8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

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

Date of report (Date of earliest event reported): March 14, 2006

LA JOLLA PHARMACEUTICAL COMPANY

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation) 0-24274
(Commission
File Number) 33-0361285
(IRS Employer
Identification No.)

6455 Nancy Ridge Drive
San Diego, California 92121
(Address of principal executive offices, including zip code)

(858) 452-6600
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EXHIBIT 10.1

EXHIBIT 10.2

EXHIBIT 99.1

Item 1.01 Entry into a Material Definitive Agreement.

     The information contained in Item 5.02 concerning the Employment Agreement with Deirdre Y. Gillespie, M.D. and the Separation Agreement with Steven B. Engle is incorporated herein by reference.

     The information contained in Item 8.01 concerning the compensation of Craig R. Smith, M.D. as Chairman of the Board of Directors (the “Board”) of La Jolla Pharmaceutical Company (the “Company”) is incorporated herein by reference.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

     On March 14, 2006, the Board accepted the resignation of Steven B. Engle as Chairman and Chief Executive Officer and, on March 15, 2006, appointed Deirdre Y. Gillespie, M.D. to serve as the new Chief Executive Officer and a director of the Company.

     Dr. Gillespie, 49, previously served as the President and Chief Executive Officer of Oxxon Therapeutics, Inc., a privately held pharmaceutical company, from 2001 to 2005. Prior to that, she served as Chief Operating Officer of Vical, Inc. from 2000 to 2001 and Executive Vice President & Chief Business Officer from 1998 to 2000. Dr. Gillespie also held a number of positions at DuPont Merck Pharmaceutical Company, including Vice President of Marketing from 1991 to 1996. She currently serves as a Trustee of The Forsyth Institute and an Advisory Board Member of The Communications Strategy Group Inc. Dr. Gillespie received her M.B.A. from the London Business School and her M.D. and B.Sc. from London University.

     On March 15, 2006, the Company entered into an Employment Agreement with Dr. Gillespie, which provides for: (i) an annual base salary of $375,000; (ii) a signing bonus of $50,000; (iii) a non-guaranteed annual bonus with a target amount equal to 40% of her annual base salary (the exact amount to be determined each year based on Dr. Gillespie’s and the Company’s performance with respect to performance objectives established by the compensation committee); (iv) a grant of options to purchase 800,000 shares of common stock of the Company, with 200,000 of the options vesting on the first anniversary of the date of the agreement and 1/36th of the remaining 600,000 options vesting each month thereafter; (v) $30,000 for moving expenses incurred in connection with Dr. Gillespie’s relocation to the San Diego area, reimbursement for reasonable costs incurred for temporary housing in the San Diego area for a period of up to six months, and reimbursement of up to $50,000 in selling expenses if Dr. Gillespie enters into an agreement to sell her current home within one year of the effective date of employment; and (vi) severance benefits in qualifying circumstances equal to one times the amount of her annual base salary (subject to review and adjustment by the Board after one year of service).

     On March 17, 2006, the Company entered into a Separation Agreement with Mr. Engle, which provides for: (i) a severance payment equal to two times his annual base salary as of the date of his resignation; (ii) an additional payment equal to two times his monthly base salary as consideration for working with management and the Board to accomplish a smooth transition; (iii) medical, dental and life insurance coverage for him and his family until the earlier of (A) 24 months from the date of his resignation or (B) such time as he receives similar paid coverage from another employer; (iv) reasonable office space and administrative assistance until the earlier of (A) six months after the date of resignation or (B) such time as he finds alternate employment; (v) the immediate vesting of all outstanding options, which options will become fully exercisable as of the date of resignation and will remain exercisable for a period equal to the remaining term of the outstanding options; and (vi) the immediate lapsing of the Company’s repurchase right with respect to all shares of restricted stock held by Mr. Engle.

     Copies of the Employment Agreement with Dr. Gillespie, the Separation Agreement with Mr. Engle and the press release announcing Mr. Engle’s resignation and the appointment of Dr. Gillespie as Chief Executive Officer are attached hereto as Exhibits 10.1, 10.2 and 99.1, respectively, and they are incorporated by reference herein.

Item 8.01 Other Events.

      Effective March 15, 2006, following the resignation of Steven B. Engle as Chairman and Chief Executive Officer, the Board appointed Craig R. Smith, M.D., a current independent director, to serve as the Chairman of the Board. As Chairman, Dr. Smith will take over the responsibilities currently carried out by the Company’s Lead Independent Director, Stephen M. Martin, who will remain on the Board. In light of the appointment of an independent director as Chairman, the position of lead independent director will be suspended.

      In connection with the appointment of Dr. Smith as Chairman, the Board approved the following compensation arrangements:

• Dr. Smith will receive an annual retainer of $25,000;

• Dr. Smith will receive $3,000 per day plus out-of-pocket expenses incurred in connection with his performance of his Chairman duties during the transition to the new CEO;

• Dr. Smith received a one-time grant of non-qualified stock options to purchase 10,000 shares of common stock of the Company at an exercise price equal to the fair market value of a share of common stock on the date Dr. Smith was appointed Chairman. These options vest and become exercisable upon the first anniversary of the grant date;

• immediately after the 2006 annual meeting of stockholders, Dr. Smith will automatically receive a grant of additional non-qualified stock options to purchase up to 10,000 shares of common stock of the Company. These options will vest and become exercisable upon the first anniversary of the grant date and will have an exercise price equal to the fair market value of the common stock of the Company on the date of grant;

• beginning with the 2007 annual meeting of stockholders, the Chairman will, upon being re-elected to the Board or continuing to serve as a director, be granted non-qualified stock options to purchase 20,000 shares of common stock of the Company;

• Dr. Smith received a one-time grant of 20,000 shares of restricted common stock of the Company, which vest with respect to 10,000 shares six months after the grant date and with respect to the remaining 10,000 shares upon the first anniversary of the grant date; and

• Dr. Smith will be granted shares of common stock of the Company equal in value to the tax liability assessed upon the vesting of the shares of restricted common stock granted upon Dr. Smith’s appointment as Chairman (based on the fair market value of the Company’s common stock on the date of the tax event).

The foregoing payments and grants are in addition to all other compensation and grants that the Chairman receives for his service on the Board and its committees.

Item 9.01 Financial Statements and Exhibits.

     (d) Exhibits

     The following exhibits are furnished with this Current Report on Form 8-K:

Exhibit No.	Description
10.1	Employment Agreement, dated March 15, 2006, by and between the Company and Deirdre Y. Gillespie
10.2	Separation Agreement, dated March 17, 2006, by and between the Company and Steven B. Engle
99.1	Press Release, dated March 15, 2006

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 hereunto duly authorized.

Date: March 20, 2006
	LA JOLLA PHARMACEUTICAL COMPANY
	By:	/s/ Gail A. Sloan
		Gail A. Sloan
		Vice President of Finance and Secretary

EXHIBIT INDEX

Exhibit No.	Description
10.1	Employment Agreement, dated March 15, 2006, by and between the Company and Deirdre Y. Gillespie
10.2	Separation Agreement, dated March 17, 2006, by and between the Company and Steven B. Engle
99.1	Press Release, dated March 15, 2006

EX-10.1

Exhibit 10.1

CHIEF EXECUTIVE OFFICER EMPLOYMENT AGREEMENT

     This Chief Executive Officer Employment Agreement (“Agreement”) is entered into as of March 15, 2006 by and between Deirdre Y. Gillespie, M.D. (“Executive”) and La Jolla Pharmaceutical Company, a Delaware corporation (the “Company”).

