10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2011

or

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

For the transition period from                      to                     

Commission File Number 001-33291

OPTIMER PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 33-0830300
(I.R.S. Employer
Identification No.)

10110 Sorrento Valley Road, Suite C
San Diego, CA 92121
(Address of principal executive offices, including zip code)

(858) 909-0736
(Registrant’s telephone number, including area code)

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 x    No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, 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 o    No o

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:

Large Accelerated Filer o	Accelerated Filer x
Non-accelerated Filer o	Smaller Reporting Company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes o    No x

The number of shares of the registrant’s common stock, par value $0.001 per share, outstanding as of April 29, 2011 was 46,349,811 shares.

OPTIMER PHARMACEUTICALS, INC.
FORM 10-Q
For the Quarterly Period Ended March 31, 2011

TABLE OF CONTENTS

	Page
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets — March 31, 2011 and December 31, 2010	3
Consolidated Statements of Operations — Three months ended March 31, 2011 and 2010	4
Consolidated Statements of Cash Flows — Three months ended March 31, 2011 and 2010	5
Notes to Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3. Quantitative and Qualitative Disclosures about Market Risk	36
Item 4. Controls and Procedures	37
PART II – OTHER INFORMATION
Item 1A. Risk Factors	38
Item 6. Exhibits	75
SIGNATURE

2

PART I – FINANCIAL INFORMATION

Item 1.  Financial Statements

Optimer Pharmaceuticals, Inc.

Consolidated Balance Sheets

	March 31,			December 31,
	2011			2010
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	139,687,802		$	19,861,924
Short-term investments	40,408,051			29,553,506
Research grant and other receivables	1,654,729			53,552
Prepaid expenses and other current assets	975,309			463,307
Total current assets	182,725,891			49,932,289
Property and equipment, net	863,980			697,683
Long-term investments	882,000			882,000
Other assets	791,857			508,190
Total assets	$	185,263,728		$	52,020,162
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	5,168,991		$	2,307,820
Accrued expenses	3,126,189			2,385,046
Total current liabilities	8,295,180			4,692,866
Deferred rent	134,239			141,138
Commitments and contingencies	—			—
Stockholders’ equity:
Preferred stock, par value $0.001, 10,000,000 shares authorized, no shares issued and outstanding at March 31, 2011 and December 31, 2010, respectively	—			—
Common stock, $0.001 par value, 75,000,000 shares authorized, 46,276,526 shares and 39,278,965 shares issued and outstanding at March 31, 2011 and December 31, 2010 respectively	46,277			39,279
Additional paid-in capital	346,031,485			267,665,732
Accumulated other comprehensive income	277,644			298,850
Accumulated deficit	(177,681,537		)	(222,814,407		)
Total Optimer Pharmaceuticals, Inc. stockholders’ equity	168,673,869			45,189,454
Noncontrolling interest	8,160,440			1,996,704
Total stockholders’ equity	176,834,309			47,186,158
Total liabilities and stockholders’ equity	$	185,263,728		$	52,020,162

See accompanying notes.

3

Optimer Pharmaceuticals, Inc.

Consolidated Statements of Operations

(unaudited)

	Three Months Ended
	March 31,
	2011		2010
Revenues:
Licensing	$	69,165,000	$	—
Research grants	111,639		297,437
Total revenues	69,276,639		297,437
Cost and expenses:
Cost of licensing	4,273,532		—
Research and development	8,470,509		11,361,579
Marketing	3,433,593		268,594
General and administrative	8,280,182		2,388,712
Total operating expenses	24,457,816		14,018,885
Income (loss) from operations	44,818,823		(13,721,448		)
Interest income and other, net	23,242		24,778
Consolidated net income (loss)	$	44,842,065	$	(13,696,670	)
Net loss attributable to noncontrolling interest	290,805		200,915
Net income (loss) attributable to Optimer Pharmaceuticals, Inc.	$	45,132,870	$	(13,495,755	)
Net income (loss) per share - basic	$	1.06	$	(0.39	)
Net income (loss) per share - diluted	$	1.04	$	(0.39	)
Weighted average number of shares used to compute net income (loss) per share - basic	42,661,533		35,001,596
Weighted average number of shares used to compute net income (loss) per share - diluted	43,399,798		35,001,596

See accompanying notes.

4

Optimer Pharmaceuticals, Inc.

Consolidated Statements of Cash Flows

(unaudited)

	Three Months Ended March 31,
	2011			2010
Operating activities
Net income (loss)	$	44,842,065		$	(13,696,670	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	86,044			69,084
Stock based compensation	2,178,424			984,448
Issuance of common stock for consulting services	2,378,039			—
Deferred rent	(6,899		)	(27,331		)
Changes in operating assets and liabilities:
Prepaids expenses and other current assets	(512,002		)	(427,137		)
Research grant and other receivables	(1,601,177		)	(249,980		)
Other assets	(283,667		)	(388		)
Accounts payable and accrued expenses	3,602,314			4,910,058
Net cash provided (used) in operating activities	50,683,141			(8,437,916		)
Investing activities
Purchases of short-term investments	(22,886,865		)	(20,905,271		)
Sales or maturity of short-term investments	12,000,000			9,000,000
Purchases of property and equipment	(252,341		)	(123,491		)
Net cash used by investing activities	(11,139,206		)	(12,028,762		)
Financing activities
Proceeds from sale of common stock	80,010,481			51,497,657
Net cash provided by financing activities	80,010,481			51,497,657
Effect of exchange rate changes on cash and cash equivalents	271,462			95,767
Net increase in cash and cash equivalents	119,825,878			31,126,746
Cash and cash equivalents at beginning of period	19,861,924			17,054,328
Cash and cash equivalents at end of period	$	139,687,802		$	48,181,074

See accompanying notes.

5

Optimer Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (continued)

(unaudited)

1.Interim Financial Information

Organization and Business Activities

Optimer Pharmaceuticals, Inc. (“Optimer” or the “Company”) was incorporated in Delaware on November 18, 1998. The Company has one majority-owned subsidiary, Optimer Biotechnology, Inc. (“OBI”), which is incorporated and located in Taiwan. In October 2009, Optimer sold 40% of its equity interest in OBI. Prior to the sale, OBI was a wholly owned subsidiary of Optimer.

