10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to _____________.

Commission file number 0-20713

CASI PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

Delaware	58-1959440
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

9620 Medical Center Drive, Suite 300

Rockville, Maryland

(Address of principal executive offices)

20850

(Zip code)

(240) 864-2600

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES xNO ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES x NO ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company þ

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ¨ NO x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most recent practicable date.

Class	Outstanding at November 7, 2014
Common Stock $.01 Par Value	32,445,811

CASI PHARMACEUTICALS, INC.

Table of Contents

PART I.  FINANCIAL INFORMATION		PAGE
Item 1 --  Consolidated Financial Statements
Consolidated Balance Sheets as of September 30, 2014 (unaudited) and December 31, 2013		4
Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2014 and 2013 (unaudited)		5
Consolidated Statements of Cash Flows for the  Nine Months Ended September 30, 2014 and 2013 (unaudited)		6
Notes to Consolidated Financial Statements (unaudited)		7
Item 2 --	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3 --	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4 --	Controls and Procedures	23
Part II.  OTHER INFORMATION
Item 1 --	Legal Proceedings	24
Item 1A --	Risk Factors	24
Item 2 --	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3 --	Defaults upon Senior Securities	35
Item 4 --	Removed and Reserved	35
Item 5 --	Other Information	35
Item 6 --	Exhibits	36
SIGNATURES		37

2

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements also may be included in other statements that we make. All statements that are not descriptions of historical facts are forward-looking statements. These statements can generally be identified by the use of forward-looking terminology such as “believes,” “expects,” “intends,” “may,” “will,” “should,” or “anticipates” or similar terminology. These forward-looking statements include, among others, statements regarding the timing of our clinical trials, our cash position and future expenses, and our future revenues.

Our forward-looking statements are based on information available to us today, and we will not update these statements.

Actual results could differ materially from those currently anticipated due to a number of factors, including: the risk that we may be unable to continue as a going concern as a result of our inability to raise sufficient capital for our operational needs; the possibility that we may be delisted from trading on the Nasdaq Capital Market; the volatility in the market price of our common stock; the difficulty of executing our business strategy in China; our inability to enter into strategic partnerships for the development, commercialization, manufacturing and distribution of our proposed product candidates or future candidates; risks relating to the need for additional capital and the uncertainty of securing additional funding on favorable terms; risks associated with our product candidates; risks associated with any early-stage products under development; the risk that results in preclinical models are not necessarily indicative of clinical results; uncertainties relating to preclinical and clinical trials, including delays to the commencement of such trials; the lack of success in the clinical development of any of our products; dependence on third parties; risks relating to the commercialization, if any, of our proposed products (such as marketing, safety, regulatory, patent, product liability, supply, competition and other risks); risks relating to interests of our largest stockholders that differ from our other stockholders; and the risk of substantial dilution of existing stockholders in future stock issuances. Such factors, among others, could have a material adverse effect upon our business, results of operations and financial condition. We caution readers not to place undue reliance on any forward-looking statements, which only speak as of the date made. Additional information about the factors and risks that could affect our business, financial condition and results of operations, are contained in our filings with the U.S. Securities and Exchange Commission (“SEC”), which are available at www.sec.gov.

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PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

CASI Pharmaceuticals, Inc.

Consolidated Balance Sheets

	September 30, 2014			December 31, 2013
ASSETS	(Unaudited)			(Note 2)
Current assets:
Cash and cash equivalents	$	11,817,324		$	15,131,671
Prepaid expenses and other		336,382			279,773
Total current assets		12,153,706			15,411,444
Property and equipment, net		230,564			78,142
Other assets		26,011			17,965
Total assets	$	12,410,281		$	15,507,551
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	600,239		$	402,456
Accrued liabilities		163,922			162,710
Total current liabilities		764,161			565,166
Note payable, net of discount		1,367,365			-
Contingent rights derivative liability		9,441,080			-
Total liabilities		11,572,606			565,166
Commitments and contingencies:		-			-
Stockholders' equity
Convertible preferred stock, $1.00 par  value;
5,000,000 shares authorized and 0 shares issued and
outstanding at September 30, 2014 and December 31, 2013		-			-
Common stock, $.01 par value:
170,000,000 shares authorized at September 30, 2014 and December 31, 2013; 32,525,356 shares and 27,119,974 shares issued at September 30, 2014
and December 31, 2013, respectively		325,251			271,198
Additional paid-in capital		432,221,907			421,775,039
Treasury stock, at cost:  79,545 shares held at September 30, 2014 and
December 31, 2013		(8,034,244	)		(8,034,244	)
Accumulated deficit		(423,675,239	)		(399,069,608	)
Total stockholders' equity		837,675			14,942,385
Total liabilities and stockholders' equity	$	12,410,281		$	15,507,551

See accompanying notes.

4

CASI Pharmaceuticals, Inc.

Consolidated Statements of Operations

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,  2014			September 30,  2013			September 30, 2014			September 30, 2013
Revenues:
Royalties	$	-		$	-		$	-		$	-
Costs and expenses:
Research and development		697,001			779,953			1,981,468			2,079,341
General and administrative		1,150,164			662,621			2,933,456			2,351,793
Acquired in-process research and development		19,681,711			-			19,681,711			-
		21,528,876			1,442,574			24,596,635			4,431,134
Interest (income) expense, net		2,927			(408	)		2,415			(1,241	)
Change in fair value of contingent rights		6,581			-			6,581			-
Net loss	$	(21,538,384	)	$	(1,442,166	)	$	(24,605,631	)	$	(4,429,893	)
Net loss per share (basic and diluted)	$	(0.77	)	$	(0.05	)	$	(0.90	)	$	(0.17	)
Weighted average number of common shares
outstanding (basic and diluted)		27,804,223			27,031,734			27,297,828			25,817,642

See accompanying notes.

5

CASI Pharmaceuticals, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended September 30,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(24,605,631	)	$	(4,429,893	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		32,713			12,900
Stock-based compensation expense		1,852,310			1,554,422
Acquired in-process research and development		19,681,711			-
Change in fair value of contingent rights		6,581			-
Non-cash interest		3,272			-
Changes in operating assets and liabilities:
Accounts receivable		-			669,310
Prepaid expenses and other		(64,655	)		(127,127	)
Accounts payable		197,783			(152,601	)
Payable to related party		-			(86,683	)
Accrued liabilities		1,212			(2,067	)
Net cash used in operating activities		(2,894,704	)		(2,561,739	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of furniture and equipment		(185,135	)		(16,926	)
Cash paid for acquired in-process research and development		(234,508	)		-
Net cash used in investing activities		(419,643	)		(16,926	)
CASH FLOWS FROM FINANCING ACTIVITIES
Stock issuance costs		-			(448,402	)
Net proceeds from sale of common stock or exercise of options and warrants		-			10,849,524
Net cash provided by financing activities		-			10,401,122
Net (decrease) increase in cash and cash equivalents		(3,314,347	)		7,822,457
Cash and cash equivalents at beginning of period		15,131,671			8,049,237
Cash and cash equivalents at end of period	$	11,817,324		$	15,871,694
Supplemental disclosure of cash flow information:
Non-cash investing and financing activities:
Warrant issued to placement agent	$	-		$	115,150
Common stock issued in connection with acquired in-process research and development	$	8,648,611		$	-
Promissory note, net of discount, issued in connection with acquired in-process research and development	$	1,364,093		$	-
Contingent rights issued in connection with acquired in-process research and development	$	9,434,499		$	-

See accompanying notes.

6

CASI PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2014 (unaudited)

1. Company Name Change

On June 12, 2014, the stockholders of EntreMed, Inc. approved changing the Company’s name from EntreMed, Inc. to CASI Pharmaceuticals, Inc., which became effective on June 16, 2014.

2. Basis of Presentation

The accompanying consolidated financial statements include the accounts of CASI Pharmaceuticals, Inc. and its subsidiaries (“CASI” or “the Company”), Miikana Therapeutics, Inc. (“Miikana”) and CASI Pharmaceuticals (Beijing) Co., Ltd. (“CASI China”). CASI China is a non-stock Chinese entity with 100% of its interest owned by CASI. CASI China received approval for a business license from the Beijing Industry and Commercial Administration in August 2012 and has operating facilities in Beijing. All inter-company balances and transactions have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been prepared in accordance with U. S. generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, such consolidated financial statements do not include all of the information and disclosures required by U. S. generally accepted accounting principles for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The accompanying December 31, 2013 financial information was derived from the Company’s audited financial statements in the Annual Report on Form 10-K for the year ended December 31, 2013. Operating results for the three and nine month periods ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. For further information, refer to the Company’s audited consolidated financial statements and footnotes thereto included in its Form 10-K for the year ended December 31, 2013.

Liquidity Risks and Management’s Plans

Since inception, the Company has incurred significant losses from operations and has incurred an accumulated deficit of $423.7 million.  The Company expects to continue to incur operating losses for the foreseeable future due to, among other factors, its continuing clinical activities. On March 14, 2013 (the “2013 Financing”), the Company closed on the sale of 4,495,828 shares of common stock and 2,247,912 warrants to certain investors for approximately $10.8 million (see Note 6). As a result of this transaction, along with on-going cost containment measures, the Company believes that it has sufficient resources to fund its operations for at least the twelve months subsequent to September 30, 2014. The Company will continue to exercise tight controls over operating expenditures and will continue to pursue opportunities, as required, to raise additional capital and will also actively pursue non- or less-dilutive capital raising arrangements in China to support the Company’s dual-country approach to drug development.

7

Reclassifications

Certain prior period amounts were reclassified to conform to the current period presentation. 

3. License Arrangements and Acquisition of In-Process Research and Development

In September 2014, the Company acquired certain product rights and perpetual exclusive licenses from Spectrum Pharmaceuticals, Inc. and certain of its affiliates (together referred to as “Spectrum”), to develop and commercialize the following commercial oncology drugs and drug candidates in China, Taiwan, Hong Kong and Macau (the “Territories”):

· Captisol-Enabled^™ (propylene glycol-free) melphalan (“CE Melphalan”);

· ZEVALIN^® (ibritumomab tiuxetan) (“Zevalin”); and

· MARQIBO^® (vinCRIStine sulfate LIPOSOME injection) (“Marqibo”).

CE Melphalan is currently in Phase III clinical trials in the U.S. (with an NDA submission planned by Spectrum for later in 2014), whereas Zevalin and Marqibo are currently marketed in the U.S. CASI is responsible for developing and commercializing these three drugs in the Territories, including the submission of import drug registration applications and conducting confirmatory clinical trials.

As consideration for the acquisition, the Company issued a total 5,405,382 shares of its common stock, a $1.5 million 0.5% secured promissory note due in March 2016, and certain contingent rights (“Contingent Rights”) to purchase additional shares of its common stock or Series A Preferred Stock. The Company accounted for the acquisition of the product rights and licenses as an “asset acquisition” and, accordingly, recorded the acquired product rights and licenses at their estimated fair values based on the fair value of the consideration exchanged (including transaction costs) of approximately $19.7 million. Because the products underlying the acquired product rights and licenses have not reached technological feasibility and have no alternative uses, they are considered “in-process research and development” costs; as such, the Company expensed the total purchase price at the acquisition date as acquired in-process research and development in the accompanying consolidated statements of operations.

The fair value of the common stock issued was based on the closing market price of the Company’s common stock on the acquisition date. The fair value of the promissory note was measured using Level 3 unobservable inputs including primarily the Company’s estimated incremental borrowing rate as provided by a commercial lending institution.

The Contingent Rights provide Spectrum with the option to acquire, at a strike price of par value, a variable number of additional shares of common stock (or other equity-linked securities) that allows Spectrum to maintain its fully-diluted ownership percentage for a certain time period and under certain terms and conditions. Based on the terms and conditions of the Contingent Rights, the Company has determined that the Contingent Rights are a derivative financial instrument that is not indexed to its common stock and therefore is required to be accounted for at fair value, initially and on a recurring basis. The fair value of the Contingent Rights was measured using Level 3 unobservable inputs, as determined by an independent valuation expert; the unobservable inputs include estimates of the Company’s future capital requirements, and the timing, probability, size and characteristics of those capital raises, among other inputs. The total estimated fair value of the Contingent Rights was $9,434,499 at the acquisition date and was $9,441,080 as of September 30, 2014; the change in fair value is reflected as change in fair value of contingent rights in the accompanying consolidated statements of operations.

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4. Note Payable

As part of the license arrangements with Spectrum (see Note 3), the Company issued to Spectrum a $1.5 million 0.5% secured promissory note due in March 2016. The promissory note was recorded initially at its fair value, giving rise to a discount of approximately $136,000; the promissory note is presented as note payable, net of discount in the accompanying consolidated balance sheets. For the three and nine months ended September 30, 2014, the Company recognized approximately $3,300 of non-cash interest expense related to the amortization of the debt discount, using the effective interest rate method.

5. Fair Value Measurements

Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value. These tiers include:

· Level 1, defined as observable inputs such as quoted prices in active markets for identical assets;

· Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

· Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. At each reporting period, the Company performs a detailed analysis of its assets and liabilities that are measured at fair value. All assets and liabilities for which the fair value measurement is based on significant unobservable inputs or instruments which trade infrequently and therefore have little or no price transparency are classified as Level 3.

The inputs used in measuring the fair value of cash and cash equivalents are considered to be Level 1 in accordance with the three-tier fair value hierarchy. The fair market values are based on period-end statements supplied by the various banks and brokers that held the majority of the Company’s funds. The fair value of short-term financial instruments (primarily accounts receivable, prepaid expenses, accounts payable, accrued expenses, and other current assets and liabilities) approximate their carrying values because of their short-term nature.

9

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis:

The Contingent Rights issued to Spectrum in connection with the license arrangements (see Note 3) are considered derivative liabilities and were recorded initially at their estimated fair value, and are marked to market each reporting period until settlement. The fair value of the Contingent Rights was measured using Level 3 unobservable inputs, as determined by an independent valuation expert; the unobservable inputs include estimates of the Company’s future capital requirements, and the timing, probability, size and characteristics of those capital raises, among other inputs. Generally, if the estimates of the size and probability of the Company’s future capital requirements increase, the fair value of the Contingent Rights will also increase.

The following table presents the Company’s financial liabilities accounted for at fair value on a recurring basis as of September 30, 2014 (none at December 31, 2013) by level within the fair value hierarchy:

	As of September 30, 2014
	Level 1		Level 2		Level 3		Total
Liabilities - Contingent Rights	$	-	$	-	$	9,441,080	$	9,441,080

The following table presents the changes in the Company’s financial liabilities accounted for at fair value on a recurring basis using Level 3 unobservable inputs:

December 31, 2013	$	-
Issuance of Contingent Rights		9,434,499
Change in fair value of Contingent Rights		6,581
Balance at September 30, 2014	$	9,441,080

Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis:

The promissory note issued to Spectrum in connection with the license arrangements (see Note 4) was initially recorded at its fair value using Level 3 unobservable inputs including primarily the Company’s estimated incremental borrowing rate as provided by a commercial lending institution.

Non-Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis:

The Company does not have any non-financial assets and liabilities that are measured at fair value on a recurring basis.

Non-Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis:

The Company measures its long-lived assets, including property and equipment, at fair value on a non-recurring basis. These assets are recognized at fair value when they are deemed to be impaired. No such fair value impairment was recognized in the three and nine months ended September 30, 2014 and 2013.

10

6. Stockholders’ Equity

As described in Note 2 and in connection with the 2013 Financing, on March 1, 2013, the Company entered into a definitive agreement with certain investors (collectively, the “2013 Investors”) for a financing in the aggregate amount of approximately $10.8 million.  In connection with the 2013 Financing, the Company entered into a Securities Purchase Agreement with the 2013 Investors pursuant to which the Company agreed to sell in a transaction registered under the Securities Act of 1933, as amended, 4,495,828 shares of the Company’s common stock and warrants to purchase up to an aggregate of 2,247,912 shares of common stock (the “2013 Warrants”).  The 2013 Warrants cover a number of shares of common stock equal to 50% of the number of shares purchased by each 2013 Investor.  The 2013 Warrants have an exercise price of $2.91 per share and became exercisable on September 4, 2013 and expire on September 4, 2016. The fair value of the 2013 Warrants issued is $3,574,180, calculated using the Black-Scholes-Merton valuation model value of $1.59 with an expected and contractual life of 3.5 years, an assumed volatility of 102.3%, and a risk-free interest rate of 0.40%. The Company completed the closings on the 2013 Financing on March 14, 2013 and received net proceeds of approximately $10.3 million.

In connection with the 2013 Financing, the Company also issued a warrant to its placement agent to purchase up to 61,250 shares of common stock at an exercise price of $3.00 per share of common stock (the “Agent’s Warrant”). The Agent’s Warrant became exercisable on September 4, 2013 and will expire on October 9, 2017. The fair value of the Agent’s Warrant issued is $115,150, calculated using the Black-Scholes-Merton valuation model value of $1.88 with an expected and contractual life of 4.6 years, an assumed volatility of 111.9%, and a risk-free interest rate of 0.85%.

7. Share-Based Compensation

The Company has adopted incentive and nonqualified stock option plans for executive, scientific and administrative personnel of the Company as well as outside directors and consultants. In June 2014, the Company’s shareholders approved an amendment to the 2011 Long-Term Incentive Plan, increasing the number of shares reserved for issuance from 4,230,000 to 5,730,000 shares of common stock to be available for grants and awards. As of September 30, 2014, there are 4,567,876 shares issuable under options previously granted and currently outstanding, with exercise prices ranging from $1.59 to $34.10. In 2014, the Company awarded options to two officers and two board members, covering up to 400,000 shares, in which vesting is subject to achievement of certain performance milestone conditions. In 2012, the Company awarded options to two officers, a portion of which is subject to certain performance conditions and market conditions. Options granted under the plans generally vest over periods varying from immediately to one to three years, are not transferable and generally expire ten years from the date of grant. As of September 30, 2014, 1,605,876 shares remained available for grant under the Company’s 2011 Long-Term Incentive Plan.

The Company records compensation expense associated with stock options and other equity-based compensation in accordance with provisions of authoritative guidance. Compensation costs are recognized over the requisite service period, which is generally the option vesting term of up to three years. Awards with performance conditions will be expensed if it is probable that the performance condition will be achieved. On September 17, 2014, the vesting of all of the performance condition options became probable as a result of the Spectrum transaction discussed in Note 3. Therefore, for the three months ended September 30, 2014, non-cash compensation expense of $686,600 has been recorded for share awards with performance conditions.

11

The Company’s net loss for the nine months ended September 30, 2014 and 2013 includes non-cash compensation expense of $1,852,310 and $1,554,422, respectively, related to the Company’s share-based compensation awards. The compensation expense related to the Company’s share-based compensation arrangements is recorded as components of general and administrative expense and research and development expense, as follows:

	NINE MONTH PERIOD ENDED SEPTEMBER 30,
	2014		2013
Research and development	$	572,842	$	587,186
General and administrative		1,279,468		967,236
Share-based compensation expense	$	1,852,310	$	1,554,422
Net share-based compensation expense, per common share:
Basic and diluted	$	0.07	$	0.06

The Company uses the Black-Scholes-Merton valuation model to estimate the fair value of stock options granted to employees. Option valuation models, including Black-Scholes-Merton, require the input of highly subjective assumptions, and changes in the assumptions used can materially affect the grant date fair value of an award.

Following are the weighted-average assumptions used in valuing the stock options granted during the nine-month periods ended September 30, 2014 and 2013:

	NINE MONTH PERIOD ENDED SEPTEMBER 30,
	2014			2013
Expected volatility		102.41	%		105.37	%
Risk-free interest rate		1.78	%		1.01	%
Expected term of option		5.63 years			5.76 years
Forfeiture rate*		3.00	%		5.00	%
Expected dividend yield		0.00	%		0.00	%

* - Authoritative guidance requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. During the nine- month periods ended September 30, 2014 and 2013, forfeitures were estimated at 3% and 5%, respectively.

The weighted average fair value of stock options granted during the nine-month periods ended September 30, 2014 and 2013 was $1.44 and $1.43, respectively.

12

A summary of the Company’s stock option plans and of changes in options outstanding under the plans for the nine months ended September 30, 2014 is as follows:

	Number of Options		Weighted Average Exercise Price
Outstanding at January 1, 2014		3,586,394	$	2.69
Granted		1,090,000	$	1.83
Exercised		-	$	-
Expired		104,976	$	6.21
Forfeited		3,542	$	1.94
Outstanding at September 30, 2014		4,567,876	$	2.40
Vested and expected to vest at September 30, 2014		4,528,970	$	2.41
Exercisable at September 30, 2014		3,270,995	$	2.64

Cash received from option exercises under all share-based payment arrangements for the three and nine months ended September 30, 2013 was $0 and $7,190, respectively. There were no option exercises during the three or nine months ended September 30, 2014.

8. Income Taxes

At December 31, 2013, the Company had a $3.0 million unrecognized tax benefit. The Company recorded a full valuation allowance on the net deferred tax asset recognized in the consolidated financial statements as of December 31, 2013.

During the nine months ended September 30, 2014, there were no material changes to the measurement of unrecognized tax benefits in various taxing jurisdictions. The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense.

The tax returns for all years in the Company’s major tax jurisdictions are not settled as of January 1, 2014; no changes in settled tax years have occurred through September 30, 2014. Due to the existence of tax attribute carryforwards (which are currently offset by a full valuation allowance), the Company treats all years’ tax positions as unsettled due to the taxing authorities’ ability to modify these attributes.

9. New Accounting Pronouncements

In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2014-15, Presentation of Financial Statements – Going Concern. The new standard requires management to evaluate on a regular basis whether any conditions or events have arisen that could raise substantial doubt about the entity’s ability to continue as a going concern. The guidance 1) provides a definition for the term “substantial doubt,” 2) requires an evaluation every reporting period, interim periods included, 3) provides principles for considering the mitigating effect of management’s plans to alleviate the substantial doubt, 4) requires certain disclosures if the substantial doubt is alleviated as a result of management’s plans, 5) requires an express statement, as well as other disclosures, if the substantial doubt is not alleviated, and 6) requires an assessment period of one year from the date the financial statements are issued.  The standard is effective for the Company’s reporting year beginning January 1, 2017 and early adoption is not permitted. The Company is currently evaluating the impact, if any, that this new accounting pronouncement will have on its financial statements.

13

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers which provides guidance for revenue recognition for contracts, superseding the previous revenue recognition requirements, along with most existing industry-specific guidance. The guidance requires an entity to review contracts in five steps: 1) identify the contract, 2) identify performance obligations, 3) determine the transaction price, 4) allocate the transaction price, and 5) recognize revenue. The new standard will result in enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue arising from contracts with customers. The standard is effective for the Company’s reporting year beginning January 1, 2017 and early adoption is not permitted. The Company is currently evaluating the impact, if any, that this new accounting pronouncement will have on its financial statements.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

OVERVIEW

We are a biopharmaceutical company dedicated to the acquisition, development and commercialization of innovative therapeutics addressing cancer and other unmet medical needs for the global market with a commercial focus on China. Our mission is to become an integrated biopharmaceutical company with significant market share in China, while establishing partnerships for global development and commercialization. Part of our strategy is to leverage our expertise and resources in North America and China to bring safer, more effective, and/or easier-to-use drugs to patients and to develop them more cost-effectively using our unique dual development approach.

We will continue to seek to expand our pipeline by (i) acquiring additional drug candidates through in-license and acquisitions, and (ii) exploring internal development of drug candidates focused on clinically proven targets. In September 2014, we acquired from Spectrum exclusive rights in China (including Taiwan, Hong Kong and Macau) to three in-licensed oncology products, including ZEVALIN^® (ibritumomab tiuxetan) approved in the U.S. for advanced non-Hodgkin’s lymphoma, MARQIBO^® (vinCRIStine sulfate LIPOSOME injection) approved in the U.S. for advanced adult Ph- acute lymphoblastic leukemia (ALL), as well as Captisol Enabled^™ melphalan (CE melphalan), which will be the subject of a New Drug Application expected to be filed with U.S. Food and Drug Administration (FDA) by Spectrum in 2014. We have initiated the development and regulatory process to obtain marketing approval for these products in our territorial region.

ZEVALIN^® injection for intravenous use is a CD20-directed radiotherapeutic antibody. It is indicated for the treatment of patients with relapsed or refractory, low-grade or follicular B-cell non-Hodgkin’s lymphoma (NHL). ZEVALIN^® is also indicated for the treatment of patients with previously untreated follicular non-Hodgkin’s Lymphoma who achieve a partial or complete response to first-line chemotherapy. ZEVALIN^® therapeutic regimen consists of two components: rituximab, and Yttrium-90 (Y-90) radiolabeled ZEVALIN^® for therapy. ZEVALIN^® builds on the combined effect of a targeted biologic monoclonal antibody augmented with the therapeutic effects of a beta-emitting radioisotope. Since ZEVALIN^® is already approved in the U.S. and marketed by Spectrum, we expect that gaining approval from local regulatory authorities for commercialization in greater China will require a shorter timeframe compared to clinical-stage drugs.

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Marqibo^® is a novel, sphingomyelin/cholesterol liposome-encapsulated, formulation of vincristine sulfate, a microtubule inhibitor. Marqibo^® is approved by the FDA for the treatment of adult patients with Philadelphia chromosome-negative (Ph-) acute lymphoblastic leukemia (ALL) in second or greater relapse or whose disease has progressed following two or more anti-leukemia therapies. Since MARQIBO^® is already approved in the U.S. and marketed by Spectrum, we expect that gaining approval from local regulatory authorities for commercialization in greater China will require a shorter timeframe compared to clinical-stage drugs.

CE melphalan is a new intravenous formulation of melphalan being investigated by our licensor in the multiple myeloma transplant setting. The formulation avoids the use of propylene glycol, which is used as a co-solvent in the current formulation of melphalan and has been reported to cause renal and cardiac side-effects that limit the ability to deliver higher quantities of intended therapeutic compounds. The use of Captisol technology to reformulate melphalan is anticipated to allow for longer administration durations and slower infusion rates, potentially enabling clinicians to avoid reductions and safely achieve a higher dose intensity of pre-transplant chemotherapy. CE-Melphalan is expected to be the subject of a New Drug Application, which we expect will be filed by Spectrum in 2014. We intend to submit our import drug registration application for CE melphalan in greater China after its approval by the FDA in the U.S.

Our pipeline also includes our proprietary ENMD-2076. ENMD-2076 is an orally-active, Aurora A/angiogenic kinase inhibitor with a unique kinase selectivity profile and multiple mechanisms of action that has shown anti-angiogenic and anti-proliferative properties in multiple preclinical and clinical cancer studies. ENMD-2076 has been shown to inhibit a distinct profile of angiogenic tyrosine kinase targets in addition to the Aurora A kinase. Aurora kinases are key regulators of mitosis (cell division), and are often over-expressed in human cancers. ENMD-2076 also targets the VEGFR, Flt-3 and FGFR3 kinases, which have been shown to play important roles in the pathology of several cancers.

ENMD-2076 has shown promising activity in a completed Phase I clinical trial in various different solid tumor cancers including ovarian, breast, liver, renal and sarcoma, as well as in leukemia, and multiple myeloma, and has also completed a Phase II clinical trial in advanced ovarian cancer. We are currently conducting multiple Phase II studies of ENMD-2076 in triple-negative breast cancer (TNBC), advanced/metastatic soft tissue sarcoma (STS), and in advanced ovarian clear cell carcinomas (OCCC) in North America. CASI received the China Food and Drug Administration’s (CFDA) clinical trial application (CTA) approval to start a TNBC trial in China and currently is in the process of initiating the trial in multiple centers in China. The clinical trials in China will supplement our ongoing Phase II TNBC trial currently underway at the University of Colorado and Indiana University. In June 2013, we filed a new drug global clinical trial application with the CFDA to expand our Phase 2 clinical trial of ENMD-2076 in advanced/metastatic sarcoma. In November 2014, the Company received CFDA’s clinical trial application (CTA) approval to start an advanced/metastatic trial in China and currently is in the planning and discussion stage. The CFDA’s approval of our application allows us to conduct clinical trials in China and supplement our ongoing Phase 2 advanced/metastatic sarcoma trial currently underway at Princess Margaret Hospital.

In January 2014, we filed a new drug global clinical trial application with the CFDA to expand our Phase 2 clinical trial of ENMD-2076 in advanced ovarian clear cell carcinoma. The CFDA has accepted our application package, and we are working with the CFDA to move the process forward towards approval. The CFDA’s approval of our application would allow us to conduct clinical trials in China and supplement our ongoing Phase 2 ovarian clear cell carcinoma trial currently underway at Princess Margaret Hospital.

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In September 2014, CASI has also filed an investigational new drug application (IND) with the FDA to conduct a Phase II trial in advanced fibrolamellar carcinoma (FLC). We currently are in the planning and discussion stage.

ENMD-2076 has received orphan drug designation from the FDA for the treatment of ovarian cancer, multiple myeloma, acute myeloid leukemia and hepatocellular carcinoma (HCC).

Our pipeline also includes 2ME2 (2-methoxyestradial) currently under reformulation development for autoimmune disorders. 2ME2 is an orally active compound that has antiproliferative, antiangiogenic and anti-inflammatory properties. The inhibition of angiogenesis is an important approach to the treatment of both cancer and autoimmune diseases such as rheumatoid arthritis. 2ME2 has potential as a single agent in rheumatoid arthritis based on its antiangiogenic, anti-inflammatory, and anti-osteoclastic (bone resorption) properties. 2ME2 has also demonstrated positive preclinical results for multiple sclerosis.

We intend to advance clinical development of our drugs and drug candidates, and the implementation of our plans will include leveraging our resources in both the United States and China. In order to capitalize on the drug development and capital resources available in China, the Company is doing business in China through its wholly-owned Chinese subsidiary that will execute the China portion of the Company’s drug development strategy, including conducting clinical trials in China, pursuing local funding opportunities and strategic collaborations, and implementing the Company’s plan for development and commercialization in the Chinese market.

Since inception, we have incurred significant losses from operations and have incurred an accumulated deficit of $423.7 million.  We expect to continue to incur operating losses for the foreseeable future due to, among other factors, our continuing clinical activities. We expect our current available cash and cash equivalents to meet our cash requirements for at least the next twelve months. We will continue to exercise tight controls over operating expenditures. In developing drug candidates, we intend to use and leverage resources available to us in both the United States and China. We intend to pursue additional financing opportunities as well as opportunities to raise capital through forms of non- or less- dilutive arrangements, such as partnerships and collaborations with organizations that have capabilities and/or products that are complementary to our capabilities and products in order to continue the development of our product candidate that we intend to pursue to commercialization. However, there can be no assurance that adequate additional financing under such arrangements will be available to us on terms that we deem acceptable, if at all.

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CRITICAL ACCOUNTING POLICIES AND THE USE OF ESTIMATES

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. Our critical accounting policies, including the items in our financial statements requiring significant estimates and judgments, are as follows:

- Research and Development - Research and development expenses consist primarily of compensation and other expenses related to research and development personnel, research collaborations, costs associated with preclinical testing and clinical trials of our product candidates, including the costs of manufacturing drug substance and drug product, regulatory maintenance costs, and facilities expenses. Research and development costs are expensed as incurred.

- Expenses for Clinical Trials – Expenses for clinical trials are incurred from planning through patient enrollment to reporting of the data. We estimate expenses incurred for clinical trials that are in process based on patient enrollment and based on clinical data collection and management. Costs that are associated with patient enrollment are recognized as each patient in the clinical trial completes the enrollment process. Estimated clinical trial costs related to enrollment can vary based on numerous factors, including expected number of patients in trials, the number of patients that do not complete participation in a trial, and when a patient drops out of a trial. Costs that are based on clinical data collection and management are recognized in the reporting period in which services are provided. In the event of early termination of a clinical trial, we accrue an amount based on estimates of the remaining non-cancelable obligations associated with winding down the clinical trial.

- Stock-Based Compensation – All share-based payment transactions are recognized in the financial statements at their fair values. Compensation expense associated with service, performance, market condition based stock options and other equity-based compensation is recorded in accordance with provisions of authoritative guidance. The fair value of awards whose fair values are calculated using the Black-Scholes option pricing model is generally being amortized on a straight-line basis over the requisite service period and is recognized based on the proportionate amount of the requisite service period that has been rendered during each reporting period. The fair value of awards with market conditions, which are valued using a binomial model, is being amortized based upon the estimated derived service period. Share based awards granted to employees with a performance condition are measured based on the probable outcome of that performance condition during the requisite service period. Such an award with a performance condition will be expensed if it is probable that a performance condition will be achieved. For the three months ended September 30, 2014, non-cash compensation expense of $686,600 has been recorded for share awards with performance conditions that became probable during the period. Using the straight-line expense attribution method over the requisite service period, which is generally the option vesting term ranging from immediately to one to three years, share-based compensation expense recognized in the nine months ended September 30, 2014 and 2013 totaled $1,852,310 and $1,554,422, respectively.

The determination of fair value of stock-based payment awards on the date of grant using the Black-Scholes or binomial model is affected by our stock price, as well as the input of other subjective assumptions. These assumptions include, but are not limited to, the expected forfeiture rate and expected term of stock options and our expected stock price volatility over the term of the awards. Changes in the assumptions can materially affect the fair value estimates.

Any future changes to our share-based compensation strategy or programs would likely affect the amount of compensation expense recognized.

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- Fair Value Measurements – At each reporting period, we perform a detailed analysis of our assets and liabilities that are measured at fair value. All assets and liabilities for which the fair value measurement is based on significant unobservable inputs or instruments which trade infrequently and therefore have little or no price transparency are classified as Level 3 within the in accordance with the hierarchy established by U.S. GAAP.  During the three months ended September 30, 2014, we measured the Contingent Rights and our promissory note issued to Spectrum at fair value at the date of issuance, and at September 30, 2014 we remeasured the Contingent Rights at fair value and will continue to do so at every balance sheet date until settlement.  In measuring the fair value of both financial instruments we used Level 3 unobservable inputs, including such inputs as our estimated borrowing rate and our future capital requirements, and the timing, probability, size and characteristics of those capital raises, among other inputs.   

RESULTS OF OPERATIONS

For the Three and Nine Months Ended September 30, 2014 and September 30, 2013.

Revenues. There were no revenues recorded during the three and nine months ended September 30, 2014 or September 30, 2013. We become entitled to share in the royalty payments received by Royalty Pharma Finance Trust on annual Thalomid^® sales when Royalty Pharma Finance Trust receives more than $15,375,000 in royalties, pursuant to a 2001 agreement with Royalty Pharma. Thalomid^® is distributed and sold by Celgene Corporation and/or its affiliates, and thus, we have no control over sales of Thalomid^® or the amount, if any, of royalty payments we will receive.Based on the previous year and the recent trend, we expect annual sales of Thalomid^® in 2014 to remain at a level below the threshold amount to trigger a royalty payment to the Company. As a result we do not expect to earn any royalty revenue in 2014 or in any subsequent year.

Research and Development Expenses.Our research and development expenses for the three and nine months ended September 30, 2014 totaled approximately $697,000 and $1,981,000, respectively. Research and development expenses for the corresponding 2013 periods were $780,000 and $2,079,000, respectively. Included in our R&D expenses totaling $697,000 for the three-month period ended September 30, 2014 are direct project costs of $199,000 for ENMD-2076, and $108,000 for our formulation development initiative that we began in late 2013 in China. The 2013 research and development expenses for the comparable period included $526,000 for ENMD-2076. Research and development expenses totaling $1,981,000 for the nine-month period ended September 30, 2014 include direct project costs of $798,000 related to ENMD-2076 and $301,000 for our new formulation development initiative. The 2013 research and development expenses for the comparable period included $1,157,000 for ENMD-2076. The overall decrease in research and development costs in the three-month and nine-month periods ended September 30, 2014, as compared to same periods in 2013, reflects higher clinical trial costs in 2013 due to our crossover bioavailability and food effect study of ENMD-2076 during the 2013 period, offset by increased costs associated with our research and development operations in China during 2014 and an increase in non-cash stock-based compensation expense.

At September 30, 2014, and, since acquired, accumulated direct project expenses for ENMD-2076 totaled $24,232,000, and for our new formulation development projects, accumulated project expenses totaled $366,000. Our research and development expenses also include non-cash stock-based compensation totaling $573,000 for the nine months ended September 30, 2014 and $587,000 for the corresponding 2013 period. The balance of our research and development expenditures includes facility costs and other departmental overhead, and expenditures related to the non-clinical support of our programs.

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We expect the majority of our research and development expenses in 2014 to be devoted to the development of our ENMD-2076 program, advancement of our new formulation development projects in China, as well as the submission of import drug registration applications to regulatory authorities in China for the drugs in-licensed from Spectrum. We expect our expenses in for the remainder of 2014 to increase based on our clinical development plan. We will continue to conduct research on ENMD-2076 in order to comply with stipulations made by the FDA, as well as to increase understanding of the mechanism of action and toxicity parameters of ENMD-2076 and its metabolites.  Completion of clinical development may take several years or more, but the length of time generally varies substantially according to the type, complexity, novelty and intended use of a product candidate.

We estimate that clinical trials of the type we generally conduct are typically completed over the following timelines:

Global FDA Trial:

CLINICAL PHASE	ESTIMATED COMPLETION PERIOD
Phase 1	1-2 Years
Phase 2	2-3 Years
Phase 3	2-4 Years

Local CFDA Trial:

CLINICAL PHASE	ESTIMATED COMPLETION PERIOD
Phase 1	1 Year
Phase 2	2 Years
Phase 3	2-3 Years

The duration and the cost of clinical trials may vary significantly over the life of a project as a result of differences arising during the clinical trial protocol, including, among others, the following:

- the number of patients that ultimately participate in the trial;

- the duration of patient follow-up that seems appropriate in view of the results;

- the number of clinical sites included in the trials; and

- the length of time required to enroll suitable patient subjects.

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We test our potential product candidates in numerous preclinical studies to identify indications for which they may be product candidates. We may conduct multiple clinical trials to cover a variety of indications for each product candidate. As we obtain results from trials, we may elect to discontinue clinical trials for certain indications in order to focus our resources on more promising indications.

Our proprietary product candidates have also not yet achieved regulatory approval, which is required before we can market them as therapeutic products. In order to proceed to subsequent clinical trial stages and to ultimately achieve regulatory approval, regulatory agencies must conclude that our clinical data establish safety and efficacy. Historically, the results from preclinical testing and early clinical trials have often not been predictive of results obtained in later clinical trials. A number of new drugs and biologics have shown promising results in clinical trials, but subsequently failed to establish sufficient safety and efficacy data to obtain necessary regulatory approvals.

Our business strategy includes being opportunistic with collaborative arrangements with third parties to complete the development and commercialization of our product candidates. In the event that third parties take over the clinical trial process for one of our product candidates, the estimated completion date would largely be under the control of that third party rather than us. We cannot forecast with any degree of certainty which proprietary products or indications, if any, will be subject to future collaborative arrangements, in whole or in part, and how such arrangements would affect our capital requirements.

As a result of the uncertainties discussed above, among others, we are unable to estimate the duration and completion costs of our research and development projects. Our inability to complete our research and development projects in a timely manner or our failure to enter into collaborative agreements, when appropriate, could significantly increase our capital requirements and could adversely impact our liquidity. These uncertainties could force us to seek additional, external sources of financing from time to time in order to continue with our business strategy. There can be no assurance that we will be able to successfully access external sources of financing in the future. Our inability to raise additional capital, or to do so on terms reasonably acceptable to us, would jeopardize the future success of our business.

Research and development expenses consist primarily of compensation and other expenses related to research and development personnel, research collaborations, costs associated with internal and contract preclinical testing and clinical trials of our product candidates, including the costs of manufacturing drug substance and drug product, regulatory maintenance costs, and facilities expenses. Overall research and development expenses decreased to $697,000 during the three months ended September 30, 2014 from $780,000 for the corresponding period in 2013. Research and development expenses decreased to $1,981,000 during the nine months ended September 30, 2014 from $2,079,000 for the corresponding period in 2013. The fluctuations in research and development expenditures during the three and nine months ended September 30, 2014 were specifically impacted by the following:

- Outside Services – In the three-month period ended September 30, 2014, we expended $25,000 on outside service activities versus $6,000 in the same 2013 period. For the nine-month period ended September 30, 2014 outside services are $57,000 compared to $40,000 for the same 2013 period. The increase in 2014 as compared to 2013 for the three and nine month periods reflect costs associated with regulatory consulting services in the U.S. during 2014 periods.

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- Clinical Trial Costs – Clinical trial costs, which include clinical site fees, monitoring costs and data management costs, decreased to $45,000 in the three months ended September 30, 2014 from $353,000 in the three-month period ended September 30, 2013. Clinical trial costs for the nine-month period ended September 30, 2014 decreased to $129,000 from $557,000 for the comparable 2013 period. This decrease relates to costs associated with enrolling patients in Phase 2 clinical trials for TNBC during the 2013 period and costs associated with clinical research organization costs related to our crossover bioavailability and food effect study of ENMD-2076 during the 2013 period.

- Contract Manufacturing Costs – The costs of manufacturing the material used in clinical trials for our product candidates is reflected in contract manufacturing. These costs include bulk manufacturing, encapsulation and fill and finish services, product release costs and storage fees. Contract manufacturing costs for the three months ended September 30, 2014 decreased to $24,000 from $34,000 during the same period in 2013 as a result of the timing of manufacturing costs incurred in China. For the nine-month period ended September 30, 2014, manufacturing costs increased to $202,000 from $158,000 for the comparable 2013 period. The increase primarily reflects manufacturing costs incurred during the second quarter of 2014 in the U.S. related to the production of new formulated capsules of ENMD-2076.

- Personnel Costs – Personnel costs increased to $509,000 in the three-month period ended September 30, 2014 from $251,000 in the corresponding 2013 period. This variance is attributed to an increase in non-cash stock-based compensation expense totaling $176,000 during the 2014 period, and increased salary and benefit costs associated with new employees in China during the 2014 period. For the nine-month period, personnel costs increased in 2014 to $1,181,000 from $1,006,000 for the corresponding 2013 period. This variance is attributed to increased salary and benefit costs associated with new employees in China during the 2014 period.

- Also reflected in our 2014 research and development expenses for the three-month period ended September 30, 2014 are outsourced consultant costs of $30,000 and facility and related expenses of $54,000. In the corresponding 2013 period, these expenses totaled $70,000 and $30,000, respectively. For the nine-month period ended September 30, 2014, outsourced consultant costs were $135,000 and facility and related expenses were $152,000. In the corresponding 2013 period, these expenses totaled $125,000 and $76,000, respectively. The variance in outsourced consultant costs reflect the timing of clinical trial management, including site visits, and regulatory activities. The increase in expenses in facilities and related expenses in 2014 resulted from leased laboratory space in China.

General and Administrative Expenses. General and administrative expenses include compensation and other expenses related to finance, business development and administrative personnel, professional services, patent costs and facilities.

General and administrative expenses increased to $1,150,000 in the three-month period ended September 30, 2014 from $663,000 in the corresponding 2013 period. The increase in the third quarter of 2014, compared to the 2013 period, is primarily related to an increase in stock-based compensation expense of $423,000 due mainly to the vesting of performance based options during the 2014 period, and an increase in outside professional fees associated with business development, investor relations and corporate name change activities during the 2014 period. For the nine-month period, general and administrative expenses increased in 2014 to $2,933,000 from $2,352,000 for the corresponding 2013 period. The increase in the 2014 period, compared to the 2013 period is primarily related to an increase in stock-based compensation expense of $312,000 associated with the vesting of performance based options, and higher costs for outside professional fees associated with business development, investor relations and corporate name change activities during 2014.

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In-process R&D. In September 2014, we acquired certain product rights and perpetual exclusive licenses from Spectrum to develop and commercialize the three commercial oncology drugs and drug candidates in China, Taiwan, Hong Kong and Macau. As consideration for the acquisition, we issued a total 5,405,382 shares of our common stock, a $1.5 million 0.5% secured promissory note due in March 2016, and certain contingent rights (“Contingent Rights”) to purchase additional shares of its common stock. We accounted for the acquisition of the product rights and licenses as an “asset acquisition” and, accordingly, recorded the acquired product rights and licenses at their estimate fair values based on the fair value of the consideration exchanged (including transaction costs) of approximately $19.7 million. Because the products underlying the acquired product rights and licenses have not reached technological feasibility and have no alternative uses, they are considered “in-process research and development” costs; as such, we expensed the total purchase price at the acquisition date as acquired in-process R&D in the accompanying consolidated statements of operations.

Interest expense, net. Interest expense, net for nine-month period ended September 30, 2014 was $2,415. This includes $267 accrued interest on our note payable; non-cash interest of $3,272 representing the amortization of the debt discount; offset by interest income of $1,124. Interest income for the nine-months ended September 30, 2013 was $1,241. There was no interest expense for the nine-months ended September 30, 2013.

Change in fair value of contingent rights. The Contingent Rights issued to Spectrum in connection with the license arrangements are considered derivative liabilities and were recorded initially at their estimated fair value, and are marked to market each reporting period until settlement. The change in fair value of the Contingent Rights for the three and nine-months ended September 30, 2014 was $6,581.

LIQUIDITY AND CAPITAL RESOURCES

To date, we have been engaged primarily in research and development activities. As a result, we have incurred and expect to continue to incur operating losses in 2014 and the foreseeable future before we commercialize any products. Based on our current plans, we expect our current available cash and cash equivalents to meet our cash requirements for at least the twelve months subsequent to September 30, 2014.

We will require significant additional funding to fund operations until such time, if ever, we become profitable. We intend to augment our cash balances by pursuing other forms of capital infusion, including strategic alliances or collaborative development opportunities with organizations that have capabilities and/or products that are complementary to our capabilities and products in order to continue the development of our potential product candidates that we intend to pursue to commercialization. If we seek strategic alliances, licenses, or other alternative arrangements, such as arrangements with collaborative partners or others, to raise further financing, we may need to relinquish rights to certain of our existing product candidates, or products we would otherwise seek to develop or commercialize on our own, or to license the rights to our product candidates on terms that are not favorable to us.

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We will continue to seek to raise additional capital to fund our research and development and advance the clinical development of ENMD-2076 and new product candidates, if any. We intend to explore one or more of the following alternatives to raise additional capital:

· selling additional equity securities;

· out-licensing product candidates to one or more corporate partners;

· completing an outright sale of non-priority assets; and/or

· engaging in one or more strategic transactions.

We also will continue to manage our cash resources prudently and cost-effectively.

There can be no assurance that adequate additional financing under such arrangements will be available to us on terms that we deem acceptable, if at all. If additional funds are raised by issuing equity securities, dilution to existing shareholders may result, or the equity securities may have rights, preferences, or privileges senior to those of the holders of our common stock. If we fail to obtain additional capital when needed, we may be required to delay or scale back our Phase 2 plans for ENMD-2076 or plans for other product candidates, if any.

At September 30, 2014, we had cash of $11,817,324 with working capital of $11,389,545.

INFLATION AND INTEREST RATE CHANGES

Management does not believe that our working capital needs are sensitive to inflation and changes in interest rates.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The primary objective of our investment activities is to preserve our capital until it is required to fund operations while at the same time maximizing the income we receive from our investments without incurring investment market volatility risk. Our investment income is sensitive to the general level of U.S. interest rates. In this regard, changes in the U.S. interest rates affect the interest earned on our cash and cash equivalents. Due to the short-term nature of our cash and cash equivalent holdings, a 10% movement in market interest rates would not materially impact on the total fair market value of our portfolio as of September 30, 2014.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s Chief Executive Officer and Principal Accounting Officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) were effective as of September 30, 2014 to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to the Company’s management, including its Chief Executive Officer and Principal Accounting Officer, as appropriate to allow timely decisions regarding required disclosure.

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Management’s assessment of the effectiveness of internal control over financial reporting is expressed at the level of reasonable assurance because a control system, no matter how well designed and operated, can provide only reasonable, but not absolute, assurance that the control system’s objectives will be met.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting that occurred during the quarter ended September 30, 2014 that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are subject in the normal course of business to various legal proceedings in which claims for monetary or other damages may be asserted. Management does not believe such legal proceedings, except as otherwise disclosed herein, are material.

ITEM 1A. RISK FACTORS

For information regarding factors that could affect the Company’s results of operations, financial condition and liquidity, see the information under “Special Note Regarding Forward-Looking Statements” included in this report and the risk factors set forth below:

Risks Relating to our Financial Position and Need for Additional Capital

We Have a History of Losses and Anticipate Future Losses and May Never Become Profitable on a Sustained Basis

To date, we have been engaged primarily in research and development activities. Although in the past we have received limited revenues on royalties from the sales of pharmaceuticals, license fees and research and development funding from a former collaborator and limited revenues from certain research grants, we have not derived significant revenues from operations.

We have experienced losses in each year since inception. Through December 31, 2013, we had an accumulated deficit of approximately $399 million. We will seek to raise capital to continue our operations and although we have been successfully funded to date through the sales of our equity securities and through limited royalty payments, there is no assurance that our capital-raising efforts will be able to attract the funding needed to sustain our operations. If we are unable to obtain additional funding for operations, we may not be able to continue operations as proposed, requiring us to modify our business plan, curtail various aspects of our operations or cease operations. In any such event, investors may lose a portion or all of their investment.

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Losses have continued since December 31, 2013 and we have an accumulated deficit of $423.7 million as of September 30, 2014. We expect that our ongoing clinical and corporate activities will result in operating losses for the foreseeable future before we commercialize any products, if ever. In addition, to the extent we rely on others to develop and commercialize our products, our ability to achieve profitability will depend upon the success of these other parties. To support our research and development of certain product candidates, we may seek and rely on cooperative agreements from governmental and other organizations as a source of support. If a cooperative agreement were to be reduced to any substantial extent, it may impair our ability to continue our research and development efforts. Even if we do achieve profitability, we may be unable to sustain or increase it.

Our Common Stock May be Delisted From The NASDAQ Capital Market, Which Could Negatively Impact the Price of Our Common Stock and Our Ability to Access the Capital Markets

If we are not able to comply with the listing standards of the Nasdaq Capital Market, our common stock will be delisted from Nasdaq and an associated decrease in liquidity in the market for our common stock will occur. In addition, the delisting of our common stock could materially adversely affect our access to the capital markets, and any limitation on liquidity or reduction in the price of our common stock could materially adversely affect our ability to raise capital on terms acceptable to us or at all. Delisting from The NASDAQ Capital Market could also result in other negative implications, including the potential loss of confidence by our research partners and suppliers, the loss of institutional investor interest and fewer business development opportunities.

We May Engage in Strategic and Other Corporate Transactions, Which Could Negatively Affect Our Financial Condition and Prospects

We may consider strategic and other corporate transactions as opportunities present themselves. There are risks associated with such activities. These risks include, among others, incorrectly assessing the quality of a prospective strategic partner, encountering greater than anticipated costs in integration, being unable to profitably deploy assets acquired in the transaction, such as drug candidates, possible dilution to our stockholders, and the loss of key employees due to changes in management. Further, strategic transactions may place additional constraints on our resources by diverting the attention of our management from our business operations. To the extent we issue securities in connection with additional transactions, these transactions and related issuances may have a dilutive effect on earnings per share and our ownership. Our financial condition and prospects after an acquisition depend in part on our ability to successfully integrate the operations of the acquired business or technologies. We may be unable to integrate operations successfully or to achieve expected cost savings. Any cost savings which are realized may be offset by losses in revenues or other charges to earnings.

The Current Capital and Credit Market Conditions May Adversely Affect the Company’s Access to Capital, Cost of Capital, and Ability to Execute its Business Plan as Scheduled

Access to capital markets is critical to our ability to operate. Traditionally, biopharmaceutical companies (such as we) have funded their research and development expenditures through raising capital in the equity markets. Declines and uncertainties in these markets over the past few years have severely restricted raising new capital in amounts sufficient to conduct our ENMD-2076 program and have affected our ability to continue to expand or fund research and development efforts with our other product candidates. We require significant capital for research and development for our product candidates and clinical trials. In recent years, the general economic and capital market conditions in the United States have deteriorated significantly and have adversely affected our access to capital and increased the cost of capital, and there is no certainty that a recovery in the capital and credit markets, enabling us to raise capital in an amount to sufficiently fund our short-term and long-term plans, will occur in 2014. If these economic conditions continue or become worse, our future cost of equity or debt capital and access to the capital markets could be adversely affected. In addition, our inability to access the capital markets on favorable terms because of our low stock price, or upon our delisting from the NASDAQ Capital Market if we fail to satisfy a listing requirement, could affect our ability to execute our business plan as scheduled. Moreover, we rely and intend to rely on third parties, including our clinical research organizations, third party manufacturers, and certain other important vendors and consultants. As a result of the current volatile and unpredictable global economic situation, there may be a disruption or delay in the performance of our third-party contractors and suppliers. If such third parties are unable to adequately satisfy their contractual commitments to us in a timely manner, our business could be adversely affected.

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We Do Not Have Any Active Revenue Streams and We Are Uncertain Whether Additional Funding Will Be Available For Our Future Capital Needs and Commitments. If We Cannot Raise Additional Funding, or Access the Capital Markets, We May Be Unable to Complete Development of Our Product Candidates

We will require substantial funds in addition to our existing working capital to develop our product candidates and otherwise to meet our business objectives. We have never generated sufficient revenue during any period since our inception to cover our expenses and have spent, and expect to continue to spend, substantial funds to continue our clinical development programs. Any one of the following factors, among others, could cause us to require additional funds or otherwise cause our cash requirements in the future to increase materially:

· progress of our clinical trials or correlative studies;

· results of clinical trials;

· changes in or terminations of our relationships with strategic partners;

· changes in the focus, direction, or costs of our research and development programs;

· competitive and technological advances;

· establishment of marketing and sales capabilities;

· manufacturing;

· the regulatory approval process; or

· product launch.

At September 30, 2014, we had cash of approximately $11,817,000. We currently have no commitments or arrangements for any new additional financing. We may continue to seek additional capital through public or private financing or collaborative agreements in 2014 and beyond. Our operations require significant amounts of cash. We may be required to seek additional capital for the future growth and development of our business. We can give no assurance as to the availability of such additional capital or, if available, whether it would be on terms acceptable to us. In addition, we may continue to seek capital through the public or private sale of securities, if market conditions are favorable for doing so. If we are successful in raising additional funds through the issuance of equity securities, stockholders will likely experience substantial dilution. If we are not successful in obtaining sufficient capital because we are unable to access the capital markets on favorable terms, it could reduce our research and development efforts, curtail significantly our development of ENMD-2076 and materially adversely affect our future growth, results of operations and financial results.

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Risks Relating to Our Business

We Plan To Conduct Development And Operations In China, Which Exposes Us To Risks Inherent In Doing Business In China

We expect to continue to conduct clinical development related activities in China in 2014. To be successful in China we will need to: establish clinical trials; attract and retain qualified personnel to operate our Chinese subsidiary; and attract and retain research and development employees. We cannot assure you that we will be able to do any of these. Employee turnover in China is high due to the intensely competitive and fluid market for skilled labor. Operations in China are subject to greater political, legal and economic risks than our operations in other countries. In particular, the political, legal and economic climate in China, both nationally and regionally, is fluid and unpredictable. Our ability to operate in China may be adversely affected by changes in Chinese laws and regulations such as those related to, among other things, taxation, import and export tariffs, environmental regulations, land use rights, intellectual property, employee benefits and other matters. In addition, we may not obtain or retain the requisite legal permits to operate in China, and costs or operational limitations may be imposed in connection with obtaining and complying with such permits. Any one of the factors cited above, or a combination of them, could result in unanticipated costs, which could materially and adversely affect our business and planned operations and development in China.

We May Not Be Able To Successfully Identify And Acquire New Product Candidates

Our growth strategy relies on our in-license of new product candidates from third parties. Our pipeline will be dependent upon the availability of suitable acquisition candidates at favorable prices and upon advantageous terms and conditions. Even if such opportunities are present, we may not be able to successfully identify appropriate acquisition candidates. Moreover, other companies, many of which may have substantially greater financial resources are competing with us for the right to acquire such product candidates.

If a product candidate is identified, the third parties with whom we seek to cooperate may not select us as a potential partner or we may not be able to enter into arrangements on commercially reasonable terms or at all. Furthermore, the negotiation and completion of collaborative and license arrangements could cause significant diversion of management’s time and resources and potential disruption of our ongoing business.

Development of Our Products is Uncertain

ENMD-2076 is in Phase 2 development and our other product candidates were in the early stage of clinical development and require significant, time-consuming and costly research and development, testing and regulatory clearances. In developing our products, we are subject to risks of failure that are inherent in the development of these product candidates. For example, it is possible that any or all of our proposed products will be ineffective or toxic, or otherwise will fail to receive necessary FDA and CFDA clearances. There is a risk that the proposed products will be uneconomical to manufacture or market or will not achieve market acceptance. There is also a risk that third parties may hold proprietary rights that preclude us from marketing our proposed products or that others will market a superior or equivalent product. Further, our research and development activities might never result in commercially viable products.

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A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in advanced clinical trials even after promising results in earlier trials. Since ENMD-2076 is our primary product candidate any significant clinical setback or an unfavorable outcome in our Phase 2 trials for ENMD-2076 may require us to delay, reduce the scope of, or eliminate this program and could have a material adverse effect on our company and the value of our common stock.

Once a clinical trial has begun, it may be delayed, suspended or terminated due to a number of factors, including:

· ongoing discussions with regulatory authorities regarding the scope or design of our clinical trials or requests by them for supplemental information with respect to our clinical trial results;

· failure to conduct clinical trials in accordance with regulatory requirements;

· lower than anticipated retention rate of patients in clinical trials;

· serious adverse events or side effects experienced by participants; and

· insufficient supply or deficient quality of product candidates or other materials necessary for the conduct of our clinical trials.

Many of these factors may also ultimately lead to denial of regulatory approval of a product candidate. If we experience delays, suspensions or terminations in a clinical trial, the commercial prospects for the related product candidate will be harmed, and our ability to generate product revenues will be delayed.

Although product candidates may demonstrate promising results in early clinical (human) trials and preclinical (animal) studies, they may not prove to be effective in subsequent clinical trials. For example, testing on animals may occur under different conditions than testing in humans and therefore the results of animal studies may not accurately predict human experience. Likewise, early clinical studies may not be predictive of eventual safety or effectiveness results in larger-scale pivotal clinical trials. Our clinical development primary focus is on ENMD-2076, and as such we do not expect to internally pursue clinical investigation of our other product candidates.

There are many regulatory steps that must be taken before any of these product candidates will be eligible for regulatory approval and subsequent sale, including the completion of preclinical and clinical trials. We do not expect that our product candidates will be commercially available for several years, if ever.

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We May Not Be Able to Commercialize Our Drugs or Drug Candidates in China

We have exclusive licenses to develop and commercialize MARQIBO® (vinCRIStine sulfate LIPOSOME injection), Captisol-Enabled™ (propylene glycol-free) melphalan (CE melphalan) and ZEVALIN® (ibritumomab tiuxetan) in Greater China. Our success in commercializing these drugs may be inhibited by a number of factors, including:

· our inability to obtain regulatory approvals;

· our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel;

· the inability of sales personnel to obtain access to or educate physicians on the benefits of our products;

· the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and

· unforeseen costs and expenses associated with creating an independent sales and marketing organization.

If we decide to rely on third parties to sell, market and distribute our product candidates, we may not be successful in entering into arrangements with such third parties or may be unable to do so on terms that are favorable to us. In addition, our product revenues and our profitability, if any, may be lower if we rely on third parties for these functions than if we were to market, sell and distribute any products that we develop ourselves. We likely will have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our products effectively. If we do not establish sales, marketing and distribution capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates, which would adversely affect our business and financial condition.

Developments By Competitors May Render Our Products Obsolete

If competitors were to develop superior drug candidates, our products could be rendered noncompetitive or obsolete, resulting in a material adverse effect to our business. Developments in the biotechnology and pharmaceutical industries are expected to continue at a rapid pace. Success depends upon achieving and maintaining a competitive position in the development of products and technologies. Competition from other biotechnology and pharmaceutical companies can be intense. Many competitors have substantially greater research and development capabilities, marketing, financial and managerial resources and experience in the industry. Even if a competitor creates a product that is not superior, we may not be able to compete.

