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Exhibit 10.6    
    

*** Test Omitted and Filed Separately

CONFIDENTIAL TREATMENT REQUESTED

Under 17 C.F.R. §§ 200.80(b)(4) and 230.406  

  
 

    NM441 LICENSE AGREEMENT
  
    BETWEEN
  
    NIPPON SHINYAKU CO., LTD.
  
    AND
  
    OPTIMER PHARMACEUTICALS, INC.    
    

 

	ARTICLE 1	 	DEFINITIONS	 	1
	ARTICLE 2	 	GRANT OF LICENSE	 	4
	ARTICLE 3	 	DISCLOSURE OF INFORMATION	 	5
	ARTICLE 4	 	ADRs REPORTING	 	6
	ARTICLE 5	 	MILESTONE PAYMENTS	 	7
	ARTICLE 6	 	MINIMUM PURCHASING AMOUNT	 	7
	ARTICLE 7	 	REPORTS AND ACCOUNTING	 	8
	ARTICLE 8	 	DEVELOPMENT PROGRAM	 	9
	ARTICLE 9	 	SECRECY	 	10
	ARTICLE 10	 	REPRESENTATIONS	 	11
	ARTICLE 11	 	SUPPLY OF COMPOUNDS	 	14
	ARTICLE 12	 	SUPPLY PRICE	 	14
	ARTICLE 13	 	FORECAST AND FIRM ORDER	 	16
	ARTICLE 14	 	QUALITY	 	17
	ARTICLE 15	 	TITLE AND RISK OF LOSS	 	18
	ARTICLE 16	 	SALES PROMOTION	 	18
	ARTICLE 17	 	LIABILITIES	 	19
	ARTICLE 18	 	PATENT INFRINGEMENT AND EXTENSION	 	20
	ARTICLE 19	 	INFRINGEMENT ACTIONS BY THIRD PARTIES	 	20
	ARTICLE 20	 	COMPETITIVE PRODUCT	 	20
	ARTICLE 21	 	TRADEMARK	 	21
	ARTICLE 22	 	WITHHOLDING TAXES	 	21
	ARTICLE 23	 	DURATION AND TERMINATION	 	21
	ARTICLE 24	 	EFFECT OF TERMINATION	 	22
	ARTICLE 25	 	NOTICES	 	23
	ARTICLE 26	 	FORCE MAJEURE	 	24
	ARTICLE 27	 	ASSIGNMENT	 	24
	ARTICLE 28	 	WAIVER	 	24
	ARTICLE 29	 	GOVERNING LAW	 	25
	ARTICLE 30	 	ARBITRATION	 	25
	ARTICLE 31	 	ENTIRE AGREEMENT	 	25
	ARTICLE 32	 	MISCELLANEOUS	 	25
	ARTICLE 33	 	COUNTERPARTS	 	26
	

SCHEDULE 1(H)    DEVELOPMENT PROGRAM	
 	

28
	SCHEDULE 1(U)    SHINYAKU PATENT	 	35
	SCHEDULE 1(W)    SPECIFICATION

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LICENSE AGREEMENT    
    

This
Agreement is made on this 10th day of June, 2004 by and between 

NIPPON
SHINYAKU CO., LTD.,

a company organized and existing under the laws of Japan, having its principal office and place of business at 14, Nishinosho-monguchi-cho, Kisshoin, Minami-ku, Kyoto
601-8550, Japan (hereinafter referred to as "SHINYAKU") 

and

OPTIMER
PHARMACEUTICALS, INC.,

a company organized and existing under the laws of the State of Delaware, having its principal office and place of business at 10110 Sorrento Valley Road, Suite C, San Diego, CA 92121, U.S.A.
(hereinafter referred to as "OPTIMER"). 

WITNESSETH
THAT: 

        WHEREAS
(A), SHINYAKU is the proprietor of certain patents relating to the COMPOUND (hereinafter defined) and possesses technical information relating to the aforementioned
patents and the development, use and manufacture of the COMPOUND and the PRODUCT (hereinafter defined) formulated therefrom; 

        WHEREAS
(B), OPTIMER wishes to obtain an exclusive license in the TERRITORY (hereinafter defined) under the patents and technical information referred to in Recital
(A) above to develop, manufacture and commercialize the PRODUCT containing the COMPOUND referred to therein; 

        WHEREAS
(C), SHINYAKU represents it has the right to grant such license and is willing to grant to OPTIMER such license in the TERRITORY under the terms and conditions herein set
forth; 

        NOW
THEREFORE, it is hereby agreed as follows: 

 
 

ARTICLE 1
  
    DEFINITIONS    
    

	1.1
	The
following terms used in this Agreement shall have the meanings as defined hereunder:

	A.
	Adverse
Drug Reactions (ADR)s herein shall mean (i) any untoward medical occurrence in a patient or clinical investigation subject administered a pharmaceutical product and
which does not necessarily have a causal relationship to the treatment; and (ii) a response to a drug which is noxious and unintended and which occurs at doses normally used in man for
prophylaxis, diagnosis or therapy of disease or for modifications of physiological function.

	B.
	AFFILIATE
herein shall mean, with respect to either party, any corporation, partnership or other entity directly or indirectly owned by, owning, or under common ownership with such
party hereto, through common ownership of at least fifty percent (50%) of the stock or other equity interests having the power to vote for the election of directors, managers, or other executive
management of such corporation, partnership or other entity to be deemed as AFFILIATE but only for so long as such ownership of voting stock continues.

	C.
	AGREEMENT
TERM herein shall have the meaning set forth in ARTICLE 23 hereof.

	D.
	ANNUAL
NET SALES herein shall mean the aggregate amount of NET SALES (hereinafter defined) that are made in the TERRITORY during each calendar year that is included within the
AGREEMENT TERM.

	E.
	COMPETITIVE
PRODUCT herein shall mean any product containing a quinolone derivative other than the COMPOUND as a pharmaceutical active ingredient which is in the public domain 

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and
in and after the development stage of animal study as of the EFFECTIVE DATE of the Agreement. 

	F.
	COMPOUND
herein shall mean the chemical compound with a chemical name of
(±)6-Fluoro-1-methyl-7-[4-(5-methyl-2-oxo-1,3-dioxolen-4-yl)methyl-1-piperazinyl]-4-oxo-4H-
[1,3] thiazeto [3,2-a]quinoline-3-carboxylic acid, of which code name is designated as NM441.

	G.
	CONFIDENTIAL
INFORMATION herein shall mean information and data relating to the COMPOUND and/or the PRODUCT including, but not limited to the OPTIMER TECHNICAL INFORMATION and the
SHINYAKU TECHNICAL INFORMATION, and any information which is acquired, disclosed, exchanged or generated for the purposes of this Agreement.

	H.
	DEVELOPMENT
PROGRAM shall mean a development program including the timeline of each study as set forth in SCHEDULE 1(H), which is attached hereto and made a part hereof.

	I.
	DMF
shall mean the drug master file for the COMPOUND, and any amendments and supplements thereto, submitted by or on behalf of SHINYAKU, which shall contain all necessary information
concerning the composition, manufacture, control and storage of the COMPOUND.

	J.
	EFFECTIVE
DATE herein shall mean the date first appearing above.

	K.
	FDA
herein shall mean the United States Food and Drug Administration.

	L.
	FIELD
herein shall mean the prevention, treatment and cure for any diseases in human beings in all the therapeutic fields.

	M.
	FIRST
COMMERCIAL SALE herein shall mean the first sale of the PRODUCT in the TERRITORY by OPTIMER or its SUBLICENSEE to unrelated third parties after the HEALTH REGISTRATION
(hereinafter defined) has been granted in the TERRITORY.

	N.
	HEALTH
REGISTRATION herein shall mean governmental authorizations and/or approvals required by the competent authorities in the TERRITORY for manufacturing, marketing and selling of
the PRODUCT, and for importing of the COMPOUND in the TERRITORY, if necessary, including but not limited to, product registration(s) and price and marketing approvals, as applicable.

	O.
	NET
SALES herein shall mean the collected gross invoiced sales of the PRODUCT by OPTIMER and its SUBLICENSEES, including OPTIMER's AFFILIATES, to unrelated third parties, less the
following deductions from such gross invoiced sales in each case actually paid or taken with respect to the sale of the PRODUCT:

	(i)
	reasonable
and customary discounts, credits, rebates, allowances, and adjustments; and all rejections, recalls and returns;

	(ii)
	price
reductions or rebates retroactively or otherwise imposed by government authorities;

	(iii)
	sales,
excise, turnover, value-added, and similar taxes assessed on the sale of the PRODUCT (but excluding income taxes);

	(iv)
	transportation,
importation and insurance directly chargeable to the sale of the PRODUCT;

	(v)
	reasonable
and customary chargebacks granted to drug wholesalers based upon sales to their customers where there are no direct shipments to such customers by OPTIMER or
its SUBLICENSEES.

	P.
	OPTIMER
PATENT herein shall mean all patent applications filed and/or patents issued in any country relating to the COMPOUND and/or the PRODUCT which may be necessary or useful in
making the COMPOUND or in developing, making, using, selling or registering the PRODUCT and which OPTIMER owns, possesses and controls or has licensed from a third party (with the 

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right
to sublicense to SHINYAKU without breaching any contractual obligation with such third party) during the AGREEMENT TERM. OPTIMER PATENT shall include all provisional applications, divisions,
continuations, continuations-in-part, additions, registrations, confirmations, renewals, extensions, supplemental protection certificates, re-examinations and
reissues of the above patent applications and patents. 

	Q.
	OPTIMER
TECHNICAL INFORMATION herein shall mean all non-patented technical data and information, improvements, trade secrets, technology and/or know-how
relating to the COMPOUND and/or the PRODUCT which may be necessary or useful in making the COMPOUND or in developing, making, using, selling or registering the PRODUCT, and which OPTIMER and its
SUBLICENSEES have itself developed or discovered, own, or possess and control or have licensed from a third party (with the right to sublicense to SHINYAKU without breaching any contractual obligation
with such third party, including to SUBLICENSEES) during the AGREEMENT TERM. This term includes, without limitation;

	i)
	specifications
for the PRODUCT;

	ii)
	chemical
data on the COMPOUND;

	iii)
	processes,
instructions, procedures and techniques for the PRODUCT;

	iv)
	toxicological,
pharmacological, pharmacokinetic data on the COMPOUND and the PRODUCT;

	v)
	clinical
data including ADRs;

	vi)
	documents
used for the New Drug Application in the TERRITORY;

	vii)
	package
inserts for the PRODUCT; and

	viii)
	commercial
and marketing information.

	R.
	PRODUCT
herein shall mean any pharmaceutical preparation suitable for administration for human use containing the COMPOUND in the FIELD as an active ingredient.

	S.
	QUARTER
herein shall mean each period of three (3) consecutive calendar months, ending March 31, June 30, September 30, and December 31.

	T.
	REASONABLE
COMMERCIAL EFFORTS herein shall mean efforts which are consistent with those utilized by OPTIMER for its own internally developed pharmaceutical products of similar market
potential at a similar stage of its product life taking into account the existence of other competitive products in the marketplace or under development, the proprietary position of the product, the
profitability of the product and other relevant factors.

	U.
	SHINYAKU
PATENT herein shall mean all patent applications filed and/or patents issued in any country relating to the COMPOUND and/or the PRODUCT, which may be necessary or useful in
developing, making, using, selling or registering the PRODUCT and which SHINYAKU owns, possesses and controls or has licensed from a third party (with the right to sublicense to OPTIMER without
breaching any contractual obligation with such third party) during the AGREEMENT TERM. SHINYAKU PATENT shall include all provisional applications, divisions, continuations,
continuations-in-part, additions, registrations, confirmations, renewals, extensions, supplemental protection certificates, re-examinations and reissues of the
above patent applications and patents. A list of the SHINYAKU PATENTS as of the EFFECTIVE DATE is attached hereto as SCHEDULE 1(U) and the list shall be updated by SHINYAKU during the AGREEMENT
TERM.

	V.
	SHINYAKU
TECHNICAL INFORMATION herein shall mean all non-patented technical data and information, improvements, trade secrets, technology and/or know-how
relating to the 

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COMPOUND
and/or the PRODUCT, which may be necessary or useful in developing, making, using, selling or registering the PRODUCT, and which SHINYAKU has itself developed or discovers, owns, or possesses
and controls or has licensed from a third party (with the right to sublicense to OPTIMER without breaching any contractual obligation with such third party) during the AGREEMENT TERM. This term
includes, without limitation; 

	i)
	SPECIFICATION;

	ii)
	chemical
data on the COMPOUND;

	iii)
	processes,
instructions, procedures and techniques for the PRODUCT;

	iv)
	toxicological,
pharmacological, pharmacokinetic data on the COMPOUND and the PRODUCT;

	v)
	clinical
data including ADRs;

	vi)
	package
inserts for the PRODUCT; and

	vii)
	commercial
and marketing information.

	W.
	SPECIFICATION
herein shall mean tests and standards of COMPOUND described in SCHEDULE 1(W) which is attached hereto and made a part hereof and other items which shall
hereinafter be designated and/or modified in writing between the parties as necessary for manufacturing PRODUCT.

	X.
	SUBLICENSEE
herein shall mean any third party including an AFFILIATE of OPTIMER which is sublicensed by OPTIMER or, as the case may be, SHINYAKU, the rights hereafter set forth in
Sections 2.2 and 2.3, but excluding distributors and wholesalers.

	Y.
	TERRITORY
herein shall mean U.S.A.

	Z.
	TESTING
STANDARDS herein shall mean the testing standards specified in the HEALTH REGISTRATION.

	AA.
	TRADEMARK
herein shall mean any trademark to be owned and used for the PRODUCT in the TERRITORY under this Agreement by OPTIMER and its SUBLICENSEE.

	BB.
	VALID
CLAIM herein shall mean a claim of any unexpired SHINYAKU PATENT which has not been withdrawn, cancelled or disclaimed nor held invalid or unenforceable by a court or tribunal
of competent jurisdiction in an unappealed or unappealable decision.

	1.2
	Rules of Construction.    The singular includes the plural and vice versa, words denoting any gender include all genders.
Where the context so admits or requires, references to SHINYAKU, OPTIMER, their respective AFFILIATES and SUBLICENSEES shall include their respective employees and agents. The words "include" or
"including" shall be construed as incorporating, "without limitation".

	1.3
	References.    References to Recitals, ARTICLES, Sections and SCHEDULES are reference to Recitals, ARTICLES, Sections and
SCHEDULES of this Agreement.

	1.4
	Headings.    The headings are for ease of reference only and are not part of this Agreement for the purpose of construction.

 
 

ARTICLE 2
  
    GRANT OF LICENSE    
    

	2.1
	License Grant to OPTIMER.    Under the terms and conditions herein set forth, SHINYAKU hereby grants to OPTIMER an exclusive
(even as to SHINYAKU) right and license in the FIELD 

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in
the TERRITORY under SHINYAKU PATENT and SHINYAKU TECHNICAL INFORMATION (i) to import and purchase the COMPOUND from SHINYAKU and (ii) to develop, make, have made, use, offer to sell
and sell the PRODUCT. 

	2.2
	Right to Sublicense.    The license granted to OPTIMER under Section 2.1 hereof includes the right to sublicense to
its AFFILIATE(s) and/or independent third parties in the TERRITORY. It is understood and agreed that no such SUBLICENSEE shall have any right to grant further sublicenses and any such
sublicense shall be automatically terminated upon termination of this Agreement for any cause whatever. OPTIMER hereby warrants that each sublicense agreement between OPTIMER and its SUBLICENSEE shall
be in writing and shall include the provision acknowledging that such sublicense is subject to the license granted to OPTIMER by SHINYAKU. OPTIMER hereby warrants that OPTIMER shall be wholly
responsible for every act and omission of its SUBLICENSEE and that the quality of the PRODUCT sold by its SUBLICENSEE shall be under OPTIMER's full control. OPTIMER shall be responsible for the
submission and accuracy of all reports by or on behalf of SUBLICENSEE required or contemplated hereby. OPTIMER shall be responsible for the performance of obligations of its SUBLICENSEE set forth
herein. OPTIMER agrees to notify SHINYAKU of every name and address of such SUBLICENSEE.

	2.3
	Manufacturing License.    In the event Shinyaku is not able to supply OPTIMA with the COMPOUND as described in
Section 11.3 and 14.3, SHINYAKU hereby shall grant to OPTIMER a non-exclusive, worldwide right and license for the TERRITORY under the SHINYAKU PATENT and SHINYAKU TECHNICAL INFORMATION to make
or have made COMPOUND for OPTIMER and its SUBLICENSEES' requirements. However, OPTIMER hereby covenants not to exercise the foregoing right and license to make or have made COMPOUND except as
expressly permitted in this Agreement.

	2.4
	License Grant to SHINYAKU under Optimer PATENT.    Under the terms and conditions herein set forth, OPTIMER shall grant to
SHINYAKU, (a) a perpetual and exclusive license with a right to sublicense outside the TERRITORY during the term of this Agreement and non-exclusive license with a right to
sublicense in the world after the termination of this Agreement, under OPTIMER PATENT free of charge, in case the invention in OPTIMER PATENT is derived exclusively from OPTIMER's own research and
development and (b) a first refusal right for a license outside the TERRITORY under OPTIMER PATENT, in case the invention in OPTIMER PATENT is derived from the third party (i) to
develop, make, have made, use, offer to sell and sell the PRODUCT; and (ii) to make or have made the COMPOUND (such a license outside the TERRITORY, an "OPTIMER LICENSE"). If OPTIMER
contemplates entering into an OPTIMER LICENSE with a third party, OPTIMER shall first notify SHINYAKU and, for a period of sixty (60) days following such notice, negotiate in good faith the
terms of an OPTIMER LICENSE exclusively with SHINYAKU. Following the expiration of such sixty (60) day period, if OPTIMER and SHINYAKU have not reached agreement on the terms of an OPTIMER
LICENSE, then OPTIMER shall have the right to enter into an OPTIMER LICENSE with any third party without further obligation to SHINYAKU. 

 
 

ARTICLE 3
  
    DISCLOSURE OF INFORMATION    
    

	3.1
	SHINYAKU PATENT and SHINYAKU TECHNICAL INFORMATION.    Promptly after EFFECTIVE DATE and from time to time thereafter during
AGREEMENT TERM, SHINYAKU shall disclose to OPTIMER all information regarding SHINYAKU PATENT and SHINYAKU TECHNICAL INFORMATION which, in OPTIMER's reasonable opinion, is necessary or helpful for
OPTIMER (i) to carry out the DEVELOPMENT PROGRAM and to obtain HEALTH 

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REGISTRATION,
(ii) to manufacture the PRODUCT from the COMPOUND, and (iii) to generally fulfill the purposes of this Agreement. 

	3.2
	Grant of Access to DMF and Regulatory Applications.    SHINYAKU or its designee shall submit the DMF to the FDA and shall
authorize OPTIMER to petition the FDA to review the DMF as part of the HEALTH REGISTRATION process to be undertaken by OPTIMER. Upon OPTIMER's request, SHINYAKU shall provide to OPTIMER true and
complete versions of any applications or filings for regulatory approvals outside the TERRITORY with respect to the PRODUCT, and all written and other information in SHINYAKU's possession or control,
including information concerning the composition of the COMPOUND or the PRODUCT or other such information as may be required by governmental authorities to enable OPTIMER to file for, prosecute and
maintain the HEALTH REGISTRATION. Further, SHINYAKU shall provide all letters of authorization, instruments and/or documents as OPTIMER may reasonably request for purposes of filing for, prosecuting
and maintaining the HEALTH REGISTRATION. SHINYAKU will promptly notify OPTIMER of any changes, modifications or deletions to the DMF, as required by the FDA "Guidelines for Drug Master Files"
Section VIIA and applicable regulatory standards, and shall not implement any such changes that would cause a delay in obtaining the HEALTH REGISTRATION without prior written agreement
with OPTIMER. Such changes may include, but are not limited to, modifications in production, testing, packaging or storage procedures related to the COMPOUND or the PRODUCT.

	3.3
	OPTIMER TECHNICAL INFORMATION.    OPTIMER agrees to disclose to SHINYAKU from time to time during AGREEMENT TERM all
information regarding OPTIMER TECHNICAL INFORMATION which OPTIMER and its SUBLICENSEES have heretofore developed or acquired or may hereafter develop or acquire during AGREEMENT TERM and SHINYAKU has
the right to use such OPTIMER TECHNICAL INFORMATION free of charge outside the TERRITORY only. OPTIMER TECHNICAL INFORMATION to be provided by OPTIMER hereunder shall include, but not be limited to,
the following:

	i)
	during
the period before filing of an application for HEALTH REGISTRATION of the PRODUCT in the TERRITORY, progress report on all studies and tests carried out by or on
behalf of OPTIMER, and data and documents obtained on each of such studies and tests; and

	ii)
	upon
filing or submission of the Investigational New Drug Application in the TERRITORY or the application for HEALTH REGISTRATION of the PRODUCT in the TERRITORY,
a copy of the documents so submitted or filed;

	iii)
	any
other OPTIMER TECHNICAL INFORMATION which shall be made available to SHINYAKU upon reasonable specific written request of SHINYAKU, provided that it is, at the time
of the request, in OPTIMER's possession and control.

	3.4
	Reciprocal Disclosures.    SHINYAKU may provide OPTIMER TECHNICAL INFORMATION free of charge to specific SHINYAKU licensees
and its sublicensees of the COMPOUND outside the TERRITORY, who hold license rights to the COMPOUND at the time of execution of this definitive License Agreement, including only Angelini
ACRAF S.p.A., YuHan Corporation or Meiji Seika Kaisha, Ltd. 