Optimer is a biopharmaceutical company focused on discovering, developing and commercializing innovative hospital specialty products.  The Company currently has two anti-infective product candidates, DIFICID™ (fidaxomicin), for the treatment of Clostridium difficile-infection (“CDI”), and Pruvel™ (prulifloxacin), for the treatment of infectious diarrhea. The Company is developing additional product candidates using its proprietary technology, including its OPopS™ drug discovery platform.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation of the results of these interim periods have been included. The results of operations for the three months ended March 31, 2011 are not necessarily indicative of the results that may be expected for the full year. These unaudited consolidated financial statements should be read in conjunction with the audited financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010, which was filed with the Securities and Exchange Commission (“SEC”) on March 10, 2011.

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

2.     Summary of Significant Accounting Policies

Cash, Cash Equivalents and Investments

Investments with original maturities of less than 90 days at the date of purchase are considered to be cash equivalents.  Except for one auction rate preferred security (“APRS”), all other investments are classified as short-term investments which are deemed by management to be available-for-sale and are reported at fair value with net unrealized gains or losses reported within other comprehensive loss in the consolidated statement of stockholders’ equity.  Realized

6

Optimer Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (continued)

(unaudited)

gains and losses, and declines in value judged to be other than temporary, are included in investment income or interest expense.  The cost of securities sold is computed using the specific identification method.

Revenue Recognition

The Company’s license and collaboration agreements contain multiple elements, including non-refundable upfront fees, payments for reimbursement of third-party research costs, payments for ongoing research, payments associated with achieving specific development milestones and royalties based on specified percentages of net product sales, if any.  The Company considers a variety of factors in determining the appropriate method of revenue recognition under these arrangements, such as whether the elements are separable, whether there are determinable fair values and whether there is a unique earnings process associated with each element of a contract.

Revenue recognition for agreements with multiple deliverables is based on the individual units of accounting determined to exist in the agreement. A delivered item is considered a separate unit of accounting when the delivered item has value to the customer on a stand-alone basis. Items are considered to have stand-alone value when they are sold separately by any vendor or when the customer could resell the item on a stand-alone basis.

For multiple deliverable agreements entered into after December 31, 2010, consideration is allocated at the inception of the agreement to all deliverables based on their relative selling price. The relative selling price for each deliverable is determined using vendor specific objective evidence (“ VSOE”), of selling price or third-party evidence of selling price if VSOE does not exist. If neither VSOE nor third-party evidence of selling price exists, the Company uses its best estimate of the selling price for the deliverable.

The Company recognizes revenue for delivered elements only when it determines there are no uncertainties regarding customer acceptance. Changes in the allocation of the sales price between delivered and undelivered elements can impact revenue recognition but do not change the total revenue recognized under any agreement.

Cash received in advance of services being performed is recorded as deferred revenue and recognized as revenue as services are performed over the applicable term of the agreement.

When a payment is specifically tied to a separate earnings process, revenues are recognized when the specific performance obligation associated with the payment is completed.  Performance obligations typically consist of significant and substantive milestones pursuant to the related agreement.  Revenues from milestone payments may be considered separable from funding for research services because of the uncertainty surrounding the achievement of milestones for products in early stages of development.  Accordingly, these payments are allowed to be recognized as revenue if and when the performance milestone is achieved if they represent a separate earnings process.

When determining whether or not to account for transactions under the milestone method, the Company makes a determination of whether or not each milestone is considered substantive.

7

Optimer Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (continued)

(unaudited)

During this assessment the Company considers if achievement of the milestone is based in whole or in part on the Company’s performance or on the occurrence of a separate outcome resulting from the Company’s performance, if there is substantive uncertainty at the date the arrangement is entered into that the event will be achieved, and if achievement will result in additional payments being due.

In connection with certain research collaboration agreements, revenues are recognized from non-refundable upfront fees, which the Company does not believe are specifically tied to a separate earnings process, ratably over the term of the agreement.  Research fees are recognized as revenue as the related research activities are performed.

With respect to revenues derived from reimbursement of direct out-of-pocket expenses for research costs associated with grants, where the Company acts as a principal, with discretion to choose suppliers, bears credit risk and performs part of the services required in the transaction, the Company records revenue for the gross amount of the reimbursement. The costs associated with these reimbursements are reflected as a component of research and development expense in the consolidated statements of operations.

In February 2011, the Company entered into a collaboration and license agreement with Astellas Pharma Europe Ltd. (“Astellas”).  Under the term of the license agreement with Astellas, Astellas paid the Company an upfront fee of $69.2 million.  The Company is also  eligible to receive additional payments under the collaboration and license agreement upon the achievement of specified regulatory and commercial milestones.  The Company has assessed the revenue recognition method for the achievement of the milestones at the inception of the arrangement using the milestone method.

None of the payments that the Company has received from collaborators to date, whether recognized as revenue or deferred, are refundable even if the related program is not successful.

Research and Development Expenses

The Company expenses costs related to research and development until technological feasibility has been established for the product.  Once technological feasibility is established, all product costs are generally capitalized until the product is available for general release to customers.  The Company has determined that technological feasibility for its product candidates will be reached when the requisite regulatory approvals are obtained to make the product available for sale, which, in the United States, generally occurs upon the approval of the New Drug Application (“NDA”) for such product.  In November 2010, the Company paid a $1.5 million filing fee to the FDA associated with the NDA for DIFICID.  The filing fee is potentially refundable for companies that qualify as a small business which is defined by the Small Business Association (“SBA”) as a company with 250 employees or less.  The Company asserted that it qualifies as a small business and submitted data to the SBA to support its assertion.  As the small business determination was uncertain, the Company recorded the $1.5 million NDA fee as research and development expense.  In March  2011, the Company received a letter from the SBA concurring with the Company’s assessment  that it is a small business. Consequently, the Company recorded the $1.5 million fee refund as a receivable and reduced the research and development expenses in March 2011.