     WHEREAS, the Company desires to employ Executive to provide personal services to the Company, and wishes to provide Executive with certain compensation and benefits in return for her services; and

     WHEREAS, Executive wishes to be employed by the Company and provide personal services to the Company in return for certain compensation and benefits.

     NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, it is hereby agreed by and between the parties hereto as follows:

     1. Employment by the Company.

          1.1 Title and Responsibilities. Subject to terms set forth herein, the Company agrees to employ Executive in the position of president and chief executive officer and Executive hereby accepts such employment effective as of the date hereof (the “Effective Date”). During her employment with the Company, Executive will devote her best efforts and substantially all of her business time and attention (except for vacation periods as set forth herein and reasonable periods of illness or other incapacity permitted by the Company’s general employment policies) to the business of the Company.

          1.2 Executive Position. Executive will continue to serve in an executive capacity and shall perform such duties as are customarily associated with her title, consistent with the bylaws of the Company and as reasonably required by the Board of Directors (the “Board”) of the Company.

          1.3 Company Employment Policies. The employment relationship between the parties shall also be governed by the general employment policies and practices of the Company, including those relating to protection of confidential information and assignment of inventions, except that if the terms of this Agreement differ from or are in conflict with the Company’s general employment policies or practices, this Agreement shall control.

          1.4 Board of Directors. On the Effective Date, Executive shall be appointed as a member of the Company’s Board of Directors to serve until the next annual meeting of stockholders. Thereafter, she will stand for election with the other directors at the annual meeting of stockholders.

     2. Compensation.

          2.1 Salary. Executive shall receive for services to be rendered hereunder an annualized base salary of $375,000, payable on a biweekly basis in accordance with the normal payroll practices of the Company (including deductions, withholdings and collections as required

by law). Executive will be considered for annual increases in base salary in accordance with Company policy and subject to review and approval by the Compensation Committee of the Board (the “Compensation Committee”).

          2.2 Signing Payment. As promptly as practicable after the Effective Date, in consideration for Executive commencing her employment with the Company on the date hereof, the Company will make a one-time payment to Executive of $50,000 in cash.

          2.3 Bonus. Executive shall be eligible to participate in the Company’s executive level bonus plan throughout the duration of Executive’s employment with the Company.

               (a) Executive’s Performance. The amount of Executive’s bonus will depend upon Executive’s and the Company’s performance with respect to the goals to be established annually by the Compensation Committee.

               (b) Determination of Bonus. The amount of Executive’s bonus will be determined after the close of the Company’s fiscal year. To be eligible to receive a bonus, Executive must remain in employment with the Company throughout the entire fiscal year. Notwithstanding the foregoing, but subject to Section 2.3(c) below, in the event that Executive is terminated without Cause, as a result of a Constructive Termination or in connection with a Change in Control, the amount of Executive’s bonus, if any, will be determined after the occurrence of such event and will be paid to Executive promptly thereafter. In the case of a Change in Control, the Board agrees to consider whether to pay Executive a bonus.

               (c) No Guaranteed Bonus. Notwithstanding the foregoing, no bonus is guaranteed to Executive. Any bonus is subject to the approval of the Board, which retains the authority to review, grant, deny or revise any bonus in its sole discretion.

               (d) Target Bonus. The target bonus for Executive shall be forty percent (40%) of her base salary.

               (e) Withholding. Any bonus paid to Executive shall be subject to such withholdings as may be required by law.

          2.4 Stock Options. On the Effective Date, the Company will grant Executive options to purchase 800,000 shares of common stock of the Company (the “Options”) pursuant to the terms and subject to the conditions set forth in the La Jolla Pharmaceutical Company 2004 Equity Incentive Plan (the “Plan”). 200,000 of the Options will vest on the first anniversary of the Effective Date. Thereafter, 1/36th of the remaining 600,000 Options will vest on the last day of each month until all options are vested. The exercise price of the Options shall be the Fair Market Value (as defined in the Plan) of the Company’s common stock on the Effective Date. With respect to the Options, the Company agrees to issue as many ISOs as possible, with the remainder of the Options being non-qualified stock options.

          2.5 Standard Company Benefits and Vacation. Executive shall be entitled to those benefits provided to the Company’s executives generally, including healthcare benefits, and

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for which she is eligible pursuant to the terms and conditions of the relevant plans. Executive shall be entitled to three weeks of paid vacation per year.

          2.6 Business Expenses. The Company shall promptly reimburse Executive for all reasonable and necessary business expenses incurred by Executive in connection with the business of the Company and the performance of her duties under this Agreement, subject to Executive providing the Company with reasonable documentation thereof.

          2.7 Moving Expense Reimbursement; Temporary housing.

               (a) The Company agrees to pay Executive $30,000 for, among other matters, expenses incurred by Executive in relocating to the San Diego area.

               (b) The Company will reimburse Executive for expenses actually and reasonably incurred by Executive for temporary housing in the San Diego area for a period of six months following the Effective Date or until such time as the Executive obtains permanent housing, whichever is earlier, and so long as Executive is employed by the Company. Executive agrees to notify the Chairman of the Board regarding the approximate amount of the temporary housing expenses in advance of incurring such expenses so that the Chairman may confirm that the temporary housing expenses to reimbursed by the Company are reasonable.

               (c) In the event that Executive has entered into an agreement to sell her current primary residence in Boston, Massachusetts on or prior to the first anniversary of the Effective Date, and so long as Executive is employed by the Company at the time of the sale, the Company will reimburse Executive for the costs actually and reasonably incurred by Executive in connection with selling such residence up to $50,000.

     3. Confidential Information, Rights and Duties.

          3.1 Agreement.

               (a) Confidential Information.

                    (i) Executive specifically agrees that she shall not at any time, either during or subsequent to the term of her employment with the Company, in any fashion, form or manner, either directly or indirectly, unless expressly consented to in writing by an executive officer of the Company, use, divulge, disclose or communicate to any person or entity any confidential information of any kind, nature or description concerning any matters affecting or relating to the business of the Company. The parties to this Agreement hereby stipulate that, as between them, the above information and items are important, material and confidential trade secrets that affect the successful conduct of the Company’s business and its goodwill, and that any breach of any term of this section is a material breach of this Agreement. All equipment, notebooks, documents, memoranda, reports, files, samples, books, correspondence, lists or other written and graphic records, and the like, including tangible or intangible computer programs, records and data, affecting or relating to the business of the Company, which the Executive might prepare, use, construct, observe, posses or control, shall be and shall remain the Company’s sole property.

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                    (ii) For purposes of this Agreement, the term “confidential information” shall not include any information that: (A) has been made public by the Company (other than by acts or omissions of Executive in violation of this Agreement or other obligation of confidentiality); (B) is developed by Executive independently of any information the Executive learns in the course of fulfilling her duties hereunder; or (C) Executive is legally compelled to disclose; provided that (1) Executive is advised by written opinion of the Executive’s counsel, who shall be reasonably satisfactory to the Company, that she is legally required to disclose such information and (2) Executive notifies the Company of such proposed disclosure as far in advance of its disclosure as is practicable and uses her best efforts to obtain assurances that confidential treatment will be accorded to such information.