We Must Show the Safety and Efficacy of Our Product Candidates Through Clinical Trials, the Results of Which are Uncertain

Before obtaining regulatory approvals for the commercial sale of our products, we must demonstrate, through preclinical studies (animal testing) and clinical trials (human testing), that our proposed products are safe and effective for use in each target indication. Testing of our product candidates will be required, and failure can occur at any stage of testing. Clinical trials may not demonstrate sufficient safety and efficacy to obtain the required regulatory approvals or result in marketable products. The failure to adequately demonstrate the safety and efficacy of a product under development could delay or prevent regulatory approval of the potential product.

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Clinical trials for the product candidates we are developing may be delayed by many factors, including that potential patients for testing are limited in number. The failure of any clinical trials to meet applicable regulatory standards could cause such trials to be delayed or terminated, which could further delay the commercialization of any of our product candidates. Newly emerging safety risks observed in animal or human studies also can result in delays of ongoing or proposed clinical trials. Any such delays will increase our product development costs. If such delays are significant, they could negatively affect our financial results and the commercial prospects for our products.

The Independent Clinical Investigators and Contract Research Organizations That We Rely Upon to Assist in the Conduct of Our Clinical Trials May Not Be Diligent, Careful or Timely, and May Make Mistakes, in the Conduct of Our Trials

We depend on independent clinical investigators and contract research organizations, or CROs, to assist in the conduct of our clinical trials under their agreements with us. The investigators are not our employees, and we cannot control the amount or timing of resources that they devote to our programs. If independent investigators fail to devote sufficient time and resources to our drug development programs, or if their performance is substandard, it could delay the approval of our FDA applications and our introduction of new drugs. The CROs we contract with to assist with the execution of our clinical trials play a significant role in the conduct of the trials and the subsequent collection and analysis of data. Failure of the CROs to meet their obligations could adversely affect clinical development of our products.

The Success of Our Business Depends Upon the Members of Our Senior Management Team, Our Clinical Development Expertise in Both U.S. and China, and Our Ability to Continue to Attract and Retain Qualified Clinical, Technical and Business Personnel

We are dependent on the principal members of our senior management team and clinical development team for our business success. The loss of any of these people could impede the achievement of our development and business objectives. We do not carry key man life insurance on the lives of any of our key personnel. There is intense competition for human resources, including management, in the scientific fields in which we operate and there can be no assurance that we will be able to attract and retain qualified personnel necessary for the successful development of ENMD-2076 and any new product candidates, and any expansion into areas and activities requiring additional expertise. In addition, there can be no assurance that such personnel or resources will be available when needed. In addition, we rely on a significant number of consultants to assist us in formulating our clinical strategy and other business activities. All of our consultants may have commitments to, or advisory or consulting agreements with, other entities that may limit their availability to us.

We May Need New Collaborative Partners to Further Develop and Commercialize Products, and if We Enter Into Such Arrangements, We May Give Up Control Over the Development and Approval Process and Decrease our Potential Revenue

We plan to develop and commercialize our product candidates both with and without corporate alliances and partners. Nonetheless, we intend to explore opportunities for new corporate alliances and partners to help us develop, commercialize and market our product candidates. We expect to grant to our partners certain rights to commercialize any products developed under these agreements, and we may rely on our partners to conduct research and development efforts and clinical trials on, obtain regulatory approvals for, and manufacture and market any products licensed to them. Each individual partner will seek to control the amount and timing of resources devoted to these activities generally. We anticipate obtaining revenues from our strategic partners under such relationships in the form of research and development payments and payments upon achievement of certain milestones. Since we generally expect to obtain a royalty for sales or a percentage of profits of products licensed to third parties, our revenues may be less than if we retained all commercialization rights and marketed products directly. In addition, there is a risk that our corporate partners will pursue alternative technologies or develop competitive products as a means for developing treatments for the diseases targeted by our programs.

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We may not be successful in establishing any collaborative arrangements. Even if we do establish such collaborations, we may not successfully commercialize any products under or derive any revenues from these arrangements. There is a risk that we will be unable to manage simultaneous collaborations, if any, successfully. With respect to existing and potential future strategic alliances and collaborative arrangements, we will depend on the expertise and dedication of sufficient resources by these outside parties to develop, manufacture, or market products. If a strategic alliance or collaborative partner fails to develop or commercialize a product to which it has rights, we may not recognize any revenues on that particular product.

We Have No Current Manufacturing or Marketing Capacity and Rely on Only One Supplier For Some of Our Products

We do not expect to manufacture or market products in the near term, but we may try to do so in certain cases. We do not currently have the capacity to manufacture or market products and we have limited experience in these activities. The manufacturing processes for all of the small molecules we are developing have not yet been tested at commercial levels, and it may not be possible to manufacture these materials in a cost-effective manner. If we elect to perform these functions, we will be required to either develop these capacities, or contract with others to perform some or all of these tasks. We may be dependent to a significant extent on corporate partners, licensees, or other entities for manufacturing and marketing of products. If we engage directly in manufacturing or marketing, we will require substantial additional funds and personnel and will be required to comply with extensive regulations. We may be unable to develop or contract for these capacities when required to do so in connection with our business.

We depend on our third-party manufacturers to perform their obligations effectively and on a timely basis. These third parties may not meet their obligations and any such non-performance may delay clinical development or submission of products for regulatory approval, or otherwise impair our competitive position. Any significant problem experienced by one of our suppliers could result in a delay or interruption in the supply of materials to us until such supplier resolves the problem or an alternative source of supply is located. Any delay or interruption would likely lead to a delay or interruption of manufacturing operations, which could negatively affect our operations. Although we have identified alternative suppliers for our product candidates, we have not entered into contractual or other arrangements with them. If we needed to use an alternate supplier for any product, we would experience delays while we negotiated an agreement with them for the manufacture of such product. In addition, we may be unable to negotiate manufacturing terms with a new supplier as favorable as the terms we have with our current suppliers.

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Problems with any manufacturing processes could result in product defects, which could require us to delay shipment of products or recall products previously shipped. In addition, any prolonged interruption in the operations of the manufacturing facilities of one of our sole-source suppliers could result in the cancellation of shipments. A number of factors could cause interruptions, including equipment malfunctions or failures, or damage to a facility due to natural disasters or otherwise. Because our manufacturing processes are or are expected to be highly complex and subject to a lengthy regulatory approval process, alternative qualified production capacity may not be available on a timely basis or at all. Difficulties or delays in our manufacturing could increase our costs and damage our reputation.

The manufacture of pharmaceutical products can be an expensive, time consuming, and complex process. Manufacturers often encounter difficulties in scaling-up production of new products, including quality control and assurance and shortages of personnel. Delays in formulation and scale-up to commercial quantities could result in additional expense and delays in our clinical trials, regulatory submissions, and commercialization.

Failure of Manufacturing Facilities Producing Our Product Candidates to Maintain Regulatory Approval Could Delay or Otherwise Hinder Our Ability to Market Our Product Candidates

Any manufacturer of our product candidates will be subject to applicable Good Manufacturing Practices (GMP) prescribed by the FDA or other rules and regulations prescribed by the CFDA and other foreign regulatory authorities. We and any of our collaborators may be unable to enter into or maintain relationships either domestically or abroad with manufacturers whose facilities and procedures comply or will continue to comply with GMP and who are able to produce our small molecules in accordance with applicable regulatory standards. Failure by a manufacturer of our products to comply with GMP could result in significant time delays or our inability to obtain marketing approval or, should we have market approval, for such approval to continue. Changes in our manufacturers could require new product testing and facility compliance inspections. In the United States, failure to comply with GMP or other applicable legal requirements can lead to federal seizure of violated products, injunctive actions brought by the federal government, inability to export product, and potential criminal and civil liability on the part of a company and its officers and employees.

We Depend on Patents and Other Proprietary Rights, Some of Which are Uncertain

Our success will depend in part on our ability to obtain and maintain patents for ENMD-2076 and our other products, in the United States, China and elsewhere. The patent position of biotechnology and pharmaceutical companies in general is highly uncertain and involves complex legal and factual questions. Risks that relate to patenting our products include the following:

· our failure to obtain additional patents;

· challenge, invalidation, or circumvention of patents already issued to us;

· failure of the rights granted under our patents to provide sufficient protection;

· independent development of similar products by third parties; or

· ability of third parties to design around patents issued to our collaborators or us.

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Our potential products may conflict with composition, method, and use of patents that have been or may be granted to competitors, universities or others. As the biotechnology industry expands and more patents are issued, the risk increases that our potential products may give rise to claims that may infringe the patents of others. Such other persons could bring legal actions against us claiming damages and seeking to enjoin clinical testing, manufacturing and marketing of the affected products. Any such litigation could result in substantial cost to us and diversion of effort by our management and technical personnel. If any of these actions are successful, in addition to any potential liability for damages, we could be required to obtain a license in order to continue to manufacture or market the affected products. We may not prevail in any action and any license required under any needed patent might not be made available on acceptable terms, if at all.

We also rely on trade secret protection for our confidential and proprietary information. However, trade secrets are difficult to protect and others may independently develop substantially equivalent proprietary information and techniques and gain access to our trade secrets and disclose our technology. We may be unable to meaningfully protect our rights to unpatented trade secrets. We require our employees to complete confidentiality training that specifically addresses trade secrets. All employees, consultants, and advisors are required to execute a confidentiality agreement when beginning an employment or a consulting relationship with us. The agreements generally provide that all trade secrets and inventions conceived by the individual and all confidential information developed or made known to the individual during the term of the relationship automatically become our exclusive property. Employees and consultants must keep such information confidential and may not disclose such information to third parties except in specified circumstances. However, these agreements may not provide meaningful protection for our proprietary information in the event of unauthorized use or disclosure of such information.

To the extent that consultants, key employees, or other third parties apply technological information independently developed by them or by others to our proposed projects, disputes may arise as to the proprietary rights to such information. Any such disputes may not be resolved in our favor. Certain of our consultants are employed by or have consulting agreements with other companies and any inventions discovered by them generally will not become our property.

Our Potential Products Are Subject to Government Regulatory Requirements and an Extensive Approval Process

Our research, development, preclinical and clinical trials, manufacturing, and marketing of our product candidates are subject to an extensive regulatory approval process by the FDA, the CFDA in China and other regulatory agencies. The process of obtaining FDA, CFDA and other required regulatory approvals for drug and biologic products, including required preclinical and clinical testing, is time consuming and expensive. Even after spending time and money, we may not receive regulatory approvals for clinical testing or for the manufacturing or marketing of any products. Our collaborators or we may encounter significant delays or costs in the effort to secure necessary approvals or licenses. Even if we obtain regulatory clearance for a product, that product will be subject to continuing review.  Later discovery of previously unknown defects or failure to comply with the applicable regulatory requirements may result in restrictions on a product’s marketing or withdrawal of the product from the market, as well as possible civil or criminal penalties.

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Potential Products May Subject Us to Product Liability for Which Insurance May Not Be Available

The use of our potential products in clinical trials and the marketing of any pharmaceutical products may expose us to product liability claims. We have obtained a level of liability insurance coverage that we believe is adequate in scope and coverage for our current stage of development. However, our present insurance coverage may not be adequate to protect us from liabilities we might incur. In addition, our existing coverage will not be adequate as we further develop products and, in the future, adequate insurance coverage and indemnification by collaborative partners may not be available in sufficient amounts or at a reasonable cost. If a product liability claim or series of claims are brought against us for uninsured liabilities, or in excess of our insurance coverage, the payment of such liabilities could have a negative effect on our business and financial condition.

Risks Relating to Our Common Stock

The Market Price of Our Common Stock May Be Highly Volatile or May Decline Regardless of Our Operating Performance

Our common stock price has fluctuated from year-to-year and quarter-to-quarter and will likely continue to be volatile. During 2014, our stock price has ranged from $1.55 to $2.17. We expect that the trading price of our common stock is likely to be highly volatile in response to factors that are beyond our control. The valuations of many biotechnology companies without consistent product revenues and earnings are extraordinarily high based on conventional valuation standards, such as price to earnings and price to sales ratios. These trading prices and valuations may not be sustained. In the future, our operating results in a particular period may not meet the expectations of any securities analysts whose attention we may attract, or those of our investors, which may result in a decline in the market price of our common stock. Any negative change in the public’s perception of the prospects of biotechnology companies could depress our stock price regardless of our results of operations. These factors may materially and adversely affect the market price of our common stock.

IDG and Spectrum Are Our Largest Holders Of Common Stock And May Have Different Interests Than Our Other Stockholders

IDG-Accel China and its affiliated entities (collectively, “IDG”) hold approximately 16.80% of the outstanding shares of our common stock (excluding the shares issuable under the warrants held by IDG). Spectrum Pharmaceuticals, Inc., a Delaware corporation and its affiliate, Spectrum Pharmaceuticals Cayman, L.P., an Exempted Limited Partnership organized under the laws of the Cayman Islands (together “Spectrum”) hold approximately 16.66% of the outstanding shares of our common stock. IDG and Spectrum are each permitted to have one representative on the Board of Directors and may have interests that are different from the interests of our other stockholders. We cannot assure that IDG and Spectrum will not seek to influence our business in a manner that is contrary to our goals or strategies or the interests of our other stockholders. In addition, the significant concentration of ownership in our common stock may adversely affect the trading price for our common stock because investors often perceive disadvantages in owning stock in companies with significant stockholders. IDG and Spectrum, if they acted together, could significantly influence all matters requiring approval by our stockholders, including the election of directors and the approval of mergers or other business combination transactions. IDG and Spectrum together may be able to determine all matters requiring stockholder approval.

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Subsequent Resales Of Shares Of Our Common Stock In The Public Market May Cause The Market Price Of Our Common Stock To Fall

The market value of our common stock could decline as a result of sales by investors from time to time, or perceptions that such sales may occur, of a substantial amount of the shares of common stock held by them.

Issuances of Additional Shares of Our Common Stock May Cause Substantial Dilution of Existing Stockholders

Spectrum has a contingent right to purchase shares of our common stock at par value ($0.01 per share) in order to maintain its post-investment equity ownership percentage as of September 17, 2014, which was 16.66%, if we issue securities (subject to a limited exception for certain equity compensation grants) in the future. This right expires upon the earliest of (1) the date on which we have raised, in the aggregate, $50 million in net proceeds through capital raising activities or (2) September 17, 2019 (subject to extension for certain outstanding derivative securities). The future exercise of this contingent purchase right will subject our existing stockholders to immediate dilution of their ownership interests. We may also issue additional shares of common stock or other securities that are convertible into or exercisable for common stock in connection with future acquisitions, future sales of our securities for capital raising purposes, future strategic relationships, or for other business purposes. The future issuance of any additional shares of our common stock may create downward pressure on the trading price of our common stock. There can be no assurance that we will not be required to issue additional shares, warrants or other convertible securities in the future in conjunction with any capital raising efforts, including at a price (or exercise prices) below the price at which shares of our common stock are then traded.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. REMOVED AND RESERVED

ITEM 5. OTHER INFORMATION

Not applicable.

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ITEM 6. EXHIBITS

4.1	Certificate of Designation of Series A Preferred Stock (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on September 19, 2014)
4.2	Secured Promissory Note, dated as of September 17, 2014, issued to Talon Therapeutics, Inc. (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on September 19, 2014)
10.1	Investment Agreement, dated as of September 17, 2014, by and between the Company and Spectrum Pharmaceuticals, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 19, 2014)
10.2	Investment Agreement, dated as of September 17, 2014, by and between the Company and Spectrum Pharmaceuticals Cayman, L.P. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on September 19, 2014)
10.3†	License Agreement, dated as of September 17, 2014, by and between the Company and Spectrum Pharmaceuticals, Inc. (filed herewith)
10.4†	License Agreement, dated as of September 17, 2014, by and between the Company and Spectrum Pharmaceuticals Cayman, L.P. (filed herewith)
10.5†	License Agreement, dated as of September 17, 2014, by and between the Company and Talon Therapeutics, Inc. (filed herewith)
31.1	Rule 13a-14(a) Certification of Chief Executive Officer
31.2	Rule 13a-14(a) Certification of Principal Accounting Officer
32.1	Section 1350 Certification of Chief Executive Officer
32.2	Section 1350 Certification of Principal Accounting Officer
101	The following financial information from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, formatted in eXtensible Business Reporting Language (XBRL):  (i) Unaudited Consolidated Balance Sheets at September 30, 2014 and December 31, 2013, (ii) Unaudited Consolidated Statements of Operations for the Three and Nine months ended September 30, 2014 and 2013, (iii) Unaudited Consolidated Statements of Cash Flows for the Nine months ended September 30, 2014 and 2013 and (iv) Notes to Unaudited Consolidated Financial Statements.*

* Filed Herewith

†Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment submitted to the SEC.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CASI PHARMACEUTICALS, INC.
	(Registrant)
Date: November 14, 2014	/s/ Ken K. Ren
	Ken K. Ren
	Chief Executive Officer
Date: November 14, 2014	/s/ Sara B. Capitelli
	Sara B. Capitelli
	Principal Accounting Officer

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EXHIBIT INDEX

4.1	Certificate of Designation of Series A Preferred Stock (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on September 19, 2014)
4.2	Secured Promissory Note, dated as of September 17, 2014, issued to Talon Therapeutics, Inc. (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on September 19, 2014)
10.1	Investment Agreement, dated as of September 17, 2014, by and between the Company and Spectrum Pharmaceuticals, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 19, 2014)
10.2	Investment Agreement, dated as of September 17, 2014, by and between the Company and Spectrum Pharmaceuticals Cayman, L.P. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on September 19, 2014)
10.3†	License Agreement, dated as of September 17, 2014, by and between the Company and Spectrum Pharmaceuticals, Inc. (filed herewith)
10.4†	License Agreement, dated as of September 17, 2014, by and between the Company and Spectrum Pharmaceuticals Cayman, L.P. (filed herewith)
10.5†	License Agreement, dated as of September 17, 2014, by and between the Company and Talon Therapeutics, Inc. (filed herewith)
31.1	Rule 13a-14(a) Certification of Chief Executive Officer
31.2	Rule 13a-14(a) Certification of Principal Accounting Officer
32.1	Section 1350 Certification of Chief Executive Officer
32.2	Section 1350 Certification of Principal Accounting Officer
101	The following financial information from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, formatted in eXtensible Business Reporting Language (XBRL):  (i) Unaudited Consolidated Balance Sheets at September 30, 2014 and December 31, 2013, (ii) Unaudited Consolidated Statements of Operations for the Three and Nine months ended September 30, 2014 and 2013, (iii) Unaudited Consolidated Statements of Cash Flows for the Nine months ended September 30, 2014 and 2013 and (iv) Notes to Unaudited Consolidated Financial Statements.*

* Filed Herewith

†Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment submitted to the SEC.

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EX-10.3

Exhibit 10.3

Execution Version

Confidential

Confidential Materials omitted and filed separately with the Securities and Exchange Commission.
Triple asterisks denote omissions.

LICENSE AGREEMENT

This LICENSE AGREEMENT (the “Agreement”) is effective as of September 17, 2014 (the “Effective Date”) by and between Spectrum Pharmaceuticals, Inc. a Delaware corporation (“Spectrum”) and CASI Pharmaceuticals, Inc., a Delaware corporation (“Licensee”). Licensee and Spectrum are each referred to herein by name or, individually, as a “Party” or, collectively, as “Parties.”

BACKGROUND

A.         Spectrum owns and/or controls rights in and to a pharmaceutical product comprising Captisol® and a compound known as melphalan, including all of its optical isomers, and salt, ester and polymorphic forms (the “Product”).

B.         Licensee desires to obtain a license to develop and commercialize the Product for use in the Field in the Licensee Territory (each capitalized term as defined below), and Spectrum desires to grant Licensee such a license.

NOW, THEREFORE, in consideration of the mutual covenants and agreements provided herein below and other consideration, the receipt and sufficiency of which is hereby acknowledged, Licensee and Spectrum hereby agree as follows:

ARTICLE 1
DEFINITIONS

The following capitalized terms shall have the meanings given in this Article 1 when used in this Agreement:

1.1         “AAA” has the meaning set forth in Section 10.2.

1.2         “AAA Rules” has the meaning set forth in Section 10.2.

1.3         “Additional Products” has the meaning set forth in Section 3.4.1.

1.4         “Affiliate” shall mean with respect to either Party, any Person controlling, controlled by or under common control with such Party, for so long as such control exists. For purposes of this Section 1.4 only, “control” shall mean (i) direct or indirect ownership of fifty percent (50%) or more of the stock or shares having the right to vote for the election of directors of such corporate entity or (ii) the possession, directly or indirectly, of the power to direct, or cause the direction of, the management or policies of such entity, whether through the ownership of voting securities, by contract or otherwise.

1.5         “Agreement” has the meaning set forth in the Preamble including any schedules, exhibits, annexures, attached hereto or any amendments and modifications.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

1.6         “Agreement Year” shall mean a twelve (12) month period from the Effective Date and each anniversary thereof.

1.7         “Applicable Laws” shall mean, with respect to a Party’s activities under this Agreement, any and all laws, ordinances, orders, rules, rulings, directives and regulations of any kind whatsoever of any governmental or regulatory authority within the applicable jurisdiction applicable to such Party’s activities.

1.8         “Auditing Party” has the meaning set forth in Section 5.5.

1.9         “Business Day” shall mean any day other than a Saturday, Sunday or any other day on which commercial banks in the United States, the People’s Republic of China or Hong Kong are authorized or required by law to remain closed.

1.10       “Captisol” means Captisol®, also known scientifically as sulfobutylether β(beta) cyclodextrin, sodium salt, including all of its optical isomers, and salt, ester, and polymorphic forms.

1.11       “Captisol Patents” means all patents and patent applications in the Licensee Territory which pertain to Captisol, other than the Spectrum Patents, and which now or at any time during the Term are owned by or licensed to *** or any *** Affiliate with the right to sublicense, including any and all extensions, renewals, continuations, substitutions, continuations-in-part, divisions, patents-of-addition, reissues, reexaminations and/or supplementary protection certificates to any such patents. Set forth in Exhibit 1.11 attached hereto include, without limitation, a list of the Captisol Patents as of the Effective Date. Such Exhibit 1.11 may be updated by *** from time to time during the Term.

1.12       “Chairperson” has the meaning set forth in Section 2.1.3.

1.13       “Change of Control” means, with respect to either Party, (i) the sale of all or substantially all of such Party’s assets or business relating to this Agreement; (ii) a merger, consolidation, share exchange or other similar transaction involving such Party and any Third Party which results in the holders of the outstanding voting securities of such Party immediately prior to such merger, consolidation, share exchange or other similar transaction ceasing to hold more than fifty percent (50%) of the combined voting power of the surviving, purchasing or continuing entity immediately after such merger, consolidation, share exchange or other similar transaction, or (iii) the acquisition by a person or entity, or group of persons or entities acting in concert, of more than fifty percent (50%) of the outstanding voting equity securities of such Party; in all cases of clauses (i)-(iii), where such transaction is to be entered into with any person or group of persons other than the other Party or its Affiliates.

1.14       “Commercialization” shall mean, with respect to the Product, any and all processes and activities conducted to establish and maintain sales for the Product (including with respect to reimbursement and patient access), including offering for sale, detailing, selling (including launch), marketing (including education and advertising activities), promoting, storing, transporting, distributing, and importing the Product, but shall exclude Development of the Product. For clarity, Commercialization shall include the manufacture of the Product in support of the foregoing processes and activities, including, to the extent applicable, packaging, labeling and other finishing activities, quality control and assurance testing, in each case, with respect to such product. “Commercialize” and “Commercializing” shall have their correlative meanings.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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1.15       “Commercially Reasonable Efforts” shall mean the carrying out of obligations or tasks using efforts not less than the efforts a reasonably prudent company engaged in the development and commercialization of a pharmaceutical product having similar market potential, profit potential, or strategic value at a similar stage of its development or product life as the Product, would use based on conditions then prevailing and taking into account relevant commercial and economic factors.

1.16       “Common Stock” has the meaning set forth in Section 5.1.

1.17       “Confidential Information” has the meaning set forth in Section 7.1.

1.18       “Control” shall mean, with respect to any Intellectual Property right, possession by a party (including its Affiliates) of the right (whether by ownership, license or otherwise) to grant to another party a license or a sublicense under such Intellectual Property right without violating the terms of any agreement or other arrangement with any third party. “Controlled” and “Controlling” shall have their correlative meanings. Notwithstanding anything to the contrary in this Agreement, in the event that a Third Party acquires (including by merger or consolidation) a Party or an Affiliate of a Party, or a Party or an Affiliate of a Party transfers to a Third Party all or substantially all of its assets to which this Agreement relates (such Third Party and its Affiliates immediately prior to such acquisition or transfer (the “Subject Transaction”), collectively, the “Acquiring Entities”), the following shall not be deemed to be Controlled by such Party or its Affiliates for purposes of this Agreement: (i) any subject matter owned or controlled by any Acquiring Entity immediately prior to the effective date of such Subject Transaction, and (ii) any subject matter developed or acquired by or on behalf of any Acquiring Entity after a Subject Transaction independently, without accessing or practicing subject matter within the Licensed Technology or any other technology or information made available to such Party under this Agreement.

1.19       “***” shall mean ***.

1.20       “Development” shall mean, with respect to the Product, any and all processes and activities conducted to obtain and maintain Regulatory Approval for the Product, including preclinical testing, test method development and stability testing, toxicology, formulation, process development, quality assurance/control development, statistical analysis, clinical studies (including trials for additional indications for the Product for which a Regulatory Approval has been obtained), quality of life assessments, pharmacoeconomics, post-marketing studies, label expansion studies, regulatory affairs, and further activities relating to the clinical development or preparation of such product for filing MAAs with Regulatory Authorities and Commercialization. “Develop” and “Developing” shall have their correlative meanings.

1.21       “Dispute” has the meaning set forth in Section 10.1.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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1.22       “DMF” means a Drug Master File for Captisol, as filed as of the Effective Date, or as hereafter updated from time to time during the Term, by *** with the FDA, and equivalent filings in other jurisdictions.

1.23       “Effective Date” has the meaning set forth in the Preamble.

1.24       “Enforcing Party” has the meaning set forth in Section 6.5.5.

1.25       “Field” shall mean the use of the Product for the diagnosis, prevention and therapy of all diseases, conditions and disorders in humans.

1.26       “First Commercial Launch” shall mean the first shipment of the Product in commercial quantities for commercial sale to a Third Party in Licensee Territory after receipt of all applicable Regulatory Approvals therefor from the applicable Regulatory Authority in Licensee Territory.

1.27       “Foreign Marketing Approval” has the meaning set forth in Section 4.1.6.

1.28       “Imported Product Regulatory Approval” has the meaning set forth in Section 4.1.6.

1.29       “Indemnify” has the meaning set forth in Section 8.5.1.

1.30       “Initial Transfer” has the meaning set forth in Section 4.2.3.

1.31       “Intellectual Property” shall mean intellectual property rights of every kind and nature throughout the world, however denominated, including all rights and interests pertaining to or deriving from:

(a)          Patent and Know-How;

(b)          trademarks, trade names, service marks, service names, brands, trade dress and logos, domain names, and the goodwill and activities associated therewith;

(c)          copyrights, works of authorship, rights of privacy and publicity, moral rights, and similar proprietary rights of any kind or nature, in all media now known or hereafter created; and

(d)          any and all registrations, applications, recordings, licenses, statutory rights, common-law rights and rights relating to any of the foregoing.

1.32       “International Accounting Standards” shall mean the International Financial Reporting Standards or U.S. Generally Accepted Accounting Principles.

1.33       “Invention” has the meaning set forth in Section 6.1.2.

1.34       “Investment Agreement” has the meaning set forth in Section 5.1.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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1.35       “JPC” has the meaning set forth in Section 2.1.1.

1.36       “Joint Patents” has the meaning set forth in Section 6.1.1(c).

1.37       “Joint Inventions” has the meaning set forth in Section 6.1.1(c).

1.38       “Know-How” shall mean inventions, business, marketing, technical and manufacturing information, know-how and materials, including technology, software, instrumentation, specifications, devices, data, compositions, formulas, biological materials, assays, reagents, constructs, compounds, discoveries, procedures, processes, practices, protocols, methods, techniques, results of experimentation or testing, knowledge, trade secrets, skill and experience, in each case whether or not patentable or copyrightable.

1.39       “Licensee” has the meaning set forth in the Preamble.

1.40       “Licensee Indemnitees” has the meaning set forth in Section 8.5.1.

1.41       “Licensee Inventions” has the meaning set forth in Section 6.1.1(b).

1.42       “Licensee Know-How” shall mean any and all Know-How Controlled by Licensee or its Affiliates during the Term that is reasonably necessary or useful for the Development or Commercialization of the Product for use in the Field. Licensee Know-How shall also include Licensee Inventions.

1.43       “Licensee Territory” shall mean People’s Republic of China including, Hong Kong, Macau and Taiwan.

1.44       “Licensee Trademarks” has the meaning set forth in Section 4.3.4(a).

1.45       “Losses” has the meaning set forth in Section 8.5.1.

1.46       “MAA” shall mean a new drug application or similar application or submission filed with or submitted to any Regulatory Authority to obtain permission to commence marketing and sales of the Product in any particular jurisdiction.

1.47       “Made” has the meaning set forth in Section 6.1.2.

1.48       “Manufacturing Cost” shall mean Spectrum’s, or Non-Spectrum Foreign Regulatory Approval Holder’s, bona fide and actual manufacturing cost or bona fide invoiced cost from a Third Party manufacturer.

1.49       “Material Impact” shall mean a material adverse effect on the regulatory status or commercial sales of the Product.

1.50       “Material Impact Matters” has the meaning set forth in Section 2.3.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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1.51       “Net Sales” has the meaning set forth in the Upstream Stream Licenses.

1.52       “Non-Spectrum Foreign Marketing Approval Holder” has the meaning set forth in Section 4.1.6.

1.53       “Party” or “Parties” has the meaning set forth in the Preamble.

1.54       “Patent” shall mean any of the following, whether existing now or in the future anywhere in the world: (i) any issued patent, including inventor's certificates, substitutions, extensions, confirmations, reissues, re-examination, renewal or any like governmental grant for protection of inventions; and (ii) any pending application for any of the foregoing, including any continuation, divisional, substitution, continuations-in-part, provisional and converted provisional applications.

1.55       “Payment Period” has the meaning set forth in Section 5.2.2.

1.56       “Person” shall mean any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization or government or political subdivision thereof.

1.57       “Prior CDA” has the meaning set forth in Section 7.3.

1.58       “Product” has the meaning set forth in the Preamble.

1.59       “Prosecution and Maintenance” shall mean, with respect to a Patent, the preparing, filing, prosecuting and maintenance of such Patent, as well as re-examinations, reissues, requests for Patent term extensions and the like with respect to such Patent, together with the conduct of interferences, the defense of oppositions and other similar proceedings with respect to the particular Patent.

1.60       “Regulatory Approval” shall mean, with respect to the Product in a particular jurisdiction, approval or other permission by the applicable Regulatory Authorities sufficient to initiate manufacturing, importing, marketing and sales of such product, including pricing and reimbursement approvals.

1.61       “Regulatory Authority” shall mean any federal, national, multinational, state, provincial or local regulatory agency, department, bureau or other governmental entity with authority over the Development, Commercialization or other use or exploitation (including the granting of Regulatory Approvals) of the Product in any jurisdiction, including the FDA.

1.62       “Regulatory Filing” shall mean any filing, application, or submission with any Regulatory Authority, including MAAs and authorization, approvals or clearances arising from the foregoing, including Regulatory Approvals, and all correspondence or communication with or from the relevant Regulatory Authority, as well as minutes of any material meetings, telephone conferences or discussions with the relevant Regulatory Authority, in each case with respect to the Product.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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1.63       “Senior Executives” has the meaning set forth in Section 2.3.

1.64       “Spectrum” has the meaning set forth in the Preamble.

1.65       “Spectrum Copyrights” shall mean all works of authorship (including advertising, marketing and promotional materials, artwork, labeling, and other works of authorship), and all copyrights, moral rights and other rights and interests thereto throughout the Licensee Territory, whether or not registered, that are (i) Controlled by Spectrum or its Affiliates, and (ii) are delivered to Licensee by Spectrum for use in connection with the Product.

1.66       “Spectrum Indemnitees” has the meaning set forth in Section 8.5.2.

1.67       “Spectrum Inventions” has the meaning set forth in Section 6.1.1(a).

1.68       “Spectrum Know-How” shall mean any and all Know-How Controlled by Spectrum or its Affiliates during the Term that is reasonably necessary or useful for the Development or Commercialization of the Product for use in the Field. Spectrum Know-How shall also include Spectrum Inventions.

1.69       “Spectrum Patents” shall mean any and all Patents Controlled by Spectrum or its Affiliates (other than the Captisol Patents) during the Term claiming (i) the composition of or formulation for, (ii) any method, composition or apparatus for the manufacture of, or (iii) any method of using in the Field, in each case of clause (i), (ii), and (iii), the Product. Spectrum Patents shall also include Patents that claim Spectrum Inventions. A list of Spectrum Patents is appended hereto as Exhibit 1.69 and will be updated periodically to reflect changes thereto during the Term.

1.70       “Spectrum Product Marks” has the meaning set forth in Section 4.3.4(c).

1.71       “Spectrum Technology” shall mean the Spectrum Know-How, Spectrum Patents and Spectrum Copyrights.

1.72       “Spectrum Trademarks” shall mean the trademarks and service marks, the goodwill associated therewith, and all registrations and applications relating thereto, that are (i) Controlled by Spectrum or its Affiliates, during the Term, and (ii) used by Spectrum in connection with the Product. A list of Spectrum Trademarks is appended hereto as Exhibit 1.72 and will be updated periodically to reflect changes thereto during the Term.

1.73       “Spectrum Territory” shall mean all countries and territories throughout the world other than the Licensee Territory.

1.74       “Supply Agreement” has the meaning set forth in Section 4.5.2.

1.75       “Term” has the meaning set forth in Section 9.1.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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1.76       “Territory” shall mean all of the countries and territories in the world. A Party’s respective “Territory” shall mean, in the case of Spectrum, the Spectrum Territory, and in the case of Licensee, the Licensee Territory.

1.77       “Third Party” shall mean any Person other than Licensee, Spectrum or their respective Affiliates.

1.78       “Third-Party Claim” has the meaning set forth in Section 8.5.1.

1.79       “Upstream Licenses” shall mean ***.

1.80       “Upstream Payments” has the meaning set forth in Section 5.2.1.

1.81       “Wind-Down Period” has the meaning set forth in Section 9.8.2.

ARTICLE 2
GOVERNANCE

2.1         Joint Product Committee.

2.1.1           Establishment. Promptly after the Effective Date, Licensee and Spectrum shall establish a joint product committee (the “JPC”) to oversee, review and coordinate the activities of Licensee under this Agreement, including the Development and Commercialization of the Product for use in the Field in the Licensee Territory.

2.1.2           Responsibilities. The JPC shall be responsible for: (i) overseeing, reviewing and monitoring Licensee’s activities under this Agreement including, without limitation, any clinical trials proposed to be conducted by Licensee; (ii) facilitating access to and the exchange of information between the Parties related to the Development and/or Commercialization of the Product for use in the Field in the Licensee Territory; and (iii) undertaking and/or approving such other matters as are specifically provided for the JPC under this Agreement.

2.1.3           Membership. The JPC shall be comprised of an equal number of representatives from each of Spectrum and Licensee and unless otherwise agreed such number shall be two (2) senior representatives from each Spectrum and Licensee. Either Party may replace its respective JPC representatives at any time with prior notice to the other Party, provided, that such replacement is of comparable authority and scope of functional responsibility within that Party’s organization as the person he or she is replacing. Unless otherwise agreed by the Parties, the JPC shall have at least one representative with relevant decision-making authority from each Party such that the JPC is able to effectuate all of its decisions within the scope of its responsibilities. Licensee shall select one of its representatives as the chairperson for the JPC (the “Chairperson”) and the Licensee may replace the Chairperson upon written notice to Spectrum. The Chairperson shall be responsible for calling meetings, preparing and circulating an agenda in advance of each meeting (which agenda will include every matter requested by either Party), and preparing and issuing minutes of each meeting within thirty (30) days thereafter.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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2.2        Meetings. The JPC shall hold meetings (either in person, by teleconference or videoconference) at such times and places as the Parties may mutually agree, provided, that, unless the Parties agree otherwise, the JPC shall meet at least semi-annually during the Development of the Product for use in the Field in the Licensee Territory, and at least annually thereafter. Each Party shall bear its own costs associated with attending such meetings. As appropriate, other employees of the Parties may attend the JPC’s meetings as nonvoting observers, but no Third Party personnel may attend unless otherwise agreed by the Parties. At the request of Spectrum and with prior written approval of Licensee, which shall not be unreasonably withheld, Third Party licensees of Spectrum for the development and commercialization of the Product for use in the Field in the Spectrum Territory may attend the JPC’s meetings as nonvoting participants if they have agreed to confidentiality terms at least as restrictive as those set forth in this Agreement. Each Party may also call for special meetings to resolve particular matters requested by such Party.

2.3        Decision Making. Decisions of the JPC shall be made by consensus of the members present in person or by other means (e.g., teleconference) at any meeting, with at least one representative from each Party participating in such vote. The members of the JPC shall at all times use good faith efforts to reach consensus on matters properly referred to the JPC. In the event that the JPC is unable to reach consensus with respect to a particular matter within its purpose, then either Party may, by written notice to the other, refer the matter to the respective business head of each Party or their respective designee who is senior in rank and authority to such Party’s JPC representatives (the “Senior Executives”) for resolution by good faith discussions for a period of at least fifteen (15) Business Days. In the event that the Senior Executives are unable to reach agreement with respect to such matter within such fifteen (15) Business Days, then Licensee shall have the final decision-making authority with respect to such matter, except in the event that such matter is reasonably possible to create a Material Impact in the Spectrum Territory (the “Material Impact Matters”) and Spectrum notifies Licensee during or before any referral of the matter to Senior Executives of each Party for resolution of Spectrum’s belief that such matter is a Material Impact Matter, in which case, Spectrum shall have the final decision-making authority.

2.4        Authority. The JPC shall perform its responsibilities under this Agreement based on the principles of prompt and diligent Development and Commercialization of the Product for use in the Field in the Licensee Territory, consistent with good pharmaceutical practices and commercially reasonable consideration of the optimal balance of maximizing long-term sale of the Product in the Licensee Territory.

2.5        Day-to-Day Responsibilities. Each Party shall: (i) be responsible for day-to-day implementation and operation of the activities hereunder for which it has or is otherwise assigned responsibility under this Agreement, provided, that such implementation is not inconsistent with the express terms of this Agreement or the decisions of the JPC within the scope of their authority specified herein; and (ii) keep the other Party informed as to the progress of such activities as reasonably requested by the other Party and as otherwise determined by the JPC.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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2.6        JPC Participation; Discontinuation. It is understood that Spectrum’s participation on the JPC shall be as a matter of right, but not an obligation. Accordingly, Spectrum may, at its discretion, elect to discontinue its participation in the JPC at any time during the Term upon written notice to Licensee. If Spectrum provides such written notice, then JPC shall have no further authority under this Agreement and shall cease to function, and thereafter decisions which were previously to be made by the JPC as set forth and contemplated in this Agreement shall be made solely by the Licensee in its reasonable discretion except that all decisions with respect to Material Impact Matters shall be made solely by Spectrum, and all of the rights and obligations of the Parties under this Agreement shall continue in full force and effect as rights and obligations directly between the Parties, including, without limitation, each Party’s obligations to provide and rights to receive results, data and other information generated from the other Party’s activities with respect to the Development of the Product for use in the Field.

ARTICLE 3
LICENSES AND EXCLUSIVITY

3.1         Grant to Licensee.

3.1.1           License. Subject to and in accordance with the terms and conditions of this Agreement, Spectrum hereby grants to Licensee, during the Term, (i) an exclusive (even as to Spectrum and its Affiliates, except to the extent necessary to perform their obligations under this Agreement), irrevocable (except as set forth in Article 9), fully paid-up, royalty-free (except as set forth in Section 5.2.1), sublicenseable at any tier (in accordance with Section 3.1.2) license to use the Spectrum Know-How, and under the Spectrum Patents and Captisol Patents, to Commercialize (including to use, sale, offer for sale and import) the Product solely in the Licensee Territory and solely for use in the Field, subject to and in accordance with Section 4.3, and (ii) a non-exclusive, irrevocable (except as set forth in Article 9), fully paid-up, royalty-free, sublicenseable at any tier (in accordance with Section 3.1.2) license to use the Spectrum Know-How, and under the Spectrum Patents and Captisol Patents, to Develop the Product solely in the Licensee Territory and solely for use in the Field, subject to and in accordance with Sections 4.1 and 4.2.

3.1.2           Sublicenses. Neither Licensee nor any of its Affiliates may grant or authorize sublicenses under the license under Section 3.1.1 without the prior written consent of Spectrum, which approval shall not be unreasonably withheld, delayed, or conditioned, except that Licensee shall have the right to sublicense at any tier the license under Section 3.1.1 to its Affiliates without the consent of Spectrum; provided, that Licensee shall promptly notify Spectrum of any such license grant to its Affiliates. Licensee shall be responsible for the failure by its Affiliates to comply with, and Licensee shall ensure the compliance by each of its Affiliates with, the terms of this Agreement including all relevant restrictions, limitations and obligations.

3.2         Activities Outside the Field and Outside the Licensee Territory.

3.2.1           Licensee Rights Limited to the Field and the Licensee Territory. Licensee agrees that neither it, nor any of its Affiliates, will Develop (including file for Regulatory Approval with respect to) or Commercialize (including use, sale, offer for sale or import) the Product anywhere in the world, or for any use anywhere in the world, except in the Licensee Territory, and for use in the Field in the Licensee Territory, only in accordance with and under this Agreement. Licensee agrees that neither it, nor any of its Affiliates, will use or otherwise exploit, except as expressly licensed under this Agreement, any Spectrum Patents, Spectrum Know-How and/or Spectrum Trademark, or their counterparts in a country outside the Licensee Territory.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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3.2.2           Territorial Integrity. Each Party shall use Commercially Reasonable Efforts to prevent any Product sold or otherwise distributed by such Party, directly or indirectly, from being sold, distributed or otherwise transported for use outside its respective Territory.

3.3         Upstream Licenses. In addition to the payment obligations under Section 5.2, Licensee shall, and shall cause its Affiliates and sublicensees to, comply with all the terms and conditions of the Upstream Licenses applicable to Licensee or its Affiliates or sublicensees, or to Spectrum due to Licensee’s or its Affiliates’ or sublicensees’ activities, under this Agreement in the Licensee Territory. To the extent that any provisions are more restrictive, or broader, under the Upstream Licenses than may be explicitly set out in the Agreement, such more restrictive or broader provisions shall govern Licensee’s rights. During the Term, Spectrum shall promptly furnish Licensee with copies of (a) complete and unredacted copies of the Upstream Licenses and any relevant ancillary agreements, exhibits, schedules, or other documents which set forth and are sufficient to fully describe all the terms and conditions with which Licensee must comply in relation to the Upstream Licenses, (b) all amendments of the Upstream Licenses, and (c) all correspondence (or in the case of oral discussions, a summary of such discussions) with or from and reports received from or provided to licensors under the Upstream Licenses to the extent material to Licensee or the rights granted or to be granted to Licensee under this Agreement. In addition, during the Term, Spectrum shall provide copies of all notices received by Spectrum relating to any alleged breach or default by Spectrum under the Upstream Licenses within five (5) Business Days after Spectrum’s receipt thereof.

3.4         Assistance to Obtain Rights to Additional Products.

3.4.1           Introduction to Third Parties with Rights to Additional Products. With regard to any current and/or future proprietary, licensed or acquired pharmaceutical or biologic assets or products, and any and all other derivatives, and/or improvements thereof, that Spectrum Controls or that come under the Control of Spectrum, other than the Product (the “Additional Products”), to the extent Development and Commercialization rights in the Licensee Territory are Controlled by Third Parties, at Licensee’s reasonable request, Spectrum shall use good faith efforts, solely from the perspective of Spectrum’s best interests, to introduce Licensee to such Third Parties to facilitate Licensee to license or acquire such rights in the Licensee Territory from such Third Parties, with the understanding that Licensee shall be solely responsible for all costs or consideration related to a license or acquisition of such rights in the Licensee Territory from such Third Parties.

3.4.2           Efforts to Obtain Rights in the Licensee Territory. Spectrum shall use good faith efforts, solely from the perspective of Spectrum’s best interests, when engaging in negotiations with Third Parties to license or acquire any Development and Commercialization rights for any pharmaceutical or biologic assets or products, and any and all other derivatives, and/or improvements thereof owned by such third parties, to license or acquire Development and Commercialization rights thereto in the Licensee Territory.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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3.4.3           Termination Upon Change of Control. Licensee acknowledges and agrees that Spectrum’s obligations under Sections 3.4.1 and 3.4.2 above shall terminate and be of no further effect upon the consummation of Change of Control by Spectrum.

3.5         No Other Rights. Each Party acknowledges that the rights and licenses granted under this Article 3 and elsewhere in this Agreement are limited to the scope expressly granted. Accordingly, except for the rights expressly granted under this Agreement, no right, title, or interest of any nature whatsoever is granted, whether by implication, estoppel, reliance, or otherwise, by either Party to the other Party. All rights with respect to Know-How, Patents or other Intellectual Property rights that are not specifically granted herein are reserved to the owner thereof. Without limiting the foregoing and unless otherwise provided in the Supply Agreement, Spectrum grants no rights to Licensee to manufacture, import, sell or offer for sale bulk Captisol.

ARTICLE 4
REGULATORY MATTERS, DEVELOPMENT AND COMMERCIALIZATION OF PRODUCT

4.1         Regulatory Matters.

4.1.1           General. Licensee shall be responsible for all correspondence, meetings and other interactions, with the relevant Regulatory Authorities concerning regulatory activities related to the Product in the Field in the Licensee Territory, and for preparing and filing any and all Regulatory Filings for Regulatory Approval for the Product in the Field in the Licensee Territory at its sole expense and shall use Commercially Reasonable Efforts in doing so. Spectrum shall assist and cooperate with Licensee in connection with the preparation, filing and maintenance of such Regulatory Filings, as reasonably requested by Licensee. All Regulatory Approvals in the Licensee Territory shall be owned by Licensee and filed and obtained in Licensee’s and/or Spectrum’s name in accordance with Applicable Laws.

4.1.2           Reporting. Licensee shall keep Spectrum fully informed of regulatory developments relating to the Product in the Field in the Licensee Territory and shall promptly notify Spectrum in writing of any action or decision by any Regulatory Authority in the Licensee Territory regarding the Product in the Field. Licensee shall provide Spectrum for review and comment all draft Regulatory Filings in its original language (with a summary in English) and in electronic form (other than routine correspondence) at least twenty (20) Business Days (or in the event of a shorter filing deadline, as soon as practicable) in advance of their intended date of submission to a Regulatory Authority in the Licensee Territory. Spectrum shall use good faith efforts to provide Licensee with comments to such draft Regulatory Filings prior to the intended date of submission, and Licensee shall consider in good faith any comments thereto provided by Spectrum. Notwithstanding the foregoing, Licensee shall provide Spectrum with copies of the portions of all regulatory submissions containing Captisol data alone (and not in conjunction with any product formulation) thirty-five (35) days prior to submission and shall use commercially reasonable efforts to incorporate Spectrum’s comments on the same. Licensee shall promptly notify Spectrum of any Regulatory Filings (other than routine correspondence) submitted to or received from any Regulatory Authority in the Licensee Territory regarding the Product in the Field, and shall provide copies thereof at least five (5) Business Days after submission or receipt, which copy may be provided in its original language and in electronic form. Licensee shall keep Spectrum informed of all meetings, conferences and discussions with any Regulatory Authority in the Licensee Territory concerning the Product, and shall provide Spectrum with a summary of the substantive content discussed in any such meeting, conferences or discussions within five (5) Business Days after such meetings, conferences or discussions. In addition, upon Spectrum’s request, Licensee shall promptly meet and confer with Spectrum to discuss any regulatory matters related to the Product in the Licensee Territory, either in person at Licensee’s facility or by audio or video teleconference as Spectrum may elect.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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4.1.3      Regulatory Costs. Licensee shall be solely responsible for all of its costs and expenses related to the preparation, filing and maintenance of all Regulatory Approvals for the Product in the Field in the Licensee Territory. Spectrum shall support Licensee, as reasonably requested by Licensee, in obtaining Regulatory Approvals in Licensee Territory, including providing necessary documents or other materials in Spectrum’s possession required by Applicable Laws to obtain Regulatory Approvals in such territory, all in accordance with the terms and conditions of this Agreement, provided, that Spectrum shall be under no obligation to generate any additional data unless specifically agreed by Spectrum and Licensee.

4.1.4      Access and Rights of Reference.

(a)          Spectrum hereby grants to Licensee a right of reference to all Regulatory Filings filed by or on behalf of Spectrum, which right of reference Licensee may use for the sole purpose of seeking, obtaining and maintaining Regulatory Approvals and Developing and Commercializing the Product in the Field in the Licensee Territory. At Licensee’s reasonable request, Spectrum shall submit to the Regulatory Authorities a copy of the Regulatory Filings related to the Product, which are reasonably determined by Spectrum to be necessary to support Licensee’s application for Regulatory Approvals in the Licensee Territory. Notwithstanding the foregoing, Licensee shall have the right to reference the DMF solely in connection with Licensee’s Regulatory Filings submitted in connection with obtaining Regulatory Approval for the Product in Licensee Territory.

(b)          Spectrum and *** shall have the right to reference and utilize all toxicology/safety and other scientific data developed on the Product by Licensee, its sublicensees or Affiliates, at no cost to Spectrum or ***. Upon written request by Spectrum or ***, Licensee shall either provide Spectrum or ***, as applicable, with a copy of all such data or shall make such data accessible to Spectrum or ***, as applicable, at such times and locations mutually agreed upon by the parties.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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4.1.5      Reporting; Adverse Drug Reactions.

(a)          Pharmacovigilance Agreement. Promptly after the Effective Date, the Parties shall enter into a pharmacovigilance agreement on reasonable and customary terms, including: (a) providing detailed procedures regarding the maintenance of core safety information and the exchange of safety data relating to the Product within appropriate timeframes and in an appropriate format to enable each Party to meet both expedited and periodic regulatory reporting requirements; and (b) ensuring compliance with the reporting requirements of all applicable Regulatory Authorities on a worldwide basis for the reporting of safety data in accordance with all applicable regulatory and legal requirements regarding the management of safety data. Each Party hereby agrees to comply with its respective obligations under such pharmacovigilance agreement and to cause its Affiliates to comply with such obligations.

(b)          Adverse Event Reporting. As between the Parties: (a) Licensee or its designee shall be responsible for the timely reporting of all adverse drug reactions/experiences, Product quality, Product complaints and safety data relating to the Product to the appropriate Regulatory Authorities in the Licensee Territory; and (b) Spectrum or its designee shall be responsible for reporting all adverse drug reactions/experiences, Product quality, Product complaints and safety data relating to the Product to the appropriate Regulatory Authorities in the Spectrum Territory; all in accordance with Applicable Laws.

4.1.6      Spectrum Assistance for Imported Products. In the event that (a) to apply for Regulatory Approval for the Product as an imported drug or product (an “Imported Product Regulatory Approval”) in a country or regulatory jurisdiction within the Licensee Territory, a Regulatory Authority or Applicable Laws of such country or regulatory jurisdiction requires the applicant to hold a marketing authorization, certificate of pharmaceutical product, or an equivalent certification for such Product outside of such country or regulatory jurisdiction within the Licensee Territory (a “Foreign Marketing Approval”), (b) Licensee decides to seek Imported Product Regulatory Approval for such Product in such country or regulatory jurisdiction, and (c) Licensee requests Spectrum, if Spectrum is the Foreign Marketing Approval holder for such Product, to authorize Licensee to file, in Spectrum’s name, or if, Spectrum’s Affiliate or a Third Party is the Foreign Marketing Approval holder for such Product (the “Non-Spectrum Foreign Marketing Approval Holder”), to procure such Non-Spectrum Foreign Marketing Approval Holder to authorize Licensee to file in such Non-Spectrum Foreign Marketing Approval Holder’s name, for such Imported Product Regulatory Approval for such Product, then, Spectrum shall, and shall use commercially reasonable efforts to cause any Non-Spectrum Marketing Approval Holder to, provide all reasonable assistance, facilitation and support including providing all documents and data reasonably requested by Licensee in a timely manner and at Licensee’s cost to effectuate such Imported Product Regulatory Approval including:

(a)          Licensee shall have sole responsibility for, and sole decision-making authority with respect to, preparing, filing, obtaining and maintaining the Imported Product Regulatory Approvals and related Regulatory Filings, provided, that Spectrum shall, and shall cause its Affiliates and any Non-Spectrum Foreign Marketing Approval Holder to, at the request of Licensee, cooperate with Licensee to prepare, file, obtain and maintain such Imported Product Regulatory Approvals and related Regulatory Submissions.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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(b)          Spectrum shall:

(i)          if Spectrum holds the Foreign Marketing Approval, authorize Licensee, and provide all reasonable assistance, facilitation and support including providing all documentations and data reasonably requested by Licensee to Licensee, to file, in Spectrum’s name, for Imported Product Regulatory Approval in such country or regulatory jurisdiction, at the direction of Licensee and for Licensee’s sole benefit; or

(ii)         if a Non-Spectrum Foreign Marketing Approval Holder holds the Foreign Marketing Approval for such Product, use commercially reasonable efforts to cause such Non-Spectrum Foreign Marketing Approval Holder to authorize and provide all reasonable assistance, facilitation and support including providing all documentations and data reasonably requested by Licensee to Licensee, to file, in such Non-Spectrum Foreign Marketing Approval Holder’s name, for Imported Product Regulatory Approval in such country or regulatory jurisdiction, at the direction of Licensee and for Licensee’s sole benefit.

(c)          If the Regulatory Authority or Applicable Laws in such country or regulatory jurisdiction allows the Spectrum to appoint a local agent (or registration agent) to assist in the filing, maintenance or amendment of the Imported Product Regulatory Approval, then Spectrum shall appoint, or use commercially reasonable efforts to procure any Non-Spectrum Foreign Marketing Approval Holder to appoint, including providing a power of attorney which effectuates such appointment and registering such appointment with the relevant Regulatory Authority, Licensee or its designated Affiliate as its designated local agent for the Imported Product Regulatory Approval process inclusive of, to the fullest extent possible, the receipt of communications from the Regulatory Authority and submission of all relevant Regulatory Submissions.

(d)          Spectrum shall use commercially reasonable efforts to cause any Non-Spectrum Foreign Marketing Approval Holder to grant to Licensee, during the Term, an exclusive (even as to Spectrum, its Affiliates, and any Non-Spectrum Foreign Marketing Approval Holder), irrevocable (except as set forth in Article 9), fully-paid, royalty-free (except as set forth in Section 5.2.1), sublicenseable (in accordance with Section 3.1.2) license under such Imported Product Regulatory Approvals to Develop and Commercialize the Product solely in the Licensee Territory and solely for use in the Field in accordance with this Agreement. In addition, Spectrum shall cause any Non-Spectrum Foreign Marketing Approval Holder to, provide to Licensee, all benefits of any Imported Product Regulatory Approvals and enforce, at Licensee’s cost and expense, at the request of and for the account of Licensee, any rights of Spectrum or its Affiliates arising under any Imported Product Regulatory Approvals against any Person.

(e)          Spectrum shall use commercially reasonable efforts to cause any Non-Spectrum Foreign Regulatory Approval Holder to Manufacture and supply via the named manufacturer or supplier on the relevant Imported Product Regulatory Approval all Products for Commercialization under the Imported Product Regulatory Approvals in the Territory to Licensee and its designated Affiliates and sublicensees at a price per Product equal to the Non-Spectrum Foreign Regulatory Approval Holder’s Manufacturing Cost (as may change from time to time) for such Product plus ***.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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(f)          Spectrum shall, and hereby appoints, and shall use commercially reasonable efforts to cause its Affiliates and any Non-Spectrum Foreign Marketing Approval Holder to appoint, Licensee as its attorney-in-fact to Develop and Commercialize the Product under the Imported Product Regulatory Approval on Spectrum’s or the Non-Spectrum Foreign Marketing Approval Holder’s behalf, and shall execute a power of attorney in favor of Licensee to this effect during the Term.

(g)          Spectrum shall, and shall use commercially reasonable efforts to cause its Affiliates and any Non-Spectrum Foreign Marketing Approval Holder to, (x) notify Licensee of all communications received from the applicable Regulatory Authority with respect to any Imported Product Regulatory Approvals, (y) provide all official original copies of all Imported Product Regulatory Approvals received from the applicable Regulatory Authority to Licensee, and (z) provide copies of any written correspondence received from the applicable Regulatory Authorities with respect to any Imported Product Regulatory Approvals to Licensee, in each case, promptly after receipt thereof.

(h)          Spectrum shall not, and shall use commercially reasonable efforts to cause its Affiliates and any Non-Spectrum Foreign Marketing Approval Holder to not, interact or communicate with the CFDA regarding the Imported Product Regulatory Approvals without the prior approval or participation of Licensee.

(i)          If at any time Spectrum, its Affiliates or any Non-Spectrum Foreign Marketing Approval Holder are permitted by the applicable Regulatory Authority to transfer the Imported Product Regulatory Approval to Licensee, Spectrum shall, and hereby does, and shall cause its Affiliates and any Non-Spectrum Foreign Marketing Approval Holder to, assign to Licensee or its designated Affiliate, all rights, title and interests in and to such Imported Product Regulatory Approvals and related Regulatory Submissions for the Product in the Field in the Territory. Spectrum agrees and covenants that it shall, and shall cause it Affiliates and any Non-Spectrum Foreign Marketing Approval Holder to, promptly take any and all actions necessary to effectuate the prompt assignment of such Imported Product Regulatory Approvals and related Regulatory Submissions, or to enable Licensee or its designated Affiliate to obtain new Imported Product Regulatory Approvals or related Regulatory Submissions, including executing and delivering all documents or instruments, and providing all copies of documents or information, that may be necessary, required or which Licensee or its designated Affiliate may request.

4.2        Development.

4.2.1      General. Licensee shall take the lead in, and be responsible for, conducting the Development activities, including clinical trials, as may be reasonably necessary to expeditiously obtain Regulatory Approvals for the Product for use in the Field in the Licensee Territory. Except as otherwise provided herein, it is understood and agreed that, as between the Parties, all Development efforts for the Product for use in the Field in the Licensee Territory shall be at the sole expense of Licensee.

4.2.2      Clinical Trials. If additional clinical trials are required in the Licensee Territory, Licensee shall promptly inform JPC and shall not conduct any clinical trial without the prior approval of the JPC in accordance with Section 2.3.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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4.2.3      Development Assistance. Promptly after the Effective Date, but not to exceed thirty (30) days following the Effective Date, Spectrum shall, at its own cost and expense, make available to Licensee the Spectrum Know-How that exists on the Effective Date and was not previously provided to Licensee (but without an obligation for Spectrum personnel to travel) including all Spectrum Know-How developed, collected, or submitted as part of an investigational new drug application or similar application or submission filed with or submitted to any Regulatory Authority to obtain permission to commence clinical trials in relation to the Product in any particular jurisdiction (the “Initial Transfer”). For clarity, the Initial Transfer shall not require Spectrum to conduct any new Development work or prepare or complete any reports not already completed. After the Initial Transfer, Spectrum shall provide Licensee with reasonable assistance regarding scientific, clinical and/or manufacturing matters (including the chemistry, manufacture and controls of the Product) in the Development of the Product in the Field in the Licensee Territory. Such assistance shall include the transfer of additional Spectrum Know How to Licensee and reasonable access to Spectrum personnel involved in the research and Development of the Product, either in-person or by teleconference. Notwithstanding the foregoing or anything in this Agreement to the contrary, Licensee is solely responsible for (i) use of all documentation provided by Spectrum, including without limitation, use in any regulatory submission to the regulatory agencies in the Licensee Territory, (ii) document control and retention, and (iii) determining the suitability of any documentation provided by Spectrum hereunder for use in any regulatory submission.

4.2.4      Diligence. Licensee shall use Commercially Reasonable Efforts to Develop and obtain and maintain Regulatory Approval for the Product for at least one indication in the Field in the Licensee Territory and shall not take actions that would be reasonably likely to create a Material Impact. As applicable, Licensee is also obligated to conduct the diligence requirements applicable to Licensee in the Licensee Territory listed on Exhibit D of the ***. Licensee will have no other diligence obligations with respect to the Development of the Product under this Agreement.