8

Optimer Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (continued)

(unaudited)

The Company’s research and development expenses consist primarily of license fees, salaries and related employee benefits, costs associated with clinical trials managed by the Company’s contract research organizations and costs associated with non-clinical activities and regulatory approvals.  The Company uses external service providers and vendors to conduct clinical trials, to manufacture supplies of product candidates to be used in clinical trials and to provide various other research and development-related products and services.

When nonrefundable payments for goods or services to be received in the future for use in research and development activities are made, the Company defers and capitalizes these types of payments. The capitalized amounts are expensed when the related goods are delivered or the services are performed.

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources.  Net income (loss) and other comprehensive income (loss), including foreign currency translation adjustments and unrealized gains and losses on investments, is required to be reported, net of their related tax effect, to arrive at comprehensive income (loss).  The Company’s comprehensive income (loss) was $45.4 million for the three months ended March 31, 2011 and ($13.6) million for the three months ended March 31, 2010. As of March 31, 2011, the cumulative unrealized loss on investments and the cumulative gain on foreign currency translation adjustment was $35,340 and $312,984 respectively. As of December 31, 2010, the cumulative unrealized loss on investments and the cumulative gain on foreign currency translation adjustment was $3,020 and $301,870, respectively.

Net Income (Loss) Per Share Attributable to Common Stockholders

Basic net income (loss) per common share is computed by dividing net loss by the weighted-average number of common shares outstanding. Diluted net income (loss) per common share is computed by dividing net loss by the weighted-average number of common shares and dilutive common share equivalents then outstanding. Common equivalent shares consist of common shares issuable upon the exercise of stock options and warrants.

Income Taxes

Income taxes are accounted for under the asset and liability method.  Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets

9

Optimer Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (continued)

(unaudited)

and liabilities of a change in tax rates is recognized as income in the period that includes the enactment date.  The Company provides a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax assets will be realized.

Recently Adopted Accounting Pronouncements

Effective January 1, 2011, the Company adopted the following accounting standards issued by the Financial Accounting Standards Board (“FASB”):

The Company adopted FASB amendments related to the revenue recognition method for milestone payments in research and development agreements.  Under these amendments, entities can make an accounting policy election to recognize a payment that is contingent upon the achievement of a substantive milestone in its entirety in the period in which the milestone is achieved.  The adoption of this standard is not expected to have a material impact on the Company’s financial position, cash flow or results of operations.

The Company adopted FASB authoritative guidance for arrangements with multiple deliverables. The guidance allows companies to allocate consideration from contractual arrangements in multiple deliverables arrangements in a manner that better reflects the economics of the transaction. The Company accounted for the collaborative agreement with Astellas Pharma Europe Ltd under the authoritative guidance for arrangements with multiple deliverables, which became effective January 1, 2011.

3.   Fair Value of Financial Instruments

The following table summarizes the Company’s financial assets measured at fair value on a recurring basis subject to the disclosure requirements as of March 31, 2011:

	Quoted Prices in Active Markets(Level 1)		Other Observable Inputs(Level 2)		Unobservable Inputs(Level 3)		Total
Cash equivalents	$	139,687,802	$	—	$	—	$	139,687,802
Marketable securities	40,408,051		—		—		40,408,051
Auction rate securities	—		—		882,000		882,000

Level 1:	Quoted prices in active markets for identical assets and liabilities; or
Level 2:	Quoted prices for identical or similar assets and liabilities in markets that are not active, or observable inputs other than quoted prices in active markets for identical assets and liabilities; or
Level 3:	Unobservable inputs.

10

Optimer Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (continued)

(unaudited)

A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level 3 inputs is as follows:

	Auction Rate Preferred Securities
Beginning balance at January 1, 2011	$	882,000
Total gains and losses:
Realized net income	—
Unrealized in accumulated other comprehensive income	—
Purchases, sales, issuances and settlements	—
Transfers in (out) of Level 3	—
Ending balance at March 31, 2011	$	882,000
Change in unrealized gains (losses) included in net income related to assets still held	$	—

All of the Company’s investments in available-for-sale securities are recorded at fair value based on quoted market prices. As of March 31, 2011, the Company held one ARPS valued at $882,000 with a perpetual maturity date that resets every 28 days.  Although as of March 31, 2011, this ARPS continued to pay interest according to its stated terms, the market in these securities continues to be illiquid. Based on a discounted cash flow model used to determine the estimated fair value of its investment in the ARPS, the Company has previously recognized in the consolidated statement of operations an unrealized loss of approximately $118,000 in investment income since the Company had determined that the decline in value was other than temporary. The assumptions used for the discontinued cash flow model include estimates for interest rates, timing and amount of cash flows and expected holding period of the ARPS.  The Company’s ARPS is classified as a long-term investment on the consolidated balance sheets, as the Company does not believe it could liquidate its security in the near term.

4.     Investment Securities

The following is a summary of the Company’s investment securities, all of which are classified as available-for-sale. Determination of estimated fair value is based upon quoted market prices as of the dates presented.

	March 31, 2011
	Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
Government agencies	$	38,438,298	$	5,215	$	(40,529	)	$	38,402,984
Corporate bonds	2,005,092		49		(74		)	2,005,067
	$	40,443,390	$	5,264	$	(40,603	)	$	40,408,051

11

Optimer Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (continued)

(unaudited)

	December 31, 2010
	Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
Government agencies	$	26,542,210	$	2,311	$	(4,924	)	$	26,539,597
Corporate bonds	3,014,319		23		(433		)	3,013,909
	$	29,556,529	$	2,334	$	(5,357	)	29,553,506

Investments in net unrealized loss positions as of March 31, 2011 are as follows:

		Less Than 12 Months of Temporary Impairment					Greater Than 12 Months of Temporary Impairment				Total Temporary Impairment
	Number of Investments	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Government agencies	14	$	23,002,729	$	(40,529	)	$	—	$	—	$	23,002,729	$	(40,529	)
Corporate bonds	1	1,001,026		(74		)	$	—	$	—	1,001,026		(74		)
	15	$	24,003,755	(40,603		)	$	—	$	—	$	24,003,755	$	(40,603	)

The amortized cost and estimated fair value of securities available-for-sale at March 31, 2011, by contractual maturity, are as follows:

	Amortized Cost		Estimated Fair Value
Due in one year or less	$	22,186,438	$	22,188,177
Due in one year to two years	18,256,952		18,219,874
	$	40,443,390	$	40,408,051

The weighted-average maturity of our short-term investments as of March 31, 2011 and 2010, was approximately twelve months and seven months, respectively.