               (b) Non-Interference. Any wrongful interference with the Company’s business, property, confidential information, trade secrets, clients, customers, employees or independent contractors by Executive or any of Executive’s agents during or after the term of Executive’s employment shall be treated and acknowledged by the parties as a material breach of this Agreement. If such interference occurs at a time that Executive is employed by the Company, such interference shall be grounds for the Company to terminate Executive for Cause.

          3.2 Remedies. Executive’s duties under this Section 3 shall survive termination of Executive’s employment with the Company. Executive acknowledges that a remedy at law for any breach or threatened breach by Executive of the provisions of this Section 3 would be inadequate, and Executive therefore agrees that the Company shall be entitled to injunctive relief in case of any such breach or threatened breach.

     4. Outside Activities.

          4.1 Activities. Except as set forth on Exhibit A hereto or with the prior written consent of the Board, Executive will not during her employment with the Company undertake or engage in any other employment, occupation or business enterprise (other than enterprises in which Executive is a passive investor; provided that such passive investment is consistent with this terms of this Agreement, including this Section 4). Notwithstanding the foregoing, Executive may engage in civic and not-for-profit activities so long as such activities do not materially interfere with the performance of her duties hereunder and are otherwise consistent with this Section 4.

          4.2 Investments and Interests. Executive agrees not to acquire, assume or participate in, directly or indirectly, any material position, investment or interest known by her to be adverse or antagonistic to the Company, its business or prospects, financial or otherwise.

          4.3 Non-Competition.

               (a) During her employment by the Company, except on behalf of the Company, Executive will not directly or indirectly, whether as an officer, director, stockholder, partner, proprietor, associate, representative, consultant, or in any capacity whatsoever engage in, become financially interested in, be employed by or have any business connection with any other person, corporation, firm, partnership or other entity whatsoever which were known by her to compete directly with the Company, throughout the world, in any line of business engaged in (or planned to be engaged in) by the Company.

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               (b) Notwithstanding the foregoing, nothing in this Agreement shall prevent Executive from owning for passive investment purposes less than 1% of the publicly traded common equity securities of any company engaged in the business of the Company (so long as Executive has no power to manage, operate, advise, consult with or control the competing enterprise and no power, alone or in conjunction with other affiliated parties, to select a director, manager, general partner, or similar governing official of the competing enterprise other than in connection with the normal and customary voting powers afforded Executive in connection with any permissible equity ownership).

     5. Termination Of Employment.

          5.1 Termination With or Without Cause.

               (a) At-Will Employment. Executive’s relationship with the Company is at-will. The Company shall have the right to terminate Executive’s employment with the Company at any time with or without Cause and with or without notice.

               (b) Definition of Cause. For purposes of this Agreement, “Cause” is defined as the occurrence of one or more of the following: (i) Executive is convicted of or pleads guilty or nolo contendere to a felony or any crime involving moral turpitude; (ii) Executive breaches this Agreement or any Agreement entered into with the Company in a manner that materially and adversely affects the Company; (iii) willful misconduct which materially and adversely impacts the Company; or (iv) Executive fails, after receipt of written notice and after receiving a period of at least 10 business days following such notice, to follow a legal direction of the Board; provided however, that if it is not possible to follow such direction within such 10 business day period, then Cause, in this case, shall mean the failure of Executive to follow a legal direction of the Board as soon as reasonably practicable after the end of such 10 business day period.

               (c) Termination for Cause. If Executive is terminated with Cause, the Company shall pay Executive the compensation and benefits otherwise payable to Executive under Section 2.1 through the date of termination. Executive’s rights under the Company’s benefit plans of general application shall be determined under the provisions of those plans. All other compensation from and after such termination shall cease (except for those benefits that must be continued pursuant to applicable law or by the terms of such benefit plans), and Executive shall not be entitled to any severance pay or other payment or compensation whatsoever upon such termination.

          5.2 Voluntary Termination; Death or Disability.

               (a) Voluntary Termination. Executive may voluntarily terminate her employment with the Company at any time, after which no further compensation will be paid to Executive, except as specifically set forth herein.

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               (b) Death or Disability. The Executive’s employment under this Agreement shall terminate immediately and without notice by the Company upon the death or disability of the Executive. In the event of Executive’s termination due to death or disability, she will not be entitled to severance pay, pay in lieu of notice or any other such compensation. For purposes of this Agreement, Executive will be deemed to have a disability if she becomes physically or mentally incapacitated or disabled or otherwise unable to fully discharge her duties hereunder for a period of 60 consecutive calendar days or for 120 days in any 360-day period.

               (c) No Severance Pay. In the event of Executive’s death or disability or if Executive voluntarily terminates her employment other than due to a Constructive Termination, she will not be entitled to severance pay, pay in lieu of notice or any other such compensation.

               (d) Definition of Constructive Termination. For purposes of this Agreement, “Constructive Termination” shall mean any one of the following events which occurs on or after the Effective Date of this Agreement: (i) a material reduction in Executive’s duties as an officer of the Company or a reduction in Executive’s title(s) as an officer of the Company; (ii) a relocation of Executive’s office to a location outside of San Diego County, California; (iii) any material breach by the Company of its obligations under this Agreement; or (iv) any failure by the Company to obtain the assumption of this Agreement by any successor or assign of the Company.

          5.3 Severance Benefits.

               (a) 90-Day Severance Payment. In the event the Company terminates Executive’s employment without Cause or if Executive terminates her employment due to a Constructive Termination on or prior to the 90th day after the Effective Date (the “90th Day”), and provided that Executive timely executes and delivers a Release Agreement (as defined in Section 8) to the Company, then Executive shall be entitled to a severance payment equal to $50,000 (the “90-Day Severance Payment”). The 90-Day Severance Payment shall be made in lump sum promptly following the effectiveness of the Release Agreement.

               (b) Severance Payment. In the event the Company terminates Executive’s employment without Cause or if Executive terminates her employment due to a Constructive Termination after the 90th Day, and provided that Executive timely executes and delivers a Release Agreement to the Company, Executive shall be entitled to a lump sum severance payment equal to one times Executive’s then current annual base salary (the “Standard Severance Payment”). As soon as reasonable practicable after the one year anniversary of the Effective Date, the Board agrees to review Executive’s performance. If the Board determines, in its reasonable discretion, that Executive has performed in a satisfactory manner, then the Standard Severance Payment shall increase to one and one-half times Executive’s annual base salary at the time of the event resulting in the payment of the severance payment.

               (c) Stock Options.

                    (i) Before the 90th Day. If Executive’s employment ceases for any reason on or before the 90th Day, then all Options shall immediately terminate.

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                    (ii) After the 90th Day.

                         (A) If the Company terminates Executive for Cause after the 90th Day, then all Options held by Executive, whether or not vested, shall immediately terminate and become unexercisable.

                         (B) If Executive voluntary resigns after the 90th Day, then all unvested Options held by Executive shall immediately terminate and become unexercisable and all vested Options held by Executive shall remain exercisable until three months after the date of cessation of service, in the case of incentive stock options, or six months after the date of cessation of service, in the case of non-qualified stock options.

                         (C) If, after the 90th Day, Executive’s employment ceases as a result of death or disability, then all unvested Options held by Executive shall immediately terminate and become unexercisable and all vested Options held by Executive shall remain exercisable until the one year anniversary of the date of cessation of service.

