License Agreement

9 Months Ended

Sep. 30, 2011

License Agreement

License Agreement

16. License Agreement

In July 2011, we entered into an exclusive license agreement with Toray Industries, Inc. (Toray) to amend and replace our existing March 2007 license agreement regarding the development of an orally-administered, modified release formulation of the prostacyclin analogue beraprost (beraprost-MR), for the treatment of pulmonary arterial hypertension. Terms of the July 2011 license agreement did not materially change from the previous license agreement and license agreement supplements except for a reduction in royalty rates. In exchange for the reduction in royalty rates, we agreed to pay Toray $50.0 million in equal, non-refundable payments over the five-year period ending in 2015. Since these payments are non-refundable and have no contingencies attached to them, we recognized an obligation of $46.3 million, which represents the present value of the related payments discounted by our estimated current cost of financing. In addition, we recognized a corresponding charge to research and development expenses during the quarter ended September 30, 2011.