 
 

ARTICLE 4
  
    ADR REPORTING    
    

	4.1
	Procedure.    During this AGREEMENT TERM, OPTIMER shall apprise SHINYAKU of its standard operating procedures for the
investigation and reporting of ADRs concerning the COMPOUND and the PRODUCT. The parties hereto shall then promptly develop and agree upon procedures for the exchange of ADRs concerning the COMPOUND
and the PRODUCT. 

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The
parties hereto shall immediately implement such agreed procedures and shall provide each other on a regular basis with any information which has become available to them and which is relevant to
the safe use of the COMPOUND or the PRODUCT to the extent specified in the agreed procedures. Such procedures shall also apply to OPTIMER's SUBLICENSEES. 

	4.2
	Further Provisions.    Both as an integral part of the procedures referred to in Section 4.1 and as a separate
obligation under this Agreement, further provisions concerning the reporting and notification of ADRs shall be separately agreed upon by the parties hereto promptly after the EFFECTIVE DATE to comply
with regulatory requirements. 

 
 

ARTICLE 5
  
    MILESTONE PAYMENTS    
    

	5.1
	Milestone Payments.    In consideration of the rights granted to OPTIMER by SHINYAKU hereunder, OPTIMER agrees to make the
following payment in US Dollars to SHINYAKU by bank wire transfer or electronic funds transfer to such account as SHINYAKU shall designate at least ten (10) days before such payment is due:

	i)
	The
sum of [***] US Dollars (US$ [***]), on the later of (a) July 2, 2004, or (b) within
thirty (30) days after EFFECTIVE DATE;

	ii)
	The
sum of [***] US Dollars (US$ [***]), within thirty (30) days after the date of the first
New Drug Application filing in the TERRITORY.

	5.2
	Non-Refundability.    Except as specifically provided in this Agreement, the payments by OPTIMER as set forth in
ARTICLE 5 shall not be creditable or refundable for any reason. 

 
 

ARTICLE 6
  
    MINIMUM PURCHASING AMOUNT    
    

In
the event that the total amount of COMPOUND to be purchased by OPTIMER pursuant to Article 11 for each Period (as hereinafter defined) does not reach Minimum Purchasing Amount
for such period as set forth below, OPTIMER shall pay SHINYAKU the balance between such Minimum Purchasing Amount and the actual purchasing amount accrued during the said Period. 

Minimum Purchasing Amount  

	Period 1	Million Dollar (Dollar ,000,000)
	Period 2 (Full Calendar Year following Period 1)	Million Dollar (Dollar ,000,000)
	Period 3 (Full Calendar Year following Period 2)	Million Dollar (Dollar ,000,000)
	Period 4 (Full Calendar Year following Period 3 and thereafter)	Million Dollar (Dollar ,000,000)

These
amount shall be fixed through mutual consultation between the parties, before the FIRST COMMERCIAL SALE of PRODUCT in the TERRITORY. 

In
this paragraph, Period 1 shall mean the period starting on and from the date of the FIRST COMMERCIAL SALE of PRODUCT by OPTIMER or its SUBLICENSEES in the TERRITORY and ending on
December 31 of the following year including the first anniversary date of such FIRST COMMERCIAL SALE. No Minimum Purchasing Amount shall be required by SHINYAKU for any Period in the event that
OPTIMER's failure to achieve the Minimum Purchasing Amount for such Period is due to an event of force majeure or due to the failure of SHINYAKU either to deliver a 

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sufficient
quantity of COMPOUND as ordered by OPTIMER or to deliver COMPOUND that conforms to the SPECIFICATION. 

 
 

ARTICLE 7
  
    REPORTS AND ACCOUNTING    
    

	7.1
	Reports.    During the term of this Agreement following the FIRST COMMERCIAL SALE of PRODUCT, OPTIMER shall furnish to
SHINYAKU a written report within sixty (60) days of the end of each QUARTER showing NET SALES and the gross sales of all PRODUCTS sold by OPTIMER and its SUBLICENSEES in the TERRITORY during
the QUARTER to which the report is applicable and the calculation of NET SALES from such gross sales, including the deductions set forth in Section 1.1(O), as further described in
Section 12.1.

	7.2
	Audits.
	(i)
	Upon
the written request of SHINYAKU and not more than once in each calendar year, OPTIMER shall permit an independent certified public accounting firm of
internationally recognized standing, selected by SHINYAKU and reasonably acceptable to OPTIMER, at SHINYAKU's expense, to have access during normal business hours to such records of OPTIMER and its
SUBLICENSEES as may be reasonably necessary to verify the accuracy of the reports hereunder for any year ending not more than twenty-four (24) months prior to the date of such
request. The accounting firm shall disclose to SHINYAKU only whether the records are correct or not and, if applicable, the specific details concerning any discrepancies. The accounting firm shall
provide a copy of its report to OPTIMER.

	(ii)
	If
the accounting firm concludes that OPTIMER overpaid for the COMPOUND during such period, OPTIMER shall be entitled to a credit for such overpayment against future
payment for the COMPOUND. If such accounting firm concludes that additional payment for the COMPOUND was owed to SHINYAKU during such period, OPTIMER shall pay the additional payment within thirty
(30) days of the date SHINYAKU delivers to OPTIMER such accounting firm's written report so concluding. The fees charged by such accounting firm shall be paid by SHINYAKU; provided, however, if
the audit discloses that the amount payable by OPTIMER for the audited period is more than one hundred five percent (105%) of the amount actually paid for such period, then OPTIMER shall pay the
reasonable fees and expenses charged by such accounting firm.

	(iii)
	OPTIMER
shall include in each permitted sublicense granted by it pursuant to this Agreement a provision requiring the SUBLICENSEE to make reports to OPTIMER, to keep
and maintain records of sales made pursuant to such sublicense and to grant access to such records by SHINYAKU's accounting firm to the same extent required of OPTIMER under this Agreement. Upon the
expiration of twenty-four (24) months following the end of any year, the calculation of the payment for the COMPOUND payable with respect to such year shall be binding and
conclusive upon SHINYAKU, OPTIMER and its SUBLICENSEES, and OPTIMER and its SUBLICENSEES shall be released from any liability or accountability with respect to the payment for the COMPOUND for such
year, except with respect to price reductions or rebates retroactively imposed by government authorities, including, but not restricted to, Medicare, Medicaid, and other government-run or
controlled entities who may be involved in transactions involving the PRODUCT.

	7.3
	Confidential Financial Information.    SHINYAKU shall treat all financial information subject to review under this
Article 7 or under any sublicense agreement as confidential, and shall cause its accounting firm to retain all such financial information in confidence as required by this Agreement. 

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ARTICLE 8
  
    DEVELOPMENT PROGRAM    
    

	8.1
	OPTIMER Responsibility.    OPTIMER shall be solely responsible, and shall bear the full cost and expense and the liability
(except insofar as such liability arises as a result of actions or omissions of, or defects in information or materials supplied by, SHINYAKU) for the performance of pre-clinical studies
and clinical studies, governmental approval for clinical studies, HEALTH REGISTRATION, manufacturing, marketing and sales of the PRODUCT in the TERRITORY. According to the timeline in DEVELOPMENT
PROGRAM, OPTIMER shall use REASONABLE COMMERCIAL EFFORTS to pursue the performance of pre-clinical studies, clinical studies, governmental approval for clinical studies, HEALTH
REGISTRATION, manufacturing, marketing and sales of the PRODUCT in the TERRITORY. The obligations of OPTIMER with respect to the PRODUCT under this ARTICLE 8 are expressly conditioned upon the
safety, efficacy or commercial feasibility of the PRODUCT, and such obligations shall be delayed, limited or suspended for so long as any condition or event exists which causes OPTIMER to question the
safety, efficacy or commercial feasibility of the PRODUCT. SCHEDULE 1(H) contains OPTIMER's current DEVELOPMENT PROGRAM for the PRODUCT in the TERRITORY. Prior to finalizing any clinical trial
protocol or filing a New Drug Application in the TERRITORY, OPTIMER shall advise SHINYAKU and reasonably consult with SHINYAKU regarding such matter.

	8.2
	Steering Committee
	(a)
	OPTIMER
and SHINYAKU shall establish a Steering Committee (the "Steering Committee") consisting of three (3) members from OPTIMER and two (2) members from
SHINYAKU. The function of the Steering Committee will be purely advisory and to provide a forum for exchanging information between and coordinating activities of the parties. The Steering Committee
will review the clinical development issues for the PRODUCT in the TERRITORY and advise OPTIMER and SHINYAKU of any step in the DEVELOPMENT PROGRAM which may have an adverse effect on the development
of any PRODUCT in the TERRITORY. Each party shall be responsible for its own members' costs associated with attending the Steering Committee meetings.

	(b)
	Within
thirty (30) days after the EFFECTIVE DATE, OPTIMER and SHINYAKU shall each appoint its initial representatives to serve on the Steering Committee. Each party may change
its representatives upon notice to the other party. A representative from OPTIMER shall chair the Steering Committee.

	(c)
	The
Steering Committee shall meet at least semiannually during the AGREEMENT TERM, at such dates and times as agreed to by the parties. Meetings shall take place in person or by
teleconference. The Steering Committee may also convene or be polled or consulted from time to time by means of telecommunications or correspondence.

	8.3
	Progress Reports.    OPTIMER shall regularly inform, not less than once every six (6) months, SHINYAKU of reports on
any and all ongoing studies and procedures for HEALTH REGISTRATION conducted by OPTIMER as specified in the DEVELOPMENT PROGRAM and the parties will exchange relevant information as required. The
Steering Committee shall convene to communicate and discuss the progress of DEVELOPMENT PROGRAM at least twice a year. The place of the Steering Committee meetings shall be agreed upon by the parties
hereto, basically on an alternate basis between the United States and Japan.

	8.4
	Publication of Clinical and Preclinical Data.    OPTIMER shall refrain from directly or indirectly or otherwise disclosing
the results of clinical or preclinical studies conducted by OPTIMER with respect to the COMPOUND and/or the PRODUCT, without previously obtaining a written 

9

 

approval
of SHINYAKU, such approval not to be unreasonably withheld, delayed or conditioned. SHINYAKU shall refrain from directly or indirectly or otherwise disclosing the results of clinical or
preclinical studies conducted by SHINYAKU or OPTIMER with respect to the COMPOUND and/or the PRODUCT, without previously obtaining a written approval of OPTIMER, such approval not to be unreasonably
withheld, delayed or conditioned. 

	8.5
	COMPOUND for DEVELOPMENT PROGRAM AND PHYSICIAN SAMPLES.    SHINYAKU shall supply OPTIMER at [***] yen
(¥[***]) per kilogram with reasonable quantity of the COMPOUND meeting the SPECIFICATION manufactured by SHINYAKU necessary to carry out the studies as specified in
the DEVELOPMENT PROGRAM. OPTIMER shall use such COMPOUND only for development purposes pursuant to this Agreement. For the avoidance of doubt, OPTIMER shall agree that the COMPOUND used for the
process validation and the like necessary for HEALTH REGISTRATION is supplied under this Section 8.5, provided that the PRODUCT manufactured by process validation and the like shall be used
only as the physician samples as per the commercial development program.

	8.6
	HEALTH REGISTRATIONS.    OPTIMER shall be responsible for preparing and filing the application for HEALTH REGISTRATION to be
submitted to the regulatory authorities in the TERRITORY. As of the EFFECTIVE DATE, OPTIMER shall use REASONABLE COMMERCIAL EFFORTS to submit a New Drug Application for the PRODUCT within
twenty four (24) months following the EFFECTIVE DATE in the TERRITORY and to obtain HEALTH REGISTRATION approval in the TERRITORY. However, OPTIMER shall not be responsible for any delays
caused by circumstances beyond its reasonable control, including guidance from the FDA to conduct a longer than expected clinical development program. In the event of any such delay, the time periods
set forth above and in Section 16.1 will be extended for a reasonable period as agreed to in good faith by SHINYAKU and OPTIMER. If any delay is anticipated, OPTIMER will inform SHINYAKU of the
reasons for the delay and the Steering Committee will discuss whether reasonable measures may be undertaken to minimize or eliminate the delay.

	8.7
	Alteration of Development Plan.    It is understood by the parties hereto that the DEVELOPMENT PROGRAM may be unattainable if
unforeseen material problems arise beyond the Optimer's reasonable control. In the event that OPTIMER believes it necessary or desirable to alter or amend the DEVELOPMENT PROGRAM, it shall promptly
advise SHINYAKU and provide details to SHINYAKU regarding the reasons for the proposed alteration or amendment prior to its adoption, and such revised DEVELOPMENT PROGRAM shall thereafter be the
DEVELOPMENT PROGRAM. No alteration or amendment shall be made which does not take into account any reasonable suggestions made by the Steering Committee.

	8.8
	Meeting with FDA.    When OPTIMER meets with the FDA as to the development of the PRODUCT and organizes an investigator
meeting in relation to the clinical trials in the TERRITORY, OPTIMER shall in reasonable advance inform SHINYAKU of the purpose and schedule of such a meeting and arrange, at OPTIMER's sole
discretion, such that SHINYAKU may also attend such a meeting as an observer, provided that such attendance is acceptable to the FDA as appropriate. OPTIMER shall promptly provide to SHINYAKU a report
of the proceedings of any such meeting that SHINYAKU does not attend. 

 
 

ARTICLE 9
  
    SECRECY    
    

During
the AGREEMENT TERM and for a period of five (5) years thereafter or fifteen (15) years from EFFECTIVE DATE hereof, whichever is longer, both parties shall, and shall cause its
SUBLICENSEE to hold in confidence the other party's CONFIDENTIAL INFORMATION and shall not disclose such CONFIDENTIAL INFORMATION to any third party nor use such 

10

 

CONFIDENTIAL
INFORMATION for any purpose other than the purpose of this Agreement, without first obtaining the written consent of the other party. However, this ARTICLE 9 shall not apply to the
following information: 

	i)
	such
CONFIDENTIAL INFORMATION which is a part of the public domain prior to the disclosure by the disclosing party to the receiving party hereunder;

	ii)
	such
CONFIDENTIAL INFORMATION which becomes a part of public domain after the disclosure by the disclosing party hereunder without any breach of this Agreement by the
receiving party;

	iii)
	such
CONFIDENTIAL INFORMATION which the receiving party can demonstrate was already in its possession prior to the disclosure by the disclosing party hereunder and at
its free disposal;

	iv)
	such
CONFIDENTIAL INFORMATION which is disclosed to the receiving party by a third party who has the right to make such disclosure; or

	v)
	such
CONFIDENTIAL INFORMATION which the receiving party can demonstrate was developed by it without reference to the CONFIDENTIAL INFORMATION disclosed to it by the
disclosing party. 

Nothing
contained herein shall prevent either party and its SUBLICENSEE from disclosing such CONFIDENTIAL INFORMATION to the extent that (a) such CONFIDENTIAL INFORMATION is disclosed in
connection with the securing of HEALTH REGISTRATION in the TERRITORY and/or other governmental approval required to commercially market the PRODUCT provided that the disclosing party shall take all
reasonable steps to seek confidential treatment thereof; (b) disclosure of CONFIDENTIAL INFORMATION is reasonably necessary in prosecuting or defending litigation, or complying with applicable
governmental laws, regulations or court order; provided that such party shall
give the other party prior written notice thereof and adequate opportunity to object to any such disclosure or to take all reasonable steps to seek confidential treatment thereof; or (c) such
CONFIDENTIAL INFORMATION is disclosed under appropriate secrecy agreement to potential SUBLICENSEES, SUBLICENSEES, consultants, outside contractors, clinical investigators and outside research
institutions performing experiments, tests and studies on the COMPOUND and/or the PRODUCT so as to perform the purpose of this Agreement, notwithstanding such disclosures shall not jeopardize HEALTH
REGISTRATIONS by either SHINYAKU or OPTIMER. 

In
addition, each of the parties hereto agrees not to disclose the terms of this Agreement to any third party without the prior written consent of the other party hereto, which consent shall not be
unreasonably withheld, except to such party's attorneys, advisors and others on a need to know basis under circumstances that reasonably ensure the confidentiality thereof, or to the extent required
by law. Notwithstanding such disclosures shall not jeopardize HEALTH REGISTRATIONS by either SHINYAKU or OPTIMER. 

 
 

ARTICLE 10
  
    REPRESENTATIONS    
    

	10.1
	SHINYAKU Representations and Warranties.    SHINYAKU represents and warrants that:

	(i)
	SHINYAKU
has the full right, power and corporate authority to enter into this Agreement and to make the promises set forth in this Agreement and that there are no
outstanding agreements, assignments or encumbrances in existence in breach of the provisions of this Agreement or which would otherwise conflict with the rights granted and obligations assumed in
terms of this Agreement; 

11

 

	(ii)
	to
the best of its knowledge, no SHINYAKU patent has been or will be obtained through any intentional activity, omission or representation by SHINYAKU that would limit
or destroy the validity and/or enforceability of the SHINYAKU PATENT, and SHINYAKU has no knowledge or information as of the EFFECTIVE DATE that would have a material adverse effect on the validity
and/or enforceability of any SHINYAKU PATENT;

	(iii)
	the
performance by SHINYAKU of any of the terms and conditions of this Agreement on its part to be performed does not and will not constitute a breach of any other
material agreement or understanding, written or oral, to which it is a party;

	(iv)
	SHINYAKU
is the sole owner or exclusive licensee of the SHINYAKU PATENT and SHINYAKU TECHNICAL INFORMATION, and SHINYAKU has not authorized and will not authorize any
third party to practice any SHINYAKU PATENT and/or SHINYAKU TECHNICAL INFORMATION or otherwise grant rights to make, have made, import, use, offer to sell or sell the COMPOUND or the PRODUCT in the
FIELD in the TERRITORY in breach of this Agreement;

	(v)
	there
are no adverse proceedings, claims or actions pending or threatened, to the best of SHINYAKU's knowledge, relating to any SHINYAKU PATENT and SHINYAKU TECHNICAL
INFORMATION and at the time of disclosure and delivery thereof to OPTIMER, SHINYAKU shall, to the best of its knowledge, have the full right and legal capacity to disclose and deliver the SHINYAKU
PATENT and SHINYAKU TECHNICAL INFORMATION without violating the rights of third parties;

	(vi)
	as
of the EFFECTIVE DATE, SHINYAKU has not received any notices of infringement or any written communications relating in any way to the possible infringement of any
third party patent by the activities of SHINYAKU prior to the EFFECTIVE DATE or the activities of SHINYAKU and OPTIMER contemplated by this Agreement, and is not otherwise aware of any such possible
infringement;

	(vii)
	the
patents and patent applications listed in SCHEDULE 1(U) constitute all of the SHINYAKU PATENT as of the EFFECTIVE DATE;

	(viii)
	as
of the EFFECTIVE DATE, SHINYAKU has no knowledge of any DATA concerning the PRODUCT that SHINYAKU has not disclosed to OPTIMER that would demonstrate the PRODUCT
is not approvable or commercially viable;

	(ix)
	As
of the EFFECTIVE DATE, SHINYAKU has not, nor to SHINYAKU's knowledge, has any third party acting under authority of SHINYAKU, made an untrue statement of a material
fact to any regulatory authority with respect to the COMPOUND or the PRODUCT, or knowingly failed to disclose a material fact required to be disclosed to any regulatory authority with respect to the
COMPOUND or the PRODUCT. SHINYAKU has, and to SHINYAKU'S knowledge such third parties have, complied and will comply with all regulatory requirements with respect to the COMPOUND and the PRODUCT; 

12

  

	(x)
	clinical
and preclinical data within the SHINYAKU TECHNICAL INFORMATION have been generated in compliance with applicable laws and regulations;

	(xi)
	The
facilities used to manufacture the COMPOUND, and the COMPOUND supplied hereunder meet all applicable regulatory requirements; and

	(xii)
	Title
to all COMPOUND delivered hereunder will pass as provided herein free and clear of any security interest, lien or other encumbrance.

	10.2
	OPTIMER Representations and Warranties.    OPTIMER represents and warrants that:

	(i)
	OPTIMER
has the full right, power and corporate authority to enter into this Agreement and to make the promises set forth in this Agreement and that there are no
outstanding agreements, assignments or encumbrances in existence in breach of the provisions of this Agreement or which would otherwise conflict with the rights granted and obligations assumed in
terms of this Agreement;

	(ii)
	to
the best of its knowledge, no OPTIMER patent will be obtained through any intentional activity, omission or representation by OPTIMER that would limit or destroy the
validity and/or enforceability of the OPTIMER PATENT;

	(iii)
	the
performance by OPTIMER of any of the terms and conditions of this Agreement on its part to be performed does not and will not constitute a breach of any other
material agreement or understanding, written or oral, to which it is a party;

	(iv)
	OPTIMER
will not authorize any third party to practice any OPTIMER PATENT and/or OPTIMER TECHNICAL INFORMATION or otherwise grant rights to make, have made, import,
use, offer to sell or sell the PRODUCT outside the TERRITORY in breach of this Agreement;

	(v)
	there
are no adverse proceedings, claims or actions pending or threatened, to the best of OPTIMER's knowledge, relating to any OPTIMER PATENT and OPTIMER TECHNICAL
INFORMATION, and at the time of disclosure thereof to SHINYAKU, OPTIMER shall, to the best of its knowledge, have the full right and legal capacity to disclose the OPTIMER PATENT and OPTIMER TECHNICAL
INFORMATION without violating the rights of third parties; and

	(vi)
	OPTIMER
will not employ (or, to the best of its knowledge, use any contractor or consultant that employs) any individual or entity debarred by the FDA or, to the
best knowledge of OPTIMER, any individual who or entity which is the subject of an FDA debarrment investigation or proceeding, in the conduct of pre-clinical studies or clinical studies of
the COMPOUND or the PRODUCT.

