of this Agreement. 

        5.3    Relationship of the Parties.    For purposes of this Termination Agreement, the
relationship among the Parties is that of an independent contractor. Nothing herein contained shall be deemed to create any agency, employment, joint venture or partnership relationship between any of
the Parties hereto. Except as otherwise expressly set forth herein, no Party shall have any power to bind or obligate any other Party in any manner whatsoever. 

        5.4    Notice.    Any notice, consent, request or waiver required or permitted to be given or
sent under this Agreement shall be in writing and sent by personal delivery, facsimile transmission (with confirmation copy by first-class mail), certified or registered mail (postage prepaid), or
internationally recognized overnight courier, to the Parties at the addresses and facsimile numbers indicated below: 

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If
to Valeant: 

Valeant
Pharmaceuticals North America One Enterprise

Aliso Viejo, California 92656

Attention: General Counsel

Facsimile: 949-461-6641 

with
a copy to: 

Skadden,
Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Attention: Bruce J. Goldner, Esq.

Facsimile: 917-777-2972 

If
to Metabasis: 

Metabasis
Therapeutics, Inc.

11119 North Torrey Pines Road

La Jolla, CA 92037

Attention: Chief Executive Officer

Facsimile: 858-458-3504 

with
a copy to: 

Wilson
Sonsini Goodrich & Rosati P.C.

650 Page Mill Road

Palo Alto, California 94304-1050

Attention: Michael J. O'Donnell

Facsimile: 650-493-6811 

If
to Schering: 

Schering
Corporation

2000 Galloping Hill Road

Kenilworth, NJ 07033

Attn: Senior Vice President, Global Licensing & Strategic Alliances

Facsimile: 908-298-7366 

with
a copy to: 

Attn:
Senior Legal Director, Licensing

Facsimile: 908-298-2739 

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        5.5    Entire Agreement.    This Termination Agreement together with the surviving provisions
of the Transaction Agreements, embodies the entire understanding between the Parties relating to the subject matter hereof, and as of the Effective Date supersedes all prior understandings or
agreements between the Parties (whether written or oral) with respect thereto. 

        5.6    Severability.    If any provision of this Termination Agreement is finally determined
to be invalid, unlawful or incapable of being enforced in a jurisdiction, (i) it will be deemed to be severed from this Termination Agreement in such jurisdiction, (ii) every other
provision of this Termination Agreement will remain in full force and effect in such jurisdiction, (iii) the Parties will negotiate in good faith to modify this Termination Agreement so as to
achieve the original intent of the Parties as closely as possible in an acceptable manner with respect to such jurisdiction and (iv) such invalidity, unlawfulness or unenforceability will not
affect the interpretation or enforcement of this Termination Agreement in any other jurisdiction. 

        5.7    Amendments.    This Agreement may not be altered or otherwise amended except by an
instrument in writing signed by authorized representatives of each of the Parties. 

        5.8    Counterparts.    This Termination Agreement may be executed in any number of
counterparts and by facsimile, each of which shall be deemed to be an original and all of which taken together will constitute one and the same instrument. 

        5.9    Further Assurances.    Each Party will duly execute and deliver, or cause to be duly
executed and delivered, such further instruments and do and cause to be done such further actions as any other Party may reasonably request in connection with this Termination Agreement in order to
give effect to the terms and conditions of this Termination Agreement. 

        5.10    Assignment.    Neither this Termination Agreement nor any interest under this
Termination Agreement may be assigned by any Party without the prior written consent of all of the other Parties hereto, except that any Party may assign this Termination Agreement, in whole or in
part, and/or transfer rights or delegate obligations under this Termination Agreement, to an Affiliate or to any third party who acquires all or substantially all of the business of the assigning
Party and/or substantially all of the business to which this Termination Agreement relates (whether by merger, sale of assets or otherwise); provided
that such Affiliate or other third party successor in interest promptly agrees in writing to be bound by the terms of this Termination Agreement. Any assignment that does not comply with this
Section 5.10 shall be null and void. 

[Remainder of this page intentionally left blank.]

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        IN
WITNESS WHEREOF, the Parties intending that this Termination Agreement be binding on each of the Parties and their respective successors and assigns have caused this Termination
Agreement to be executed by their respective duly authorized representatives as of the dates set forth below. 