                         (D) If, after the 90th Day, the Company terminates Executive’s employment without Cause or if Executive terminates her employment due to a Constructive Termination, then: (1) one-half of all of Executive’s then unvested Options will immediately vest and become exercisable; (2) the other one-half of Executive’s then unvested Options will immediately terminate and become unexercisable; and (3) all Executive’s vested Options (including those which vested pursuant to clause (1)) shall expire on the two year anniversary of the termination date.

                         (E) Notwithstanding the foregoing, in no event shall any Option be exercisable after the date of expiration set forth in the Plan.

               (d) Healthcare Coverage. To the extent that Executive is eligible to continue her medical coverage under COBRA, the Company will pay the premiums for Executive’s COBRA coverage as they become due (including the premiums for any dependent coverage she elects), until the earlier of: (i) the date Executive accepts full time employment and/or becomes covered under another plan; (ii) the date she is otherwise no longer eligible for COBRA coverage; or (iii) 12 months after the effective date of separation.

               (e) Section 409A. Notwithstanding any provision of this Agreement to the contrary, if, at the time of Executive’s termination of employment with the Company, Executive is a “specified employee” as defined in Section 409A of the Internal Revenue Code (the “Code”), and one or more of the payments or benefits received or to be received by Executive pursuant to this Agreement or otherwise would constitute deferred compensation subject to Section 409A, then:

                    (i) no such payment will be made under this Agreement until the earliest of (A) the date which is six months after her “separation from service” for any reason, other than “death” or “disability” (as such terms are used in Section 409A(a)(2) of the Code), (B) the date of Executive’s “death” or “disability” (as such terms are used in Section 409A(a)(2) of the Code), or (C) the effective date of a “change in the ownership or effective control” of the Company (as such term is used in Section 409A(a)(2)(A)(v) of the Code).

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                    (ii) For the sake of clarity, the provisions of this Section 5.3(e) only apply to the extent required to avoid Executive’s incurrence of any penalty tax or interest under Section 409A of the Code or any regulations or United States Treasury guidance promulgated thereunder. In addition, if any provision of this Agreement would cause Executive to incur any penalty tax or interest under Section 409A of the Code or any regulations or Treasury guidance promulgated thereunder, the Company may reform such provision to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Section 409A of the Code.

          5.4 Cessation. If Executive violates any provision of Sections 3, 4, 7 or 8 of this Agreement, any severance payments or other benefits being provided to Executive will cease immediately, and Executive will not be entitled to any further compensation from the Company.

     6. Change in Control.

               (a) If Executive is employed by the Company at the time of a Change in Control, and if on or within 360 days after the consummation of the Change in Control Executive’s position is reduced such that she no longer serves as the Chief Executive Officer of the Company, then all of Executive’s unvested Options shall immediately vest and become exercisable.

               (b) “Change in Control” means the following and shall be deemed to occur if any of the following events occur:

                    (i) Except as provided by subsection (iii) hereof, the acquisition (other than from the Company) by any person, entity or “group,” within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (excluding, for this purpose, the Company or its subsidiaries, or any employee benefit plan of the Company or its subsidiaries which acquires beneficial ownership of voting securities of the Company), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of forty percent (40%) or more of either the then outstanding shares of common stock or the combined voting power of the Company’s then outstanding voting securities entitled to vote generally in the election of directors; or

                    (ii) Individuals who, as of the effective date of the Plan, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, is or was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of the Plan, considered as though such person were a member of the Incumbent Board; or

                    (iii) Approval by the stockholders of the Company of a reorganization, merger or consolidation with any other person, entity or corporation, other than:

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                         (A) a merger or consolidation which would result in the persons holding the voting securities of the Company outstanding immediately prior thereto continuing to hold more than fifty percent (50%) of the combined voting power of the voting securities of the Company or its successor which are outstanding immediately after such merger or consolidation, or

                         (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person acquires forty percent (40%) or more of the combined voting power of the Company’s then outstanding voting securities; or

                    (iv) Approval by the stockholders of the Company of a plan of complete liquidation of the Company or an agreement for the sale or other disposition by the Company of all or substantially all of the Company’s assets.

Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred (1) if the “person” is an underwriter or underwriting syndicate that has acquired the ownership of 50% or more of the combined voting power of the Company’s then outstanding voting securities solely in connection with a public offering of the Company’s securities, or (2) if the “person” is an employee stock ownership plan or other employee benefit plan maintained by the Company that is qualified under the provisions of the Employee Retirement Income Security Act of 1974, as amended.

     7. Other Agreements.

          7.1 Employees. For two years immediately following the termination date of Executive’s employment for any reason, Executive agrees not to solicit, attempt to solicit, induce, or otherwise cause any employee of the Company to terminate his or her employment in order to become an employee, consultant or independent contractor to or for any competitor of the Company.

          7.2 Noninterference. For one year immediately following the termination date of Executive’s employment for any reason, Executive agrees not to solicit, on Executive’s own behalf or for any entity that is in competition with the Company, any person or entity that is doing business with the Company or is an active prospect to do business with the Company for the purpose of diverting Company’s business or active business opportunities in competition with Company.

     8. Release. In exchange for the benefits and other consideration under this Agreement to which Executive would not otherwise be entitled, Executive shall enter into and execute a release substantially in the form attached hereto as Exhibit B (the “Release Agreement”) upon her termination of employment. Unless the Release Agreement is executed by Executive and delivered to the Company within 21 days after the termination of Executive’s employment with the Company, and the same is not revoked, Executive shall not receive any severance benefits provided under this Agreement.

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     9. General Provisions.

          9.1 Notices. Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of personal delivery (including personal delivery by facsimile transmission) or the third day after mailing by first class mail, to the Company at its primary office location and to Executive at her address as listed on the Company payroll.

          9.2 Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained herein or therein.

          9.3 Waiver. If either party should waive any breach of any provisions of this Agreement, she or it shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.

          9.4 Complete Agreement. This Agreement, together with the exhibits attached hereto and incorporated herein, constitutes the entire agreement between Executive and the Company and it is the complete, final, and exclusive embodiment of their agreement and supersedes any prior agreement written or otherwise between Executive and the Company with regard to this subject matter. It is entered into without reliance on any promise or representation other than those expressly contained herein or therein, and it cannot be modified or amended except in a writing signed by an officer of the Company.

          9.5 Counterparts. This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but all of which taken together will constitute one and the same agreement or plan. Signatures transmitted electronically or via facsimile shall be deemed to be original signatures.

          9.6 Headings. The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof or thereof nor to affect the meaning thereof.

          9.7 Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company and their respective successors, assigns, heirs, executors and administrators, except that Executive may not assign any of her duties hereunder and she may not assign any of her rights hereunder without the written consent of the Company.

          9.8 Arbitration. To provide a mechanism for rapid and economical dispute resolution, Executive and the Company agree that any and all disputes, claims, or causes of action, in law or equity, arising from or relating to this Agreement (including the Release Agreement) and its enforcement, performance, breach, or interpretation, will be resolved, to the fullest extent permitted by law, by final, binding, and confidential arbitration before a single arbitrator held in San Diego, California and conducted by Judicial Arbitration & Mediation

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Services/Endispute (“JAMS”), under its then-existing Rules and Procedures. The parties shall be entitled to conduct adequate discovery, and they may obtain all remedies available to the parties as if the matter had been tried in court. The arbitrator shall issue a written decision which specifies the findings of fact and conclusions of law on which the arbitrator’s decision is based. Judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof. Unless otherwise required by law, the arbitrator will award reasonable expenses (including reimbursement of the assigned arbitration costs) to the prevailing party. Nothing in this Section 9.8 or in this Agreement is intended to prevent either Executive or the Company from obtaining injunctive relief in a court of competent jurisdiction to prevent irreparable harm pending the conclusion of any such arbitration.