The Company considered a number of factors to determine whether the decline in value in its investments is other than temporary, including the length of time and the extent to which the market value has been less than cost, the financial condition of the issuer and the Company’s intent to hold and ability to retain these short-term investments.  Based on these factors, the Company believes that the decline in value is temporary and primarily related to the change in market interest rates since purchase.  The Company anticipates full recovery of amortized cost with respect to these securities at maturity or sooner in the event of a change in the market interest rate environment.

12

Optimer Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (continued)

(unaudited)

5.     Stockholders’ Equity

Noncontrolling Interest

In October 2009, the Company sold 40% of its equity interest in OBI and in February 2011, pursuant to an amendment to the October 2009 financing agreement, OBI sold newly-issued shares of its common stock for gross proceeds of approximately 462.0 million New Taiwan Dollars (approximately $15.5 million based on then- current exchange rates).  The Company purchased 277.2 million New Taiwan Dollars (approximately $9.3 million based on then-current exchange rates) of the shares issued in the financing, such that the Company continued to maintain a 60% equity interest in OBI.  Pursuant to authoritative guidance, the Company accounts and reports for minority interests, the portion of OBI not owned by the Company, as noncontrolling interests and classifies them as a component of stockholders’ equity on the consolidated balance sheets of the Company.  The Company includes the net loss attributable to noncontrolling interests as part of its consolidated net loss.

The following table reconciles equity attributable to noncontrolling interest:

	For the Three Months Ended
Noncontrolling interest, January 1, 2011	$	1,996,704
Additional financing	6,194,193
Net loss attributable to noncontrolling interest	(290,805		)
Translation adjustments	260,348
Noncontrolling interest, March 31, 2011	$	8,160,440

Follow-On Offering

In February 2011, the Company completed the sale of 6.9 million shares of its common stock in a public offering with the net proceeds of approximately $73.1 million.

6.     Commitments

Leases

In February 2011, the Company entered into an office lease agreement with 101 Hudson Leasing Associates for approximately 14,000 square feet of office space in Jersey City, New Jersey. The initial term of the lease will expire in February 2016 with minimum rent payable of approximately $39,000 per month during the first 27 months of the initial term, will increase to approximately $41,000 per month thereafter through the 39th month of the initial term and will increase to approximately $44,000 per month thereafter through the expiration of the initial term. In addition, the Company has the option to extend the lease for an additional five-year term, which would commence upon the expiration of the initial five-year term. We have accounted for lease expense on a straight line basis and recorded a corresponding deferred rent balance.

13

Optimer Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (continued)

(unaudited)

The leases for both of the Company’s San Diego facilities are operating lease agreements that extend through November 2011 with one lease subject to one five-year renewal option and the other lease subject to two five-year renewal options.

7.Net Income (Loss) Per Share Attributable to Common Stockholders

The following table sets forth the computation of basic and diluted net income per share for the periods indicated:

	Three Months Ended March 31,
	2011		2010
Numerator:
Net income (loss) — basic and diluted	$	45,132,870	$	(13,793,192	)
Denominator:
Weighted average number of shares of common stock outstanding - basic	42,661,533		35,001,596
Effect of dilutive securities:
ESPP shares	14,247		—
Stock award common share equivalents	724,018		—
Weighted average number of shares of common stock outstanding - diluted	43,399,798		35,001,596
Net income (loss) per share - basic	$	1.06	$	(0.39	)
Net income (loss) per share - diluted	$	1.04	$	(0.39	)

For the three months ended March 31, 2011, 3.6 million potentially dilutive shares of common stock were not included in the diluted net income per share calculations because they would have been antidilutive.

As of March 31, 2010, the Company’s common shares issuable upon the exercise of stock options and warrants totaling 2,868,963 shares was excluded from the calculation, as their effect would have been antidilutive.

8.Stock Based Compensation

Optimer Pharmaceuticals, Inc.

Stock Options

In November 1998, the Company adopted the 1998 Stock Plan (the “1998 Plan”).  The Company terminated and ceased granting options under the 1998 Plan upon the closing of the Company’s initial public offering in February 2007.

14

Optimer Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (continued)

(unaudited)

In December 2006, the Company’s board of directors approved the 2006 Equity Incentive Plan (“2006 Plan”).  The 2006 Plan became effective upon the closing of the Company’s initial public offering. A total of 2,000,000 shares of the Company’s common stock were initially made available for sale under the plan.  The 2006 Plan provides for annual increases in the number of shares available for issuance thereunder on the first day of each fiscal year equal to the lesser of (i) 5% of the outstanding shares of the Company’s common stock on the last day of the immediately preceding fiscal year; (ii) 750,000 shares; or (iii) such other amount as the board of directors may determine. Pursuant to this provision, 750,000 additional shares of the Company’s common stock were reserved for issuance under the 2006 Plan on January 1, 2011, 2010 and 2009.  Under the 2006 Plan, the exercise price of options granted must at least be equal to the fair market value of the Company’s common stock on the date of grant.

In March 2011, the Company’s Board of Directors approved an amendment to the 2006 Plan to provide for the reservation of an additional 1,750,000 shares of the Company’s common stock to be used exclusively for the grant of awards to individuals not previously an employee or non-employee director of the Company (or following a bona fide period of non-employment with the Company), as an inducement material to the individual’s entry into employment with the Company within the meaning of Rule 5635(c)(4) of the NASDAQ Listing Rules.

Options granted under both the 1998 Plan and the 2006 Plan generally expire 10 years from the date of grant (five years for a 10% or greater stockholder) and vest over a period of four years.  The exercise price of options granted must at least be equal to the fair market value of the Company’s common stock on the date of grant.