	
 SCHERING CORPORATION	
 	

 
	
 By:
	
 	

 
	
 Name:
	
 	

 
	
 Title:
	
 	

 
	
 Date:
	
 	

 
	
 	
 	

 
	
 VALEANT PHARMACEUTICALS NORTH AMERICA	
 	

 
	
 By:
	
 	

 
	
 Name:
	
 	

 
	
 Title:
	
 	

 
	
 Date:
	
 	

 
	
 	
 	

 
	
 METABASIS THERAPEUTICS, INC.	
 	

 
	
 By:
	
 	

 
	
 Name:
	
 	

 
	
 Title:
	
 	

 
	
 Date:
	
 	

 
	
 	
 	

 

10

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Exhibit 10.32

Execution Copy

TERMINATION AGREEMENT

RecitalsQuickLinks
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Exhibit 10.33    
    

 
 

TERMINATION AGREEMENT    
    

        This Termination Agreement (the "Agreement") is made as of this 30th day of January 2008 (the "Termination Date") by and between Daiichi
Sankyo Company, Ltd. ("Daiichi Sankyo"), a Japanese corporation having its principal place of business at 5-1 Nihonbashi-Honcho, 3-chome, Chuo-ku, Tokyo
103-8426, Japan, and Metabasis Therapeutics, Inc. ("Metabasis"), a Delaware corporation having its principal place of business at 11119 North Torrey Pines Road, La Jolla, California
92037. Capitalized terms used herein but not otherwise defined in this Agreement shall have the meanings set forth in the Amended and Restated Collaborative Research and Development and License
Agreement between Sankyo Co., Ltd. (which was merged with Daiichi Sankyo as of April 1, 2007) and Metabasis, dated June 30, 1999 (the "License Agreement"). 

WITNESSETH:  

        WHEREAS, Daiichi Sankyo and Metabasis entered into the License Agreement pursuant to which the parties conducted a research program and Daiichi Sankyo commenced
clinical development on the Licensed Compound known as CS-917 and also entered into the Exclusive Option Agreement, dated as of October 21, 2002 (the "Option Agreement") pursuant to
which the parties conducted additional activities in the Field, which Option Agreement has expired; and 

        WHEREAS,
Daiichi Sankyo and Metabasis have mutually agreed to terminate the License Agreement; 

        NOW,
THEREFORE, in consideration of the premises and the mutual agreements, covenants, and conditions set forth in this Agreement and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Daiichi Sankyo and Metabasis, intending to be legally bound, hereby agree as follows: 

1.     Termination of License Agreement. 

                (a)   Daiichi
Sankyo and Metabasis each agrees that the License Agreement shall be terminated as of the Termination Date. Notwithstanding anything to the
contrary in the License Agreement, effective upon the Termination Date, all rights and obligations of the parties under the License Agreement shall terminate except as expressly set forth in this
Termination Agreement. All rights to all compounds discovered or generated in the course of research and development activities conducted by the parties under the License Agreement and/or the Option
Agreement, including, without limitation, all Compounds, shall revert to (i) Metabasis if such compounds were discovered or generated by Metabasis or were licensed to Metabasis from a Third
Party and (ii) Daiichi Sankyo if such compounds were discovered or generated by Daiichi Sankyo. 

                (b)   MTI
Inventions shall continue to be owned by Metabasis and Sankyo Inventions shall continue to be owned by Daiichi Sankyo, except as provided in
Section 2(c). 

 

                (c)   Notwithstanding
the termination of the License Agreement, Daiichi Sankyo and Metabasis, as applicable, shall undertake the obligations as set forth in
Section 1(a) above and Sections 2 and 3 below. 

2.    Outstanding Obligations with Respect to Daiichi Sankyo.    Daiichi Sankyo and Metabasis each agrees and acknowledges that, as
soon as practicable after the Termination Date, with respect to Daiichi Sankyo: 