4.3        Commercialization.

4.3.1      General. Except as otherwise provided herein, it is understood and agreed that, as between the Parties, all Commercialization efforts for the Product for use in the Field in the Licensee Territory shall be at the sole expense of Licensee.

4.3.2      Diligence. Licensee will use Commercially Reasonable Efforts to Commercialize the Product in the Field in each country in the Licensee Territory in which Regulatory Approval is received and shall not take actions that would be reasonably likely to create a Material Impact. Without limiting the foregoing, Licensee agrees to, directly or through one or more of its Affiliates, use Commercially Reasonable Efforts (i) to launch the Product for use in the Field as soon as practicable in the Licensee Territory, and thereafter (ii) to market, promote and sell the Product in the Field throughout the Licensee Territory to maximize Net Sales with respect thereto. As applicable, Licensee is also obligated to conduct the diligence requirements listed on Exhibit D of the ***. Licensee will have no other diligence obligations with respect to the Commercialization of the Product under this Agreement.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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4.3.3      Pricing. Licensee shall have the sole right to determine pricing of the Product in the Field in the Licensee Territory, provided, that Licensee and Spectrum shall discuss the pricing strategy for the Licensee Territory.

4.3.4      Trademarks.

(a)          Licensee Trademarks. Licensee shall have the right to select the Product names and all trademarks, including any Spectrum Trademarks (subject to Section 4.3.4(b) and only to the extent Spectrum has the right to grant a license to such Spectrum Trademarks to Licensee), used in connection with the Commercialization of the Product for use in the Field, including special promotional or advertising taglines, in each case in the Licensee Territory (all such trademarks, other than the Spectrum Trademarks, specific to the Product and including all goodwill associated therewith, and all applications, registrations, extensions and renewals relating thereto, shall be referred to as the “Licensee Trademarks”). Licensee shall be the exclusive owner of the Licensee Trademarks, and shall use Commercially Reasonable Efforts to register and maintain, at its expense, such Licensee Trademarks as shall be used for Commercialization of the Product for use in the Field in the Licensee Territory.

(b)          Reference to Spectrum as Licensor.

(i)          Spectrum Trademarks. To the extent permitted by Applicable Laws, at Spectrum’s election, the labels and packaging of the Product and all promotional materials for the Product shall include text identifying Spectrum as the licensor of the Product and a Spectrum Trademark to be placed in a size and location reasonably agreed to by the Parties, provided, that such mark: (i) is used in a consistent and noticeable manner sufficient to constitute trademark usage under Applicable Laws, (ii) is clearly identified as a trademark (i.e., through the use of a “®”, “™” or other appropriate identifier), (iii) is not used as combination marks with other marks or trademarks, and (iv) is reasonably less prominent in size and location as the Licensee Trademarks. Licensee shall obtain Spectrum’s review and approval prior to the first use of the Spectrum Trademarks in such labeling, packaging or promotional materials, such approval not to be unreasonably withheld if the Spectrum Trademarks are used in a manner that is consistent with Spectrum’s reasonable usage guidelines for such Spectrum Trademarks.

(ii)         Trademark License. In connection with Section 4.3.4(b)(i) above, Spectrum hereby grants to Licensee an exclusive license to use the Spectrum Trademarks (except with respect to the Spectrum’s trade name under which such license to use is non-exclusive) for the packaging, labeling, marketing, promotion, distribution and sale of the Product for use in the Field in the Licensee Territory in accordance with this Agreement, and Licensee shall have the right to exercise such license through its Affiliates, provided, that Licensee shall be responsible for the failure by its Affiliates to comply with, and Licensee guarantees the compliance by each of its Affiliates with, the terms of this Agreement including all relevant restrictions, limitations and obligations. Spectrum shall own all right, title and interest in and to the Spectrum Trademarks and the registrations thereof and all goodwill from the use of the Spectrum Trademarks shall vest in and inure to the benefit of Spectrum. Spectrum shall use Commercially Reasonable Efforts to register and maintain, at Licensee’s expense, such Spectrum Trademarks as shall be used for Commercialization of the Product for use in the Field in the Licensee Territory.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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(c)          Spectrum Product Marks. Spectrum shall have the right, but not the obligation, to brand the Product for use in the Field in the Spectrum Territory using the Licensee Trademarks (“Spectrum Product Marks”). Accordingly, Licensee shall provide to Spectrum copy proofs of each Licensee Trademark and reasonable usage guidelines therefor as such mark is registered with the applicable Regulatory Authorities in the Licensee Territory for Spectrum’s review and consideration. Spectrum shall obtain Licensee’s review and approval prior to the first use of the Spectrum Product Marks in such labeling, packaging or promotional materials, such approval not to be unreasonably withheld if the Spectrum Product Marks are used in a manner that is consistent with Licensee’s reasonable usage guidelines for such Spectrum Product Marks. Subject to this Section 4.3.4(c), Licensee further hereby grants to Spectrum an exclusive license to use the Spectrum Product Marks (except with respect to the Licensee’s trade name under which such license to use is non-exclusive), to the extent Spectrum Product Marks exist in the Spectrum Territory, consistent with the usage guidelines applicable to Licensee and its Affiliates’ use of such Licensee Trademarks in the Licensee Territory solely in connection with the Development and Commercialization of the Product solely for use in the Field and solely in the Spectrum Territory for the packaging, labeling, marketing, promotion, distribution and sale of the Product for use in the Field in the Spectrum Territory in accordance with this Agreement, and Spectrum shall have the right to exercise such license through its Affiliates or sublicense a Third Party, provided, that Spectrum shall be responsible for the failure by its Affiliates or Third Party sub-licensees to comply with, and Spectrum guarantees the compliance by each of its Affiliates with, the terms of this Agreement including all relevant restrictions, limitations and obligations. Licensee shall own all right, title and interest in and to any Spectrum Product Marks and the registrations thereof and all goodwill from the use of the Spectrum Product Marks shall vest in and inure to the benefit of Licensee. The above notwithstanding, Licensee shall have the right, but not the obligation, to register or maintain any Spectrum Product Marks in the Spectrum Territory.

4.4         Reporting. Without limiting any other provisions of this Agreement, Licensee shall keep Spectrum reasonably informed through the JPC as to the progress of its activities with respect to the Development and Commercialization of the Product or otherwise under this Article 4 and provide such reports and information with respect thereto as designated by the JPC or as may be reasonably requested by Spectrum. In addition, Licensee shall promptly notify Spectrum if it anticipates or there are material deviations from the Commercialization Plan(s) or any development diligence requirement, and shall discuss in good faith and keep Spectrum informed as to any corrective actions that it intends or is taking to address such deviations.

4.5         Manufacturing and Supply.

4.5.1      No Manufacturing Rights. Spectrum retains all rights with respect to manufacturing of the Product.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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4.5.2      Supply. Subject to the terms and conditions of this Agreement, Spectrum shall use Commercially Reasonable Efforts to supply or have supplied to Licensee or its designee all quantities of the Product ordered by Licensee for use in the Field in the Licensee Territory in accordance with a separate written agreement to be negotiated between the Parties pursuant to Section 4.5.3 below (a “Supply Agreement”). Licensee shall solely purchase from Spectrum its entire requirement of the Product and Spectrum shall have the right to manufacture and have manufactured such quantities of the Product for Licensee.

4.5.3      Supply Agreement. Within ninety (90) days of the Effective Date, the Parties shall negotiate and execute a Supply Agreement for the supply by Spectrum to Licensee of the requirements of the Product ordered by Licensee for Development and Commercialization in the Licensee Territory.

4.5.4      Supply Price and Adjustment. The price per unit of each Product supplied by Spectrum under the Supply Agreement shall be equal to Spectrum’s Manufacturing Cost (as may change from time to time) for such Product plus ***.

4.5.5      Quality Agreement. Within ninety (90) days of executing the Supply Agreement, Spectrum and Licensee shall execute a mutually acceptable quality agreement that allocates roles and responsibilities to each Party with respect to quality control and regulatory compliance with respect to supply of the Product to Licensee.

ARTICLE 5
PAYMENTS

5.1         Upfront Equity Consideration. As consideration for the licenses granted under Section 3.1 and Licensee’s other rights under this Agreement, Licensee shall issue 3,228,627 shares of Licensee’s common stock, par value $0.01 per share (the “Common Stock”) in accordance with the terms and conditions of that certain investment agreement between the Parties as of the even date hereof (the “Investment Agreement”).

5.2        Payments to Upstream Licensors.

5.2.1      Payments. Licensee shall pay to Spectrum any and all payments due from Spectrum to *** under the Upstream Licenses on account of the Development and/or Commercialization of the Product in the Field in the Licensee Territory by Licensee and its Affiliates and sublicensees (the “Upstream Payments”) including running royalty payments; provided that if Licensee is obligated to make any Upstream Payments due to the achievement of a milestone, Licensee shall only pay: (a) a prorated portion of any Upstream Payments triggered by the occurrence of a sales milestones reached in part due to sales by Licensee in the Licensee Territory; and (b) any Upstream Payments triggered by the occurrence of a development milestone wherein the trigger is explicitly defined as the achievement of a milestone in the Licensee Territory or achieved as a direct result of Licensee’s Development of the Product in the Licensee Territory. As an example of Licensee’s obligation to only pay a prorated portion of an Upstream Payment triggered by the occurrence of a sales milestone, if (x) a sales milestone payment of $10,000,000 is triggered due to the occurrence of aggregate annual sales of the Product within a territory covering the Licensed Territory reaching a certain threshold and (y) at the triggering of the sales milestone payment, Licensee’s annual sales of the Product in the Licensee Territory for the year the payment is triggered account for 10% of total sales of the Product in a territory which covers the Licensee Territory, then (z) Licensee shall pay $1,000,000 of that $10,000,000 sales milestone payment. Except for (i) the upfront equity consideration under Section 5.1, and (ii) the Upstream Payments under this Section 5.2.1, no payment shall be due from Licensee to Spectrum for the Development and/or Commercialization of the Product in the Field in the Licensee Territory.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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5.2.2      Payment Reports and Payments. For as long as Licensee is obligated to make the Upstream Payments in accordance with Section 5.2.1, within thirty (30) days after the last day of each calendar quarter, Licensee will deliver to Spectrum a report of Net Sales of the Product by Licensee, its Affiliates and sublicensees during the preceding quarterly period (any such period, a “Payment Period”), with all the Upstream Payments in accordance with Section 5.2.1, if any, for the Payment Period covered by such report being due no later than forty (40) days after the last day of such Payment Period. For any Upstream Payments triggered due to the occurrence of a sales milestone, Spectrum shall provide Licensee with an invoice no later than twenty (20) days before such Upstream Payment is due if feasible or such other documentation and such invoice or documentation will set forth: (a) the Licensee’s prorated portion of such Upstream Payment, (b) how the Licensee’s prorated portion of the Upstream Payment was calculated and reasonable support for the calculation, and (c) the date when such Upstream Payment is due. In relation to any Upstream Payment, which Spectrum claims is triggered due to the occurrence of a development milestone achieved as a direct result of Licensee’s Development of the Product in the Licensee Territory (other than wherein the trigger is explicitly defined as the achievement of a milestone in the Licensee Territory), Spectrum shall provide Licensee with information, reasonably requested by Licensee, regarding the Development of the Product in the Spectrum Territory sufficient for Licensee to determine whether Licensee’s Development has triggered such an Upstream Payment.

5.3        Payment Method. All payments due under this Agreement to Spectrum shall be made by bank wire transfer in immediately available funds to an account designated by Spectrum. All payments hereunder shall be made in the legal currency of the United States of America, and all references to “$” or “Dollars” shall refer to United States dollars. To the extent that Applicable Law imposes withholding taxes on any payments from Licensee to Spectrum pursuant to this Agreement, Licensee may withhold such taxes and pay such amounts to the relevant government authority. For any Upstream Payments where Spectrum cannot reduce any amounts owed to the Upstream Licensor under the applicable Upstream License with respect to withholding taxes paid by the Licensee under this Agreement, all amounts payable to Spectrum pursuant to this Agreement shall be made without reduction for any withholding or similar taxes paid by Licensee. For any Upstream Payments where Spectrum can reduce any amounts owed to the Upstream Licensor under the applicable Upstream License with respect to withholding taxes paid by the Licensee under this Agreement, the Licensee may deduct from the amounts payable to Spectrum pursuant to this Agreement any withholding or similar taxes paid by Licensee. Licensee shall furnish to Spectrum appropriate evidence of payment of such taxes or other amount required by Applicable Laws to be deducted from any payment due under this Agreement to Spectrum, including any tax or withholding levied by a foreign taxing authority in respect of such payment.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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5.4        Support Fees. Spectrum will provide to Licensee at its own expense: (a) *** (***) hours of regulatory and development support during the first Agreement Year, and (b) *** (***) hours of regulatory and development support for each Agreement year after the first anniversary of the Effective Date. Regulatory and development support provided by Spectrum to Licensee, in excess of the number of free hours, set forth above, in any Agreement Year, shall be charged at a rate of $*** per hour. For clarity, the costs incurred by Spectrum to provide the Initial Transfer under Section 4.2.3 shall also be borne by Spectrum and shall not be charged to Licensee or counted toward the hours set out in the this Section that Spectrum will provide to Licensee at its own expense.

5.5        Records; Audit. The Parties will, and will cause its Affiliates to, keep and maintain for three (3) years after the relevant calendar quarter complete and accurate books and records in sufficient detail so that Net Sales and payments made hereunder can be properly calculated. No more frequently than once during each calendar year during the Term and once during the three (3) year period thereafter, the Parties will permit independent third party auditors appointed by Spectrum, *** or Licensee (the party requesting an audit, the “Auditing Party”) and with at least forty-five (45) days advance notice at any time during normal business hours, accompanied at all times, to inspect, audit and copy reasonable amounts of relevant accounts and records of the non-Auditing Party and its Affiliates and reports submitted to the non-Auditing Party and its Affiliates by its sublicensees pertaining to a payment period that is not earlier than thirty-six (36) months from the date of conclusion of the audit, for the sole purpose of verifying the accuracy of the calculation of Upstream Payments to Spectrum pursuant to this Article 5. The accounts, records and reports related to any particular period of time may only be audited one time under this Section 5.5. The Auditing Party will cause their independent third party auditors not to provide the Auditing Party with any copies of such accounts, records or reports and not to disclose to the Auditing Party any information other than information relating solely to the accuracy of the accounting and payments made by Licensee pursuant to this Article 5. The Auditing Party will cause its independent third party auditors to promptly provide a copy of their report to non-Auditing Party. If such audit determines that payments are due to Spectrum, Licensee will pay to Spectrum any such additional amounts within ten (10) Business Days after the date on which such auditor’s written report is delivered to Licensee and the Auditing Party, unless such audit report is disputed by Licensee, in which case the dispute will be resolved in accordance with Article 10. If such audit determines that Licensee has overpaid any amounts to Spectrum, Spectrum will refund any such overpaid amounts to Licensee within ten (10) Business Days after the date on which such auditor’s written report is delivered to Licensee and the Auditing Party. Any such inspection of records will be at the Auditing Party’s expense unless such audit discloses a deficiency or overpayment in the payments made by Licensee (whether for itself or on behalf of its Affiliates) of more than *** percent (***%) of the aggregate amount payable for the relevant period, in the case of such a deficiency, Licensee will bear the cost of such audit, or in the case of such overpayment caused by Spectrum, Spectrum shall bear the cost of such audit. Each of the parties agree that all information subject to review under this Section 5.5 is non-Auditing Party’s Confidential Information that is subject to confidentiality and non-use obligations under Section 7.2, and Auditing Party agrees that it shall cause its independent third party auditors to also retain all such information subject to the non-disclosure and non-use restrictions of Section 7.2 or similar (but no less stringent) obligations of confidentiality and non-use customary in the accounting industry.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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5.6        Late Payment. Any payments or portions thereof due hereunder which are not paid when due shall bear interest equal to the lesser of (i) the rate equal to the thirty (30) day U.S. dollar LIBOR rate effective for the date that payment was due, as published by The Wall Street Journal, Internet Edition at www.wsj.com in the “Money Rates” column, on the date such payment was due, plus an additional *** percent (***%), or (ii) the maximum rate permitted by Applicable Laws, calculated on the number of days such payment is delinquent. This Section 5.6 shall in no way limit any other remedies available to Spectrum.

ARTICLE 6
INTELLECTUAL PROPERTY

6.1        Ownership of Inventions.

6.1.1      Ownership.

(a)          Spectrum shall own all right, title and interest to (i) any and all Inventions solely Made by or on behalf of Spectrum or its Affiliates in connection with their activities under this Agreement and (ii) any and all Patents claiming any such Inventions described in the foregoing clause (ii) (collectively, “Spectrum Inventions”).

(b)          Licensee shall own all right, title and interest to (i) any and all Inventions solely Made by or on behalf of Licensee or its Affiliates or sublicensees in connection with their activities under this Agreement, and (ii) any and all Patents claiming any such Inventions described in the foregoing clause (i) (collectively, “Licensee Inventions”).

(c)          The Parties shall jointly own all right, title and interest to (i) any and all Inventions jointly Made by at least one employee, agent, consultant, contractor, Affiliate, or sublicensee of Spectrum and at least one employee, agent, consultant, contractor, Affiliate, or sublicensee of Licensee (each having the obligation to assign such Inventions to either Spectrum or Licensee), and (ii) any and all Patents claiming such Inventions described in the foregoing clause (i) (“Joint Patents” and collectively with Inventions described in clause (i), “Joint Inventions”).

(d)          During the Term, Spectrum Inventions and Joint Inventions shall be included in the definition of Spectrum Technology, Spectrum Patents, Spectrum Know-How, and Spectrum Copyrights, as applicable, and subject to the licenses granted under Section 3.1. For the avoidance of doubt, Spectrum reserves the right to use, practice or otherwise exploit any and all Spectrum Inventions and Joint Inventions subject to the licenses granted under Section 3.1.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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6.1.2      Interpretation. For purposes of this Section 6.1, “Invention” shall mean any invention (whether or not patentable), data, results, ideas, discovery, development, method, process, know-how, works of authorship or other information that is Made by or on behalf of a Party or the Parties; and “Made” shall mean developed, conceived, authored, acquired or created by or on behalf of a Party or the Parties. It is understood that except as expressly set forth under this Section 6.1, inventorship, authorship and other indicia of which Party Made an Invention will be determined in accordance with United States or the relevant foreign Intellectual Property laws under which the relevant foreign Intellectual Property right exists in effect at the time such Invention was Made.

6.2        License Grant to Spectrum. Licensee hereby grants to Spectrum a perpetual, irrevocable, fully paid-up, royalty free, exclusive license, with the right to grant sublicenses at any tier, under Licensee Know-How (including, without limitation, Licensee Inventions) and Licensee’s rights in the Joint Inventions, to research, Develop, make, have made, use, sell, offer for sale, have sold, import and otherwise Commercialize the Product in the Spectrum Territory.

6.3        Patent Prosecution. Spectrum shall control the Prosecution and Maintenance of Spectrum Patents and Joint Patents. Licensee will bear the costs of Prosecution and Maintenance of all Spectrum Patents and Joint Patents in the Licensee Territory. Costs billed to or incurred by Spectrum for the Prosecution and Maintenance of all Spectrum Patents and Joint Patents in the Licensee Territory will be rebilled to Licensee and are due within thirty (30) days of rebilling by Spectrum.

6.4        Defense of Third Party Infringement Claims. If the Product becomes the subject of a Third Party’s claim or assertion of infringement of a Patent relating to the manufacture, use, sale, offer for sale or importation of the Product for use in the Field in the Licensee Territory, the Party first having notice of the claim or assertion shall promptly notify the other Party, and the Parties shall agree on and enter into a “common interest agreement” wherein such Parties agree to their shared, mutual interest in the outcome of such potential dispute, and thereafter, the Parties shall promptly confer to consider the claim or assertion and the appropriate course of action.

6.5        Enforcement.

6.5.1      Notice. Licensee will promptly report in writing to Spectrum any (a) known or suspected third party infringement of any Spectrum Patents, Spectrum Trademarks, or Spectrum Copyrights, or (b) unauthorized use or misappropriation of any Spectrum Know-How or other Confidential Information by a Third Party of which it becomes aware, and will provide Spectrum with all available evidence supporting such infringement or unauthorized use or misappropriation. Spectrum will promptly report in writing to Licensee any (a) known or suspected third party infringement of any Licensee Inventions, Licensee Trademarks, or Spectrum Product Marks, or (b) unauthorized use or misappropriation of any Licensee Know-How or other Confidential Information by a Third Party of which it becomes aware, and will provide Licensee with all available evidence supporting such infringement or unauthorized use or misappropriation.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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6.5.2      Right to Enforce Spectrum Patents, Spectrum Trademarks or Spectrum Copyrights. Spectrum will have the first right, but not the obligation, to take any reasonable measures it deems appropriate to stop activities in the Licensee Territory infringing the Spectrum Patents, Spectrum Trademarks or Spectrum Copyrights or the use without proper authorization of any Spectrum Know-How, in each case in connection with a Third Party’s manufacture, use, sale, offering for sale, or importation of Product for use in the Field in the Licensee Territory, including initiating or prosecuting an infringement or other appropriate action against. If Spectrum does not initiate any such measures within one hundred twenty (120) days of receiving written notice from Licensee of such activities (or within a reasonable shorter time period if a shorter period to take action is required by Applicable Laws to avoid the loss of legal rights), then Licensee will have the second right, but not the obligation, to take any reasonable measures it deems appropriate to stop such activities, provided, that, Licensee must coordinate and consult with Spectrum regarding such measures and will not take any measures, without the written permission of Spectrum, which permission will not be unreasonably withheld. It shall be reasonable for Spectrum to withhold such permission if Spectrum reasonably believes such measures will affect the protection that any Spectrum-Controlled Intellectual Property affords Spectrum. Licensee will have no right to settle any infringement or misappropriation Action under this Section 6.5.2 in a manner that diminishes the rights or interests of Spectrum without the express written consent of Spectrum. In addition, Licensee will not settle any such action in a manner that admits the invalidity or unenforceability of any Spectrum-Controlled Intellectual Property without obtaining the prior written consent of Spectrum.

6.5.3      Right to Enforce Licensee Inventions, Licensee Trademarks or Spectrum Product Marks. Licensee will have the first right, but not the obligation, to take any reasonable measures it deems appropriate to stop activities in the Spectrum Territory infringing the Licensee Inventions, Licensee Trademarks or Spectrum Product Marks or the use without proper authorization of any Licensee Know-How, in each case in connection with a Third Party’s manufacture, use, sale, offering for sale, or importation of Product for use in the Field in the Spectrum Territory, including initiating or prosecuting an infringement or other appropriate action against. If Licensee does not initiate any such measures within one hundred twenty (120) days of receiving written notice from Spectrum of such activities (or within a reasonable shorter time period if a shorter period to take action is required by Applicable Laws to avoid the loss of legal rights), then Spectrum will have the second right, but not the obligation, to take any reasonable measures it deems appropriate to stop such activities, provided, that, Spectrum must coordinate and consult with Licensee regarding such measures and will not take any measures, without the written permission of Licensee, which permission will not be unreasonably withheld. It shall be reasonable for Licensee to withhold such permission if Licensee reasonably believes such measures will affect the protection that any Licensee -Controlled Intellectual Property affords Licensee. Spectrum will have no right to settle any infringement or misappropriation Action under this Section 6.5.3 in a manner that diminishes the rights or interests of Licensee without the express written consent of Licensee. In addition, Spectrum will not settle any such action in a manner that admits the invalidity or unenforceability of any Licensee-Controlled Intellectual Property without obtaining the prior written consent of Licensee.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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6.5.4      Right to Enforce Joint Patents or Joint Inventions. Spectrum will have the first right, but not the obligation, to take any reasonable measures it deems appropriate to stop activities in the Licensee Territory infringing the Joint Patents or Joint Inventions or the use without proper authorization of any Joint Invention, in each case in connection with a Third Party’s manufacture, use, sale, offering for sale, or importation of Product for use in the Field in the Territory, including initiating or prosecuting an infringement or other appropriate action against. If Spectrum does not initiate any such measures within one hundred twenty (120) days of becoming aware of such activities (or within a reasonable shorter time period if a shorter period to take action is required by Applicable Laws to avoid the loss of legal rights), then Licensee will have the second right, but not the obligation, to take any reasonable measures it deems appropriate to stop such activities in the Licensee Territory, provided, that, Licensee must coordinate and consult with Spectrum regarding such measures and will not take any measures, without the written permission of Spectrum, which permission will not be unreasonably withheld. Licensee will have no right to settle any infringement or misappropriation Action under this Section 6.5.4 in a manner that diminishes the rights or interests of Spectrum without the express written consent of Spectrum. In addition, Licensee will not settle any such action in a manner that admits the invalidity or unenforceability of any Joint Patent or Joint Inventions without obtaining the prior written consent of Spectrum.

6.5.5      Cooperation. The Party commencing, controlling or defending any enforcement action under this Section 6.5 (the “Enforcing Party”) shall keep the other Party reasonably informed of the progress of such action, and such other Party shall have the right to participate with counsel of its own choice at its own expense. In any event, the other Party shall reasonably cooperate with the Enforcing Party, including providing information and materials, at the Enforcing Party’s request and expense.

6.5.6      Recoveries. Any recovery received as a result of any enforcement action to enforce any Intellectual Property pursuant to this Section 6.5 shall be used first to reimburse the Enforcing Party for the costs and expenses (including court, attorneys’ and professional fees) incurred in connection with such action, and the remainder of the recovery shall be shared as following: (i) if the enforcement action is filed in the Enforcing Party’s territory, one hundred percent (100%) of such recovery shall be paid to the Enforcing Party, and (ii) if the enforcement action is not filed in the Enforcing Party’s territory, *** percent (***%) of such recovery shall be paid to the Enforcing Party and *** percent (***%) of such recovery shall be paid to the other Party. All recovery by Licensee in excess of its costs and expenses shall be treated as Net Sales and subject to royalty obligations under the Upstream Licenses.

6.5.7      Patents Claiming Spectrum Inventions. During the Term, Patents claiming Spectrum Inventions that are necessary or useful for the Development and Commercialization of the Product shall be deemed Spectrum Patents and the enforcement thereof shall be subject to Sections 6.5.1- 6.5.6 above.

6.5.8      Infringement of Captisol Patents by Third Parties. If Licensee becomes aware that a Third Party may be infringing a Captisol Patent, it will promptly notify Spectrum in writing, providing all information available to Licensee regarding the potential infringement. Licensee acknowledges that *** shall take whatever, if any, action it deems appropriate, in its sole discretion, against the alleged infringer. If *** elects to take action, Licensee shall, at ***’s request and expense, cooperate and shall cause its employees to cooperate with *** in taking any such action, including but not limited to, cooperating with the prosecution of any infringement suit by *** related to a Captisol Patent. Licensee shall not take any such action against the alleged infringer related to a Captisol Patent without the written consent of ***.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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6.6        Patent Marking. At Spectrum’s request, Licensee shall mark (or cause to be marked) the Product marketed and sold hereunder with appropriate Spectrum Patent numbers or indicia in accordance with Applicable Laws.

ARTICLE 7
CONFIDENTIALITY

7.1        Confidentiality; Exceptions. Except to the extent expressly authorized by this Agreement or otherwise agreed by the Parties in writing, the Parties agree that the receiving Party shall keep confidential and shall not publish or otherwise disclose or use for any purpose other than as provided for in this Agreement any confidential or proprietary information or materials furnished to it by the other Party pursuant to this Agreement (collectively, “Confidential Information”). Notwithstanding the foregoing, Confidential Information shall not be deemed to include information or materials to the extent that it can be established by written documentation by the receiving Party that such information or material:

7.1.1      was already known to or possessed by the receiving Party without any obligation of confidentiality, at the time of its disclosure to the receiving Party hereunder;

7.1.2      was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving Party hereunder;

7.1.3      became generally available to the public or otherwise part of the public domain after its disclosure hereunder other than through any act or omission of the receiving Party in breach of this Agreement;

7.1.4      was independently developed by the receiving Party without use of or reference to the other Party’s Confidential Information as demonstrated by documented evidence prepared by the receiving Party contemporaneously with such independent development; or

7.1.5      was disclosed to the receiving Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the disclosing Party not to disclose such information to others.

7.2         Authorized Use and Disclosure. Each Party may use and disclose Confidential Information of the other Party as follows: (i) under appropriate confidentiality provisions substantially equivalent to those in this Agreement in connection with the performance of its obligations or exercise of rights granted to such Party in this Agreement; (ii) to the extent such disclosure is reasonably necessary for the Prosecution and Maintenance of Patents (including applications therefor) in accordance with this Agreement, prosecuting or defending litigation, complying with applicable governmental regulations, filing for, conducting preclinical or clinical trials, obtaining and maintaining regulatory approvals (including Regulatory Approvals), or otherwise required by Applicable Laws or the rules of a recognized stock exchange, provided, that if a Party is required by Applicable Laws or stock exchange to make any such disclosure of the other Party’s Confidential Information it will, except where impracticable for necessary disclosures (for example, in the event of medical emergency), give reasonable advance notice to the other Party of such disclosure requirement and, except to the extent inappropriate in the case of patent applications, will use its reasonable efforts to secure confidential treatment of such Confidential Information required to be disclosed; (iii) to its Affiliates and sublicensees, in each case under appropriate confidentiality provisions substantially equivalent to those of this Agreement; (iv) in communication with existing and potential investors, acquirers, consultants, advisors (including financial advisors, lawyers and accountants) and others on a need to know basis, in each case under appropriate confidentiality provisions substantially equivalent to those of this Agreement; or (v) to the extent mutually agreed to by the Parties.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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7.3         Prior Agreements. This Agreement supersedes the Confidentiality Agreement between Spectrum and Licensee dated January 28, 2014 (the “Prior CDA”) with respect to information disclosed thereunder. All information or materials disclosed or provided by Spectrum to Licensee under the Prior CDA shall be deemed Confidential Information of Spectrum (subject to the exceptions set forth herein) and shall be subject to Licensee’s confidentiality obligations under this Article 7. All information disclosed by Licensee under the Prior CDA shall be deemed Confidential Information of Licensee (subject to the exceptions set forth herein) and shall be subject to Spectrum’s confidentiality obligations under this Article 7.

7.4         Scientific Publications. Licensee shall submit to Spectrum any proposed publication or public disclosure containing clinical or scientific results relating to the Product for use in the Field at least sixty (60) days in advance to allow Spectrum to review such proposed publication or disclosure. Spectrum shall notify Licensee in writing during such sixty (60)-day reviewing period if Spectrum wishes to (a) remove its Confidential Information from such proposed publication or presentation, in which event Licensee shall remove such Confidential Information from its proposed publication or presentation; or (b) request a reasonable delay in publication or presentation in order to protect patentable information, in which event Licensee shall delay the publication or presentation for a period of no more than one hundred twenty (120) days to enable patent applications to be filed in accordance with Section 6.3 protecting inventions disclosed in such publication or presentation. For clarity, if Spectrum fails to notify Licensee during the sixty (60)-day reviewing period as provided under this Section 7.4, Licensee shall be free to proceed with the proposed publication or presentation.

7.5        Publicity.

7.5.1      Confidential Terms. Each of the Parties agrees not to disclose to any Third Party the terms and conditions of this Agreement without the prior approval of the other Party, except to advisors (including consultants, financial advisors, attorneys and accountants), potential and existing investors and acquirers on a need to know basis, in each case under circumstances that reasonably protect the confidentiality thereof, or to the extent necessary to comply with the terms of agreements with Third Parties, or to the extent required by Applicable Laws, including securities laws. Notwithstanding the foregoing, the Parties agree upon the initial press release(s) to announce the execution of this Agreement, which is attached hereto as Exhibit 7.5.1; thereafter, Spectrum and Licensee may each disclose to Third Parties the information contained in such press release(s) without the need for further approval by the other.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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7.5.2      Publicity Review. The Parties acknowledge the importance of supporting each other’s efforts to publicly disclose results and significant developments regarding the Product for use in the Field in the Licensee Territory and other activities in connection with this Agreement, beyond what may be strictly required by Applicable Laws and the rules of a recognized stock exchange, and each Party may make such disclosures from time to time with the approval of the other Party, which approval shall not be unreasonably withheld, conditioned or delayed. Such disclosures may include achievement of significant events in the Development (including regulatory process) or Commercialization of the Product for use in the Field in the Licensee Territory. Unless otherwise requested by Spectrum, Licensee shall indicate that Spectrum is the owner and licensor of the Product and Spectrum Technology in each public disclosure issued by Licensee regarding the Product. When Spectrum elects to make any such public disclosure under this Section 7.5.2, it will give Licensee reasonable notice to review and comment on such statement, it being understood that if Licensee does not notify Spectrum in writing within a three (3) Business Day period or such shorter period if required by Applicable Laws of any reasonable objections, as contemplated in this Section 7.5.2, such disclosure shall be deemed approved, and in any event Licensee shall work diligently and reasonably to agree on the text of any proposed disclosure in an expeditious manner. The principles to be observed in such disclosures shall be accuracy, compliance with Applicable Laws and regulatory guidance documents, reasonable sensitivity to potential negative reactions of applicable Regulatory Authorities and the need to keep investors and others informed regarding the requesting Party’s business, including as required by the rules of a recognized stock exchange.

ARTICLE 8
REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION

8.1        Licensee Representations and Warranties. Licensee represents and warrants to Spectrum that:

8.1.1      it is duly organized and validly existing under the Applicable Laws of the jurisdiction of its incorporation, and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof;

8.1.2      it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the person executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate action;

8.1.3      this Agreement is legally binding upon it and enforceable in accordance with its terms and the execution, delivery and performance of this Agreement by it does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material Applicable Laws;

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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8.1.4      Licensee, its Affiliates and their employees and contractors have not and shall not, in connection with the performance of their respective obligations under this Agreement directly or indirectly through Third Parties, pay, promise or offer to pay, or authorize the payment of, any money or give any promise or offer to give, or authorize the giving of anything of value to a public official or entity or other person for purpose of obtaining or retaining business for or with, or directing business to, any person, including Licensee (it being understood that, without any limitation to the foregoing, Licensee, and to its knowledge, its and its Affiliates’ employees and contractors, has not directly or indirectly promised, offered or provided any corrupt payment, gratuity, emolument, bribe, kickback, illicit gift or hospitality or other illegal or unethical benefit to a public official or entity or any other person in connection with the performance of Licensee’s obligations under this Agreement, and shall not, directly or indirectly, engage in any of the foregoing). Notwithstanding the foregoing, the intent of this warranty is to ensure compliance with the US Foreign Corrupt Practices Act of 1977, as amended, UK Bribery Act, and any rules or regulations thereunder or any similar anti-corruption or anti-bribery laws applicable to company or any of its affiliates or subsidiaries (in each case, as in effect at the time of such action).  Licensee will certify annually to conducting an effective compliance program and Spectrum will have rights to audit the Company’s compliance program periodically; and

8.1.5      it is not aware of any action, suit or inquiry or investigation instituted by any Person which questions or threatens the validity of this Agreement.

8.2        Spectrum’s Warranties. Spectrum represents and warrants to Licensee, as of the Effective Date, that:

8.2.1      it is duly organized and validly existing under the Applicable Laws of the jurisdiction of its incorporation, and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof;

8.2.2      it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the person executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate action;

8.2.3      this Agreement is legally binding upon it and enforceable in accordance with its terms and the execution, delivery and performance of this Agreement by it does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material Applicable Laws;

8.2.4      it has the full right, power and authority under the Spectrum Technology, Spectrum Trademarks, Captisol Patents, and the Upstream Licenses to grant the licenses to Licensee as purported to be granted pursuant to this Agreement;

8.2.5      as of the Effective Date, it has provided complete and unredacted copies of the Upstream Licenses and any relevant ancillary agreements, exhibits, schedules, or other documents including any and all amendments thereto) which set forth and are sufficient to fully describe all the terms and conditions with which Licensee must comply in relation to the Upstream Licenses.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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8.2.6      the Upstream Licenses represent all the material agreements Spectrum or its Affiliates have entered into that may affect Licensee’s exercise of the rights granted under this Agreement;

8.2.7      it is not aware of any action, suit or inquiry or investigation instituted by any Person which questions or threatens the validity of this Agreement;

8.2.8      as of the Effective Date, Spectrum has not granted, and will not grant during the Term, rights to any Third Party under the Spectrum Technology that conflict with the rights granted to Licensee hereunder;

8.2.9      as of the Effective Date, Spectrum has not received any written notice of any threatened claims or litigation seeking to invalidate or otherwise challenge the Spectrum Patents, Spectrum’s rights therein, or the Captisol Patents;

8.2.10    to its actual knowledge, as of the Effective Date, none of the Spectrum Patents or Captisol Patents are subject to any pending re-examination, opposition, interference or litigation proceedings; and

8.2.11    to its actual knowledge, as of the Effective Date, the performance of Development and Commercialization activities in accordance with this Agreement will not infringe any Intellectual Property rights of any Third Party in the Licensee Territory, including any issued patent of any Third Party in the Licensee Territory or, if and when issued, any claim within any published patent application of any Third Party in the Licensee Territory.

8.3        Disclaimer of Warranties. EXCEPT AS SET FORTH IN THIS ARTICLE 8, SPECTRUM AND LICENSEE EXPRESSLY DISCLAIM ANY WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT (INCLUDING THE LICENSED TECHNOLOGY), INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, NONINFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE.

8.4        Spectrum’s Representations, Warranties, and Covenants. Spectrum represents, warrants and covenants to Licensee and agrees that:

8.4.1      it and its Affiliates are in compliance, and it shall comply, and shall cause its Affiliates to comply, in all material respects, with all Upstream Licenses;

8.4.2      it shall not, during the Term, amend any Upstream License in any manner that adversely affects the rights granted to Licensee hereunder or Spectrum’s ability to materially perform its obligations hereunder; and

8.4.3      it and its Affiliates shall not, during the Term, do or fail to do any acts, which cause to be terminated or result in the termination of any Upstream Licenses or result in the loss of any rights under any Upstream Licenses, which would adversely affect the rights granted to Licensee hereunder or Spectrum’s ability to materially perform its obligations hereunder.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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8.5        Indemnification.

8.5.1      Indemnification by Spectrum. Spectrum hereby agrees to defend, hold harmless and indemnify (collectively, “Indemnify”) Licensee and its Affiliates, and its and their agents, directors, officers and employees (the “Licensee Indemnitees”) from and against any liability or expense (including reasonable legal expenses and attorneys’ fees) (collectively, “Losses”) resulting from suits, claims, actions and demands, in each case brought by a Third Party (each, a “Third-Party Claim”) against any Licensee Indemnitee arising out of: (i) a breach of any of Spectrum’s representations and warranties under Section 8.2 or representations, warranties and covenants under Section 8.4; (ii) the Development, Commercialization or other exploitation of the Product by Spectrum, its Affiliates, or sub-licensees in the Spectrum Territory; or (iii) the gross negligence or intentional misconduct of any Spectrum Indemnities. Spectrum’s obligation to Indemnify the Licensee Indemnitees pursuant to this Section 8.5.1 shall not apply to the extent that any such Losses (A) arise from the gross negligence or intentional misconduct of any Licensee Indemnitee; (B) arise from any breach by Licensee of this Agreement; or (C) are Losses for which Licensee is obligated to Indemnify the Spectrum Indemnitees pursuant to Section 8.5.2.

8.5.2      Indemnification by Licensee. Licensee hereby agrees to Indemnify Spectrum and its Affiliates, and its and their agents, directors, officers and employees (the “Spectrum Indemnitees”) from and against any and all Losses resulting from Third-Party Claims arising out of: (i) a breach of any of Licensee’s representations and warranties under Section 8.1; (ii) the Development, Commercialization or other exploitation of the Product by the Licensee, its Affiliates, or sub-licensees in the Licensee Territories; or (iii) the gross negligence or intentional misconduct of any Licensee Indemnities. Licensee’s obligation to Indemnify the Spectrum Indemnitees pursuant to this Section 8.5.1 shall not apply to the extent that any such Losses (A) arise from the gross negligence or intentional misconduct of any Spectrum Indemnitee; (B) arise from any breach by Spectrum of this Agreement; or (C) are Losses for which Spectrum is obligated to Indemnify the Licensee Indemnitees pursuant to Section 8.5.1.

8.5.3      Additional Indemnities.

(a)          In addition to the indemnities set forth in Section 8.5.1, Spectrum hereby agrees to Indemnify the Licensee Indemnitees from and against any and all Losses resulting from any breach by Spectrum of Section 3.1 (Grant to Licensee), Section 4.1.4 (Rights of Reference), Section 4.2.3 (Development Assistance), or Section 8.4.3 (Spectrum’s Representations, Warranties, and Covenants), as single event or in combination with one or more breaches, that: (i) has a material adverse effect on Licensee’s Development or Commercialization of the Product in the Licensee Territory, and (ii) if curable, shall have continued uncured for ninety (90) days after written notice thereof was provided to Spectrum by Licensee.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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(b)          In addition to the indemnities set forth in Section 8.5.2, Licensee hereby agrees to Indemnify the Spectrum Indemnitees from and against any and all Losses resulting from any breach by Licensee of Section 3.1 (Grant to Licensee), Section 3.2.1 (Licensee Rights Limited to the Field and the Licensee Territory), Section 3.3 (Upstream Licenses), or Sections 4.2.4 and 4.3.2 (Diligence), as single event or in combination with one or more breaches, that: (i) has a material adverse effect on Spectrum’s rights under the Upstream Licenses, and (ii) if curable, shall have continued uncured for ninety (90) days after written notice thereof was provided to Licensee by Spectrum.

8.5.4      Procedure. To be eligible to be Indemnified hereunder, the indemnified Party shall provide the indemnifying Party with prompt notice of the Third-Party Claim giving rise to the indemnification obligation pursuant to this Section 8.5 and the exclusive ability to defend (with the reasonable cooperation of the indemnified Party) or settle any such claim, provided, that the indemnifying Party shall not enter into any settlement that admits fault, wrongdoing or damages without the indemnified Party’s written consent, such consent not to be unreasonably withheld or delayed. The indemnified Party shall have the right to participate, at its own expense and with counsel of its choice, in the defense of any claim or suit that has been assumed by the indemnifying Party, provided, that the indemnifying Party shall have no obligations with respect to any Losses resulting from the indemnified Party’s admission, settlement or other communication without the prior written consent of the indemnifying Party.

8.6        NO CONSEQUENTIAL DAMAGES. NOTWITHSTANDING THE FOREGOING, IN NO EVENT WILL EITHER PARTY BE LIABLE TO OTHER PARTY FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES UNDER THIS AGREEMENT, EXCEPT TO THE EXTENT THE DAMAGES RESULT FROM A PARTY’S BREACH OF CONFIDENTIALITY OBLIGATIONS HEREUNDER, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR ARISE FROM EITHER PARTY’S INDEMNIFICATION OBLIGATIONS UNDER THIS ARTICLE 8 OR EITHER PARTY’S MATERIAL BREACH UNDER SECTION 9.10.

8.7        MAXIMUM LIABILITY. EXCEPT FOR A PARTY’S BREACH OF CONFIDENTIALITY OBLIGATIONS HEREUNDER, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, IN NO EVENT SHALL THE MAXIMUM AGGREGATE LIABILITY OF EITHER PARTY IN RESPECT OF ALL CLAIMS UNDER THIS AGREEMENT EXCEED THE ***.

ARTICLE 9
TERM AND TERMINATION AND MATERIAL BREACH

9.1        Term. This Agreement shall become effective as of the Effective Date and, unless earlier terminated pursuant to the other provisions of this Article 9, shall be perpetual (the “Term”).

9.2        Termination for Breach. Each Party may terminate this Agreement in the event the other Party materially breaches this Agreement, and such breach, if curable, shall have continued uncured for ninety (90) days after written notice thereof was provided to the breaching Party by the terminating Party. Any such termination shall become effective at the end of such ninety (90) day period unless, if applicable, the breaching Party has cured any such breach prior to the expiration of such ninety (90) day period.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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9.3        Termination for Patent Challenge. If Licensee or any of its Affiliates challenges under any court action or proceeding, or before any patent office, the validity, patentability, enforceability, scope or non-infringement of any Spectrum Patent, or initiates a reexamination of any Spectrum Patent, or assists any Third Party to conduct any of the foregoing activities (each, a “Challenge”), Spectrum will have the right to immediately terminate this Agreement. In any event, Licensee shall notify Spectrum at least thirty (30) days prior to initiating any such Challenge.

9.4        Termination of Upstream Licenses. To the extent any Upstream License is terminated, the rights granted hereunder with respect to such Upstream License shall also hereby terminate.

9.5        Termination for Insolvency. Each Party shall have the right to terminate this Agreement upon delivery of written notice to the other Party in the event that (i) such other Party files in any court or agency pursuant to any statute or regulation of any jurisdiction a petition in bankruptcy or insolvency or for reorganization or similar arrangement for the benefit of creditors or for the appointment of a receiver or trustee of such other Party or its assets, (ii) such other Party is served with an involuntary petition against it in any insolvency proceeding and such involuntary petition has not been stayed or dismissed within ninety (90) days of its filing, or (iii) such other Party makes an assignment of substantially all of its assets for the benefit of its creditors.

9.6        Provision for Insolvency. All rights and licenses granted under or pursuant to any Section of this Agreement are rights to “intellectual property” (as defined in Section 101(35A) of Bankruptcy Code). Each Party hereby acknowledges that (i) copies of research data, (ii) laboratory samples, (iii) product samples, (iv) formulas, (v) laboratory notes and notebooks, (vi) data and results related to clinical trials, (vii) Regulatory Filings and Regulatory Approvals, (viii) rights of reference in respect of Regulatory Filings and Regulatory Approvals, (ix) pre-clinical research data and results, and (x) marketing, advertising and promotional materials, in each case, that relate to such intellectual property, constitute “embodiments” of such intellectual property pursuant to Section 365(n) of the Bankruptcy Code. Each Party agrees not to interfere with the other Party’s exercise, pursuant to Section 365(n) of the Bankruptcy Code, of rights and licenses to intellectual property licensed hereunder and embodiments thereof and agrees to use Commercially Reasonable Efforts to assist such other Party to obtain such intellectual property and embodiments thereof in the possession or control of Third Parties as reasonably necessary for such other Party to exercise, pursuant to Section 365(n) of the Bankruptcy Code, such rights and licenses. Each Party shall take any and all action requested by the other Party to ensure that the foregoing provisions of this Section 9.6 may be fully effectuated under Applicable Laws, and, if requested by the other Party, each Party shall procure that any past, existing or future creditor of the other Party irrevocably waives in writing any and all rights that such creditor may have to the intellectual property licensed hereunder and embodiments thereof.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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9.7        General Effects of Termination.

9.7.1      Termination of Rights. In the event of termination of this Agreement for any reason, all rights and licenses granted to Licensee herein shall immediately terminate.

9.7.2      Accrued Obligations. Termination of this Agreement for any reason shall not release either Party of any obligation or liability which, at the time of such termination, has already accrued to the other Party or which is attributable to a period prior to such termination.

9.7.3      Non-Exclusive Remedy. Notwithstanding anything herein to the contrary, termination of this Agreement by a Party shall be without prejudice to other remedies such Party may have at law or equity.

9.7.4      General Survival. Article 1 (Definitions), Article 6 (Intellectual Property), Article 7 (Confidentiality), Article 10 (Dispute Resolution), Article 11 (Miscellaneous) and Sections 5.5 (Records; Audit)(for a period of three (3) years after the effectiveness of the termination of this Agreement), 8.5 (Indemnification), 8.6 (No Consequential Damages), 8.7 (Maximum Liability), 9.7 (General Effects of Termination), 9.8 (Additional Effects of Termination), 9.9 (Termination Press Releases), and 9.10 (Material Breach) shall survive termination of this Agreement for any reason. Except as otherwise provided in this Article 9, all rights and obligations of the Parties under this Agreement shall terminate upon termination of this Agreement for any reason.

9.8        Additional Effects of Certain Terminations. If this Agreement is terminated by Spectrum, then:

9.8.1      Ongoing Trials. If there are any ongoing clinical trials with respect to the Product being conducted by or on behalf of Licensee (or its Affiliate) at the time of notice of termination, Licensee agrees to (i) promptly transition to Spectrum or its designee some or all of such clinical trials and the activities related to or supporting such trials, or (ii) terminate such clinical trials in each case, as requested by Spectrum. The Parties recognize that early termination of this Agreement requires both discussion and coordination between the Parties to ensure patient safety, continuity of treatment, if appropriate, and compliance with Applicable Laws. Upon early termination of this Agreement, the Parties shall cooperate to provide for an orderly transition or cessation of any clinical trials, as requested by Spectrum. Each Party further agrees to take no action or forego taking action if such action or forbearance would in any manner jeopardize patient safety or cause the other Party to violate any Applicable Laws.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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9.8.2      Commercialization. To avoid a disruption in the supply of the Product, if this Agreement is terminated after the First Commercial Launch of the Product for use in the Field in the Licensee Territory, Licensee and its Affiliates shall continue to distribute and sell such Product for use in the Field in the Licensee Territory, in accordance with the terms and conditions of this Agreement, for a period reasonably sufficient for them to sell off all amounts of Product in Licensee’s inventory not to exceed *** (***) months from the effective date of such termination (the “Wind-Down Period”). Notwithstanding any other provision of this Agreement, during this Wind-Down Period, Licensee’s and its Affiliates’ rights with respect to the Product (including the licenses granted under Section 3.1) shall be non-exclusive and Spectrum shall have the right to engage one or more partners(s) or distributor(s) of the Product in all or part of the Licensee Territory. During the Wind-Down Period, Licensee shall continue to make any and all Upstream Payments to Spectrum for the Product sold or disposed by Licensee, its Affiliates, or its sublicensees. After the Wind-Down Period, Licensee and its Affiliates shall not sell the Product or make any representation regarding their status as a licensee of or distributor for Spectrum for the Product. Within thirty (30) days of expiration of the Wind-Down Period, Licensee shall notify Spectrum of any quantity of the Product remaining in Licensee’s inventory and Spectrum shall have the option, upon notice to Licensee, to purchase any such quantities of the Product, as applicable, from Licensee at a price equal to the amounts paid by Licensee for such Product.

9.8.3      Regulatory Filings. Licensee shall promptly assign and transfer to Spectrum all Regulatory Filings for the Product that are held or controlled by or under authority of Licensee, and shall take such actions and execute such other instruments, assignments and documents as may be necessary to effect the transfer of rights under the Regulatory Filings to Spectrum. Licensee shall cause each of its Affiliates or sublicensees to transfer any such Regulatory Filings to Spectrum if this Agreement terminates. If Applicable Laws prevents or delays the transfer of ownership of a Regulatory Filing to Spectrum, Licensee shall grant, and does hereby grant, to Spectrum an exclusive and irrevocable right of access and reference to such Regulatory Filing for the Product, and shall cooperate fully to make the benefits of such Regulatory Filings available to Spectrum and/or its designee(s). Within sixty (60) days after notice of such termination, Licensee shall provide to Spectrum copies of all such Regulatory Filings, and of all preclinical and clinical data (including raw data, original records, investigator reports, both preliminary and final, statistical analyses, expert opinions and reports, safety and other electronic databases) and other Know-How pertaining to the Product, or the manufacture thereof. Spectrum shall be free to use and disclose such Regulatory Filings and other items in connection with the exercise of its rights and licenses under this Section 9.8.

9.8.4      License to Spectrum. Licensee hereby grants Spectrum, effective upon the effective date of termination of this Agreement, a perpetual, irrevocable, fully paid-up, royalty free, non-exclusive license, with the right to grant sublicenses at any tier, under Licensee Know-How (including, without limitation, Licensee Inventions) and Licensee’s rights in the Joint Inventions, to research, Develop, make, have made, use, sell, offer for sale, have sold, import and otherwise Commercialize the Product in the Licensee Territory.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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9.8.5      Transition Assistance. Licensee agrees to fully cooperate with Spectrum and its designee(s) to facilitate a smooth, orderly and prompt transition of the Development and Commercialization of the Product to Spectrum and/or its designee(s) during this Wind-Down Period. Without limiting the foregoing, Licensee shall promptly provide Spectrum (i) all commercial data generated by Licensee under this Agreement including copies of customer lists, customer data and other customer information relating to the Product, and (ii) manufacturing information (including protocols for the production, packaging, testing and other manufacturing activities) relating to the Product in Licensee’s Control, which in each case Spectrum shall have the right to use and disclose for any purpose during this Wind-Down Period and thereafter. Upon request by Spectrum, Licensee shall transfer to Spectrum some or all quantities of the Product in its or its Affiliates’ Control (as requested by Spectrum), within thirty (30) days after the end of this Wind-Down Period, provided, that Spectrum shall reimburse Licensee for the out-of-pocket costs that Licensee actually incurred to manufacture or otherwise acquire the quantities so provided to Spectrum. If any Product was manufactured by any Third Party for Licensee, or Licensee had contracts with vendors which contracts are necessary or useful for Spectrum to take over responsibility for the Product in the Licensee Territory, then Licensee shall to the extent possible and requested in writing by Spectrum, assign all of the relevant Third-Party contracts to Spectrum, and in any case, Licensee agrees to cooperate with Spectrum to ensure uninterrupted supply of the Product. If Licensee or its Affiliate manufactured any Product at the time of termination, then Licensee (or its Affiliate) shall continue to provide for manufacturing of such Product for Spectrum, at its fully-burdened manufacturing cost therefor, from the date of notice of such termination until such time as Spectrum is able, using Commercially Reasonable Efforts to do so but no longer than the expiration of the Wind-Down Period, to secure an acceptable alternative commercial manufacturing source from which sufficient quantities of the Product may be procured and legally sold in the Licensee Territory.

9.8.6      Costs and Expenses. Except as expressly provided herein, Licensee shall perform its obligations under this Section 9.8 at its own costs without consideration from Spectrum. Spectrum shall be responsible for its own costs of performing its activities under this Section 9.8.

9.9        Termination Press Releases. In the event of termination of this Agreement for any reason, the Parties shall cooperate in good faith to coordinate public disclosure of such termination and the reasons therefor, and shall not, except to the extent required by Applicable Laws or the rules of a recognized stock exchange, disclose such information without the prior approval of the other Party, such approval not to be unreasonably withheld, conditioned or delayed. When Spectrum elects to make a public disclosure under this Section 9.9, Spectrum shall provide Licensee with a draft of any such public disclosure it intends to issue three (3) Business Days in advance and with the opportunity to review and comment on such statement, it being understood that if Licensee does not notify Spectrum in writing within such three (3) Business Day period (or such shorter period if required by Applicable Laws or the rules of a recognized stock exchange) of any reasonable objections, such disclosure shall be deemed approved, and in any event the Parties shall work diligently and reasonably to agree on the text of any such proposed disclosure in an expeditious manner. The principles to be observed in such disclosures shall be accuracy, compliance with Applicable Laws and regulatory guidance documents, reasonable sensitivity to potential negative reactions to such news and the need to keep investors and others informed regarding the Parties’ business and other activities.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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9.10      Material Breach.

9.10.1    Spectrum agrees that any breach by Spectrum of Section 3.1 (Grant to Licensee), Section 4.1.4 (Rights of Reference), Section 4.2.3 (Development Assistance), or Section 8.4.3 (Spectrum’s Representations, Warranties, and Covenants) as single event or in combination with one or more breaches, that has a material adverse effect on Licensee’s Development or Commercialization of the Product in the Licensee Territory shall be deemed a material breach by Spectrum of this Agreement, and, if such breach, if curable, shall have continued uncured for ninety (90) days after written notice thereof was provided to Spectrum by Licensee, then: (a) subject to Section 8.7, Licensee shall be entitled to recovery of damages for such material breach without any limitation on the amount or type of damages (including special, consequential (including loss of profits and loss of revenue), incidental, punitive or indirect damages); and (b) Licensee, in addition to being entitled to exercise all rights provided herein (unless Licensee has also terminated this Agreement under Section 9.2) or granted by law, including, without limitation, recovery of damages, will be entitled to specific performance of its rights and Spectrum’s obligations under the above Sections 3.1 (Grant to Licensee), Section 4.1.4 (Rights of Reference), Section 4.2.3 (Development Assistance), or Section 8.4.3 (Spectrum’s Representations, Warranties, and Covenants) of the Agreement, without the necessity of posting any bond and without the necessity of establishing that monetary relief would not provide an adequate remedy. Spectrum agrees that Licensee may seek, and AAA (or any court having competent jurisdiction in relation to any injunctive or provisional relief necessary) may grant, specific performance in the event of such Spectrum’s material breach, and that monetary damages would not be adequate compensation for any loss incurred by reason of a material breach by Spectrum as recited in this Section of this Agreement, and hereby agrees to waive any defense in any action for specific performance, including that a remedy at law would be adequate.

9.10.2    Licensee agrees that any breach by Licensee of Section 3.1 (Grant to Licensee), Section 3.2.1 (Licensee Rights Limited to the Field and the Licensee Territory), Section 3.3 (Upstream Licenses), or Sections 4.2.4 and 4.3.2 (Diligence) as single event or in combination with one or more breaches, that has a material adverse effect on Spectrum’s rights under the Upstream Licenses shall be deemed a material breach by Licensee of this Agreement, and, if such breach, if curable, shall have continued uncured for ninety (90) days after written notice thereof was provided by Spectrum to Licensee, then: (a) subject to Section 8.7, Spectrum shall be entitled to recovery of damages for such material breach without any limitation on the amount or type of damages (including special, consequential (including loss of profits and loss of revenue), incidental, punitive or indirect damages); and (b) Spectrum, in addition to being entitled to exercise all rights provided herein or granted by law, including, without limitation, recovery of damages, will be entitled to specific performance of its rights and Licensee’s obligations under the above Sections 3.1 (Grant to Licensee), Section 3.2.1 (Licensee Rights Limited to the Field and the Licensee Territory), Section 3.3 (Upstream Licenses), or Sections 4.2.4 and 4.3.2 (Diligence) of the Agreement, without the necessity of posting any bond and without the necessity of establishing that monetary relief would not provide an adequate remedy. Licensee agrees that Spectrum may seek, and AAA (or any court having competent jurisdiction in relation to any injunctive or provisional relief necessary) may grant, specific performance in the event of such Licensee’s material breach, and that monetary damages would not be adequate compensation for any loss incurred by reason of a material breach by Licensee as recited in this Section of this Agreement, and hereby agrees to waive any defense in any action for specific performance, including that a remedy at law would be adequate.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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ARTICLE 10
DISPUTE RESOLUTION

10.1      Disputes. If the Parties are unable to resolve any dispute or other matter arising out of or in connection with this Agreement (“Dispute”), either Party may, by written notice to the other, have such Dispute referred to the respective business heads of the Parties for attempted resolution by good faith negotiations within fifteen (15) Business Days after such notice is received. In such event, each Party shall cause its respective business head to meet (face-to-face or by teleconference) and be available to attempt to resolve such Dispute. If the Parties should resolve such Dispute under this Section 10.1, a memorandum setting forth their agreement will be prepared and signed by both Parties if requested by either Party. The Parties shall cooperate in an effort to limit the issues for consideration in such manner as narrowly as reasonably practicable in order to resolve the Dispute. If the Parties are unable to resolve such Dispute under this Section 10.1, then either Party may submit such Dispute to arbitration pursuant to Section 10.2 below or initiate proceedings pursuant to Section 10.3 below, as applicable. No Dispute shall be submitted to arbitration under Section 10.2 below and no proceedings shall be initiated pursuant to Section 10.3 below, as applicable, until the following procedures in this Section 10.1 have been satisfied, unless the Senior Executives have already attempted to resolve such Dispute pursuant to Section 2.3, in which case, either Party may refer such Dispute to arbitration pursuant to Section 10.2 below or initiate proceedings pursuant to Section 10.3 below, as applicable, provided, that any applicable statute of limitations with respect to such Dispute shall be tolled while the Parties attempt to resolve such Dispute in accordance with Section 2.3 or this Section 10.1.