          9.9 Governing Law. All questions concerning the construction, validity and interpretation of this Agreement will be governed by the law of the State of California as applied to contracts made and to be performed entirely within California, excluding the rules on conflicts of law.

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     IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above written.

LA JOLLA PHARMACEUTICAL COMPANY
By:	/s/ Craig R. Smith
	Craig R. Smith
	Chairman of the Board of Directors
EXECUTIVE
/s/ Deirdre Y. Gillespie, M.D.
Deirdre Y. Gillespie, M.D.

EXHIBIT A

1.	The Forsyth Institute, Trustee
2.	The Communications Strategy Group Inc., Advisory Board Member and Senior Medical Adviser

EXHIBIT B

RELEASE AGREEMENT

     I understand that all of my positions with La Jolla Pharmaceutical Company and its subsidiaries and affiliates (collectively, the “Company”) terminated effective                      (the “Separation Date”). The Company has agreed that if I choose to sign this Agreement, the Company will pay me severance benefits (minus the standard withholdings and deductions) pursuant to the terms of the Chief Executive Officer Employment Agreement entered into as of March 15, 2006 between myself and the Company (the “Employment Agreement”). I understand that I am not entitled to any severance payment under the Employment Agreement unless I sign this release agreement. I understand that in addition to this severance, the Company will pay me all of my accrued salary and vacation, to which I am entitled by law regardless of whether I sign this release agreement.

     In consideration for the severance payment I am to receive under my Employment Agreement, I agree not to use or disclose any of the Company’s proprietary information without written authorization from an executive officer of the Company, to immediately return all Company property and documents (including all embodiments of proprietary information) and all copies thereof in my possession or control, and to release the Company and its current and former officers, directors, agents, attorneys, employees, shareholders, and affiliates from any and all claims, liabilities, demands, causes of action, attorneys’ fees, damages, or obligations of every kind and nature, whether they are known or unknown, arising at any time prior to the date I sign this release agreement. This general release includes, but is not limited to: all federal and state statutory and common law claims, claims related to my employment or the termination of my employment or related to breach of contract, tort, wrongful termination, discrimination, wages or benefits, or claims for any form of compensation. This release is not intended to release any claims I have or may have against any of the released parties for (a) indemnification as a director, officer, agent or employee under applicable law, charter document or agreement, (b) severance and other termination benefits specifically provided for in my employment agreement which constitutes a part of the consideration for this release, (c) health or other insurance benefits based on claims already submitted or which are covered claims properly submitted in the future, (d) vested rights under pension, retirement or other benefit plans, or (e) in respect of events, acts or omissions occurring after the date of this release agreement.

     In releasing claims unknown to me at present, I am waiving all rights and benefits under Section 1542 of the California Civil Code, and any law or legal principle of similar effect in any jurisdiction: “A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by her must have materially affected her settlement with the debtor.”

     I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the federal Age Discrimination in Employment Act of 1967, as amended (the “ADEA”). I have been advised by this writing, as required by the ADEA that: (a) my waiver and release do not apply to any claims that may arise after my signing of this release; (b) I should consult with an attorney prior to executing this release, (c) I have 21 days within

which to consider this release (although I may choose to voluntarily execute this release earlier); (d) I have seven days following the execution of this release to revoke it; and (e) this release will not be effective until the eighth day after this release agreement has been signed both by me and by the Company (“Effective Date”).

     This release agreement constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof. I am not relying on any promise or representation by or on behalf of the Company that is not expressly stated herein. This release agreement may only be modified by a writing signed by both me and a duly authorized officer of the Company.

     I accept and agree to the terms and conditions stated above:

Deirdre Y. Gillespie, M.D.

Date:

ACKNOWLEDGED:

La Jolla Pharmaceutical Company

By:
	Name:
	Title:
Date:

EX-10.2

Exhibit 10.2

SEPARATION AGREEMENT

     This Separation Agreement (this “Agreement”) is made as of March 17, 2006 by and between La Jolla Pharmaceutical Company (the “Company”) and Steven B. Engle (“Executive”).

     1. Employment Status. Executive’s resignation became effective and his employment with the Company terminated on March 14, 2006 (the “Resignation Date”). At such time, Executive relinquished the position, title and duties of Chairman of the Board and Chief Executive Officer of the Company, as well as from all other positions that Executive held with the Company, its subsidiary and any trustee position with employee-related Company benefit plans.

     2. Payments.

          (a) Severance.

               (i) The Company, in consideration of this Agreement and the delivery of the Release Agreement (defined below), will, subject to the terms and conditions of this Agreement, including the expiration of the revocation period set forth in Section 9, provide Executive with a lump sum severance pay equal to two times his base salary as of the Resignation Date (the “Severance Amount”).

               (ii) Notwithstanding any provision of this Agreement to the contrary, if, at the time of Executive’s termination of employment with the Company, Executive is a “specified employee” as defined in Section 409A of the Internal Revenue Code (the “Code”), and one or more of the payments or benefits received or to be received by Executive pursuant to this Agreement or otherwise would constitute deferred compensation subject to Section 409A, then:

                    (A) no such payment will be made under this Agreement until the earliest of (1) the date which is six months after his “separation from service” for any reason, other than “death” or “disability” (as such terms are used in Section 409A(a)(2) of the Code), (2) the date of Executive’s “death” or “disability” (as such terms are used in Section 409A(a)(2) of the Code), or (3) the effective date of a “change in the ownership or effective control” of the Company (as such term is used in Section 409A(a)(2)(A)(v) of the Code).

                    (B) For the sake of clarity, the provisions of this Section 2(a) only apply to the extent required to avoid Executive’s incurrence of any penalty tax or interest under Section 409A of the Code or any regulations or United States Treasury guidance promulgated thereunder. In addition, if any provision of this Agreement would cause Executive to incur any penalty tax or interest under Section 409A of the Code or any regulations or Treasury guidance promulgated thereunder, the Company may reform such provision to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Section 409A of the Code.

                    (C) In the event the six-month delay described in this Section 2(a)(ii) applies, at the request of Executive, the Company will make an irrevocable contribution in the amount of the severance amount to a rabbi trust which shall take the form of

the model rabbi trust described in Internal Revenue Service Revenue Procedure 92-64, which amount (along with any net income received by the trust) shall be paid by the trust to the Executive in accordance with Section 2(a). At such time as all amounts are paid, the trust shall terminate. The trustee shall be chosen by the Company in its reasonable discretion. The Company shall pay the reasonable expenses of establishing and maintaining the trust.

          (b) Additional Payment. As additional consideration for entering into this Agreement, working with management and the board of directors to accomplish a smooth and amicable transition, and waiving any applicable notice provisions in Executive’s employment agreement, as amended, the Company will pay Executive an amount equal to two (2) times Executive’s monthly base salary on the Resignation Date promptly following the effectiveness of the Release Agreement.

          (c) Healthcare Coverage. To the extent that Executive and his family are not covered by other insurance, the Company agrees to continue, at its sole expense, all medical, dental and life insurance coverage for Executive and his family on terms substantially equivalent to the terms offered to the senior executives of the Company from time to time after the date hereof until the earlier of (i) 24 months from the Resignation Date or (ii) such time as Executive receives similar paid coverage from another employer. Executive agrees to advise the Company in writing promptly upon his becoming reemployed.