                (a)   Daiichi
Sankyo shall keep open and active the Investigational New Drug Application filed with the Food and Drug Administration ("FDA") for the Licensed
Compound, as well as any comparable application(s) filed with any regulatory body in any other jurisdiction for the Licensed Compound (the "Regulatory Filings") while the following actions described
in this Section 2(a) are taken. Daiichi Sankyo shall, promptly after its finalization, deliver to Metabasis (i) the final study report for the clinical study
(CS-917-A-U205), and (ii) the final study reports for the clinical pharmacology studies (U-111 Cimet/Quin; U-113
BA-abbreviated CTR; and U112 14C/ADME). Daiichi Sankyo confirms that there are no final study reports with respect to the Licensed Compound to be written other than those referenced in the
preceding sentence. Metabasis shall, within 90 days after receipt of all such final study reports, notify Daiichi Sankyo in writing whether Metabasis elects to have Daiichi Sankyo transfer the
Regulatory Filings to Metabasis or to have Daiichi Sankyo close the Regulatory Filings. Effective upon written notice by Metabasis to Daiichi Sankyo that Metabasis elects to have Daiichi Sankyo
transfer the Regulatory Filings to Metabasis, Daiichi Sankyo shall, and hereby does effective upon such written notice, transfer and assign the Regulatory Filings to Metabasis so that Metabasis may
conduct development activities with the Licensed Compound pursuant to such Regulatory Filings. Daiichi Sankyo shall also promptly transfer to Metabasis all documentation with respect to the Regulatory
Filings and shall make such filings with the FDA and any other applicable regulatory body as necessary or appropriate to effect such transfer and assignment to Metabasis. Daiichi Sankyo will bear any
costs with respect to such transfer and assignment to Metabasis and related filings. If Metabasis elects to have Daiichi Sankyo close the Regulatory Filings or does not notify Daiichi Sankyo in
writing within such time frame, then Daiichi Sankyo shall promptly take all necessary actions to close the Regulatory Filings. 

                (b)   Daiichi
Sankyo shall, and hereby does, transfer and assign all data in the Regulatory Filings and all information and data from any clinical or preclinical
studies of the Licensed Compound conducted by or on behalf of Daiichi Sankyo, including statistical models, integrated and individual data sets, final reports and all regulatory correspondence, to
Metabasis, which information and data Metabasis may use for research, development and commercialization of the Licensed Compound and any product containing the Licensed Compound by or on behalf of
Metabasis, including through any affiliate, licensee or assignee. Daiichi Sankyo shall also promptly transfer to Metabasis, at Daiichi Sankyo's expense, all documentation with respect to such
information and data. Daiichi Sankyo shall provide such data and Regulatory Filings to Metabasis in electronic format. 

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                (c)   Daiichi
Sankyo shall, and hereby does, assign its interest in (i) patent application No. MTI037 and (ii) the Sankyo Invention patent
applications numbered FP0529, and FP0626 (collectively, the "Patent Applications", as more fully described in Exhibit A-1 attached hereto) to Metabasis, and Metabasis shall
thereafter bear all responsibility, expenses and costs relating to such Patent Applications; provided, however, and subject to, Metabasis granting to Daiichi Sankyo a non-exclusive, fully
paid-up, perpetual, irrevocable, worldwide license, including the right to grant sublicenses, to the Patent Applications. Daiichi Sankyo shall promptly transfer to Metabasis all
documentation with respect to the Patent Applications, including, without limitation, all correspondence with any patent office, and shall make such filings with each applicable patent office as
necessary or appropriate to effect the assignment of the Patent Applications to Metabasis. Daiichi Sankyo will bear any costs with respect to such transfer and assignment to Metabasis of the Patent
Applications and related filings. Daiichi Sankyo confirms to Metabasis that Daiichi Sankyo does not own or control any patent, patent application or invention with respect to compounds discovered,
generated or developed in the course of research and development activities conducted by the parties under the License Agreement or the Option Agreement other than the Patent Applications. Daiichi
Sankyo shall abandon the Daiichi Sankyo Invention patent applications numbered FP0318, FP0530, FP0706, FP0603 and JP2006-251995 (collectively, the "Abandoned Applications", as more fully
described in Exhibit A-2 attached hereto) and shall not, whether directly or indirectly, revive or seek to revive all or any part of the Abandoned Applications. 

                (d)   Daiichi
Sankyo confirms to Metabasis that Daiichi Sankyo has ceased, in accordance with the agreement between Metabasis and Daiichi Sankyo, all activities
related to the toxicology, chemistry manufacturing and controls, and pharmacokinetic studies and activities relating to the Licensed Compound set forth in Exhibit B attached hereto, and shall
not use any materials, data or information from such activities, provided that Daiichi Sankyo shall, at Daiichi Sankyo's cost, transfer 3 kg from the inventory of API described in Exhibit B to
Metabasis. 