	10.3
	Compliance with Law.    OPTIMER and SHINYAKU each represent and warrant that it shall use its best efforts to comply with
all applicable laws and regulations in connection with that party's performance of its obligations and rights pursuant to this Agreement, including the regulations of the U.S.A. and Japan concerning
any export or other transfer of technology, services or products.

	10.4
	No Representations on Patent Validity.    Nothing in this Agreement or any license pursuant to this Agreement shall be
construed or implied as a representation or warranty by SHINYAKU that any SHINYAKU PATENT is valid or enforceable, or that manufacture, exercise, use or sale of the PRODUCT under this Agreement is not
an infringement of any patent owned by third parties or that such manufacture, exercise, use or sale of the PRODUCT does not otherwise infringe the rights of third parties.

	10.5
	Non-Warranty of Marketability.    Neither SHINYAKU nor OPTIMER represents or warrants that HEALTH REGISTRATION
will be obtained and the PRODUCT can be commercially or legally 

13

 

marketed
in the TERRITORY. SHINYAKU further represents that it is not in possession of any information, other than what has been disclosed to OPTIMER, which indicates that the PRODUCT may not be
legally marketed in the TERRITORY. 

	10.6
	Disclaimers and Liability Limitations.
	(i)
	Except
as explicitly stated in this Agreement, all warranties including warranties of merchantability and fitness for any particular purpose are excluded.

	(ii)
	Except
for a breach of ARTICLE 9 (SECRECY), neither party will be liable for consequential, incidental or special damages of any nature arising from such party's
activities under this Agreement; provided, however, that this limitation shall not limit the indemnification or obligation of such party under ARTICLE 17 below for consequential, incidental or
special damages recovered by a third party. 

 
 

ARTICLE 11
  
    SUPPLY OF COMPOUND    
    

	11.1
	SUPPLY.    To the extent that any applicable laws allow, SHINYAKU shall manufacture and supply the COMPOUND meeting the
SPECIFICATION in bulk form for all of OPTIMER's and its SUBLICENSEES' requirements for formulating the PRODUCT in the TERRITORY. Subject to the terms and conditions of the AGREEMENT, OPTIMER agrees to
purchase all of OPTIMER's and its SUBLICENSEES' requirements of the COMPOUND exclusively from SHINYAKU during the AGREEMENT TERM.

	11.2
	ALLOCATION.    In the event that SHINYAKU cannot supply OPTIMER's requirements of the COMPOUND, SHINYAKU shall allocate the
COMPOUND that it has in inventory, or is able to produce, on a reasonable pro-rated basis, among SHINYAKU and SHINYAKU's licensees of the COMPOUND throughout the world based on reasonable
forecasts (taking into consideration past sales and sales performance against forecast) of OPTIMER (including its sublicensees), SHINYAKU, and SHINYAKU's other licensees.

	11.3
	RIGHT TO MANUFACTURE.    In the event that SHINYAKU actually fails to supply OPTIMER's requirements exclusively due to an
event of force majeure as described in ARTICLE 26 and which failure lasts longer than 45 days, then (a) OPTIMER shall have the right to exercise its manufacturing license under
Section 2.3, and (b) SHINYAKU shall promptly transfer all of the manufacturing information, know-how, protocols and the like necessary or useful for OPTIMER to
manufacture the COMPOUND and generally assist OPTIMER in the establishment of such manufacturing capabilities without charge as reasonably necessary to enable OPTIMER to manufacture the COMPOUND. Upon
thirty (30) days after the occurrence of an event of force majeure herein above, SHINYAKU shall take reasonable actions to accumulate such manufacturing information for deposit in an escrow
account with an independent third party agent reasonably acceptable to SHINYAKU. Such escrow account shall be maintained at OPTIMER's expense, and such manufacturing information will only be released
to OPTIMER in connection with the exercise of its manufacturing rights above. In case OPTIMER is granted the manufacturing license under Section 2.3 and actually manufacture and market
the PRODUCT without being supplied with COMPOUND from SHINYAKU, OPTIMER shall pay to SHINYAKU [***] percent ([***]) of NET SALES as a royalty. 

 
 

ARTICLE 12
  
    SUPPLY PRICE    
    

	12.1
	Formula.    For quantities of COMPOUND not used for development purposes, the supply price (CIP OPTIMER's designated
airport) of the COMPOUND per kilogram shipped to OPTIMER by 

14

 

SHINYAKU
in US Dollars, including royalty, shall be calculated pursuant to this Section 12.1. The price invoiced on OPTIMER's purchase orders shall be [***] Japanese
yen([***]) per kilogram. 

	(i)
	The
Supply Price of COMPOUND per kilogram for a calendar year will equal the aggregate amount of ANNUAL NET SALES in the TERRITORY for that year divided by the number of
kilograms of COMPOUND actually contained in PRODUCT sold by OPTIMER and its SUBLICENSEES in the TERRITORY during the said calendar year, and multiplied by the appropriate percentage "A" specified in
the following table: 

	Level of ANNUAL NET SALES
 
	 	A%

	portion of NET SALES between US$[***] and US$[***]	 	[***]%
	portion of NET SALES above US$[***] to US$[***]	 	[***]%
	portion of NET SALES above US$[***]	 	[***]%

By way of example only, if ANNUAL NET SALES total US$[***], then the percentage "A" would be [***] for
the first US$[***] of ANNUAL NET SALES, [***] for the next US$[***] of ANNUAL NET SALES, and [***]% for
the remaining US$[***] of ANNUAL NET SALES. 

	(ii)
	On
a quarterly basis, the aggregate invoiced amount for shipments of COMPOUND to OPTIMER will be reconciled with the Supply Price as follows. Within sixty
(60) days after the last day of each QUARTER, OPTIMER shall provide SHINYAKU with a statement setting forth the calculation of the Supply Price and the difference between (A) the Supply
Price, and (B) the amount invoiced for the quantity of the COMPOUND actually contained in the PRODUCTS sold by OPTIMER in that QUARTER plus a reasonable allocation for normal manufacturing
shrinkage, yield variances, quality assurance and quality control samples and retention samples (the "Shrinkage Allowance"), such Shrinkage Allowance not to exceed
[***]% of COMPOUND shipped to OPTIMER. If the Supply Price in (A) is greater than the amounts invoiced for (B), then OPTIMER shall provide SHINYAKU with payment
for such difference together with such statement. 

By way of example only, if: 

	•
	the
exchange rate is one hundred Japanese yen (¥100) to one United States dollar (US$1), such that the invoiced price of COMPOUND is
US$[***] per kilogram;

	•
	each
pill of PRODUCT contains 500mg of COMPOUND;

	•
	in
the first QUARTER of the calendar year, OPTIMER sells ten million pills for NET SALES of US$[***]; and

	•
	the
Shrinkage Allowance for that QUARTER is 150 kilograms of COMPOUND; 

then: 

	•
	the
Supply Price for that QUARTER would be (US$ [***]%) = US$[***];

	•
	the
amount of COMPOUND in kilograms actually contained in pills sold would be [[***] pills * (500mg/pill)] = 5,000kg
of COMPOUND;

	•
	the
amount invoiced for COMPOUND contained in pills sold would be [5,000kg * (US$[***]/kg)] =
US$[***];

	•
	the
amount invoiced for COMPOUND contained in the Shrinkage Allowance would be [150kg * (US$[***]/kg)] =
US$[***]; 

15

 

	•
	the
difference between the Supply Price and the amount invoiced for COMPOUND contained in pills sold plus the Shrinkage Allowance would be
[US$[***]—(US$[***] + US$[***])] =
US$[***] ;

	•
	Therefore,
OPTIMER would provide payment to SHINYAKU for US$[***] million along with the statement described in
Section 12.1(ii) for that QUARTER.

	12.2
	Payment Terms.    The payment for COMPOUND hereunder shall be made to SHINYAKU by OPTIMER in US Dollars within thirty
(30) days following the relevant invoice date, which shall not be earlier than the shipment date of COMPOUND. For the purpose of this ARTICLE, the shipment shall be deemed to be made on the
date of the Airway Bill for the COMPOUND.

	12.3
	Generic Version of Product.    In the event of ANDA approval for generic version of PRODUCT in the TERRITORY during the
AGREEMENT TERM and the Supply Price of the COMPOUND per kilogram including royalty becomes less than [***] Japanese yen (¥[***]) per
kilogram, the parties agree to negotiate in good faith the Supply Price, set forth in this Article 12, which are mutually favorable to both parties. This negotiation shall be completed within
60 days of said ANDA approval for a generic version of the PRODUCT in the TERRITORY, during which time SHINYAKU shall be allowed to propose to OPTIMER terms and conditions of an agreement to
supply COMPOUND to OPTIMER at a newly negotiated supply price. In the event such negotiations are not completed within 60 days, OPTIMER shall be free to seek an alternate manufacturing partner
for the production of the COMPOUND. In case OPTIMER actually manufacture and market the PRODUCT without being supplied with COMPOUND from SHINYAKU, OPTIMER shall pay SHINYAKU
[***] percent ([***]) of NET SALES as a royalty. 

 
 

ARTICLE 13
  
    FORECAST AND FIRM ORDER    
    

	13.1
	Forecast and Firm Order.    During the AGREEMENT TERM, OPTIMER shall submit to SHINYAKU the following Forecast and Firm
order:

	i)
	By
June 30 of each calendar year, OPTIMER shall submit SHINYAKU the Firm Order for the COMPOUND required during October 1 of the said year to
March 31 of next year and the Forecast of the COMPOUND anticipated during April 1 to September 30 following the aforementioned period; and

	ii)
	By
December 31 of each calendar year, OPTIMER shall submit SHINYAKU the Firm Order for the COMPOUND required during April 1 to September 30 of next
year and the Forecast of COMPOUND anticipated during October 1 to March 30 following the aforementioned period. 

Each
Forecast of OPTIMER's anticipated requirements for the COMPOUND is nonbinding and should attach a description of supply quantities and supply time taking into account the minimum order size of
150±12 kg(MINIMUM ORDER SIZE). Within two(2) weeks upon receipt of each Forecast, SHINYAKU will submit to OPTIMER a written
confirmation that it is able to supply OPTIMER with its requirements according to OPTIMER's Forecast. 

All
Firm Orders for the COMPOUND shall be made on OPTIMER's purchase order. The only function of OPTIMER's purchase order shall be to communicate the desired quantities of the COMPOUND, shipping dates
and delivery location. All other terms shall be void and of no effect, and the terms of this Agreement shall be applied. Should a Firm Order differ in quantity from the immediately preceding Forecast
for the same period communicated to SHINYAKU by OPTIMER by an amount not higher than [***] [***] the Firm Order is deemed accepted by SHINYAKU. If 

16

 

the
Firm Order differs by more than this limit, SHINYAKU will notify OPTIMER within one week upon receipt of the Firm Order if it accepts the Firm Order. SHINYAKU shall use its best efforts to supply
the amounts in excess of this limit. 

	13.2
	Delivery Terms.    The delivery terms and conditions for the supply of the COMPOUND shall be CIP (Carriage and Insurance
Paid) to an airport destination to be named at the sole discretion of OPTIMER under Incoterms (2000). The manner of supply of the shipment of the COMPOUND shall be agreed upon between the parties
hereto in due time. SHINYAKU shall deliver the COMPOUND on OPTIMER's designated delivery date and pay for all shipping, handling, and insurance expenses related to sending the COMPOUND to OPTIMER's
designated airport delivery location. In the event of an OPTIMER order to SHINYAKU equal to the MINIMUM ORDER SIZE, SHINYAKU shall fill each said order of COMPOUND from a single manufacturing lot of
the COMPOUND. If such an order exceeds the MINIMUM ORDER SIZE of COMPOUND, SHINYAKU shall not be so restricted, and may provide COMPOUND to OPTIMER from more than one manufacturing lot of the
COMPOUND, such lots not to be less than 150 ± 12 kg of COMPOUND. 

 
 

ARTICLE 14
  
    QUALITY    
    

	14.1
	Conformance with SPECIFICATION/TESTING STANDARDS.    SHINYAKU warrants that the quality of the COMPOUND supplied hereunder,
when delivered by SHINYAKU to the carrier at the point of shipment, shall comply with the SPECIFICATION when tested according to the agreed TESTING STANDARDS.

	14.2
	Documentation.    Each shipment of the COMPOUND shall be accompanied by the following written documentation:

	(i)
	invoice;

	(ii)
	packing
list; and

	(iii)
	a
certificate of analysis setting forth the results of tests performed by SHINYAKU or its contract manufacturer in accordance with the TESTING STANDARDS and
SPECIFICATION.

	14.3
	Non-conformity with the SPECIFICATION.    In the event that OPTIMER has found that any quantity of the COMPOUND
supplied by SHINYAKU hereunder does not comply with the SPECIFICATION and if SHINYAKU has confirmed the defectiveness of such quantity of the COMPOUND, OPTIMER shall have the right to request the
replacement thereof by the quantity of the COMPOUND of the quality specified in the SPECIFICATION and return to SHINYAKU such defective quantity of the COMPOUND at SHINYAKU's expense, provided that
OPTIMER shall notify, within a period of thirty (30) days after receipt of such quantity of the COMPOUND (where the quality does not meet the SPECIFICATION or the defect is apparent on
reasonable inspection), or as soon as reasonably practicable after becoming aware of the defect (where the defect is not apparent on reasonable inspection), SHINYAKU of such defectiveness. Such
notification to SHINYAKU of the defective nature of delivered COMPOUND shall be made in any event before OPTIMER has utilized such defective quantity of the COMPOUND into production. 

In
the event that SHINYAKU is unable to replace within 45 days the defective quantity of the COMPOUND by the COMPOUND complying with the SPECIFICATION, which is not due to FORCE MAJEURE,
OPTIMER will be freed from Supply Price payment obligations for such 

17

 

defective
COMPOUND under Article 12 and may exercise its manufacturing rights under Section 11.3. In case OPTIMER is granted the manufacturing license under Section 2.3
and actually manufacture and market the PRODUCT without being supplied with COMPOUND from SHINYAKU, OPTIMER shall pay to SHINYAKU [***] percent
([***]%) of NET SALES as a royalty. 

	14.4
	Independent Laboratory Analysis.    In the event that the concurrent quality control testing conducted by the parties leads
to significant differences of the results between the parties, the parties shall endeavor to settle such matter amicably and constructively between themselves. In the event that the parties fail to
settle, the parties shall agree to refer such defective quantity of the COMPOUND to independent laboratory as agreed upon between the parties for analysis. The results of the independent laboratory
shall be final and binding upon the parties. All expenses incurred by both parties on such analysis will be borne by the party whose quality control results do not conform to the results of the
independent laboratory. In the event that the independent laboratory upholds the results of OPTIMER relating to quality of the COMPOUND being defective, then SHINYAKU shall replace, at its cost and
expense, the entire defective quantity of the COMPOUND as soon as possible and also reimburse OPTIMER all cost and expense incurred by OPTIMER in the testing and handling of such defective quantity of
the COMPOUND. It is agreed and understood that SHINYAKU's responsibility on the COMPOUND shall be limited to such replacement of the defective quantity of the COMPOUND and such reimbursement and
OPTIMER's right to manufacture under Section 11.3, and that other remedies or responsibilities are disclaimed.

	14.5
	Recalls.    In the event that any PRODUCT is quarantined or recalled, or is subject to stop-sale action, whether
voluntary or by governmental action, any expenses, including reasonable fees of any experts or attorneys that may be utilized by either party hereto, government fines or penalties, related to such
recall, quarantine or stop-sale, shall be borne by the party hereto determined to have been responsible for the basis upon which said recall, quarantine or stop-sale was
initiated. Such determination may be made by the governmental agency involved, or by mutual agreement of the parties hereto following examination and review of all records pertinent to the manufacture
of the PRODUCT subject to such recall. 

 
 

ARTICLE 15
  
    TITLE AND RISK OF LOSS    
    

Title
and risk of loss to the COMPOUND sold hereunder shall pass to OPTIMER upon delivering into the custody of OPTIMER or its designee at the airport delivery location specified by OPTIMER,
notwithstanding any term herein unless otherwise agreed upon. 

 
 

ARTICLE 16
  
    SALES PROMOTION    
    

	16.1
	Marketing.    OPTIMER will use REASONABLE COMMERCIAL EFFORTS to commence (itself or through SUBLICENSEES) marketing and
commercial activities for the PRODUCT in the TERRITORY within six (6) months following the date of HEALTH REGISTRATION (including pricing approval) in the TERRITORY.

	16.2
	Sales Organization.    Upon obtaining HEALTH REGISTRATION in the TERRITORY, OPTIMER shall use REASONABLE COMMERCIAL EFFORTS
to enable OPTIMER or its SUBLICENSEES to establish a sufficient sales organization with qualified personnel for sales 

18

 

promotion
of the PRODUCT and use REASONABLE COMMERCIAL EFFORTS, at its sole responsibility and expense, to market and promote the PRODUCT in the TERRITORY. 

	16.3
	Sales Reports.    OPTIMER agrees to give SHINYAKU every six (6) months general information of the market situation
including the progress of implementation of the sales and promotion in the TERRITORY.

	16.4
	Samples.    OPTIMER shall undertake to furnish SHINYAKU with reasonable quantities of samples of the PRODUCT at no cost,
specimens of all packages, labels and package inserts, as used in the TERRITORY. 

 
 

ARTICLE 17
  
    LIABILITIES    
    

	17.1
	OPTIMER Liability.    OPTIMER shall assume any and all liabilities arising out of or associated with the development,
manufacture, use or distribution of the PRODUCT by OPTIMER or its SUBLICENSEES in the TERRITORY, except to the extent that such liability is the responsibility of SHINYAKU in accordance with
Section 17.2, or where OPTIMER can demonstrate that SHINYAKU is responsible for any such liabilities by its actions or omissions. 

Unless
otherwise provided in this Agreement, OPTIMER hereby expressly undertakes to indemnify, defend and hold SHINYAKU harmless from and against any and all claims, losses, damages or liabilities
asserted against or sustained by SHINYAKU in respect of the development, manufacture, use or distribution of the PRODUCT by OPTIMER or its SUBLICENSEES in the TERRITORY, except to the extent that such
claims are the responsibility of SHINYAKU in accordance with Section 17.2. 

	17.2
	SHINYAKU Liability.    SHINYAKU shall assume any and all liabilities arising out of or associated with (a) failure of
the COMPOUND to conform to SPECIFICATION at the time of delivery from SHINYAKU or failure to be manufactured in compliance with GMP or applicable laws, or (b) failure of SHINYAKU's
representations and warranties to be true, and shall indemnify, defend and hold OPTIMER harmless from and against any and all claims, losses, damages or liabilities asserted against or sustained by
OPTIMER in respect of such failure.

	17.3
	INDEMNITY CONDITION.    WHERE INDEMNITIES ARE GRANTED HEREUNDER THEY SHALL BE SUBJECT TO THE FOLLOWING CONDITIONS:

	(I)
	THAT
THE INDEMNIFIED PARTY NOTIFIES THE INDEMNIFYING PARTY AS SOON AS REASONABLY PRACTICABLE OF ANY CLAIM OR POTENTIAL CLAIM;

	(II)
	THAT
THE INDEMNIFYING PARTY HAS THE RIGHT TO TAKE OVER THE DEFENCE OF ANY CLAIM OR SETTLEMENT NEGOTIATIONS IN THE INDEMNIFIED PARTY'S NAME BUT AT THE INDEMNIFYING
PARTY'S COST;

	(III)
	THAT
THE INDEMNIFIED PARTY PROVIDES THE INDEMNIFYING PARTY WITH ALL REASONABLE ASSISTANCE IN DEFENDING OR SETTLING THE CLAIM AND DOES NOTHING WHICH WOULD ADVERSELY
AFFECT THE DEFENCE OR SETTLEMENT OF THE CLAIM; AND

	(IV)
	THAT
THE INDEMNIFYING PARTY NOT COMPROMISE OR SETTLE ANY CLAIM OR SUIT IN A MANNER THAT ADMITS FAULT OR NEGLIGENCE ON THE PART OF THE INDEMNIFIED PARTY OR THAT
OTHERWISE MATERIALLY AFFECTS THE INDEMNIFIED PARTY'S RIGHTS OR REQUIRES ANY PAYMENT BY THE INDEMNIFIED PARTY WITHOUT THE PRIOR WRITTEN CONSENT OF THE INDEMNIFIED PARTY. 

19

 

 
 

ARTICLE 18
  
    PATENT INFRINGEMENT AND EXTENSION    
    

	18.1
	Third Party Infringers.    If either party hereto becomes aware of any third party infringement of any SHINYAKU PATENT in
the TERRITORY, it shall promptly inform the other party and shall supply the other party with all evidence possessed by the notifying party pertaining to such infringement. OPTIMER shall have the sole
right and opportunity to enforce any SHINYAKU PATENT in the TERRITORY and shall bear the full cost and expense of such enforcement action. OPTIMER shall reasonably consult with SHINYAKU prior to
beginning and during such enforcement action. All money recovered upon the final judgment or settlement of any such suit shall be retained by OPTIMER. OPTIMER may deduct its out of pocket costs and
expenses of such enforcement action from amounts payable to SHINYAKU under Section 12.1(ii), up to [***]% of the amount payable each QUARTER, until all such out of
pocket costs and expenses have been so deducted. In the event OPTIMER should receive monies due to successful resolution of such a patent dispute, at such time OPTIMER shall reimburse SHINYAKU for all
such out of pocket costs and expenses of such enforcement action previously deducted from amounts payable to SHINYAKU under Section 12.1(ii).