          (d) Office Space and Administrative Assistance. Upon Executive’s request, the Company agrees to provide reasonable office space at a mutually agreed upon location (other than at the Company’s current offices) and administrative assistance until the earlier of (i) six months after the Resignation Date or (ii) such time as Executive finds alternate employment. Executive agrees to advise the Company in writing promptly upon his becoming reemployed.

          (e) Earned Amounts. Upon his resignation, Executive shall receive all earned but unpaid salary, including vacation pay, through the Resignation Date.

          (f) Business Expenses. The Company will reimburse Executive for all reasonable business expenses incurred by Executive prior to the Resignation Date. Executive shall submit all such business expenses for reimbursement to the Company within 30 days of the Resignation Date.

          (g) Other Perquisites and Benefits. Except as required by law, all other perquisites and employee benefits and Executive’s participation in all other employee benefit programs of the Company which are not described herein shall be terminated on the Resignation Date.

          (h) No Other Payments. Except as provided in this Agreement, Executive agrees that the foregoing payments shall be the only amounts which the Company shall pay to Executive, and all other payments, wages, bonuses, incentive compensation, promises of future compensation, claims for payments or any other forms of compensation whatsoever are hereby waived.

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     3. Stock Options and Restricted Stock.

          (a) Executive currently holds options to purchase 655,990 shares of the Company’s common stock (the “Outstanding Options”). The Outstanding Options were issued pursuant to the La Jolla Pharmaceutical Company 1994 Stock Incentive Plan (the “1994 Plan”) and the La Jolla Pharmaceutical Company 2004 Equity Incentive Plan (the “2004 Plan” and, together with the 1994 Plan, the “Plans”). In accordance with Executive’s employment agreement, all of the Outstanding Options will automatically vest and become fully exercisable as of the Resignation Date and will remain exercisable for a period equal to the remaining term of the Outstanding Options. For the sake of clarity, in no event may such Outstanding Options be exercisable beyond the original term thereof. Notwithstanding the foregoing, if any option qualifies as an incentive stock option under the Internal Revenue Code and applicable regulations thereunder, the exercise period thereof shall not be extended beyond the termination date otherwise provided by the award grant unless Executive elects to forego incentive stock option treatment and to extend the exercise period thereof as provided herein. The exercise price of the Outstanding Options shall remain unchanged.

          (b) If, within one year of the Resignation Date, employee stock options granted to any executive officer of the Company (or its successor) or non-employee directors’ options granted to any member of the Company’s board of directors (or members of the board of directors of its successor) are repriced, then the Company shall provide similar repricing at the election of Executive for all Outstanding Options that have not expired and remain unexercised. If necessary to accomplish any repricing of Outstanding Options, the Company agrees to engage Executive as a consultant on customary and reasonable terms, to the extent required under applicable laws and regulations and any documents governing the Outstanding Options, to make Executive eligible to have his Outstanding Options repriced. Notwithstanding anything to the contrary in this Agreement or the plans or awards under which the Outstanding Options were granted to Executive, the Company shall have no obligation to register Executive’s repriced options under the Securities Act of 1933, as amended (the “Securities Act”), and shall have no obligation to make Executive a consultant or advisor of the Company solely for the purpose of making Executive’s repriced options or shares of common stock underlying such repriced options eligible for inclusion in any registration statement under the Securities Act that the Company has otherwise filed or is otherwise filing with respect to stock options granted to individuals other than Executive or the shares of common stock underlying such options.

          (c) Pursuant to the terms of that certain agreement dated October 6, 2005 (the “Retention Agreement”), the Company granted Executive 29,120 shares of restricted stock under the 2004 Plan (the “Restricted Stock”). The Company’s repurchase right with respect to the Restricted Stock will immediately lapse upon the Resignation Date.

     4. Release; Effectiveness. As consideration for the payments and benefits granted to Executive hereunder, Executive agrees to execute and deliver to the Company the release agreement attached hereto as Exhibit A (the “Release Agreement”) concurrently with the execution of this Agreement. For the sake of clarity, the benefits and payments described herein are conditioned upon Executive executing and delivering to the Company the Release Agreement, the Release Agreement becoming effective, and on Executive complying with the terms and conditions set forth in this Agreement.

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     5. Withholding and Taxes. All payments required to be made by the Company hereunder shall be subject to any and all applicable withholdings, including any withholdings for any related federal, state or local taxes. Executive shall be responsible for any and all income taxes or other taxes incurred by him as a result of his receipt of any payments from the Company pursuant to the terms of this Agreement or as a result of Executive’s stock options or restricted stock.

     6. Other Agreements.

          (a) Termination of Employment Agreement. Executive specifically acknowledges that his employment agreement with the Company, as amended, is of no further force and effect.

          (b) Company Property. By April 1, 2006, Executive agrees to return to the Company all property of the Company, including without limitation any documents, books, records, reports, contracts, lists, computer disks or other computer-generated files or data, or copies thereof, created on any medium, prepared or obtained by Executive or the Company in the course of or incident to Executive’s employment with the Company. The Company agrees to provide Executive with a replacement laptop computer upon return of his current, company-issued computer.

          (c) Company Information.

               (i) Executive acknowledges that in the course of his employment with the Company, certain factual and strategic information specifically related to the Company and its subsidiaries (such as personnel information, financial information, proprietary computer systems or programs, pricing information, planned projects, marketing strategies and information concerning pending or potential products and transactions) has been disclosed to Executive in confidence which was for the use of the Company or any or all of its subsidiaries (“Company Information”). Executive understands and agrees that he (A) will keep such Company Information confidential at all times during and after his employment with the Company, (B) will not disclose or communicate Company Information to any third party, and (C) will not, directly or indirectly, make use of Company Information on his own behalf, or on behalf of any third party; provided that this Agreement does not apply to Company Information that becomes publicly available other than by Executive’s acts or omissions.

               (ii) In view of the nature of Executive’s employment and the nature of Company Information that Executive received during the course of his employment, Executive agrees that any unauthorized disclosure to third parties of Company Information or other violation, or threatened violation, of this Agreement would cause irreparable damage to the confidential status of Company Information and to the Company or any and all of its subsidiaries, and that therefore, the Company shall be entitled to an injunction, without bond, prohibiting Executive from any such disclosure, attempted disclosure, violation or threatened violation. When specific Company Information becomes generally available to the public other than by Executive’s acts or omissions, it is no longer subject to restrictions in this paragraph. However, Company Information shall not be deemed to come under the exception merely

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because it is embraced by more general information which is or becomes generally available to the public.

          (d) Employees. For two years following the date hereof, Executive agrees not to solicit, attempt to solicit, induce, or otherwise cause any employee of the Company to terminate his or her employment with the Company in order to become an employee, consultant or independent contractor to or for any competitor of the Company.

          (e) No Claims. Executive represents and warrants that he has not instituted any complaints, charges, lawsuits or other proceedings against the Company (including any of its subsidiaries, affiliates or current or former directors, employees, agents, representatives or stockholders) with any governmental agency, court, arbitration agency or tribunal, and that Executive will not file any complaint, charge, lawsuit or other proceeding against the Company or any subsidiary, affiliate or current or former director, employee, agent, representative or stockholder at any time hereafter for any act or event occurring prior to the date of this Agreement. Should any agency or court assume jurisdiction of any complaint, charge or lawsuit against the Company, its subsidiaries or current or former directors, employees, agents, representatives or stockholders on Executive’s behalf, Executive agrees to request that such agency or court dismiss the matter with prejudice. Executive further agrees not to encourage or induce any person or employee of the Company to assert any claim or cause of action against the Company.