                (e)   Daiichi
Sankyo shall remain responsible for all liability, obligations, costs and expenses related to all studies and activities relating to the Licensed
Compound conducted by or on behalf of Daiichi Sankyo, including, without limitation, those studies and activities set forth in Exhibit B, and shall indemnify and hold harmless Metabasis and its
directors and employees with respect to any claims or losses arising from or relating to any such studies and activities, except to the extent that any claims or losses are based solely upon studies
and activities for which Metabasis has an indemnification obligation under Section 3(b). 

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                (f)    Daiichi
Sankyo shall destroy all FBPase constructs and related expression vectors and protocols for screening and shall confirm in writing to Metabasis
that all of such items have been destroyed. 

                (g)   Daiichi
Sankyo shall, at Daiichi Sankyo's expense, store blood samples obtained in connection with studies of the Licensed Compound and shall not use such
blood samples unless subsequently agreed in writing by Daiichi Sankyo and Metabasis for potential future pharmacogenomic studies. Should Daiichi Sankyo and Metabasis not agree on the pharmacogenomic
studies, Daiichi Sankyo may destroy such blood samples. 

        (h)   Daiichi
Sankyo may publish information from non-clinical studies of the Licensed Compound as summarized on Exhibit C subject to compliance with the
conditions of this Section 2(h). Before any such material is submitted for publication, Daiichi Sankyo shall first deliver a complete copy of the proposed publication to Metabasis at least
30 days prior to submitting the material to a publisher and obtain Metabasis' written consent to proceed with such publication, provided that Metabasis shall notify Daiichi Sankyo of any
comments it may have within 20 days from the date which it receives such proposed publication from Daiichi Sankyo and shall not unreasonably withhold such consent. 

3.     Outstanding Obligations with Respect to Metabasis.  

                (a)   Daiichi
Sankyo and Metabasis each agrees and acknowledges that, as soon as practicable after the Effective Date, with respect to Metabasis, Metabasis shall
(i) accept assignment and assume full title and ownership of the Patent Applications and (ii) grant to Daiichi Sankyo a non-exclusive, fully paid-up, perpetual,
irrevocable, worldwide license, including the right to grant sublicenses, to the Patent Applications. 

                (b)   Metabasis
shall indemnify and hold harmless Daiichi Sankyo and its directors and employees with respect to any claims or losses arising from or relating to
any future studies or activities conducted by Metabasis in connection with, or relating to, the Licensed Compound, except to the extent that any claims or losses are based solely upon studies and
activities for which Daiichi Sankyo has an indemnification obligation under Section 2(e). 

4.    Indemnification Procedure.    A party entitled to indemnification pursuant to Sections 2(e) or 3 (b) shall
notify the indemnifying party promptly of any claim that might give rise to a claim of indemnification, shall allow the indemnifying party to handle the defense of the claim (provided the indemnifying
party acknowledges its obligation to indemnify hereunder), shall cooperate in the defense of such claim, and shall not settle such claim without the indemnifying party's written consent (which shall
not be unreasonably withheld, delayed or conditioned). An indemnified party shall have the right to participate in the defense of any matter as to which indemnification is being provided with its own
counsel and at its own expense. 

4

 

5.    Release.    In consideration of the foregoing agreements, acknowledgments and obligations, except as expressly set forth in
this Agreement, Daiichi Sankyo and Metabasis each agree that the other shall no longer bear any liability, duty, or obligation whatsoever arising under or related to the License Agreement or any
matters relating to the relationship between the parties with respect to research and development of compounds and products, including Compounds, for treatment of diabetes, and shall be immediately
released from any and all such liabilities, duties or obligations arising prior to, and existing at, the time of this Agreement. Each party acknowledges that it has read and understood
Section 1542 of the Civil Code of the State of California (set forth below) and hereby expressly waives and relinquishes all rights and benefits under Section 1542 and any law or legal
principle of similar effect in any jurisdiction with respect to the release set forth in this Section 5: 

A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must
have materially affected his settlement with the debtor.

6.    Survival.    The provisions of Article 11 (Confidentiality) shall survive termination of the License Agreement;
provided that the parties acknowledge and agree that all Information transferred or assigned to Metabasis pursuant to this Agreement shall be Information of Metabasis. 