Performance-Based Stock Options, Performance-Based Restricted Stock Units, and Stock Awards

On May 5, 2010, the Company’s Board of Directors appointed Pedro Lichtinger as its President and CEO and as a member of its Board of Directors.  Pursuant to Mr. Lichtinger’s offer letter, he received performance-based stock options to purchase up to an aggregate of 480,000 shares of common stock and performance-based restricted stock units covering up to an aggregate of 120,000 shares of common stock, which vest over time beginning on the dates the Company achieves specified development and commercialization goals.  In February 2011, one of the performance criteria was met, and therefore 1/4th of the performance-based stock options and performance-based restricted stock units related to this goal will vest on the one-year anniversary of the achievement of the goal and the remaining shares will vest in 36 equal monthly installments thereafter.

Simultaneously with Mr. Lichtinger’s appointment, Michael Chang resigned as the Company’s President and CEO.  The Company entered into a consulting agreement with Dr. Chang to provide general consulting services. Pursuant to his consulting agreement and as part of his compensation, Dr. Chang received performance-based stock options to purchase up to an aggregate of 400,000 shares of common stock which vest over time beginning on the dates certain regulatory filings are accepted and approved. Dr. Chang has continued to serve as the Chairman of the Company’s Board of Directors. In January 2011, one of the performance criteria was met, and therefore 1/4th of the option shares related to this goal vested. The remaining shares will vest in 24 equal monthly installments over the subsequent two-year period.

15

Optimer Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (continued)

(unaudited)

Employee Stock Purchase Plan

Optimer also grants stock awards under its employee stock purchase plan (“ESPP”). Under the terms of the ESPP, eligible employees may purchase shares of Optimer’s common stock at the lesser of 85% of the fair market value of Optimer’s common stock on the offering date or the purchase date.

 Valuations

The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options and stock awards, which have no vesting restrictions and are fully transferable.  In addition, the Black-Scholes option-pricing model requires the input of subjective assumptions, including the expected stock price volatility of the underlying stock.  The following table shows the assumptions used to compute stock-based compensation expense for the stock options, performance-based stock options, performance-based restricted stock units, and ESPP purchase rights during the three months ended March 31, 2011 and 2010, using the Black-Scholes option pricing model:

	Three months endedMarch 31,
Stock Options including performance stock options	2011		2010
Risk-free interest rate	2.19-2.58	%	2.70	%
Dividend yield	0.00	%	0.00	%
Expected life of options (years)	5.27-9.49		5.02-6.08
Volatility	69.66-73.63	%	71.36	%

	Three months endedMarch 31,
ESPP	2011		2010
Risk-free interest rate	0.18	%	0.17	%
Dividend yield	0.00	%	0.00	%
Expected life of options (years)	6 months		6 months
Volatility	40.01	%	34.08	%

The risk-free interest rate assumption was based on the United States Treasury’s rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued.  The assumed dividend yield was based on the Company’s expectation of not paying dividends in the foreseeable future.  The weighted-average expected life of options was calculated using the simplified method.  This decision was based on the lack of relevant historical data due to the Company’s limited history.  In addition, due to the Company’s limited historical data, the Company used the historical volatility of comparable companies whose share prices are publicly available to estimate the Company’s options volatility rate.

Total stock-based compensation expense related to all of the Company’s stock options, restricted stock units, stock awards issued to employees and consultants, and employee stock purchases, recognized for the three months ended March 31, 2011 and 2010, was comprised as follows:

16

Optimer Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (continued)

(unaudited)

	Three months ended March 31,
	2011		2010
Research and development	$	675,522	$	383,998
Marketing	42,865		93,310
General and administrative	1,412,845		467,246
Stock-based compensation expense	$	2,131,232	$	944,553

At March 31, 2011, the total unrecognized compensation expense related to unvested stock options and restricted stock units issued to employees was approximately $15.5 million and the related weighted-average period over which such expense is expected to be recognized is approximately 3.6 years.

Optimer Biotechnology, Inc.

Stock Options

In March 2010, OBI’s board of directors approved a Stock Option Plan and reserved 8.0 million shares of OBI common stock for issuance of equity awards thereunder. The Stock Option Plan provides for the issuance of stock options, restricted stock awards and stock appreciation rights to employees of OBI. The options generally vest over four years and have a maximum contractual term of ten years.

Valuations

The following table shows the assumptions used to compute stock-based compensation expense for the stock options granted by OBI during the quarter ended March 31, 2011 and 2010, using the Black-Scholes option pricing model:

	Three months endedMarch 31,
Stock Options including performance stock options	2011		2010
Risk-free interest rate	1.625	%	1.25	%
Dividend yield	0.00	%	0.00	%
Expected life of options (years)	6.08		6.08
Volatility	88.12	%	92.14	%

The risk-free interest rate assumption was based on the Central Bank of China interest rates.  The assumed dividend yield was based on OBI’s expectation of not paying dividends in the foreseeable future.  The weighted-average expected life of options was calculated using the simplified method.  This decision was based on the lack of relevant historical data due to OBI’s limited history.  Due to OBI’s limited historical data, OBI used the historical volatility of OBI’s peers whose share prices are publicly available to estimate the volatility rate of OBI stock options.

17

Optimer Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (continued)

(unaudited)

The following table summarizes the stock-based compensation expense for OBI included in each operating expense line item in Optimer’s consolidated statements of operations as of March 31, 2011 and 2010:

	Three months ended March 31,
	2011		2010
Research and development	$	12,424	$	7,434
General and administrative	34,768		32,461
Stock-based compensation expense	$	47,192	$	39,895

At March 31, 2011, the total unrecognized compensation expense related to unvested stock options and restricted stock units issued to employees was approximately $617,943 and the related weighted-average period over which such expense is expected to be recognized is approximately 2.9 years.