     7. Acknowledgements.

          (a) Advice of Counsel. Executive represents and agrees that he fully understands his rights to discuss, and that the Company has advised him to discuss, all aspects of this Agreement with his private attorney, that Executive has carefully read and fully understands all the provisions of the Agreement, that Executive understands its final and binding effect, that Executive is competent to sign this Agreement, and that Executive is voluntarily entering into this Agreement.

          (b) Independent Judgment. Executive represents and agrees that in executing this Agreement he is relying solely upon his own judgment, belief and knowledge, and the advice and recommendations of any independently selected counsel, concerning the nature, extent and duration of Executive’s rights and claims. Executive acknowledges that no other individual has made any promise, representation or warranty, express or implied, not contained in this Agreement, to induce Executive to execute this Agreement. Executive further acknowledges that he is not executing this Agreement in reliance on any promise, representation, or warranty not contained in this Agreement.

     8. Miscellaneous.

          (a) Arbitration. To provide a mechanism for rapid and economical dispute resolution, Executive and the Company agree that any and all disputes, claims, or causes of action, in law or equity, arising from or relating to this Agreement (including the Release Agreement) and its enforcement, performance, breach, or interpretation, will be resolved, to the fullest extent permitted by law, by final and binding arbitration before a single arbitrator held in

5

San Diego, California and conducted by Judicial Arbitration & Mediation Services/Endispute (“JAMS”), under its then-existing Rules and Procedures. The parties shall be entitled to conduct adequate discovery, and they may obtain all remedies available to the parties as if the matter had been tried in court. The arbitrator shall issue a written decision which specifies the findings of fact and conclusions of law on which the arbitrator’s decision is based. Judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof. Unless otherwise required by law, the arbitrator will award reasonable expenses (including reimbursement of the assigned arbitration costs) to the prevailing party. Nothing in this Section 8(a) or in this Agreement is intended to prevent either Executive or the Company from obtaining injunctive relief in a court of competent jurisdiction to prevent irreparable harm pending the conclusion of any such arbitration.

          (b) Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained herein or therein.

          (c) Governing Law. All questions concerning the construction, validity and interpretation of this Agreement will be governed by the law of the State of California as applied to contracts made and to be performed entirely within California, excluding the rules on conflicts of law.

          (d) Binding on Successors and Assigns. This Agreement and the releases contained herein shall be binding on the parties, their representatives, heirs, executors, successors, assigns and creditors, and shall inure to the benefit of each of the parties and all of the persons and entities covered by the releases.

          (e) Entire Agreement. This Agreement, including the exhibit attached hereto and incorporated herein, contains the entire agreement and understanding between Executive and the Company regarding the matters set forth herein and replaces all prior agreements, arrangements and understandings, written or oral. Neither Executive nor the Company shall be bound or liable for any representation, promise or inducement not contained in this Agreement. This Agreement cannot be amended, modified, supplemented, or altered, except by written amendment or supplement signed by Executive and the Company.

          (f) Headings. The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof or thereof nor to affect the meaning thereof.

          (g) Counterparts. This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but all of which taken together will constitute one and the same agreement or plan. Signatures transmitted electronically or via facsimile shall be deemed to be original signatures.

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          (h) Notices. Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of personal delivery (including personal delivery by facsimile transmission) or the third day after mailing by first class mail, to the Company at its primary office location and to Executive at his address as listed on the Company payroll as of the time of this Agreement.

     9. Revocation Period. Executive acknowledges that he has been given 21 days from receipt of this Agreement to consider signing it (although Executive may, by his own choice, execute this Agreement earlier). Executive understands that he has seven days following the signing of this Agreement to revoke it in writing and that this Agreement is not effective or enforceable until the revocation period has expired. To be effective, any such written revocation shall be personally delivered to the Company’s corporate Secretary at the Company’s headquarters.

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

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

LA JOLLA PHARMACEUTICAL COMPANY
By:	/s/ Craig R. Smith
	Craig R. Smith
	Chairman of the Board of Directors
EXECUTIVE
/s/ Steven B. Engle
Steven B. Engle

EXHIBIT A

RELEASE AGREEMENT

See attached.

RELEASE AGREEMENT

     I understand that all of my positions with La Jolla Pharmaceutical Company and its subsidiary (collectively, the “Company”) terminated effective March 14, 2006 (the “Resignation Date”). The Company has agreed to provide me with certain payments and benefits if I sign this Agreement and Release (this “Release”) and the Separation Agreement of which this Release forms a part. I understand that I am not entitled to these benefits unless I sign this Release. I understand that in addition to the benefits provided under the Separation Agreement, the Company will pay me all of the accrued salary and vacation to which I am entitled by law regardless of whether I sign this Release.

     In consideration for the benefits I am receiving under this Agreement, I agree not to use, directly or indirectly, or disclose any of the Company’s proprietary information without written authorization from an executive officer of the Company, to return all Company property and documents (including all embodiments of proprietary information) and all copies thereof in my possession or control to the Company within the time frame set forth in the Separation Agreement, and to release the Company and its current and former officers, directors, agents, attorneys, employees, shareholders and affiliates from any and all claims, liabilities, demands, causes of action, attorneys’ fees, damages, or obligations of every kind and nature, whether they are known or unknown, arising at any time prior to the date I sign this Agreement. This general release includes, but is not limited to: all federal and state statutory and common law claims, claims related to my employment or the termination of my employment or related to breach of contract, tort, wrongful termination, discrimination, wages or benefits, or claims for any form of compensation. This Release does not release any claims I have or may have against any of the released parties for (a) indemnification as a director, officer, agent or employee under applicable law, charter document or agreement, (b) the benefits specifically provided for in this Release or the Separation Agreement, which constitute a part of the consideration for this Release, (c) health or other insurance benefits based on claims already submitted or which are covered claims properly submitted in the future, (d) vested rights under pension, retirement or other benefit plans, or (e) in respect of events, acts or omissions occurring after the date of this Release.

     In releasing claims unknown to me at present, I am waiving all rights and benefits under Section 1542 of the California Civil Code, and any law or legal principle of similar effect in any jurisdiction: “A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.”

     I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the federal Age Discrimination in Employment Act of 1967, as amended (the “ADEA”). I have been advised by this writing, as required by the ADEA that: (a) my waiver and release do not apply to any claims that may arise after I sign this Release; (b) I should consult with an attorney prior to executing this Release; (c) I have 21 days within which to consider this Release (although I may choose to voluntarily execute this Release earlier); (d) I have seven days following the execution of this Release to revoke the Release; and (e) this Release will not be effective until the eighth day after this Release has been signed both by me and by the Company.

     This Release and the Separation Agreement together constitute the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof. I am not relying on any promise or representation by or on behalf of the Company that is not expressly stated herein. The Release and the Separation Agreement may only be modified by a writing signed by both me and a duly authorized officer of the Company.