7.    Notices.    All notices required or permitted under this Agreement shall be in writing and shall be deemed to have been duly
given when: (i) delivered by hand, courier, or express mail service (with written confirmation of receipt); (ii) sent by means of facsimile or other wire transmission (with provision for
assurance of receipt in a manner typical with respect to communications of that type); or (iii) mailed by registered or certified first class mail, return receipt requested, to the address or
facsimile (fax) number set forth below (or to such other person, address, or facsimile (fax) number as a party may, from time to time, designate by written notice): 

	(i)
	if
to Daiichi Sankyo: 

Daiichi
Sankyo, Company, Ltd.

2-58, Hiromachi 1 chome

Shinagawa-ku, Tokyo 140-8710

Japan

Attention: General Manager, Global Project Management,

                   R&D Division

Fax: 81-3-5740-3602 

Vice
President, General Counsel and Secretary

Daiichi Sankyo, Inc.

Two Hilton Court

Parsippany, NJ 07054

Fax: 973-630-2808 

5

 

	(ii)
	if
to Metabasis: 

Metabasis
Therapeutics, Inc.

11119 North Torrey Pines Road

La Jolla, California 92037

Attention: President and Chief Executive Officer

Fax: 858-458-3504 

With
a copy to: 

Cooley
Godward Kronish LLP

4401 Eastgate Mall

San Diego, California 92121

Attention: Kay Chandler

Fax: 858-550-6420 

8.    Publicity.    A party shall not, except with the prior written consent of the other party, issue, or cause to be issued, any
press release, or other public statement on or in any way related to this Agreement or the License Agreement or the rights and obligations thereunder; provided, however, that either party may
(i) issue statements as required by applicable law and (ii) disclose information or issue public statements already approved by a party pursuant to the License Agreement, or with the
prior consent of the other party. 

9.    Governing Law.    This Agreement, including, without limitation, its construction, interpretation, breach, and damages for
breach, shall be governed by and construed in accordance with the laws of the State of California (without regard to its conflict of laws principles). 

10.    Waiver.    A party's failure to exercise or enforce any right conferred upon it hereunder shall not be deemed a waiver of any
such right or any other right or operate to bar the exercise or enforcement thereof at any time or times thereafter; nor shall a party's waiver of any right hereunder at any time be deemed a waiver
thereof for any other time. 

11.    Severability.    If any provision of this Agreement should be finally determined by a court of competent jurisdiction to be
invalid, illegal or unenforceable for any reason, the parties shall negotiate in good faith a valid, legal and enforceable substitute provision that most nearly reflects the original intent of the
parties and all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the parties as nearly as may
be possible. Such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction. 

12.    Further Assurances.    Each of the parties shall perform such acts, execute and deliver such instruments and documents, and
do all such other things as may be reasonably necessary to accomplish the purpose and transfer the intellectual property rights, filings, data and activities contemplated under this Agreement. 

6

 

13.    Counterparts, Headings and Ambiguities.    The division of this Agreement into sections and the insertion of headings are for
convenience of reference only and shall not affect the construction or interpretation of this Agreement. This Agreement may be executed in any number of counterparts, each of which shall be deemed an
original but all of which taken together shall constitute one and the same instrument. In interpreting any provision of this Agreement, no weight shall be given to, nor shall any construction or
interpretation be influenced by, the fact that counsel for one of the parties drafted this Agreement, each party recognizing that it and its counsel have had an opportunity to review this Agreement
and have contributed to the final form of the same. 

14.    Entire Agreement.    This Agreement represents and contains the full and complete understanding and agreement of the parties
with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, statements, clauses, and conditions with respect to the transactions contemplated by
this Agreement or which may be contained in any other form or document. 

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

	

DAIICHI SANKYO COMPANY, LTD.	
 	

METABASIS THERAPEUTICS, INC.
	