10.2      Arbitration. Except with respect to Disputes related to Intellectual Property rights as provided under Section 10.3 below, if the Parties are unable to resolve a Dispute under Section 10.1 above, either Party may, upon written notice to the other Party, submit such Dispute for resolution by final, binding arbitration in the manner described in this Section 10.2 below, as applicable. Any arbitration under this Section 10.2 below, as applicable, shall be conducted by the American Arbitration Association (“AAA”) in New York, New York in accordance with the then-current Commercial Rules of Arbitration of AAA (“AAA Rules”), except as modified by this Section 10.2 below, as applicable. The arbitration shall be conducted by a single arbitrator. The costs of such arbitration shall be shared equally by the Parties, and each Party shall bear its own expenses in connection with the arbitration. The Parties shall use good faith efforts to complete arbitration under this Section 10.2 within ninety (90) days following the initiation of such arbitration. The arbitrator shall establish reasonable additional procedures to facilitate and complete such arbitration within such ninety (90) day period. Nothing in this Agreement shall limit the right of either Party to seek to obtain in any court of competent jurisdiction any equitable or interim relief or provisional remedy, including injunctive relief. Notwithstanding the foregoing, if the dispute involves *** as a party, then the arbitration shall be conducted in accordance with the ***.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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10.3      Other Disputes. If the Parties are unable to resolve a Dispute related to Intellectual Property rights under Section 10.1 above, either Party may initiate legal proceedings with respect thereto. Each of the Parties irrevocably agrees that the federal or state courts in New York, New York shall have the exclusive jurisdiction to hear and decide any suit, action, proceedings, and/or settle any such Disputes, and for these purposes, each Party irrevocably submits to the jurisdiction of the courts of New York. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS AGREEMENT.

ARTICLE 11
MISCELLANEOUS

11.1      Affiliates; Licensees. For clarity and without limitation, each Party shall have the right to exercise any of its rights and licenses or perform or delegate all or any portion of any of its obligations under this Agreement through any of its Affiliates, provided, that each Party shall remain responsible to the other Party under this Agreement for all activities of its Affiliates to the same extent as if such activities had been undertaken by such Party itself. In addition, Spectrum shall have the right to exercise any of its rights and licenses or perform or delegate all or any portion of any of its obligations under this Agreement through any of its Third Party licensees, provided, that Spectrum shall require each such licensee to be bound by a written agreement containing terms and conditions consistent with the terms and conditions of this Agreement.

11.2      Governing Law. This Agreement and any dispute arising from the performance or breach hereof shall be governed by and construed and enforced in accordance with the laws of the State of New York, without reference to conflicts of laws principles. Notwithstanding the foregoing, a breach of any of the Upstream Licenses shall be governed by and construed in accordance with the laws of the State of California (without giving effect to any conflicts of law principles that require the application of the law of a different state).

11.3      Assignment. This Agreement shall not be assignable by either Party to any Third Party without the written consent of the other Party and any such attempted assignment shall be void. Notwithstanding the foregoing, either Party may assign this Agreement, without the written consent of the other Party, to an Affiliate of such Party or an entity that acquires all or substantially all of the business or assets of such Party to which this Agreement pertains (whether by merger, reorganization, acquisition, sale, operation of law or otherwise), and agrees in writing to be bound by the terms and conditions of this Agreement. No assignment or transfer of this Agreement shall be valid and effective unless and until the assignee/transferee agrees in writing to be bound by the provisions of this Agreement. The terms and conditions of this Agreement shall be binding on and inure to the benefit of the permitted successors and assigns of the Parties. Except as expressly provided in this Section 11.3, any attempted assignment or transfer of this Agreement shall be null and void.

11.4      Notices. Any notice, request, delivery, approval or consent required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been sufficiently given if delivered in person, transmitted by facsimile (receipt verified) or by express courier service (signature required) or five (5) days after it was sent by registered letter, return receipt requested (or its equivalent), provided, that no postal strike or other disruption is then in effect or comes into effect within two (2) days after such mailing, to the Party to which it is directed at its address or facsimile number shown below or such other address or facsimile number as such Party will have last given by notice to the other Party.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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If to Spectrum, addressed to:
	Spectrum Pharmaceuticals, Inc.
	11500 South Eastern Ave. Suite 240
	Henderson, NV 89052
	Attn:  Legal Department
	Telephone number:	(702) 835-6300
	Facsimile number:	(702) 260-7405
With a copy to:
	Stradling Yocca Carlson & Rauth
	660, Newport Center Dr, Suite 1600
	Newport Beach, CA 92660
	Attn:  Shivbir S. Grewal, Esq.
	Telephone number:	(949) 725-4000
	Facsimile number:	(949) 725-4100
If to Licensee, addressed to:
	CASI Pharmaceuticals, Inc.
	9620 Medical Center Drive, Suite 300
	Rockville, MD 20850
	Attn: General Counsel
	Telephone number:	(240) 864-2781
	Facsimile number:	(240) 864-2782
With a copy to:
	Ropes & Gray LLP
	36F, Park Place 1601 Nanjing Road West
	Shanghai 200040, China
	Attention: Geoffrey Lin and Arthur Mok
	Telephone:  +86 21 6157 5200
	Facsimile: + 86 21 6157 5299

11.5      Waiver. Neither Party may waive or release any of its rights or interests in this Agreement except in writing. The failure of either Party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition. No waiver by either Party of any condition or term in any one or more instances shall be construed as a continuing waiver of such condition or term or of another condition or term.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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11.6      Severability. If any provision hereof should be held invalid, illegal or unenforceable in any jurisdiction, the Parties shall negotiate in good faith a valid, legal and enforceable substitute provision that most nearly reflects the original intent of the Parties and all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the Parties as nearly as may be possible. Such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction. If a Party seeks to avoid a provision of this Agreement by asserting that such provision is invalid, illegal or otherwise unenforceable, the other Party shall have the right to terminate this Agreement pursuant to Section 9.2 upon sixty (60) days prior written notice to the asserting Party, unless such assertion is eliminated and cured within such sixty (60) day period.

11.7      Entire Agreement/Modification. This Agreement, including its Exhibits, sets forth all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties and supersedes and terminates all prior agreements and understandings between the Parties including the Prior CDA. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by the respective authorized officers of the Parties.

11.8      Relationship of the Parties. The Parties agree that the relationship of Spectrum and Licensee established by this Agreement is that of independent contractors. Furthermore, the Parties agree that this Agreement does not, is not intended to, and shall not be construed to, establish an employment, agency or any other relationship. Except as may be specifically provided herein, neither Party shall have any right, power or authority, nor shall they represent themselves as having any authority to assume, create or incur any expense, liability or obligation, express or implied, on behalf of the other Party, or otherwise act as an agent for the other Party for any purpose.

11.9      Force Majeure. Except with respect to payment of money, neither Party shall be liable to the other for failure or delay in the performance of any of its obligations under this Agreement for the time and to the extent such failure or delay is caused by earthquake, riot, civil commotion, war, terrorist acts, strike, flood, change of law, political unrest, or governmental acts or restriction, or other cause that is beyond the reasonable control of the respective Party. The Party affected by such force majeure will provide the other Party with full particulars thereof as soon as it becomes aware of the same (including its best estimate of the likely extent and duration of the interference with its activities), and will use Commercially Reasonable Efforts to overcome the difficulties created thereby and to resume performance of its obligations as soon as practicable. If the performance of any such obligation under this Agreement is delayed owing to such a force majeure for any continuous period of more than one hundred eighty (180) days, the Parties will consult with respect to an equitable solution, including the possibility of the mutual termination of this Agreement.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

-42-

11.10    Compliance with Applicable Laws/Other.  Notwithstanding anything to the contrary contained herein, all rights and obligations of Spectrum and Licensee are subject to prior compliance with, and each Party shall comply with, all Applicable Laws, including obtaining all necessary approvals required by the applicable agencies of the governments of the relevant jurisdictions. In addition, each Party shall conduct its activities under this Agreement in accordance with good scientific and business practices.

11.11    Interpretation. The captions and headings to this Agreement are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of this Agreement. Unless specified to the contrary, references to Articles, Sections or Exhibits mean the particular Articles, Sections or Exhibits to this Agreement and references to this Agreement include all Exhibits hereto. Unless context otherwise clearly requires, whenever used in this Agreement: (i) the words “include” or “including” shall be construed as incorporating, also, “but not limited to” or “without limitation;” (ii) the word “day” or “year” means a calendar day or year unless otherwise specified; (iii) the word “notice” shall mean notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other written communications contemplated under this Agreement; (iv) the words “hereof,” “herein,” “hereby” and derivative or similar words refer to this Agreement (including any Exhibits); (v) the word “or” shall be construed as the inclusive meaning identified with the phrase “and/or;”(vi) provisions that require that a Party, the Parties or a committee hereunder “agree,” “consent” or “approve” or the like shall require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise; (vii) words of any gender include the other gender; (viii) words using the singular or plural number also include the plural or singular number, respectively; (ix) references to any specific law, rule or regulation, or article, section or other division thereof, shall be deemed to include the then-current amendments thereto or any replacement law, rule or regulation thereof; and (x) neither Party or its Affiliates shall be deemed to be acting “on behalf of” the other Party hereunder.

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

[The remainder of this page intentionally left blank; the signature page follows.]

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

-43-

IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate originals by their duly authorized representatives as of the Effective Date.

SPECTRUM PHARMACEUTICALS, INC.		CASI PHARMACEUTICALS, INC.
By:	/s/ Rajesh C. Shrotriya	By:	/s/ Ken K. Ren
Name:  Rajesh C. Shrotriya, MD		Name:  Ken K. Ren
Title:  Chairman and CEO		Title:  Chief Executive Officer

List of Exhibits:

Exhibit 1.11: Captisol Patents

Exhibit 1.69: Spectrum Patents

Exhibit 1.72: Spectrum Trademarks

Exhibit 7.5.1: Press Release(s)

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

Exhibit 1.11

Captisol Patents

Title	Country	Application No.	Effective filing date	Patent No.	Grant Date
***	***	***	***	***	***
	***	***	***	***	***
***	***	***	***	***	***
	***	***	***	***	***
***	***	***	***	***	***
	***	***	***	***	***

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

Exhibit 1.69

Spectrum Patents

Title	Country	Application No.	Effective filing date	Patent No.	Grant Date
***	***	***	***	***	***

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

Exhibit 1.72

Spectrum Trademarks

None.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

Exhibit 7.5.1

Press Release(s)

See attached.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

Spectrum Pharmaceuticals Out-Licenses

Rights for Greater China to CASI Pharmaceuticals for Three of Its Drugs

· Spectrum receives a 19.99% stake (pre-transaction) in CASI, a NASDAQ-listed, oncology-focused Company with expertise and focus on markets in China and a $1.5 million promissory note

HENDERSON, Nev. and ROCKVILLE, Md. (September 18, 2014) – Spectrum Pharmaceuticals, Inc. (Nasdaq: SPPI), a biotechnology company with fully integrated commercial and drug development operations with a primary focus in hematology and oncology, and CASI Pharmaceuticals, Inc. (Nasdaq: CASI), a biopharmaceutical company dedicated to the acquisition, development and commercialization of innovative therapeutics addressing cancer and other unmet medical needs for the global market with a primary focus on China, announce the signing of license agreements whereby CASI has been granted exclusive rights to two of Spectrum Pharmaceuticals’ commercial oncology drugs, Zevalin® (ibritumomab tiuxetan) Injection for intravenous use and Marqibo® (vinCRIStine sulfate LIPOSOME injection) for intravenous infusion, and a Phase 3 drug candidate, Captisol-Enabled^TM Melphalan (CE melphalan), for development and commercialization in China, including Taiwan, Hong Kong and Macau.

ZEVALIN is used in the treatment of non-Hodgkin’s lymphoma (NHL) and MARQIBO is used in the treatment of acute lymphoblastic leukemia (ALL). CE melphalan has met the endpoints in a pivotal trial for use as a conditioning treatment prior to autologous stem cell transplant for patients with multiple myeloma. Spectrum plans to file a New Drug Application with the U.S. Food and Drug Administration (FDA) for CE melphalan in the second half of 2014.

CASI will be responsible for the development and commercialization of the three drugs, including the submission of import drug registration applications to regulatory authorities and conducting any confirmatory clinical studies in greater China, if and as required.

“We are delighted to see our anticancer drugs to be developed and marketed in greater China through CASI, a NASDAQ-listed Company focused on China,” said Rajesh C. Shrotriya, MD, Chairman and Chief Executive Officer of Spectrum Pharmaceuticals. “The management of CASI has a track record of successfully developing anticancer drugs in China. We are pleased to be a shareholder of CASI at this early stage of their development and look forward to CASI creating value for our shareholders as they grow. China’s pharmaceutical market is growing at a rapid pace and is already approaching second place to only the United States in the world. The greater China drug market for anticancer drugs is projected to become the world’s largest in the next decade and CASI has the opportunity to take a leading position to address these significant unmet medical needs. We are impressed with the management team at CASI and their expertise in China, and look forward to sharing in the success of our drugs in this important market.”

Spectrum Pharmaceuticals, Inc., 11500 S. Eastern Ave., Ste. 240  •  Henderson, Nevada 89052   •   Tel: 702-835-6300

•   Fax: 702-260-7405   •   www.sppirx.com   •   NASDAQ: SPPI

CASI Pharmaceuticals, Inc., 9620 Medical Center Drive, Ste. 300 • Rockville, Maryland 20852   •   Tel: 240-864-2643

•   Fax: 301-325-2437   •   www.casipharmaceuticals.com   •   NASDAQ: CASI

Commenting on the transaction, Ken K. Ren, Ph.D., CASI’s Chief Executive Officer, said, “We are very excited to have entered into this transaction with Spectrum, a Company with a successful track record of developing and commercializing drugs expeditiously in the U.S. The addition of these three drugs transforms our pipeline and significantly expands our market share potential in China. Our transaction is structured rather uniquely in that the shares and note represent the purchase price to Spectrum and is in lieu of royalties and milestones normally associated with traditional licenses, thereby aligning Spectrum’s interest with our shareholders. We look forward to a productive relationship with Spectrum.”

Dr. Ren added, “These drug products come with strong intellectual property protection and significant technology barriers. We are currently preparing the import drug registration applications in greater China, initially for ZEVALIN and MARQIBO, and since both drugs are approved for sale in the U.S., we anticipate that confirmatory clinical trials will be required for marketing approval in our territory. The submission of the import drug registration for CE melphalan will follow immediately after its approval by the U.S. FDA. The annual incidence in China for NHL, ALL and multiple myeloma is increasing each year with high mortality rates, it is our goal to have these innovative products available to patients in greater China as soon as possible to address these unmet medical needs, and as Spectrum expands these drugs into additional indications in the U.S., we too will apply for expanded labels in our territory.”

In addition to its initial stake in CASI, Spectrum Pharmaceuticals will have certain rights to maintain its post-transaction ownership position. Spectrum Pharmaceuticals also will have the opportunity to designate a member to CASI’s board of directors. Detailed information on the transaction can be found in CASI’s Report on Form 8-K, which will be filed with the Securities and Exchange Commission.

H.C. Wainwright & Co., LLC acted as Spectrum's advisor.

About Spectrum Pharmaceuticals, Inc.

Spectrum Pharmaceuticals is a leading biotechnology company focused on acquiring, developing, and commercializing drug products, with a primary focus in oncology and hematology. Spectrum and its affiliates market five oncology drugs: FUSILEV® (levoleucovorin) for Injection; FOLOTYN® (pralatrexate injection); ZEVALIN® (ibritumomab tiuxetan) Injection for intravenous use; MARQIBO® (vinCRIStine sulfate LIPOSOME injection) for intravenous infusion; and BELEODAQ™ (belinostat) for Injection. Spectrum's strong track record in in-licensing and acquiring differentiated drugs, and expertise in clinical development have generated a robust, diversified and growing pipeline of product candidates in advanced-stage Phase 2 and Phase 3 studies. More information on Spectrum is available at www.sppirx.com.

About CASI Pharmaceuticals, Inc.

CASI is a biopharmaceutical company dedicated to the acquisition, development and commercialization of innovative therapeutics addressing cancer and other unmet medical needs for the global market with a primary focus on China.. CASI’s product pipeline includes exclusive regional rights to ZEVALIN (ibritumomab tiuxetan), MARQIBO (vinCRIStine sulfate LIPOSOME injection) and Captisol-Enabled (propylene glycol-free) melphalan (CE melphalan) in greater China (including Taiwan, Hong Kong and Macau). CASI’s development pipeline also includes its proprietary drug candidate ENMD-2076, a selective angiogenic kinase inhibitor currently in multiple Phase 2 oncology studies, and 2ME2 (2-methoxyestradial) currently under reformulation development. CASI is headquartered in Rockville, Maryland and has a wholly owned subsidiary and R&D operations in Beijing, China. More information on CASI is available at www.casipharmaceuticals.comand in the Company’s filings with the U.S. Securities and Exchange Commission.

About ZEVALIN and the ZEVALIN Therapeutic Regimen

ZEVALIN (ibritumomab tiuxetan) injection for intravenous use, is indicated for the treatment of patients with relapsed or refractory, low-grade or follicular B-cell non-Hodgkin's lymphoma (NHL). ZEVALIN is also indicated for the treatment of patients with previously untreated follicular non-Hodgkin's Lymphoma who achieve a partial or complete response to first-line chemotherapy.

ZEVALIN is a CD20-directed radiotherapeutic antibody. The ZEVALIN therapeutic regimen consists of two components: rituximab, and Yttrium-90 (Y-90) radiolabeled ZEVALIN for therapy. ZEVALIN builds on the combined effect of a targeted biologic monoclonal antibody augmented with the therapeutic effects of a beta-emitting radioisotope.

Important ZEVALIN Safety Information

Deaths have occurred within 24 hours of rituximab infusion, an essential component of the ZEVALIN therapeutic regimen. These fatalities were associated with hypoxia, pulmonary infiltrates, acute respiratory distress syndrome, myocardial infarction, ventricular fibrillation, or cardiogenic shock. Most (80%) fatalities occurred with the first rituximab infusion. ZEVALIN administration can result in severe and prolonged cytopenias in most patients. Severe cutaneous and mucocutaneous reactions, some fatal, can occur with the ZEVALIN therapeutic regimen.

Please see full Prescribing Information, including BOXED WARNINGS, for ZEVALIN and rituximab. Full prescribing information for ZEVALIN can be found at www.ZEVALIN.com.

About MARQIBO

MARQIBO is a novel, sphingomyelin/cholesterol liposome-encapsulated, formulation of vincristine sulfate. Vincristine, a microtubule inhibitor, is FDA-approved for the treatment of adult patients with Philadelphia chromosome-negative (Ph-) acute lymphoblastic leukemia (ALL) in second or greater relapse or whose disease has progressed following two or more anti-leukemia therapies. (The encapsulation technology, utilized in this formulation, has been shown to provide prolonged circulation of vincristine in the blood).

Please see important safety information below and the full prescribing information for MARQIBO at www.marqibo.com.

Indication and usage

MARQIBO is a liposomal vinca alkaloid indicated for the treatment of adult patients with Philadelphia chromosome-negative (Ph-) acute lymphoblastic leukemia (ALL) in second or greater relapse or whose disease has progressed following two or more anti-leukemia therapies. This indication is based on overall response rate. Clinical benefit such as improvement in overall survival has not been verified.

Important safety information

CONTRAINDICATIONS

· MARQIBO is contraindicated in patients with demyelinating conditions including Charcot-Marie-Tooth syndrome

· MARQIBO is contraindicated in patients with hypersensitivity to vincristine sulfate or any of the other components of MARQIBO (vinCRIStine sulfate LIPOSOME injection

· MARQIBO is contraindicated for intrathecal administration

About Captisol-Enabled Melphalan

Captisol-enabled, PG-free melphalan is a novel intravenous formulation of melphalan being investigated for the multiple myeloma transplant setting, for which it has been granted an Orphan Drug Designation by the FDA. This formulation eliminates the use of propylene glycol, which has been reported to cause renal and cardiac side effects that limit the ability to deliver higher doses of therapeutic compounds. The use of the Captisol technology to reformulate melphalan also improves its stability and is anticipated to allow for slower infusion rates and longer administration durations, potentially enabling clinicians to safely achieve a higher dose intensity for pre-transplant chemotherapy.

About Captisol

Captisol is a patent-protected, chemically modified cyclodextrin with a structure designed to optimize the solubility and stability of drugs. Captisol was invented and initially developed by scientists in the laboratories of Dr. Valentino Stella at the University of Kansas’ Higuchi Biosciences Center for specific use in drug development and formulation. This unique technology has enabled seven FDA-approved products, including Onyx Pharmaceuticals’ Kyprolis^®, Baxter International’s Nexterone^® and Merck’s NOXAFIL IV. There are also more than 30 Captisol-enabled products currently in clinical development.

Forward-Looking Statements – Spectrum Pharmaceuticals, Inc.

This press release may contain forward-looking statements regarding future events and the future performance of Spectrum Pharmaceuticals that involve risks and uncertainties that could cause actual results to differ materially. These statements are based on management's current beliefs and expectations. These statements include, but are not limited to, statements that relate to our business and its future, including sales of Spectrum’s drug products, certain company milestones, Spectrum's ability to identify, acquire, develop and commercialize a broad and diverse pipeline of late-stage clinical and commercial products, leveraging the expertise of partners and employees around the world to assist us in the execution of our strategy, and any statements that relate to the intent, belief, plans or expectations of Spectrum or its management, or that are not a statement of historical fact. Risks that could cause actual results to differ include the possibility that our existing and new drug candidates may not prove safe or effective, the possibility that our existing and new applications to the FDA and other regulatory agencies may not receive approval in a timely manner or at all, the possibility that our existing and new drug candidates, if approved, may not be more effective, safer or more cost efficient than competing drugs, the possibility that our efforts to acquire or in-license and develop additional drug candidates may fail, our lack of sustained revenue history, our limited marketing experience, our customer concentration, the possibility for fluctuations in customer orders, evolving market dynamics, our dependence on third parties for clinical trials, manufacturing, distribution, information and quality control and other risks that are described in further detail in the Company's reports filed with the Securities and Exchange Commission. We do not plan to update any such forward-looking statements and expressly disclaim any duty to update the information contained in this press release except as required by law.

SPECTRUM PHARMACEUTICALS, INC. ^®, FUSILEV^®, FOLOTYN^®, ZEVALIN^®, and MARQIBO^® are registered trademarks of Spectrum Pharmaceuticals, Inc. and its affiliates. BELEODAQ™,REDEFINING CANCER CARE™ and the Spectrum Pharmaceuticals logos are trademarks owned by Spectrum Pharmaceuticals, Inc. Any other trademarks are the property of their respective owners.

© 2014 Spectrum Pharmaceuticals, Inc. All Rights Reserved.

Forward-Looking Statements – CASI Pharmaceuticals, Inc.

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to the outlook for expectations for future financial or business performance, strategies, expectations and goals. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and no duty to update forward-looking statements is assumed.

Actual results could differ materially from those currently anticipated due to a number of factors, including: the risk that we may be unable to continue as a going concern as a result of our inability to raise sufficient capital for our operational needs; the possibility that we may be delisted from trading on the Nasdaq Capital Market; the volatility in the market price of our common stock; the difficulty of executing our business strategy in China; our inability to enter into strategic partnerships for the development, commercialization, manufacturing and distribution of our proposed product candidate or future candidates; risks relating to the need for additional capital and the uncertainty of securing additional funding on favorable terms; risks associated with our product candidates; risks associated with any early-stage products under development; the risk that results in preclinical models are not necessarily indicative of clinical results; uncertainties relating to preclinical and clinical trials, including delays to the commencement of such trials; the lack of success in the clinical development of any of our products; dependence on third parties; and risks relating to the commercialization, if any, of our proposed products (such as marketing, safety, regulatory, patent, product liability, supply, competition and other risks). Such factors, among others, could have a material adverse effect upon our business, results of operations and financial condition. We caution readers not to place undue reliance on any forward-looking statements, which only speak as of the date made. Additional information about the factors and risks that could affect our business, financial condition and results of operations, are contained in our filings with the U.S. Securities and Exchange Commission, which are available at www.sec.gov.

SPECTRUM INVESTOR CONTACT:

Spectrum Pharmaceuticals, Inc.
Shiv Kapoor
Vice President, Strategic Planning & Investor 
Relations
702-835-6300
InvestorRelations@sppirx.com CASI INVESTOR CONTACTS:

CASI Pharmaceuticals, Inc.
240.864.2643
ir@casipharmaceuticals.com

LHA
Kim Sutton Golodetz
212.838.3777
kgolodetz@lhai.com

#  #  #

EX-10.4

Exhibit 10.4

Execution Version

Confidential

Confidential Materials omitted and filed separately with the Securities and Exchange Commission.
Triple asterisks denote omissions.

LICENSE AGREEMENT

This LICENSE AGREEMENT (the “Agreement”) is effective as of September 17, 2014 (the “Effective Date”) by and between Spectrum Pharmaceuticals Cayman, L.P., an Exempted Limited Partnership organized under the laws of the Cayman Islands (“Spectrum”) and CASI Pharmaceuticals, Inc., a Delaware corporation (“Licensee”). Licensee and Spectrum are each referred to herein by name or, individually, as a “Party” or, collectively, as “Parties.”

BACKGROUND

A.           Spectrum owns and/or controls rights in and to a product containing Ibritumomab Tiuxetan in a Kit (as defined below) and Yttrium-90 (Y-90) Chloride sterile solution (the “Product”).

B.           Licensee desires to obtain a license to develop and commercialize the Product for use in the Field in the Licensee Territory (each capitalized term as defined below), and Spectrum desires to grant Licensee such a license.

NOW, THEREFORE, in consideration of the mutual covenants and agreements provided herein below and other consideration, the receipt and sufficiency of which is hereby acknowledged, Licensee and Spectrum hereby agree as follows:

Article 1
DEFINITIONS

The following capitalized terms shall have the meanings given in this Article 1 when used in this Agreement:

1.1          “AAA” has the meaning set forth in Section 10.2.

1.2          “AAA Rules” has the meaning set forth in Section 10.2.

1.3          “Additional Products” has the meaning set forth in Section 3.4.1.

1.4          “Affiliate” shall mean with respect to either Party, any Person controlling, controlled by or under common control with such Party, for so long as such control exists. For purposes of this Section 1.4 only, “control” shall mean (i) direct or indirect ownership of fifty percent (50%) or more of the stock or shares having the right to vote for the election of directors of such corporate entity or (ii) the possession, directly or indirectly, of the power to direct, or cause the direction of, the management or policies of such entity, whether through the ownership of voting securities, by contract or otherwise.

1.5          “Agreement” has the meaning set forth in the Preamble including any schedules, exhibits, annexures, attached hereto or any amendments and modifications.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission. 

1.6          “Agreement Year” shall mean a twelve (12) month period from the Effective Date and each anniversary thereof.

1.7          “Applicable Laws” shall mean, with respect to a Party’s activities under this Agreement, any and all laws, ordinances, orders, rules, rulings, directives and regulations of any kind whatsoever of any governmental or regulatory authority within the applicable jurisdiction applicable to such Party’s activities.

1.8          “Auditing Party” has the meaning set forth in Section 5.5.

1.9          “***” shall mean ***.

1.10        “***” shall mean ***.

1.11        “Business Day” shall mean any day other than a Saturday, Sunday or any other day on which commercial banks in the United States, the People’s Republic of China or Hong Kong are authorized or required by law to remain closed.

1.12        “Chairperson” has the meaning set forth in Section 2.1.3.

1.13        “Change of Control” means, with respect to either Party, (i) the sale of all or substantially all of such Party’s assets or business relating to this Agreement; (ii) a merger, consolidation, share exchange or other similar transaction involving such Party and any Third Party which results in the holders of the outstanding voting securities of such Party immediately prior to such merger, consolidation, share exchange or other similar transaction ceasing to hold more than fifty percent (50%) of the combined voting power of the surviving, purchasing or continuing entity immediately after such merger, consolidation, share exchange or other similar transaction, or (iii) the acquisition by a person or entity, or group of persons or entities acting in concert, of more than fifty percent (50%) of the outstanding voting equity securities of such Party; in all cases of clauses (i)-(iii), where such transaction is to be entered into with any person or group of persons other than the other Party or its Affiliates.

1.14        “Commercialization” shall mean, with respect to the Product, any and all processes and activities conducted to establish and maintain sales for the Product (including with respect to reimbursement and patient access), including offering for sale, detailing, selling (including launch), marketing (including education and advertising activities), promoting, storing, transporting, distributing, and importing the Product, but shall exclude Development of the Product. For clarity, Commercialization shall include the manufacture of the Product in support of the foregoing processes and activities, including, to the extent applicable, packaging, labeling and other finishing activities, quality control and assurance testing, in each case, with respect to such product. “Commercialize” and “Commercializing” shall have their correlative meanings.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission. 

-2-

1.15        “Commercially Reasonable Efforts” shall mean, with respect to the efforts to be expended by a Party with respect to any objective, the efforts and resources normally applied by the Party to other pharmaceutical products of similar commercial potential and is at a similar stage in its development or product life but no less than those reasonable, diligent, good faith efforts consistent with those normally applied in the pharmaceutical industry for products of similar commercial potential. With respect to Licensee’s efforts in connection with the Development, or Commercialization of the Product hereunder, commercially reasonable efforts shall mean efforts reasonably used by Licensee or its Affiliates (giving due consideration to relevant industry standards) for Licensee’s own products (including internally developed, acquired and in-licensed products) with similar commercial potential at a similar stage in their lifecycle (assuming continuing development of such product), taking into consideration their safety, tolerability and efficacy, and the radioimmunotherapy nature of the Product, the profitability on a GAAP basis consistent with Licensee’s publicly reported financial statements, the competitive landscape, extent of market exclusivity, patent protection, cost to develop the product, promotable claims, health economic claims, the approved indications and the regulatory and reimbursement structure involved.

1.16        “Common Stock” has the meaning set forth in Section 5.1.

1.17        “Confidential Information” has the meaning set forth in Section 7.1.

1.18        “Control” shall mean, with respect to any Intellectual Property right, possession by a party (including its Affiliates) of the right (whether by ownership, license or otherwise) to grant to another party a license or a sublicense under such Intellectual Property right without violating the terms of any agreement or other arrangement with any third party. “Controlled” and “Controlling” shall have their correlative meanings. Notwithstanding anything to the contrary in this Agreement, in the event that a Third Party acquires (including by merger or consolidation) a Party or an Affiliate of a Party, or a Party or an Affiliate of a Party transfers to a Third Party all or substantially all of its assets to which this Agreement relates (such Third Party and its Affiliates immediately prior to such acquisition or transfer (the “Subject Transaction”), collectively, the “Acquiring Entities”), the following shall not be deemed to be Controlled by such Party or its Affiliates for purposes of this Agreement: (i) any subject matter owned or controlled by any Acquiring Entity immediately prior to the effective date of such Subject Transaction, and (ii) any subject matter developed or acquired by or on behalf of any Acquiring Entity after a Subject Transaction independently, without accessing or practicing subject matter within the Licensed Technology or any other technology or information made available to such Party under this Agreement.

1.19        “Development” shall mean, with respect to the Product, any and all processes and activities conducted to obtain and maintain Regulatory Approval for the Product, including preclinical testing, test method development and stability testing, toxicology, formulation, process development, quality assurance/control development, statistical analysis, clinical studies (including trials for additional indications for the Product for which a Regulatory Approval has been obtained), quality of life assessments, pharmacoeconomics, post-marketing studies, label expansion studies, regulatory affairs, and further activities relating to the clinical development or preparation of such product for filing MAAs with Regulatory Authorities and Commercialization. “Develop” and “Developing” shall have their correlative meanings.

1.20        “Dispute” has the meaning set forth in Section 10.1.

1.21        “Effective Date” has the meaning set forth in the Preamble.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission. 

-3-

1.22        “Enforcing Party” has the meaning set forth in Section 6.5.5.

1.23        “Field” shall mean the use of the Product for the diagnosis, prevention and therapy of all diseases, conditions and disorders in humans.

1.24        “First Commercial Launch” shall mean the first shipment of the Product in commercial quantities for commercial sale to a Third Party in Licensee Territory after receipt of all applicable Regulatory Approvals therefor from the applicable Regulatory Authority in Licensee Territory.

1.25        “Foreign Marketing Approval” has the meaning set forth in Section 4.1.6.

1.26        “Imported Product Regulatory Approval” has the meaning set forth in Section 4.1.6.

1.27        “Indemnify” has the meaning set forth in Section 8.5.1.

1.28        “Initial Transfer” has the meaning set forth in Section 4.2.3.

1.29        “Intellectual Property” shall mean intellectual property rights of every kind and nature throughout the world, however denominated, including all rights and interests pertaining to or deriving from:

(a)          Patent and Know-How;

(b)          trademarks, trade names, service marks, service names, brands, trade dress and logos, domain names, and the goodwill and activities associated therewith;

(c)          copyrights, works of authorship, rights of privacy and publicity, moral rights, and similar proprietary rights of any kind or nature, in all media now known or hereafter created; and

(d)          any and all registrations, applications, recordings, licenses, statutory rights, common-law rights and rights relating to any of the foregoing.

1.30        “International Accounting Standards” shall mean the International Financial Reporting Standards or U.S. Generally Accepted Accounting Principles.

1.31        “Invention” has the meaning set forth in Section 6.1.2.

1.32        “Investment Agreement” has the meaning set forth in Section 5.1.

1.33        “JPC” has the meaning set forth in Section 2.1.1.

1.34        “Joint Patents” has the meaning set forth in Section 6.1.1(c).

1.35        “Joint Inventions” has the meaning set forth in Section 6.1.1(c).

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission. 

-4-

1.36        “Kit” shall mean the product kit described in Exhibit 1.36.

1.37        “Know-How” shall mean inventions, business, marketing, technical and manufacturing information, know-how and materials, including technology, software, instrumentation, specifications, devices, data, compositions, formulas, biological materials, assays, reagents, constructs, compounds, discoveries, procedures, processes, practices, protocols, methods, techniques, results of experimentation or testing, knowledge, trade secrets, skill and experience, in each case whether or not patentable or copyrightable.

1.38        “Licensee” has the meaning set forth in the Preamble.

1.39        “Licensee Indemnitees” has the meaning set forth in Section 8.5.1.

1.40        “Licensee Inventions” has the meaning set forth in Section 6.1.1(b).

1.41        “Licensee Know-How” shall mean any and all Know-How Controlled by Licensee or its Affiliates during the Term that is reasonably necessary or useful for the Development or Commercialization of the Product for use in the Field. Licensee Know-How shall also include Licensee Inventions.

1.42        “Licensee Territory” shall mean People’s Republic of China including, Hong Kong, Macau and Taiwan; provided however, that Hong Kong shall not be part of the Licensee Territory until such time that is the earlier of (a) the completion of the transfer of the MA (as defined in the MA Transfer and Interim Holding Agreement) pursuant to the MA Transfer and Interim Holding Agreement, dated March 25, 2014, by and between Spectrum and Global Medical Solutions Hong Kong Ltd., or (b) one (1) year from the execution of this Agreement.

1.43        “Licensee Trademarks” has the meaning set forth in Section 4.3.4(a).

1.44        “Losses” has the meaning set forth in Section 8.5.1.

1.45        “MAA” shall mean a new drug application or similar application or submission filed with or submitted to any Regulatory Authority to obtain permission to commence marketing and sales of the Product in any particular jurisdiction.

1.46        “Made” has the meaning set forth in Section 6.1.2.

1.47        “Manufacturing Cost” shall mean Spectrum’s, or Non-Spectrum Foreign Regulatory Approval Holder’s, bona fide and actual manufacturing cost or bona fide invoiced cost from a Third Party manufacturer.

1.48        “Material Impact” shall mean a material adverse effect on the regulatory status or commercial sales of the Product.

1.49        “Material Impact Matters” has the meaning set forth in Section 2.3.

1.50        “Net Sales” has the meaning set forth in the Upstream Stream Licenses.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission. 

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1.51        “Non-Spectrum Foreign Marketing Approval Holder” has the meaning set forth in Section 4.1.6.

1.52        “Party” or “Parties” has the meaning set forth in the Preamble.

1.53        “Patent” shall mean any of the following, whether existing now or in the future anywhere in the world: (i) any issued patent, including inventor's certificates, substitutions, extensions, confirmations, reissues, re-examination, renewal or any like governmental grant for protection of inventions; and (ii) any pending application for any of the foregoing, including any continuation, divisional, substitution, continuations-in-part, provisional and converted provisional applications.

1.54        “Payment Period” has the meaning set forth in Section 5.2.2.

1.55        “Person” shall mean any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization or government or political subdivision thereof.

1.56        “Prior CDA” has the meaning set forth in Section 7.3.

1.57        “Product” has the meaning set forth in the Preamble.

1.58        “Prosecution and Maintenance” shall mean, with respect to a Patent, the preparing, filing, prosecuting and maintenance of such Patent, as well as re-examinations, reissues, requests for Patent term extensions and the like with respect to such Patent, together with the conduct of interferences, the defense of oppositions and other similar proceedings with respect to the particular Patent.

1.59        “Regulatory Approval” shall mean, with respect to the Product in a particular jurisdiction, approval or other permission by the applicable Regulatory Authorities sufficient to initiate manufacturing, importing, marketing and sales of such product, including pricing and reimbursement approvals.

1.60        “Regulatory Authority” shall mean any federal, national, multinational, state, provincial or local regulatory agency, department, bureau or other governmental entity with authority over the Development, Commercialization or other use or exploitation (including the granting of Regulatory Approvals) of the Product in any jurisdiction, including the FDA.

1.61        “Regulatory Filing” shall mean any filing, application, or submission with any Regulatory Authority, including MAAs and authorization, approvals or clearances arising from the foregoing, including Regulatory Approvals, and all correspondence or communication with or from the relevant Regulatory Authority, as well as minutes of any material meetings, telephone conferences or discussions with the relevant Regulatory Authority, in each case with respect to the Product.

1.62        “Senior Executives” has the meaning set forth in Section 2.3.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission. 

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1.63        “Spectrum” has the meaning set forth in the Preamble.

1.64        “Spectrum Copyrights” shall mean all works of authorship (including advertising, marketing and promotional materials, artwork, labeling, and other works of authorship), and all copyrights, moral rights and other rights and interests thereto throughout the Licensee Territory, whether or not registered, that are (i) Controlled by Spectrum or its Affiliates, and (ii) are delivered to Licensee by Spectrum for use in connection with the Product.

1.65        “Spectrum Indemnitees” has the meaning set forth in Section 8.5.2.

1.66        “Spectrum Inventions” has the meaning set forth in Section 6.1.1(a).

1.67        “Spectrum Know-How” shall mean any and all Know-How Controlled by Spectrum or its Affiliates during the Term that is reasonably necessary or useful for the Development or Commercialization of the Product for use in the Field. Spectrum Know-How shall also include Spectrum Inventions.

1.68        “Spectrum Patents” shall mean any and all Patents Controlled by Spectrum or its Affiliates during the Term claiming (i) the composition of or formulation for, (ii) any method, composition or apparatus for the manufacture of, or (iii) any method of using in the Field, in each case of clause (i), (ii), and (iii), the Product. Spectrum Patents shall also include Patents that claim Spectrum Inventions. A list of Spectrum Patents is appended hereto as Exhibit 1.68 and will be updated periodically to reflect changes thereto during the Term.

1.69        “Spectrum Product Marks” has the meaning set forth in Section 4.3.4(c).

1.70        “Spectrum Technology” shall mean the Spectrum Know-How, Spectrum Patents and Spectrum Copyrights.

1.71        “Spectrum Trademarks” shall mean the trademarks and service marks, the goodwill associated therewith, and all registrations and applications relating thereto, that are (i) Controlled by Spectrum or its Affiliates, during the Term, and (ii) used by Spectrum in connection with the Product. A list of Spectrum Trademarks is appended hereto as Exhibit 1.71 and will be updated periodically to reflect changes thereto during the Term.

1.72        “Spectrum Territory” shall mean all countries and territories throughout the world other than the Licensee Territory.

1.73        “Supply Agreement” has the meaning set forth in Section 4.5.2.

1.74        “Term” has the meaning set forth in Section 9.1.

1.75        “Territory” shall mean all of the countries and territories in the world. A Party’s respective “Territory” shall mean, in the case of Spectrum, the Spectrum Territory, and in the case of Licensee, the Licensee Territory.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission. 

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1.76        “Third Party” shall mean any Person other than Licensee, Spectrum or their respective Affiliates.

1.77        “Third-Party Claim” has the meaning set forth in Section 8.5.1.

1.78        “Upstream Licenses” shall mean ***.

1.79        “Upstream Payments” has the meaning set forth in Section 5.2.1.

1.80        “Wind-Down Period” has the meaning set forth in Section 9.8.2.

Article 2
GOVERNANCE

2.1          Joint Product Committee.

2.1.1       Establishment. Promptly after the Effective Date, Licensee and Spectrum shall establish a joint product committee (the “JPC”) to oversee, review and coordinate the activities of Licensee under this Agreement, including the Development and Commercialization of the Product for use in the Field in the Licensee Territory.

2.1.2       Responsibilities. The JPC shall be responsible for: (i) overseeing, reviewing and monitoring Licensee’s activities under this Agreement including, without limitation, any clinical trials proposed to be conducted by Licensee; (ii) facilitating access to and the exchange of information between the Parties related to the Development and/or Commercialization of the Product for use in the Field in the Licensee Territory; and (iii) undertaking and/or approving such other matters as are specifically provided for the JPC under this Agreement.

2.1.3       Membership. The JPC shall be comprised of an equal number of representatives from each of Spectrum and Licensee and unless otherwise agreed such number shall be two (2) senior representatives from each Spectrum and Licensee. Either Party may replace its respective JPC representatives at any time with prior notice to the other Party, provided, that such replacement is of comparable authority and scope of functional responsibility within that Party’s organization as the person he or she is replacing. Unless otherwise agreed by the Parties, the JPC shall have at least one representative with relevant decision-making authority from each Party such that the JPC is able to effectuate all of its decisions within the scope of its responsibilities. Licensee shall select one of its representatives as the chairperson for the JPC (the “Chairperson”) and the Licensee may replace the Chairperson upon written notice to Spectrum. The Chairperson shall be responsible for calling meetings, preparing and circulating an agenda in advance of each meeting (which agenda will include every matter requested by either Party), and preparing and issuing minutes of each meeting within thirty (30) days thereafter.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission. 

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2.2          Meetings. The JPC shall hold meetings (either in person, by teleconference or videoconference) at such times and places as the Parties may mutually agree, provided, that, unless the Parties agree otherwise, the JPC shall meet at least semi-annually during the Development of the Product for use in the Field in the Licensee Territory, and at least annually thereafter. Each Party shall bear its own costs associated with attending such meetings. As appropriate, other employees of the Parties may attend the JPC’s meetings as nonvoting observers, but no Third Party personnel may attend unless otherwise agreed by the Parties. At the request of Spectrum and with prior written approval of Licensee, which shall not be unreasonably withheld, Third Party licensees of Spectrum for the development and commercialization of the Product for use in the Field in the Spectrum Territory may attend the JPC’s meetings as nonvoting participants if they have agreed to confidentiality terms at least as restrictive as those set forth in this Agreement. Each Party may also call for special meetings to resolve particular matters requested by such Party.

2.3          Decision Making. Decisions of the JPC shall be made by consensus of the members present in person or by other means (e.g., teleconference) at any meeting, with at least one representative from each Party participating in such vote. The members of the JPC shall at all times use good faith efforts to reach consensus on matters properly referred to the JPC. In the event that the JPC is unable to reach consensus with respect to a particular matter within its purpose, then either Party may, by written notice to the other, refer the matter to the respective business head of each Party or their respective designee who is senior in rank and authority to such Party’s JPC representatives (the “Senior Executives”) for resolution by good faith discussions for a period of at least fifteen (15) Business Days. In the event that the Senior Executives are unable to reach agreement with respect to such matter within such fifteen (15) Business Days, then Licensee shall have the final decision-making authority with respect to such matter, except in the event that such matter is reasonably possible to create a Material Impact in the Spectrum Territory (the “Material Impact Matters”) and Spectrum notifies Licensee during or before any referral of the matter to Senior Executives of each Party for resolution of Spectrum’s belief that such matter is a Material Impact Matter, in which case, Spectrum shall have the final decision-making authority.

2.4          Authority. The JPC shall perform its responsibilities under this Agreement based on the principles of prompt and diligent Development and Commercialization of the Product for use in the Field in the Licensee Territory, consistent with good pharmaceutical practices and commercially reasonable consideration of the optimal balance of maximizing long-term sale of the Product in the Licensee Territory.

2.5          Day-to-Day Responsibilities. Each Party shall: (i) be responsible for day-to-day implementation and operation of the activities hereunder for which it has or is otherwise assigned responsibility under this Agreement, provided, that such implementation is not inconsistent with the express terms of this Agreement or the decisions of the JPC within the scope of their authority specified herein; and (ii) keep the other Party informed as to the progress of such activities as reasonably requested by the other Party and as otherwise determined by the JPC.

2.6          JPC Participation; Discontinuation. It is understood that Spectrum’s participation on the JPC shall be as a matter of right, but not an obligation. Accordingly, Spectrum may, at its discretion, elect to discontinue its participation in the JPC at any time during the Term upon written notice to Licensee. If Spectrum provides such written notice, then JPC shall have no further authority under this Agreement and shall cease to function, and thereafter decisions which were previously to be made by the JPC as set forth and contemplated in this Agreement shall be made solely by the Licensee in its reasonable discretion except that all decisions with respect to Material Impact Matters shall be made solely by Spectrum, and all of the rights and obligations of the Parties under this Agreement shall continue in full force and effect as rights and obligations directly between the Parties, including, without limitation, each Party’s obligations to provide and rights to receive results, data and other information generated from the other Party’s activities with respect to the Development of the Product for use in the Field.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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Article 3
LICENSES AND EXCLUSIVITY

3.1          Grant to Licensee.

3.1.1       License. Subject to and in accordance with the terms and conditions of this Agreement, Spectrum hereby grants to Licensee, during the Term, (i) an exclusive (even as to Spectrum and its Affiliates, except to the extent necessary to perform their obligations under this Agreement), irrevocable (except as set forth in Article 9), fully paid-up, royalty-free (except as set forth in Section 5.2.1), sublicenseable at any tier (in accordance with Section 3.1.2) license to use the Spectrum Know-How, and under the Spectrum Patents, to Commercialize (including to use, sale, offer for sale and import) the Product solely in the Licensee Territory and solely for use in the Field, subject to and in accordance with Section 4.3, and (ii) a non-exclusive, irrevocable (except as set forth in Article 9), fully paid-up, royalty-free, sublicenseable at any tier (in accordance with Section 3.1.2) license to use the Spectrum Know-How, and under the Spectrum Patents, to Develop the Product solely in the Licensee Territory and solely for use in the Field, subject to and in accordance with Sections 4.1 and 4.2.

3.1.2       Sublicenses. Neither Licensee nor any of its Affiliates may grant or authorize sublicenses under the license under Section 3.1.1 without the prior written consent of Spectrum, which approval shall not be unreasonably withheld, delayed, or conditioned, except that Licensee shall have the right to sublicense at any tier the license under Section 3.1.1 to its Affiliates without the consent of Spectrum. Licensee shall be responsible for the failure by its Affiliates to comply with, and Licensee shall ensure the compliance by each of its Affiliates with, the terms of this Agreement including all relevant restrictions, limitations and obligations.

3.2          Activities Outside the Field and Outside the Licensee Territory.

3.2.1       Licensee Rights Limited to the Field and the Licensee Territory. Licensee agrees that neither it, nor any of its Affiliates, will Develop (including file for Regulatory Approval with respect to) or Commercialize (including use, sale, offer for sale or import) the Product anywhere in the world, or for any use anywhere in the world, except in the Licensee Territory, and for use in the Field in the Licensee Territory, only in accordance with and under this Agreement. Licensee agrees that neither it, nor any of its Affiliates, will use or otherwise exploit, except as expressly licensed under this Agreement, any Spectrum Patents, Spectrum Know-How and/or Spectrum Trademark, or their counterparts in a country outside the Licensee Territory.

3.2.2       Territorial Integrity. Each Party shall use Commercially Reasonable Efforts to prevent any Product sold or otherwise distributed by such Party, directly or indirectly, from being sold, distributed or otherwise transported for use outside its respective Territory.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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3.3          Upstream Licenses. In addition to the payment obligations under Section 5.2, Licensee shall, and shall cause its Affiliates and sublicensees to, comply with all the terms and conditions of the Upstream Licenses applicable to Licensee or its Affiliates or sublicensees, or to Spectrum due to Licensee’s or its Affiliates’ or sublicensees’ activities, under this Agreement in the Licensee Territory. To the extent that any provisions are more restrictive, or broader, under the Upstream Licenses than may be explicitly set out in the Agreement, such more restrictive or broader provisions shall govern Licensee’s rights. During the Term, Spectrum shall promptly furnish Licensee with copies of (a) complete and unredacted copies of the Upstream Licenses and any relevant ancillary agreements, exhibits, schedules, or other documents which set forth and are sufficient to fully describe all the terms and conditions with which Licensee must comply in relation to the Upstream Licenses, (b) all amendments of the Upstream Licenses, and (c) all correspondence (or in the case of oral discussions, a summary of such discussions) with or from and reports received from or provided to licensors under the Upstream Licenses to the extent material to Licensee or the rights granted or to be granted to Licensee under this Agreement. In addition, during the Term, Spectrum shall provide copies of all notices received by Spectrum relating to any alleged breach or default by Spectrum under the Upstream Licenses within five (5) Business Days after Spectrum’s receipt thereof..

3.4          Assistance to Obtain Rights to Additional Products.

3.4.1       Introduction to Third Parties with Rights to Additional Products. With regard to any current and/or future proprietary, licensed or acquired pharmaceutical or biologic assets or products, and any and all other derivatives, and/or improvements thereof, that Spectrum Controls or that come under the Control of Spectrum, other than the Product (the “Additional Products”), to the extent Development and Commercialization rights in the Licensee Territory are Controlled by Third Parties, at Licensee’s reasonable request, Spectrum shall use good faith efforts, solely from the perspective of Spectrum’s best interests, to introduce Licensee to such Third Parties to facilitate Licensee to license or acquire such rights in the Licensee Territory from such Third Parties, with the understanding that Licensee shall be solely responsible for all costs or consideration related to a license or acquisition of such rights in the Licensee Territory from such Third Parties.

3.4.2       Efforts to Obtain Rights in the Licensee Territory. Spectrum shall use good faith efforts, solely from the perspective of Spectrum’s best interests, when engaging in negotiations with Third Parties to license or acquire any Development and Commercialization rights for any pharmaceutical or biologic assets or products, and any and all other derivatives, and/or improvements thereof owned by such third parties, to license or acquire Development and Commercialization rights thereto in the Licensee Territory.

3.4.3       Termination Upon Change of Control. Licensee acknowledges and agrees that Spectrum’s obligations under Sections 3.4.1 and 3.4.2 above shall terminate and be of no further effect upon the consummation of Change of Control by Spectrum.

3.5          No Other Rights. Each Party acknowledges that the rights and licenses granted under this Article 3 and elsewhere in this Agreement are limited to the scope expressly granted. Accordingly, except for the rights expressly granted under this Agreement, no right, title, or interest of any nature whatsoever is granted, whether by implication, estoppel, reliance, or otherwise, by either Party to the other Party. All rights with respect to Know-How, Patents or other Intellectual Property rights that are not specifically granted herein are reserved to the owner thereof.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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Article 4
REGULATORY MATTERS, DEVELOPMENT AND COMMERCIALIZATION OF PRODUCT

4.1          Regulatory Matters.

4.1.1       General. Licensee shall be responsible for all correspondence, meetings and other interactions, with the relevant Regulatory Authorities concerning regulatory activities related to the Product in the Field in the Licensee Territory, and for preparing and filing any and all Regulatory Filings for Regulatory Approval for the Product in the Field in the Licensee Territory at its sole expense and shall use Commercially Reasonable Efforts in doing so. Spectrum shall assist and cooperate with Licensee in connection with the preparation, filing and maintenance of such Regulatory Filings, as reasonably requested by Licensee. All Regulatory Approvals in the Licensee Territory shall be owned by Licensee and filed and obtained in Licensee’s and/or Spectrum’s name in accordance with Applicable Laws.

4.1.2       Reporting. Licensee shall keep Spectrum fully informed of regulatory developments relating to the Product in the Field in the Licensee Territory and shall promptly notify Spectrum in writing of any action or decision by any Regulatory Authority in the Licensee Territory regarding the Product in the Field. Licensee shall provide Spectrum for review and comment all draft Regulatory Filings in its original language (with a summary in English) and in electronic form (other than routine correspondence) at least twenty (20) Business Days (or in the event of a shorter filing deadline, as soon as practicable) in advance of their intended date of submission to a Regulatory Authority in the Licensee Territory. Spectrum shall use good faith efforts to provide Licensee with comments to such draft Regulatory Filings prior to the intended date of submission, and Licensee shall consider in good faith any comments thereto provided by Spectrum. Licensee shall promptly notify Spectrum of any Regulatory Filings (other than routine correspondence) submitted to or received from any Regulatory Authority in the Licensee Territory regarding the Product in the Field, and shall provide copies thereof at least five (5) Business Days after submission or receipt, which copy may be provided in its original language and in electronic form. Licensee shall keep Spectrum informed of all meetings, conferences and discussions with any Regulatory Authority in the Licensee Territory concerning the Product, and shall provide Spectrum with a summary of the substantive content discussed in any such meeting, conferences or discussions within five (5) Business Days after such meetings, conferences or discussions. In addition, upon Spectrum’s request, Licensee shall promptly meet and confer with Spectrum to discuss any regulatory matters related to the Product in the Licensee Territory, either in person at Licensee’s facility or by audio or video teleconference as Spectrum may elect.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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4.1.3       Regulatory Costs. Licensee shall be solely responsible for all of its costs and expenses related to the preparation, filing and maintenance of all Regulatory Approvals for the Product in the Field in the Licensee Territory. Spectrum shall support Licensee, as reasonably requested by Licensee, in obtaining Regulatory Approvals in Licensee Territory, including providing necessary documents or other materials in Spectrum’s possession required by Applicable Laws to obtain Regulatory Approvals in such territory, all in accordance with the terms and conditions of this Agreement, provided, that Spectrum shall be under no obligation to generate any additional data unless specifically agreed by Spectrum and Licensee.

4.1.4       Rights of Reference. Spectrum hereby grants to Licensee a right of reference to all Regulatory Filings filed by or on behalf of Spectrum, which right of reference Licensee may use for the sole purpose of seeking, obtaining and maintaining Regulatory Approvals and Developing and Commercializing the Product in the Field in the Licensee Territory. At Licensee’s reasonable request, Spectrum shall submit to the Regulatory Authorities a copy of the Regulatory Filings related to the Product, which are reasonably determined by Spectrum to be necessary to support Licensee’s application for Regulatory Approvals in the Licensee Territory.

4.1.5       Reporting; Adverse Drug Reactions.

(a)          Pharmacovigilance Agreement. Promptly after the Effective Date, the Parties shall enter into a pharmacovigilance agreement on reasonable and customary terms, including: (a) providing detailed procedures regarding the maintenance of core safety information and the exchange of safety data relating to the Product within appropriate timeframes and in an appropriate format to enable each Party to meet both expedited and periodic regulatory reporting requirements; and (b) ensuring compliance with the reporting requirements of all applicable Regulatory Authorities on a worldwide basis for the reporting of safety data in accordance with all applicable regulatory and legal requirements regarding the management of safety data. Each Party hereby agrees to comply with its respective obligations under such pharmacovigilance agreement and to cause its Affiliates to comply with such obligations.

(b)          Adverse Event Reporting. As between the Parties: (a) Licensee or its designee shall be responsible for the timely reporting of all adverse drug reactions/experiences, Product quality, Product complaints and safety data relating to the Product to the appropriate Regulatory Authorities in the Licensee Territory; and (b) Spectrum or its designee shall be responsible for reporting all adverse drug reactions/experiences, Product quality, Product complaints and safety data relating to the Product to the appropriate Regulatory Authorities in the Spectrum Territory; all in accordance with Applicable Laws.

4.1.6       Spectrum Assistance for Imported Products. In the event that (a) to apply for Regulatory Approval for the Product as an imported drug or product (an “Imported Product Regulatory Approval”) in a country or regulatory jurisdiction within the Licensee Territory, a Regulatory Authority or Applicable Laws of such country or regulatory jurisdiction requires the applicant to hold a marketing authorization, certificate of pharmaceutical product, or an equivalent certification for such Product outside of such country or regulatory jurisdiction within the Licensee Territory (a “Foreign Marketing Approval”), (b) Licensee decides to seek Imported Product Regulatory Approval for such Product in such country or regulatory jurisdiction, and (c) Licensee requests Spectrum, if Spectrum is the Foreign Marketing Approval holder for such Product, to authorize Licensee to file, in Spectrum’s name, or if, Spectrum’s Affiliate or a Third Party is the Foreign Marketing Approval holder for such Product (the “Non-Spectrum Foreign Marketing Approval Holder”), to procure such Non-Spectrum Foreign Marketing Approval Holder to authorize Licensee to file in such Non-Spectrum Foreign Marketing Approval Holder’s name, for such Imported Product Regulatory Approval for such Product, then, Spectrum shall, and shall use commercially reasonable efforts to cause any Non-Spectrum Marketing Approval Holder to, provide all reasonable assistance, facilitation and support including providing all documents and data reasonably requested by Licensee in a timely manner and at Licensee’s cost to effectuate such Imported Product Regulatory Approval including:

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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(a)          Licensee shall have sole responsibility for, and sole decision-making authority with respect to, preparing, filing, obtaining and maintaining the Imported Product Regulatory Approvals and related Regulatory Filings, provided, that Spectrum shall, and shall cause its Affiliates and any Non-Spectrum Foreign Marketing Approval Holder to, at the request of Licensee, cooperate with Licensee to prepare, file, obtain and maintain such Imported Product Regulatory Approvals and related Regulatory Submissions.

(b)          Spectrum shall:

(i)          if Spectrum holds the Foreign Marketing Approval, authorize Licensee, and provide all reasonable assistance, facilitation and support including providing all documentations and data reasonably requested by Licensee to Licensee, to file, in Spectrum’s name, for Imported Product Regulatory Approval in such country or regulatory jurisdiction, at the direction of Licensee and for Licensee’s sole benefit; or

(ii)         if a Non-Spectrum Foreign Marketing Approval Holder holds the Foreign Marketing Approval for such Product, use commercially reasonable efforts to cause such Non-Spectrum Foreign Marketing Approval Holder to authorize and provide all reasonable assistance, facilitation and support including providing all documentations and data reasonably requested by Licensee to Licensee, to file, in such Non-Spectrum Foreign Marketing Approval Holder’s name, for Imported Product Regulatory Approval in such country or regulatory jurisdiction, at the direction of Licensee and for Licensee’s sole benefit.

(c)          If the Regulatory Authority or Applicable Laws in such country or regulatory jurisdiction allows the Spectrum to appoint a local agent (or registration agent) to assist in the filing, maintenance or amendment of the Imported Product Regulatory Approval, then Spectrum shall appoint, or use commercially reasonable efforts to procure any Non-Spectrum Foreign Marketing Approval Holder to appoint, including providing a power of attorney which effectuates such appointment and registering such appointment with the relevant Regulatory Authority, Licensee or its designated Affiliate as its designated local agent for the Imported Product Regulatory Approval process inclusive of, to the fullest extent possible, the receipt of communications from the Regulatory Authority and submission of all relevant Regulatory Submissions.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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(d)          Spectrum shall use commercially reasonable efforts to cause any Non-Spectrum Foreign Marketing Approval Holder to grant to Licensee, during the Term, an exclusive (even as to Spectrum, its Affiliates, and any Non-Spectrum Foreign Marketing Approval Holder), irrevocable (except as set forth in Article 9), fully-paid, royalty-free (except as set forth in Section 5.2.1), sublicenseable (in accordance with Section 3.1.2) license under such Imported Product Regulatory Approvals to Develop and Commercialize the Product solely in the Licensee Territory and solely for use in the Field in accordance with this Agreement. In addition, Spectrum shall cause any Non-Spectrum Foreign Marketing Approval Holder to, provide to Licensee, all benefits of any Imported Product Regulatory Approvals and enforce, at Licensee’s cost and expense, at the request of and for the account of Licensee, any rights of Spectrum or its Affiliates arising under any Imported Product Regulatory Approvals against any Person.