	18.2
	Patent Extensions.    OPTIMER agrees to reasonably assist SHINYAKU in taking all and any steps necessary to seek extension
of any SHINYAKU PATENT in the TERRITORY wherever possible upon request of SHINYAKU thereof. If SHINYAKU fails to take any steps necessary to seek extension of any SHINYAKU PATENT, then OPTIMER shall
have the right, following the expiry of one hundred and eighty (180) days notice requesting SHINYAKU to take action, to seek extension and SHINYAKU will provide all reasonable assistance to
OPTIMER for this purpose free of charge. 

 
 

ARTICLE 19
  
    INFRINGEMENT ACTIONS BY THIRD PARTIES    
    

If
OPTIMER, or any of its SUBLICENSEES or customers, shall be sued by a third party for infringement of a patent because of the development, manufacture, import, use or sale of the COMPOUND or the
PRODUCT in the TERRITORY, OPTIMER shall promptly notify SHINYAKU in writing of the institution of such suit. In such occasion, SHINYAKU shall cooperate in the defense of such suit and furnish to
OPTIMER available evidence and assistance in its control. OPTIMER agrees to keep SHINYAKU informed with respect to all material developments in such lawsuit and to reasonably consult with SHINYAKU
regarding the defense and any settlement of such lawsuit. OPTIMER may deduct its out of pocket costs and expenses of such defense or settlement from amounts payable to SHINYAKU under
Section 12.1(ii), up to [***]% of the amount payable each QUARTER, until all such out of pocket costs and expenses have been so deducted. 

 
 

ARTICLE 20
  
    COMPETITIVE PRODUCT    
    

During
AGREEMENT TERM, (a) OPTIMER shall not sell, and shall cause SUBLICENSEES not to sell COMPETITIVE PRODUCT in the TERRITORY without the prior written consent of SHINYAKU except for any
products for which OPTIMER or SUBLICENSEES have already begun clinical testing as of the EFFECTIVE DATE, and (b) SHINYAKU and its AFFILIATES will not, nor authorize any third party to, develop,
market or import COMPETITIVE PRODUCT in the TERRITORY. 

20

 
 
 

ARTICLE 21
  
    TRADEMARK    
    

	21.1
	Selection.    OPTIMER shall be responsible for the selection, registration and maintenance of all TRADEMARKS which it
employs in connection with the PRODUCT in the TERRITORY and shall own and control such TRADEMARKS and pay all related costs thereto.

	21.2
	Third party Infringers.    Each party shall notify the other promptly upon learning of any actual, alleged or threatened
infringement of the TRADEMARKS applicable to the PRODUCT or of any unfair trade practices, trade dress imitation, passing off of counterfeit goods, or like offences. Only OPTIMER will be authorized to
initiate at its own discretion legal proceedings against any infringement or threatened infringement of TRADEMARKS applicable to the PRODUCT. 

 
 

ARTICLE 22
  
    WITHHOLDING TAXES    
    

Where
any sum to be paid to SHINYAKU hereunder is subject to any withholding or similar tax, the parties shall use their reasonable best efforts to do all such acts and things and to sign all such
deeds and documents as will enable them to take advantage of any exemption from or reduction in such taxes under any applicable double taxation agreement or treaty. In the event there is no applicable
double taxation agreement or treaty, or if an applicable double taxation agreement or treaty reduces but does not eliminate such withholding or similar tax, OPTIMER shall pay such withholding or
similar tax, deduct the amount paid from the amount due SHINYAKU, and secure and send to SHINYAKU proof of such withholding or similar tax as evidence of such payment. 

 
 

ARTICLE 23
  
    DURATION AND TERMINATION    
    

	23.1
	AGREEMENT TERM.    This Agreement shall come into force on the EFFECTIVE DATE and shall, unless sooner terminated pursuant
to any provision of this Agreement, continue to be in full force for a period of ten (10) years from the date of FIRST COMMERCIAL SALE in the TERRITORY or until the last to expire VALID CLAIM
under the SHINYAKU PATENTS in the TERRITORY, whichever is longer. The AGREEMENT TERM shall mean the time period that this Agreement is effective prior to its termination under the provisions of this
ARTICLE 23.

	23.2
	Renewal Terms.    Following expiration of the AGREEMENT TERM, at OPTIMER's request, SHINYAKU and OPTIMER shall negotiate
within sixty (60) days in good faith the terms and conditions of a continuation of the relationship established hereunder. If no such continuation is established within 60 days, OPTIMER
shall be released from any obligations to renew its relationship with SHINYAKU.

	23.3
	Breach.    If either party fails to fulfill any material obligation hereunder, the party aggrieved by such breach or
violation may give to the other party written notification of such breach or violation and after sixty (60) days from the date of such notification, the notified party fails or refuses to
remedy, the notifying party shall be entitled to terminate this Agreement forthwith by written notice sent by registered mail.

	23.4
	No HEALTH REGISTRATION.    In the event that, despite OPTIMER's REASONABLE COMMERCIAL EFFORTS to obtain HEALTH REGISTRATION
from FDA, FDA refuses to grant HEALTH REGISTRATION, OPTIMER shall give full explanation and evidences of the circumstance, including the reasons alleged for such refusal, to SHINYAKU so that SHINYAKU
may supply arguments and documentation such as to remove said refusal. In case that FDA should 

21

 

maintain
its position, OPTIMER shall have the right to terminate this Agreement forthwith in the TERRITORY by giving a written notice of termination of this Agreement to SHINYAKU. In no event may
either party claim against other party any right or any compensation of damages or losses caused by the termination pursuant to this paragraph. 

	23.5
	Stoppage of PRODUCT Sales.    In the event that, despite OPTIMER's REASONABLE COMMERCIAL EFFORTS to maintain sales of the
PRODUCT in the TERRITORY, FDA should order OPTIMER to stop the sales of the PRODUCT in the TERRITORY, OPTIMER shall have the right to terminate this Agreement in the TERRITORY forthwith by giving a
written notice of termination of this Agreement to SHINYAKU, provided that OPTIMER gives SHINYAKU sufficient reports thereof and reasonable explanation of such OPTIMER's decision. In no event may
either party claim against the other party any right or any compensation of damages or losses caused by the termination pursuant to this paragraph.

	23.6
	Bankruptcy.    Either party shall have the right to terminate this Agreement immediately by delivering written notice to the
other party, in the event that the other party is bankrupt (not to include reorganizations) or insolvent and such bankruptcy or insolvency materially and adversely affects such party's ability
to perform its obligations hereunder, provided that applicable bankruptcy laws shall apply.

	23.7
	Termination by OPTIMER.    OPTIMER may terminate this Agreement at any time for convenience upon sixty (60) days
written notice to SHINYAKU.

	23.8
	Dispute.    Notwithstanding anything in this Article 23 to the contrary, if a party disputes in good faith by
written notice the other party's right to terminate this Agreement prior to the effective date of such termination, then the other party will not have the right to terminate this Agreement until such
dispute has been settled in accordance with Article 30 and the first party fails to cure, to the extent possible, the condition giving rise to such right to terminate within sixty
(60) days thereafter. 

 
 

ARTICLE 24
  
    EFFECT OF TERMINATION    
    

	24.1
	Effect of Termination.    The termination of this Agreement shall:

	(i)
	be
without prejudice of the obligation of OPTIMER to pay to SHINYAKU any sums accrued, due and payable under ARTICLES 5, 6 and 12 hereof (except that
OPTIMER shall have the right to cancel without charge any purchase orders for which shipment has not occurred as of the date of termination);

	(ii)
	be
without prejudice to any right of, or remedy available to, either party against the other in respect of anything done or omitted hereunder prior to such termination;
and

	(iii)
	not
release either party from the confidentiality or liability obligations set forth in ARTICLES 9 and 17.

	24.2
	SHINYAKU's Rights.    If this Agreement is terminated by SHINYAKU pursuant to Sections 23.3 or 23.6 or by
OPTIMER pursuant to Section 23.7 hereof:

	(i)
	OPTIMER
shall promptly return or furnish to SHINYAKU all written SHINYAKU TECHNICAL INFORMATION and OPTIMER TECHNICAL INFORMATION in OPTIMER's and its SUBLICENSEES'
possession. In addition, OPTIMER and its SUBLICENSEES shall immediately cease to use and thereafter refrain from using OPTIMER 

22

 

PATENT,
SHINYAKU PATENT, OPTIMER TECHNICAL INFORMATION, SHINYAKU TECHNICAL INFORMATION and TRADEMARK; 

	(ii)
	except
as expressly provided herein, all rights and licenses granted to OPTIMER by SHINYAKU shall forthwith cease and terminate; and

	(iii)
	at
the option of SHINYAKU, OPTIMER shall either (a) transfer, free of charge, to SHINYAKU or the company designated by SHINYAKU, HEALTH REGISTRATION and other
relevant authorizations, permits or licenses which OPTIMER and its SUBLICENSEE hold in connection with the PRODUCT on the date of termination if and to the extent permissible under the laws of the
TERRITORY, or (b) cancel the HEALTH REGISTRATION in the TERRITORY. 

OPTIMER
will make its personnel and other resources reasonably available to SHINYAKU as necessary to effect an orderly transition of development or commercialization responsibilities with the cost of
such resources and personnel to be borne by SHINYAKU after the effective date of termination. 

	24.3
	OPTIMER's Rights.    If this Agreement is terminated by OPTIMER pursuant to Section 23.3 or 23.6 hereof:

	(i)
	SHINYAKU
shall promptly return or furnish to OPTIMER all written OPTIMER TECHNICAL INFORMATION in SHINYAKU's possession; and

	(ii)
	except
as expressly provided herein, all rights and licenses granted to SHINYAKU by OPTIMER shall forthwith cease and terminate.

	24.4
	OPTIMER's obligation.    If this Agreement is terminated by SHINYAKU pursuant to Section 23.3 and by OPTIMER
pursuant to SECTION 23.7, OPTIMER shall agree to finish any clinical trials for the PRODUCT in progress at OPTIMER's cost, but OPTIMER shall have no obligation to recruit or enroll any additional
patients after the date of termination.

	24.5
	Termination pursuant to 23.4 or 23.5.    If this Agreement is terminated pursuant to Sections 23.4
or 23.5 hereof, 24.2 (i) and (ii) shall be applied.

	24.6
	Right to Sell Inventory.    Except in the case of termination pursuant to Sections 23.4 or 23.5 hereof, for
six (6) months following termination of this Agreement, OPTIMER may sell PRODUCT inventory on hand as of the effective date of termination, provided that ARTICLE 12 shall apply to such
inventory sales.

	24.7
	Survival.    The following provisions of this Agreement will survive termination or expiration of this Agreement:
Articles 9, 10, 17, 22 and 24 and Sections 7.3 and 14.5. In addition, upon expiration (but not earlier termination), OPTIMER's license under the SHINYAKU
TECHNICAL INFORMATION shall become non-exclusive, fully-paid and irrevocable. 

 
 

ARTICLE 25
  
    NOTICES    
    

Any
notice, request, demand or other communication to be given or made to either party shall, unless otherwise expressly provided herein or subsequently agreed to in writing, be deemed to have been
delivered upon the fifth (5th) business day after having been deposited in first class airmail, postage 

23

 

prepaid,
in an envelope addressed, or if sent by confirmed telefax (with a mailed copy as aforesaid), the next business day after transmitted, to the following: 

	 	If to SHINYAKU:	 	Licensing & Business Development Dept.

NIPPON SHINYAKU CO., LTD.

14, Nishinosho-monguchi-cho

Kisshoin, Minami-ku,

Kyoto 601-8550, JAPAN

Telefax: +81-75-321-9019
	 	
 If to OPTIMER:	
 	

Optimer Pharmaceuticals, Inc.

ATTN: Chief Executive Officer

10110 Sorrento Valley Road, Suite C

San Diego, CA 92121

Telefax: +1 858-909-0737

The
parties shall designate contact persons to communicate with respect to normal activities associated with the DEVELOPMENT PROGRAM, the supply of the COMPOUND, ADRs and marketing activities. 

 
 

ARTICLE 26
  
    FORCE MAJEURE    
    

Neither
party hereto shall be liable to the other party for any failure or delay in the performance of any of its obligations hereunder for the period and to the extent such failure or delay is caused
by riots, civil commotion, wars, hostilities, laws, orders, regulations, embargoes, action by the government or any government agency, acts of God, earthquakes, floods, storms, fires, accidents,
explosions, epidemics, quarantine restrictions, or other similar or different contingencies beyond the reasonable control of the respective parties. The party affected shall immediately notify the
other of the circumstances and shall take such reasonable action as may be necessary to avoid, minimize or remove the cause of such non-performance. 

 
 

ARTICLE 27
  
    ASSIGNMENT    
    

This
Agreement, licenses granted hereby or any of rights, duties and obligations hereof shall not be assigned by either party hereto either totally or in part, to any third party without the prior
written consent of the other party, such consent not to be unreasonably withheld. However, OPTIMER or SHINYAKU may without such consent but with written notice to the other party, assign this
Agreement and its rights and obligations hereunder in connection with the transfer or sale of all or substantially all of its business pertaining to this Agreement or in the event of its merger,
consolidation, change in control or similar transaction. Any permitted assignee shall assume all obligations of its assignor under this Agreement. The rights and obligations of the parties under this
Agreement shall inure to the benefit of and shall be binding upon the successors and assignees of the parties. 

 
 

ARTICLE 28
  
    WAIVER    
    

The
failure on the part of SHINYAKU or OPTIMER to exercise or enforce any rights conferred upon it hereunder shall not be deemed to be a waiver of any such rights nor a bar of the exercise or
enforcement thereof at any time or times thereafter. 

24

 
 
 

ARTICLE 29
  
    GOVERNING LAW    
    

This
Agreement shall be governed and construed under the laws of Japan. 

 
 

ARTICLE 30
  
    ARBITRATION    
    

The
parties shall attempt to amicably resolve disputes arising between them regarding the validity, construction, enforceability or performance of the terms of this Agreement, and any differences or
disputes in the interpretation of the rights, obligations, liabilities and/or remedies hereunder, which have been identified in written notice from one party to the other, by good faith settlement
discussions. The parties agree that any dispute that arises in connection with this Agreement, which cannot be amicably resolved by such settlement discussions, shall be finally settled by arbitration
in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce. The arbitration shall be held in English in San Diego, USA if initiated by SHINYAKU, and in
Osaka, Japan if initiated by OPTIMER. 

 
 

ARTICLE 31
  
    ENTIRE AGREEMENT    
    

This
Agreement constitutes the entire agreement by and between the parties hereto with respect to any and all subject matter covered herein and shall supersede all previous negotiations,
understandings and agreements between the parties relating thereto. This Agreement may be amended, modified, altered, or changed only by written instrument duly executed by authorized representatives
of the parties hereto. 

 
 

ARTICLE 32
  
    MISCELLANEOUS    
    

	32.1
	Publicity.    Neither party shall issue any press release or other publicity material or make representation which refers to
the terms of this Agreement without the prior written consent of the other party. However, this restriction shall not apply to announcements required by law or regulations including without limiting
announcements to be made to the shareholders of either party and to any Stock Exchange on which the shares or other securities of such party are quoted or listed. It is, however, the parties' intent
that they shall co-ordinate to such extent as may be reasonably possible with respect to the wording of any such announcements.

	32.2
	Agreement and Documentation Language.    The English language version of this Agreement shall be controlling in all
respects, notwithstanding any translation hereof made for any purpose whatever. All communications and notices, documentation, assistance, disclosure and technical information exchanged hereunder
among the parties shall be in English.

	32.3
	Late Payments.    Unless otherwise provided in this Agreement, OPTIMER shall pay interest to SHINYAKU on the aggregate
amount of any payments by OPTIMER that are not paid on or before the date such payments are due under this Agreement, at a rate of five percent (5%) per annum, calculated on the number of days
such payment is delinquent.

	32.4
	Conflict with Applicable Law.    Should any part of this Agreement be in conflict with any applicable law, all other
provisions of this Agreement shall remain in force and the parties hereto shall 

25

 

mutually
and in good faith modify the conflicting provisions so as to maintain essentially the spirit hereof and the original intent of the parties. 

 
 

ARTICLE 33
  
    COUNTERPARTS    
    

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

        IN
WITNESS WHEREOF, the parties have made out two originals in English and have executed them by their duly authorized representatives. 

	NIPPON SHINYAKU CO., LTD.	 	OPTIMER PHARMACEUTICALS, INC.
	
 By:	

Kazuto Hatsuyama
	
 	

By:	

Michael N. Chang, PhD

	 	Kazuto Hatsuyama	 	 	Michael N. Chang, PhD
	

Title: President	
 	

Title: President & CEO
	

Date:    June 10, 2004
	
 	

Date:    6/10/2004

26

  

 
 

SCHEDULE 1(H)
  
    GENERAL INVESTIGATIONAL PLAN OF NM441
  FOR BACTERIAL PROSTATITIS
  (Draft May 5, 2004)    
    

        This study plan reflects the current development concept toward NDA filing and eventual marketing approval of  NM441, a fluoroquinolone
antibiotic. It is not the sponsor's intent to present a fully-detailed development plan, because continuing progress will
depend on the results of the preceding work. The studies described below address the crucial issues related to the approval of NM441 as a therapy for bacterial prostatitis. 

Introduction  

        The activity and profile of NM441 support its use in both chronic and acute bacterial prostatitis. There is no satisfactory short nor long term therapy to
cure chronic bacterial prostatitis, although the pathogens may be highly sensitive to the drugs.1 Upon absorption, NM411 (prulifloxacin) is metabolized in the intestinal epithelium and
the liver to the active metabolite, NM394.8,12,13 NM394 inhibits bacterial DNA
replication11,14,15 with a rapid bacterial killing activity5,6,11,16 (faster than other quinolones
including ciprofloxacin, gatifloxacin, levofloxacin, ofloxacin, and tosufloxacin), and has a long half-life compatible with once-daily
dosing.12,17-19 

        NM441 offers
both an excellent safety profile and broad spectrum coverage of gram-positive and gram-negative bacteria, including the Enterobacteriaceae
most likely to cause prostatitis.5-11 The compound's safety was established in Japanese18,20,21 and European22 clinical trials
which involved 1,649 evaluable patients, and by post-marketing experience since its 2002 approval in Japan. NM441's gastrointestinal side effects have been similar to those
associated with comparators (ciprofloxacin, ofloxacin, or amoxicillin and clavulonic acid) albeit typically at lower frequencies.18,20-22 Although NM394 penetrates
well into bacteria16, phagocytes23-25, and tissues including the prostate10,19,26-29, the possibility of CNS30-33
and cardiovascular34-37 side effects associated with some competing fluoroquinolones are minimized by NM441's limited penetration into cerebrospinal fluid38 and its very
low potential to prolong the QT interval.35,39 

        Drug
entry into the nonacutely inflamed prostate occurs primarily by passive diffusion across a barrier between the stroma of the prostate gland and the
microcirculation,2,3 thereby allowing antimicrobial agents with proper hydrophobicity, such as N394 (the active metabolite) to reach therapeutic levels within the
gland.4 NM394 concentrations in the prostate are as high or higher than serum levels. The pH of prostatic secretions increases with inflammation4 to reach the mildly
alkaline pH range where NM394 is most effective. 

Phase 1 and 2 Studies  

        The objectives of the Phase 1 studies are to determine the safety, tolerability, and pharmacokinetics of NM441 in volunteers. The Phase 1
program has been divided into Phase 1A (single dose) in healthy male volunteers and the second study will be a combined Phase 1B-2A (multiple dose) trial to be conducted in
patients. 

        An
ex-US single-dose safety study including dosages up to 600 mg has been completed.12 This was a single-center, crossover,
single-dose, escalating study of NM441 administered orally to 12 healthy male subjects. Each group of four subjects received three different, escalating doses. The details of
the study are summarized in the Study Details section below. We anticipate that this study will satisfy the need to conduct a redundant single-dose safety study in the US. 

        The
Phase 1A will be a bridging safety and pharmacokinetic study of our formulation in healthy volunteers. Two groups of 4 volunteers (8 subjects total) will receive
a single oral dose of 600 mg in 

27

 

either
a fasted or an unfasted state, and plasma will be sampled at various time points in order to determine the pharmacokinetic profile. 

        The
combined Phase 1B-2A multiple-dose safety and efficacy study will be a multicenter, controlled, double-blind, multiple-dose study of orally
administered NM441 or levofloxacin. The study will require a minimum of 40 evaluable subjects with confirmed chronic bacterial prostatitis. Because the safety of the NM441 at the
600 mg/day dose level for up to two weeks has been established in clinical trials and by post marketing clinical experience, and because we do not feel ethically justified in giving an extended
course of antibiotics to healthy subjects that will receive no benefit, we feel that patients may be used in this study if they are carefully monitored. Subjects will be randomized into two groups of
20 patients, and will receive 600 mg of NM441 qd or levofloxacin 500 mg qd for
42 consecutive days. The details of the study are summarized in the Study Details. 

Phase 3 Study  

        The primary objective of the Phase 3 study will be to determine the efficacy of NM441 as therapy for chronic bacterial prostatitis in comparison to
conventional therapy with levofloxacin. Demonstration of non-inferiority to an established therapy is a common approach in active-controlled clinical trials. In addition, the safety
database will be expanded. The Phase 3 will be a multi-center, randomized, double-blind, double-dummy trial to compare the effects of NM441 (taken for 42 days) with an equivalent course
of ciprofloxacin (500 mg bid) in patients with chronic bacterial prostatitis. The study will require a minimum of 300 evaluable subjects
with confirmed chronic bacterial prostatitis. 