9.     Revenue and Other Collaborative Agreements

Revenues from Research Grants

The Company has one active grant from the National Institute of Allergy and Infectious Diseases (“NIAID”). This $3.0 million grant was awarded in September 2007 for three years and was extended to August 2011. The award is being used to conduct supplementary studies to the ongoing DIFICID trials to confirm narrow spectrum activity and potency of DIFICID against hypervirulent epidemic strains, to support additional toxicology and microbiological studies to demonstrate the safety and efficacy of the DIFICID compound and its major metabolite in CDI patients and to support a surveillance study of C. difficile isolates across North America to compare activity of DIFICID with existing CDI treatments.  For the three months ended March 31, 2011 and 2010, the Company recognized revenues related to research grants of $111,639, and $297,437, respectively.

Other Collaborative Agreements

Astellas Pharma Europe Ltd.

In February 2011, the Company entered into a collaboration and license agreement with Astellas pursuant to which the Company granted to Astellas an exclusive, royalty-bearing license under certain of the Company’s know-how and intellectual property to develop and commercialize DIFICID in Europe, and certain other countries in the Middle East, Africa and the CIS, or the Astellas territory.  Under the terms of the agreement, Astellas has agreed to use commercially reasonable efforts to develop and commercialize DIFICID in the Astellas territory at its expense, and is obligated to achieve certain additional regulatory and commercial diligence milestones with respect to DIFICID in the Astellas territory.  The Company and Astellas may also agree to collaborate in, and share data resulting from, global development activities with respect to DIFICID, in which case we and Astellas will be obligated to co-fund such activities.  In addition, under the terms of the agreement, Astellas granted the Company an exclusive, royalty-free license under know-how and intellectual property generated by Astellas and its sublicensees in the course of developing DIFICID and controlled by Astellas or its affiliates for use by the Company and any of the Company’s sublicensees in the development and commercialization of DIFICID outside the Astellas territory and, following termination of the agreement and subject to

18

Optimer Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (continued)

(unaudited)

payment by the Company of single-digit royalties, in the Astellas territory.  In addition, under the terms of a supply agreement entered into by the Company and Astellas on the same date, the Company will be the exclusive supplier of DIFICID to Astellas for Astellas’ development and commercialization activities in the Astellas territory during the term of the supply agreement, and Astellas is obligated to pay the Company an amount equal to cost plus an agreed mark-up for such supply.

Under the terms of the license agreement with Astellas, in March 2011, Astellas paid the Company an upfront fee of $69.2 million. The Company is eligible to receive additional cash payments totaling up to 115.0 million Euros upon the achievement by Astellas of specified regulatory and commercial milestones.  When determining whether or not to account for the additional cash payments under the milestone method, the Company makes a determination of whether or not each milestone is considered substantive. During this assessment the Company considers if the milestone is achieved based in whole or in part on the Company’s performance or on the occurrence of a separate outcome resulting from the Company’s performance, if there is substantive uncertainty at the date the arrangement is entered into that the event will be achieved, and if achievement will result in additional payments being due.  Based on the Company’s assessment process it was determined that additional payments due related to regulatory approval and product launch will be accounted for under the milestone method as technological hurdles create uncertainty of whether or not they will be met and are based in part on the occurrence of a separate outcome resulting from the Company’s performance.  In addition, the Company will be entitled to receive escalating double-digit royalties ranging from the high teens to low twenties on net sales of DIFICID products in the Astellas territory, which royalties are subject to reduction in certain, limited circumstances.  Such royalties will be payable by Astellas on a product-by-product and country-by-country basis until a generic product accounts for a specified market share of the applicable DIFICID product in the applicable country.

The Company assessed the deliverables under the authoritative guidance for multiple element arrangements. Analyzing the arrangement to identify deliverables requires the use of judgment, and each deliverable may be an obligation to deliver services, a right or license to use an asset, or another performance obligation.  Once the Company identified the deliverables under the arrangement, the Company determined whether or not the deliverables can be accounted for as separate units of accounting, and the appropriate method of revenue recognition is for each element. Based on the results of the Company’s analysis, the Company determined that the upfront payment was earned upon the delivery of the license and related know-how, which occurred by March 31, 2011.

The agreements with Astellas will continue in effect on a product-by-product and country-by-country basis until expiration of Astellas’ obligation to pay royalties with respect to each DIFICID product in each country in the Astellas territory, unless terminated early by either party as more fully described below.  Following expiration, Astellas’ license to develop and commercialize the applicable DIFICID product in the applicable country will become non-exclusive.  The Company and Astellas may each terminate either of the agreements prior to expiration upon the material breach of such agreement by the other party, or upon the bankruptcy or insolvency of the other party.  In addition, the Company may terminate the agreements prior

19

Optimer Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (continued)

(unaudited)

to expiration in the event Astellas or any of its affiliates or sublicensees commences an interference or opposition proceeding with respect to, challenges the validity or enforceability of, or opposes any extension of or the grant of a supplementary protection certificate with respect to, any patent licensed to it, and Astellas may terminate the agreements prior to expiration for any reason on a product-by-product and country-by-country basis upon 180 days’ prior written notice to the Company.  Upon any such termination, the license granted to Astellas (in total or with respect to the terminated product or terminated country, as applicable) will terminate and revert to the Company.

Par Pharmaceutical, Inc.

The Company holds worldwide rights to DIFICID.  In February 2007, the Company repurchased the rights to develop and commercialize DIFICID in North America and Israel from Par Pharmaceutical, Inc. (“Par”) under a prospective buy-back agreement.  The Company paid Par a one-time $5.0 million milestone payment in June 2010 for the successful completion by the Company of its second pivotal Phase 3 trial for DIFICID.  The Company may be obligated to pay Par a 5% royalty on net sales by the Company, its affiliates or its licensees of DIFICID in North America and Israel, and a 1.5% royalty on net sales by the Company or its affiliates of DIFICID in the rest of the world.  In addition, in the event the Company licenses its right to market DIFICID in the rest of the world, the Company will be required to pay Par a 6.25% royalty on net revenues received by it related to DIFICID.  The Company is obligated to pay each of these royalties, if any, on a country-by-country basis for seven years commencing on the applicable commercial launch in each such country. In March 2011, the Company paid Par $4.3 million in royalties for net revenues received by the Company under the Astellas agreement.