(e)          Spectrum shall use commercially reasonable efforts to cause any Non-Spectrum Foreign Regulatory Approval Holder to Manufacture and supply via the named manufacturer or supplier on the relevant Imported Product Regulatory Approval all Products for Commercialization under the Imported Product Regulatory Approvals in the Territory to Licensee and its designated Affiliates and sublicensees at a price per Product equal to the Non-Spectrum Foreign Regulatory Approval Holder’s Manufacturing Cost (as may change from time to time) for such Product plus ***.

(f)          Spectrum shall, and hereby appoints, and shall use commercially reasonable efforts to cause its Affiliates and any Non-Spectrum Foreign Marketing Approval Holder to appoint, Licensee as its attorney-in-fact to Develop and Commercialize the Product under the Imported Product Regulatory Approval on Spectrum’s or the Non-Spectrum Foreign Marketing Approval Holder’s behalf, and shall execute a power of attorney in favor of Licensee to this effect during the Term.

(g)          Spectrum shall, and shall use commercially reasonable efforts to cause its Affiliates and any Non-Spectrum Foreign Marketing Approval Holder to, (x) notify Licensee of all communications received from the applicable Regulatory Authority with respect to any Imported Product Regulatory Approvals, (y) provide all official original copies of all Imported Product Regulatory Approvals received from the applicable Regulatory Authority to Licensee, and (z) provide copies of any written correspondence received from the applicable Regulatory Authorities with respect to any Imported Product Regulatory Approvals to Licensee, in each case, promptly after receipt thereof.

(h)          Spectrum shall not, and shall use commercially reasonable efforts to cause its Affiliates and any Non-Spectrum Foreign Marketing Approval Holder to not, interact or communicate with the CFDA regarding the Imported Product Regulatory Approvals without the prior approval or participation of Licensee.

(i)          If at any time Spectrum, its Affiliates or any Non-Spectrum Foreign Marketing Approval Holder are permitted by the applicable Regulatory Authority to transfer the Imported Product Regulatory Approval to Licensee, Spectrum shall, and hereby does, and shall cause its Affiliates and any Non-Spectrum Foreign Marketing Approval Holder to, assign to Licensee or its designated Affiliate, all rights, title and interests in and to such Imported Product Regulatory Approvals and related Regulatory Submissions for the Product in the Field in the Territory. Spectrum agrees and covenants that it shall, and shall cause it Affiliates and any Non-Spectrum Foreign Marketing Approval Holder to, promptly take any and all actions necessary to effectuate the prompt assignment of such Imported Product Regulatory Approvals and related Regulatory Submissions, or to enable Licensee or its designated Affiliate to obtain new Imported Product Regulatory Approvals or related Regulatory Submissions, including executing and delivering all documents or instruments, and providing all copies of documents or information, that may be necessary, required or which Licensee or its designated Affiliate may request.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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4.2          Development.

4.2.1       General. Licensee shall take the lead in, and be responsible for, conducting the Development activities, including clinical trials, as may be reasonably necessary to expeditiously obtain Regulatory Approvals for the Product for use in the Field in the Licensee Territory. Except as otherwise provided herein, it is understood and agreed that, as between the Parties, all Development efforts for the Product for use in the Field in the Licensee Territory shall be at the sole expense of Licensee.

4.2.2       Clinical Trials. If additional clinical trials are required in the Licensee Territory, Licensee shall promptly inform JPC and shall not conduct any clinical trial without the prior approval of the JPC in accordance with Section 2.3.

4.2.3       Development Assistance. Promptly after the Effective Date, but not to exceed thirty (30) days following the Effective Date, Spectrum shall, at its own cost and expense, make available to Licensee the Spectrum Know-How that exists on the Effective Date and was not previously provided to Licensee (but without an obligation for Spectrum personnel to travel) including all Spectrum Know-How developed, collected, or submitted as part of an investigational new drug application or similar application or submission filed with or submitted to any Regulatory Authority to obtain permission to commence clinical trials in relation to the Product in any particular jurisdiction (the “Initial Transfer”). For clarity, the Initial Transfer shall not require Spectrum to conduct any new Development work or prepare or complete any reports not already completed. After the Initial Transfer, Spectrum shall provide Licensee with reasonable assistance regarding scientific, clinical and/or manufacturing matters (including the chemistry, manufacture and controls of the Product) in the Development of the Product in the Field in the Licensee Territory. Such assistance shall include the transfer of additional Spectrum Know How to Licensee and reasonable access to Spectrum personnel involved in the research and Development of the Product, either in-person or by teleconference.

4.2.4       Diligence. Licensee shall use Commercially Reasonable Efforts to Develop and obtain and maintain Regulatory Approval for the Product for at least one indication in the Field in the Licensee Territory and shall not take actions that would be reasonably likely to create a Material Impact. Licensee will have no other diligence obligations with respect to the Development of the Product under this Agreement.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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4.3          Commercialization.

4.3.1       General. Except as otherwise provided herein, it is understood and agreed that, as between the Parties, all Commercialization efforts for the Product for use in the Field in the Licensee Territory shall be at the sole expense of Licensee.

4.3.2       Diligence. Licensee will use Commercially Reasonable Efforts to Commercialize the Product in the Field in each country in the Licensee Territory in which Regulatory Approval is received and shall not take actions that would be reasonably likely to create a Material Impact. Without limiting the foregoing, Licensee agrees to, directly or through one or more of its Affiliates, use Commercially Reasonable Efforts (i) to launch the Product for use in the Field as soon as practicable in the Licensee Territory, and thereafter (ii) to market, promote and sell the Product in the Field throughout the Licensee Territory to maximize Net Sales with respect thereto. Licensee will have no other diligence obligations with respect to the Commercialization of the Product under this Agreement.

4.3.3       Pricing. Licensee shall have the sole right to determine pricing of the Product in the Field in the Licensee Territory, provided, that Licensee and Spectrum shall discuss the pricing strategy for the Licensee Territory.

4.3.4       Trademarks.

(a)          Licensee Trademarks. Licensee shall have the right to select the Product names and all trademarks, including any Spectrum Trademarks (subject to Section 4.3.4(b) and only to the extent Spectrum has the right to grant a license to such Spectrum Trademarks to Licensee), used in connection with the Commercialization of the Product for use in the Field, including special promotional or advertising taglines, in each case in the Licensee Territory (all such trademarks, other than the Spectrum Trademarks, specific to the Product and including all goodwill associated therewith, and all applications, registrations, extensions and renewals relating thereto, shall be referred to as the “Licensee Trademarks”). Licensee shall be the exclusive owner of the Licensee Trademarks, and shall use Commercially Reasonable Efforts to register and maintain, at its expense, such Licensee Trademarks as shall be used for Commercialization of the Product for use in the Field in the Licensee Territory.

(b)          Reference to Spectrum as Licensor.

(i)          Spectrum Trademarks. To the extent permitted by Applicable Laws, at Spectrum’s election, the labels and packaging of the Product and all promotional materials for the Product shall include text identifying Spectrum as the licensor of the Product and a Spectrum Trademark to be placed in a size and location reasonably agreed to by the Parties, provided, that such mark: (i) is used in a consistent and noticeable manner sufficient to constitute trademark usage under Applicable Laws, (ii) is clearly identified as a trademark (i.e., through the use of a “®”, “™” or other appropriate identifier), (iii) is not used as combination marks with other marks or trademarks, and (iv) is reasonably less prominent in size and location as the Licensee Trademarks. Licensee shall obtain Spectrum’s review and approval prior to the first use of the Spectrum Trademarks in such labeling, packaging or promotional materials, such approval not to be unreasonably withheld if the Spectrum Trademarks are used in a manner that is consistent with Spectrum’s reasonable usage guidelines for such Spectrum Trademarks.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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(ii)         Trademark License. In connection with Section 4.3.4(b)(i) above, Spectrum hereby grants to Licensee an exclusive license to use the Spectrum Trademarks (except with respect to the Spectrum’s trade name under which such license to use is non-exclusive) for the packaging, labeling, marketing, promotion, distribution and sale of the Product for use in the Field in the Licensee Territory in accordance with this Agreement, and Licensee shall have the right to exercise such license through its Affiliates, provided, that Licensee shall be responsible for the failure by its Affiliates to comply with, and Licensee guarantees the compliance by each of its Affiliates with, the terms of this Agreement including all relevant restrictions, limitations and obligations. Spectrum shall own all right, title and interest in and to the Spectrum Trademarks and the registrations thereof and all goodwill from the use of the Spectrum Trademarks shall vest in and inure to the benefit of Spectrum. Spectrum shall use Commercially Reasonable Efforts to register and maintain, at Licensee’s expense, such Spectrum Trademarks as shall be used for Commercialization of the Product for use in the Field in the Licensee Territory.

(c)          Spectrum Product Marks. Spectrum shall have the right, but not the obligation, to brand the Product for use in the Field in the Spectrum Territory using the Licensee Trademarks (“Spectrum Product Marks”). Accordingly, Licensee shall provide to Spectrum copy proofs of each Licensee Trademark and reasonable usage guidelines therefor as such mark is registered with the applicable Regulatory Authorities in the Licensee Territory for Spectrum’s review and consideration. Spectrum shall obtain Licensee’s review and approval prior to the first use of the Spectrum Product Marks in such labeling, packaging or promotional materials, such approval not to be unreasonably withheld if the Spectrum Product Marks are used in a manner that is consistent with Licensee’s reasonable usage guidelines for such Spectrum Product Marks. Subject to this Section 4.3.4(c), Licensee further hereby grants to Spectrum an exclusive license to use the Spectrum Product Marks (except with respect to the Licensee’s trade name under which such license to use is non-exclusive), to the extent Spectrum Product Marks exist in the Spectrum Territory, consistent with the usage guidelines applicable to Licensee and its Affiliates’ use of such Licensee Trademarks in the Licensee Territory solely in connection with the Development and Commercialization of the Product solely for use in the Field and solely in the Spectrum Territory for the packaging, labeling, marketing, promotion, distribution and sale of the Product for use in the Field in the Spectrum Territory in accordance with this Agreement, and Spectrum shall have the right to exercise such license through its Affiliates or sublicense a Third Party, provided, that Spectrum shall be responsible for the failure by its Affiliates or Third Party sub-licensees to comply with, and Spectrum guarantees the compliance by each of its Affiliates with, the terms of this Agreement including all relevant restrictions, limitations and obligations. Licensee shall own all right, title and interest in and to any Spectrum Product Marks and the registrations thereof and all goodwill from the use of the Spectrum Product Marks shall vest in and inure to the benefit of Licensee. The above notwithstanding, Licensee shall have the right, but not the obligation, to register or maintain any Spectrum Product Marks in the Spectrum Territory.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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4.4          Reporting. Without limiting any other provisions of this Agreement, Licensee shall keep Spectrum reasonably informed through the JPC as to the progress of its activities with respect to the Development and Commercialization of the Product or otherwise under this Article 4 and provide such reports and information with respect thereto as designated by the JPC or as may be reasonably requested by Spectrum. In addition, Licensee shall promptly notify Spectrum if it anticipates or there are material deviations from the Commercialization Plan(s) or any development diligence requirement, and shall discuss in good faith and keep Spectrum informed as to any corrective actions that it intends or is taking to address such deviations.

4.5          Manufacturing and Supply.

4.5.1       No Manufacturing Rights. Spectrum retains all rights with respect to manufacturing of the Product.

4.5.2       Supply. Subject to the terms and conditions of this Agreement, Spectrum shall use Commercially Reasonable Efforts to supply or have supplied to Licensee or its designee all quantities of the Product ordered by Licensee for use in the Field in the Licensee Territory in accordance with a separate written agreement to be negotiated between the Parties pursuant to Section 4.5.3 below (a “Supply Agreement”). Licensee shall solely purchase from Spectrum its entire requirement of the Product and Spectrum shall have the right to manufacture and have manufactured such quantities of the Product for Licensee.

4.5.3       Supply Agreement. Within ninety (90) days of the Effective Date, the Parties shall negotiate and execute a Supply Agreement for the supply by Spectrum to Licensee of the requirements of the Product ordered by Licensee for Development and Commercialization in the Licensee Territory.

4.5.4       Supply Price and Adjustment. The price per unit of each Product supplied by Spectrum under the Supply Agreement shall be equal to Spectrum’s Manufacturing Cost (as may change from time to time) for such Product plus ***.

4.5.5       Quality Agreement. Within ninety (90) days of executing the Supply Agreement, Spectrum and Licensee shall execute a mutually acceptable quality agreement that allocates roles and responsibilities to each Party with respect to quality control and regulatory compliance with respect to supply of the Product to Licensee.

Article 5
PAYMENTS

5.1          Upfront Equity Consideration. As consideration for the licenses granted under Section 3.1 and Licensee’s other rights under this Agreement, Licensee shall issue 2,176,755 shares of Licensee’s common stock, par value $0.01 per share (the “Common Stock”) in accordance with the terms and conditions of that certain investment agreement between the Parties as of the even date hereof (the “Investment Agreement”).

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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5.2         Payments to Upstream Licensors.

5.2.1       Payments. Licensee shall pay to Spectrum any and all payments due from Spectrum to *** under the Upstream Licenses on account of the Development and/or Commercialization of the Product in the Field in the Licensee Territory by Licensee and its Affiliates and sublicensees (the “Upstream Payments”) including running royalty payments; provided that if Licensee is obligated to make any Upstream Payments due to the achievement of a milestone, Licensee shall only pay: (a) a prorated portion of any Upstream Payments triggered by the occurrence of a sales milestones reached in part due to sales by Licensee in the Licensee Territory; and (b) any Upstream Payments triggered by the occurrence of a development milestone wherein the trigger is explicitly defined as the achievement of a milestone in the Licensee Territory or achieved as a direct result of Licensee’s Development of the Product in the Licensee Territory. As an example of Licensee’s obligation to only pay a prorated portion of an Upstream Payment triggered by the occurrence of a sales milestone, if (x) a sales milestone payment of $10,000,000 is triggered due to the occurrence of aggregate annual sales of the Product within a territory covering the Licensed Territory reaching a certain threshold and (y) at the triggering of the sales milestone payment, Licensee’s annual sales of the Product in the Licensee Territory for the year the payment is triggered account for 10% of total sales of the Product in a territory which covers the Licensee Territory, then (z) Licensee shall pay $1,000,000 of that $10,000,000 sales milestone payment. Except for (i) the upfront equity consideration under Section 5.1, and (ii) the Upstream Payments under this Section 5.2.1, no payment shall be due from Licensee to Spectrum for the Development and/or Commercialization of the Product in the Field in the Licensee Territory.

5.2.2       Payment Reports and Payments. For as long as Licensee is obligated to make the Upstream Payments in accordance with Section 5.2.1, within thirty (30) days after the last day of each calendar quarter, Licensee will deliver to Spectrum a report of Net Sales of the Product by Licensee, its Affiliates and sublicensees during the preceding quarterly period (any such period, a “Payment Period”), with all the Upstream Payments in accordance with Section 5.2.1, if any, for the Payment Period covered by such report being due no later than forty (40) days after the last day of such Payment Period. For any Upstream Payments triggered due to the occurrence of a sales milestone, Spectrum shall provide Licensee with an invoice no later than twenty (20) days before such Upstream Payment is due if feasible or such other documentation and such invoice or documentation will set forth: (a) the Licensee’s prorated portion of such Upstream Payment, (b) how the Licensee’s prorated portion of the Upstream Payment was calculated and reasonable support for the calculation, and (c) the date when such Upstream Payment is due. In relation to any Upstream Payment, which Spectrum claims is triggered due to the occurrence of a development milestone achieved as a direct result of Licensee’s Development of the Product in the Licensee Territory (other than wherein the trigger is explicitly defined as the achievement of a milestone in the Licensee Territory), Spectrum shall provide Licensee with information, reasonably requested by Licensee, regarding the Development of the Product in the Spectrum Territory sufficient for Licensee to determine whether Licensee’s Development has triggered such an Upstream Payment.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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5.3          Payment Method. All payments due under this Agreement to Spectrum shall be made by bank wire transfer in immediately available funds to an account designated by Spectrum. All payments hereunder shall be made in the legal currency of the United States of America, and all references to “$” or “Dollars” shall refer to United States dollars. To the extent that Applicable Law imposes withholding taxes on any payments from Licensee to Spectrum pursuant to this Agreement, Licensee may withhold such taxes and pay such amounts to the relevant government authority. For any Upstream Payments where Spectrum cannot reduce any amounts owed to the Upstream Licensor under the applicable Upstream License with respect to withholding taxes paid by the Licensee under this Agreement, all amounts payable to Spectrum pursuant to this Agreement shall be made without reduction for any withholding or similar taxes paid by Licensee. For any Upstream Payments where Spectrum can reduce any amounts owed to the Upstream Licensor under the applicable Upstream License with respect to withholding taxes paid by the Licensee under this Agreement, the Licensee may deduct from the amounts payable to Spectrum pursuant to this Agreement any withholding or similar taxes paid by Licensee. Licensee shall furnish to Spectrum appropriate evidence of payment of such taxes or other amount required by Applicable Laws to be deducted from any payment due under this Agreement to Spectrum, including any tax or withholding levied by a foreign taxing authority in respect of such payment.

5.4          Support Fees. Spectrum will provide to Licensee at its own expense: (a) *** (***) hours of regulatory and development support during the first Agreement Year, and (b) *** (***) hours of regulatory and development support for each Agreement year after the first anniversary of the Effective Date. Regulatory and development support provided by Spectrum to Licensee, in excess of the number of free hours, set forth above, in any Agreement Year, shall be charged at a rate of $*** per hour. For clarity, the costs incurred by Spectrum to provide the Initial Transfer under Section 4.2.3 shall also be borne by Spectrum and shall not be charged to Licensee or counted toward the hours set out in the this Section that Spectrum will provide to Licensee at its own expense.

5.5         Records; Audit. The Parties will, and will cause its Affiliates to, keep and maintain for three (3) years after the relevant calendar quarter complete and accurate books and records in sufficient detail so that Net Sales and payments made hereunder can be properly calculated. No more frequently than once during each calendar year during the Term and once during the three (3) year period thereafter, the Parties will permit independent third party auditors appointed by Spectrum, ***, or Licensee (the party requesting an audit, the “Auditing Party”) and with at least forty-five (45) days advance notice at any time during normal business hours, accompanied at all times, to inspect, audit and copy reasonable amounts of relevant accounts and records of the non-Auditing Party and its Affiliates and reports submitted to the non-Auditing Party and its Affiliates by its sublicensees pertaining to a payment period that is not earlier than thirty-six (36) months from the date of conclusion of the audit, for the sole purpose of verifying the accuracy of the calculation of Upstream Payments to Spectrum pursuant to this Article 5. The accounts, records and reports related to any particular period of time may only be audited one time under this Section 5.5. The Auditing Party will cause their independent third party auditors not to provide the Auditing Party with any copies of such accounts, records or reports and not to disclose to the Auditing Party any information other than information relating solely to the accuracy of the accounting and payments made by Licensee pursuant to this Article 5. The Auditing Party will cause its independent third party auditors to promptly provide a copy of their report to non-Auditing Party. If such audit determines that payments are due to Spectrum, Licensee will pay to Spectrum any such additional amounts within ten (10) Business Days after the date on which such auditor’s written report is delivered to Licensee and the Auditing Party, unless such audit report is disputed by Licensee, in which case the dispute will be resolved in accordance with Article 10. If such audit determines that Licensee has overpaid any amounts to Spectrum, Spectrum will refund any such overpaid amounts to Licensee within ten (10) Business Days after the date on which such auditor’s written report is delivered to Licensee and the Auditing Party. Any such inspection of records will be at the Auditing Party’s expense unless such audit discloses a deficiency or overpayment in the payments made by Licensee (whether for itself or on behalf of its Affiliates) of more than *** percent (***%) of the aggregate amount payable for the relevant period, in the case of such a deficiency, Licensee will bear the cost of such audit, or in the case of such overpayment caused by Spectrum, Spectrum shall bear the cost of such audit. Each of the parties agree that all information subject to review under this Section 5.5 is non-Auditing Party’s Confidential Information that is subject to confidentiality and non-use obligations under Section 7.2, and Auditing Party agrees that it shall cause its independent third party auditors to also retain all such information subject to the non-disclosure and non-use restrictions of Section 7.2 or similar (but no less stringent) obligations of confidentiality and non-use customary in the accounting industry.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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5.6          Late Payment. Any payments or portions thereof due hereunder which are not paid when due shall bear interest equal to the lesser of (i) the rate equal to the thirty (30) day U.S. dollar LIBOR rate effective for the date that payment was due, as published by The Wall Street Journal, Internet Edition at www.wsj.com in the “Money Rates” column, on the date such payment was due, plus an additional *** percent (***%), or (ii) the maximum rate permitted by Applicable Laws, calculated on the number of days such payment is delinquent. This Section 5.6 shall in no way limit any other remedies available to Spectrum.

Article 6
INTELLECTUAL PROPERTY

6.1          Ownership of Inventions.

6.1.1       Ownership.

(a)          Spectrum shall own all right, title and interest to (i) any and all Inventions solely Made by or on behalf of Spectrum or its Affiliates in connection with their activities under this Agreement and (ii) any and all Patents claiming any such Inventions described in the foregoing clause (ii) (collectively, “Spectrum Inventions”).

(b)          Licensee shall own all right, title and interest to (i) any and all Inventions solely Made by or on behalf of Licensee or its Affiliates or sublicensees in connection with their activities under this Agreement, and (ii) any and all Patents claiming any such Inventions described in the foregoing clause (i) (collectively, “Licensee Inventions”).

(c)          The Parties shall jointly own all right, title and interest to (i) any and all Inventions jointly Made by at least one employee, agent, consultant, contractor, Affiliate, or sublicensee of Spectrum and at least one employee, agent, consultant, contractor, Affiliate, or sublicensee of Licensee (each having the obligation to assign such Inventions to either Spectrum or Licensee), and (ii) any and all Patents claiming such Inventions described in the foregoing clause (i) (“Joint Patents” and collectively with Inventions described in clause (i), “Joint Inventions”).

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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(d)          During the Term, Spectrum Inventions and Joint Inventions shall be included in the definition of Spectrum Technology, Spectrum Patents, Spectrum Know-How, and Spectrum Copyrights, as applicable, and subject to the licenses granted under Section 3.1. For the avoidance of doubt, Spectrum reserves the right to use, practice or otherwise exploit any and all Spectrum Inventions and Joint Inventions subject to the licenses granted under Section 3.1.

6.1.2       Interpretation. For purposes of this Section 6.1, “Invention” shall mean any invention (whether or not patentable), data, results, ideas, discovery, development, method, process, know-how, works of authorship or other information that is Made by or on behalf of a Party or the Parties; and “Made” shall mean developed, conceived, authored, acquired or created by or on behalf of a Party or the Parties. It is understood that except as expressly set forth under this Section 6.1, inventorship, authorship and other indicia of which Party Made an Invention will be determined in accordance with United States or the relevant foreign Intellectual Property laws under which the relevant foreign Intellectual Property right exists in effect at the time such Invention was Made.

6.2          License Grant to Spectrum. Licensee hereby grants to Spectrum a perpetual, irrevocable, fully paid-up, royalty free, exclusive license, with the right to grant sublicenses at any tier, under Licensee Know-How (including, without limitation, Licensee Inventions) and Licensee’s rights in the Joint Inventions, to research, Develop, make, have made, use, sell, offer for sale, have sold, import and otherwise Commercialize the Product in the Spectrum Territory.

6.3          Patent Prosecution. Spectrum shall control the Prosecution and Maintenance of Spectrum Patents and Joint Patents. Licensee will bear the costs of Prosecution and Maintenance of all Spectrum Patents and Joint Patents in the Licensee Territory. Costs billed to or incurred by Spectrum for the Prosecution and Maintenance of all Spectrum Patents and Joint Patents in the Licensee Territory will be rebilled to Licensee and are due within thirty (30) days of rebilling by Spectrum.

6.4          Defense of Third Party Infringement Claims. If the Product becomes the subject of a Third Party’s claim or assertion of infringement of a Patent relating to the manufacture, use, sale, offer for sale or importation of the Product for use in the Field in the Licensee Territory, the Party first having notice of the claim or assertion shall promptly notify the other Party, and the Parties shall agree on and enter into a “common interest agreement” wherein such Parties agree to their shared, mutual interest in the outcome of such potential dispute, and thereafter, the Parties shall promptly confer to consider the claim or assertion and the appropriate course of action.

6.5          Enforcement.

6.5.1       Notice. Licensee will promptly report in writing to Spectrum any (a) known or suspected third party infringement of any Spectrum Patents, Spectrum Trademarks, or Spectrum Copyrights, or (b) unauthorized use or misappropriation of any Spectrum Know-How or other Confidential Information by a Third Party of which it becomes aware, and will provide Spectrum with all available evidence supporting such infringement or unauthorized use or misappropriation. Spectrum will promptly report in writing to Licensee any (a) known or suspected third party infringement of any Licensee Inventions, Licensee Trademarks, or Spectrum Product Marks, or (b) unauthorized use or misappropriation of any Licensee Know-How or other Confidential Information by a Third Party of which it becomes aware, and will provide Licensee with all available evidence supporting such infringement or unauthorized use or misappropriation.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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6.5.2       Right to Enforce Spectrum Patents, Spectrum Trademarks or Spectrum Copyrights. Spectrum will have the first right, but not the obligation, to take any reasonable measures it deems appropriate to stop activities in the Licensee Territory infringing the Spectrum Patents, Spectrum Trademarks or Spectrum Copyrights or the use without proper authorization of any Spectrum Know-How, in each case in connection with a Third Party’s manufacture, use, sale, offering for sale, or importation of Product for use in the Field in the Licensee Territory, including initiating or prosecuting an infringement or other appropriate action against. If Spectrum does not initiate any such measures within one hundred twenty (120) days of receiving written notice from Licensee of such activities (or within a reasonable shorter time period if a shorter period to take action is required by Applicable Laws to avoid the loss of legal rights), then Licensee will have the second right, but not the obligation, to take any reasonable measures it deems appropriate to stop such activities, provided, that, Licensee must coordinate and consult with Spectrum regarding such measures and will not take any measures, without the written permission of Spectrum, which permission will not be unreasonably withheld. It shall be reasonable for Spectrum to withhold such permission if Spectrum reasonably believes such measures will affect the protection that any Spectrum-Controlled Intellectual Property affords Spectrum. Licensee will have no right to settle any infringement or misappropriation Action under this Section 6.5.2 in a manner that diminishes the rights or interests of Spectrum without the express written consent of Spectrum. In addition, Licensee will not settle any such action in a manner that admits the invalidity or unenforceability of any Spectrum-Controlled Intellectual Property without obtaining the prior written consent of Spectrum.

6.5.3       Right to Enforce Licensee Inventions, Licensee Trademarks or Spectrum Product Marks. Licensee will have the first right, but not the obligation, to take any reasonable measures it deems appropriate to stop activities in the Spectrum Territory infringing the Licensee Inventions, Licensee Trademarks or Spectrum Product Marks or the use without proper authorization of any Licensee Know-How, in each case in connection with a Third Party’s manufacture, use, sale, offering for sale, or importation of Product for use in the Field in the Spectrum Territory, including initiating or prosecuting an infringement or other appropriate action against. If Licensee does not initiate any such measures within one hundred twenty (120) days of receiving written notice from Spectrum of such activities (or within a reasonable shorter time period if a shorter period to take action is required by Applicable Laws to avoid the loss of legal rights), then Spectrum will have the second right, but not the obligation, to take any reasonable measures it deems appropriate to stop such activities, provided, that, Spectrum must coordinate and consult with Licensee regarding such measures and will not take any measures, without the written permission of Licensee, which permission will not be unreasonably withheld. It shall be reasonable for Licensee to withhold such permission if Licensee reasonably believes such measures will affect the protection that any Licensee -Controlled Intellectual Property affords Licensee. Spectrum will have no right to settle any infringement or misappropriation Action under this Section 6.5.3 in a manner that diminishes the rights or interests of Licensee without the express written consent of Licensee. In addition, Spectrum will not settle any such action in a manner that admits the invalidity or unenforceability of any Licensee-Controlled Intellectual Property without obtaining the prior written consent of Licensee.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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6.5.4       Right to Enforce Joint Patents or Joint Inventions. Spectrum will have the first right, but not the obligation, to take any reasonable measures it deems appropriate to stop activities in the Licensee Territory infringing the Joint Patents or Joint Inventions or the use without proper authorization of any Joint Invention, in each case in connection with a Third Party’s manufacture, use, sale, offering for sale, or importation of Product for use in the Field in the Territory, including initiating or prosecuting an infringement or other appropriate action against. If Spectrum does not initiate any such measures within one hundred twenty (120) days of becoming aware of such activities (or within a reasonable shorter time period if a shorter period to take action is required by Applicable Laws to avoid the loss of legal rights), then Licensee will have the second right, but not the obligation, to take any reasonable measures it deems appropriate to stop such activities in the Licensee Territory, provided, that, Licensee must coordinate and consult with Spectrum regarding such measures and will not take any measures, without the written permission of Spectrum, which permission will not be unreasonably withheld. Licensee will have no right to settle any infringement or misappropriation Action under this Section 6.5.4 in a manner that diminishes the rights or interests of Spectrum without the express written consent of Spectrum. In addition, Licensee will not settle any such action in a manner that admits the invalidity or unenforceability of any Joint Patent or Joint Inventions without obtaining the prior written consent of Spectrum.

6.5.5       Cooperation. The Party commencing, controlling or defending any enforcement action under this Section 6.5 (the “Enforcing Party”) shall keep the other Party reasonably informed of the progress of such action, and such other Party shall have the right to participate with counsel of its own choice at its own expense. In any event, the other Party shall reasonably cooperate with the Enforcing Party, including providing information and materials, at the Enforcing Party’s request and expense.

6.5.6       Recoveries. Any recovery received as a result of any enforcement action to enforce any Intellectual Property pursuant to this Section 6.5 shall be used first to reimburse the Enforcing Party for the costs and expenses (including court, attorneys’ and professional fees) incurred in connection with such action, and the remainder of the recovery shall be shared as following: (i) if the enforcement action is filed in the Enforcing Party’s territory, one hundred percent (100%) of such recovery shall be paid to the Enforcing Party, and (ii) if the enforcement action is not filed in the Enforcing Party’s territory, *** percent (***%) of such recovery shall be paid to the Enforcing Party and *** percent (***%) of such recovery shall be paid to the other Party.

6.5.7       Patents Claiming Spectrum Inventions. During the Term, Patents claiming Spectrum Inventions that are necessary or useful for the Development and Commercialization of the Product shall be deemed Spectrum Patents and the enforcement thereof shall be subject to Sections 6.5.1- 6.5.6 above.

6.6           Patent Marking. At Spectrum’s request, Licensee shall mark (or cause to be marked) the Product marketed and sold hereunder with appropriate Spectrum Patent numbers or indicia in accordance with Applicable Laws.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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Article 7
CONFIDENTIALITY

7.1          Confidentiality; Exceptions. Except to the extent expressly authorized by this Agreement or otherwise agreed by the Parties in writing, the Parties agree that the receiving Party shall keep confidential and shall not publish or otherwise disclose or use for any purpose other than as provided for in this Agreement any confidential or proprietary information or materials furnished to it by the other Party pursuant to this Agreement (collectively, “Confidential Information”). Notwithstanding the foregoing, Confidential Information shall not be deemed to include information or materials to the extent that it can be established by written documentation by the receiving Party that such information or material:

7.1.1       was already known to or possessed by the receiving Party without any obligation of confidentiality, at the time of its disclosure to the receiving Party hereunder;

7.1.2       was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving Party hereunder;

7.1.3       became generally available to the public or otherwise part of the public domain after its disclosure hereunder other than through any act or omission of the receiving Party in breach of this Agreement;

7.1.4       was independently developed by the receiving Party without use of or reference to the other Party’s Confidential Information as demonstrated by documented evidence prepared by the receiving Party contemporaneously with such independent development; or

7.1.5       was disclosed to the receiving Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the disclosing Party not to disclose such information to others.

7.2          Authorized Use and Disclosure. Each Party may use and disclose Confidential Information of the other Party as follows: (i) under appropriate confidentiality provisions substantially equivalent to those in this Agreement in connection with the performance of its obligations or exercise of rights granted to such Party in this Agreement; (ii) to the extent such disclosure is reasonably necessary for the Prosecution and Maintenance of Patents (including applications therefor) in accordance with this Agreement, prosecuting or defending litigation, complying with applicable governmental regulations, filing for, conducting preclinical or clinical trials, obtaining and maintaining regulatory approvals (including Regulatory Approvals), or otherwise required by Applicable Laws or the rules of a recognized stock exchange, provided, that if a Party is required by Applicable Laws or stock exchange to make any such disclosure of the other Party’s Confidential Information it will, except where impracticable for necessary disclosures (for example, in the event of medical emergency), give reasonable advance notice to the other Party of such disclosure requirement and, except to the extent inappropriate in the case of patent applications, will use its reasonable efforts to secure confidential treatment of such Confidential Information required to be disclosed; (iii) to its Affiliates and sublicensees, in each case under appropriate confidentiality provisions substantially equivalent to those of this Agreement; (iv) in communication with existing and potential investors, acquirers, consultants, advisors (including financial advisors, lawyers and accountants) and others on a need to know basis, in each case under appropriate confidentiality provisions substantially equivalent to those of this Agreement; or (v) to the extent mutually agreed to by the Parties.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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7.3          Prior Agreements. This Agreement supersedes the Confidentiality Agreement between Spectrum and Licensee dated January 28, 2014 (the “Prior CDA”) with respect to information disclosed thereunder. All information or materials disclosed or provided by Spectrum to Licensee under the Prior CDA shall be deemed Confidential Information of Spectrum (subject to the exceptions set forth herein) and shall be subject to Licensee’s confidentiality obligations under this Article 7. All information disclosed by Licensee under the Prior CDA shall be deemed Confidential Information of Licensee (subject to the exceptions set forth herein) and shall be subject to Spectrum’s confidentiality obligations under this Article 7.

7.4          Scientific Publications. Licensee shall submit to Spectrum any proposed publication or public disclosure containing clinical or scientific results relating to the Product for use in the Field at least sixty (60) days in advance to allow Spectrum to review such proposed publication or disclosure. Spectrum shall notify Licensee in writing during such sixty (60)-day reviewing period if Spectrum wishes to (a) remove its Confidential Information from such proposed publication or presentation, in which event Licensee shall remove such Confidential Information from its proposed publication or presentation; or (b) request a reasonable delay in publication or presentation in order to protect patentable information, in which event Licensee shall delay the publication or presentation for a period of no more than one hundred twenty (120) days to enable patent applications to be filed in accordance with Section 6.3 protecting inventions disclosed in such publication or presentation. For clarity, if Spectrum fails to notify Licensee during the sixty (60)-day reviewing period as provided under this Section 7.4, Licensee shall be free to proceed with the proposed publication or presentation.

7.5          Publicity.

7.5.1       Confidential Terms. Each of the Parties agrees not to disclose to any Third Party the terms and conditions of this Agreement without the prior approval of the other Party, except to advisors (including consultants, financial advisors, attorneys and accountants), potential and existing investors and acquirers on a need to know basis, in each case under circumstances that reasonably protect the confidentiality thereof, or to the extent necessary to comply with the terms of agreements with Third Parties, or to the extent required by Applicable Laws, including securities laws. Notwithstanding the foregoing, the Parties agree upon the initial press release(s) to announce the execution of this Agreement, which is attached hereto as Exhibit 7.5.1; thereafter, Spectrum and Licensee may each disclose to Third Parties the information contained in such press release(s) without the need for further approval by the other.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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7.5.2       Publicity Review. The Parties acknowledge the importance of supporting each other’s efforts to publicly disclose results and significant developments regarding the Product for use in the Field in the Licensee Territory and other activities in connection with this Agreement, beyond what may be strictly required by Applicable Laws and the rules of a recognized stock exchange, and each Party may make such disclosures from time to time with the approval of the other Party, which approval shall not be unreasonably withheld, conditioned or delayed. Such disclosures may include achievement of significant events in the Development (including regulatory process) or Commercialization of the Product for use in the Field in the Licensee Territory. Unless otherwise requested by Spectrum, Licensee shall indicate that Spectrum is the owner and licensor of the Product and Spectrum Technology in each public disclosure issued by Licensee regarding the Product. When Spectrum elects to make any such public disclosure under this Section 7.5.2, it will give Licensee reasonable notice to review and comment on such statement, it being understood that if Licensee does not notify Spectrum in writing within a three (3) Business Day period or such shorter period if required by Applicable Laws of any reasonable objections, as contemplated in this Section 7.5.2, such disclosure shall be deemed approved, and in any event Licensee shall work diligently and reasonably to agree on the text of any proposed disclosure in an expeditious manner. The principles to be observed in such disclosures shall be accuracy, compliance with Applicable Laws and regulatory guidance documents, reasonable sensitivity to potential negative reactions of applicable Regulatory Authorities and the need to keep investors and others informed regarding the requesting Party’s business, including as required by the rules of a recognized stock exchange.

Article 8
REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION

8.1          Licensee Representations and Warranties. Licensee represents and warrants to Spectrum that:

8.1.1       it is duly organized and validly existing under the Applicable Laws of the jurisdiction of its incorporation, and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof;

8.1.2       it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the person executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate action;

8.1.3       this Agreement is legally binding upon it and enforceable in accordance with its terms and the execution, delivery and performance of this Agreement by it does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material Applicable Laws;

8.1.4       Licensee, its Affiliates and their employees and contractors have not and shall not, in connection with the performance of their respective obligations under this Agreement directly or indirectly through Third Parties, pay, promise or offer to pay, or authorize the payment of, any money or give any promise or offer to give, or authorize the giving of anything of value to a public official or entity or other person for purpose of obtaining or retaining business for or with, or directing business to, any person, including Licensee (it being understood that, without any limitation to the foregoing, Licensee, and to its knowledge, its and its Affiliates’ employees and contractors, has not directly or indirectly promised, offered or provided any corrupt payment, gratuity, emolument, bribe, kickback, illicit gift or hospitality or other illegal or unethical benefit to a public official or entity or any other person in connection with the performance of Licensee’s obligations under this Agreement, and shall not, directly or indirectly, engage in any of the foregoing). Notwithstanding the foregoing, the intent of this warranty is to ensure compliance with the US Foreign Corrupt Practices Act of 1977, as amended, UK Bribery Act, and any rules or regulations thereunder or any similar anti-corruption or anti-bribery laws applicable to company or any of its affiliates or subsidiaries (in each case, as in effect at the time of such action).  Licensee will certify annually to conducting an effective compliance program and Spectrum will have rights to audit the Company’s compliance program periodically; and

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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8.1.5       it is not aware of any action, suit or inquiry or investigation instituted by any Person which questions or threatens the validity of this Agreement.

8.2           Spectrum’s Warranties. Spectrum represents and warrants to Licensee, as of the Effective Date, that:

8.2.1       it is duly organized and validly existing under the Applicable Laws of the jurisdiction of its incorporation, and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof;

8.2.2       it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the person executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate action;

8.2.3       this Agreement is legally binding upon it and enforceable in accordance with its terms and the execution, delivery and performance of this Agreement by it does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material Applicable Laws;

8.2.4       it has the full right, power and authority under the Spectrum Technology, Spectrum Trademarks, and the Upstream Licenses to grant the licenses to Licensee as purported to be granted pursuant to this Agreement;

8.2.5       as of the Effective Date, it has provided complete and unredacted copies of the Upstream Licenses and any relevant ancillary agreements, exhibits, schedules, or other documents including any and all amendments thereto) which set forth and are sufficient to fully describe all the terms and conditions with which Licensee must comply in relation to the Upstream Licenses;

8.2.6       the Upstream Licenses represent all the material agreements Spectrum or its Affiliates have entered into that may affect Licensee’s exercise of the rights granted under this Agreement;

8.2.7       it is not aware of any action, suit or inquiry or investigation instituted by any Person which questions or threatens the validity of this Agreement;

8.2.8       as of the Effective Date, Spectrum has not granted, and will not grant during the Term, rights to any Third Party under the Spectrum Technology that conflict with the rights granted to Licensee hereunder;

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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8.2.9       as of the Effective Date, Spectrum has not received any written notice of any threatened claims or litigation seeking to invalidate or otherwise challenge the Spectrum Patents or Spectrum’s rights therein;

8.2.10     to its actual knowledge, as of the Effective Date, none of the Spectrum Patents are subject to any pending re-examination, opposition, interference or litigation proceedings; and

8.2.11     to its actual knowledge, as of the Effective Date, the performance of Development and Commercialization activities in accordance with this Agreement will not infringe any Intellectual Property rights of any Third Party in the Licensee Territory, including any issued patent of any Third Party in the Licensee Territory or, if and when issued, any claim within any published patent application of any Third Party in the Licensee Territory.

8.3          Disclaimer of Warranties. EXCEPT AS SET FORTH IN THIS Article 8, SPECTRUM AND LICENSEE EXPRESSLY DISCLAIM ANY WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT (INCLUDING THE LICENSED TECHNOLOGY), INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, NONINFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE.

8.4          Spectrum’s Representations, Warranties, and Covenants. Spectrum represents, warrants and covenants to Licensee and agrees that:

8.4.1       it and its Affiliates are in compliance, and it shall comply, and shall cause its Affiliates to comply, in all material respects, with all Upstream Licenses;

8.4.2       it shall not, during the Term, amend any Upstream License in any manner that adversely affects the rights granted to Licensee hereunder or Spectrum’s ability to materially perform its obligations hereunder; and

8.4.3       it and its Affiliates shall not, during the Term, do or fail to do any acts, which cause to be terminated or result in the termination of any Upstream Licenses or result in the loss of any rights under any Upstream Licenses, which would adversely affect the rights granted to Licensee hereunder or Spectrum’s ability to materially perform its obligations hereunder.

8.5          Indemnification.

8.5.1       Indemnification by Spectrum. Spectrum hereby agrees to defend, hold harmless and indemnify (collectively, “Indemnify”) Licensee and its Affiliates, and its and their agents, directors, officers and employees (the “Licensee Indemnitees”) from and against any liability or expense (including reasonable legal expenses and attorneys’ fees) (collectively, “Losses”) resulting from suits, claims, actions and demands, in each case brought by a Third Party (each, a “Third-Party Claim”) against any Licensee Indemnitee arising out of: (i) a breach of any of Spectrum’s representations and warranties under Section 8.2 or representations, warranties and covenants under Section 8.4; (ii) the Development, Commercialization or other exploitation of the Product by Spectrum, its Affiliates, or sub-licensees in the Spectrum Territory; or (iii) the gross negligence or intentional misconduct of any Spectrum Indemnities. Spectrum’s obligation to Indemnify the Licensee Indemnitees pursuant to this Section 8.5.1 shall not apply to the extent that any such Losses (A) arise from the gross negligence or intentional misconduct of any Licensee Indemnitee; (B) arise from any breach by Licensee of this Agreement; or (C) are Losses for which Licensee is obligated to Indemnify the Spectrum Indemnitees pursuant to Section 8.5.2.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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8.5.2       Indemnification by Licensee. Licensee hereby agrees to Indemnify Spectrum and its Affiliates, and its and their agents, directors, officers and employees (the “Spectrum Indemnitees”) from and against any and all Losses resulting from Third-Party Claims arising out of: (i) a breach of any of Licensee’s representations and warranties under Section 8.1; (ii) the Development, Commercialization or other exploitation of the Product by the Licensee, its Affiliates, or sub-licensees in the Licensee Territories; or (iii) the gross negligence or intentional misconduct of any Licensee Indemnities. Licensee’s obligation to Indemnify the Spectrum Indemnitees pursuant to this Section 8.5.1 shall not apply to the extent that any such Losses (A) arise from the gross negligence or intentional misconduct of any Spectrum Indemnitee; (B) arise from any breach by Spectrum of this Agreement; or (C) are Losses for which Spectrum is obligated to Indemnify the Licensee Indemnitees pursuant to Section 8.5.1.

8.5.3       Additional Indemnities.

(a)          In addition to the indemnities set forth in Section 8.5.1, Spectrum hereby agrees to Indemnify the Licensee Indemnitees from and against any and all Losses resulting from any breach by Spectrum of Section 3.1 (Grant to Licensee), Section 4.1.4 (Rights of Reference), Section 4.2.3 (Development Assistance), or Section 8.4.3 (Spectrum’s Representations, Warranties, and Covenants), as single event or in combination with one or more breaches, that: (i) has a material adverse effect on Licensee’s Development or Commercialization of the Product in the Licensee Territory, and (ii) if curable, shall have continued uncured for ninety (90) days after written notice thereof was provided to Spectrum by Licensee.

(b)          In addition to the indemnities set forth in Section 8.5.2, Licensee hereby agrees to Indemnify the Spectrum Indemnitees from and against any and all Losses resulting from any breach by Licensee of Section 3.1 (Grant to Licensee), Section 3.2.1 (Licensee Rights Limited to the Field and the Licensee Territory), Section 3.3 (Upstream Licenses), or Sections 4.2.4 and 4.3.2 (Diligence), as single event or in combination with one or more breaches, that: (i) has a material adverse effect on Spectrum’s rights under the Upstream Licenses, and (ii) if curable, shall have continued uncured for ninety (90) days after written notice thereof was provided to Licensee by Spectrum.

8.5.4       Procedure. To be eligible to be Indemnified hereunder, the indemnified Party shall provide the indemnifying Party with prompt notice of the Third-Party Claim giving rise to the indemnification obligation pursuant to this Section 8.5 and the exclusive ability to defend (with the reasonable cooperation of the indemnified Party) or settle any such claim, provided, that the indemnifying Party shall not enter into any settlement that admits fault, wrongdoing or damages without the indemnified Party’s written consent, such consent not to be unreasonably withheld or delayed. The indemnified Party shall have the right to participate, at its own expense and with counsel of its choice, in the defense of any claim or suit that has been assumed by the indemnifying Party, provided, that the indemnifying Party shall have no obligations with respect to any Losses resulting from the indemnified Party’s admission, settlement or other communication without the prior written consent of the indemnifying Party.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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8.6          NO CONSEQUENTIAL DAMAGES. NOTWITHSTANDING THE FOREGOING, IN NO EVENT WILL EITHER PARTY BE LIABLE TO OTHER PARTY FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES UNDER THIS AGREEMENT, EXCEPT TO THE EXTENT THE DAMAGES RESULT FROM A PARTY’S BREACH OF CONFIDENTIALITY OBLIGATIONS HEREUNDER, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR ARISE FROM EITHER PARTY’S INDEMNIFICATION OBLIGATIONS UNDER THIS Article 8 OR EITHER PARTY’S MATERIAL BREACH UNDER SECTION 9.10.

8.7          MAXIMUM LIABILITY. EXCEPT FOR A PARTY’S BREACH OF CONFIDENTIALITY OBLIGATIONS HEREUNDER, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, IN NO EVENT SHALL THE MAXIMUM AGGREGATE LIABILITY OF EITHER PARTY IN RESPECT OF ALL CLAIMS UNDER THIS AGREEMENT EXCEED THE ***.

Article 9
TERM AND TERMINATION AND MATERIAL BREACH

9.1          Term. This Agreement shall become effective as of the Effective Date and, unless earlier terminated pursuant to the other provisions of this Article 9, shall be perpetual (the “Term”).

9.2          Termination for Breach. Each Party may terminate this Agreement in the event the other Party materially breaches this Agreement, and such breach, if curable, shall have continued uncured for ninety (90) days after written notice thereof was provided to the breaching Party by the terminating Party. Any such termination shall become effective at the end of such ninety (90) day period unless, if applicable, the breaching Party has cured any such breach prior to the expiration of such ninety (90) day period.

9.3          Termination for Patent Challenge. If Licensee or any of its Affiliates challenges under any court action or proceeding, or before any patent office, the validity, patentability, enforceability, scope or non-infringement of any Spectrum Patent, or initiates a reexamination of any Spectrum Patent, or assists any Third Party to conduct any of the foregoing activities (each, a “Challenge”), Spectrum will have the right to immediately terminate this Agreement. In any event, Licensee shall notify Spectrum at least thirty (30) days prior to initiating any such Challenge.

9.4          Termination of Upstream Licenses. To the extent any Upstream License is terminated, the rights granted hereunder with respect to such Upstream License shall also hereby terminate.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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9.5          Termination for Insolvency. Each Party shall have the right to terminate this Agreement upon delivery of written notice to the other Party in the event that (i) such other Party files in any court or agency pursuant to any statute or regulation of any jurisdiction a petition in bankruptcy or insolvency or for reorganization or similar arrangement for the benefit of creditors or for the appointment of a receiver or trustee of such other Party or its assets, (ii) such other Party is served with an involuntary petition against it in any insolvency proceeding and such involuntary petition has not been stayed or dismissed within ninety (90) days of its filing, or (iii) such other Party makes an assignment of substantially all of its assets for the benefit of its creditors.

9.6          Provision for Insolvency. All rights and licenses granted under or pursuant to any Section of this Agreement are rights to “intellectual property” (as defined in Section 101(35A) of Bankruptcy Code). Each Party hereby acknowledges that (i) copies of research data, (ii) laboratory samples, (iii) product samples, (iv) formulas, (v) laboratory notes and notebooks, (vi) data and results related to clinical trials, (vii) Regulatory Filings and Regulatory Approvals, (viii) rights of reference in respect of Regulatory Filings and Regulatory Approvals, (ix) pre-clinical research data and results, and (x) marketing, advertising and promotional materials, in each case, that relate to such intellectual property, constitute “embodiments” of such intellectual property pursuant to Section 365(n) of the Bankruptcy Code. Each Party agrees not to interfere with the other Party’s exercise, pursuant to Section 365(n) of the Bankruptcy Code, of rights and licenses to intellectual property licensed hereunder and embodiments thereof and agrees to use Commercially Reasonable Efforts to assist such other Party to obtain such intellectual property and embodiments thereof in the possession or control of Third Parties as reasonably necessary for such other Party to exercise, pursuant to Section 365(n) of the Bankruptcy Code, such rights and licenses. Each Party shall take any and all action requested by the other Party to ensure that the foregoing provisions of this Section 9.6 may be fully effectuated under Applicable Laws, and, if requested by the other Party, each Party shall procure that any past, existing or future creditor of the other Party irrevocably waives in writing any and all rights that such creditor may have to the intellectual property licensed hereunder and embodiments thereof.

9.7          General Effects of Termination.

9.7.1       Termination of Rights. In the event of termination of this Agreement for any reason, all rights and licenses granted to Licensee herein shall immediately terminate.

9.7.2       Accrued Obligations. Termination of this Agreement for any reason shall not release either Party of any obligation or liability which, at the time of such termination, has already accrued to the other Party or which is attributable to a period prior to such termination.

9.7.3       Non-Exclusive Remedy. Notwithstanding anything herein to the contrary, termination of this Agreement by a Party shall be without prejudice to other remedies such Party may have at law or equity.

9.7.4       General Survival. Article 1 (Definitions), Article 6 (Intellectual Property), Article 7 (Confidentiality), Article 10 (Dispute Resolution), Article 11 (Miscellaneous) and Sections 5.5 (Records; Audit)(for a period of three (3) years after the effectiveness of the termination of this Agreement), 8.5 (Indemnification), 8.6 (No Consequential Damages), 8.7 (Maximum Liability), 9.7 (General Effects of Termination), 9.8 (Additional Effects of Termination), 9.9 (Termination Press Releases), and 9.10 (Material Breach) shall survive termination of this Agreement for any reason. Except as otherwise provided in this Article 9, all rights and obligations of the Parties under this Agreement shall terminate upon termination of this Agreement for any reason.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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9.8          Additional Effects of Certain Terminations. If this Agreement is terminated by Spectrum, then:

9.8.1       Ongoing Trials. If there are any ongoing clinical trials with respect to the Product being conducted by or on behalf of Licensee (or its Affiliate) at the time of notice of termination, Licensee agrees to (i) promptly transition to Spectrum or its designee some or all of such clinical trials and the activities related to or supporting such trials, or (ii) terminate such clinical trials in each case, as requested by Spectrum. The Parties recognize that early termination of this Agreement requires both discussion and coordination between the Parties to ensure patient safety, continuity of treatment, if appropriate, and compliance with Applicable Laws. Upon early termination of this Agreement, the Parties shall cooperate to provide for an orderly transition or cessation of any clinical trials, as requested by Spectrum. Each Party further agrees to take no action or forego taking action if such action or forbearance would in any manner jeopardize patient safety or cause the other Party to violate any Applicable Laws.

9.8.2       Commercialization. To avoid a disruption in the supply of the Product, if this Agreement is terminated after the First Commercial Launch of the Product for use in the Field in the Licensee Territory, Licensee and its Affiliates shall continue to distribute and sell such Product for use in the Field in the Licensee Territory, in accordance with the terms and conditions of this Agreement, for a period reasonably sufficient for them to sell off all amounts of Product in Licensee’s inventory not to exceed *** (***) months from the effective date of such termination (the “Wind-Down Period”). Notwithstanding any other provision of this Agreement, during this Wind-Down Period, Licensee’s and its Affiliates’ rights with respect to the Product (including the licenses granted under Section 3.1) shall be non-exclusive and Spectrum shall have the right to engage one or more partners(s) or distributor(s) of the Product in all or part of the Licensee Territory. During the Wind-Down Period, Licensee shall continue to make any and all Upstream Payments to Spectrum for the Product sold or disposed by Licensee, its Affiliates, or its sublicensees. After the Wind-Down Period, Licensee and its Affiliates shall not sell the Product or make any representation regarding their status as a licensee of or distributor for Spectrum for the Product. Within thirty (30) days of expiration of the Wind-Down Period, Licensee shall notify Spectrum of any quantity of the Product remaining in Licensee’s inventory and Spectrum shall have the option, upon notice to Licensee, to purchase any such quantities of the Product, as applicable, from Licensee at a price equal to the amounts paid by Licensee for such Product.

9.8.3       Regulatory Filings. Licensee shall promptly assign and transfer to Spectrum all Regulatory Filings for the Product that are held or controlled by or under authority of Licensee, and shall take such actions and execute such other instruments, assignments and documents as may be necessary to effect the transfer of rights under the Regulatory Filings to Spectrum. Licensee shall cause each of its Affiliates or sublicensees to transfer any such Regulatory Filings to Spectrum if this Agreement terminates. If Applicable Laws prevents or delays the transfer of ownership of a Regulatory Filing to Spectrum, Licensee shall grant, and does hereby grant, to Spectrum an exclusive and irrevocable right of access and reference to such Regulatory Filing for the Product, and shall cooperate fully to make the benefits of such Regulatory Filings available to Spectrum and/or its designee(s). Within sixty (60) days after notice of such termination, Licensee shall provide to Spectrum copies of all such Regulatory Filings, and of all preclinical and clinical data (including raw data, original records, investigator reports, both preliminary and final, statistical analyses, expert opinions and reports, safety and other electronic databases) and other Know-How pertaining to the Product, or the manufacture thereof. Spectrum shall be free to use and disclose such Regulatory Filings and other items in connection with the exercise of its rights and licenses under this Section 9.8.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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 9.8.4       License to Spectrum. Licensee hereby grants Spectrum, effective upon the effective date of termination of this Agreement, a perpetual, irrevocable, fully paid-up, royalty free, non-exclusive license, with the right to grant sublicenses at any tier, under Licensee Know-How (including, without limitation, Licensee Inventions) and Licensee’s rights in the Joint Inventions, to research, Develop, make, have made, use, sell, offer for sale, have sold, import and otherwise Commercialize the Product in the Licensee Territory.

9.8.5       Transition Assistance. Licensee agrees to fully cooperate with Spectrum and its designee(s) to facilitate a smooth, orderly and prompt transition of the Development and Commercialization of the Product to Spectrum and/or its designee(s) during this Wind-Down Period. Without limiting the foregoing, Licensee shall promptly provide Spectrum (i) all commercial data generated by Licensee under this Agreement including copies of customer lists, customer data and other customer information relating to the Product, and (ii) manufacturing information (including protocols for the production, packaging, testing and other manufacturing activities) relating to the Product in Licensee’s Control, which in each case Spectrum shall have the right to use and disclose for any purpose during this Wind-Down Period and thereafter. Upon request by Spectrum, Licensee shall transfer to Spectrum some or all quantities of the Product in its or its Affiliates’ Control (as requested by Spectrum), within thirty (30) days after the end of this Wind-Down Period, provided, that Spectrum shall reimburse Licensee for the out-of-pocket costs that Licensee actually incurred to manufacture or otherwise acquire the quantities so provided to Spectrum. If any Product was manufactured by any Third Party for Licensee, or Licensee had contracts with vendors which contracts are necessary or useful for Spectrum to take over responsibility for the Product in the Licensee Territory, then Licensee shall to the extent possible and requested in writing by Spectrum, assign all of the relevant Third-Party contracts to Spectrum, and in any case, Licensee agrees to cooperate with Spectrum to ensure uninterrupted supply of the Product. If Licensee or its Affiliate manufactured any Product at the time of termination, then Licensee (or its Affiliate) shall continue to provide for manufacturing of such Product for Spectrum, at its fully-burdened manufacturing cost therefor, from the date of notice of such termination until such time as Spectrum is able, using Commercially Reasonable Efforts to do so but no longer than the expiration of the Wind-Down Period, to secure an acceptable alternative commercial manufacturing source from which sufficient quantities of the Product may be procured and legally sold in the Licensee Territory.

9.8.6       Costs and Expenses. Except as expressly provided herein, Licensee shall perform its obligations under this Section 9.8 at its own costs without consideration from Spectrum. Spectrum shall be responsible for its own costs of performing its activities under this Section 9.8.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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9.9          Termination Press Releases. In the event of termination of this Agreement for any reason, the Parties shall cooperate in good faith to coordinate public disclosure of such termination and the reasons therefor, and shall not, except to the extent required by Applicable Laws or the rules of a recognized stock exchange, disclose such information without the prior approval of the other Party, such approval not to be unreasonably withheld, conditioned or delayed. When Spectrum elects to make a public disclosure under this Section 9.9, Spectrum shall provide Licensee with a draft of any such public disclosure it intends to issue three (3) Business Days in advance and with the opportunity to review and comment on such statement, it being understood that if Licensee does not notify Spectrum in writing within such three (3) Business Day period (or such shorter period if required by Applicable Laws or the rules of a recognized stock exchange) of any reasonable objections, such disclosure shall be deemed approved, and in any event the Parties shall work diligently and reasonably to agree on the text of any such proposed disclosure in an expeditious manner. The principles to be observed in such disclosures shall be accuracy, compliance with Applicable Laws and regulatory guidance documents, reasonable sensitivity to potential negative reactions to such news and the need to keep investors and others informed regarding the Parties’ business and other activities.