Study Details  

COMPLETED (EX-US):  

A SINGLE DOSE-ESCALATING SAFETY STUDY OF NM441 IN HEALTHY VOLUNTEERS  

	•
	Objective:  To determine the safety, tolerability, and pharmacokinetics of
NM441 in healthy volunteers.

	•
	Study Population:  A total of 12 healthy male volunteers between 18 and
34 years of age were enrolled in the study. Each group of four subjects received single doses at each of three different, escalating dose levels.

	•
	Study Endpoints:  Safety, tolerance and pharmacokinetics.

	•
	Study Design:  This was a single-center, randomized, crossover, single-dose
study of orally administered NM441. A total of 12 healthy Caucasian male subjects (three groups of 4 subjects) between 18-34 years of age were enrolled in the study.
Each group received three different, escalating doses.

	•
	Status:  Complete.12

	•
	Results:  The pharmacokinetic properties and tolerability of three different strengths of
NM441 (prulifloxacin) were investigated in a randomized, cross-over study.12 NM441 was administered as a single oral dose at dose levels of 300, 450 and
600 mg to 12 Caucasian male subjects (age range 19-34 years). Plasma concentrations of the active metabolite (NM394) were determined in blood samples collected
before the administration (pre-dose) and at 15, 30, 45 min, 1, 1.5, 2, 3, 4, 6, 8, 10, 12, 16, 24, 36 and 48 h after dosing. Urine samples were also collected.
Determination in biological samples was performed using validated and specific HPLC methods. The following parameters were calculated: Cmax, tmax, AUC0-t,
AUC0-00, t1/2, V/F, Aeut, CLren and fe. The analysis of variance performed on dose-normalized data after logarithmic
transformation evidenced no statistically significant differences between the three doses concerning Cmax and AUC. Friedman's test applied to tmax and t1/2 did not
show any statistically 

28

 

significant
difference between doses. A significant linear relationship between doses and AUC0-00 was detected (p< 0.05). Very high urinary concentrations and the relatively
long terminal half-life (10-12 h) suggest that a once-daily application would show adequate clinical efficacy, especially in urinary tract infections.
The safety profile was very good at all three dose levels. 

Phase 1A:  

A Safety and Pharmacokinetic evaluation of a single oral dose of NM441 in healthy volunteers  

	•
	Objective:  To determine the pharmacokinetics of NM441 in healthy volunteers.

	•
	Study Population:  A total of 4 healthy male volunteers between 18 and
65 years of age will be enrolled in the study.

	•
	Study Endpoints:  Safety, pharmacokinetic profiling.

	•
	Study Design:  This will be an open-label, single-center,
single-dose pharmacokinetic study of orally administered NM441. A total of 8 male subjects will be enrolled in the study. They will be admitted on the evening prior to a morning
administration of 600 mg NM441 (fasted or unfasted, in groups of four), and will maintained on site for 24 hours following dosing. Blood and urine samples will be collected at various
time points to allow pharmacokinetic measurements.

	•
	Study parameters:  Plasma concentrations of the active metabolite (NM394) will be
determined in blood samples collected before the administration (pre-dose) and at 0.5, 1, 2, 3, 4, 6, 12, 18, and 24 h after dosing. Urine samples will also be collected.
Determination in biological samples will be performed using validated and specific HPLC methods. The following parameters will be calculated: Cmax, tmax, AUC0-t,
AUC0-00, t1/2, V/F, Aeut, CLren, and fe. 

PHASE 1B/2A:  

A DOUBLE-BLINDED, MULTIPLE DOSE, 42-DAY SAFETY AND COMPARATIVE EFFICACY STUDY OF NM411 IN PATIENT VOLUNTEERS WITH CHRONIC BACTERIAL
PROSTATITIS  

	•
	Objectives:  To determine the safety, tolerability, pharmacokinetics, and comparative
efficacy of NM441 versus levofloxacin in patients with chronic bacterial prostatitis, following a series of oral doses for 42 consecutive days.

	•
	Study Population:  A minimum of 40 evaluable patients with chronic bacterial
prostatitis will be enrolled in the study. The subjects (20 per group) will be treated with either NM441 or levofloxacin for 42 consecutive days.

	•
	Study Design:  Patients will be randomized to receive either NM441 (600 mg/day) or
levofloxacin (500 mg/day) daily for 42 days. Each subject will receive one capsule each morning. Laboratory assessments and clinical evaluations will be performed at screening and Days
7, 14, 28, and 42 of the 42-day study period. Pharmacokinetic profiling will take place on days 42. Microbiological assessment (the four-glass test) will be
performed at screening and on Day 42. Clinical symptoms will be assessed at the end of the treatment course in order to determine the efficacies of the medications in treating the infection.

	•
	Inclusion criteria

	1.
	Male
subjects 18 years and above who have chronic bacterial prostatitis, documented using the four glass procedure

	2.
	All
subjects will be required to sign an Informed Consent Form 

29

 

	•
	Exclusion criteria

	1.
	Life-threatening
or serious disease

	2.
	Concurrent
use of antibiotics unrelated to the study

	3.
	Unable
or unwilling to comply with study

	4.
	Participation
in other IND studies within 1 month prior to screening or within 5 half-lives of the investigational agent, whichever is longer.

	•
	Study Endpoints:  

	•
	Primary Study Endpoints:

	•
	Safety

	•
	Complete
relief of symptoms of bacterial prostatitis by the final day of therapy

	•
	Secondary Study Endpoints:

	•
	Culture-negative
assessment by the four glass method

	•
	Dose:  Levofloxacin was well tolerated at the 500 mg/day dose level for the
6 week duration of this study in a Canadian clinical trial.40 The 600 mg/day NM441 dose to be used in this study has been well-tolerated as a multiple
dose regimen in Japanese and European clinical trials and in clinical practice in Japan. In a closely-monitored (6.5 day) multiple dose study, the mean plasma concentrations of active
metabolite NM394 peaked between 0.5 and 1.0 hours; the maximum concentration was 1.88 mg/mL at a dose of 400 mg/day; the mean half-life was approximately
8.5 hours, and was not affected by the dose. The mean urinary excretion rates of NM394 was 30.6% of the doses within 48 hours at 400 mg/day, and other metabolites were
excreted in urine as 7% of the dose. The mean fecal excretion rates of NM394 and NM441 were 52.9 and 4.2%, respectively within 72 hours after dosing of 400 mg.
NM441 and NM394 did not accumulate. 

Phase 3:  

A Multi-center, Randomized, Double-blind Study to Compare the Effects of NM441 Taken for 6 Weeks with Equivalent Treatment with
Levofloxacin as Therapy for Chronic Bacterial Prostatitis  

	•
	Objectives:  To compare the efficacy and recurrence rate of a 6-week course
of NM441 (600 mg/day) with a 6-week course of levofloxacin (500 mg/day) in the treatment of chronic bacterial prostatitis.

	•
	Study Endpoints:  

	•
	Primary Study Endpoints:

	•
	Complete
relief of symptoms of bacterial prostatitis by the final day of therapy

	•
	Secondary Study Endpoints:

	•
	Culture-negative
assessment by the four glass method

	•
	Recurrence
of symptoms at day 70

	•
	Study Population:  A multi-center, randomized, double-blind trial will involve a total of
about 300 patients, aged 18 years and above, with chronic bacterial prostatitis.

	•
	Study Design:  Patients will be randomized to receive either NM441 (600 mg  qd) or
levofloxacin (500 mg qd). Each subject will receive one capsule each morning.
 

30

 

Laboratory
assessments and clinical evaluations will be performed at screening and Days 21 and 42 of the 42-day study period. Microbiological assessment
(the four-glass test) will be performed at screening and on Day 42. In addition, clinical evaluation and microbiological assessment will be performed on Day 70, four weeks after the
final antibiotic dose. 

	•
	Inclusion criteria

	1.
	Male
subjects 18 years and above who have chronic bacterial prostatitis, documented using the four glass procedure

	2.
	All
subjects will be required to sign an Informed Consent Form

	•
	Exclusion criteria

	1.
	Life-threatening
or serious disease

	2.
	Concurrent
use of antibiotics unrelated to the study

	3.
	Unable
or unwilling to comply with study

	4.
	Participation
in other IND studies within 1 month prior to screening or within 5 half-lives of the investigational agent, whichever is longer. 

REFERENCES  

	1.
	Aagaard
J, Madsen, PO. Bacterial prostatitis: New methods of treatment. Urology. 1991;37(3 Suppl):4.

	2.
	Fulmer
BR, Turner TT. A blood-prostate barrier restricts cell and molecular movement across the rat ventral prostate epithelium. J Urol.
May 2000;163(5):1591-1594.

	3.
	El-Alfy
M, Pelletier G, Hermo LS, Labrie F. Unique features of the basal cells of human prostate epithelium. Microsc Res
Tech. Dec 1 2000;51(5):436-446.

	4.
	Charalabopoulos
K, Karachalios G, Baltogiannis D, Charalabopoulos A, Giannakopoulos X, Sofikitis N. Penetration of antimicrobial agents into the prostate.  Chemotherapy. Dec 2003;49(6):269-279.

	5.
	Araake
M, Hara T, Watabe H, Nishino T. In vitro antibacterial activity of prulifloxacin, a new oral fluoroquinolone. Jpn J Antibiot. Dec
2002;55(6):778-790.

	6.
	Inoue
M, Kuga A, Kaieda S, et al. [In vitro antibacterial activity of prulifloxacin, a new oral quinolone, and comparative susceptibility rate at clinical breakpoint
MIC]. Jpn J Antibiot. Sep 2000;53(9):593-608.

	7.
	Ozaki
M, Matsuda M, Tomii Y, et al. In vitro antibacterial activity of a new quinolone, NM394. Antimicrob Agents Chemother. Dec
1991;35(12):2490-2495.

	8.
	Ozaki
M, Matsuda M, Tomii Y, et al. In vivo evaluation of NM441, a new thiazeto-quinoline derivative. Antimicrob Agents
Chemother. Dec 1991;35(12):2496-2499.

	9.
	Prats
G, Roig C, Miro E, Navarro F, Mirelis B. In vitro activity of the active metabolite of prulifloxacin (AF 3013) compared with six other fluoroquinolones.  Eur J Clin Microbiol Infect Dis. Apr
2002;21(4):328-334.

	10.
	Tomii
Y, Ozaki M, Matsuda M, et al. Therapeutic effect of the quinolone prodrug prulifloxacin against experimental urinary tract infections in mice.  Arzneimittelforschung. Dec 1996;46(12):1169-1173.

31

 
	11.
	Yoshida
T, Mitsuhashi S. Antibacterial activity of NM394, the active form of prodrug NM441, a new quinolone. Antimicrob Agents
Chemother. Apr 1993;37(4):793-800.

	12.
	Picollo
R, Brion N, Gualano V, et al. Pharmacokinetics and tolerability of prulifloxacin after single oral administration.  Arzneimittelforschung. 2003;53(3):201-205.

	13.
	Okuyama
Y, Morino A. Pharmacokinetics of prulifloxacin. 3rd communication: metabolism in rats, dogs and monkeys. Arzneimittelforschung.
Mar 1997;47(3):293-298.

	14.
	Drlica
K, Zhao X. DNA gyrase, topoisomerase IV, and the 4-quinolones. Microbiol Mol Biol Rev. Sep
1997;61(3):377-392.

	15.
	Tani
M, Maebashi K, Araake M, Watabe H. [Inhibitory activity of NM394, the active form of prodrug prulifloxacin against type II topoisomerase from Pseudomonas
aeruginosa]. Jpn J Antibiot. Dec 2002;55(6):882-885.

	16.
	Shimizu
M, Tabata M, Hara T, Araake M, Watabe H, Nishino T. [In vitro short-term bactericidal activity and accumulation of NM394, the active metabolite of
prulifloxacin, for Staphylococcus aureus, Escherichia coli and Pseudomonas aeruginosa: comparison with ciprofloxacin, levofloxacin, and gatifloxacin]. Jpn J
Antibiot. Dec 2002;55(6):791-799.

	17.
	Nakashima
M, Uematsu T, Kosuge K, et al. Pharmacokinetics and safety of NM441, a new quinolone, in healthy male volunteers. J Clin
Pharmacol. Sep 1994;34(9):930-937.

	18.
	Kumazawa
J MT, Kumamoto Y, and Hirose T, et al. A Double-Blind Comparative Trial of Prulifloxacin and Ofloxacin for the Treatment of Complicated Urinary Tract Infections.  Nishinihon J. Urolology.
1997;59:357-372.

	19.
	Okuyama
Y, Momota K, Morino A. Pharmacokinetics of prulifloxacin. 1st communication: absorption, distribution and excretion in rats, dogs and monkeys after a single administration.  Arzneimittelforschung. Mar
1997;47(3):276-284.

	20.
	Kobayashi
H KS, Sakayori S, Miura H, Koike T, Ohnishi K, et al. A double-blind comparative study on prulifloxacin and ofloxacin in bacterial pneumonia.

	21.
	Kobayashi
H KS, Sakayori S, Miura H, Kawakami Y, Yamaguchi E et al. A double-blind comparative study of prulifloxacin and ofloxacin in lower chronic respiratory tract
infections.

	22.
	Grassi
C, Salvatori E, Rosignoli MT, Dionisio P. Randomized, double-blind study of prulifloxacin versus ciprofloxacin in patients with acute exacerbations of chronic bronchitis.  Respiration. 2002;69(3)
:217-222.

	23.
	Ozaki
M, Komori K, Matsuda M, et al. Uptake and intracellular activity of NM394, a new quinolone, in human polymorphonuclear leukocytes. Antimicrob
Agents Chemother. Mar 1996;40(3):739-742.

	24.
	Tullio
V, Cuffini AM, Bonino A, Ianni Palarchio A, Rossi V, Carlone NA. Cellular uptake and intraphagocytic activity of the new fluoroquinolone AF 3013 against Klebsiella
pneumoniae. Drugs Exp Clin Res. 1999;25(1):1-11.

	25.
	Tullio
V, Cuffini AM, Bonino A, et al. Influence of a new fluoroquinolone, AF3013 (the active metabolite of prulifloxacin), on macrophage functions against Klebsiella
pneumoniae: an in vitro comparison with pefloxacin. J Antimicrob Chemother. Aug 2000;46(2):241-247.

	26.
	Mikamo
H, Kawazoe K, Izumi K, Ito K, Tamaya T. NM441: penetration into gynaecological tissues and in vitro activity against clinical isolates from obstetric and gynaecological
patients. Drugs. 1995;49 Suppl 2:326-330. 

32

 
	27.
	Tanimura
H, Ishimoto K, Murakami K, Uchiyama K, Iwakura S. Penetration of NM441, a new quinolone, into human bile and gallbladder tissue.  Drugs. 1995;49 Suppl 2:337-340.

	28.
	Pharmacokinetic
study of NAD-441A (II) -Tissue distribution in rats. Nippon Shinyaku confidential report
H—11.

	29.
	Pharmacokinetic
study of NAD-441A (III) -Repeated administration study in rats. Nippon Shinyaku confidential report
H-12.

	30.
	Ball
P, Mandell L, Niki Y, Tillotson G. Comparative tolerability of the newer fluoroquinolone antibacterials. Drug Saf. Nov
1999;21(5):407-421.

	31.
	Halliwell
R, Davey, PG, Lambert, JJ. Antagonism of GABAA receptors by 4-quinolones. J Antimicrob Chemother. 1993
1993;31:457.

	32.
	Hori
S, Shimada, S. Effects of quinolones on the central nervous system. In: Hooper D, Volfson, JS, ed. Quinolone antimicrobial agents.
2nd ed. Washington, DC: American Society for Microbiology; 1993:513.

	33.
	Lipsky
BA, Baker CA. Fluoroquinolone toxicity profiles: a review focusing on newer agents. Clin Infect Dis. Feb
1999;28(2):352-364.

	34.
	Ball
P. Quinolone-induced QT interval prolongation: a not-so-unexpected class effect. J Antimicrob Chemother.
May 2000;45(5):557-559.

	35.
	Akita
M, Shibazaki Y, Izumi M, et al. Comparative assessment of prurifloxacin, sparfloxacin, gatifloxacin and levofloxacin in the rabbit model of proarrhythmia.  J Toxicol Sci. Feb 2004;29(1):63-71.

	36.
	Jaillon
P, Morganroth J, Brumpt I, Talbot G. Overview of electrocardiographic and cardiovascular safety data for sparfloxacin. Sparfloxacin Safety Group. J
Antimicrob Chemother. May 1996;37 Suppl A:161-167.

	37.
	Stahlmann
R, Schwabe R. Safety profile of grepafloxacin compared with other fluoroquinolones. J Antimicrob Chemother. Dec
1997;40 Suppl A:83-92.

	38.
	Time
course of NM394 concentration in plasma and cerebrospinal fluid after intravenous administration in beagle dogs. Nippon Shinyaku confidential
report H-14.

	39.
	Lacroix
P, Crumb WJ, Durando L, Ciottoli GB. Prulifloxacin: in vitro (HERG current) and in vivo (conscious dog) assessment of cardiac risk. Eur J
Pharmacol. Sep 5 2003;477(1):69-72.

	40.
	Nickel
JC, Downey J, Clark J, et al. Levofloxacin for chronic prostatitis/chronic pelvic pain syndrome in men: a randomized placebo-controlled multicenter trial.  Urology. Oct 2003;62(4):614-617.

33

  

 
 

SCHEDULE 1(U)
  
    PATENT ON NM441    
    

	Country
 
	 	Application Date
	 	Application No.
	 	Publn. Date of unexamined application
	 	Publn. No. of unexamined application
	 	Registration Date
	 	Patent No.
	 	Expiration Date

	Japan	 	'88.10.19	 	63-263568	 	'89.11.28	 	1-294680	 	'96.02.19	 	2015708	 	'08.10.19 A)
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

	U.S.A.	 	'88.11.07	 	267940	 	 	 	 	 	 	 	 	 	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

	 	 —CIP	 	'91.04.08	 	682434	 	 	 	 	 	'92.02.04	 	5086049	 	'09.02.04
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

	Canada	 	'88.11.07	 	582460	 	 	 	 	 	'93.04.27	 	1316925	 	'10.04.27
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

	EP	 	'88.10.26	 	88117810.7	 	'89.05.17	 	0315828	 	'92.04.08	 	0315828	 	'08.10.26
	 	Germany	 	†EP	 	 	 	 	 	 	 	 	 	 	 	 
	 	France	 	†EP	 	 	 	 	 	 	 	 	 	 	 	 
	 	Italy	 	†EP	 	 	 	 	 	 	 	 	 	 	 	 
	 	England	 	†EP	 	 	 	 	 	 	 	 	 	 	 	 
	 	Spain	 	†EP	 	 	 	 	 	 	 	 	 	 	 	 
	 	Belgium	 	†EP	 	 	 	 	 	 	 	 	 	 	 	 
	 	Holland	 	†EP	 	 	 	 	 	 	 	 	 	 	 	 
	 	Switzerland	 	†EP	 	 	 	 	 	 	 	 	 	 	 	 
	 	Sweden	 	†EP	 	 	 	 	 	 	 	 	 	 	 	 
	 	Austria	 	†EP	 	 	 	 	 	 	 	 	 	 	 	 
	 	Denmark	 	'88.11.04	 	6163/88	 	 	 	 	 	'97.10.13	 	172077	 	'08.11.04
	 	Norway	 	'88.11.07	 	884958	 	 	 	 	 	'95.12.20	 	177.934	 	'08.11.07
	 	Finland	 	'88.11.07	 	885121	 	 	 	 	 	'93.06.10	 	88618	 	'08.11.07
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

	Israel	 	'88.11.07	 	088303	 	 	 	 	 	'93.08.15	 	88303	 	'08.11.07
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

	Australia	 	'88.11.03	 	24673/88	 	 	 	 	 	'91.08.19	 	608911	 	'04.11.03
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

	South Africa	 	'88.11.01	 	88/8186	 	 	 	 	 	'89.07.26	 	88/8186	 	'08.11.01
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

	South Korea	 	'88.11.07	 	88-14591	 	'89.07.10	 	89-8150	 	'96.03.28	 	097577	 	'10.10.09
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

	China	 	'88.11.05	 	88107689.9	 	'89.05.24	 	1033055A	 	'94.02.20	 	25863	 	'08.11.05
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

	Taiwan	 	'88.07.29	 	77105214	 	 	 	 	 	'90.05.15	 	36388	 	'05.01.10
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

        A): Expiration date of Japanese patent is extended to '13.10.19 

34

 
 
 

Specifications and Test Methods for NM441    

 
 

GRAPHIC    
    

C21H20FN3O6S
: 461-46 

Content  

NM441 contain
not less than 98.5% and not more than 101.0% of C21H20FN3O6S calculated on the anhydrous basis. 

Characteristics:  

White
to pale yellow crystals or crystalline powder. It is odourless or has a slight characteristic odour. 

Crystallinity:  

Determine
the X-ray diffraction pattern of NM441 by means of X-ray Powder Diffraction Method according to the following conditions, and compare the diffraction pattern
with the reference one: both diffraction pattern exhibit similar diffraction peaks at the same diffraction angle 2 ? Form III). 

	Operating conditions
 
	 	 

	Angular range:	 	4-60°
	
 Voltage and current:	
 	

40 kV, 20mA
	
 Target:	
 	

Cu
	
 Detector:	
 	

Graphite monochrometer
	
 Slit:	
 	

receiving slit (R.S.) 0.3 mm;

receiving slit (R.S.m.) 0.45 mm;

divergence slit (D.S.) 1°;

scatter slit (S.S.) 1°;
	
 Scan Speed:	
 	

4°/min.