Biocon Limited

In May 2010, the Company entered into a long-term supply agreement with Biocon for the commercial manufacture of DIFICID’s active pharmaceutical ingredient (“API”).   Pursuant to the agreement, Biocon agreed to manufacture and supply to the Company, up to certain limits, DIFICID API and, subject to certain conditions, the Company agreed to purchase from Biocon at least a portion of its requirements for DIFICID API in the United States and Canada. The Company previously paid to Biocon $2.5 million for certain equipment purchases and manufacturing scale-up activities, and the Company may be entitled to recover up to $1.5 million of this amount under the supply agreement in the form of discounted prices for DIFICID API.   The Company expensed the entire $2.5 million in the second quarter of 2009 because at the time of payment the recovery of up to $1.5 million could not be assured.  The Company may be obligated to make additional payments to Biocon if it fails to meet the minimum purchase requirements after Biocon has dedicated certain manufacturing capacity to the production of DIFICID API and if Biocon is unable to manufacture alternative products with the dedicated capacity.  Unless both the Company and Biocon agree to extend the term of the supply agreement, it will terminate seven and a half years from the date the Company obtains marketing authorization for DIFICID in the United States or Canada.  The supply agreement will be terminated earlier in the event that the Company does not obtain marketing authorization for DIFICID in the United States or Canada prior to December 31, 2013.  In addition, the supply

20

Optimer Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (continued)

(unaudited)

agreement may be earlier terminated (i) by either party by giving two and a half years notice after the fifth anniversary of the Effective Date or upon a material breach of the supply agreement by the other party, (ii) by the Company upon the occurrence of certain events, including Biocon’s failure to supply requested amounts of DIFICID API, or (iii) by Biocon upon the occurrence of certain events, including the Company’s failure to purchase amounts of DIFICID API indicated in binding forecasts.

Nippon Shinyaku, Co., Ltd.

In June 2004, the Company entered into a license agreement with Nippon Shinyaku, Co., Ltd. (“Nippon Shinyaku”).  Under the terms of the agreement, the Company acquired the non-exclusive right to import and purchase Pruvel, and the exclusive right (with the right to sublicense), within the United States, to develop, make, use, offer to sell, sell and license products suitable for consumption by humans containing Pruvel.  Under this agreement, the Company paid Nippon Shinyaku an up-front fee in the amount of $1.0 million and will be required to make one future milestone payment in the amount of $1.0 million upon submission, if any, of its first NDA for Pruvel in the United States.  Under the agreement, the Company pays Nippon Shinyaku for certain materials.  If Nippon Shinyaku is unable to supply the Company with the contracted amount of Pruvel, then Nippon Shinyaku is obligated to grant the Company a non-exclusive, worldwide license to make or have made Pruvel, in which event the Company will owe Nippon Shinyaku a royalty based on the amount of net sales of Pruvel generated by the Company and the Company’s subsidiary.  Additionally, the Company will owe Nippon Shinyaku certain royalties based on the amount of net sales of Pruvel less the amount of Pruvel the Company buys from Nippon Shinyaku.  Either party may terminate the agreement 60 days after giving notice of a material breach which remains uncured 60 days after written notice.  If not terminated earlier, the agreement will terminate upon the later of ten years from the date of the first commercial sale of Pruvel in the United States or the date on which the last valid patent claim relating to Pruvel expires in the United States.

Cempra Pharmaceuticals, Inc.

In March 2006, the Company entered into a collaborative research and development and license agreement with Cempra Pharmaceuticals, Inc. (“Cempra”).  The Company granted to Cempra an exclusive worldwide license, except in Association of Southeast Asian Nations (“ASEAN”) countries, with the right to sublicense, to the Company’s patent and know-how related to the Company’s macrolide and ketolide antibacterial program.  As partial consideration for granting Cempra the license, the Company obtained equity of Cempra and the Company assigned no value to such equity.  The Company may receive milestone payments as product candidates are developed and/or co-developed by Cempra, in addition to milestone payments based on certain sublicense revenue.  The aggregate potential amount of such milestone payments is not capped and, based in part on the number of products developed under the agreement, may exceed $24.5 million.  The Company will also receive royalty payments based on a percentage of net sales of licensed products.  The milestone payments will be triggered upon the completion of certain clinical development milestones and in certain instances, regulatory approval of products.  In consideration of the foregoing, Cempra may receive milestone payments from the Company in

21

Optimer Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (continued)

(unaudited)

the amount of $1.0 million for each of the first two products the Company develops which receive regulatory approval in ASEAN countries, as well as royalty payments on the net sales of such products.  The research term of the agreement was completed in March 2008.  Subject to certain exceptions, on a country-by-country basis, the general terms of this agreement continue until the later of: (i) the expiration of the last to expire patent rights of a covered product in the applicable country or (ii) ten years from the first commercial sale of a covered product in the applicable country.  Either party may terminate the agreement in the event of a material breach by the other party, subject to prior notice and the opportunity to cure.  Either party may also terminate the agreement for any reason upon 30 days’ prior written notice provided that all licenses granted by the terminating party to the non-terminating party will survive upon the express election of the non-terminating party.

Memorial Sloan-Kettering Cancer Center

In July 2002, the Company entered into a license agreement with Memorial Sloan-Kettering Cancer Center (“MSKCC”) to acquire, together with certain nonexclusive licenses, exclusive, worldwide licensing and sublicensing rights to certain patented and patent-pending carbohydrate-based cancer immunotherapies.  As partial consideration for the licensing rights, the Company paid to MSKCC a one-time fee consisting of both cash and 55,383 shares of its common stock.  In anticipation of the various transactions involving OBI which the Company completed in October 2009, the Company assigned its rights and obligations under this agreement with OBI. Under the agreement, which was amended in June 2005, the Company owes MSKCC milestone payments in the following amounts for each licensed product: (i) $500,000 upon the commencement of Phase 3 clinical studies, (ii) $750,000 upon the filing of the first NDA, (iii) $1.5 million upon obtaining marketing approval in the United States and (iv) $1.0 million upon obtaining marketing approval in each and any of Japan and certain European countries, but only to the extent that OBI, and not a sublicensee, achieves such milestones.  OBI may owe MSKCC royalties based on net sales generated from the licensed products and income OBI sources from its sublicensing activities, which royalty payments are credited against a minimum annual royalty payment OBI owes to MSKCC during the term of the agreement.