By:    /s/ Kazunori Hirokawa
	
 	

By:    /s/ Ed Baracchini

	

Name:    Kazunori Hirokawa
	
 	

Name:    Ed Baracchini

	

Title:    Executive Officer, Head of R&D Division
	
 	

Title:    SVP, Business Development

	

Date:    Jan 30, 2008
	
 	

Date:    Jan. 31, 2008

7

 

 

 
 

EXHIBIT A-1
  
    PATENT APPLICATIONS    
    

MT1037  

Title:    Combination of FBPase Inhibitor and anti diabetic agents  

<Combination use> FBPase inhibitors + Anti-diabetics (Insulin, SU etc.) 

	country
	 	application No.
	 	filing date
	 	 

	AU	 	2001273271	 	7/5/2001	 	 
	BR	 	P10112212-6	 	7/5/2001	 	 
	CA	 	2412142	 	7/5/2001	 	 
	CN	 	1814924.3	 	7/5/2001	 	 
	CZ	 	PV2003-5	 	7/5/2001	 	 
	EP	 	1952530.2	 	7/5/2001	 	 
	HK	 	 	 	 	 	 
	HU	 	US01/21557	 	7/5/2001	 	 
	ID	 	2002000977	 	7/5/2001	 	 
	IL	 	153513	 	7/5/2001	 	 
	IN	 	PCT/200201873	 	7/5/2001	 	 
	JP	 	2002-508433	 	7/5/2001	 	 
	KR	 	2003-7000126	 	7/5/2001	 	 
	MX	 	PA/a/2002/012713	 	7/5/2001	 	 
	NO	 	2003-0034	 	7/5/2001	 	 
	NZ	 	523227	 	7/5/2001	 	 
	PL	 	365779	 	7/5/2001	 	 
	RU	 	2003 7000126	 	7/5/2001	 	 
	SG	 	200207558-8	 	7/5/2001	 	 
	SK	 	PP6-2003	 	7/5/2001	 	 
	US	 	09/900364	 	7/5/2001	 	 
	VN	 	1-2003-00101	 	7/5/2001	 	 
	WO	 	PCT/US2001/021557	 	7/5/2001	 	 
	ZA	 	2003/0044	 	7/5/2001	 	 

8

 

FP0529  

Title:    Medicinal composition for treating diabetes  

<Combination use> FBPase inhibitors + Biguanides 

	country
	 	application No.
	 	filing date
	 	 

	BR	 	PI0519006-1	 	12/12/2005	 	 
	CA	 	2590883	 	12/12/2005	 	 
	CN	 	 	 	12/12/2005	 	 
	EP	 	5814764.6	 	12/12/2005	 	 
	JP	 	2005-357073	 	12/12/2005	 	 
	KR	 	2007-7013097	 	12/12/2005	 	 
	TW	 	94143827	 	12/12/2005	 	 
	US	 	11/792879	 	12/12/2005	 	 
	WO	 	PCT/US2005/022739	 	12/12/2005	 	 

FP0626  

Title:    Drug containing FBPase Inhibitor  

<Combination use> CS-917 + MK0431 (DPP-IV inhibitor) 

	country
	 	application No.
	 	filing date
	 	 

	TW	 	95130334	 	8/18/2006	 	 
	WO	 	PCT/JP2006/316292	 	8/21/2006	 	 

9

 
 
 

EXHIBIT A-2
  
    ABANDONED APPLICAT1ONS    
    

FP0318  

Title:    Preventive agents for diabetes mellitus

<Use>
treatment for IGT 

	country
	 	application No.
	 	filing date
	 	 

	EP	 	3765368	 	7/23/2003	 	 
	JP	 	2003-200333	 	7/23/2003	 	 
	US	 	10/522401	 	7/23/2003	 	 
	WO	 	PCT/JP03/09348	 	7/23/2003	 	 

FP0530  

Title:    Medicinal composition containing FBPase Inhibitor

<Combination
use> FBPase inhibitors + CS-011 

	country
	 	application No.
	 	filing date
	 	 

	BR	 	PI0519015-0	 	12/14/2005	 	 
	CA	 	2591416	 	12/14/2005	 	 
	CN	 	 	 	12/14/2005	 	 
	EP	 	5816808.9	 	12/14/2005	 	 
	JP	 	2005-359751	 	12/14/2005	 	 
	KR	 	2007-7013335	 	12/14/2005	 	 
	TW	 	94144174	 	12/14/2005	 	 
	US	 	11/818534	 	12/14/2005	 	 
	WO	 	PCT/US2005/022915	 	12/14/2005	 	 

10

 