Identification

	(1)
	UV spectrum

Determine
the absorption spectrum of a solution of NM441 in acetonitrile (1 in 100,000) as directed in the Spectrophotometry: it exhibits maxima between 279 ran and 283 nm,
and between 339 nm and 343 nm. 

	(2)
	Infrared spectrum

Determine
the infrared absorption spectrum of NM441, as directed in the potassium bromide disk method under the Infrared Spectrophotometry. Compare the spectrum with the Reference Spectrum: both
spectra exhibit similar intensities of absorption at the same wave numbers. 

Purity
test 

	(1)
	Clarity and colour of solution:

Dissolve
0.20 g of NM441 in 10 mL of N, N-dimethylformamide: the solution is clear and colourless to pale yellow in colour. When the absorbance of the solution at
450 nm using N, N-dimethylformamide as blank is determined, it is not more than 0.10. 

	(2)
	Halide

35

 

Transfer
0.5 g of NM441 to a Nessler tube, and dissolve it in a proper volume of dimethylsulphoxide to make 40 mL. Add 6 mL of dilute nitric acid and dimethylsulphoxide to
make 50 mL, and use this solution as the test solution. Transfer 0.30 mL of 0.01 mol/L hydrochloric acid VS, to another Nessler tube, add 6 mL of dilute nitric acid and
dimethylsulphoxide to make 50 mL, and use this as the control solution. When the solutions are not clear, filter both solutions by using a microfilter (0.45 μm). 

Add
1 mL of silver nitrate TS to the test solution and to the control solution, mix well, and allow to stand for 5 minutes protecting from direct sunlight. 

Compare
the opalescence developed in both solutions against a black background by viewing downward. The opalescence developed in the test solution is not more than that of the control solution
(not more than 0.021% chloride). Reagents 

	•
	Silver nitrate TS:

Dissolve 17.5 g of silver nitrate in water to make 1,000 mL (0.1 mol/L). Preserve in tight, light-resistant containers.

	•
	Dilute nitric acid:  

Dilute
10.5 mL of nitric acid with water to make 100 mL (10%). 

	(3)
	Heavy metals: 

Place
2.0 g of NM441 in a porcelain crucible, cover loosely with a lid, and carbonise by gentle ignition. After cooling, add 2 mL of nitric acid and 5 drops of sulphuric
acid, heat cautiously until white fumes no longer are evolved, and incinerate by ignition between 500°C and 600°C. 

Cool,
add 2 mL of hydrochloric acid, evaporate to dryness on a water bath, moisten the residue with 3 drops of hydrochloric acid, add 10 mL of hot water, and warm for
2 minutes. Then add 1 drop of phenolphthalein TS, and add ammonia TS dropwise until the solution develops a pale red colour, add 2 mL of dilute acetic acid, filter if necessary,
and wash with 10 mL of water. Transfer the filtrate and washings to a Nessler tube, and add water to make 50 mL. Designate it as the test solution. 

The
control solution is prepared as follows: Evaporate a mixture of 2 mL of nitric acid, 5 drops of sulphuric acid and 2 mL of hydrochloric acid on a water bath, further evaporate
to dryness on a sand bath, and moisten the residue with 3 drops of hydrochloric acid. Hereinafter, proceed as directed in the test solution, then add 2 mL of Standard Lead Solution and
water to make 50 mL. 

Add
1 drop of sodium sulphide TS to each of the test solution and the control solution, mix thoroughly, and allow to stand for 5 minutes. Then compare the colours of both solutions by
viewing the tubes downward or transversely against a white background. The test solution has no more colour than the control solution (not more than 10ppm). Reagents 

	•
	Standard Lead Stock Solution: 

Weigh exactly 159.8 mg of lead (II) nitrate, dissolve in 10 mL of dilute nitric acid, and add water to make exactly 1,000 mL(l mL of this solution contains
0.1 mg of lead). Prepare and store this solution using glass containers, free from soluble lead salts.

	•
	Standard Lead Solution:

Measure exactly 10 mL of Standard Lead Stock Solution, and add water to make exactly 100 mL. 1 mL of this solution contains 0.01 mg of lead (Pb). Prepare before use.

	•
	Sodium sulphide TS: 

Dissolve 5 g of sodium sulphide enneahydrate in a mixture of 10 mL of water and 30 mL of glycerine. Preserve in well-filled light-resistant bottles. Use within
3 months. 

36

 

	•
	Dilute acetic acid: 

Dilute 6 g of glacial acetic acid (100) with water to make 100 mL (1 mol/L). Phenolphthalein TS:

Dissolve 1 g of phenolphthalein in 100 mL of ethanol (95).

	•
	Ammonia TS: 

To 400 mL of ammonia solution (28) add water to make 1,000 mL (10%).

	(4)
	Related substances (Liquid Chromatography)

Dissolve
0.01 g of NM441 in 10 mL of acetonitrile and use this solution as the sample solution. Perform the test with 2 μL of the sample solution as
directed under the Liquid Chromatography according to the following two conditions. Determine each peak area of the sample by automatic integration method, and calculate the area of the peak of each
related substance by the area percentage method. 

Calculate
the content of each related substance according to the following expression. Content of NM394 (%) = Content of NM394 by the area percentage method (%)x 0.81 

Content
of NM672 (%) = Content of NM672 by the area percentage method (%) Content of NM603 (%) = Content of NM603 by the area percentage method (%) Content of
NM9009 (%) = Content of NM9009 by the area percentage method (%) Content of NM660 (%) = Content of NM660 by the area
percentage method (%) × 0.95 Content of NM9008 (%) = Content of NM9008 by the area percentage method (%) 

Response
factor by specific absorbance (Al%, lcm) between NM441 and NM394: 0.81 Response factor by specific absorbance (Al%, lcm) between NM441 and NM660: 0.95 

	(Specification)

Condition 1	 	 	 	 
	Condition 1	 	Total	 	not more than 1.0%
	 	 	NM394	 	not more than 0.3%
	 	 	NM672	 	not more than 0.1%
	 	 	NM603	 	not more than 0.1%
	 	 	Each other	 	less than 0.1%
	Condition 2	 	Total	 	not more than 1.0%
	 	 	NM9009	 	not more than 0.1%
	 	 	NM660	 	not more than 0.4%
	 	 	NM9008	 	not more than 0.1%
	 	 	Each other	 	less than 0.1%

Operating Conditions "1"  

        Detector: An ultraviolet absorption photometer (wavelength: 275 ran). 

Column:
A stainless steel column, about 4.0 mm in inside diameter and 150 mm in length, packed with 5 urn octadecylsilanised silica gel for Liquid Chromatography. 

Column
temperature: A constant temperature of about 40°C. 

Mobile
phase: A mixture of dilute phosphoric acid (1 in 1,000), acetonitrile and 1 mol/L sodium 1-pentanesuphonate solution in water (75:24:1). 

Flow
rate: Adjust the flow rate so that the retention time of NM441 is about 10 minutes. 

Selection
of column: Pipette 1 mL of the sample solution, add acetonitrile to make 100 mL. Pipette 2 mL of this solution and add 2 mL of a solution of ethylparaben in
acetonitrile (1 in 50,000). Proceed with 2 μL of this solution under the above operating condition, and calculate the resolution. Use a 

37

 

column
giving elution of NM441 and ethylparaben in this order with a resolution between their peaks being not less than 11. 

Detection
sensitivity: Pipette 1 mL of the sample solution, add acetonitrile to make 250 mL and use this solution as the standard solution. Adjust the detection sensitivity so that the
peak height of NM441, obtained from 2 μL of the standard solution, is about 2 - 4 cm. 

Time
span of measurement: About three times as long as the retention time of NM441. 

Operating Conditions "2"  

Detector:
An ultraviolet absorption photometer (wavelength 275 nm). 

Column:
A stainless steel column 4.0 mm in inside diameter and 150 mm in length, packed with 5 μm of octadecylsilanised silica gel for Liquid Chromatography. 

Column
temperature: A constant temperature of about 40°C. 

Mobile
phase: A mixture of dilute phosphoric acid (1 in 1,000) adjusted to pH 3.0 with triethylamine in water and acetonitrile (6:5). 

Flow
rate: Adjust the flow rate so that the retention time of NM441 is about 4 minutes. 

Selection
of column: Pipette 1 mL of the sample solution, add acetonitrile to make 250 mL. Pipette 2 mL of this solution, add 2 mL of a solution of thymol in acetonitrile
(1 to 25,000). Proceed with 2 μL of this solution under the above operating condition, and calculate the resolution. Use a column giving elution of NM441 and
thymol in this order with a resolution between their peaks being not less than 22. 

Detection
sensitivity: Pipette 1 mL of the sample solution, add acetonitrile to make exactly 500 mL and use this solution as the standard solution. Adjust the detection sensitivity so
that the peak height of NM441, obtained from 2 μL of the standard solution, is about 2 - 4cm. 

Time
span of measurement: About ten times as long as the retention time of NM441. 

	(5)
	Residual solvent (acetonitrile):

Dissolve
0.2 g of NM441 in 2 mL of 1 mol/L sodium hydroxide containing 10% of sodium chloride and let absorb into Extrelut 3 (Merck). Wash the container with 0.5 mL
of 1 mol/L sodium hydroxide containing 10% sodium chloride, and let absorb the washings to Extrelut 3, twice. After 15 minutes, elute with  n-hexane and collect the eluate to make exactly
20 mL, and use this solution as the sample solution. 

To
65 μL of acetonitrile (50.7mg; d=0.78) add water to make exactly 100 mL, pipette 1 mL of this solution, add 1 mol/L sodium hydroxide solution
containing 10% sodium chloride to make exactly 100 mL. Pipette 2 mL of this solution, let absorb into Extrelut 3 and add 1 mL of 1 mol/L sodium hydroxide solution
containing 10% sodium chloride to Extrelut 3. After 15 minutes elute with n-hexane and collect the eluate to make exactly 20 mL, and use this solution as the standard
solution. 

Perform
the test with 5 μL each of the sample solution and of the standard solution, as directed under the Gas Chromatography, according to the following conditions. Determine
the peak of acetonitrile in both solutions by the automatic integration method: the peak area of acetonitrile from the sample solution is not larger than the peak area of the acetonitrile from the
standard solution (not more than 50ppm). 

38

 

 Operating conditions:  

Detector:
A hydrogen flame ionization detector. Column: A glass column, about 3 mm inside diameter and about 2 m in length, packed with 150-180 μm
porous divinylbenzene copolymer for gas chromatography [Sunpak A (Shimadzu)]. 

Column
temperature: A constant temperature of about 180°C. 

Carrier
gas: Helium. 

Flow
rate: Adjust the flow rate so that the retention time of acetonitrile is about 2 minutes. 

Detection
sensitivity: Adjust the detection sensitivity so that the peak height of acetonitrile, obtained from 5 uL of the standard solution, is between 5 and 15 mm. 

Selection
of column: To 0.3 mL of acetonitrile add 0.15 mL of acetone and add water to make exactly 100 mL. Pipette 1 mL of this solution and add 1 mol/L sodium
hydroxide solution, containing 10% sodium chloride, to make exactly 100 mL. Hereinafter, proceed with 2mL of this solution as directed in the standard solution. Proceed with 5
μL of this solution under the above operating conditions, and calculate the resolution. Use a column giving elution of the acetonitrile and acetone in this order with a
resolution between their peaks being not less than 2.3. 

Water
content: 

Take
15 mL of a mixture of chloroform and propylene carbonate for Karl-Fischer Method in a dried titration flask, and titrate with the Karl-Fischer TS to make the
content of the flask anhydrous. 

Weigh
accurately about 0.05 g of NM441, transfer it quickly into the titration flask, dissolve by stirring, and titrate the solution to be examined with Karl-Fischer TS to the end
point under vigorous stirring (not more than 1.0%). 

Residue on ignition  

Previously
ignite a crucible of platinum to constant weight between 450°C and 550°C, and weigh accurately after cooling. 

Take
1.0 ± 0.1 g of NM441, transfer into above ignite container, and weigh it accurately. Moisten the sample with a few drops of sulphuric acid, then heat
slowly at a temperature as low as practicable until the sample is almost incinerated, and cool it. Moisten again with a small amount of sulphuric acid, heat gently until white fumes are evolved no
longer, and ignite between 450°C and 550°C until the residue is completely incinerated. Cool the crucible and reweigh accurately. Use a desiccator (silica gel) for the cooling:
not more than 0.10%. 

Particle size  

Accurately
weigh 10 mg of NM441 and place it in a 20 mL tube. Add 10 mL of silicone (Shin-Etsu silicone RF-96-10CS). Put the tube in the
ultrasonic wave bath to disperse the sample for 2 minutes at the room temperature. Transfer the sample solution to the apparatus and measure the median diameter three times according to the
following conditions. Use the mean value as the particle size: 

Median
particle size: Not more than 10 μm (<10 μm). 

Distribution:
95% of particles: Not more than 20 μm (<20 μm). 

39

 

Operating
condition: Dispersion medium viscosity:    10.00 cP 

	Dispersion medium density	 	0.94 g/cm3
	Sample density Maximum	 	1.46 g/cm3
	diameter Division of	 	30 urn
	diameter Minimum	 	2.00 μm
	diameter Centrifuge	 	2.00 μm
	sedimentation	 	1,500 rpm
	Measurement time	 	7 minutes and 48 seconds

Assay
(Non aqueous titration): 

Accurately
weigh about 0.10 g of NM441, and dissolve in 50 mL of glacial acetic acid; titrate with 0.02 mol/L perchloric acid (potentiometric titration). Perform a blank
determination in the same manner and make any necessary correction: not less than 98.5% and not more than 101.0% of C21H20FN3O6S calculated on the
anhydrous basis. 

Each
mL of 0.02 mol/L perchloric acid is equivalent to 9.229 mg of C21H20FN3O6S 

40

QuickLinks

Exhibit 10.6

NM441 LICENSE AGREEMENT BETWEEN NIPPON SHINYAKU CO., LTD. AND OPTIMER PHARMACEUTICALS, INC.

LICENSE AGREEMENT

ARTICLE 1 DEFINITIONS

ARTICLE 2 GRANT OF LICENSE

ARTICLE 3 DISCLOSURE OF INFORMATION

ARTICLE 4 ADR REPORTING

ARTICLE 5 MILESTONE PAYMENTS

ARTICLE 6 MINIMUM PURCHASING AMOUNT

ARTICLE 7 REPORTS AND ACCOUNTING

ARTICLE 8 DEVELOPMENT PROGRAM

ARTICLE 9 SECRECY

ARTICLE 10 REPRESENTATIONS

ARTICLE 11 SUPPLY OF COMPOUND

ARTICLE 12 SUPPLY PRICE

ARTICLE 13 FORECAST AND FIRM ORDER

ARTICLE 14 QUALITY

ARTICLE 15 TITLE AND RISK OF LOSS

ARTICLE 16 SALES PROMOTION

ARTICLE 17 LIABILITIES

ARTICLE 18 PATENT INFRINGEMENT AND EXTENSION

ARTICLE 19 INFRINGEMENT ACTIONS BY THIRD PARTIES

ARTICLE 20 COMPETITIVE PRODUCT

ARTICLE 21 TRADEMARK

ARTICLE 22 WITHHOLDING TAXES

ARTICLE 23 DURATION AND TERMINATION

ARTICLE 24 EFFECT OF TERMINATION

ARTICLE 25 NOTICES

ARTICLE 26 FORCE MAJEURE

ARTICLE 27 ASSIGNMENT

ARTICLE 28 WAIVER

ARTICLE 29 GOVERNING LAW

ARTICLE 30 ARBITRATION

ARTICLE 31 ENTIRE AGREEMENT

ARTICLE 32 MISCELLANEOUS

ARTICLE 33 COUNTERPARTS

SCHEDULE 1(H) GENERAL INVESTIGATIONAL PLAN OF NM441 FOR BACTERIAL PROSTATITIS (Draft May 5, 2004)

SCHEDULE 1(U) PATENT ON NM441

Specifications and Test Methods for NM441

GRAPHICQuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.7    
    

*** Test Omitted and Filed Separately

CONFIDENTIAL TREATMENT REQUESTED

Under 17 C.F.R. §§ 200.80(b)(4) and 230.406  

 LICENSE AGREEMENT  

by and between  

THE SCRIPPS RESEARCH INSTITUTE,

a California nonprofit

public benefit corporation  

and  

OPTIMER PHARMACEUTICALS, Inc.

a Delaware corporation  

 
TABLE OF CONTENTS  

	 
	 
	 	Page

	1.	Definitions	 	1
	 	1.1	 	1
	 	1.2	 	1
	 	1.3	 	1
	 	1.4	 	2
	 	1.5	 	2
	 	1.6	 	2
	 	1.7	 	2
	 	1.8	 	2
	 	1.9	 	2
	 	1.10	 	2
	 	1.11	 	2
	 	1.12	 	2
	 	1.13	 	3
	 	1.14	 	3
	
 2.	

License Terms and Conditions	
 	

3
	 	2.1 Grant of License	 	3
	 	2.2 Initial License Fee	 	3
	 	2.3 Royalties	 	3
	 	      2.3.1 Percentage Royalty	 	4
	 	2.4	 	4
	 	2.5 Quarterly Payments	 	4
	 	2.6 Term of License	 	4
	 	2.7 Sublicense	 	4
	 	2.8 Duration of Royalty Obligations	 	5
	 	2.9 Reports	 	5
	 	2.10 Records	 	5
	 	2.11 Foreign Sales	 	5
	 	2.12 Foreign Taxes	 	6
	
 3.	

Patent Matters	
 	

6
	 	3.1 Patent Prosecution and Maintenance	 	6
	 	3.2 Information to Licensee	 	6
	 	3.3 Patent Costs	 	6
	 	3.4 Ownership	 	6
	 	3.5 Scripps Right to Pursue Patent	 	6
	 	3.6 Infringement Actions	 	7
	 	      3.6.1 Prosecution and Defense of Infringements	 	7
	 	      3.6.2 Allocation of Recovery	 	7
	
 4.	

Obligations Related to Commercialization	
 	

7
	 	4.1 Commercial Development Obligation	 	7
	 	4.2 Governmental Approvals and Marketing of Licensed Products	 	7
	 	4.3 Indemnity	 	8
	 	4.4 Patent Marking	 	8
	 	4.5 No Use of Name	 	8
	 	4.6 U.S. Manufacture	 	8
	 	4.7 Foreign Registration	 	8
	 	 	 	 

i

 

	
 5.	

Limited Warranty	
 	

8
	
 6.	

Interests in Intellectual Property Rights	
 	

8
	 	6.1 Preservation of Title	 	8
	 	6.2 Royalty-free License to Improvements	 	8
	 	6.3 Governmental Interest	 	8
	 	6.4 Reservation of Rights	 	9
	
 7.	

Confidentiality and Publication	
 	

9
	 	7.1 Treatment of Confidential Information	 	9
	 	7.2 Publications	 	9
	 	7.3 Publicity	 	9
	
 8.	

Term and Termination	
 	

9
	 	8.1 Term	 	9
	 	8.2 Termination Upon Default	 	9
	 	8.3 Termination Upon Bankruptcy or Insolvency	 	9
	 	8.4 Rights Upon Expiration	 	10
	 	8.5 Rights Upon Termination	 	10
	 	8.6 Work-in-Progress	 	10
	
 9.	

Assignment; Successors	
 	

10
	 	9.1 Assignment	 	10
	 	9.2 Binding Upon Successors and Assigns	 	10
	
 10.	

General Provisions	
 	

10
	 	10.1 Independent Contractors	 	10
	 	10.2 Arbitration	 	11
	 	      10.2.1 Location	 	11
	 	      10.2.2 Selection of Arbitrators	 	11
	 	      10.2.3 Discovery	 	11
	 	      10.2.4 Case Management	 	11
	 	      10.2.5 Remedies	 	11
	 	      10.2.6 Expenses	 	11
	 	      10.2.7 Confidentiality	 	11
	 	10.3 Entire Agreement; Modification	 	12
	 	10.4 California Law	 	12
	 	10.5 Headings	 	12
	 	10.6 Severability	 	12
	 	10.7 No Waiver	 	12
	 	10.8 Name	 	12
	 	10.9 Attorneys' Fees	 	12
	 	10.10 Notices	 	12
	 	10.11 Compliance with U.S. Laws	 	13
	
 	

Exhibit A Disclosure of Scripps Technology	
 	

 
	 	Exhibit B Sublicense Form	 	 
	 	Exhibit C Milestones	 	 

ii

   LICENSE AGREEMENT  

        This License Agreement is entered into and made effective as of this 23rd day of July, 1999, by and between THE SCRIPPS RESEARCH INSTITUTE, a California nonprofit
public benefit corporation ("Scripps") located at 10550 North Torrey Pines Road, La Jolla, California 92037, and OPTIMER PHARMACEUTICALS, INC., a Delaware corporation ("Licensee")
located at c/o Mr. Casey McGlynn, Wilson, Sonsini, Goodrich and Rosati, 2 Palo Alto Sq., Palo Alto, CA 94306 with respect to the facts set forth below. 

RECITALS  

        A.    Scripps
is engaged in fundamental scientific biomedical and biochemical research including research relating to carbohydrates and carbohydrate mimetics. 

        B.    Licensee
is engaged in research and development of carbohydrates and carbohydrate mimetics for human and veterinarian therapeutics. 

        C.    Scripps
has disclosed to Licensee certain technology described in certain technology disclosures, patents and patent applications listed on Exhibit A attached
hereto and incorporated herein by reference. 

        D.    Scripps
has the exclusive right to grant a license to the technology listed on Exhibit A, subject to certain rights of the U.S. Government to use
such technology for its own purposes, resulting from the receipt by Scripps of certain funding from the U.S. Government. 