9.10        Material Breach.

9.10.1     Spectrum agrees that any breach by Spectrum of Section 3.1 (Grant to Licensee), Section 4.1.4 (Rights of Reference), Section 4.2.3 (Development Assistance), or Section 8.4.3 (Spectrum’s Representations, Warranties, and Covenants) as single event or in combination with one or more breaches, that has a material adverse effect on Licensee’s Development or Commercialization of the Product in the Licensee Territory shall be deemed a material breach by Spectrum of this Agreement, and, if such breach, if curable, shall have continued uncured for ninety (90) days after written notice thereof was provided to Spectrum by Licensee, then: (a) subject to Section 8.7, Licensee shall be entitled to recovery of damages for such material breach without any limitation on the amount or type of damages (including special, consequential (including loss of profits and loss of revenue), incidental, punitive or indirect damages); and (b) Licensee, in addition to being entitled to exercise all rights provided herein (unless Licensee has also terminated this Agreement under Section 9.2) or granted by law, including, without limitation, recovery of damages, will be entitled to specific performance of its rights and Spectrum’s obligations under the above Sections 3.1 (Grant to Licensee), Section 4.1.4 (Rights of Reference), Section 4.2.3 (Development Assistance), or Section 8.4.3 (Spectrum’s Representations, Warranties, and Covenants) of the Agreement, without the necessity of posting any bond and without the necessity of establishing that monetary relief would not provide an adequate remedy. Spectrum agrees that Licensee may seek, and AAA (or any court having competent jurisdiction in relation to any injunctive or provisional relief necessary) may grant, specific performance in the event of such Spectrum’s material breach, and that monetary damages would not be adequate compensation for any loss incurred by reason of a material breach by Spectrum as recited in this Section of this Agreement, and hereby agrees to waive any defense in any action for specific performance, including that a remedy at law would be adequate.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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9.10.2     Licensee agrees that any breach by Licensee of Section 3.1 (Grant to Licensee), Section 3.2.1 (Licensee Rights Limited to the Field and the Licensee Territory), Section 3.3 (Upstream Licenses), or Sections 4.2.4 and 4.3.2 (Diligence) as single event or in combination with one or more breaches, that has a material adverse effect on Spectrum’s rights under the Upstream Licenses shall be deemed a material breach by Licensee of this Agreement, and, if such breach, if curable, shall have continued uncured for ninety (90) days after written notice thereof was provided by Spectrum to Licensee, then: (a) subject to Section 8.7, Spectrum shall be entitled to recovery of damages for such material breach without any limitation on the amount or type of damages (including special, consequential (including loss of profits and loss of revenue), incidental, punitive or indirect damages); and (b) Spectrum, in addition to being entitled to exercise all rights provided herein or granted by law, including, without limitation, recovery of damages, will be entitled to specific performance of its rights and Licensee’s obligations under the above Sections 3.1 (Grant to Licensee), Section 3.2.1 (Licensee Rights Limited to the Field and the Licensee Territory), Section 3.3 (Upstream Licenses), or Sections 4.2.4 and 4.3.2 (Diligence) of the Agreement, without the necessity of posting any bond and without the necessity of establishing that monetary relief would not provide an adequate remedy. Licensee agrees that Spectrum may seek, and AAA (or any court having competent jurisdiction in relation to any injunctive or provisional relief necessary) may grant, specific performance in the event of such Licensee’s material breach, and that monetary damages would not be adequate compensation for any loss incurred by reason of a material breach by Licensee as recited in this Section of this Agreement, and hereby agrees to waive any defense in any action for specific performance, including that a remedy at law would be adequate.

Article 10
DISPUTE RESOLUTION

10.1        Disputes. If the Parties are unable to resolve any dispute or other matter arising out of or in connection with this Agreement (“Dispute”), either Party may, by written notice to the other, have such Dispute referred to the respective business heads of the Parties for attempted resolution by good faith negotiations within fifteen (15) Business Days after such notice is received. In such event, each Party shall cause its respective business head to meet (face-to-face or by teleconference) and be available to attempt to resolve such Dispute. If the Parties should resolve such Dispute under this Section 10.1, a memorandum setting forth their agreement will be prepared and signed by both Parties if requested by either Party. The Parties shall cooperate in an effort to limit the issues for consideration in such manner as narrowly as reasonably practicable in order to resolve the Dispute. If the Parties are unable to resolve such Dispute under this Section 10.1, then either Party may submit such Dispute to arbitration pursuant to Section 10.2 below or initiate proceedings pursuant to Section 10.3 below, as applicable. No Dispute shall be submitted to arbitration under Section 10.2 below and no proceedings shall be initiated pursuant to Section 10.3 below, as applicable, until the following procedures in this Section 10.1 have been satisfied, unless the Senior Executives have already attempted to resolve such Dispute pursuant to Section 2.3, in which case, either Party may refer such Dispute to arbitration pursuant to Section 10.2 below or initiate proceedings pursuant to Section 10.3 below, as applicable, provided, that any applicable statute of limitations with respect to such Dispute shall be tolled while the Parties attempt to resolve such Dispute in accordance with Section 2.3 or this Section 10.1.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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10.2        Arbitration. Except with respect to Disputes related to Intellectual Property rights as provided under Section 10.3 below, if the Parties are unable to resolve a Dispute under Section 10.1 above, either Party may, upon written notice to the other Party, submit such Dispute for resolution by final, binding arbitration in the manner described in this Section 10.2 below, as applicable. Any arbitration under this Section 10.2 below, as applicable, shall be conducted by the American Arbitration Association (“AAA”) in New York, New York in accordance with the then-current Commercial Rules of Arbitration of AAA (“AAA Rules”), except as modified by this Section 10.2 below, as applicable. The arbitration shall be conducted by a single arbitrator. The costs of such arbitration shall be shared equally by the Parties, and each Party shall bear its own expenses in connection with the arbitration. The Parties shall use good faith efforts to complete arbitration under this Section 10.2 within ninety (90) days following the initiation of such arbitration. The arbitrator shall establish reasonable additional procedures to facilitate and complete such arbitration within such ninety (90) day period. Nothing in this Agreement shall limit the right of either Party to seek to obtain in any court of competent jurisdiction any equitable or interim relief or provisional remedy, including injunctive relief.

10.3        Other Disputes. If the Parties are unable to resolve a Dispute related to Intellectual Property rights under Section 10.1 above, either Party may initiate legal proceedings with respect thereto. Each of the Parties irrevocably agrees that the federal or state courts in New York, New York shall have the exclusive jurisdiction to hear and decide any suit, action, proceedings, and/or settle any such Disputes, and for these purposes, each Party irrevocably submits to the jurisdiction of the courts of New York. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS AGREEMENT.

Article 11
MISCELLANEOUS

11.1        Affiliates; Licensees. For clarity and without limitation, each Party shall have the right to exercise any of its rights and licenses or perform or delegate all or any portion of any of its obligations under this Agreement through any of its Affiliates, provided, that each Party shall remain responsible to the other Party under this Agreement for all activities of its Affiliates to the same extent as if such activities had been undertaken by such Party itself. In addition, Spectrum shall have the right to exercise any of its rights and licenses or perform or delegate all or any portion of any of its obligations under this Agreement through any of its Third Party licensees, provided, that Spectrum shall require each such licensee to be bound by a written agreement containing terms and conditions consistent with the terms and conditions of this Agreement.

11.2        Governing Law. This Agreement and any dispute arising from the performance or breach hereof shall be governed by and construed and enforced in accordance with the laws of the State of New York, without reference to conflicts of laws principles.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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11.3        Assignment. This Agreement shall not be assignable by either Party to any Third Party without the written consent of the other Party and any such attempted assignment shall be void. Notwithstanding the foregoing, either Party may assign this Agreement, without the written consent of the other Party, to an Affiliate of such Party or an entity that acquires all or substantially all of the business or assets of such Party to which this Agreement pertains (whether by merger, reorganization, acquisition, sale, operation of law or otherwise), and agrees in writing to be bound by the terms and conditions of this Agreement. No assignment or transfer of this Agreement shall be valid and effective unless and until the assignee/transferee agrees in writing to be bound by the provisions of this Agreement. The terms and conditions of this Agreement shall be binding on and inure to the benefit of the permitted successors and assigns of the Parties. Except as expressly provided in this Section 11.3, any attempted assignment or transfer of this Agreement shall be null and void.

11.4        Notices. Any notice, request, delivery, approval or consent required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been sufficiently given if delivered in person, transmitted by facsimile (receipt verified) or by express courier service (signature required) or five (5) days after it was sent by registered letter, return receipt requested (or its equivalent), provided, that no postal strike or other disruption is then in effect or comes into effect within two (2) days after such mailing, to the Party to which it is directed at its address or facsimile number shown below or such other address or facsimile number as such Party will have last given by notice to the other Party.

If to Spectrum, addressed to:

Spectrum Cayman, L.P.

c/o Spectrum Pharmaceuticals, Inc.

11500 South Eastern Ave. Suite 240

Henderson, NV 89052

Attn: Legal Department

Telephone number: (702) 835-6300

Facsimile number:   (702) 260-7405

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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With a copy to:

Stradling Yocca Carlson & Rauth

660, Newport Center Dr, Suite 1600

Newport Beach, CA 92660

Attn: Shivbir S. Grewal, Esq.

Telephone number: (949) 725-4000

Facsimile number:   (949) 725-4100

If to Licensee, addressed to:

CASI Pharmaceuticals, Inc.

9620 Medical Center Drive, Suite 300

Rockville, MD 20850

Attn: General Counsel

Telephone number: (240) 864-2781

Facsimile number:  (240) 864-2782

With a copy to:

Ropes & Gray LLP

36F, Park Place 1601 Nanjing Road West

Shanghai 200040, China

Attention: Geoffrey Lin and Arthur Mok

Telephone: +86 21 6157 5200

Facsimile: + 86 21 6157 5299

11.5        Waiver. Neither Party may waive or release any of its rights or interests in this Agreement except in writing. The failure of either Party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition. No waiver by either Party of any condition or term in any one or more instances shall be construed as a continuing waiver of such condition or term or of another condition or term.

11.6        Severability. If any provision hereof should be held invalid, illegal or unenforceable in any jurisdiction, the Parties shall negotiate in good faith a valid, legal and enforceable substitute provision that most nearly reflects the original intent of the Parties and all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the Parties as nearly as may be possible. Such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction. If a Party seeks to avoid a provision of this Agreement by asserting that such provision is invalid, illegal or otherwise unenforceable, the other Party shall have the right to terminate this Agreement pursuant to Section 9.2 upon sixty (60) days prior written notice to the asserting Party, unless such assertion is eliminated and cured within such sixty (60) day period.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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11.7        Entire Agreement/Modification. This Agreement, including its Exhibits, sets forth all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties and supersedes and terminates all prior agreements and understandings between the Parties including the Prior CDA. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by the respective authorized officers of the Parties.

11.8        Relationship of the Parties. The Parties agree that the relationship of Spectrum and Licensee established by this Agreement is that of independent contractors. Furthermore, the Parties agree that this Agreement does not, is not intended to, and shall not be construed to, establish an employment, agency or any other relationship. Except as may be specifically provided herein, neither Party shall have any right, power or authority, nor shall they represent themselves as having any authority to assume, create or incur any expense, liability or obligation, express or implied, on behalf of the other Party, or otherwise act as an agent for the other Party for any purpose.

11.9        Force Majeure. Except with respect to payment of money, neither Party shall be liable to the other for failure or delay in the performance of any of its obligations under this Agreement for the time and to the extent such failure or delay is caused by earthquake, riot, civil commotion, war, terrorist acts, strike, flood, change of law, political unrest, or governmental acts or restriction, or other cause that is beyond the reasonable control of the respective Party. The Party affected by such force majeure will provide the other Party with full particulars thereof as soon as it becomes aware of the same (including its best estimate of the likely extent and duration of the interference with its activities), and will use Commercially Reasonable Efforts to overcome the difficulties created thereby and to resume performance of its obligations as soon as practicable. If the performance of any such obligation under this Agreement is delayed owing to such a force majeure for any continuous period of more than one hundred eighty (180) days, the Parties will consult with respect to an equitable solution, including the possibility of the mutual termination of this Agreement.

11.10       Compliance with Applicable Laws/Other.  Notwithstanding anything to the contrary contained herein, all rights and obligations of Spectrum and Licensee are subject to prior compliance with, and each Party shall comply with, all Applicable Laws, including obtaining all necessary approvals required by the applicable agencies of the governments of the relevant jurisdictions. In addition, each Party shall conduct its activities under this Agreement in accordance with good scientific and business practices.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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11.11      Interpretation. The captions and headings to this Agreement are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of this Agreement. Unless specified to the contrary, references to Articles, Sections or Exhibits mean the particular Articles, Sections or Exhibits to this Agreement and references to this Agreement include all Exhibits hereto. Unless context otherwise clearly requires, whenever used in this Agreement: (i) the words “include” or “including” shall be construed as incorporating, also, “but not limited to” or “without limitation;” (ii) the word “day” or “year” means a calendar day or year unless otherwise specified; (iii) the word “notice” shall mean notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other written communications contemplated under this Agreement; (iv) the words “hereof,” “herein,” “hereby” and derivative or similar words refer to this Agreement (including any Exhibits); (v) the word “or” shall be construed as the inclusive meaning identified with the phrase “and/or;”(vi) provisions that require that a Party, the Parties or a committee hereunder “agree,” “consent” or “approve” or the like shall require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise; (vii) words of any gender include the other gender; (viii) words using the singular or plural number also include the plural or singular number, respectively; (ix) references to any specific law, rule or regulation, or article, section or other division thereof, shall be deemed to include the then-current amendments thereto or any replacement law, rule or regulation thereof; and (x) neither Party or its Affiliates shall be deemed to be acting “on behalf of” the other Party hereunder.

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

[The remainder of this page intentionally left blank; the signature page follows.]

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate originals by their duly authorized representatives as of the Effective Date.

SPECTRUM PHARMACEUTICALS CAYMAN, L.P.		CASI PHARMACEUTICALS, INC.
By:	Spectrum Pharmaceuticals International Holdings, LLC	By:	/s/ Ken K. Ren
Its:	General Partner	Name:	Ken K. Ren
		Title:	Chief Executive Officer
By:	Spectrum Pharmaceuticals, Inc.
Its:	Managing Member
By:	/s/ Rajesh C. Shrotriya
Name:	Rajesh C. Shrotriya, MD
Title:	Chairman and CEO

List of Exhibits:

Exhibit 1.36: Kits

Exhibit 1.68: Spectrum Patents

Exhibit 1.71: Spectrum Trademarks

Exhibit 7.5.1: Press Release(s)

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

Exhibit 1.36

Kits

1.     One (1) Zevalin vial containing 3.2 mg ibritumomab tiuxetan in 2 mL 0.9% Sodium Chloride as a clear, colorless solution.

2.     One (1) 50 mM Sodium Acetate Vial containing 13.6 mg Sodium Acetate trihydrate in 2 mL Water for Injection, USP as a clear, colorless solution

3.     One (1) Formulation Buffer Vial containing 750 mg Albumin (Human), 76 mg Sodium Chloride, 28 mg Sodium Phosphate Dibasic Dodecahydrate, 4 mg Pentetic Acid, 2 mg Potassium Phosphate Monobasic and 2 mg Potassium Chloride in 10 mL Water for Injection, pH 7.1 as a clear yellow to amber colored solution

4.     One (1) empty Reaction Vial.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

Exhibit 1.68

Spectrum Patents

Title	Country	Application No.	Effective filing date	Patent No.	Grant Date
***	***	***	***	***	***
	***	***	***	***	***
***	***	***	***	***	***
	***	***	***	***	***
***	***	***	***	***	***
	***	***	***	***	***

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

Exhibit 1.71

Spectrum Trademarks

Country	Trademark	Class	Goods	Appl. Date	Appl. Number	Reg. Date	Reg. Number
***	***	***	***	***	***	***	***
***	***	***	***	***	***	***	***
***	***		***	***	***	***	***
***	***	***	***	***	***	***	***
***	***	***	***	***	***	***	***
***	***	***	***	***	***	***	***
***	***	***	***	***	***	***	***
***	***	***	***	***	***	***	***
***	***	***	***	***	***	***	***
***	***	***	***	***	***	***	***

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

Exhibit 7.5.1

Press Release(s)

See attached.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

Spectrum Pharmaceuticals Out-Licenses

Rights for Greater China to CASI Pharmaceuticals for Three of Its Drugs

· Spectrum receives a 19.99% stake (pre-transaction) in CASI, a NASDAQ-listed, oncology-focused Company with expertise and focus on markets in China and a $1.5 million promissory note

HENDERSON, Nev. and ROCKVILLE, Md. (September 18, 2014) – Spectrum Pharmaceuticals, Inc. (Nasdaq: SPPI), a biotechnology company with fully integrated commercial and drug development operations with a primary focus in hematology and oncology, and CASI Pharmaceuticals, Inc. (Nasdaq: CASI), a biopharmaceutical company dedicated to the acquisition, development and commercialization of innovative therapeutics addressing cancer and other unmet medical needs for the global market with a primary focus on China, announce the signing of license agreements whereby CASI has been granted exclusive rights to two of Spectrum Pharmaceuticals’ commercial oncology drugs, Zevalin® (ibritumomab tiuxetan) Injection for intravenous use and Marqibo® (vinCRIStine sulfate LIPOSOME injection) for intravenous infusion, and a Phase 3 drug candidate, Captisol-Enabled^TM Melphalan (CE melphalan), for development and commercialization in China, including Taiwan, Hong Kong and Macau.

ZEVALIN is used in the treatment of non-Hodgkin’s lymphoma (NHL) and MARQIBO is used in the treatment of acute lymphoblastic leukemia (ALL). CE melphalan has met the endpoints in a pivotal trial for use as a conditioning treatment prior to autologous stem cell transplant for patients with multiple myeloma. Spectrum plans to file a New Drug Application with the U.S. Food and Drug Administration (FDA) for CE melphalan in the second half of 2014.

CASI will be responsible for the development and commercialization of the three drugs, including the submission of import drug registration applications to regulatory authorities and conducting any confirmatory clinical studies in greater China, if and as required.

“We are delighted to see our anticancer drugs to be developed and marketed in greater China through CASI, a NASDAQ-listed Company focused on China,” said Rajesh C. Shrotriya, MD, Chairman and Chief Executive Officer of Spectrum Pharmaceuticals. “The management of CASI has a track record of successfully developing anticancer drugs in China. We are pleased to be a shareholder of CASI at this early stage of their development and look forward to CASI creating value for our shareholders as they grow. China’s pharmaceutical market is growing at a rapid pace and is already approaching second place to only the United States in the world. The greater China drug market for anticancer drugs is projected to become the world’s largest in the next decade and CASI has the opportunity to take a leading position to address these significant unmet medical needs. We are impressed with the management team at CASI and their expertise in China, and look forward to sharing in the success of our drugs in this important market.”

Spectrum Pharmaceuticals, Inc., 11500 S. Eastern Ave., Ste. 240  •  Henderson, Nevada 89052   •   Tel: 702-835-6300

•   Fax: 702-260-7405   •   www.sppirx.com   •   NASDAQ: SPPI

CASI Pharmaceuticals, Inc., 9620 Medical Center Drive, Ste. 300 • Rockville, Maryland 20852   •   Tel: 240-864-2643

•   Fax: 301-325-2437   •   www.casipharmaceuticals.com   •   NASDAQ: CASI

Commenting on the transaction, Ken K. Ren, Ph.D., CASI’s Chief Executive Officer, said, “We are very excited to have entered into this transaction with Spectrum, a Company with a successful track record of developing and commercializing drugs expeditiously in the U.S. The addition of these three drugs transforms our pipeline and significantly expands our market share potential in China. Our transaction is structured rather uniquely in that the shares and note represent the purchase price to Spectrum and is in lieu of royalties and milestones normally associated with traditional licenses, thereby aligning Spectrum’s interest with our shareholders. We look forward to a productive relationship with Spectrum.”

Dr. Ren added, “These drug products come with strong intellectual property protection and significant technology barriers. We are currently preparing the import drug registration applications in greater China, initially for ZEVALIN and MARQIBO, and since both drugs are approved for sale in the U.S., we anticipate that confirmatory clinical trials will be required for marketing approval in our territory. The submission of the import drug registration for CE melphalan will follow immediately after its approval by the U.S. FDA. The annual incidence in China for NHL, ALL and multiple myeloma is increasing each year with high mortality rates, it is our goal to have these innovative products available to patients in greater China as soon as possible to address these unmet medical needs, and as Spectrum expands these drugs into additional indications in the U.S., we too will apply for expanded labels in our territory.”

In addition to its initial stake in CASI, Spectrum Pharmaceuticals will have certain rights to maintain its post-transaction ownership position. Spectrum Pharmaceuticals also will have the opportunity to designate a member to CASI’s board of directors. Detailed information on the transaction can be found in CASI’s Report on Form 8-K, which will be filed with the Securities and Exchange Commission.

H.C. Wainwright & Co., LLC acted as Spectrum's advisor.

About Spectrum Pharmaceuticals, Inc.

Spectrum Pharmaceuticals is a leading biotechnology company focused on acquiring, developing, and commercializing drug products, with a primary focus in oncology and hematology. Spectrum and its affiliates market five oncology drugs: FUSILEV® (levoleucovorin) for Injection; FOLOTYN® (pralatrexate injection); ZEVALIN® (ibritumomab tiuxetan) Injection for intravenous use; MARQIBO® (vinCRIStine sulfate LIPOSOME injection) for intravenous infusion; and BELEODAQ™ (belinostat) for Injection. Spectrum's strong track record in in-licensing and acquiring differentiated drugs, and expertise in clinical development have generated a robust, diversified and growing pipeline of product candidates in advanced-stage Phase 2 and Phase 3 studies. More information on Spectrum is available at www.sppirx.com.

About CASI Pharmaceuticals, Inc.

CASI is a biopharmaceutical company dedicated to the acquisition, development and commercialization of innovative therapeutics addressing cancer and other unmet medical needs for the global market with a primary focus on China.. CASI’s product pipeline includes exclusive regional rights to ZEVALIN (ibritumomab tiuxetan), MARQIBO (vinCRIStine sulfate LIPOSOME injection) and Captisol-Enabled (propylene glycol-free) melphalan (CE melphalan) in greater China (including Taiwan, Hong Kong and Macau). CASI’s development pipeline also includes its proprietary drug candidate ENMD-2076, a selective angiogenic kinase inhibitor currently in multiple Phase 2 oncology studies, and 2ME2 (2-methoxyestradial) currently under reformulation development. CASI is headquartered in Rockville, Maryland and has a wholly owned subsidiary and R&D operations in Beijing, China. More information on CASI is available at www.casipharmaceuticals.comand in the Company’s filings with the U.S. Securities and Exchange Commission.

About ZEVALIN and the ZEVALIN Therapeutic Regimen

ZEVALIN (ibritumomab tiuxetan) injection for intravenous use, is indicated for the treatment of patients with relapsed or refractory, low-grade or follicular B-cell non-Hodgkin's lymphoma (NHL). ZEVALIN is also indicated for the treatment of patients with previously untreated follicular non-Hodgkin's Lymphoma who achieve a partial or complete response to first-line chemotherapy.

ZEVALIN is a CD20-directed radiotherapeutic antibody. The ZEVALIN therapeutic regimen consists of two components: rituximab, and Yttrium-90 (Y-90) radiolabeled ZEVALIN for therapy. ZEVALIN builds on the combined effect of a targeted biologic monoclonal antibody augmented with the therapeutic effects of a beta-emitting radioisotope.

Important ZEVALIN Safety Information

Deaths have occurred within 24 hours of rituximab infusion, an essential component of the ZEVALIN therapeutic regimen. These fatalities were associated with hypoxia, pulmonary infiltrates, acute respiratory distress syndrome, myocardial infarction, ventricular fibrillation, or cardiogenic shock. Most (80%) fatalities occurred with the first rituximab infusion. ZEVALIN administration can result in severe and prolonged cytopenias in most patients. Severe cutaneous and mucocutaneous reactions, some fatal, can occur with the ZEVALIN therapeutic regimen.

Please see full Prescribing Information, including BOXED WARNINGS, for ZEVALIN and rituximab. Full prescribing information for ZEVALIN can be found at www.ZEVALIN.com.

About MARQIBO

MARQIBO is a novel, sphingomyelin/cholesterol liposome-encapsulated, formulation of vincristine sulfate. Vincristine, a microtubule inhibitor, is FDA-approved for the treatment of adult patients with Philadelphia chromosome-negative (Ph-) acute lymphoblastic leukemia (ALL) in second or greater relapse or whose disease has progressed following two or more anti-leukemia therapies. (The encapsulation technology, utilized in this formulation, has been shown to provide prolonged circulation of vincristine in the blood).

Please see important safety information below and the full prescribing information for MARQIBO at www.marqibo.com.

Indication and usage

MARQIBO is a liposomal vinca alkaloid indicated for the treatment of adult patients with Philadelphia chromosome-negative (Ph-) acute lymphoblastic leukemia (ALL) in second or greater relapse or whose disease has progressed following two or more anti-leukemia therapies. This indication is based on overall response rate. Clinical benefit such as improvement in overall survival has not been verified.

Important safety information

CONTRAINDICATIONS

· MARQIBO is contraindicated in patients with demyelinating conditions including Charcot-Marie-Tooth syndrome

· MARQIBO is contraindicated in patients with hypersensitivity to vincristine sulfate or any of the other components of MARQIBO (vinCRIStine sulfate LIPOSOME injection

· MARQIBO is contraindicated for intrathecal administration

About Captisol-Enabled Melphalan

Captisol-enabled, PG-free melphalan is a novel intravenous formulation of melphalan being investigated for the multiple myeloma transplant setting, for which it has been granted an Orphan Drug Designation by the FDA. This formulation eliminates the use of propylene glycol, which has been reported to cause renal and cardiac side effects that limit the ability to deliver higher doses of therapeutic compounds. The use of the Captisol technology to reformulate melphalan also improves its stability and is anticipated to allow for slower infusion rates and longer administration durations, potentially enabling clinicians to safely achieve a higher dose intensity for pre-transplant chemotherapy.

About Captisol

Captisol is a patent-protected, chemically modified cyclodextrin with a structure designed to optimize the solubility and stability of drugs. Captisol was invented and initially developed by scientists in the laboratories of Dr. Valentino Stella at the University of Kansas’ Higuchi Biosciences Center for specific use in drug development and formulation. This unique technology has enabled seven FDA-approved products, including Onyx Pharmaceuticals’ Kyprolis^®, Baxter International’s Nexterone^® and Merck’s NOXAFIL IV. There are also more than 30 Captisol-enabled products currently in clinical development.

Forward-Looking Statements – Spectrum Pharmaceuticals, Inc.

This press release may contain forward-looking statements regarding future events and the future performance of Spectrum Pharmaceuticals that involve risks and uncertainties that could cause actual results to differ materially. These statements are based on management's current beliefs and expectations. These statements include, but are not limited to, statements that relate to our business and its future, including sales of Spectrum’s drug products, certain company milestones, Spectrum's ability to identify, acquire, develop and commercialize a broad and diverse pipeline of late-stage clinical and commercial products, leveraging the expertise of partners and employees around the world to assist us in the execution of our strategy, and any statements that relate to the intent, belief, plans or expectations of Spectrum or its management, or that are not a statement of historical fact. Risks that could cause actual results to differ include the possibility that our existing and new drug candidates may not prove safe or effective, the possibility that our existing and new applications to the FDA and other regulatory agencies may not receive approval in a timely manner or at all, the possibility that our existing and new drug candidates, if approved, may not be more effective, safer or more cost efficient than competing drugs, the possibility that our efforts to acquire or in-license and develop additional drug candidates may fail, our lack of sustained revenue history, our limited marketing experience, our customer concentration, the possibility for fluctuations in customer orders, evolving market dynamics, our dependence on third parties for clinical trials, manufacturing, distribution, information and quality control and other risks that are described in further detail in the Company's reports filed with the Securities and Exchange Commission. We do not plan to update any such forward-looking statements and expressly disclaim any duty to update the information contained in this press release except as required by law.

SPECTRUM PHARMACEUTICALS, INC. ^®, FUSILEV^®, FOLOTYN^®, ZEVALIN^®, and MARQIBO^® are registered trademarks of Spectrum Pharmaceuticals, Inc. and its affiliates. BELEODAQ™,REDEFINING CANCER CARE™ and the Spectrum Pharmaceuticals logos are trademarks owned by Spectrum Pharmaceuticals, Inc. Any other trademarks are the property of their respective owners.

© 2014 Spectrum Pharmaceuticals, Inc. All Rights Reserved.

Forward-Looking Statements – CASI Pharmaceuticals, Inc.

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to the outlook for expectations for future financial or business performance, strategies, expectations and goals. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and no duty to update forward-looking statements is assumed.

Actual results could differ materially from those currently anticipated due to a number of factors, including: the risk that we may be unable to continue as a going concern as a result of our inability to raise sufficient capital for our operational needs; the possibility that we may be delisted from trading on the Nasdaq Capital Market; the volatility in the market price of our common stock; the difficulty of executing our business strategy in China; our inability to enter into strategic partnerships for the development, commercialization, manufacturing and distribution of our proposed product candidate or future candidates; risks relating to the need for additional capital and the uncertainty of securing additional funding on favorable terms; risks associated with our product candidates; risks associated with any early-stage products under development; the risk that results in preclinical models are not necessarily indicative of clinical results; uncertainties relating to preclinical and clinical trials, including delays to the commencement of such trials; the lack of success in the clinical development of any of our products; dependence on third parties; and risks relating to the commercialization, if any, of our proposed products (such as marketing, safety, regulatory, patent, product liability, supply, competition and other risks). Such factors, among others, could have a material adverse effect upon our business, results of operations and financial condition. We caution readers not to place undue reliance on any forward-looking statements, which only speak as of the date made. Additional information about the factors and risks that could affect our business, financial condition and results of operations, are contained in our filings with the U.S. Securities and Exchange Commission, which are available at www.sec.gov.

SPECTRUM INVESTOR CONTACT:   Spectrum Pharmaceuticals, Inc. Shiv Kapoor Vice President, Strategic Planning & Investor
Relations 702-835-6300 InvestorRelations@sppirx.com   CASI INVESTOR CONTACTS:   CASI Pharmaceuticals, Inc. 240.864.2643 ir@casipharmaceuticals.com   LHA Kim Sutton Golodetz 212.838.3777 kgolodetz@lhai.com

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EX-10.5

Exhibit 10.5

Execution Version

Confidential

Confidential Materials omitted and filed separately with the Securities and Exchange Commission.
Triple asterisks denote omissions.

LICENSE AGREEMENT

This LICENSE AGREEMENT (the “Agreement”) is effective as of September 17, 2014 (the “Effective Date”) by and between Talon Therapeutics, Inc., a Delaware corporation (“Talon”) and CASI Pharmaceuticals, Inc., a Delaware corporation (“Licensee”). Licensee and Talon are each referred to herein by name or, individually, as a “Party” or, collectively, as “Parties.”

BACKGROUND

A.           Talon owns and controls rights in and to a product commercially known as “Marqibo®”, a sphingosomal vincristine, described as a liposome that includes sphingomyelin and cholesterol and contains encapsulated vincristine, wherein the sphingomyelin comprises less than 20% dihydrosphingomyelin (the “Product”).

B.           Licensee desires to obtain a license to develop and commercialize the Product for use in the Field in the Licensee Territory (each capitalized term as defined below), and Talon desires to grant Licensee such a license.

NOW, THEREFORE, in consideration of the mutual covenants and agreements provided herein below and other consideration, the receipt and sufficiency of which is hereby acknowledged, Licensee and Talon hereby agree as follows:

Article 1
DEFINITIONS

The following capitalized terms shall have the meanings given in this Article 1 when used in this Agreement:

1.1           “AAA” has the meaning set forth in Section 10.2.

1.2           “AAA Rules” has the meaning set forth in Section 10.2.

1.3           “Additional Products” has the meaning set forth in Section 3.4.1.

1.4           “Affiliate” shall mean with respect to either Party, any Person controlling, controlled by or under common control with such Party, for so long as such control exists. For purposes of this Section 1.4 only, “control” shall mean (i) direct or indirect ownership of fifty percent (50%) or more of the stock or shares having the right to vote for the election of directors of such corporate entity or (ii) the possession, directly or indirectly, of the power to direct, or cause the direction of, the management or policies of such entity, whether through the ownership of voting securities, by contract or otherwise.

1.5           “Agreement” has the meaning set forth in the Preamble including any schedules, exhibits, annexures, attached hereto or any amendments and modifications.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

1.6           “Agreement Year” shall mean a twelve (12) month period from the Effective Date and each anniversary thereof.

1.7           “Applicable Laws” shall mean, with respect to a Party’s activities under this Agreement, any and all laws, ordinances, orders, rules, rulings, directives and regulations of any kind whatsoever of any governmental or regulatory authority within the applicable jurisdiction applicable to such Party’s activities.

1.8           “Auditing Party” has the meaning set forth in Section 5.5.

1.9           “Business Day” shall mean any day other than a Saturday, Sunday or any other day on which commercial banks in the United States, the People’s Republic of China or Hong Kong are authorized or required by law to remain closed.

1.10         “Chairperson” has the meaning set forth in Section 2.1.3.

1.11         “Change of Control” means, with respect to either Party, (i) the sale of all or substantially all of such Party’s assets or business relating to this Agreement; (ii) a merger, consolidation, share exchange or other similar transaction involving such Party and any Third Party which results in the holders of the outstanding voting securities of such Party immediately prior to such merger, consolidation, share exchange or other similar transaction ceasing to hold more than fifty percent (50%) of the combined voting power of the surviving, purchasing or continuing entity immediately after such merger, consolidation, share exchange or other similar transaction, or (iii) the acquisition by a person or entity, or group of persons or entities acting in concert, of more than fifty percent (50%) of the outstanding voting equity securities of such Party; in all cases of clauses (i)-(iii), where such transaction is to be entered into with any person or group of persons other than the other Party or its Affiliates.

1.12         “Commercialization” shall mean, with respect to the Product, any and all processes and activities conducted to establish and maintain sales for the Product (including with respect to reimbursement and patient access), including offering for sale, detailing, selling (including launch), marketing (including education and advertising activities), promoting, storing, transporting, distributing, and importing the Product, but shall exclude Development of the Product. For clarity, Commercialization shall include the manufacture of the Product in support of the foregoing processes and activities, including, to the extent applicable, packaging, labeling and other finishing activities, quality control and assurance testing, in each case, with respect to such product. “Commercialize” and “Commercializing” shall have their correlative meanings.

1.13         “Commercially Reasonable Efforts” shall mean:

(a)          those efforts and resources that Licensee would use were it developing, promoting and detailing its own pharmaceutical products which are of similar market potential as the Product, taking into account product labeling, market potential, past performance, economic return, the regulatory environment and competitive market conditions in the therapeutic area, all as measured by the facts and circumstances at the time such efforts are due, and

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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(b)          with respect to any Product, commercially reasonable efforts of a Person to carry out its obligations, and to cause its Affiliates and licensees and sublicensees to carry out their respective obligations, using such efforts and employing such resources normally used by Persons of comparable resources in the specialty pharmaceutical business relating to the research, development or commercialization of a product, that is of similar market potential at a similar stage in its development or product life, taking into account issues of market exclusivity, product profile, including efficacy, safety, tolerability and convenience, the competitiveness of alternate products in the marketplace or under development, the availability of existing forms or dosages for other indications, the launch or sales of a similar product by such Person or third parties, the regulatory environment and the profitability of the applicable product (including pricing and reimbursement status achieved), and other relevant factors, including technical, commercial, legal, scientific and/or medical factors. Factors beyond the reasonable control of a Person, including without limitation, regulatory delays, safety findings, unforeseen technical challenges, the failure of a Product to meet necessary scientific or regulatory endpoints, and force majeure events shall be taken into account when evaluating whether a Person’s efforts under this Section 1.13(b)

1.14         “Confidential Information” has the meaning set forth in Section 7.1.

1.15         “Control” shall mean, with respect to any Intellectual Property right, possession by a party (including its Affiliates) of the right (whether by ownership, license or otherwise) to grant to another party a license or a sublicense under such Intellectual Property right without violating the terms of any agreement or other arrangement with any third party. “Controlled” and “Controlling” shall have their correlative meanings. Notwithstanding anything to the contrary in this Agreement, in the event that a Third Party acquires (including by merger or consolidation) a Party or an Affiliate of a Party, or a Party or an Affiliate of a Party transfers to a Third Party all or substantially all of its assets to which this Agreement relates (such Third Party and its Affiliates immediately prior to such acquisition or transfer (the “Subject Transaction”), collectively, the “Acquiring Entities”), the following shall not be deemed to be Controlled by such Party or its Affiliates for purposes of this Agreement: (i) any subject matter owned or controlled by any Acquiring Entity immediately prior to the effective date of such Subject Transaction, and (ii) any subject matter developed or acquired by or on behalf of any Acquiring Entity after a Subject Transaction independently, without accessing or practicing subject matter within the Licensed Technology or any other technology or information made available to such Party under this Agreement.

1.16         “Development” shall mean, with respect to the Product, any and all processes and activities conducted to obtain and maintain Regulatory Approval for the Product, including preclinical testing, test method development and stability testing, toxicology, formulation, process development, quality assurance/control development, statistical analysis, clinical studies (including trials for additional indications for the Product for which a Regulatory Approval has been obtained), quality of life assessments, pharmacoeconomics, post-marketing studies, label expansion studies, regulatory affairs, and further activities relating to the clinical development or preparation of such product for filing MAAs with Regulatory Authorities and Commercialization. “Develop” and “Developing” shall have their correlative meanings.

1.17         “Dispute” has the meaning set forth in Section 10.1.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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1.18         “Effective Date” has the meaning set forth in the Preamble.

1.19         “Enforcing Party” has the meaning set forth in Section 6.5.5.

1.20         “Field” shall mean the use of the Product for the diagnosis, prevention and therapy of all diseases, conditions and disorders in humans.

1.21         “First Commercial Launch” shall mean the first shipment of the Product in commercial quantities for commercial sale to a Third Party in Licensee Territory after receipt of all applicable Regulatory Approvals therefor from the applicable Regulatory Authority in Licensee Territory.

1.22         “Foreign Marketing Approval” has the meaning set forth in Section 4.1.6.

1.23         “Imported Product Regulatory Approval” has the meaning set forth in Section 4.1.6.

1.24         “Indemnify” has the meaning set forth in Section 8.5.1.

1.25         “Initial Transfer” has the meaning set forth in Section 4.2.3.

1.26         “Intellectual Property” shall mean intellectual property rights of every kind and nature throughout the world, however denominated, including all rights and interests pertaining to or deriving from:

(a)          Patent and Know-How;

(b)          trademarks, trade names, service marks, service names, brands, trade dress and logos, domain names, and the goodwill and activities associated therewith;

(c)          copyrights, works of authorship, rights of privacy and publicity, moral rights, and similar proprietary rights of any kind or nature, in all media now known or hereafter created; and

(d)          any and all registrations, applications, recordings, licenses, statutory rights, common-law rights and rights relating to any of the foregoing.

1.27         “International Accounting Standards” shall mean the International Financial Reporting Standards or U.S. Generally Accepted Accounting Principles.

1.28         “Invention” has the meaning set forth in Section 6.1.2.

1.29         “Investment Agreement” has the meaning set forth in Section 5.1.

1.30         “JPC” has the meaning set forth in Section 2.1.1.

1.31         “Joint Patents” has the meaning set forth in Section 6.1.1(c).

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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1.32         “Joint Inventions” has the meaning set forth in Section 6.1.1(c).

1.33         Intentionally Omitted.

1.34         “Know-How” shall mean inventions, business, marketing, technical and manufacturing information, know-how and materials, including technology, software, instrumentation, specifications, devices, data, compositions, formulas, biological materials, assays, reagents, constructs, compounds, discoveries, procedures, processes, practices, protocols, methods, techniques, results of experimentation or testing, knowledge, trade secrets, skill and experience, in each case whether or not patentable or copyrightable.

1.35         “Licensee” has the meaning set forth in the Preamble.

1.36         “Licensee Indemnitees” has the meaning set forth in Section 8.5.1.

1.37         “Licensee Inventions” has the meaning set forth in Section 6.1.1(b).

1.38         “Licensee Know-How” shall mean any and all Know-How Controlled by Licensee or its Affiliates during the Term that is reasonably necessary or useful for the Development or Commercialization of the Product for use in the Field. Licensee Know-How shall also include Licensee Inventions.

1.39         “Licensee Territory” shall mean People’s Republic of China including, Hong Kong, Macau and Taiwan.

1.40         “Licensee Trademarks” has the meaning set forth in Section 4.3.4(a).

1.41         “Losses” has the meaning set forth in Section 8.5.1.

1.42         “MAA” shall mean a new drug application or similar application or submission filed with or submitted to any Regulatory Authority to obtain permission to commence marketing and sales of the Product in any particular jurisdiction.

1.43         “Made” has the meaning set forth in Section 6.1.2.

1.44         “Manufacturing Cost” shall mean Talon’s, or Non-Talon Foreign Regulatory Approval Holder’s, bona fide and actual manufacturing cost or bona fide invoiced cost from a Third Party manufacturer.

1.45         “Material Impact” shall mean a material adverse effect on the regulatory status or commercial sales of the Product.

1.46         “Material Impact Matters” has the meaning set forth in Section 2.3.

1.47         “Net Sales” has the meaning set forth in the Upstream Stream Licenses.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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1.48         “Non-Talon Foreign Marketing Approval Holder” has the meaning set forth in Section 4.1.6.

1.49         “Party” or “Parties” has the meaning set forth in the Preamble.

1.50         “Patent” shall mean any of the following, whether existing now or in the future anywhere in the world: (i) any issued patent, including inventor's certificates, substitutions, extensions, confirmations, reissues, re-examination, renewal or any like governmental grant for protection of inventions; and (ii) any pending application for any of the foregoing, including any continuation, divisional, substitution, continuations-in-part, provisional and converted provisional applications.

1.51         “Payment Period” has the meaning set forth in Section 5.2.2.

1.52         “Person” shall mean any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization or government or political subdivision thereof.

1.53         “Prior CDA” has the meaning set forth in Section 7.3.

1.54         “Product” has the meaning set forth in the Preamble.

1.55         “Prosecution and Maintenance” shall mean, with respect to a Patent, the preparing, filing, prosecuting and maintenance of such Patent, as well as re-examinations, reissues, requests for Patent term extensions and the like with respect to such Patent, together with the conduct of interferences, the defense of oppositions and other similar proceedings with respect to the particular Patent.

1.56         “Regulatory Approval” shall mean, with respect to the Product in a particular jurisdiction, approval or other permission by the applicable Regulatory Authorities sufficient to initiate manufacturing, importing, marketing and sales of such product, including pricing and reimbursement approvals.

1.57         “Regulatory Authority” shall mean any federal, national, multinational, state, provincial or local regulatory agency, department, bureau or other governmental entity with authority over the Development, Commercialization or other use or exploitation (including the granting of Regulatory Approvals) of the Product in any jurisdiction, including the FDA.

1.58         “Regulatory Filing” shall mean any filing, application, or submission with any Regulatory Authority, including MAAs and authorization, approvals or clearances arising from the foregoing, including Regulatory Approvals, and all correspondence or communication with or from the relevant Regulatory Authority, as well as minutes of any material meetings, telephone conferences or discussions with the relevant Regulatory Authority, in each case with respect to the Product.

1.59         “Senior Executives” has the meaning set forth in Section 2.3.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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1.60         “Supply Agreement” has the meaning set forth in Section 4.5.2.

1.61         “Talon” has the meaning set forth in the Preamble.

1.62         “Talon Copyrights” shall mean all works of authorship (including advertising, marketing and promotional materials, artwork, labeling, and other works of authorship), and all copyrights, moral rights and other rights and interests thereto throughout the Licensee Territory, whether or not registered, that are (i) Controlled by Talon or its Affiliates, and (ii) are delivered to Licensee by Talon for use in connection with the Product.

1.63         “Talon Indemnitees” has the meaning set forth in Section 8.5.2.

1.64         “Talon Inventions” has the meaning set forth in Section 6.1.1(a).

1.65         “Talon Know-How” shall mean any and all Know-How Controlled by Talon or its Affiliates during the Term that is reasonably necessary or useful for the Development or Commercialization of the Product for use in the Field. Talon Know-How shall also include Talon Inventions.

1.66         “Talon Patents” shall mean any and all Patents Controlled by Talon or its Affiliates during the Term claiming (i) the composition of or formulation for, (ii) any method, composition or apparatus for the manufacture of, or (iii) any method of using in the Field, in each case of clause (i), (ii), and (iii), the Product. Talon Patents shall also include Patents that claim Talon Inventions. A list of Talon Patents is appended hereto as Exhibit 1.66 and will be updated periodically to reflect changes thereto during the Term.

1.67         “Talon Product Marks” has the meaning set forth in Section 4.3.4(c).

1.68         “Talon Technology” shall mean the Talon Know-How, Talon Patents and Talon Copyrights.

1.69         “Talon Trademarks” shall mean the trademarks and service marks, the goodwill associated therewith, and all registrations and applications relating thereto, that are (i) Controlled by Talon or its Affiliates, during the Term, and (ii) used by Talon in connection with the Product. A list of Talon Trademarks is appended hereto as Exhibit 1.69 and will be updated periodically to reflect changes thereto during the Term.

1.70         “Talon Territory” shall mean all countries and territories throughout the world other than the Licensee Territory.

1.71         “***” shall mean ***.

1.72         “Term” has the meaning set forth in Section 9.1.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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1.73         “Territory” shall mean all of the countries and territories in the world. A Party’s respective “Territory” shall mean, in the case of Talon, the Talon Territory, and in the case of Licensee, the Licensee Territory.

1.74         “Third Party” shall mean any Person other than Licensee, Talon or their respective Affiliates.

1.75         “Third-Party Claim” has the meaning set forth in Section 8.5.1.

1.76         “Upfront Note” has the meaning set forth in Section 5.1.

1.77         “Upstream Licenses” shall mean ***.

1.78         “Upstream Licensor” shall mean the licensor under the Upstream License, or the Rights Agent with respect to the Contingent Value Rights Agreement.

1.79         “Upstream Payments” has the meaning set forth in Section 5.2.1.

1.80         “Wind-Down Period” has the meaning set forth in Section 9.8.2.

Article 2
GOVERNANCE

2.1           Joint Product Committee.

2.1.1           Establishment. Promptly after the Effective Date, Licensee and Talon shall establish a joint product committee (the “JPC”) to oversee, review and coordinate the activities of Licensee under this Agreement, including the Development and Commercialization of the Product for use in the Field in the Licensee Territory.

2.1.2           Responsibilities. The JPC shall be responsible for: (i) overseeing, reviewing and monitoring Licensee’s activities under this Agreement including, without limitation, any clinical trials proposed to be conducted by Licensee; (ii) facilitating access to and the exchange of information between the Parties related to the Development and/or Commercialization of the Product for use in the Field in the Licensee Territory; and (iii) undertaking and/or approving such other matters as are specifically provided for the JPC under this Agreement.

2.1.3           Membership. The JPC shall be comprised of an equal number of representatives from each of Talon and Licensee and unless otherwise agreed such number shall be two (2) senior representatives from each Talon and Licensee. Either Party may replace its respective JPC representatives at any time with prior notice to the other Party, provided, that such replacement is of comparable authority and scope of functional responsibility within that Party’s organization as the person he or she is replacing. Unless otherwise agreed by the Parties, the JPC shall have at least one representative with relevant decision-making authority from each Party such that the JPC is able to effectuate all of its decisions within the scope of its responsibilities. Licensee shall select one of its representatives as the chairperson for the JPC (the “Chairperson”) and the Licensee may replace the Chairperson upon written notice to Talon. The Chairperson shall be responsible for calling meetings, preparing and circulating an agenda in advance of each meeting (which agenda will include every matter requested by either Party), and preparing and issuing minutes of each meeting within thirty (30) days thereafter.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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2.2           Meetings. The JPC shall hold meetings (either in person, by teleconference or videoconference) at such times and places as the Parties may mutually agree, provided, that, unless the Parties agree otherwise, the JPC shall meet at least semi-annually during the Development of the Product for use in the Field in the Licensee Territory, and at least annually thereafter. Each Party shall bear its own costs associated with attending such meetings. As appropriate, other employees of the Parties may attend the JPC’s meetings as nonvoting observers, but no Third Party personnel may attend unless otherwise agreed by the Parties. At the request of Talon and with prior written approval of Licensee, which shall not be unreasonably withheld, Third Party licensees of Talon for the development and commercialization of the Product for use in the Field in the Talon Territory may attend the JPC’s meetings as nonvoting participants if they have agreed to confidentiality terms at least as restrictive as those set forth in this Agreement. Each Party may also call for special meetings to resolve particular matters requested by such Party.

2.3           Decision Making. Decisions of the JPC shall be made by consensus of the members present in person or by other means (e.g., teleconference) at any meeting, with at least one representative from each Party participating in such vote. The members of the JPC shall at all times use good faith efforts to reach consensus on matters properly referred to the JPC. In the event that the JPC is unable to reach consensus with respect to a particular matter within its purpose, then either Party may, by written notice to the other, refer the matter to the respective business head of each Party or their respective designee who is senior in rank and authority to such Party’s JPC representatives (the “Senior Executives”) for resolution by good faith discussions for a period of at least fifteen (15) Business Days. In the event that the Senior Executives are unable to reach agreement with respect to such matter within such fifteen (15) Business Days, then Licensee shall have the final decision-making authority with respect to such matter, except in the event that such matter is reasonably possible to create a Material Impact in the Talon Territory (the “Material Impact Matters”) and Talon notifies Licensee during or before any referral of the matter to Senior Executives of each Party for resolution of Talon’s belief that such matter is a Material Impact Matter, in which case, Talon shall have the final decision-making authority.

2.4           Authority. The JPC shall perform its responsibilities under this Agreement based on the principles of prompt and diligent Development and Commercialization of the Product for use in the Field in the Licensee Territory, consistent with good pharmaceutical practices and commercially reasonable consideration of the optimal balance of maximizing long-term sale of the Product in the Licensee Territory.

2.5           Day-to-Day Responsibilities. Each Party shall: (i) be responsible for day-to-day implementation and operation of the activities hereunder for which it has or is otherwise assigned responsibility under this Agreement, provided, that such implementation is not inconsistent with the express terms of this Agreement or the decisions of the JPC within the scope of their authority specified herein; and (ii) keep the other Party informed as to the progress of such activities as reasonably requested by the other Party and as otherwise determined by the JPC.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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2.6           JPC Participation; Discontinuation. It is understood that Talon’s participation on the JPC shall be as a matter of right, but not an obligation. Accordingly, Talon may, at its discretion, elect to discontinue its participation in the JPC at any time during the Term upon written notice to Licensee. If Talon provides such written notice, then JPC shall have no further authority under this Agreement and shall cease to function, and thereafter decisions which were previously to be made by the JPC as set forth and contemplated in this Agreement shall be made solely by the Licensee in its reasonable discretion except that all decisions with respect to Material Impact Matters shall be made solely by Talon, and all of the rights and obligations of the Parties under this Agreement shall continue in full force and effect as rights and obligations directly between the Parties, including, without limitation, each Party’s obligations to provide and rights to receive results, data and other information generated from the other Party’s activities with respect to the Development of the Product for use in the Field.

Article 3
LICENSES AND EXCLUSIVITY

3.1           Grant to Licensee.

3.1.1           License. Subject to and in accordance with the terms and conditions of this Agreement, Talon hereby grants to Licensee, during the Term, (i) an exclusive (even as to Talon and its Affiliates, except to the extent necessary to perform their obligations under this Agreement), irrevocable (except as set forth in Article 9), fully paid-up, royalty-free (except as set forth in Section 5.2.1), sublicenseable at any tier (in accordance with Section 3.1.2) license to use the Talon Know-How, and under the Talon Patents, to Commercialize (including to use, sale, offer for sale and import) the Product solely in the Licensee Territory and solely for use in the Field, subject to and in accordance with Section 4.3, and (ii) a non-exclusive, irrevocable (except as set forth in Article 9), fully paid-up, royalty-free, sublicenseable at any tier (in accordance with Section 3.1.2) license to use the Talon Know-How, and under the Talon Patents, to Develop the Product solely in the Licensee Territory and solely for use in the Field, subject to and in accordance with Sections 4.1 and 4.2.

3.1.2           Sublicenses. Neither Licensee nor any of its Affiliates may grant or authorize sublicenses under the license under Section 3.1.1 without the prior written consent of Talon, which approval shall not be unreasonably withheld, delayed, or conditioned, except that Licensee shall have the right to sublicense at any tier the license under Section 3.1.1 to its Affiliates without the consent of Talon. Licensee shall be responsible for the failure by its Affiliates to comply with, and Licensee shall ensure the compliance by each of its Affiliates with, the terms of this Agreement including all relevant restrictions, limitations and obligations.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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3.2           Activities Outside the Field and Outside the Licensee Territory.

3.2.1           Licensee Rights Limited to the Field and the Licensee Territory. Licensee agrees that neither it, nor any of its Affiliates, will Develop (including file for Regulatory Approval with respect to) or Commercialize (including use, sale, offer for sale or import) the Product anywhere in the world, or for any use anywhere in the world, except in the Licensee Territory, and for use in the Field in the Licensee Territory, only in accordance with and under this Agreement. Licensee agrees that neither it, nor any of its Affiliates, will use or otherwise exploit, except as expressly licensed under this Agreement, any Talon Patents, Talon Know-How and/or Talon Trademark, or their counterparts in a country outside the Licensee Territory.

3.2.2           Territorial Integrity. Each Party shall use Commercially Reasonable Efforts to prevent any Product sold or otherwise distributed by such Party, directly or indirectly, from being sold, distributed or otherwise transported for use outside its respective Territory.

3.3           Upstream Licenses. In addition to the payment obligations under Section 5.2, Licensee shall, and shall cause its Affiliates and sublicensees to, comply with all the terms and conditions of the Upstream Licenses applicable to Licensee or its Affiliates or sublicensees, or to Talon due to Licensee’s or its Affiliates’ or sublicensees’ activities, under this Agreement in the Licensee Territory. To the extent that any provisions are more restrictive, or broader, under the Upstream Licenses than may be explicitly set out in the Agreement, such more restrictive or broader provisions shall govern Licensee’s rights. During the Term, Talon shall promptly furnish Licensee with copies of (a) complete and unredacted copies of the Upstream Licenses and any relevant ancillary agreements, exhibits, schedules, or other documents which set forth and are sufficient to fully describe all the terms and conditions with which Licensee must comply in relation to the Upstream Licenses, (b) all amendments of the Upstream Licenses, and (c) all correspondence (or in the case of oral discussions, a summary of such discussions) with or from and reports received from or provided to licensors under the Upstream Licenses to the extent material to Licensee or the rights granted or to be granted to Licensee under this Agreement. In addition, during the Term, Talon shall provide copies of all notices received by Talon relating to any alleged breach or default by Talon under the Upstream Licenses within five (5) Business Days after Talon’s receipt thereof.

3.4           Assistance to Obtain Rights to Additional Products.

3.4.1           Introduction to Third Parties with Rights to Additional Products. With regard to any current and/or future proprietary, licensed or acquired pharmaceutical or biologic assets or products, and any and all other derivatives, and/or improvements thereof, that Talon Controls or that come under the Control of Talon, other than the Product (the “Additional Products”), to the extent Development and Commercialization rights in the Licensee Territory are Controlled by Third Parties, at Licensee’s reasonable request, Talon shall use good faith efforts, solely from the perspective of Talon’s best interests, to introduce Licensee to such Third Parties to facilitate Licensee to license or acquire such rights in the Licensee Territory from such Third Parties, with the understanding that Licensee shall be solely responsible for all costs or consideration related to a license or acquisition of such rights in the Licensee Territory from such Third Parties.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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3.4.2           Efforts to Obtain Rights in the Licensee Territory. Talon shall use good faith efforts, solely from the perspective of Talon’s best interests, when engaging in negotiations with Third Parties to license or acquire any Development and Commercialization rights for any pharmaceutical or biologic assets or products, and any and all other derivatives, and/or improvements thereof owned by such third parties, to license or acquire Development and Commercialization rights thereto in the Licensee Territory.

3.4.3           Termination Upon Change of Control. Licensee acknowledges and agrees that Talon’s obligations under Sections 3.4.1 and 3.4.2 above shall terminate and be of no further effect upon the consummation of Change of Control by Talon.

3.5           No Other Rights. Each Party acknowledges that the rights and licenses granted under this Article 3 and elsewhere in this Agreement are limited to the scope expressly granted. Accordingly, except for the rights expressly granted under this Agreement, no right, title, or interest of any nature whatsoever is granted, whether by implication, estoppel, reliance, or otherwise, by either Party to the other Party. All rights with respect to Know-How, Patents or other Intellectual Property rights that are not specifically granted herein are reserved to the owner thereof.

Article 4
REGULATORY MATTERS, DEVELOPMENT AND COMMERCIALIZATION OF PRODUCT

4.1           Regulatory Matters.

4.1.1           General. Licensee shall be responsible for all correspondence, meetings and other interactions, with the relevant Regulatory Authorities concerning regulatory activities related to the Product in the Field in the Licensee Territory, and for preparing and filing any and all Regulatory Filings for Regulatory Approval for the Product in the Field in the Licensee Territory at its sole expense and shall use Commercially Reasonable Efforts in doing so. Talon shall assist and cooperate with Licensee in connection with the preparation, filing and maintenance of such Regulatory Filings, as reasonably requested by Licensee. All Regulatory Approvals in the Licensee Territory shall be owned by Licensee and filed and obtained in Licensee’s and/or Talon’s name in accordance with Applicable Laws.

4.1.2           Reporting. Licensee shall keep Talon fully informed of regulatory developments relating to the Product in the Field in the Licensee Territory and shall promptly notify Talon in writing of any action or decision by any Regulatory Authority in the Licensee Territory regarding the Product in the Field. Licensee shall provide Talon for review and comment all draft Regulatory Filings in its original language (with a summary in English) and in electronic form (other than routine correspondence) at least twenty (20) Business Days (or in the event of a shorter filing deadline, as soon as practicable) in advance of their intended date of submission to a Regulatory Authority in the Licensee Territory. Talon shall use good faith efforts to provide Licensee with comments to such draft Regulatory Filings prior to the intended date of submission, and Licensee shall consider in good faith any comments thereto provided by Talon. Licensee shall promptly notify Talon of any Regulatory Filings (other than routine correspondence) submitted to or received from any Regulatory Authority in the Licensee Territory regarding the Product in the Field, and shall provide copies thereof at least five (5) Business Days after submission or receipt, which copy may be provided in its original language and in electronic form. Licensee shall keep Talon informed of all meetings, conferences and discussions with any Regulatory Authority in the Licensee Territory concerning the Product, and shall provide Talon with a summary of the substantive content discussed in any such meeting, conferences or discussions within five (5) Business Days after such meetings, conferences or discussions. In addition, upon Talon’s request, Licensee shall promptly meet and confer with Talon to discuss any regulatory matters related to the Product in the Licensee Territory, either in person at Licensee’s facility or by audio or video teleconference as Talon may elect.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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4.1.3           Regulatory Costs. Licensee shall be solely responsible for all of its costs and expenses related to the preparation, filing and maintenance of all Regulatory Approvals for the Product in the Field in the Licensee Territory. Talon shall support Licensee, as reasonably requested by Licensee, in obtaining Regulatory Approvals in Licensee Territory, including providing necessary documents or other materials in Talon’s possession required by Applicable Laws to obtain Regulatory Approvals in such territory, all in accordance with the terms and conditions of this Agreement, provided, that Talon shall be under no obligation to generate any additional data unless specifically agreed by Talon and Licensee.

4.1.4           Rights of Reference. Talon hereby grants to Licensee a right of reference to all Regulatory Filings filed by or on behalf of Talon, which right of reference Licensee may use for the sole purpose of seeking, obtaining and maintaining Regulatory Approvals and Developing and Commercializing the Product in the Field in the Licensee Territory. At Licensee’s reasonable request, Talon shall submit to the Regulatory Authorities a copy of the Regulatory Filings related to the Product, which are reasonably determined by Talon to be necessary to support Licensee’s application for Regulatory Approvals in the Licensee Territory.

4.1.5           Reporting; Adverse Drug Reactions.

(a)          Pharmacovigilance Agreement. Promptly after the Effective Date, the Parties shall enter into a pharmacovigilance agreement on reasonable and customary terms, including: (a) providing detailed procedures regarding the maintenance of core safety information and the exchange of safety data relating to the Product within appropriate timeframes and in an appropriate format to enable each Party to meet both expedited and periodic regulatory reporting requirements; and (b) ensuring compliance with the reporting requirements of all applicable Regulatory Authorities on a worldwide basis for the reporting of safety data in accordance with all applicable regulatory and legal requirements regarding the management of safety data. Each Party hereby agrees to comply with its respective obligations under such pharmacovigilance agreement and to cause its Affiliates to comply with such obligations.