FP0706  

Title:    Preparation produced by dry process

<Formulation>
process for preparing CS-917 tablet 

	country
	 	application No.
	 	filing date
	 	 

	TW	 	96112406	 	4/10/2007	 	 
	WO	 	PCT/JP2007/057832	 	4/9/2007	 	 

Back-ups  

FP0603  

Title:    Thiazole compound

	country
	 	application No.
	 	filing date
	 	 

	JP	 	2006-82453	 	3/24/2006	 	 
	WO	 	PCT/JP2006/305940	 	3/24/2006	 	 

JP2006-251995  

Title:    Pharmaceutical composition containing thiazole compound

	country
	 	application No.
	 	filing date
	 	 

	JP	 	2006-251995	 	9/19/2006	 	 

11

 

 

 
 

EXHIBIT B
  
    ONGOING STUDIES AND ACTIVITIES RELATED TO THE LICENSED COMPOUND    
    

TOX  

	Mouse CA study	 	-Start of administration: May 24, 2006	 	-Facility BOZO research (CRO, Japan)
	

Rat CA study	
 	

-Start of Administration: June 13, 2006	
 	

-Facility: BOZO research (CRO, Japan)
	
 	
 	

 	
 	

 

CMC  

	Inventory of API (final method) in GMP condition	 	About 300kg	 	To be retested
	

Inventory of clinical supply in GMP condition	
 	

25mg 550K tabs, 50 mg 550K tabs, 100mg 500K tabs and placebo 1.2M tabs	
 	

Use by date

-Placebo: Sep 2011

-25mg, 50mg, 100mg: Oct 2010
	

Stability studies (API, DP)	
 	

DP: Planned for 3 years (Oct 2006-Oct 2009)	
 	

 
	

DMF	
 	

Annual report was submitted in July 2007	
 	

 
	

  	

 	

 	

 	

 

PK  

	Measurement of PK sample in the 205 study	 	Preliminary measure was completed	 	-Facility: Simbec, UK

12

 

 

 
 

EXHIBIT C
  
    PUBLICATION PLAN RELATED TO NON-CLINICAL STUDIES OF CS-917 AND BACKUP COMPOUNDS    
    

TOX  

	Area
	 	Title (tentative)
	 	Timing for submission

	Pharmacology	 	CS-917 inhibits hepatic GNG In vivo and improves post prandial hyperglycaemia in GK rats	 	1Q 2008
	

Pharmacology	
 	

CS-917 decreases PG and acts on liver as prodrug in cynomolgus monkeys	
 	

1Q 2008
	

Pharmacology	
 	

CS-917 decreases hepatic glucose production, whereas metformin increases intestinal lactate production	
 	

1Q 2008
	

Pharmacology	
 	

Different effects of CS-917 and metformin in vivo and possibility of combination treatment	
 	

2Q 2008
	

Pharmacology	
 	

Enhancement of Insulin action improves lactate metabolism in combination with CS-917	
 	

3Q 2008
	

ADME	
 	

Preclinical Pharmacokinetics and ADME of CS-917	
 	

by the end of 2009
	

ADME	
 	

Identification of renal transporters in human	
 	

by the end of 2009
	

ADME	
 	

Identification of activating enzymes in human	
 	

by the end of 2009
	

ADAM	
 	

Species differences, including human, in hepatic uptake	
 	

by the end of 2009
	

ADME	
 	

Species differences, including human, in renal excretion	
 	

by the end of 2009
	

ADME	
 	

Human Metabolism	
 	

by the end of 2009
	

Analysis	
 	

Elucidation of the chemical structure of volatile degradation product and their degradation mechanism for active pharmaceutical ingredients	
 	

4Q 2008
	

Process research	
 	

Development of manufacturing process for CS-917	
 	

by the end of 2009
	

Back up compounds (Medicinal chemistry)	
 	

Novel tricyclic derivatives as potent FBPase inhibitors (several articles*)	
 	

by the end of 2009
	

 	
 	

 	
 	

 

	*
	The
number of articles has not fixed yet. 

All
articles are subject to review by Metabasis before submission. 

Daiichi
Sankyo will not newly initiate studies related to those listed in this table. 

13

QuickLinks

Exhibit 10.33

TERMINATION AGREEMENT

EXHIBIT A-1 PATENT APPLICATIONS

EXHIBIT A-2 ABANDONED APPLICAT1ONS

EXHIBIT B ONGOING STUDIES AND ACTIVITIES RELATED TO THE LICENSED COMPOUND

EXHIBIT C PUBLICATION PLAN RELATED TO NON-CLINICAL STUDIES OF CS-917 AND BACKUP COMPOUNDS

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