        E.    Scripps
desires to grant to Licensee, and Licensee wishes to acquire, an exclusive worldwide right and license to the technology listed on Exhibit A and to
certain patent rights and know-how of Scripps with respect thereto, subject to the terms and conditions set forth herein, with a view to developing and marketing diagnostic and therapeutic
products within the Field (as defined below). 

AGREEMENT  

        NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth herein, Scripps and Licensee hereby agree as follows: 

        1.    Definitions.    Capitalized terms shall have the meaning set forth below. 

        1.1    Affiliate.    The term "Affiliate" shall mean any entity which directly or
indirectly controls, is controlled by or is under common control with Licensee. The term "control" as used herein means the possession of the power to direct or cause the direction of the management
and the policies of an entity, whether through the ownership of a majority of the outstanding voting securities or by contract or otherwise. 

        1.2    Agricultural Products.    The term "Agricultural Product", individually, or
"Agricultural Products", collectively, shall mean any one or more product, device, method, procedure, software, computer program, material, or element utilized by the agricultural and farming industry
for the purpose of improving, restricting or otherwise modifying growth or productivity of plants; or preventing or treating disease or insect or fungal infestation in plants; or controlling or
modifying certain traits of plants or producing improved or modified seeds and plants; or techniques and methods for evaluating efficacy or determining the safety of an Agricultural Product such as
utilization in determining toxicity to living things or otherwise involved in the general field of agriculture. 

        1.3    Confidential Information.    The term "Confidential Information" shall mean any
and all proprietary or confidential information of Scripps or Licensee which may be exchanged between the 

1

 

parties
at any time and from time to time during the term of this Agreement. Information shall not be considered confidential to the extent that it: 

        a.     Is
publicly disclosed through no fault of any party hereto, either before or after it becomes known to the receiving party; or 

        b.     Was
known to the receiving party prior to the date of this Agreement, which knowledge was acquired independently and not from another party hereto (or such party's
employees); or 

        c.     Is
subsequently disclosed to the receiving party in good faith by a third party who has a right to make such disclosure; or 

        d.     Has
been published by a third party as a matter of right. 

        1.4    Derivative Work.    The term "Derivative Work" shall mean a work that is based in
whole or in part on the Licensed Software. 

        1.5    Enhancements.    The term "Enhancements" shall mean modifications, changes,
additions to, deletions from, and overall improvements to the Licensed Software. 

        1.6    Field.    The term "Field" shall mean all applications and fields except
Agricultural Products. 

        1.7    Licensed Product.    The term "Licensed Product" shall mean any product which
cannot be developed, manufactured, offered for sale, imported, used or sold without (i) infringing one or more claims under Scripps Patent Rights; (ii) utilizing any part of Scripps
Technology not otherwise included within Scripps Patent Rights; (iii) utilizing Licensed Software, Derivative Work, or Enhancement or any portion thereof, alone or in combination with other
software and/or technology; or (iv) any other product made utilizing a Licensed Right. 

        1.8    Licensed Right.    The term "Licensed Right" shall mean (i) Licensed
Software, Derivative Work, and Enhancements, as well as associated trade secrets; or (ii) Registered and unregistered copyrights that control the right to reproduce, use and lease computer
programs relating to the Field, including Copyright Registration No.
                                    . 

        1.9    Licensed Software.    The term "Licensed Software" shall mean Scripps' software
modules specified in Appendix A and incorporated herein. 

        1.10    Major Market Country.    The term "Major Market Country" shall mean any of the
following countries and their respective territories and possessions: Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. 

        1.11    Net Sales.    The term "Net Sales" shall mean the gross amount invoiced by
Licensee, or its Affiliates and sublicensees, or any of them, on all sales of Licensed Products, less (i) discounts actually allowed, (ii) credits for claims, allowances, retroactive
price reductions or returned goods, (iii) prepaid freight and
(iv) sales taxes or other governmental charges actually paid in connection with sales of Licensed Products. For purposes of determining Net Sales, a sale shall be deemed to have occurred when
an invoice therefor shall be generated or the Licensed Product is shipped for delivery. Sales of Licensed Products by Licensee, or an Affiliate or sublicensee of Licensee to any Affiliate or
sublicensee which is a reseller thereof shall be excluded, and only the subsequent sale of such Licensed Products by Affiliates or sublicensees of Licensee to unrelated parties shall be deemed Net
Sales hereunder. 

        1.12    Scripps Patent Rights.    The term "Scripps Patent Rights" shall mean rights
arising out of or resulting from (i) any and all U.S. and foreign patent applications and patents covering Scripps Technology, (ii) the patents proceeding from such applications,
(iii) all claims of continuations-in-part directed solely to subject matter specifically described in Scripps Technology, and (iv) divisionals, continuations,
reissues, reexaminations, and extensions of any patent or application set forth in (i)-(iii) 

2

 

above,
so long as said patents have not been held invalid and/or unenforceable by a court of competent jurisdiction from which there is no appeal or, if appealable, from which no appeal has
been taken. 

        1.13    Scripps Technology.    The term "Scripps Technology" shall mean so much of the
technology as is proprietary to Scripps and disclosed in the patents, patent applications and disclosures listed on Exhibit A which is attached hereto and incorporated herein by reference,
together with materials, information and know-how that are specifically related to the subject matter of the patents, patent applications, and disclosures listed on Exhibit A
and are proprietary to Scripps, whether or not the same is eligible for protection under the patent laws of the United States or elsewhere, and whether or not the same would be
enforceable as a trade secret or the copying of which would be enjoined or restrained by a court as constituting unfair competition. 

        1.14    Valid Claim.    The term "Valid Claim" shall mean a claim of any issued and
unexpired patent within the Scripps Patent Rights which has not been held unenforceable, unpatentable or invalid by a decision of a court or governmental body of competent jurisdiction in a ruling
that is unappealable or unappealed within the time allowed for appeal, which has not been rendered unenforceable through disclaimer or otherwise, and which has not been lost through an interference
proceeding; provided that if a claim of a pending patent application has not issued as a claim of an issued patent within the Scripps Patent Rights within ten (10) years after the filing date
from which such claim takes priority, such pending claim shall not be a Valid Claim for the purposes of this Agreement. 

        2.    License Terms and Conditions.    

        2.1    Grant of License.    Scripps hereby grants to Licensee an exclusive, worldwide
license, including the right to sublicense, to Scripps Technology and under Scripps Patent Rights, to make, to have made, to import, to use, to offer for sell, and to sell Licensed Products in the
Field, subject to the terms of this Agreement. Scripps hereby grants to Licensee an exclusive, worldwide license to Licensed Software and
under Licensed Right to copy or reproduce the Licensed Software; prepare derivative works based upon the Licensed Software, that is, modifications; distribute copies of the Licensed Software to the
public by sale, rental, lease, or lending; perform the Licensed Software publicly; and display the Licensed Software publicly. 

        2.2    Initial License Fee.    In partial consideration for the exclusive license granted
pursuant to Section 2.1 hereof, Licensee shall pay to Scripps a nonrefundable license fee upon execution of this Agreement in the amount of four hundred thousand (400,000) shares of Optimer
Pharmaceuticals, Inc. common stock (10% of the fully diluted common stock issued before the first round financing). The license fee described in this Section is consideration for the grant and
continuation of the license hereunder, and Scripps shall have no obligation to return any portion of such license fee, notwithstanding any failure by Licensee to develop any Licensed Product or market
any Licensed Product commercially, and notwithstanding the volume of sales of any such Licensed Product. 

        2.3    Royalties.    

        2.3.1    Percentage Royalty.    As additional consideration for the exclusive license
granted pursuant to Section 2.1 hereof, Licensee shall pay to Scripps a continuing royalty on a country-by-country basis in the amount of
(i) [***] percent ([***]%) of Net Sales of Licensed Products which cannot be made, imported, used or sold in such country without utilizing one
or more Valid Claims with no provision or offset for combination products; (ii) [***] a percent ([***]%) of Net Sales of Licensed Products, in
all countries where the manufacture, use or sale of such Licensed Product is not covered by a Valid Claim in such country or Licensed Rights but is covered by Scripps Technology; or
(iii) [***] percent ([***]%) of net sales of Licensed Products covered by Licensed Rights, or from the internal use of Licensed Products and/or
Licensed Software on behalf of a third party. 

3

 

        2.4    Milestone Payments.    In consideration for the license granted to Licensee,
Licensee shall pay to Scripps within thirty (30) days upon the first occurrence, in a Major Market Country, of each milestone specified below for the first Licensed Product to meet
such milestone. 

	Successful completion of a Phase II clinical trial	 	$	[***]
	First NDA filing in US or equivalent major country	 	$	[***]
	First government marketing and distribution approval	 	$	[***]

        2.5    Quarterly Payments.    

        2.5.1    Sales by Licensee.    With regard to Net Sales made by Licensee or its
Affiliates, royalties shall be payable by Licensee quarterly, within sixty (60) days after the end of each calendar quarter, based upon the Net Sales of Licensed Products during such preceding
calendar quarter, commencing with the calendar quarter in which the first commercial sale of any Licensed Product is made. 

        2.5.2    Sales by Sublicensees.    With regard to Net Sales made by sublicensees of
Licensee or its Affiliates, royalties shall be payable by Licensee quarterly, within ninety (90) days after the end of each calendar quarter, based upon the Net Sales of Licensed Products by
such sublicensee during such preceding calendar quarter, commencing with the calendar quarter in which the first commercial sale of any Licensed Product is made by such sublicensee. 

        2.6    Term of License.    Unless terminated sooner in accordance with the provisions of
this Agreement, the term of this license shall expire when the last of the royalty obligations set forth in Section 2.10 below have expired. Notwithstanding the foregoing, if applicable
government regulations require a shorter term and/or a shorter term of exclusivity than provided for herein, then the term of this License Agreement shall be so shortened or this License Agreement
shall be amended to provide for a non-exclusive license, and, in such event, the parties shall negotiate in good faith to reduce appropriately the royalties payable as set forth under the
section heading "Royalties" hereof. 

        2.7    Sublicense.    Licensee shall have the sole and exclusive right to grant
sublicenses to any party with respect to the rights conferred upon Licensee under this Agreement, provided, however, that (i) any such sublicense shall be subject in all respects to the
restrictions, exceptions, royalty obligations, reports, termination provisions, and other provisions contained in this Agreement (but not including the payment of a license fee pursuant to
Section 2.2 hereof) and (ii) each such sublicensee, and the form and substance of each such sublicense, shall be subject to the prior written approval of Scripps, which approval shall
not be unreasonably withheld, provided, however, that any sublicense granted to an Affiliate of Licensee shall not be subject to Scripps's prior written approval. No approval shall be required as to
any sublicense which utilizes the form of sublicense attached hereto as Exhibit B. Licensee shall pay Scripps, or cause its Affiliate or sublicensee to pay Scripps, the same royalties on all
Net Sales made by Licensee, its Affiliate or sublicensee. Each Affiliate and sublicensee shall report its
Net Sales to Scripps through Licensee, which Net Sales shall be aggregated with any Net Sales of Licensee for purposes of determining the Net Sales upon which royalties are to be paid
to Scripps. 

        Except
as set forth below, any sublicense revenues, other than royalties, due Licensee pursuant to the grant of a sublicense to a party not an Affiliate but excluding any payments for
research, development, or equity ("Sublicense Revenue"), so long as said equity payment reflects the current fair market value of the stock, as determined by such sublicensees' board of directors,
which determination will be acceptable as long as it is reasonable and reflects industry standards in comparable arrangements, shall be reported to Scripps by Licensee. For the first three years of
this Agreement, the calculation of Scripps' percentage of Sublicense Revenue shall be based on a pro-rata contribution of Scripps Technology if it is sublicensed in combination with
non-Scripps technology. For the fourth year and after Scripps shall receive [***] of the Sublicense Revenue with no reductions if sublicensed in 

4

 

combination
with non-Scripps technology. Licensee shall pay Scripps a portion of Sublicense Revenue according to the following schedule: 

	First six (6) months after execution of this agreement	 	[***] of the Sublicense Revenue
	Second six (6) months after execution of this agreement	 	[***] of the Sublicense Revenue
	Third six (6) months after execution of this agreement	 	[***] of the Sublicense Revenue
	Fourth six (6) months after execution of this agreement	 	[***] of the Sublicense Revenue
	Third year after execution of this agreement	 	[***] of the Sublicense Revenue

        2.8    Duration of Royalty Obligations.    The royalty obligations of Licensee as to each
Licensed Product shall terminate: (i) on a country-by-country basis concurrently with the expiration of the last to expire of Scripps Patent Rights utilized by or in
such Licensed Product in each such country; (ii) with respect to Licensed Products utilizing only Scripps Technology but not Scripps Patent Rights, fifteen (15) years after the date of
first commercial sale of such Licensed Product in such country; and (iii) for Licensed Software protected by copyright seventy-five (75) years from the filing of the
copyright in the United States. 

        2.9    Reports.    Licensee shall furnish to Scripps at the same time as each royalty
payment is made by Licensee, a detailed written report of Net Sales of the Licensed Products and the royalty due and payable thereon, including a description of any offsets or credits deducted
therefrom, on a product-by-product and country-by-country basis, for the calendar quarter upon which the royalty payment is based. 

        2.10    Records.    Licensee shall keep, and cause its Affiliates and sublicensees to
keep, full, complete and proper records and accounts of all sales of Licensed Products in sufficient detail to enable the royalties payable on Net Sales of each Licensed Product to be determined.
Scripps shall have the right to appoint an independent certified public accounting firm approved by Licensee, which approval shall not be unreasonably withheld, to audit the records of Licensee, its
Affiliates and sublicensees as necessary to verify the royalties payable pursuant to this Agreement provided such auditor executes a confidentiality agreement standard for the industry. Licensee, its
Affiliates and sublicensees shall pay to Scripps an amount equal to any additional royalties to which Scripps is entitled as disclosed by the audit, plus interest thereon at the rate of one and
one-half percent (1.5%) per month. Such audit shall be at Scripps's expense; provided, however, that if the audit discloses that Scripps was underpaid royalties with respect to any
Licensed Product by at least five percent (5%) for any calendar quarter, then Licensee, its Affiliates or sublicensee, as the case may be shall reimburse Scripps for any such audit costs. Scripps may
exercise its right of audit as to each of Licensee, its Affiliates or sublicensees no more frequently than once in any calendar year. The accounting firm shall disclose to Scripps only information
relating to the accuracy of the royalty payments. Licensee, its Affiliates and sublicensees shall preserve and maintain all such records required for audit for a period of three (3) years after
the calendar quarter to which the record applies. 

        2.11    Foreign Sales.    The remittance of royalties payable on sales outside the
United States shall be payable to Scripps in United States Dollar equivalents at the official rate of exchange of the currency of the country from which the royalties are payable, as
quoted in the Wall Street Journal for the last business day of the calendar quarter in which the royalties are payable. If the transfer of or the conversion into the United States Dollar
equivalents of any such remittance in any such instance is not lawful or possible, the payment of such part of the royalties as is necessary shall be made by the deposit thereof, in the currency of
the county where the sale was made on which the royalty was based to the credit and account of Scripps or its nominee in any commercial bank or trust company of Scripps's choice located in that
country, prompt written notice of which shall be given by Licensee to Scripps. 

5

   
        2.12    Foreign Taxes.    Any tax required to be withheld by Licensee under the laws of
any foreign country for the accounts of Scripps shall be promptly paid by Licensee for and on behalf of Scripps to the appropriate governmental authority, and Licensee shall use its best efforts to
furnish Scripps with proof of payment of such tax together with official or other appropriate evidence issued by the applicable government authority. Any such tax actually paid on Scripps's behalf
shall be deducted from royalty payments due Scripps. 

        3.    Patent Matters.    

        3.1    Patent Prosecution and Maintenance.    From and after the date of this Agreement,
the provisions of this Section 3 shall control the prosecution and maintenance of any patent application and any patent included within Scripps Patent Rights. Subject to the requirements,
limitations, and conditions set forth in this Agreement, Scripps shall direct and control (i) the preparation, filing, and prosecution of the United States and foreign patent
applications within Scripps Patent Rights (including any interferences and foreign oppositions) and (ii) maintain the patents issuing therefrom. Scripps shall select the patent attorney, which
may be independent outside counsel specialized in the Field, subject to Licensee's written approval, which approval shall not be unreasonably withheld. Both parties hereto agree that Scripps may, at
its sole discretion, utilize Scripps's Office of Patent Counsel in lieu of independent counsel for patent prosecution and maintenance described herein, and the fees and expenses incurred by Scripps
with respect to work done by such Office of Patent Counsel shall be paid as set forth below. Licensee shall have full rights of consultation with the patent attorney so selected on all matters
relating to Scripps Patent Rights. Scripps shall use its best efforts to implement all reasonable requests made by Licensee with regard to the preparation, filing, prosecution and/or maintenance of
the patent applications and/or patents within Scripps Patent Rights. 

        3.2    Information to Licensee.    Scripps shall keep Licensee timely informed with
regard to the patent application and maintenance processes. Scripps shall deliver to Licensee copies of all patent applications, amendments, related correspondence, and other related matters within
twenty (20) days of submission or receipt, as applicable, including a monthly updated patent prosecution and maintenance schedule of all patent applications and patents. 

        3.3    Patent Costs.    Licensee acknowledges and agrees that Scripps does not have
independent funding to cover patent costs, and that the license granted hereunder is in part in consideration for Licensee's assumption of patent costs and expenses as described herein. Licensee shall
pay for all expenses incurred by Scripps pursuant to Section 3.1 hereof. In addition, Licensee agrees to reimburse Scripps for all patent costs and expenses paid or incurred by Scripps' in
connection with Scripps Patent Rights licensed hereunder. Licensee agrees to pay all such past and future patent expenses directly or to reimburse Scripps for the payment of such expenses within
thirty (30) days after Licensee receives an itemized invoice therefor. In the event Licensee elects to discontinue payment for the filing,
prosecution and/or maintenance of any patent application and/or patent within Scripps Patent Rights, any such patent application or patent shall be excluded from the definition of Scripps Patent
Rights and from the scope of the license granted under this Agreement, and all rights relating thereto shall revert to Scripps and may be freely licensed by Scripps. Licensee shall give Scripps at
least thirty (30) days' prior written notice of such election. No such notice shall have any effect on Licensee's obligations to pay expenses incurred up to the effective date of
such election. 

        3.4    Ownership.    The patent applications filed and the patents obtained by Scripps
pursuant to Section 3.1 hereof shall be owned solely by Scripps, assigned to Scripps and deemed a part of Scripps Patent Rights. 

        3.5    Scripps Right to Pursue Patent.    If at any time during the term of this
Agreement, Licensee's rights with respect to Scripps Patent Rights are terminated, Scripps shall have the right to take whatever action Scripps deems appropriate to obtain or maintain the
corresponding patent protection at its own expense. If Scripps pursues patents under this Section 3.5, Licensee agrees to cooperate fully, 

6

 

including
by providing, at no charge to Scripps, all appropriate technical data and executing all necessary legal documents in connection with such transfer. 

        3.6    Infringement Actions.    

        3.6.1    Prosecution and Defense of Infringements.    In order to maintain the license
granted hereunder in force, Licensee shall prosecute any and all infringements of any Scripps Patent Rights and shall defend all charges of infringement arising as a result of the exercise of Scripps
Patent Rights by Licensee, its Affiliates or sublicensees, unless otherwise agreed to between Scripps and Licensee. Licensee may enter into settlements, stipulated judgements or other arrangements
respecting such infringement, at its own expense, but only with the prior written consent of Scripps, which consent shall not be reasonably withheld. Scripps shall permit any action to be brought in
its name if required by law, and Licensee shall hold Scripps harmless from any costs, expenses of liability respecting all such infringements or charges of infringement. Scripps agrees to provide
reasonable assistance of a technical nature which Licensee may require in any litigation arising in accordance with the provisions of this Section 3.6.1, for which Licensee shall pay to Scripps
a reasonable hourly rate of compensation. In the event Licensee fails to prosecute any such infringement, Licensee shall notify Scripps in writing promptly and Scripps shall have the right to
prosecute such infringement on its own behalf. Failure on the part of Licensee to prosecute any such infringement shall be grounds for termination of the license granted to Licensee hereunder
(but solely with respect to the patent at issue, which, with respect to the country in which such infringement occurs, shall thereafter be excluded from the the definition of Scripps Patent
Rights) at the option of Scripps. 

        3.6.2    Allocation of Recovery.    Any damages, settlements, or other recovery from an
infringement action undertaken by Licensee pursuant to Section 3.6.1 shall first be used to reimburse the parties for the
costs and expenses incurred in such action, and shall thereafter be allocated between the parties on the same basis as Net Sales of Licensed Products and shall not be deemed to be Sublicense Revenues. 

        4.    Obligations Related to Commercialization.    

        4.1    Commercial Development Obligation.    In order to maintain the license granted
hereunder in force, Licensee shall use reasonable efforts and due diligence to develop Scripps Technology and Scripps Patent Rights which are licensed hereunder into commercially viable Licensed
Products, as promptly as is reasonably and commercially feasible, and thereafter to produce and sell reasonable quantities of Licensed Products. Licensee shall keep Scripps generally informed as to
Licensee's progress in such development, production and sale, including its efforts, if any, to sublicense Scripps Technology and Scripps Patent Rights, and Licensee shall deliver to Scripps an annual
written report and such other reports as Scripps may reasonably request. The parties hereto acknowledge and agree that achievement of the milestones described in Exhibit C attached hereto on or
before the dates set forth therein shall be evidence of compliance by Licensee with its commercial development obligations hereunder for the time periods specified in Exhibit C. In the event
Scripps has a reasonable basis to believe that Licensee is not using reasonable efforts and due diligence as required hereunder, upon notice by Scripps to Licensee which specifies the basis for such
belief, Scripps and Licensee shall negotiate in good faith to attempt to mutually resolve the issue. In the event Scripps and Licensee cannot agree upon any matter related to Licensee's commercial
development obligations, the parties agree to utilize arbitration pursuant to Section 10.2 hereof in order to resolve the matter. If the arbitrator determines that Licensee has not complied
with its obligations hereunder, and such default is not fully cured within sixty (60) days after the arbitrator's decision, Scripps may terminate Licensee's rights under this Agreement. 