(b)          Adverse Event Reporting. As between the Parties: (a) Licensee or its designee shall be responsible for the timely reporting of all adverse drug reactions/experiences, Product quality, Product complaints and safety data relating to the Product to the appropriate Regulatory Authorities in the Licensee Territory; and (b) Talon or its designee shall be responsible for reporting all adverse drug reactions/experiences, Product quality, Product complaints and safety data relating to the Product to the appropriate Regulatory Authorities in the Talon Territory; all in accordance with Applicable Laws.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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4.1.6           Talon Assistance for Imported Products. In the event that (a) to apply for Regulatory Approval for the Product as an imported drug or product (an “Imported Product Regulatory Approval”) in a country or regulatory jurisdiction within the Licensee Territory, a Regulatory Authority or Applicable Laws of such country or regulatory jurisdiction requires the applicant to hold a marketing authorization, certificate of pharmaceutical product, or an equivalent certification for such Product outside of such country or regulatory jurisdiction within the Licensee Territory (a “Foreign Marketing Approval”), (b) Licensee decides to seek Imported Product Regulatory Approval for such Product in such country or regulatory jurisdiction, and (c) Licensee requests Talon, if Talon is the Foreign Marketing Approval holder for such Product, to authorize Licensee to file, in Talon’s name, or if, Talon’s Affiliate or a Third Party is the Foreign Marketing Approval holder for such Product (the “Non-Talon Foreign Marketing Approval Holder”), to procure such Non-Talon Foreign Marketing Approval Holder to authorize Licensee to file in such Non-Talon Foreign Marketing Approval Holder’s name, for such Imported Product Regulatory Approval for such Product, then, Talon shall, and shall use commercially reasonable efforts to cause any Non-Talon Marketing Approval Holder to, provide all reasonable assistance, facilitation and support including providing all documents and data reasonably requested by Licensee in a timely manner and at Licensee’s cost to effectuate such Imported Product Regulatory Approval including:

(a)          Licensee shall have sole responsibility for, and sole decision-making authority with respect to, preparing, filing, obtaining and maintaining the Imported Product Regulatory Approvals and related Regulatory Filings, provided, that Talon shall, and shall cause its Affiliates and any Non-Talon Foreign Marketing Approval Holder to, at the request of Licensee, cooperate with Licensee to prepare, file, obtain and maintain such Imported Product Regulatory Approvals and related Regulatory Submissions.

(b)          Talon shall:

(i)          if Talon holds the Foreign Marketing Approval, authorize Licensee, and provide all reasonable assistance, facilitation and support including providing all documentations and data reasonably requested by Licensee to Licensee, to file, in Talon’s name, for Imported Product Regulatory Approval in such country or regulatory jurisdiction, at the direction of Licensee and for Licensee’s sole benefit; or

(ii)         if a Non-Talon Foreign Marketing Approval Holder holds the Foreign Marketing Approval for such Product, use commercially reasonable efforts to cause such Non-Talon Foreign Marketing Approval Holder to authorize and provide all reasonable assistance, facilitation and support including providing all documentations and data reasonably requested by Licensee to Licensee, to file, in such Non-Talon Foreign Marketing Approval Holder’s name, for Imported Product Regulatory Approval in such country or regulatory jurisdiction, at the direction of Licensee and for Licensee’s sole benefit.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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(c)          If the Regulatory Authority or Applicable Laws in such country or regulatory jurisdiction allows the Talon to appoint a local agent (or registration agent) to assist in the filing, maintenance or amendment of the Imported Product Regulatory Approval, then Talon shall appoint, or use commercially reasonable efforts to procure any Non-Talon Foreign Marketing Approval Holder to appoint, including providing a power of attorney which effectuates such appointment and registering such appointment with the relevant Regulatory Authority, Licensee or its designated Affiliate as its designated local agent for the Imported Product Regulatory Approval process inclusive of, to the fullest extent possible, the receipt of communications from the Regulatory Authority and submission of all relevant Regulatory Submissions.

(d)          Talon shall use commercially reasonable efforts to cause any Non-Talon Foreign Marketing Approval Holder to grant to Licensee, during the Term, an exclusive (even as to Talon, its Affiliates, and any Non-Talon Foreign Marketing Approval Holder), irrevocable (except as set forth in Article 9), fully-paid, royalty-free (except as set forth in Section 5.2.1), sublicenseable (in accordance with Section 3.1.2) license under such Imported Product Regulatory Approvals to Develop and Commercialize the Product solely in the Licensee Territory and solely for use in the Field in accordance with this Agreement. In addition, Talon shall cause any Non-Talon Foreign Marketing Approval Holder to, provide to Licensee, all benefits of any Imported Product Regulatory Approvals and enforce, at Licensee’s cost and expense, at the request of and for the account of Licensee, any rights of Talon or its Affiliates arising under any Imported Product Regulatory Approvals against any Person.

(e)          Talon shall use commercially reasonable efforts to cause any Non-Talon Foreign Regulatory Approval Holder to Manufacture and supply via the named manufacturer or supplier on the relevant Imported Product Regulatory Approval all Products for Commercialization under the Imported Product Regulatory Approvals in the Territory to Licensee and its designated Affiliates and sublicensees at a price per Product equal to the Non-Talon Foreign Regulatory Approval Holder’s Manufacturing Cost (as may change from time to time) for such Product plus ***.

(f)          Talon shall, and hereby appoints, and shall use commercially reasonable efforts to cause its Affiliates and any Non-Talon Foreign Marketing Approval Holder to appoint, Licensee as its attorney-in-fact to Develop and Commercialize the Product under the Imported Product Regulatory Approval on Talon’s or the Non-Talon Foreign Marketing Approval Holder’s behalf, and shall execute a power of attorney in favor of Licensee to this effect during the Term.

(g)          Talon shall, and shall use commercially reasonable efforts to cause its Affiliates and any Non-Talon Foreign Marketing Approval Holder to, (x) notify Licensee of all communications received from the applicable Regulatory Authority with respect to any Imported Product Regulatory Approvals, (y) provide all official original copies of all Imported Product Regulatory Approvals received from the applicable Regulatory Authority to Licensee, and (z) provide copies of any written correspondence received from the applicable Regulatory Authorities with respect to any Imported Product Regulatory Approvals to Licensee, in each case, promptly after receipt thereof.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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(h)          Talon shall not, and shall use commercially reasonable efforts to cause its Affiliates and any Non-Talon Foreign Marketing Approval Holder to not, interact or communicate with the CFDA regarding the Imported Product Regulatory Approvals without the prior approval or participation of Licensee.

(i)          If at any time Talon, its Affiliates or any Non-Talon Foreign Marketing Approval Holder are permitted by the applicable Regulatory Authority to transfer the Imported Product Regulatory Approval to Licensee, Talon shall, and hereby does, and shall cause its Affiliates and any Non-Talon Foreign Marketing Approval Holder to, assign to Licensee or its designated Affiliate, all rights, title and interests in and to such Imported Product Regulatory Approvals and related Regulatory Submissions for the Product in the Field in the Territory. Talon agrees and covenants that it shall, and shall cause it Affiliates and any Non-Talon Foreign Marketing Approval Holder to, promptly take any and all actions necessary to effectuate the prompt assignment of such Imported Product Regulatory Approvals and related Regulatory Submissions, or to enable Licensee or its designated Affiliate to obtain new Imported Product Regulatory Approvals or related Regulatory Submissions, including executing and delivering all documents or instruments, and providing all copies of documents or information, that may be necessary, required or which Licensee or its designated Affiliate may request.

4.2           Development.

4.2.1           General. Licensee shall take the lead in, and be responsible for, conducting the Development activities, including clinical trials, as may be reasonably necessary to expeditiously obtain Regulatory Approvals for the Product for use in the Field in the Licensee Territory. Except as otherwise provided herein, it is understood and agreed that, as between the Parties, all Development efforts for the Product for use in the Field in the Licensee Territory shall be at the sole expense of Licensee.

4.2.2           Clinical Trials. If additional clinical trials are required in the Licensee Territory, Licensee shall promptly inform JPC and shall not conduct any clinical trial without the prior approval of the JPC in accordance with Section 2.3.

4.2.3           Development Assistance. Promptly after the Effective Date, but not to exceed thirty (30) days following the Effective Date, Talon shall, at its own cost and expense, make available to Licensee the Talon Know-How that exists on the Effective Date and was not previously provided to Licensee (but without an obligation for Talon personnel to travel) including all Talon Know-How developed, collected, or submitted as part of an investigational new drug application or similar application or submission filed with or submitted to any Regulatory Authority to obtain permission to commence clinical trials in relation to the Product in any particular jurisdiction (the “Initial Transfer”). For clarity, the Initial Transfer shall not require Talon to conduct any new Development work or prepare or complete any reports not already completed. After the Initial Transfer, Talon shall provide Licensee with reasonable assistance regarding scientific, clinical and/or manufacturing matters (including the chemistry, manufacture and controls of the Product) in the Development of the Product in the Field in the Licensee Territory. Such assistance shall include the transfer of additional Talon Know How to Licensee and reasonable access to Talon personnel involved in the research and Development of the Product, either in-person or by teleconference.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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4.2.4           Diligence. Licensee shall use Commercially Reasonable Efforts to Develop and obtain and maintain Regulatory Approval for the Product for at least one indication in the Field in the Licensee Territory and shall not take actions that would be reasonably likely to create a Material Impact. Licensee will have no other diligence obligations with respect to the Development of the Product under this Agreement.

4.3           Commercialization.

4.3.1           General. Except as otherwise provided herein, it is understood and agreed that, as between the Parties, all Commercialization efforts for the Product for use in the Field in the Licensee Territory shall be at the sole expense of Licensee.

4.3.2           Diligence. Licensee will use Commercially Reasonable Efforts to Commercialize the Product in the Field in each country in the Licensee Territory in which Regulatory Approval is received and shall not take actions that would be reasonably likely to create a Material Impact. Without limiting the foregoing, Licensee agrees to, directly or through one or more of its Affiliates, use Commercially Reasonable Efforts (i) to launch the Product for use in the Field as soon as practicable in the Licensee Territory, and thereafter (ii) to market, promote and sell the Product in the Field throughout the Licensee Territory to maximize Net Sales with respect thereto. Licensee will have no other diligence obligations with respect to the Commercialization of the Product under this Agreement.

4.3.3           Pricing. Licensee shall have the sole right to determine pricing of the Product in the Field in the Licensee Territory, provided, that Licensee and Talon shall discuss the pricing strategy for the Licensee Territory.

4.3.4           Trademarks.

(a)          Licensee Trademarks. Licensee shall have the right to select the Product names and all trademarks, including any Talon Trademarks (subject to Section 4.3.4(b) and only to the extent Talon has the right to grant a license to such Talon Trademarks to Licensee), used in connection with the Commercialization of the Product for use in the Field, including special promotional or advertising taglines, in each case in the Licensee Territory (all such trademarks, other than the Talon Trademarks, specific to the Product and including all goodwill associated therewith, and all applications, registrations, extensions and renewals relating thereto, shall be referred to as the “Licensee Trademarks”). Licensee shall be the exclusive owner of the Licensee Trademarks, and shall use Commercially Reasonable Efforts to register and maintain, at its expense, such Licensee Trademarks as shall be used for Commercialization of the Product for use in the Field in the Licensee Territory.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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(b)          Reference to Talon as Licensor.

(i)          Talon Trademarks. To the extent permitted by Applicable Laws, at Talon’s election, the labels and packaging of the Product and all promotional materials for the Product shall include text identifying Talon as the licensor of the Product and a Talon Trademark to be placed in a size and location reasonably agreed to by the Parties, provided, that such mark: (i) is used in a consistent and noticeable manner sufficient to constitute trademark usage under Applicable Laws, (ii) is clearly identified as a trademark (i.e., through the use of a “®”, “™” or other appropriate identifier), (iii) is not used as combination marks with other marks or trademarks, and (iv) is reasonably less prominent in size and location as the Licensee Trademarks. Licensee shall obtain Talon’s review and approval prior to the first use of the Talon Trademarks in such labeling, packaging or promotional materials, such approval not to be unreasonably withheld if the Talon Trademarks are used in a manner that is consistent with Talon’s reasonable usage guidelines for such Talon Trademarks.

(ii)         Trademark License. In connection with Section 4.3.4(b)(i) above, Talon hereby grants to Licensee an exclusive license to use the Talon Trademarks (except with respect to the Talon’s trade name under which such license to use is non-exclusive) for the packaging, labeling, marketing, promotion, distribution and sale of the Product for use in the Field in the Licensee Territory in accordance with this Agreement, and Licensee shall have the right to exercise such license through its Affiliates, provided, that Licensee shall be responsible for the failure by its Affiliates to comply with, and Licensee guarantees the compliance by each of its Affiliates with, the terms of this Agreement including all relevant restrictions, limitations and obligations. Talon shall own all right, title and interest in and to the Talon Trademarks and the registrations thereof and all goodwill from the use of the Talon Trademarks shall vest in and inure to the benefit of Talon. Talon shall use Commercially Reasonable Efforts to register and maintain, at Licensee’s expense, such Talon Trademarks as shall be used for Commercialization of the Product for use in the Field in the Licensee Territory.

(c)          Talon Product Marks. Talon shall have the right, but not the obligation, to brand the Product for use in the Field in the Talon Territory using the Licensee Trademarks (“Talon Product Marks”). Accordingly, Licensee shall provide to Talon copy proofs of each Licensee Trademark and reasonable usage guidelines therefor as such mark is registered with the applicable Regulatory Authorities in the Licensee Territory for Talon’s review and consideration. Talon shall obtain Licensee’s review and approval prior to the first use of the Talon Product Marks in such labeling, packaging or promotional materials, such approval not to be unreasonably withheld if the Talon Product Marks are used in a manner that is consistent with Licensee’s reasonable usage guidelines for such Talon Product Marks. Subject to this Section 4.3.4(c), Licensee further hereby grants to Talon an exclusive license to use the Talon Product Marks (except with respect to the Licensee’s trade name under which such license to use is non-exclusive), to the extent Talon Product Marks exist in the Talon Territory, consistent with the usage guidelines applicable to Licensee and its Affiliates’ use of such Licensee Trademarks in the Licensee Territory solely in connection with the Development and Commercialization of the Product solely for use in the Field and solely in the Talon Territory for the packaging, labeling, marketing, promotion, distribution and sale of the Product for use in the Field in the Talon Territory in accordance with this Agreement, and Talon shall have the right to exercise such license through its Affiliates or sublicense a Third Party, provided, that Talon shall be responsible for the failure by its Affiliates or Third Party sub-licensees to comply with, and Talon guarantees the compliance by each of its Affiliates with, the terms of this Agreement including all relevant restrictions, limitations and obligations. Licensee shall own all right, title and interest in and to any Talon Product Marks and the registrations thereof and all goodwill from the use of the Talon Product Marks shall vest in and inure to the benefit of Licensee. The above notwithstanding, Licensee shall have the right, but not the obligation, to register or maintain any Talon Product Marks in the Talon Territory.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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4.4           Reporting. Without limiting any other provisions of this Agreement, Licensee shall keep Talon reasonably informed through the JPC as to the progress of its activities with respect to the Development and Commercialization of the Product or otherwise under this Article 4 and provide such reports and information with respect thereto as designated by the JPC or as may be reasonably requested by Talon. In addition, Licensee shall promptly notify Talon if it anticipates or there are material deviations from the Commercialization Plan(s) or any development diligence requirement, and shall discuss in good faith and keep Talon informed as to any corrective actions that it intends or is taking to address such deviations.

4.5           Manufacturing and Supply.

4.5.1           No Manufacturing Rights. Talon retains all rights with respect to manufacturing of the Product.

4.5.2           Supply. Subject to the terms and conditions of this Agreement, Talon shall use Commercially Reasonable Efforts to supply or have supplied to Licensee or its designee all quantities of the Product ordered by Licensee for use in the Field in the Licensee Territory in accordance with a separate written agreement to be negotiated between the Parties pursuant to Section 4.5.3 below (a “Supply Agreement”). Licensee shall solely purchase from Talon its entire requirement of the Product and Talon shall have the right to manufacture and have manufactured such quantities of the Product for Licensee.

4.5.3           Supply Agreement. Within ninety (90) days of the Effective Date, the Parties shall negotiate and execute a Supply Agreement for the supply by Talon to Licensee of the requirements of the Product ordered by Licensee for Development and Commercialization in the Licensee Territory.

4.5.4           Supply Price and Adjustment. The price per unit of each Product supplied by Talon under the Supply Agreement shall be equal to Talon’s Manufacturing Cost (as may change from time to time) for such Product plus ***.

4.5.5           Quality Agreement. Within ninety (90) days of executing the Supply Agreement, Talon and Licensee shall execute a mutually acceptable quality agreement that allocates roles and responsibilities to each Party with respect to quality control and regulatory compliance with respect to supply of the Product to Licensee.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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Article 5
PAYMENTS

5.1           Upfront Payment. As consideration for the licenses granted under Section 3.1 and Licensee’s other rights under this Agreement, Licensee shall pay to Talon one million five hundred thousand U.S. dollars (USD$1,500,000) by delivery of a secured promissory note in the form of Exhibit 5.1 (the “Upfront Note”).

5.2           Payments to Upstream Licensors.

5.2.1           Payments. Licensee shall pay to Talon any and all payments due from Talon to *** under the Upstream Licenses on account of the Development and/or Commercialization of the Product in the Field in the Licensee Territory by Licensee and its Affiliates and sublicensees (the “Upstream Payments”) including running royalty payments; provided that if Licensee is obligated to make any Upstream Payments due to the achievement of a milestone, Licensee shall only pay: (a) a prorated portion of any Upstream Payments triggered by the occurrence of a sales milestones reached in part due to sales by Licensee in the Licensee Territory; and (b) any Upstream Payments triggered by the occurrence of a development milestone wherein the trigger is explicitly defined as the achievement of a milestone in the Licensee Territory or achieved as a direct result of Licensee’s Development of the Product in the Licensee Territory. As an example of Licensee’s obligation to only pay a prorated portion of an Upstream Payment triggered by the occurrence of a sales milestone, if (x) a sales milestone payment of $10,000,000 is triggered due to the occurrence of aggregate annual sales of the Product within a territory covering the Licensed Territory reaching a certain threshold and (y) at the triggering of the sales milestone payment, Licensee’s annual sales of the Product in the Licensee Territory for the year the payment is triggered account for 10% of total sales of the Product in a territory which covers the Licensee Territory, then (z) Licensee shall pay $1,000,000 of that $10,000,000 sales milestone payment. Except for (i) the upfront payment under Section 5.1, and (ii) the Upstream Payments under this Section 5.2.1, no payment shall be due from Licensee to Talon for the Development and/or Commercialization of the Product in the Field in the Licensee Territory.

5.2.2           Payment Reports and Payments. For as long as Licensee is obligated to make the Upstream Payments in accordance with Section 5.2.1, within twenty five (25) days after the last day of each calendar quarter, Licensee will deliver to Talon a report of Net Sales of the Product by Licensee, its Affiliates and sublicensees during the preceding quarterly period (any such period, a “Payment Period”), with all the Upstream Payments in accordance with Section 5.2.1, if any, for the Payment Period covered by such report being due no later than forty (40) days after the last day of such Payment Period. For any Upstream Payments triggered due to the occurrence of a sales milestone, Talon shall provide Licensee with an invoice no later than twenty (20) days before such Upstream Payment is due if feasible or such other documentation and such invoice or documentation will set forth: (a) the Licensee’s prorated portion of such Upstream Payment, (b) how the Licensee’s prorated portion of the Upstream Payment was calculated and reasonable support for the calculation, and (c) the date when such Upstream Payment is due. In relation to any Upstream Payment, which Talon claims is triggered due to the occurrence of a development milestone achieved as a direct result of Licensee’s Development of the Product in the Licensee Territory (other than wherein the trigger is explicitly defined as the achievement of a milestone in the Licensee Territory), Talon shall provide Licensee with information, reasonably requested by Licensee, regarding the Development of the Product in the Talon Territory sufficient for Licensee to determine whether Licensee’s Development has triggered such an Upstream Payment.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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5.3           Payment Method. All payments due under this Agreement to Talon shall be made by bank wire transfer in immediately available funds to an account designated by Talon. All payments hereunder shall be made in the legal currency of the United States of America, and all references to “$” or “Dollars” shall refer to United States dollars. To the extent that Applicable Law imposes withholding taxes on any payments from Licensee to Talon pursuant to this Agreement, Licensee may withhold such taxes and pay such amounts to the relevant government authority. For any Upstream Payments where Talon cannot reduce any amounts owed to the Upstream Licensor under the applicable Upstream License with respect to withholding taxes paid by the Licensee under this Agreement, all amounts payable to Talon pursuant to this Agreement shall be made without reduction for any withholding or similar taxes paid by Licensee. For any Upstream Payments where Talon can reduce any amounts owed to the Upstream Licensor under the applicable Upstream License with respect to withholding taxes paid by the Licensee under this Agreement, the Licensee may deduct from the amounts payable to Talon pursuant to this Agreement any withholding or similar taxes paid by Licensee. Licensee shall furnish to Talon appropriate evidence of payment of such taxes or other amount required by Applicable Laws to be deducted from any payment due under this Agreement to Talon, including any tax or withholding levied by a foreign taxing authority in respect of such payment.

5.4           Support Fees. Talon will provide to Licensee at its own expense: (a) *** (***) hours of regulatory and development support during the first Agreement Year, and (b) *** (***) hours of regulatory and development support for each Agreement year after the first anniversary of the Effective Date. Regulatory and development support provided by Talon to Licensee, in excess of the number of free hours, set forth above, in any Agreement Year, shall be charged at a rate of $*** per hour. For clarity, the costs incurred by Talon to provide the Initial Transfer under Section 4.2.3 shall also be borne by Talon and shall not be charged to Licensee or counted toward the hours set out in the this Section that Talon will provide to Licensee at its own expense.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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5.5           Records; Audit. The Parties will, and will cause its Affiliates to, keep and maintain for three (3) years after the relevant calendar quarter complete and accurate books and records in sufficient detail so that Net Sales and payments made hereunder can be properly calculated. No more frequently than once during each calendar year during the Term and once during the three (3) year period thereafter, the Parties will permit independent third party auditors appointed by Talon, Talon, *** or Licensee (the party requesting an audit, the “Auditing Party”) and with at least forty-five (45) days advance notice at any time during normal business hours, accompanied at all times, to inspect, audit and copy reasonable amounts of relevant accounts and records of the non-Auditing Party and its Affiliates and reports submitted to the non-Auditing Party and its Affiliates by its sublicensees pertaining to a payment period that is not earlier than thirty-six (36) months from the date of conclusion of the audit, for the sole purpose of verifying the accuracy of the calculation of Upstream Payments to Talon pursuant to this Article 5. The accounts, records and reports related to any particular period of time may only be audited one time under this Section 5.5. The Auditing Party will cause their independent third party auditors not to provide the Auditing Party with any copies of such accounts, records or reports and not to disclose to the Auditing Party any information other than information relating solely to the accuracy of the accounting and payments made by Licensee pursuant to this Article 5. The Auditing Party will cause its independent third party auditors to promptly provide a copy of their report to non-Auditing Party. If such audit determines that payments are due to Talon, Licensee will pay to Talon any such additional amounts within ten (10) Business Days after the date on which such auditor’s written report is delivered to Licensee and the Auditing Party, unless such audit report is disputed by Licensee, in which case the dispute will be resolved in accordance with Article 10. If such audit determines that Licensee has overpaid any amounts to Talon, Talon will refund any such overpaid amounts to Licensee within ten (10) Business Days after the date on which such auditor’s written report is delivered to Licensee and the Auditing Party. Any such inspection of records will be at the Auditing Party’s expense unless such audit discloses a deficiency or overpayment in the payments made by Licensee (whether for itself or on behalf of its Affiliates) of more than *** percent (***%) of the aggregate amount payable for the relevant period, in the case of such a deficiency, Licensee will bear the cost of such audit, or in the case of such overpayment caused by Talon, Talon shall bear the cost of such audit. Each of the parties agree that all information subject to review under this Section 5.5 is non-Auditing Party’s Confidential Information that is subject to confidentiality and non-use obligations under Section 7.2, and Auditing Party agrees that it shall cause its independent third party auditors to also retain all such information subject to the non-disclosure and non-use restrictions of Section 7.2 or similar (but no less stringent) obligations of confidentiality and non-use customary in the accounting industry.

5.6           Late Payment. Any payments or portions thereof due hereunder which are not paid when due shall bear interest equal to the lesser of (i) the rate equal to the thirty (30) day U.S. dollar LIBOR rate effective for the date that payment was due, as published by The Wall Street Journal, Internet Edition at www.wsj.com in the “Money Rates” column, on the date such payment was due, plus an additional *** percent (***%), or (ii) the maximum rate permitted by Applicable Laws, calculated on the number of days such payment is delinquent. This Section 5.6 shall in no way limit any other remedies available to Talon.

Article 6
INTELLECTUAL PROPERTY

6.1           Ownership of Inventions.

6.1.1           Ownership.

(a)          Talon shall own all right, title and interest to (i) any and all Inventions solely Made by or on behalf of Talon or its Affiliates in connection with their activities under this Agreement and (ii) any and all Patents claiming any such Inventions described in the foregoing clause (ii) (collectively, “Talon Inventions”).

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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(b)          Licensee shall own all right, title and interest to (i) any and all Inventions solely Made by or on behalf of Licensee or its Affiliates or sublicensees in connection with their activities under this Agreement, and (ii) any and all Patents claiming any such Inventions described in the foregoing clause (i) (collectively, “Licensee Inventions”).

(c)          The Parties shall jointly own all right, title and interest to (i) any and all Inventions jointly Made by at least one employee, agent, consultant, contractor, Affiliate, or sublicensee of Talon and at least one employee, agent, consultant, contractor, Affiliate, or sublicensee of Licensee (each having the obligation to assign such Inventions to either Talon or Licensee), and (ii) any and all Patents claiming such Inventions described in the foregoing clause (i) (“Joint Patents” and collectively with Inventions described in clause (i), “Joint Inventions”).

(d)          During the Term, Talon Inventions and Joint Inventions shall be included in the definition of Talon Technology, Talon Patents, Talon Know-How, and Talon Copyrights, as applicable, and subject to the licenses granted under Section 3.1. For the avoidance of doubt, Talon reserves the right to use, practice or otherwise exploit any and all Talon Inventions and Joint Inventions subject to the licenses granted under Section 3.1.

6.1.2           Interpretation. For purposes of this Section 6.1, “Invention” shall mean any invention (whether or not patentable), data, results, ideas, discovery, development, method, process, know-how, works of authorship or other information that is Made by or on behalf of a Party or the Parties; and “Made” shall mean developed, conceived, authored, acquired or created by or on behalf of a Party or the Parties. It is understood that except as expressly set forth under this Section 6.1, inventorship, authorship and other indicia of which Party Made an Invention will be determined in accordance with United States or the relevant foreign Intellectual Property laws under which the relevant foreign Intellectual Property right exists in effect at the time such Invention was Made.

6.2           License Grant to Talon. Licensee hereby grants to Talon a perpetual, irrevocable, fully paid-up, royalty free, exclusive license, with the right to grant sublicenses at any tier, under Licensee Know-How (including, without limitation, Licensee Inventions) and Licensee’s rights in the Joint Inventions, to research, Develop, make, have made, use, sell, offer for sale, have sold, import and otherwise Commercialize the Product in the Talon Territory.

6.3           Patent Prosecution. Talon shall control the Prosecution and Maintenance of Talon Patents and Joint Patents. Licensee will bear the costs of Prosecution and Maintenance of all Talon Patents and Joint Patents in the Licensee Territory. Costs billed to or incurred by Talon for the Prosecution and Maintenance of all Talon Patents and Joint Patents in the Licensee Territory will be rebilled to Licensee and are due within thirty (30) days of rebilling by Talon.

6.4           Defense of Third Party Infringement Claims. If the Product becomes the subject of a Third Party’s claim or assertion of infringement of a Patent relating to the manufacture, use, sale, offer for sale or importation of the Product for use in the Field in the Licensee Territory, the Party first having notice of the claim or assertion shall promptly notify the other Party, and the Parties shall agree on and enter into a “common interest agreement” wherein such Parties agree to their shared, mutual interest in the outcome of such potential dispute, and thereafter, the Parties shall promptly confer to consider the claim or assertion and the appropriate course of action.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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6.5           Enforcement.

6.5.1           Notice. Licensee will promptly report in writing to Talon any (a) known or suspected third party infringement of any Talon Patents, Talon Trademarks, or Talon Copyrights, or (b) unauthorized use or misappropriation of any Talon Know-How or other Confidential Information by a Third Party of which it becomes aware, and will provide Talon with all available evidence supporting such infringement or unauthorized use or misappropriation. Talon will promptly report in writing to Licensee any (a) known or suspected third party infringement of any Licensee Inventions, Licensee Trademarks, or Talon Product Marks, or (b) unauthorized use or misappropriation of any Licensee Know-How or other Confidential Information by a Third Party of which it becomes aware, and will provide Licensee with all available evidence supporting such infringement or unauthorized use or misappropriation.

6.5.2           Right to Enforce Talon Patents, Talon Trademarks or Talon Copyrights. Talon will have the first right, but not the obligation, to take any reasonable measures it deems appropriate to stop activities in the Licensee Territory infringing the Talon Patents, Talon Trademarks or Talon Copyrights or the use without proper authorization of any Talon Know-How, in each case in connection with a Third Party’s manufacture, use, sale, offering for sale, or importation of Product for use in the Field in the Licensee Territory, including initiating or prosecuting an infringement or other appropriate action against. If Talon does not initiate any such measures within one hundred twenty (120) days of receiving written notice from Licensee of such activities (or within a reasonable shorter time period if a shorter period to take action is required by Applicable Laws to avoid the loss of legal rights), then Licensee will have the second right, but not the obligation, to take any reasonable measures it deems appropriate to stop such activities, provided, that, Licensee must coordinate and consult with Talon regarding such measures and will not take any measures, without the written permission of Talon, which permission will not be unreasonably withheld. It shall be reasonable for Talon to withhold such permission if Talon reasonably believes such measures will affect the protection that any Talon-Controlled Intellectual Property affords Talon. Licensee will have no right to settle any infringement or misappropriation Action under this Section 6.5.2 in a manner that diminishes the rights or interests of Talon without the express written consent of Talon. In addition, Licensee will not settle any such action in a manner that admits the invalidity or unenforceability of any Talon-Controlled Intellectual Property without obtaining the prior written consent of Talon.

6.5.3           Right to Enforce Licensee Inventions, Licensee Trademarks or Talon Product Marks. Licensee will have the first right, but not the obligation, to take any reasonable measures it deems appropriate to stop activities in the Talon Territory infringing the Licensee Inventions, Licensee Trademarks or Talon Product Marks or the use without proper authorization of any Licensee Know-How, in each case in connection with a Third Party’s manufacture, use, sale, offering for sale, or importation of Product for use in the Field in the Talon Territory, including initiating or prosecuting an infringement or other appropriate action against. If Licensee does not initiate any such measures within one hundred twenty (120) days of receiving written notice from Talon of such activities (or within a reasonable shorter time period if a shorter period to take action is required by Applicable Laws to avoid the loss of legal rights), then Talon will have the second right, but not the obligation, to take any reasonable measures it deems appropriate to stop such activities, provided, that, Talon must coordinate and consult with Licensee regarding such measures and will not take any measures, without the written permission of Licensee, which permission will not be unreasonably withheld. It shall be reasonable for Licensee to withhold such permission if Licensee reasonably believes such measures will affect the protection that any Licensee -Controlled Intellectual Property affords Licensee. Talon will have no right to settle any infringement or misappropriation Action under this Section 6.5.3 in a manner that diminishes the rights or interests of Licensee without the express written consent of Licensee. In addition, Talon will not settle any such action in a manner that admits the invalidity or unenforceability of any Licensee-Controlled Intellectual Property without obtaining the prior written consent of Licensee.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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6.5.4           Right to Enforce Joint Patents or Joint Inventions. Talon will have the first right, but not the obligation, to take any reasonable measures it deems appropriate to stop activities in the Licensee Territory infringing the Joint Patents or Joint Inventions or the use without proper authorization of any Joint Invention, in each case in connection with a Third Party’s manufacture, use, sale, offering for sale, or importation of Product for use in the Field in the Territory, including initiating or prosecuting an infringement or other appropriate action against. If Talon does not initiate any such measures within one hundred twenty (120) days of becoming aware of such activities (or within a reasonable shorter time period if a shorter period to take action is required by Applicable Laws to avoid the loss of legal rights), then Licensee will have the second right, but not the obligation, to take any reasonable measures it deems appropriate to stop such activities in the Licensee Territory, provided, that, Licensee must coordinate and consult with Talon regarding such measures and will not take any measures, without the written permission of Talon, which permission will not be unreasonably withheld. Licensee will have no right to settle any infringement or misappropriation Action under this Section 6.5.4 in a manner that diminishes the rights or interests of Talon without the express written consent of Talon. In addition, Licensee will not settle any such action in a manner that admits the invalidity or unenforceability of any Joint Patent or Joint Inventions without obtaining the prior written consent of Talon.

6.5.5           Cooperation. The Party commencing, controlling or defending any enforcement action under this Section 6.5 (the “Enforcing Party”) shall keep the other Party reasonably informed of the progress of such action, and such other Party shall have the right to participate with counsel of its own choice at its own expense. In any event, the other Party shall reasonably cooperate with the Enforcing Party, including providing information and materials, at the Enforcing Party’s request and expense.

6.5.6           Recoveries. Any recovery received as a result of any enforcement action to enforce any Intellectual Property pursuant to this Section 6.5 shall be used first to reimburse the Enforcing Party for the costs and expenses (including court, attorneys’ and professional fees) incurred in connection with such action, and the remainder of the recovery shall be shared as following: (i) if the enforcement action is filed in the Enforcing Party’s territory, one hundred percent (100%) of such recovery shall be paid to the Enforcing Party, and (ii) if the enforcement action is not filed in the Enforcing Party’s territory, *** percent (***%) of such recovery shall be paid to the Enforcing Party and *** percent (***%) of such recovery shall be paid to the other Party.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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6.5.7           Patents Claiming Talon Inventions. During the Term, Patents claiming Talon Inventions that are necessary or useful for the Development and Commercialization of the Product shall be deemed Talon Patents and the enforcement thereof shall be subject to Sections 6.5.1- 6.5.6 above.

6.6           Patent Marking. At Talon’s request, Licensee shall mark (or cause to be marked) the Product marketed and sold hereunder with appropriate Talon Patent numbers or indicia in accordance with Applicable Laws.

Article 7
CONFIDENTIALITY

7.1           Confidentiality; Exceptions. Except to the extent expressly authorized by this Agreement or otherwise agreed by the Parties in writing, the Parties agree that the receiving Party shall keep confidential and shall not publish or otherwise disclose or use for any purpose other than as provided for in this Agreement any confidential or proprietary information or materials furnished to it by the other Party pursuant to this Agreement (collectively, “Confidential Information”). Notwithstanding the foregoing, Confidential Information shall not be deemed to include information or materials to the extent that it can be established by written documentation by the receiving Party that such information or material:

7.1.1           was already known to or possessed by the receiving Party without any obligation of confidentiality, at the time of its disclosure to the receiving Party hereunder;

7.1.2           was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving Party hereunder;

7.1.3           became generally available to the public or otherwise part of the public domain after its disclosure hereunder other than through any act or omission of the receiving Party in breach of this Agreement;

7.1.4           was independently developed by the receiving Party without use of or reference to the other Party’s Confidential Information as demonstrated by documented evidence prepared by the receiving Party contemporaneously with such independent development; or

7.1.5           was disclosed to the receiving Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the disclosing Party not to disclose such information to others.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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7.2           Authorized Use and Disclosure. Each Party may use and disclose Confidential Information of the other Party as follows: (i) under appropriate confidentiality provisions substantially equivalent to those in this Agreement in connection with the performance of its obligations or exercise of rights granted to such Party in this Agreement; (ii) to the extent such disclosure is reasonably necessary for the Prosecution and Maintenance of Patents (including applications therefor) in accordance with this Agreement, prosecuting or defending litigation, complying with applicable governmental regulations, filing for, conducting preclinical or clinical trials, obtaining and maintaining regulatory approvals (including Regulatory Approvals), or otherwise required by Applicable Laws or the rules of a recognized stock exchange, provided, that if a Party is required by Applicable Laws or stock exchange to make any such disclosure of the other Party’s Confidential Information it will, except where impracticable for necessary disclosures (for example, in the event of medical emergency), give reasonable advance notice to the other Party of such disclosure requirement and, except to the extent inappropriate in the case of patent applications, will use its reasonable efforts to secure confidential treatment of such Confidential Information required to be disclosed; (iii) to its Affiliates and sublicensees, in each case under appropriate confidentiality provisions substantially equivalent to those of this Agreement; (iv) in communication with existing and potential investors, acquirers, consultants, advisors (including financial advisors, lawyers and accountants) and others on a need to know basis, in each case under appropriate confidentiality provisions substantially equivalent to those of this Agreement; or (v) to the extent mutually agreed to by the Parties.

7.3           Prior Agreements. This Agreement supersedes the Confidentiality Agreement between Talon and Licensee dated January 28, 2014 (the “Prior CDA”) with respect to information disclosed thereunder. All information or materials disclosed or provided by Talon to Licensee under the Prior CDA shall be deemed Confidential Information of Talon (subject to the exceptions set forth herein) and shall be subject to Licensee’s confidentiality obligations under this Article 7. All information disclosed by Licensee under the Prior CDA shall be deemed Confidential Information of Licensee (subject to the exceptions set forth herein) and shall be subject to Talon’s confidentiality obligations under this Article 7.

7.4           Scientific Publications. Licensee shall submit to Talon any proposed publication or public disclosure containing clinical or scientific results relating to the Product for use in the Field at least sixty (60) days in advance to allow Talon to review such proposed publication or disclosure. Talon shall notify Licensee in writing during such sixty (60)-day reviewing period if Talon wishes to (a) remove its Confidential Information from such proposed publication or presentation, in which event Licensee shall remove such Confidential Information from its proposed publication or presentation; or (b) request a reasonable delay in publication or presentation in order to protect patentable information, in which event Licensee shall delay the publication or presentation for a period of no more than one hundred twenty (120) days to enable patent applications to be filed in accordance with Section 6.3 protecting inventions disclosed in such publication or presentation. For clarity, if Talon fails to notify Licensee during the sixty (60)-day reviewing period as provided under this Section 7.4, Licensee shall be free to proceed with the proposed publication or presentation.

7.5           Publicity.

7.5.1           Confidential Terms. Each of the Parties agrees not to disclose to any Third Party the terms and conditions of this Agreement without the prior approval of the other Party, except to advisors (including consultants, financial advisors, attorneys and accountants), potential and existing investors and acquirers on a need to know basis, in each case under circumstances that reasonably protect the confidentiality thereof, or to the extent necessary to comply with the terms of agreements with Third Parties, or to the extent required by Applicable Laws, including securities laws. Notwithstanding the foregoing, the Parties agree upon the initial press release(s) to announce the execution of this Agreement, which is attached hereto as Exhibit 7.5.1; thereafter, Talon and Licensee may each disclose to Third Parties the information contained in such press release(s) without the need for further approval by the other.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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7.5.2           Publicity Review. The Parties acknowledge the importance of supporting each other’s efforts to publicly disclose results and significant developments regarding the Product for use in the Field in the Licensee Territory and other activities in connection with this Agreement, beyond what may be strictly required by Applicable Laws and the rules of a recognized stock exchange, and each Party may make such disclosures from time to time with the approval of the other Party, which approval shall not be unreasonably withheld, conditioned or delayed. Such disclosures may include achievement of significant events in the Development (including regulatory process) or Commercialization of the Product for use in the Field in the Licensee Territory. Unless otherwise requested by Talon, Licensee shall indicate that Talon is the owner and licensor of the Product and Talon Technology in each public disclosure issued by Licensee regarding the Product. When Talon elects to make any such public disclosure under this Section 7.5.2, it will give Licensee reasonable notice to review and comment on such statement, it being understood that if Licensee does not notify Talon in writing within a three (3) Business Day period or such shorter period if required by Applicable Laws of any reasonable objections, as contemplated in this Section 7.5.2, such disclosure shall be deemed approved, and in any event Licensee shall work diligently and reasonably to agree on the text of any proposed disclosure in an expeditious manner. The principles to be observed in such disclosures shall be accuracy, compliance with Applicable Laws and regulatory guidance documents, reasonable sensitivity to potential negative reactions of applicable Regulatory Authorities and the need to keep investors and others informed regarding the requesting Party’s business, including as required by the rules of a recognized stock exchange.

Article 8
REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION

8.1           Licensee Representations and Warranties. Licensee represents and warrants to Talon that:

8.1.1           it is duly organized and validly existing under the Applicable Laws of the jurisdiction of its incorporation, and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof;

8.1.2           it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the person executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate action;

8.1.3           this Agreement is legally binding upon it and enforceable in accordance with its terms and the execution, delivery and performance of this Agreement by it does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material Applicable Laws;

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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8.1.4           Licensee, its Affiliates and their employees and contractors have not and shall not, in connection with the performance of their respective obligations under this Agreement directly or indirectly through Third Parties, pay, promise or offer to pay, or authorize the payment of, any money or give any promise or offer to give, or authorize the giving of anything of value to a public official or entity or other person for purpose of obtaining or retaining business for or with, or directing business to, any person, including Licensee (it being understood that, without any limitation to the foregoing, Licensee, and to its knowledge, its and its Affiliates’ employees and contractors, has not directly or indirectly promised, offered or provided any corrupt payment, gratuity, emolument, bribe, kickback, illicit gift or hospitality or other illegal or unethical benefit to a public official or entity or any other person in connection with the performance of Licensee’s obligations under this Agreement, and shall not, directly or indirectly, engage in any of the foregoing). Notwithstanding the foregoing, the intent of this warranty is to ensure compliance with the US Foreign Corrupt Practices Act of 1977, as amended, UK Bribery Act, and any rules or regulations thereunder or any similar anti-corruption or anti-bribery laws applicable to company or any of its affiliates or subsidiaries (in each case, as in effect at the time of such action). Licensee will certify annually to conducting an effective compliance program and Talon will have rights to audit the Company’s compliance program periodically; and

8.1.5           it is not aware of any action, suit or inquiry or investigation instituted by any Person which questions or threatens the validity of this Agreement.

8.2           Talon’s Warranties. Talon represents and warrants to Licensee, as of the Effective Date, that:

8.2.1           it is duly organized and validly existing under the Applicable Laws of the jurisdiction of its incorporation, and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof;

8.2.2           it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the person executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate action;

8.2.3           this Agreement is legally binding upon it and enforceable in accordance with its terms and the execution, delivery and performance of this Agreement by it does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material Applicable Laws;

8.2.4           it has the full right, power and authority under the Talon Technology, Talon Trademarks, and the Upstream Licenses to grant the licenses to Licensee as purported to be granted pursuant to this Agreement;

8.2.5           as of the Effective Date, it has provided complete and unredacted copies of the Upstream Licenses and any relevant ancillary agreements, exhibits, schedules, or other documents including any and all amendments thereto) which set forth and are sufficient to fully describe all the terms and conditions with which Licensee must comply in relation to the Upstream Licenses;

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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8.2.6           the Upstream Licenses represent all the material agreements Talon or its Affiliates have entered into that may affect Licensee’s exercise of the rights granted under this Agreement;

8.2.7           it is not aware of any action, suit or inquiry or investigation instituted by any Person which questions or threatens the validity of this Agreement;

8.2.8           as of the Effective Date, Talon has not granted, and will not grant during the Term, rights to any Third Party under the Talon Technology that conflict with the rights granted to Licensee hereunder;

8.2.9           as of the Effective Date, Talon has not received any written notice of any threatened claims or litigation seeking to invalidate or otherwise challenge the Talon Patents or Talon’s rights therein;

8.2.10         to its actual knowledge, as of the Effective Date, none of the Talon Patents are subject to any pending re-examination, opposition, interference or litigation proceedings; and

8.2.11         to its actual knowledge, as of the Effective Date, the performance of Development and Commercialization activities in accordance with this Agreement will not infringe any Intellectual Property rights of any Third Party in the Licensee Territory, including any issued patent of any Third Party in the Licensee Territory or, if and when issued, any claim within any published patent application of any Third Party in the Licensee Territory.

8.3           Disclaimer of Warranties. EXCEPT AS SET FORTH IN THIS Article 8, TALON AND LICENSEE EXPRESSLY DISCLAIM ANY WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT (INCLUDING THE LICENSED TECHNOLOGY), INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, NONINFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE.

8.4           Talon’s Representations, Warranties, and Covenants. Talon represents, warrants and covenants to Licensee and agrees that:

8.4.1           it and its Affiliates are in compliance, and it shall comply, and shall cause its Affiliates to comply, in all material respects, with all Upstream Licenses;

8.4.2           it shall not, during the Term, amend any Upstream License in any manner that adversely affects the rights granted to Licensee hereunder or Talon’s ability to materially perform its obligations hereunder; and

8.4.3           it and its Affiliates shall not, during the Term, do or fail to do any acts, which cause to be terminated or result in the termination of any Upstream Licenses or result in the loss of any rights under any Upstream Licenses, which would adversely affect the rights granted to Licensee hereunder or Talon’s ability to materially perform its obligations hereunder.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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8.5           Indemnification.

8.5.1           Indemnification by Talon. Talon hereby agrees to defend, hold harmless and indemnify (collectively, “Indemnify”) Licensee and its Affiliates, and its and their agents, directors, officers and employees (the “Licensee Indemnitees”) from and against any liability or expense (including reasonable legal expenses and attorneys’ fees) (collectively, “Losses”) resulting from suits, claims, actions and demands, in each case brought by a Third Party (each, a “Third-Party Claim”) against any Licensee Indemnitee arising out of: (i) a breach of any of Talon’s representations and warranties under Section 8.2 or representations, warranties and covenants under Section 8.4; (ii) the Development, Commercialization or other exploitation of the Product by Talon, its Affiliates, or sub-licensees in the Talon Territory; or (iii) the gross negligence or intentional misconduct of any Talon Indemnities. Talon’s obligation to Indemnify the Licensee Indemnitees pursuant to this Section 8.5.1 shall not apply to the extent that any such Losses (A) arise from the gross negligence or intentional misconduct of any Licensee Indemnitee; (B) arise from any breach by Licensee of this Agreement; or (C) are Losses for which Licensee is obligated to Indemnify the Talon Indemnitees pursuant to Section 8.5.2.

8.5.2           Indemnification by Licensee. Licensee hereby agrees to Indemnify Talon and its Affiliates, and its and their agents, directors, officers and employees (the “Talon Indemnitees”) from and against any and all Losses resulting from Third-Party Claims arising out of: (i) a breach of any of Licensee’s representations and warranties under Section 8.1; (ii) the Development, Commercialization or other exploitation of the Product by the Licensee, its Affiliates, or sub-licensees in the Licensee Territories; or (iii) the gross negligence or intentional misconduct of any Licensee Indemnities. Licensee’s obligation to Indemnify the Talon Indemnitees pursuant to this Section 8.5.1 shall not apply to the extent that any such Losses (A) arise from the gross negligence or intentional misconduct of any Talon Indemnitee; (B) arise from any breach by Talon of this Agreement; or (C) are Losses for which Talon is obligated to Indemnify the Licensee Indemnitees pursuant to Section 8.5.1.

8.5.3           Additional Indemnities.

(a)          In addition to the indemnities set forth in Section 8.5.1, Talon hereby agrees to Indemnify the Licensee Indemnitees from and against any and all Losses resulting from any breach by Talon of Section 3.1 (Grant to Licensee), Section 4.1.4 (Rights of Reference), Section 4.2.3 (Development Assistance), or Section 8.4.3 (Talon’s Representations, Warranties, and Covenants), as single event or in combination with one or more breaches, that: (i) has a material adverse effect on Licensee’s Development or Commercialization of the Product in the Licensee Territory, and (ii) if curable, shall have continued uncured for ninety (90) days after written notice thereof was provided to Talon by Licensee.

(b)          In addition to the indemnities set forth in Section 8.5.2, Licensee hereby agrees to Indemnify the Talon Indemnitees from and against any and all Losses resulting from any breach by Licensee of Section 3.1 (Grant to Licensee), Section 3.2.1 (Licensee Rights Limited to the Field and the Licensee Territory), Section 3.3 (Upstream Licenses), or Sections 4.2.4 and 4.3.2 (Diligence), as single event or in combination with one or more breaches, that: (i) has a material adverse effect on Talon’s rights under the Upstream Licenses, and (ii) if curable, shall have continued uncured for ninety (90) days after written notice thereof was provided to Licensee by Talon.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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8.5.4           Procedure. To be eligible to be Indemnified hereunder, the indemnified Party shall provide the indemnifying Party with prompt notice of the Third-Party Claim giving rise to the indemnification obligation pursuant to this Section 8.5 and the exclusive ability to defend (with the reasonable cooperation of the indemnified Party) or settle any such claim, provided, that the indemnifying Party shall not enter into any settlement that admits fault, wrongdoing or damages without the indemnified Party’s written consent, such consent not to be unreasonably withheld or delayed. The indemnified Party shall have the right to participate, at its own expense and with counsel of its choice, in the defense of any claim or suit that has been assumed by the indemnifying Party, provided, that the indemnifying Party shall have no obligations with respect to any Losses resulting from the indemnified Party’s admission, settlement or other communication without the prior written consent of the indemnifying Party.

8.6           NO CONSEQUENTIAL DAMAGES. NOTWITHSTANDING THE FOREGOING, IN NO EVENT WILL EITHER PARTY BE LIABLE TO OTHER PARTY FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES UNDER THIS AGREEMENT, EXCEPT TO THE EXTENT THE DAMAGES RESULT FROM A PARTY’S BREACH OF CONFIDENTIALITY OBLIGATIONS HEREUNDER, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR ARISE FROM EITHER PARTY’S INDEMNIFICATION OBLIGATIONS UNDER THIS Article 8 OR EITHER PARTY’S MATERIAL BREACH UNDER SECTION 9.10.

8.7           MAXIMUM LIABILITY. EXCEPT FOR A PARTY’S BREACH OF CONFIDENTIALITY OBLIGATIONS HEREUNDER, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, IN NO EVENT SHALL THE MAXIMUM AGGREGATE LIABILITY OF EITHER PARTY IN RESPECT OF ALL CLAIMS UNDER THIS AGREEMENT EXCEED THE ***.

Article 9
TERM AND TERMINATION AND MATERIAL BREACH

9.1           Term. This Agreement shall become effective as of the Effective Date and, unless earlier terminated pursuant to the other provisions of this Article 9, shall be perpetual (the “Term”).

9.2           Termination for Breach. Each Party may terminate this Agreement in the event the other Party materially breaches this Agreement, and such breach, if curable, shall have continued uncured for ninety (90) days after written notice thereof was provided to the breaching Party by the terminating Party. Any such termination shall become effective at the end of such ninety (90) day period unless, if applicable, the breaching Party has cured any such breach prior to the expiration of such ninety (90) day period.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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9.3           Termination for Patent Challenge. If Licensee or any of its Affiliates challenges under any court action or proceeding, or before any patent office, the validity, patentability, enforceability, scope or non-infringement of any Talon Patent, or initiates a reexamination of any Talon Patent, or assists any Third Party to conduct any of the foregoing activities (each, a “Challenge”), Talon will have the right to immediately terminate this Agreement. In any event, Licensee shall notify Talon at least thirty (30) days prior to initiating any such Challenge.

9.4           Termination of Upstream Licenses. To the extent any Upstream License is terminated, the rights granted hereunder with respect to such Upstream License shall also terminate.

9.5           Termination for Insolvency. Each Party shall have the right to terminate this Agreement upon delivery of written notice to the other Party in the event that (i) such other Party files in any court or agency pursuant to any statute or regulation of any jurisdiction a petition in bankruptcy or insolvency or for reorganization or similar arrangement for the benefit of creditors or for the appointment of a receiver or trustee of such other Party or its assets, (ii) such other Party is served with an involuntary petition against it in any insolvency proceeding and such involuntary petition has not been stayed or dismissed within ninety (90) days of its filing, or (iii) such other Party makes an assignment of substantially all of its assets for the benefit of its creditors.

9.6           Provision for Insolvency. All rights and licenses granted under or pursuant to any Section of this Agreement are rights to “intellectual property” (as defined in Section 101(35A) of Bankruptcy Code). Each Party hereby acknowledges that (i) copies of research data, (ii) laboratory samples, (iii) product samples, (iv) formulas, (v) laboratory notes and notebooks, (vi) data and results related to clinical trials, (vii) Regulatory Filings and Regulatory Approvals, (viii) rights of reference in respect of Regulatory Filings and Regulatory Approvals, (ix) pre-clinical research data and results, and (x) marketing, advertising and promotional materials, in each case, that relate to such intellectual property, constitute “embodiments” of such intellectual property pursuant to Section 365(n) of the Bankruptcy Code. Each Party agrees not to interfere with the other Party’s exercise, pursuant to Section 365(n) of the Bankruptcy Code, of rights and licenses to intellectual property licensed hereunder and embodiments thereof and agrees to use Commercially Reasonable Efforts to assist such other Party to obtain such intellectual property and embodiments thereof in the possession or control of Third Parties as reasonably necessary for such other Party to exercise, pursuant to Section 365(n) of the Bankruptcy Code, such rights and licenses. Each Party shall take any and all action requested by the other Party to ensure that the foregoing provisions of this Section 9.6 may be fully effectuated under Applicable Laws, and, if requested by the other Party, each Party shall procure that any past, existing or future creditor of the other Party irrevocably waives in writing any and all rights that such creditor may have to the intellectual property licensed hereunder and embodiments thereof.

9.7           General Effects of Termination.

9.7.1           Termination of Rights. In the event of termination of this Agreement for any reason, all rights and licenses granted to Licensee herein shall immediately terminate, except as set forth in Section 9.8.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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9.7.2           Accrued Obligations. Termination of this Agreement for any reason shall not release either Party of any obligation or liability which, at the time of such termination, has already accrued to the other Party or which is attributable to a period prior to such termination.

9.7.3           Non-Exclusive Remedy. Notwithstanding anything herein to the contrary, termination of this Agreement by a Party shall be without prejudice to other remedies such Party may have at law or equity.

9.7.4           General Survival. Article 1 (Definitions), Article 6 (Intellectual Property), Article 7 (Confidentiality), Article 10 (Dispute Resolution), Article 11 (Miscellaneous) and Sections 5.5 (Records; Audit)(for a period of three (3) years after the effectiveness of the termination of this Agreement), 8.5 (Indemnification), 8.6 (No Consequential Damages), 8.7 (Maximum Liability), 9.7 (General Effects of Termination), 9.8 (Additional Effects of Termination), 9.9 (Termination Press Releases), and 9.10 (Material Breach) shall survive termination of this Agreement for any reason. Except as otherwise provided in this Article 9, all rights and obligations of the Parties under this Agreement shall terminate upon termination of this Agreement for any reason.

9.8           Additional Effects of Certain Terminations. If this Agreement is terminated by Talon, then:

9.8.1           Ongoing Trials. If there are any ongoing clinical trials with respect to the Product being conducted by or on behalf of Licensee (or its Affiliate) at the time of notice of termination, Licensee agrees to (i) promptly transition to Talon or its designee some or all of such clinical trials and the activities related to or supporting such trials, or (ii) terminate such clinical trials in each case, as requested by Talon. The Parties recognize that early termination of this Agreement requires both discussion and coordination between the Parties to ensure patient safety, continuity of treatment, if appropriate, and compliance with Applicable Laws. Upon early termination of this Agreement, the Parties shall cooperate to provide for an orderly transition or cessation of any clinical trials, as requested by Talon. Each Party further agrees to take no action or forego taking action if such action or forbearance would in any manner jeopardize patient safety or cause the other Party to violate any Applicable Laws.

9.8.2           Commercialization. To avoid a disruption in the supply of the Product, if this Agreement is terminated after the First Commercial Launch of the Product for use in the Field in the Licensee Territory, Licensee and its Affiliates shall continue to distribute and sell such Product for use in the Field in the Licensee Territory, in accordance with the terms and conditions of this Agreement, for a period reasonably sufficient for them to sell off all amounts of Product in Licensee’s inventory not to exceed *** (***) months from the effective date of such termination (the “Wind-Down Period”). Notwithstanding any other provision of this Agreement, during this Wind-Down Period, Licensee’s and its Affiliates’ rights with respect to the Product (including the licenses granted under Section 3.1) shall be non-exclusive and Talon shall have the right to engage one or more partners(s) or distributor(s) of the Product in all or part of the Licensee Territory. During the Wind-Down Period, Licensee shall continue to make any and all Upstream Payments to Talon for the Product sold or disposed by Licensee, its Affiliates, or its sublicensees. After the Wind-Down Period, Licensee and its Affiliates shall not sell the Product or make any representation regarding their status as a licensee of or distributor for Talon for the Product. Within thirty (30) days of expiration of the Wind-Down Period, Licensee shall notify Talon of any quantity of the Product remaining in Licensee’s inventory and Talon shall have the option, upon notice to Licensee, to purchase any such quantities of the Product, as applicable, from Licensee at a price equal to the amounts paid by Licensee for such Product.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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9.8.3           Regulatory Filings. Licensee shall promptly assign and transfer to Talon all Regulatory Filings for the Product that are held or controlled by or under authority of Licensee, and shall take such actions and execute such other instruments, assignments and documents as may be necessary to effect the transfer of rights under the Regulatory Filings to Talon. Licensee shall cause each of its Affiliates or sublicensees to transfer any such Regulatory Filings to Talon if this Agreement terminates. If Applicable Laws prevents or delays the transfer of ownership of a Regulatory Filing to Talon, Licensee shall grant, and does hereby grant, to Talon an exclusive and irrevocable right of access and reference to such Regulatory Filing for the Product, and shall cooperate fully to make the benefits of such Regulatory Filings available to Talon and/or its designee(s). Within sixty (60) days after notice of such termination, Licensee shall provide to Talon copies of all such Regulatory Filings, and of all preclinical and clinical data (including raw data, original records, investigator reports, both preliminary and final, statistical analyses, expert opinions and reports, safety and other electronic databases) and other Know-How pertaining to the Product, or the manufacture thereof. Talon shall be free to use and disclose such Regulatory Filings and other items in connection with the exercise of its rights and licenses under this Section 9.8.

9.8.4           License to Talon. Licensee hereby grants Talon, effective upon the effective date of termination of this Agreement, a perpetual, irrevocable, fully paid-up, royalty free, non-exclusive license, with the right to grant sublicenses at any tier, under Licensee Know-How (including, without limitation, Licensee Inventions) and Licensee’s rights in the Joint Inventions, to research, Develop, make, have made, use, sell, offer for sale, have sold, import and otherwise Commercialize the Product in the Licensee Territory.

9.8.5           Transition Assistance. Licensee agrees to fully cooperate with Talon and its designee(s) to facilitate a smooth, orderly and prompt transition of the Development and Commercialization of the Product to Talon and/or its designee(s) during this Wind-Down Period. Without limiting the foregoing, Licensee shall promptly provide Talon (i) all commercial data generated by Licensee under this Agreement including copies of customer lists, customer data and other customer information relating to the Product, and (ii) manufacturing information (including protocols for the production, packaging, testing and other manufacturing activities) relating to the Product in Licensee’s Control, which in each case Talon shall have the right to use and disclose for any purpose during this Wind-Down Period and thereafter. Upon request by Talon, Licensee shall transfer to Talon some or all quantities of the Product in its or its Affiliates’ Control (as requested by Talon), within thirty (30) days after the end of this Wind-Down Period, provided, that Talon shall reimburse Licensee for the out-of-pocket costs that Licensee actually incurred to manufacture or otherwise acquire the quantities so provided to Talon. If any Product was manufactured by any Third Party for Licensee, or Licensee had contracts with vendors which contracts are necessary or useful for Talon to take over responsibility for the Product in the Licensee Territory, then Licensee shall to the extent possible and requested in writing by Talon, assign all of the relevant Third-Party contracts to Talon, and in any case, Licensee agrees to cooperate with Talon to ensure uninterrupted supply of the Product. If Licensee or its Affiliate manufactured any Product at the time of termination, then Licensee (or its Affiliate) shall continue to provide for manufacturing of such Product for Talon, at its fully-burdened manufacturing cost therefor, from the date of notice of such termination until such time as Talon is able, using Commercially Reasonable Efforts to do so but no longer than the expiration of the Wind-Down Period, to secure an acceptable alternative commercial manufacturing source from which sufficient quantities of the Product may be procured and legally sold in the Licensee Territory.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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9.8.6           Costs and Expenses. Except as expressly provided herein, Licensee shall perform its obligations under this Section 9.8 at its own costs without consideration from Talon. Talon shall be responsible for its own costs of performing its activities under this Section 9.8.