     I accept and agree to the terms and conditions stated above:

/s/ Steven B. Engle
Steven B. Engle
Date:	March 17, 2006

ACKNOWLEDGED:
La Jolla Pharmaceutical Company
By:	/s/ Craig R. Smith
	Craig R. Smith Chairman of the Board of Directors
Date:	March 17, 2006

EX-99.1

Exhibit 99.1

Company Contact:	Media Contacts:
Andrew Wiseman, Ph.D.	Virginia Amann or Trista Morrison
Sr. Director of Business Development	Porter Novelli Life Sciences
and Investor Relations	for La Jolla Pharmaceutical Company
La Jolla Pharmaceutical Company	608-274-6046 or 858-527-3490
858-646-6615	vamann@pnlifesciences.com
andrew.wiseman@ljpc.com	tmorrison@pnlifesciences.com

LA JOLLA PHARMACEUTICAL ANNOUNCES APPOINTMENT OF
DEIRDRE Y. GILLESPIE AS NEW CHIEF EXECUTIVE OFFICER

     SAN DIEGO, CA, March 15, 2006 — La Jolla Pharmaceutical Company (Nasdaq: LJPC) today announced that Deirdre Y. Gillespie, M.D. has been appointed to serve as the new Chief Executive Officer of the Company following the resignation of Steven B. Engle on March 14, 2006. Dr. Gillespie, who also joined the board of directors, has 20 years of executive management and clinical experience in biotechnology and pharmaceuticals, and most recently was the President and CEO of Oxxon Therapeutics, Inc.

     The Company also announced that its board of directors has appointed Craig R. Smith, M.D., a current independent director, to serve as Chairman of the board. Dr. Smith will take over the responsibilities currently carried out by the Company’s Lead Independent Director, Stephen M. Martin, who will remain on the board. In light of the appointment of an independent Chairman, the position of lead independent director will be suspended.

     “We are extremely pleased that Dr. Gillespie will be applying her depth of experience in life sciences companies to La Jolla Pharmaceutical,” said Dr. Smith. “We are confident that her excellent management and clinical skills will enable us to continue our efforts to obtain marketing approval for Riquent® as we remain focused on this critical goal both for the Company and lupus patients.”

     At privately-held Oxxon, Dr. Gillespie led the company through the successful completion of initial Phase 2 trials of two novel immunotherapeutics. Before joining Oxxon in 2001, Dr. Gillespie was the Chief Operating Officer and Chief Business Officer of Vical, Inc. Prior to that, she held executive positions at 3-Dimensional Pharmaceuticals in Business Development, the DuPont Merck Pharmaceutical Company in Worldwide Product Planning and Marketing, and Sandoz (now Novartis) in Clinical Development. She currently serves as a Trustee of The Forsyth Institute, a biomedical research facility in Boston, MA. Dr. Gillespie received her M.B.A. from London Business School and her M.D. and B.Sc. from London University.

     Dr. Smith has been a director of the Company since 2004 and is currently the President of Williston Consulting, a pharmaceutical and biotechnology advisory firm. He is the former Chairman, President and CEO of Guilford Pharmaceuticals. Before retiring from Guilford in 2004, Dr. Smith led its growth into a fully integrated pharmaceutical company with two marketed products and two products in Phase 3 clinical trials. Prior to joining Guilford in 1993, Dr. Smith was a senior executive at Centocor, Inc. and served on the faculty of the Department of Medicine at Johns Hopkins Medical School. Dr. Smith is the Chair of the Advisory Council for the Institute of Basic Biomedical Sciences at Johns Hopkins University and a member of the board of directors of several public and private pharmaceutical companies. Dr. Smith holds an M.D. from the State University of New York at Buffalo and trained in Internal Medicine at Johns Hopkins Hospital.

     “In addition to promising clinical data for Riquent, the Company has an Approvable Letter from the FDA, a manufacturing facility that has passed an FDA pre-approval inspection, and approximately $62 million in net proceeds from its recent stock and warrant offering. These factors provide us with an opportunity to drive the current clinical trial of Riquent forward with the goal of providing a new treatment for lupus, a devastating disease with few treatment options, to market,” said Dr. Gillespie. “I am committed to advancing the current trial and maintaining the Company’s focus on obtaining marketing approval for Riquent.”

     Dr. Smith added, “The Board is grateful to Steve for his many years of dedicated service to the Company, its stockholders and lupus patients. During his term, Steve was instrumental in securing an Approvable Letter from the FDA for Riquent and in moving our organization forward during a number of challenging times. We wish him well in his future endeavors.”

     La Jolla Pharmaceutical Company is a biotechnology company developing therapeutics for antibody-mediated autoimmune diseases and inflammation afflicting several million people in the United States and Europe. The Company is developing Riquent^® for the treatment of lupus kidney disease, a leading cause of sickness and death in patients with lupus. The Company is also developing small molecules to treat various other autoimmune and inflammatory conditions. The Company’s common stock is traded on The Nasdaq Stock Market under the symbol LJPC. For more information about the Company, visit its Web site: http://www.ljpc.com.

     The forward-looking statements in this press release involve significant risks and uncertainties, and a number of factors, both foreseen and unforeseen, could cause actual results to differ materially from our current expectations. Forward-looking statements include those that express a plan, belief, expectation, estimation, anticipation, intent, contingency, future development or similar expression. The analyses of clinical results of Riquent, previously known as LJP 394, our drug candidate for the treatment of systemic lupus erythematosus (“lupus”), and any other drug candidate that we may develop, including the results of any trials or models that are ongoing or that we may initiate in the future, could result in a finding that these drug candidates are not effective in large patient populations, do not provide a meaningful clinical benefit, or may reveal a potential safety issue requiring us to develop new candidates. The analysis of the data from our Phase 3 trial of Riquent showed that the trial did not reach

statistical significance with respect to its primary endpoint, time to renal flare, or with respect to its secondary endpoint, time to treatment with high-dose corticosteroids or cyclophosphamide. The results from our clinical trials of Riquent, including the results of any trials that are ongoing or that we may initiate in the future, may not ultimately be sufficient to obtain regulatory clearance to market Riquent either in the United States or Europe, and we may be required to conduct additional clinical studies to demonstrate the safety and efficacy of Riquent in order to obtain marketing approval. There can be no assurance, however, that we will have the necessary resources to complete any current or future trials or that any such trials will sufficiently demonstrate the safety and efficacy of Riquent. Our blood test to measure the binding affinity for Riquent is experimental, has not been validated by independent laboratories and will likely be reviewed as part of the Riquent approval process. Our SSAO inhibitor program is at a very early stage of development and involves comparable risks. Analysis of our clinical trials could have negative or inconclusive results. Any positive results observed to date in our clinical trials or animal models may not be indicative of future results. In any event, regulatory authorities may require clinical trials in addition to our current clinical trial, or may not approve our drugs. Our ability to develop and sell our products in the future may be adversely affected by the intellectual property rights of third parties. Additional risk factors include the uncertainty and timing of: obtaining required regulatory approvals, including delays associated with any approvals that we may obtain; our ability to pass all necessary regulatory inspections; the availability of sufficient financial resources; the increase in capacity of our manufacturing capabilities for possible commercialization; successfully marketing and selling our products; our lack of manufacturing, marketing and sales experience; our ability to make use of the orphan drug designation for Riquent; generating future revenue from product sales or other sources such as collaborative relationships; future profitability; and our dependence on patents and other proprietary rights. Readers are cautioned to not place undue reliance upon forward-looking statements, which speak only as of the date hereof, and we undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date hereof. Interested parties are urged to review the risks described in our Annual Report on Form 10-K for the year ended December 31, 2005, and in other reports and registration statements that we file with the Securities and Exchange Commission from time to time.