        4.2    Governmental Approvals and Marketing of Licensed Products.    Licensee shall be
responsible for obtaining all necessary governmental approvals for the development, production, distribution, sale, and use of any Licensed Product, at Licensee's expense, including, without
limitation, any safety studies. Licensee shall have sole responsibility for any warning labels, packaging, and instructions as to the use of Licensed Products and for the quality control for any
Licensed Product. 

7

 

        4.3    Indemnity.    Licensee hereby agrees to indemnify, defend and hold harmless
Scripps and any parent, subsidiary or other affiliated entity and their trustees, officers, employees, scientists and agents from and against any liability or expense arising from any product
liability claim asserted by any party as to any Licensed Product or any claims arising from the use of any Scripps Patent Rights, Licensed Right, Licensed Software, or Scripps Technology pursuant to
this Agreement. Such indemnity and defense obligation shall apply to any product liability or other claims, including without limitation, personal injury, death or property damage, made by employees,
subcontractors, sublicensees, or agents of Licensee, as well as any member of the general public. 

        4.4    Patent Marking.    To the extent required by applicable law, Licensee shall mark
all Licensed Products or their containers in accordance with the applicable patent marking laws. 

        4.5    No Use of Name.    The use of the name "The Scripps Research Institute",
"Scripps", or any variation thereof in connection with the advertising or sale of Licensed Products is expressly prohibited. 

        4.6    U.S. Manufacture.    To the extent required by applicable
United States laws, if at all, Licensee agrees that Licensed Products will be manufactured in the United States, or its territories, subject to such waivers as may be required, or
obtained, if at all, from the United States Department of Health and Human Services, or its designee. 

        4.7    Foreign Registration.    Licensee agrees to register this Agreement with any
foreign governmental agency which requires such registration, and Licensee shall pay all costs and legal fees in connection therewith. In addition, Licensee shall assure that all foreign laws
affecting this Agreement or the sale of Licensed Products are fully satisfied. 

        5.    Limited Warranty.    Scripps hereby represents and warrants that it has full right
and power to enter into this Agreement and has received an assignment from inventors and/or creators of the Scripps Technology, Scripps Patent Rights, and the Licensed Rights. SCRIPPS MAKES NO OTHER
WARRANTIES CONCERNING SCRIPPS PATENT RIGHTS, LICENSED SOFTWARE, OR SCRIPPS TECHNOLOGY COVERED BY THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE AS TO SCRIPPS PATENT RIGHTS, SCRIPPS TECHNOLOGY, LICENSED RIGHT, LICENSED SOFTWARE OR ANY LICENSED PRODUCT. SCRIPPS MAKES NO WARRANTY OR REPRESENTATION AS TO THE
VALIDITY OR SCOPE OF SCRIPPS PATENT RIGHTS, OR THAT ANY LICENSED PRODUCT WILL BE FREE FROM AN INFRINGEMENT ON PATENTS OR OTHER INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, OR THAT NO THIRD PARTIES
ARE IN ANY WAY INFRINGING SCRIPPS PATENT RIGHTS OR SCRIPPS TECHNOLOGY COVERED BY THIS AGREEMENT. 

        6.    Interests in Intellectual Property Rights.    

        6.1    Preservation of Title.    Scripps shall retain full ownership and title to Scripps
Technology, and Scripps Patent Rights licensed hereunder and shall use its reasonable best efforts to preserve and maintain such full ownership and title, subject to Licensee fully performing all of
its obligations under this Agreement. 

        6.2    Royalty-free License to Improvements.    Licensee hereby grants to
Scripps a non-exclusive, royalty-free license to any improvement to Scripps Technology developed by Licensee, to use for its own non-commercial research purposes or
grant to, subject to Licensee's approval, other nonprofit institutions for their non-commercial research purposes. 

        6.3    Governmental Interest.    Licensee and Scripps acknowledge that Scripps has
received, and expects to continue to receive, funding from the United States Government in support of Scripps's research activities. Licensee and Scripps acknowledge and agree that their
respective rights and obligations pursuant to this Agreement shall be subject to Scripps's obligations and the rights of the United States Government, if any, which arise or result from
Scripps's receipt of research support from 

8

 

the
United States Government, including without limitation, the grant by Scripps to the United States a non-exclusive, irrevocable, royalty-free license to
Scripps Technology and Scripps Patent Rights licensed hereunder for governmental purposes. 

        6.4    Reservation of Rights.    Scripps reserves the right to use for any
non-commercial research purposes and the right to allow other nonprofit institutions to use for any non-commercial research purposes any Scripps Technology and Scripps Patent
Rights licensed hereunder, without Scripps or such other institutions being obligated to pay Licensee any royalties or other compensation. 

        7.    Confidentiality and Publication.    

        7.1    Treatment of Confidential Information.    The parties agree that during the term
of this Agreement, and for a period of five (5) years after this Agreement terminates, a party receiving Confidential Information of the other party will (i) maintain in confidence such
Confidential Information to the same extent such party maintains its own proprietary industrial information, (ii) not disclose such Confidential Information to any third party without prior
written consent of the other party and (iii) not use such Confidential Information for any purpose except those permitted by this Agreement. 

        7.2    Publications.    Licensee agrees that Scripps shall have a right to publish in
accordance with its general policies. 

        7.3    Publicity.    Except as otherwise provided herein or required by any law, rule or
regulation, no party shall originate any publication, news release or other public announcement, written or oral, whether in the public press, or otherwise, relating to this Agreement or to any
sublicense hereunder, or to the performance hereunder or any such agreements, without the prior written approval of the other party, which approval shall not be unreasonably withheld. Scientific
publications published in accordance with Section 7.2 of this Agreement shall not be construed as publicity governed by this Section 7.3. 

        8.    Term and Termination.    

        8.1    Term.    Unless terminated sooner in accordance with the terms set forth herein,
this Agreement, and the license granted hereunder, shall terminate as provided in Section 2.6 hereof. 

        8.2    Termination Upon Default.    Any one or more of the following events shall
constitute an event of default hereunder: (i) the failure of a party to pay any amounts when due hereunder and the expiration of thirty (30) days after receipt of a written notice
requesting the payment of such amount; (ii) the failure of a party to perform any obligation required of it to be performed hereunder, and the failure to cure within sixty (60) days
after receipt of notice from the other party specifying in reasonable detail the nature of such default. Upon the occurrence of any event of default, the non-defaulting party may deliver
to the defaulting party written notice of intent to terminate, such termination to be effective upon the date set forth in such notice. 

        Such
termination rights shall be in addition to and not in substitution for any other remedies that may be available to the non-defaulting party. Termination pursuant to this
Section 8.2 shall not relieve the defaulting party from liability and damages to the other party for breach of this Agreement. Waiver by either party of a single default or a succession of
defaults shall not deprive such party of any right to terminate this Agreement arising by reason of any subsequent default. 

        8.3    Termination Upon Bankruptcy or Insolvency.    This Agreement may be terminated by
Scripps giving written notice of termination to Licensee upon the filing of bankruptcy or bankruptcy of Licensee or the appointment of a receiver of any of Licensee's assets, or the making by Licensee
of any assignment for the benefit of creditors, or the institution of any proceedings against Licensee under any bankruptcy law. Termination shall be effective upon the date specified in
such notice. 

9

 

        8.4    Rights Upon Expiration.    Neither party shall have any further rights or
obligations upon the expiration of this Agreement upon its regularly scheduled expiration date with respect to this Agreement, other than the obligation of Licensee to make any and all reports and
payments for the final quarter period. Provided, however, that upon such expiration, each party shall be required to continue to abide by its non-disclosure obligations as described in
Section 7.1, and Licensee shall continue to abide by its obligation to indemnify Scripps as described in Section 4.3 and by its obligations under Section 6.2 hereof. 

        8.5    Rights Upon Termination.    Notwithstanding any other provision of this Agreement,
upon any termination of this Agreement prior to the regularly scheduled expiration date of this Agreement, the license granted hereunder shall terminate. Except as otherwise provided in
Section 8.6 of this Agreement with respect to work-in-progress, upon such termination, Licensee shall have no further right to develop, manufacture or market any
Licensed Product, or to otherwise use any Scripps Patent Rights or any Scripps Technology not otherwise includable therein. Upon any such termination, Licensee shall promptly return all materials,
samples, documents,
information, and other materials which embody or disclose Scripps Patent Rights or any Scripps Technology not otherwise includable therein; provided, however, that Licensee shall not be obligated to
provide Scripps with proprietary information which Licensee can show that it independently developed. Any such termination shall not relieve either party from any obligations accrued to the date of
such termination. Upon such termination, each party shall be required to abide by its nondisclosure obligations as described in Section 7.1, and Licensee shall continue to abide by its
obligations to indemnify Scripps as described in Section 4.3. 

        8.6    Work-in-Progress.    Upon any such early termination of
the license granted hereunder in accordance with this Agreement, Licensee shall be entitled to finish any work-in-progress and to sell any completed inventory of a Licensed
Product covered by such license which remain on hand as of the date of the termination, so long as Licensee pays to Scripps the royalties applicable to said subsequent sales in accordance with the
terms and conditions as set forth in this Agreement, provided that no such sales shall be permitted after the expiration of six (6) months after the date of termination. 

        9.    Assignment; Successors.    

        9.1    Assignment.    Neither this Agreement nor any rights granted hereunder may be
assigned or transferred by Licensee except (i) to an Affiliate of Licensee; (ii) to a successor in interest to all or substantially all of the business assets of Licensee whether by way
of a merger, consolidation, sale of all or substantially all of Licensee's assets, change of control, or similar transaction; or (iii) as expressly permitted hereunder, without the prior
written consent of Scripps. 

        9.2    Binding Upon Successors and Assigns.    Subject to the limitations on assignment
herein, this Agreement shall be binding upon and inure to the benefit of any successors in interest and assigns of Scripps and Licensee. Any such successor or assignee of Licensee's interest shall
expressly assume in writing the performance of all the terms and conditions of this Agreement to be performed by Licensee. 

        10.    General Provisions.    

        10.1    Independent Contractors.    The relationship between Scripps and Licensee is that
of independent contractors. Scripps and Licensee are not joint venturers, partners, principal and agent, master and servant, employer or employee, and have no other relationship other than independent
contracting parties. Scripps and Licensee shall have no power to bind or obligate each other in any manner, other than as is expressly set forth in this Agreement. 

10

   
        10.2    Arbitration.    Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA"), and the procedures set
forth below. In the event of any inconsistency between the Rules of AAA and the procedures set forth below, the procedures set forth below shall control. Judgment upon the award rendered by the
arbitrators may be enforced in any court having jurisdiction thereof. 

        10.2.1    Location.    The location of the arbitration shall be in the County of
San Diego. 

        10.2.2    Selection of Arbitrators.    The arbitration shall be conducted by a panel of
three neutral arbitrators who are independent and disinterested with respect to the parties, this Agreement, and the outcome of the arbitration. Each party shall appoint one neutral arbitrator, and
these two arbitrators so selected by the parties shall then select the third arbitrator. If one party has given written notice to the other party as to the identity of the arbitrator appointed by the
party, and the party thereafter makes a written demand on the other party to appoint its designated arbitrator within the next ten days, and the other party fails to appoint its designated arbitrator
within ten days after receiving said written demand, then the arbitrator who has already been designated shall appoint the other two arbitrators. 

        10.2.3    Discovery.    Unless the parties mutually agree in writing to some additional
and specific pre-hearing discovery, the only pre-hearing discovery shall be (a) reasonably limited production of relevant and non-privileged documents, and
(b) the identification of witnesses to be called at the hearing, which identification shall give the witness's name, general qualifications and position, and a brief statement as to the general
scope of the testimony to be given by the witness. The arbitrators shall decide any disputes and shall control the process concerning these pre-hearing discovery matters. Pursuant to the
Rules of AAA, the parties may subpoena witnesses and documents for presentation at the hearing. 

        10.2.4    Case Management.    Prompt resolution of any dispute is important to both
parties; and the parties agree that the arbitration of any dispute shall be conducted expeditiously. The arbitrators are instructed and directed to assume case management initiative and control over
the arbitration process (including scheduling of events, pre-hearing discovery and activities, and the conduct of the hearing), in order to complete the arbitration as expeditiously as is
reasonably practical for obtaining a just resolution of the dispute. 

        10.2.5    Remedies.    The arbitrators may grant any legal or equitable remedy or relief
that the arbitrators deem just and equitable, to the same extent that remedies or relief could be granted by a state or
federal court, provided however, that no punitive damages may be awarded. No court action may be maintained seeking punitive damages. The decision of any two of the three arbitrators appointed shall
be binding upon the parties. 

        10.2.6    Expenses.    The expenses of the arbitration, including the arbitrators' fees,
expert witness fees, and attorney's fees, may be awarded to the prevailing party, in the discretion of the arbitrators, or may be apportioned between the parties in any manner deemed appropriate by
the arbitrators. Unless and until the arbitrators decide that one party is to pay for all (or a share) of such expenses, both parties shall share equally in the payment of the arbitrators' fees
as and when billed by the arbitrators. 

        10.2.7    Confidentiality.    Except as set forth below, the parties shall keep
confidential the fact of the arbitration, the dispute being arbitrated, and the decision of the arbitrators. Notwithstanding the foregoing, the parties may disclose information about the arbitration
to persons who have a need to know, such as directors, trustees, management employees, witnesses, experts, investors, attorneys, lenders, insurers, and others who may be directly affected.
Additionally, if a party has stock which is publicly traded, the party may make such disclosures as are required by applicable securities laws. Further, if a party is expressly asked by a third party
about the dispute or the arbitration, the party may disclose and acknowledge in general and limited terms that there is a dispute with the other party 

11

 

which
is being (or has been) arbitrated. Once the arbitration award has become final, if the arbitration award is not promptly satisfied, then these confidentiality provisions shall no longer
be applicable. 

        10.3    Entire Agreement; Modification.    This Agreement sets forth the entire agreement
and understanding between the parties as to the subject matter hereof. There shall be no amendments or modifications to this Agreement, except by a written document which is signed by
both parties. 

        10.4    California Law.    This Agreement shall be construed and enforced in accordance
with the laws of the State of California without regard to the conflicts of laws principles thereof. 

        10.5    Headings.    The headings for each article and section in this Agreement have
been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular article or section. 

        10.6    Severability.    Should any one or more of the provisions of this Agreement be
held invalid or unenforceable by a court of competent jurisdiction, it shall be considered severed from this Agreement and shall not serve to invalidate the remaining provisions thereof. The parties
shall make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by them when entering this Agreement may
be realized. 

        10.7    No Waiver.    Any delay in enforcing a party's rights under this Agreement or any
waiver as to a particular default or other matter shall not constitute a waiver of such party's rights to the future enforcement of its rights under this Agreement, excepting only as to an express
written and signed waiver as to a particular matter for a particular period of time. 

        10.8    Name.    Whenever there has been an assignment or a sublicense by Licensee as
permitted by this Agreement, the term "Licensee" as used in this Agreement shall also include and refer to, if appropriate, such assignee or sublicensee. 

        10.9    Attorneys' Fees.    In the event of a dispute between the parties hereto or in
the event of any default hereunder, the party prevailing in the resolution of any such dispute or default shall be entitled to recover its reasonable attorneys' fees and other costs incurred in
connection with resolving such dispute or default. 

        10.10    Notices.    Any notices required by this Agreement shall be in writing, shall
specifically refer to this Agreement and shall be sent by registered or certified airmail, postage prepaid, or by telefax, telex or cable, charges prepaid, or by overnight courier, postage prepaid and
shall be forwarded to the respective addresses set forth below unless subsequently changed by written notice to the other party: 

	For Scripps:	 	The Scripps Research Institute
	 	 	 	 	10550 North Torrey Pines Road, TPC-9

La Jolla, California 92037

Attention: Director, Technology Development

Fax No.: (858) 784-9910
	
 and	
 	

The Scripps Research Institute
	 	 	 	 	10550 North Torrey Pines Road, TPC-8

La Jolla, California 92037

Attention: General Counsel

Fax No.: (858) 784-9910
	
 For Licensee:	
 	

Optimer Pharmaceutical, Inc.
	 	 	 	 	1120 Drake Ave.

Burlingame, CA 94010

Attention: Michael Chang

Fax No.: 650-548-4955

12

 

        Notice
shall be deemed delivered upon the earlier of (i) when received, (ii) three (3) days after deposit into the mail, or (iii) the date notice is sent via
telefax, telex or cable, (iv) the day immediately following delivery to overnight courier (except Sunday and holidays). 

        10.11    Compliance with U.S. Laws.    Nothing contained in this Agreement shall
require or permit Scripps or Licensee to do any act inconsistent with the requirements of any United States law, regulation or executive order as the same may be in effect from time
to time. 

        IN
WITNESS WHEREOF, the parties have executed this Agreement by their duly authorized representatives as of the date set forth above. 

	 SCRIPPS:	 	LICENSEE:
	
    	

 	
 	

 	

 
	
  THE SCRIPPS RESEARCH INSTITUTE	
 	

OPTIMER PHARMACEUTICALS, Inc.
	
    	

 	
 	

 	

 
	
 By:	

	
 	

By:	

	
 Title:	

	
 	

Title:	

13

 
EXHIBIT A 

DISCLOSURE
OF TECHNOLOGY 

	
 	
 	

 
	
 TSRI 473.0	
 	

US issued patent # 5,599,915 "Sialyl Lewis X Mimetics" by Drs. Wong and Kajimoto
	
 TSRI 473.1	
 	

US issued patent # 5,614,615 "Sialyl Lewis X Mimetics Incorporating Fucopeptides" by Dr. Wong
	
 TSRI 473.2	
 	

Foreign Cases:

Canada #2,414,107 "Sialyl Lewis X Mimetics" by Drs. Wong and Kajimoto

China

Japan

Singapore

South Korea
	
 TSRI 473.3	
 	

US patent application #08/933,775 "Sialyl Lewis X Mimetics Incorporating Fucopeptides" by Drs. Wong, Lin, and Kajimoto
	
 TSRI 473.4	
 	

US patent application #09/088,411 "Fucopeptide Mimetics" by Drs. Wong and Lambe
	
 TSRI 552.1	
 	

US patent application #08/918,858 "Liposomic Sialyl Lewis X Mimetics" by Drs. Wong, Lin and Woltering
	
 TSRI 557.0	
 	

US issued patent #5,837,862 "Sialyl Lewis X Mimetics Incorporating Mannopeptides" by Drs. Wong, Kajimoto, Marron, Woltering, and Weitz-Schmidt
	
 TSRI 566.0	
 	

US issued patent #5,830,871 "Inhibitors of E-, P—and L-Selectin Binding" by Drs. Wong, Moris-Varas, and Lin
	
 TSRI 597.1	
 	

US provisional patent application #60/111,696 "Preparation of 1 and 2 Fluorsugars and Their Glycosides Using the Selectfluor Fluoridination Reagent" by Drs. Wong Burkart, Hung, and Zhang
	
 TSRI 663.0	
 	

US provisional patent application #60/096,003 "Alpha 2,8/2,9 Polysialtransferase" by Drs. Wong, Shen, and Datta
	
 TSRI 664.0	
 	

US provisional patent application #60/096,001 "Programmed One-Pot Multistep Assembly of Oligosaccharides" by Drs. Wong, Zhang, Ollman, Baasov, and Ye

Including copyright registration of the computer program

14

 
EXHIBIT B 

FORM
OF SUBLICENSE 

        This
Sublicense Term Sheet is entered into and made effective as of
                                    ,
19             by and between
                                    , a
                                     located at
                                     ("Licensee") and
                                    , a
                                     located at
                                     ("Sublicensee").
 

        Grant
of Sublicense.    Licensee hereby grants to Sublicensee a sublicense under and on all the same terms and conditions of that certain License
Agreement between Licensee and The Scripps Research
Institute, a California nonprofit public benefit corporation ("Scripps") attached hereto as Exhibit I (the "Master License Agreement"), except as set forth below: 

	 	
 a.    Technology subject to Sublicense:	
 	

	

	

	 	
 b.    Term:	
 	

	

	

	 	
 c.    Royalty Payments:	
 	

	

	

	 	
 d.    Commercial Development Obligations:	
 	

	

	

        By
its signature below, Sublicensee agrees to be bound by all of the terms and conditions of the Master License Agreement, as modified hereby, for the benefit of Licensee
and Scripps. 

	
 LICENSEE:	
 	

SUBLICENSEE:
	

     	

 	

 	

 	

 
	

   By:	

	

 	

By:	

	

   Title:	

	

 	

Title:	

15

 
EXHIBIT C 

MILESTONES

        Financial:
Optimer shall have received at least one and half million dollars ($1,500,000) in funding within three (3) years from the date hereof, or such license to the Scripps
Patent Rights and Scripps Technology shall terminate. 

        Developmental:
Recognizing that Optimer is a small, early stage company, Optimer will provide Scripps with developmental milestones for the technology in the first year following
execution of this Agreement. The developmental milestones provided by Optimer will not be unreasonably rejected by Scripps. 

16

QuickLinks

Exhibit 10.7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}]]