9.9           Termination Press Releases. In the event of termination of this Agreement for any reason, the Parties shall cooperate in good faith to coordinate public disclosure of such termination and the reasons therefor, and shall not, except to the extent required by Applicable Laws or the rules of a recognized stock exchange, disclose such information without the prior approval of the other Party, such approval not to be unreasonably withheld, conditioned or delayed. When Talon elects to make a public disclosure under this Section 9.9, Talon shall provide Licensee with a draft of any such public disclosure it intends to issue three (3) Business Days in advance and with the opportunity to review and comment on such statement, it being understood that if Licensee does not notify Talon in writing within such three (3) Business Day period (or such shorter period if required by Applicable Laws or the rules of a recognized stock exchange) of any reasonable objections, such disclosure shall be deemed approved, and in any event the Parties shall work diligently and reasonably to agree on the text of any such proposed disclosure in an expeditious manner. The principles to be observed in such disclosures shall be accuracy, compliance with Applicable Laws and regulatory guidance documents, reasonable sensitivity to potential negative reactions to such news and the need to keep investors and others informed regarding the Parties’ business and other activities.

9.10         Material Breach.

9.10.1         Talon agrees that any breach by Talon of Section 3.1 (Grant to Licensee), Section 4.1.4 (Rights of Reference), Section 4.2.3 (Development Assistance), or Section 8.4.3 (Talon’s Representations, Warranties, and Covenants) as single event or in combination with one or more breaches, that has a material adverse effect on Licensee’s Development or Commercialization of the Product in the Licensee Territory shall be deemed a material breach by Talon of this Agreement, and, if such breach, if curable, shall have continued uncured for ninety (90) days after written notice thereof was provided to Talon by Licensee, then: (a) subject to Section 8.7, Licensee shall be entitled to recovery of damages for such material breach without any limitation on the amount or type of damages (including special, consequential (including loss of profits and loss of revenue), incidental, punitive or indirect damages); and (b) Licensee, in addition to being entitled to exercise all rights provided herein (unless Licensee has also terminated this Agreement under Section 9.2) or granted by law, including, without limitation, recovery of damages, will be entitled to specific performance of its rights and Talon’s obligations under the above Sections 3.1 (Grant to Licensee), Section 4.1.4 (Rights of Reference), Section 4.2.3 (Development Assistance), or Section 8.4.3 (Talon’s Representations, Warranties, and Covenants) of the Agreement, without the necessity of posting any bond and without the necessity of establishing that monetary relief would not provide an adequate remedy. Talon agrees that Licensee may seek, and AAA (or any court having competent jurisdiction in relation to any injunctive or provisional relief necessary) may grant, specific performance in the event of such Talon’s material breach, and that monetary damages would not be adequate compensation for any loss incurred by reason of a material breach by Talon as recited in this Section of this Agreement, and hereby agrees to waive any defense in any action for specific performance, including that a remedy at law would be adequate.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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9.10.2         Licensee agrees that any breach by Licensee of Section 3.1 (Grant to Licensee), Section 3.2.1 (Licensee Rights Limited to the Field and the Licensee Territory), Section 3.3 (Upstream Licenses), or Sections 4.2.4 and 4.3.2 (Diligence) as single event or in combination with one or more breaches, that has a material adverse effect on Talon’s rights under the Upstream Licenses shall be deemed a material breach by Licensee of this Agreement, and, if such breach, if curable, shall have continued uncured for ninety (90) days after written notice thereof was provided by Talon to Licensee, then: (a) subject to Section 8.7, Talon shall be entitled to recovery of damages for such material breach without any limitation on the amount or type of damages (including special, consequential (including loss of profits and loss of revenue), incidental, punitive or indirect damages); and (b) Talon, in addition to being entitled to exercise all rights provided herein or granted by law, including, without limitation, recovery of damages, will be entitled to specific performance of its rights and Licensee’s obligations under the above Sections 3.1 (Grant to Licensee), Section 3.2.1 (Licensee Rights Limited to the Field and the Licensee Territory), Section 3.3 (Upstream Licenses), or Sections 4.2.4 and 4.3.2 (Diligence) of the Agreement, without the necessity of posting any bond and without the necessity of establishing that monetary relief would not provide an adequate remedy. Licensee agrees that Talon may seek, and AAA (or any court having competent jurisdiction in relation to any injunctive or provisional relief necessary) may grant, specific performance in the event of such Licensee’s material breach, and that monetary damages would not be adequate compensation for any loss incurred by reason of a material breach by Licensee as recited in this Section of this Agreement, and hereby agrees to waive any defense in any action for specific performance, including that a remedy at law would be adequate.

Article 10
DISPUTE RESOLUTION

10.1         Disputes. If the Parties are unable to resolve any dispute or other matter arising out of or in connection with this Agreement (“Dispute”), either Party may, by written notice to the other, have such Dispute referred to the respective business heads of the Parties for attempted resolution by good faith negotiations within fifteen (15) Business Days after such notice is received. In such event, each Party shall cause its respective business head to meet (face-to-face or by teleconference) and be available to attempt to resolve such Dispute. If the Parties should resolve such Dispute under this Section 10.1, a memorandum setting forth their agreement will be prepared and signed by both Parties if requested by either Party. The Parties shall cooperate in an effort to limit the issues for consideration in such manner as narrowly as reasonably practicable in order to resolve the Dispute. If the Parties are unable to resolve such Dispute under this Section 10.1, then either Party may submit such Dispute to arbitration pursuant to Section 10.2 below or initiate proceedings pursuant to Section 10.3 below, as applicable. No Dispute shall be submitted to arbitration under Section 10.2 below and no proceedings shall be initiated pursuant to Section 10.3 below, as applicable, until the following procedures in this Section 10.1 have been satisfied, unless the Senior Executives have already attempted to resolve such Dispute pursuant to Section 2.3, in which case, either Party may refer such Dispute to arbitration pursuant to Section 10.2 below or initiate proceedings pursuant to Section 10.3 below, as applicable, provided, that any applicable statute of limitations with respect to such Dispute shall be tolled while the Parties attempt to resolve such Dispute in accordance with Section 2.3 or this Section 10.1.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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10.2         Arbitration. Except with respect to Disputes related to Intellectual Property rights as provided under Section 10.3 below, if the Parties are unable to resolve a Dispute under Section 10.1 above, either Party may, upon written notice to the other Party, submit such Dispute for resolution by final, binding arbitration in the manner described in this Section 10.2 below, as applicable. Any arbitration under this Section 10.2 below, as applicable, shall be conducted by the American Arbitration Association (“AAA”) in New York, New York in accordance with the then-current Commercial Rules of Arbitration of AAA (“AAA Rules”), except as modified by this Section 10.2 below, as applicable. The arbitration shall be conducted by a single arbitrator. The costs of such arbitration shall be shared equally by the Parties, and each Party shall bear its own expenses in connection with the arbitration. The Parties shall use good faith efforts to complete arbitration under this Section 10.2 within ninety (90) days following the initiation of such arbitration. The arbitrator shall establish reasonable additional procedures to facilitate and complete such arbitration within such ninety (90) day period. Nothing in this Agreement shall limit the right of either Party to seek to obtain in any court of competent jurisdiction any equitable or interim relief or provisional remedy, including injunctive relief.

10.3         Other Disputes. If the Parties are unable to resolve a Dispute related to Intellectual Property rights under Section 10.1 above, either Party may initiate legal proceedings with respect thereto. Each of the Parties irrevocably agrees that the federal or state courts in New York, New York shall have the exclusive jurisdiction to hear and decide any suit, action, proceedings, and/or settle any such Disputes, and for these purposes, each Party irrevocably submits to the jurisdiction of the courts of New York. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS AGREEMENT.

Article 11
MISCELLANEOUS

11.1         Affiliates; Licensees. For clarity and without limitation, each Party shall have the right to exercise any of its rights and licenses or perform or delegate all or any portion of any of its obligations under this Agreement through any of its Affiliates, provided, that each Party shall remain responsible to the other Party under this Agreement for all activities of its Affiliates to the same extent as if such activities had been undertaken by such Party itself. In addition, Talon shall have the right to exercise any of its rights and licenses or perform or delegate all or any portion of any of its obligations under this Agreement through any of its Third Party licensees, provided, that Talon shall require each such licensee to be bound by a written agreement containing terms and conditions consistent with the terms and conditions of this Agreement.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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11.2         Governing Law. This Agreement and any dispute arising from the performance or breach hereof shall be governed by and construed and enforced in accordance with the laws of the State of New York, without reference to conflicts of laws principles.

11.3         Assignment. This Agreement shall not be assignable by either Party to any Third Party without the written consent of the other Party and any such attempted assignment shall be void. Notwithstanding the foregoing, either Party may assign this Agreement, without the written consent of the other Party, to an Affiliate of such Party or an entity that acquires all or substantially all of the business or assets of such Party to which this Agreement pertains (whether by merger, reorganization, acquisition, sale, operation of law or otherwise), and agrees in writing to be bound by the terms and conditions of this Agreement. No assignment or transfer of this Agreement shall be valid and effective unless and until the assignee/transferee agrees in writing to be bound by the provisions of this Agreement. The terms and conditions of this Agreement shall be binding on and inure to the benefit of the permitted successors and assigns of the Parties. Except as expressly provided in this Section 11.3, any attempted assignment or transfer of this Agreement shall be null and void.

11.4         Notices. Any notice, request, delivery, approval or consent required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been sufficiently given if delivered in person, transmitted by facsimile (receipt verified) or by express courier service (signature required) or five (5) days after it was sent by registered letter, return receipt requested (or its equivalent), provided, that no postal strike or other disruption is then in effect or comes into effect within two (2) days after such mailing, to the Party to which it is directed at its address or facsimile number shown below or such other address or facsimile number as such Party will have last given by notice to the other Party.

If to Talon, addressed to:                   Talon Therapeutics, Inc.

11500 South Eastern Ave. Suite 240

Henderson, NV 89052

Attn: Legal Department

Telephone number: (702) 835-6300

Facsimile number: (702) 260-7405

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

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With a copy to:                                  Stradling Yocca Carlson & Rauth

660, Newport Center Dr, Suite 1600

Newport Beach, CA 92660

Attn: Shivbir S. Grewal, Esq.

Telephone number:     (949) 725-4000

Facsimile number:     (949) 725-4100

If to Licensee, addressed to:             CASI Pharmaceuticals, Inc.

9620 Medical Center Drive, Suite 300

Rockville, MD 20850

Attn: General Counsel

Telephone number:     (240) 864-2781

Facsimile number:     (240) 864-2782

With a copy to:                                 Ropes & Gray LLP

36F, Park Place 1601 Nanjing Road West

Shanghai 200040, China

Attention: Geoffrey Lin and Arthur Mok

Telephone: +86 21 6157 5200

Facsimile: + 86 21 6157 5299

11.5         Waiver. Neither Party may waive or release any of its rights or interests in this Agreement except in writing. The failure of either Party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition. No waiver by either Party of any condition or term in any one or more instances shall be construed as a continuing waiver of such condition or term or of another condition or term.

11.6         Severability. If any provision hereof should be held invalid, illegal or unenforceable in any jurisdiction, the Parties shall negotiate in good faith a valid, legal and enforceable substitute provision that most nearly reflects the original intent of the Parties and all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the Parties as nearly as may be possible. Such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction. If a Party seeks to avoid a provision of this Agreement by asserting that such provision is invalid, illegal or otherwise unenforceable, the other Party shall have the right to terminate this Agreement pursuant to Section 9.2 upon sixty (60) days prior written notice to the asserting Party, unless such assertion is eliminated and cured within such sixty (60) day period.

11.7         Entire Agreement/Modification. This Agreement, including its Exhibits, sets forth all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties and supersedes and terminates all prior agreements and understandings between the Parties including the Prior CDA. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by the respective authorized officers of the Parties.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

-40-

11.8         Relationship of the Parties. The Parties agree that the relationship of Talon and Licensee established by this Agreement is that of independent contractors. Furthermore, the Parties agree that this Agreement does not, is not intended to, and shall not be construed to, establish an employment, agency or any other relationship. Except as may be specifically provided herein, neither Party shall have any right, power or authority, nor shall they represent themselves as having any authority to assume, create or incur any expense, liability or obligation, express or implied, on behalf of the other Party, or otherwise act as an agent for the other Party for any purpose.

11.9         Force Majeure. Except with respect to payment of money, neither Party shall be liable to the other for failure or delay in the performance of any of its obligations under this Agreement for the time and to the extent such failure or delay is caused by earthquake, riot, civil commotion, war, terrorist acts, strike, flood, change of law, political unrest, or governmental acts or restriction, or other cause that is beyond the reasonable control of the respective Party. The Party affected by such force majeure will provide the other Party with full particulars thereof as soon as it becomes aware of the same (including its best estimate of the likely extent and duration of the interference with its activities), and will use Commercially Reasonable Efforts to overcome the difficulties created thereby and to resume performance of its obligations as soon as practicable. If the performance of any such obligation under this Agreement is delayed owing to such a force majeure for any continuous period of more than one hundred eighty (180) days, the Parties will consult with respect to an equitable solution, including the possibility of the mutual termination of this Agreement.

11.10         Compliance with Applicable Laws/Other.  Notwithstanding anything to the contrary contained herein, all rights and obligations of Talon and Licensee are subject to prior compliance with, and each Party shall comply with, all Applicable Laws, including obtaining all necessary approvals required by the applicable agencies of the governments of the relevant jurisdictions. In addition, each Party shall conduct its activities under this Agreement in accordance with good scientific and business practices.

11.11         Interpretation. The captions and headings to this Agreement are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of this Agreement. Unless specified to the contrary, references to Articles, Sections or Exhibits mean the particular Articles, Sections or Exhibits to this Agreement and references to this Agreement include all Exhibits hereto. Unless context otherwise clearly requires, whenever used in this Agreement: (i) the words “include” or “including” shall be construed as incorporating, also, “but not limited to” or “without limitation;” (ii) the word “day” or “year” means a calendar day or year unless otherwise specified; (iii) the word “notice” shall mean notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other written communications contemplated under this Agreement; (iv) the words “hereof,” “herein,” “hereby” and derivative or similar words refer to this Agreement (including any Exhibits); (v) the word “or” shall be construed as the inclusive meaning identified with the phrase “and/or;”(vi) provisions that require that a Party, the Parties or a committee hereunder “agree,” “consent” or “approve” or the like shall require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise; (vii) words of any gender include the other gender; (viii) words using the singular or plural number also include the plural or singular number, respectively; (ix) references to any specific law, rule or regulation, or article, section or other division thereof, shall be deemed to include the then-current amendments thereto or any replacement law, rule or regulation thereof; and (x) neither Party or its Affiliates shall be deemed to be acting “on behalf of” the other Party hereunder.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

-41-

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

[The remainder of this page intentionally left blank; the signature page follows.]

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

-42-

IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate originals by their duly authorized representatives as of the Effective Date.

TALON THERAPEUTICS, INC.		CASI PHARMACEUTICALS, INC.
By:	/s/ Joseph W. Turgeon	By:	/s/ Ken K. Ren
Name:	Joseph W. Turgeon	Name:	Ken K. Ren
Title:	President	Title:	Chief Executive Officer

List of Exhibits:

Exhibit 1.66: Talon Patents

Exhibit 1.69: Talon Trademarks

Exhibit 5.1: Note

Exhibit 7.5.1: Press Release(s)

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

Exhibit 1.66

Talon Patents

Title	Application No.	Country	Patent  No.	Publication No.	PCT Filing Date
***	***	***	***	***	***
***	***	***	***	***	***
***	***	***	***	***	***
***	***	***	***	***	***
***	***	***	***	***	***

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

Exhibit 1.69

Talon Trademarks

Marqibo™.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

Exhibit 5.1

Note

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

Exhibit 7.5.1

Press Release(s)

See attached.

*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  An unredacted version of this exhibit has been filed separately with the Commission.

Spectrum Pharmaceuticals Out-Licenses

Rights for Greater China to CASI Pharmaceuticals for Three of Its Drugs

· Spectrum receives a 19.99% stake (pre-transaction) in CASI, a NASDAQ-listed, oncology-focused Company with expertise and focus on markets in China and a $1.5 million promissory note

HENDERSON, Nev. and ROCKVILLE, Md. (September 18, 2014) – Spectrum Pharmaceuticals, Inc. (Nasdaq: SPPI), a biotechnology company with fully integrated commercial and drug development operations with a primary focus in hematology and oncology, and CASI Pharmaceuticals, Inc. (Nasdaq: CASI), a biopharmaceutical company dedicated to the acquisition, development and commercialization of innovative therapeutics addressing cancer and other unmet medical needs for the global market with a primary focus on China, announce the signing of license agreements whereby CASI has been granted exclusive rights to two of Spectrum Pharmaceuticals’ commercial oncology drugs, Zevalin® (ibritumomab tiuxetan) Injection for intravenous use and Marqibo® (vinCRIStine sulfate LIPOSOME injection) for intravenous infusion, and a Phase 3 drug candidate, Captisol-Enabled^TM Melphalan (CE melphalan), for development and commercialization in China, including Taiwan, Hong Kong and Macau.

ZEVALIN is used in the treatment of non-Hodgkin’s lymphoma (NHL) and MARQIBO is used in the treatment of acute lymphoblastic leukemia (ALL). CE melphalan has met the endpoints in a pivotal trial for use as a conditioning treatment prior to autologous stem cell transplant for patients with multiple myeloma. Spectrum plans to file a New Drug Application with the U.S. Food and Drug Administration (FDA) for CE melphalan in the second half of 2014.

CASI will be responsible for the development and commercialization of the three drugs, including the submission of import drug registration applications to regulatory authorities and conducting any confirmatory clinical studies in greater China, if and as required.

“We are delighted to see our anticancer drugs to be developed and marketed in greater China through CASI, a NASDAQ-listed Company focused on China,” said Rajesh C. Shrotriya, MD, Chairman and Chief Executive Officer of Spectrum Pharmaceuticals. “The management of CASI has a track record of successfully developing anticancer drugs in China. We are pleased to be a shareholder of CASI at this early stage of their development and look forward to CASI creating value for our shareholders as they grow. China’s pharmaceutical market is growing at a rapid pace and is already approaching second place to only the United States in the world. The greater China drug market for anticancer drugs is projected to become the world’s largest in the next decade and CASI has the opportunity to take a leading position to address these significant unmet medical needs. We are impressed with the management team at CASI and their expertise in China, and look forward to sharing in the success of our drugs in this important market.”

Spectrum Pharmaceuticals, Inc., 11500 S. Eastern Ave., Ste. 240  •  Henderson, Nevada 89052   •   Tel: 702-835-6300

•   Fax: 702-260-7405   •   www.sppirx.com   •   NASDAQ: SPPI

CASI Pharmaceuticals, Inc., 9620 Medical Center Drive, Ste. 300 • Rockville, Maryland 20852   •   Tel: 240-864-2643

•   Fax: 301-325-2437   •   www.casipharmaceuticals.com   •   NASDAQ: CASI

Commenting on the transaction, Ken K. Ren, Ph.D., CASI’s Chief Executive Officer, said, “We are very excited to have entered into this transaction with Spectrum, a Company with a successful track record of developing and commercializing drugs expeditiously in the U.S. The addition of these three drugs transforms our pipeline and significantly expands our market share potential in China. Our transaction is structured rather uniquely in that the shares and note represent the purchase price to Spectrum and is in lieu of royalties and milestones normally associated with traditional licenses, thereby aligning Spectrum’s interest with our shareholders. We look forward to a productive relationship with Spectrum.”

Dr. Ren added, “These drug products come with strong intellectual property protection and significant technology barriers. We are currently preparing the import drug registration applications in greater China, initially for ZEVALIN and MARQIBO, and since both drugs are approved for sale in the U.S., we anticipate that confirmatory clinical trials will be required for marketing approval in our territory. The submission of the import drug registration for CE melphalan will follow immediately after its approval by the U.S. FDA. The annual incidence in China for NHL, ALL and multiple myeloma is increasing each year with high mortality rates, it is our goal to have these innovative products available to patients in greater China as soon as possible to address these unmet medical needs, and as Spectrum expands these drugs into additional indications in the U.S., we too will apply for expanded labels in our territory.”

In addition to its initial stake in CASI, Spectrum Pharmaceuticals will have certain rights to maintain its post-transaction ownership position. Spectrum Pharmaceuticals also will have the opportunity to designate a member to CASI’s board of directors. Detailed information on the transaction can be found in CASI’s Report on Form 8-K, which will be filed with the Securities and Exchange Commission.

H.C. Wainwright & Co., LLC acted as Spectrum's advisor.

About Spectrum Pharmaceuticals, Inc.

Spectrum Pharmaceuticals is a leading biotechnology company focused on acquiring, developing, and commercializing drug products, with a primary focus in oncology and hematology. Spectrum and its affiliates market five oncology drugs: FUSILEV® (levoleucovorin) for Injection; FOLOTYN® (pralatrexate injection); ZEVALIN® (ibritumomab tiuxetan) Injection for intravenous use; MARQIBO® (vinCRIStine sulfate LIPOSOME injection) for intravenous infusion; and BELEODAQ™ (belinostat) for Injection. Spectrum's strong track record in in-licensing and acquiring differentiated drugs, and expertise in clinical development have generated a robust, diversified and growing pipeline of product candidates in advanced-stage Phase 2 and Phase 3 studies. More information on Spectrum is available at www.sppirx.com.

About CASI Pharmaceuticals, Inc.

CASI is a biopharmaceutical company dedicated to the acquisition, development and commercialization of innovative therapeutics addressing cancer and other unmet medical needs for the global market with a primary focus on China.. CASI’s product pipeline includes exclusive regional rights to ZEVALIN (ibritumomab tiuxetan), MARQIBO (vinCRIStine sulfate LIPOSOME injection) and Captisol-Enabled (propylene glycol-free) melphalan (CE melphalan) in greater China (including Taiwan, Hong Kong and Macau). CASI’s development pipeline also includes its proprietary drug candidate ENMD-2076, a selective angiogenic kinase inhibitor currently in multiple Phase 2 oncology studies, and 2ME2 (2-methoxyestradial) currently under reformulation development. CASI is headquartered in Rockville, Maryland and has a wholly owned subsidiary and R&D operations in Beijing, China. More information on CASI is available at www.casipharmaceuticals.comand in the Company’s filings with the U.S. Securities and Exchange Commission.

About ZEVALIN and the ZEVALIN Therapeutic Regimen

ZEVALIN (ibritumomab tiuxetan) injection for intravenous use, is indicated for the treatment of patients with relapsed or refractory, low-grade or follicular B-cell non-Hodgkin's lymphoma (NHL). ZEVALIN is also indicated for the treatment of patients with previously untreated follicular non-Hodgkin's Lymphoma who achieve a partial or complete response to first-line chemotherapy.

ZEVALIN is a CD20-directed radiotherapeutic antibody. The ZEVALIN therapeutic regimen consists of two components: rituximab, and Yttrium-90 (Y-90) radiolabeled ZEVALIN for therapy. ZEVALIN builds on the combined effect of a targeted biologic monoclonal antibody augmented with the therapeutic effects of a beta-emitting radioisotope.

Important ZEVALIN Safety Information

Deaths have occurred within 24 hours of rituximab infusion, an essential component of the ZEVALIN therapeutic regimen. These fatalities were associated with hypoxia, pulmonary infiltrates, acute respiratory distress syndrome, myocardial infarction, ventricular fibrillation, or cardiogenic shock. Most (80%) fatalities occurred with the first rituximab infusion. ZEVALIN administration can result in severe and prolonged cytopenias in most patients. Severe cutaneous and mucocutaneous reactions, some fatal, can occur with the ZEVALIN therapeutic regimen.

Please see full Prescribing Information, including BOXED WARNINGS, for ZEVALIN and rituximab. Full prescribing information for ZEVALIN can be found at www.ZEVALIN.com.

About MARQIBO

MARQIBO is a novel, sphingomyelin/cholesterol liposome-encapsulated, formulation of vincristine sulfate. Vincristine, a microtubule inhibitor, is FDA-approved for the treatment of adult patients with Philadelphia chromosome-negative (Ph-) acute lymphoblastic leukemia (ALL) in second or greater relapse or whose disease has progressed following two or more anti-leukemia therapies. (The encapsulation technology, utilized in this formulation, has been shown to provide prolonged circulation of vincristine in the blood).

Please see important safety information below and the full prescribing information for MARQIBO at www.marqibo.com.

Indication and usage

MARQIBO is a liposomal vinca alkaloid indicated for the treatment of adult patients with Philadelphia chromosome-negative (Ph-) acute lymphoblastic leukemia (ALL) in second or greater relapse or whose disease has progressed following two or more anti-leukemia therapies. This indication is based on overall response rate. Clinical benefit such as improvement in overall survival has not been verified.

Important safety information

CONTRAINDICATIONS

· MARQIBO is contraindicated in patients with demyelinating conditions including Charcot-Marie-Tooth syndrome

· MARQIBO is contraindicated in patients with hypersensitivity to vincristine sulfate or any of the other components of MARQIBO (vinCRIStine sulfate LIPOSOME injection

· MARQIBO is contraindicated for intrathecal administration

About Captisol-Enabled Melphalan

Captisol-enabled, PG-free melphalan is a novel intravenous formulation of melphalan being investigated for the multiple myeloma transplant setting, for which it has been granted an Orphan Drug Designation by the FDA. This formulation eliminates the use of propylene glycol, which has been reported to cause renal and cardiac side effects that limit the ability to deliver higher doses of therapeutic compounds. The use of the Captisol technology to reformulate melphalan also improves its stability and is anticipated to allow for slower infusion rates and longer administration durations, potentially enabling clinicians to safely achieve a higher dose intensity for pre-transplant chemotherapy.

About Captisol

Captisol is a patent-protected, chemically modified cyclodextrin with a structure designed to optimize the solubility and stability of drugs. Captisol was invented and initially developed by scientists in the laboratories of Dr. Valentino Stella at the University of Kansas’ Higuchi Biosciences Center for specific use in drug development and formulation. This unique technology has enabled seven FDA-approved products, including Onyx Pharmaceuticals’ Kyprolis^®, Baxter International’s Nexterone^® and Merck’s NOXAFIL IV. There are also more than 30 Captisol-enabled products currently in clinical development.

Forward-Looking Statements – Spectrum Pharmaceuticals, Inc.

This press release may contain forward-looking statements regarding future events and the future performance of Spectrum Pharmaceuticals that involve risks and uncertainties that could cause actual results to differ materially. These statements are based on management's current beliefs and expectations. These statements include, but are not limited to, statements that relate to our business and its future, including sales of Spectrum’s drug products, certain company milestones, Spectrum's ability to identify, acquire, develop and commercialize a broad and diverse pipeline of late-stage clinical and commercial products, leveraging the expertise of partners and employees around the world to assist us in the execution of our strategy, and any statements that relate to the intent, belief, plans or expectations of Spectrum or its management, or that are not a statement of historical fact. Risks that could cause actual results to differ include the possibility that our existing and new drug candidates may not prove safe or effective, the possibility that our existing and new applications to the FDA and other regulatory agencies may not receive approval in a timely manner or at all, the possibility that our existing and new drug candidates, if approved, may not be more effective, safer or more cost efficient than competing drugs, the possibility that our efforts to acquire or in-license and develop additional drug candidates may fail, our lack of sustained revenue history, our limited marketing experience, our customer concentration, the possibility for fluctuations in customer orders, evolving market dynamics, our dependence on third parties for clinical trials, manufacturing, distribution, information and quality control and other risks that are described in further detail in the Company's reports filed with the Securities and Exchange Commission. We do not plan to update any such forward-looking statements and expressly disclaim any duty to update the information contained in this press release except as required by law.

SPECTRUM PHARMACEUTICALS, INC. ^®, FUSILEV^®, FOLOTYN^®, ZEVALIN^®, and MARQIBO^® are registered trademarks of Spectrum Pharmaceuticals, Inc. and its affiliates. BELEODAQ™,REDEFINING CANCER CARE™ and the Spectrum Pharmaceuticals logos are trademarks owned by Spectrum Pharmaceuticals, Inc. Any other trademarks are the property of their respective owners.

© 2014 Spectrum Pharmaceuticals, Inc. All Rights Reserved.

Forward-Looking Statements – CASI Pharmaceuticals, Inc.

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to the outlook for expectations for future financial or business performance, strategies, expectations and goals. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and no duty to update forward-looking statements is assumed.

Actual results could differ materially from those currently anticipated due to a number of factors, including: the risk that we may be unable to continue as a going concern as a result of our inability to raise sufficient capital for our operational needs; the possibility that we may be delisted from trading on the Nasdaq Capital Market; the volatility in the market price of our common stock; the difficulty of executing our business strategy in China; our inability to enter into strategic partnerships for the development, commercialization, manufacturing and distribution of our proposed product candidate or future candidates; risks relating to the need for additional capital and the uncertainty of securing additional funding on favorable terms; risks associated with our product candidates; risks associated with any early-stage products under development; the risk that results in preclinical models are not necessarily indicative of clinical results; uncertainties relating to preclinical and clinical trials, including delays to the commencement of such trials; the lack of success in the clinical development of any of our products; dependence on third parties; and risks relating to the commercialization, if any, of our proposed products (such as marketing, safety, regulatory, patent, product liability, supply, competition and other risks). Such factors, among others, could have a material adverse effect upon our business, results of operations and financial condition. We caution readers not to place undue reliance on any forward-looking statements, which only speak as of the date made. Additional information about the factors and risks that could affect our business, financial condition and results of operations, are contained in our filings with the U.S. Securities and Exchange Commission, which are available at www.sec.gov.

SPECTRUM INVESTOR CONTACT:	CASI INVESTOR CONTACTS:
Spectrum Pharmaceuticals, Inc.	CASI Pharmaceuticals, Inc.
Shiv Kapoor	240.864.2643
Vice President, Strategic Planning & Investor	ir@casipharmaceuticals.com
Relations
702-835-6300	LHA
InvestorRelations@sppirx.com	Kim Sutton Golodetz
	212.838.3777
	kgolodetz@lhai.com

#  #  #

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Ken K. Ren, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CASI Pharmaceuticals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 14, 2014

/s/ Ken K. Ren

Ken K. Ren

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL ACCOUNTING OFFICER

I, Sara B. Capitelli, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CASI Pharmaceuticals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 14, 2014

/s/ Sara B. Capitelli

Sara B. Capitelli

Principal Accounting Officer

EX-32.1

Exhibit 32.1

CERTIFICATION BY CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of CASI Pharmaceuticals, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ken K. Ren, as Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the dates and periods covered by the Report.

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

Date:   November 14, 2014	/s/ Ken K. Ren
	Ken K. Ren Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION BY PRINCIPAL ACCOUNTING OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of CASI Pharmaceuticals, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Sara B. Capitelli, as Principal Accounting Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the dates and periods covered by the Report.

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

Date:  November 14, 2014	/s/ Sara B. Capitelli
	Sara B. Capitelli Principal Accounting Officer

XML

Share-Based Compensation (Details 2) (USD $)	9 Months Ended
	Sep. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding - Number of Options, Beginning Balance	3,586,394
Granted - Number of Options	1,090,000
Exercised - Number of Options	0
Expired - Number of Options	104,976
Forfeited - Number of Options	3,542
Outstanding - Number of Options, Ending Balance	4,567,876
Vested and expected to vest - Number of Options at September 30, 2014	4,528,970
Exercisable - Number of Options at September 30, 2014	3,270,995
Outstanding - Weighted Average Exercise Price, Beginning balance	$ 2.69
Granted - Weighted Average Exercise Price	$ 1.83
Exercised - Weighted Average Exercise Price	$ 0
Expired - Weighted Average Exercise Price	$ 6.21
Forfeited - Weighted Average Exercise Price	$ 1.94
Outstanding - Weighted Average Exercise Price	$ 2.40
Vested and expected to vest - Weighted Average Exercise Price, Ending Balance	$ 2.41
Exercisable - Weighted Average Exercise Price at September 30, 2014	$ 2.64

XML

Note Payable

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

4. Note Payable

As part of the license arrangements with Spectrum (see Note 3), the Company issued to Spectrum a $1.5 million 0.5% secured promissory note due in March 2016. The promissory note was recorded initially at its fair value, giving rise to a discount of approximately $136,000; the promissory note is presented as note payable, net of discount in the accompanying consolidated balance sheets. For the three and nine months ended September 30, 2014, the Company recognized approximately $3,300 of non-cash interest expense related to the amortization of the debt discount, using the effective interest rate method.

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License Arrangements and Acquisition of In-Process Research and Development

9 Months Ended

Sep. 30, 2014

Research and Development [Abstract]

Research, Development, and Computer Software Disclosure [Text Block]

3. License Arrangements and Acquisition of In-Process Research and Development

In September 2014, the Company acquired certain product rights and perpetual exclusive licenses from Spectrum Pharmaceuticals, Inc. and certain of its affiliates (together referred to as “Spectrum”), to develop and commercialize the following commercial oncology drugs and drug candidates in China, Taiwan, Hong Kong and Macau (the “Territories”):

⋅ Captisol-Enabled^™ (propylene glycol-free) melphalan (“CE Melphalan”);

⋅ ZEVALIN^® (ibritumomab tiuxetan) (“Zevalin”); and

⋅ MARQIBO^® (vinCRIStine sulfate LIPOSOME injection) (“Marqibo”).

CE Melphalan is currently in Phase III clinical trials in the U.S. (with an NDA submission planned by Spectrum for later in 2014), whereas Zevalin and Marqibo are currently marketed in the U.S. CASI is responsible for developing and commercializing these three drugs in the Territories, including the submission of import drug registration applications and conducting confirmatory clinical trials.

As consideration for the acquisition, the Company issued a total 5,405,382 shares of its common stock, a $1.5 million 0.5% secured promissory note due in March 2016, and certain contingent rights (“Contingent Rights”) to purchase additional shares of its common stock or Series A Preferred Stock. The Company accounted for the acquisition of the product rights and licenses as an “asset acquisition” and, accordingly, recorded the acquired product rights and licenses at their estimated fair values based on the fair value of the consideration exchanged (including transaction costs) of approximately $19.7 million. Because the products underlying the acquired product rights and licenses have not reached technological feasibility and have no alternative uses, they are considered “in-process research and development” costs; as such, the Company expensed the total purchase price at the acquisition date as acquired in-process research and development in the accompanying consolidated statements of operations.

The fair value of the common stock issued was based on the closing market price of the Company’s common stock on the acquisition date. The fair value of the promissory note was measured using Level 3 unobservable inputs including primarily the Company’s estimated incremental borrowing rate as provided by a commercial lending institution.

The Contingent Rights provide Spectrum with the option to acquire, at a strike price of par value, a variable number of additional shares of common stock (or other equity-linked securities) that allows Spectrum to maintain its fully-diluted ownership percentage for a certain time period and under certain terms and conditions. Based on the terms and conditions of the Contingent Rights, the Company has determined that the Contingent Rights are a derivative financial instrument that is not indexed to its common stock and therefore is required to be accounted for at fair value, initially and on a recurring basis. The fair value of the Contingent Rights was measured using Level 3 unobservable inputs, as determined by an independent valuation expert; the unobservable inputs include estimates of the Company’s future capital requirements, and the timing, probability, size and characteristics of those capital raises, among other inputs. The total estimated fair value of the Contingent Rights was $9,434,499 at the acquisition date and was $9,441,080 as of September 30, 2014; the change in fair value is reflected as change in fair value of contingent rights in the accompanying consolidated statements of operations.

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Consolidated Balance Sheets (USD $)	Sep. 30, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 11,817,324	$ 15,131,671
Prepaid expenses and other	336,382	279,773
Total current assets	12,153,706	15,411,444
Property and equipment, net	230,564	78,142
Other assets	26,011	17,965
Total assets	12,410,281	15,507,551
Current liabilities:
Accounts payable	600,239	402,456
Accrued liabilities	163,922	162,710
Total current liabilities	764,161	565,166
Note payable, net of discount	1,367,365	0
Contingent rights derivative liability	9,441,080	0
Total liabilities	11,572,606	565,166
Commitments and contingencies:	0	0
Stockholders' equity
Convertible preferred stock, $1.00 par value; 5,000,000 shares authorized and 0 shares issued and outstanding at September 30, 2014 and December 31, 2013	0	0
Common stock, $.01 par value: 170,000,000 shares authorized at September 30, 2014 and December 31, 2013; 32,525,356 shares and 27,119,974 shares issued at September 30, 2014 and December 31, 2013, respectively	325,251	271,198
Additional paid-in capital	432,221,907	421,775,039
Treasury stock, at cost: 79,545 shares held at September 30, 2014 and December 31, 2013	(8,034,244)	(8,034,244)
Accumulated deficit	(423,675,239)	(399,069,608)
Total stockholders' equity	837,675	14,942,385
Total liabilities and stockholders' equity	$ 12,410,281	$ 15,507,551

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Company Name Change

9 Months Ended

Sep. 30, 2014

Company Name Change [Abstract]

Company Name Change [Text Block]

1. Company Name Change

On June 12, 2014, the stockholders of EntreMed, Inc. approved changing the Company’s name from EntreMed, Inc. to CASI Pharmaceuticals, Inc., which became effective on June 16, 2014.

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Stockholders' Equity (Details Textual) (USD $)			3 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Mar. 31, 2013 Financing 2013 [Member]	Mar. 31, 2013 Agent Warrant [Member]
Stockholders Equity [Line Items]
Common stock, shares issued	32,525,356	27,119,974	4,495,828
Class of Warrant or Right, Number of Securities Called by Warrants or Rights			2,247,912	61,250
Fair Value Assumptions, Expected Term			3 years 6 months	4 years 7 months 6 days
Fair Value Assumptions, Risk Free Interest Rate			0.40%	0.85%
Gross Proceeds From Issuance Of Shares And Warrants			$ 10,800,000
Class Of Warrant Or Right Maturity Period Description			The 2013 Warrants cover a number of shares of common stock equal to 50% of the number of shares purchased by each 2013 Investor. The 2013 Warrants have an exercise price of $2.91 per share and became exercisable on September 4, 2013 and expire on September 4, 2016.	The Agents Warrant became exercisable on September 4, 2013 and will expire on October 9, 2017.
Fair Value Of Warrant Issued			3,574,180	115,150
Fair Value Assumptions Fair Value			$ 1.59	$ 1.88
Fair Value Assumptions, Expected Volatility Rate			102.30%	111.90%
Proceeds from Issuance of Common Stock			$ 10,300,000
Class of Warrant or Right, Exercise Price of Warrants or Rights			$ 2.91	$ 3.00

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Share-Based Compensation (Details 1)	9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	102.41%		105.37%
Risk-free interest rate	1.78%		1.01%
Expected term of option	5 years 7 months 17 days		5 years 9 months 4 days
Forfeiture rate	3.00%	[1]	5.00%	[1]
Expected dividend yield	0.00%		0.00%

[1] Authoritative guidance requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. During the nine- month periods ended September 30, 2014 and 2013, forfeitures were estimated at 3% and 5%, respectively.

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Basis of Presentation

9 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Accounting [Text Block]

2. Basis of Presentation

The accompanying consolidated financial statements include the accounts of CASI Pharmaceuticals, Inc. and its subsidiaries (“CASI” or “the Company”), Miikana Therapeutics, Inc. (“Miikana”) and CASI Pharmaceuticals (Beijing) Co., Ltd. (“CASI China”). CASI China is a non-stock Chinese entity with 100% of its interest owned by CASI. CASI China received approval for a business license from the Beijing Industry and Commercial Administration in August 2012 and has operating facilities in Beijing. All inter-company balances and transactions have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been prepared in accordance with U. S. generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, such consolidated financial statements do not include all of the information and disclosures required by U. S. generally accepted accounting principles for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The accompanying December 31, 2013 financial information was derived from the Company’s audited financial statements in the Annual Report on Form 10-K for the year ended December 31, 2013. Operating results for the three and nine month periods ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. For further information, refer to the Company’s audited consolidated financial statements and footnotes thereto included in its Form 10-K for the year ended December 31, 2013.

Liquidity Risks and Management’s Plans

Since inception, the Company has incurred significant losses from operations and has incurred an accumulated deficit of $423.7 million.   The Company expects to continue to incur operating losses for the foreseeable future due to, among other factors, its continuing clinical activities. On March 14, 2013 (the “2013 Financing”), the Company closed on the sale of 4,495,828 shares of common stock and 2,247,912 warrants to certain investors for approximately $10.8 million (see Note 6). As a result of this transaction, along with on-going cost containment measures, the Company believes that it has sufficient resources to fund its operations for at least the twelve months subsequent to September 30, 2014. The Company will continue to exercise tight controls over operating expenditures and will continue to pursue opportunities, as required, to raise additional capital and will also actively pursue non- or less-dilutive capital raising arrangements in China to support the Company’s dual-country approach to drug development.

Reclassifications

Certain prior period amounts were reclassified to conform to the current period presentation. 

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Consolidated Balance Sheets [Parenthetical] (USD $)	Sep. 30, 2014	Dec. 31, 2013
Convertible preferred stock, par value (in dollars per share)	$ 1.00	$ 1.00
Convertible preferred stock, shares authorized	5,000,000	5,000,000
Convertible preferred stock, shares issued	0	0
Convertible preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	170,000,000	170,000,000
Common stock, shares issued	32,525,356	27,119,974
Treasury stock, shares held	79,545	79,545

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Basis of Presentation (Details Textual) (USD $)	0 Months Ended	9 Months Ended
	Mar. 14, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Description of Business and Basis of Presentation [Line Items]
Retained Earnings (Accumulated Deficit), Total		$ (423,675,239)		$ (399,069,608)
Issuance of common stock (in shares)	4,495,828
Warrants Issued During The Period	2,247,912
Proceeds from Issuance or Sale of Equity, Total	$ 10,800,000	$ 0	$ 10,849,524
Percentage Of Ownership Interest In Non Stock Subsidiary		100.00%

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Document And Entity Information	9 Months Ended
	Sep. 30, 2014	Nov. 07, 2014
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Entity Registrant Name	CASI PHARMACEUTICALS, INC.
Entity Central Index Key	0000895051
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	CASI
Entity Common Stock, Shares Outstanding		32,445,811

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License Arrangements and Acquisition of In-Process Research and Development (Details Textual) (USD $)	1 Months Ended
	Sep. 30, 2014	Sep. 17, 2014	Dec. 31, 2013
License Arrangements and Acquisition of In Process Research and Development [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value	$ 9,441,080	$ 9,434,499	$ 0
Debt Instrument, Maturity Date, Description	March 2016
Spectrum Pharmaceuticals [Member]
License Arrangements and Acquisition of In Process Research and Development [Line Items]
Contingent Consideration Fair Value Of License	19,700,000
Stock Issued During Period, Shares, Acquisitions	5,405,382
Long-term Debt, Gross		$ 1,500,000
Debt Instrument, Interest Rate, Stated Percentage	0.50%
Debt Instrument, Maturity Date, Description	March 2016

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Consolidated Statements of Operations (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Revenues:
Royalties	$ 0	$ 0	$ 0	$ 0
Costs and expenses:
Research and development	697,001	779,953	1,981,468	2,079,341
General and administrative	1,150,164	662,621	2,933,456	2,351,793
Acquired in-process research and development	19,681,711	0	19,681,711	0
Costs and expenses	21,528,876	1,442,574	24,596,635	4,431,134
Interest (income) expense, net	2,927	(408)	2,415	(1,241)
Change in fair value of contingent rights	6,581	0	6,581	0
Net loss	$ (21,538,384)	$ (1,442,166)	$ (24,605,631)	$ (4,429,893)
Net loss per share (basic and diluted) (in dollars per share)	$ (0.77)	$ (0.05)	$ (0.90)	$ (0.17)
Weighted average number of common shares outstanding (basic and diluted) (in shares)	27,804,223	27,031,734	27,297,828	25,817,642

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Share-Based Compensation

9 Months Ended

Sep. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

7. Share-Based Compensation

The Company has adopted incentive and nonqualified stock option plans for executive, scientific and administrative personnel of the Company as well as outside directors and consultants. In June 2014, the Company’s shareholders approved an amendment to the 2011 Long-Term Incentive Plan, increasing the number of shares reserved for issuance from 4,230,000 to 5,730,000 shares of common stock to be available for grants and awards. As of September 30, 2014, there are 4,567,876 shares issuable under options previously granted and currently outstanding, with exercise prices ranging from $1.59 to $34.10. In 2014, the Company awarded options to two officers and two board members, covering up to 400,000 shares, in which vesting is subject to achievement of certain performance milestone conditions. In 2012, the Company awarded options to two officers, a portion of which is subject to certain performance conditions and market conditions. Options granted under the plans generally vest over periods varying from immediately to one to three years, are not transferable and generally expire ten years from the date of grant. As of September 30, 2014, 1,605,876 shares remained available for grant under the Company’s 2011 Long-Term Incentive Plan.

The Company records compensation expense associated with stock options and other equity-based compensation in accordance with provisions of authoritative guidance. Compensation costs are recognized over the requisite service period, which is generally the option vesting term of up to three years. Awards with performance conditions will be expensed if it is probable that the performance condition will be achieved. On September 17, 2014, the vesting of all of the performance condition options became probable as a result of the Spectrum transaction discussed in Note 3. Therefore, for the three months ended September 30, 2014, non-cash compensation expense of $686,600 has been recorded for share awards with performance conditions.

The Company’s net loss for the nine months ended September 30, 2014 and 2013 includes non-cash compensation expense of $1,852,310 and $1,554,422, respectively, related to the Company’s share-based compensation awards. The compensation expense related to the Company’s share-based compensation arrangements is recorded as components of general and administrative expense and research and development expense, as follows:

	NINE MONTH PERIOD ENDED SEPTEMBER 30,
	2014		2013
Research and development	$	572,842	$	587,186
General and administrative		1,279,468		967,236
Share-based compensation expense	$	1,852,310	$	1,554,422
Net share-based compensation expense, per common share:
Basic and diluted	$	0.07	$	0.06

The Company uses the Black-Scholes-Merton valuation model to estimate the fair value of stock options granted to employees. Option valuation models, including Black-Scholes-Merton, require the input of highly subjective assumptions, and changes in the assumptions used can materially affect the grant date fair value of an award.

Following are the weighted-average assumptions used in valuing the stock options granted during the nine-month periods ended September 30, 2014 and 2013:

	NINE MONTH PERIOD ENDED SEPTEMBER 30,
	2014		2013
Expected volatility	102.41	%		105.37	%
Risk-free interest rate	1.78	%		1.01	%
Expected term of option	5.63 years			5.76 years
Forfeiture rate*	3.00	%		5.00	%
Expected dividend yield	0.00	%		0.00	%

* - Authoritative guidance requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. During the nine- month periods ended September 30, 2014 and 2013, forfeitures were estimated at 3% and 5%, respectively.

The weighted average fair value of stock options granted during the nine-month periods ended September 30, 2014 and 2013 was $1.44 and $1.43, respectively.

A summary of the Company’s stock option plans and of changes in options outstanding under the plans for the nine months ended September 30, 2014 is as follows:

			Weighted
			Average
	Number of		Exercise
	Options		Price
Outstanding at January 1, 2014		3,586,394	$	2.69
Granted		1,090,000	$	1.83
Exercised		-	$	-
Expired		104,976	$	6.21
Forfeited		3,542	$	1.94
Outstanding at September 30, 2014		4,567,876	$	2.40
Vested and expected to vest at September 30, 2014		4,528,970	$	2.41
Exercisable at September 30, 2014		3,270,995	$	2.64

Cash received from option exercises under all share-based payment arrangements for the three and nine months ended September 30, 2013 was $0 and $7,190, respectively. There were no option exercises during the three or nine months ended September 30, 2014.

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Stockholders' Equity

9 Months Ended

Sep. 30, 2014

Stockholders Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

6. Stockholders’ Equity

As described in Note 2 and in connection with the 2013 Financing, on March 1, 2013, the Company entered into a definitive agreement with certain investors (collectively, the “2013 Investors”) for a financing in the aggregate amount of approximately $10.8 million.  In connection with the 2013 Financing, the Company entered into a Securities Purchase Agreement with the 2013 Investors pursuant to which the Company agreed to sell in a transaction registered under the Securities Act of 1933, as amended, 4,495,828 shares of the Company’s common stock and warrants to purchase up to an aggregate of 2,247,912 shares of common stock (the “2013 Warrants”).   The 2013 Warrants cover a number of shares of common stock equal to 50% of the number of shares purchased by each 2013 Investor.  The 2013 Warrants have an exercise price of $2.91 per share and became exercisable on September 4, 2013 and expire on September 4, 2016.  The fair value of the 2013 Warrants issued is $3,574,180, calculated using the Black-Scholes-Merton valuation model value of $1.59 with an expected and contractual life of 3.5 years, an assumed volatility of 102.3%, and a risk-free interest rate of 0.40%. The Company completed the closings on the 2013 Financing on March 14, 2013 and received net proceeds of approximately $10.3 million.

In connection with the 2013 Financing, the Company also issued a warrant to its placement agent to purchase up to 61,250 shares of common stock at an exercise price of $3.00 per share of common stock (the “Agent’s Warrant”). The Agent’s Warrant became exercisable on September 4, 2013 and will expire on October 9, 2017. The fair value of the Agent’s Warrant issued is $115,150, calculated using the Black-Scholes-Merton valuation model value of $1.88 with an expected and contractual life of 4.6 years, an assumed volatility of 111.9%, and a risk-free interest rate of 0.85%.

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Share-Based Compensation (Details) (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation, Total	$ 1,852,310	$ 1,554,422
Net share-based compensation expense, per common share:
Basic and diluted (in dollars per share)	$ 0.07	$ 0.06
Research and Development Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation, Total	572,842	587,186
General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation, Total	$ 1,279,468	$ 967,236

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Note Payable (Details Textual) (USD $)	1 Months Ended	3 Months Ended	9 Months Ended	1 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2014 Spectrum Pharmaceuticals [Member]	Sep. 17, 2014 Spectrum Pharmaceuticals [Member]
Notes Payable [Line Items]
Long-term Debt, Gross					$ 1,500,000
Amortization of Debt Discount (Premium)		3,300	3,300
Debt Instrument, Interest Rate, Stated Percentage				0.50%
Debt Instrument, Unamortized Discount (Premium), Net				$ 136,000
Debt Instrument, Maturity Date, Description	March 2016			March 2016

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]

Fair Value, Liabilities Measured on Recurring Basis [Table Text Block]

The following table presents the Company’s financial liabilities accounted for at fair value on a recurring basis as of September 30, 2014 (none at December 31, 2013) by level within the fair value hierarchy:

	As of September 30, 2014
	Level 1		Level 2		Level 3		Total
Liabilities - Contingent Rights	$	-	$	-	$	9,441,080	$	9,441,080

Fair Value, Inputs, Level 3 [Member]

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]

Fair Value, Liabilities Measured on Recurring Basis [Table Text Block]

The following table presents the changes in the Company’s financial liabilities accounted for at fair value on a recurring basis using Level 3 unobservable inputs:

December 31, 2013	$	-
Issuance of Contingent Rights		9,434,499
Change in fair value of Contingent Rights		6,581
Balance at September 30, 2014	$	9,441,080

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Income Taxes

9 Months Ended

Sep. 30, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

8. Income Taxes

At December 31, 2013, the Company had a $3.0 million unrecognized tax benefit. The Company recorded a full valuation allowance on the net deferred tax asset recognized in the consolidated financial statements as of December 31, 2013.

During the nine months ended September 30, 2014, there were no material changes to the measurement of unrecognized tax benefits in various taxing jurisdictions. The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense.

The tax returns for all years in the Company’s major tax jurisdictions are not settled as of January 1, 2014; no changes in settled tax years have occurred through September 30, 2014. Due to the existence of tax attribute carryforwards (which are currently offset by a full valuation allowance), the Company treats all years’ tax positions as unsettled due to the taxing authorities’ ability to modify these attributes.

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New Accounting Pronouncements

9 Months Ended

Sep. 30, 2014

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

9. New Accounting Pronouncements

In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2014-15, Presentation of Financial Statements – Going Concern. The new standard requires management to evaluate on a regular basis whether any conditions or events have arisen that could raise substantial doubt about the entity’s ability to continue as a going concern. The guidance 1) provides a definition for the term “substantial doubt,” 2) requires an evaluation every reporting period, interim periods included, 3) provides principles for considering the mitigating effect of management’s plans to alleviate the substantial doubt, 4) requires certain disclosures if the substantial doubt is alleviated as a result of management’s plans, 5) requires an express statement, as well as other disclosures, if the substantial doubt is not alleviated, and 6) requires an assessment period of one year from the date the financial statements are issued.  The standard is effective for the Company’s reporting year beginning January 1, 2017 and early adoption is not permitted. The Company is currently evaluating the impact, if any, that this new accounting pronouncement will have on its financial statements.

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers which provides guidance for revenue recognition for contracts, superseding the previous revenue recognition requirements, along with most existing industry-specific guidance. The guidance requires an entity to review contracts in five steps: 1) identify the contract, 2) identify performance obligations, 3) determine the transaction price, 4) allocate the transaction price, and 5) recognize revenue. The new standard will result in enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue arising from contracts with customers. The standard is effective for the Company’s reporting year beginning January 1, 2017 and early adoption is not permitted. The Company is currently evaluating the impact, if any, that this new accounting pronouncement will have on its financial statements.

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Share-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

The compensation expense related to the Company’s share-based compensation arrangements is recorded as components of general and administrative expense and research and development expense, as follows:

	NINE MONTH PERIOD ENDED SEPTEMBER 30,
	2014		2013
Research and development	$	572,842	$	587,186
General and administrative		1,279,468		967,236
Share-based compensation expense	$	1,852,310	$	1,554,422
Net share-based compensation expense, per common share:
Basic and diluted	$	0.07	$	0.06

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

Following are the weighted-average assumptions used in valuing the stock options granted during the nine-month periods ended September 30, 2014 and 2013:

	NINE MONTH PERIOD ENDED SEPTEMBER 30,
	2014		2013
Expected volatility	102.41	%		105.37	%
Risk-free interest rate	1.78	%		1.01	%
Expected term of option	5.63 years			5.76 years
Forfeiture rate*	3.00	%		5.00	%
Expected dividend yield	0.00	%		0.00	%

* - Authoritative guidance requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. During the nine- month periods ended September 30, 2014 and 2013, forfeitures were estimated at 3% and 5%, respectively.

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

A summary of the Company’s stock option plans and of changes in options outstanding under the plans for the nine months ended September 30, 2014 is as follows:

			Weighted
			Average
	Number of		Exercise
	Options		Price
Outstanding at January 1, 2014		3,586,394	$	2.69
Granted		1,090,000	$	1.83
Exercised		-	$	-
Expired		104,976	$	6.21
Forfeited		3,542	$	1.94
Outstanding at September 30, 2014		4,567,876	$	2.40
Vested and expected to vest at September 30, 2014		4,528,970	$	2.41
Exercisable at September 30, 2014		3,270,995	$	2.64

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Fair Value Measurements (Details 1) (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 17, 2014
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
December 31, 2013	$ 0	$ 9,434,499
Issuance of Contingent Rights	9,434,499
Change in fair value of Contingent Rights	6,581
Balance at September 30, 2014	$ 9,441,080	$ 9,434,499

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Share-Based Compensation (Details Textual) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value		$ 1.44	$ 1.43
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	1,605,876	1,605,876
Share-based Compensation, Total		$ 1,852,310	$ 1,554,422
Allocated Share-based Compensation Expense	686,600
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance	4,567,876	4,567,876		3,586,394
Share Based Compensation Estimated Forfeiture Rate		3.00%	5.00%
Proceeds from Stock Options Exercised		$ 0	$ 7,190
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit		$ 1.59
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit		$ 34.10
Two Officers And Two Board Members[Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Based Compensation Arrangement By Share Based Payment Award Options Granted Subject To Achievement		400,000
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common Stock, Capital Shares Reserved for Future Issuance	5,730,000	5,730,000
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common Stock, Capital Shares Reserved for Future Issuance	4,230,000	4,230,000

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Consolidated Statements of Cash Flows (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (24,605,631)	$ (4,429,893)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	32,713	12,900
Stock-based compensation expense	1,852,310	1,554,422
Acquired in-process research and development	19,681,711	0
Change in fair value of contingent rights	6,581	0
Non-cash interest	3,272	0
Changes in operating assets and liabilities:
Accounts receivable	0	669,310
Prepaid expenses and other	(64,655)	(127,127)
Accounts payable	197,783	(152,601)
Payable to related party	0	(86,683)
Accrued liabilities	1,212	(2,067)
Net cash used in operating activities	(2,894,704)	(2,561,739)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of furniture and equipment	(185,135)	(16,926)
Cash paid for acquired in-process research and development	(234,508)	0
Net cash used in investing activities	(419,643)	(16,926)
CASH FLOWS FROM FINANCING ACTIVITIES
Stock issuance costs	0	(448,402)
Net proceeds from sale of common stock or exercise of options and warrants	0	10,849,524
Net cash provided by financing activities	0	10,401,122
Net (decrease) increase in cash and cash equivalents	(3,314,347)	7,822,457
Cash and cash equivalents at beginning of period	15,131,671	8,049,237
Cash and cash equivalents at end of period	11,817,324	15,871,694
Non-cash investing and financing activities:
Warrant issued to placement agent	0	115,150
Common stock issued in connection with acquired in-process research and development	8,648,611	0
Promissory note, net of discount, issued in connection with acquired in-process research and development	1,364,093	0
Contingent rights issued in connection with acquired in-process research and development	$ 9,434,499	$ 0

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Fair Value Measurements

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

5. Fair Value Measurements

Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value. These tiers include:

⋅ Level 1, defined as observable inputs such as quoted prices in active markets for identical assets;

⋅ Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

⋅ Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. At each reporting period, the Company performs a detailed analysis of its assets and liabilities that are measured at fair value. All assets and liabilities for which the fair value measurement is based on significant unobservable inputs or instruments which trade infrequently and therefore have little or no price transparency are classified as Level 3.

The inputs used in measuring the fair value of cash and cash equivalents are considered to be Level 1 in accordance with the three-tier fair value hierarchy. The fair market values are based on period-end statements supplied by the various banks and brokers that held the majority of the Company’s  funds. The fair value of short-term financial instruments (primarily accounts receivable, prepaid expenses, accounts payable, accrued expenses, and other current assets and liabilities) approximate their carrying values because of their short-term nature.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis:

The Contingent Rights issued to Spectrum in connection with the license arrangements (see Note 3) are considered derivative liabilities and were recorded initially at their estimated fair value, and are marked to market each reporting period until settlement. The fair value of the Contingent Rights was measured using Level 3 unobservable inputs, as determined by an independent valuation expert; the unobservable inputs include estimates of the Company’s future capital requirements, and the timing, probability, size and characteristics of those capital raises, among other inputs. Generally, if the estimates of the size and probability of the Company’s future capital requirements increase, the fair value of the Contingent Rights will also increase.

The following table presents the Company’s financial liabilities accounted for at fair value on a recurring basis as of September 30, 2014 (none at December 31, 2013) by level within the fair value hierarchy:

	As of September 30, 2014
	Level 1		Level 2		Level 3		Total
Liabilities - Contingent Rights	$	-	$	-	$	9,441,080	$	9,441,080

The following table presents the changes in the Company’s financial liabilities accounted for at fair value on a recurring basis using Level 3 unobservable inputs:

December 31, 2013	$	-
Issuance of Contingent Rights		9,434,499
Change in fair value of Contingent Rights		6,581
Balance at September 30, 2014	$	9,441,080

Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis:

The promissory note issued to Spectrum in connection with the license arrangements (see Note 4) was initially recorded at its fair value using Level 3 unobservable inputs including primarily the Company’s estimated incremental borrowing rate as provided by a commercial lending institution.

Non-Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis:

The Company does not have any non-financial assets and liabilities that are measured at fair value on a recurring basis.

Non-Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis:

The Company measures its long-lived assets, including property and equipment, at fair value on a non-recurring basis. These assets are recognized at fair value when they are deemed to be impaired. No such fair value impairment was recognized in the three and nine months ended September 30, 2014 and 2013.

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Income Taxes (Details Textual) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013
Income Tax Contingency [Line Items]
Unrecognized Tax Benefits	$ 3.0

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Fair Value Measurements (Details) (USD $)	Sep. 30, 2014	Sep. 17, 2014	Dec. 31, 2013
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Liabilities - Contingent Rights	$ 9,441,080	$ 9,434,499	$ 0
Fair Value, Inputs, Level 1 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Liabilities - Contingent Rights	0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Liabilities - Contingent Rights	0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Liabilities - Contingent Rights	$ 9,441,080