Scripps Research Institute

In July 1999, the Company acquired exclusive, worldwide rights to its OPopS technology from the Scripps Research Institute (“TSRI”).  This agreement includes the license to the Company of patents, patent applications and copyrights related to OPopS technology.  The Company also acquired, pursuant to three separate license agreements with TSRI, exclusive, worldwide rights to over 20 TSRI patents and patent applications related to other potential drug compounds and technologies, including HIV/FIV protease inhibitors, aminoglycoside antibiotics, polysialytransferase, selectin inhibitors, nucleic acid binders, carbohydrate mimetics and osteoarthritis.  Under the four agreements with TSRI, the Company paid TSRI license fees consisting of an aggregate of 239,996 shares of its common stock with a deemed aggregate fair market value of $46,400, as determined on the dates of each such payment.  In October 2009, the Company assigned to OBI one of the agreements with TSRI related to the Company’s OPT-88 product candidate, which after further evaluation OBI decided not to pursue.  In February 2011,

22

Optimer Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (continued)

(unaudited)

the license agreement related to OPT-88 was terminated and OBI returned the patents related to OPT-88. Under each of the three remaining agreements, the Company owes TSRI royalties based on net sales by the Company, its affiliates and sublicensees of the covered products and royalties based on revenue the Company generates from sublicenses granted pursuant to the agreements.  For the first licensed product under each of the three agreements, the Company also will owe TSRI payments upon achievement of certain milestones.  In two of the three TSRI agreements, the milestones are the successful completion of a Phase 2 trial or its foreign equivalent, the submission of an NDA or its foreign equivalent and government marketing and distribution approval.  In the remaining TSRI agreement, the milestones are the initiation of a Phase 3 trial or its foreign equivalent, the submission of an NDA or its foreign equivalent and government marketing and distribution approval.  The aggregate potential amount of milestone payments the Company may be required to pay TSRI under the remaining TSRI agreements is approximately $11.1 million.

Optimer Biotechnology, Inc.

In October 2009, the Company entered into certain transactions involving OBI, then the Company’s wholly-owned subsidiary, to provide funding for the development of two of the Company’s early-stage, non-core programs.  The transactions with OBI included an Intellectual Property Assignment and License Agreement, pursuant to which the Company assigned to OBI certain patent rights, information and know-how related to OPT-88 and OPT-822/821.  In anticipation of these transactions, the Company also assigned, and OBI assumed, the Company’s rights and obligations under related license agreements with MSKCC and TSRI.  Under this agreement, the Company is eligible to receive up to $10 million in milestone payments for each product developed under the development programs and is also eligible to receive royalties on net sales of any product which is commercialized under the programs.  The term of the Intellectual Property Assignment and License Agreement continues until the last to expire of the patents assigned by the Company to OBI and the patents licensed to OBI under the TSRI and MSKCC agreements. After further evaluation, OBI determined not to pursue additional development of OPT-88 and in February 2011, OBI and TSRI agreed to terminate the license agreement and OBI returned the related  OPT-88 patents to TSRI. To provide capital for OBI’s product development efforts, the Company and OBI also entered into a financing agreement with a group of new investors.  Simultaneously, the Company sold 40 percent of its existing OBI shares to the same group of new investors, and the Company and the new investors also purchased new OBI shares.  The financing agreement also contemplated an additional financing pursuant to which the Company and the new investors would invest approximately an additional $184.8 million New Taiwan Dollars and $277.2 million New Taiwan Dollars, respectively, in exchange for new OBI shares. In February 2011, pursuant to an amendment to the October 2009 financing agreement, OBI completed the second financing and sold newly-issued shares of its common stock for gross proceeds of approximately 462.0 million New Taiwan Dollars (approximately $15.5 million based on then-current exchange rates).  The Company  purchased 277.2 million New Taiwan Dollars (approximately $9.3 million based on then-current exchange rates) of the shares issued in the second financing, such that the Company maintained its 60% equity interest in OBI.

23

Optimer Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements (continued)

(unaudited)

10.Subsequent Event

On April 5, 2011, the Company entered into a co-promotion agreement with Cubist Pharmaceuticals, Inc. (“Cubist”) pursuant to which the Company engaged Cubist as its exclusive partner for the promotion of DIFICID in the United States.  Under the terms of the agreement, the Company and Cubist have agreed to co-promote DIFICID to physicians, hospitals, long-term care facilities and other healthcare institutions as well as jointly provide medical affairs support for DIFICID. In conducting their respective co-promotion activities, each party is obligated under the agreement to commit minimum levels of personnel, and Cubist is obligated to tie a portion of the incentive compensation paid to its sales representatives to the promotion of DIFICID in the United States.  Under the terms of the agreement, the Company will be responsible for the distribution of DIFICID in the United States and for recording revenue from sales of DIFICID, and agreed to use commercially reasonable efforts to maintain adequate inventory and third party logistics support for the supply of DIFICID in the United States.  In addition, Cubist agreed to not promote competing products in the United States during the term of the agreement and, subject to certain exceptions, for a specified period of time thereafter. The initial term of the agreement is two years from the date of first commercial sale of DIFICID in the United States, subject to renewal or early termination as described below.

In exchange for Cubist’s co-promotion activities and personnel commitments, the Company will pay a quarterly fee of approximately $3.8 million to Cubist ($15.0 million per year) beginning as of the first commercial sale of DIFICID in the United States. Cubist is also eligible to receive an additional $5.0 million in the first year after first commercial sale and $12.5 million in the second year after first commercial sale if mutually agreed upon annual sales targets are achieved, as well as a portion of the Company’s gross profits derived from net sales above the specified annual targets, if any.

The agreement may be renewed by mutual agreement of the parties for additional, consecutive one-year terms.  The Company and Cubist may terminate the agreement prior to expiration upon the uncured material breach of the agreement by the other party, upon the bankruptcy or insolvency of the other party, or in the event that actual net sales during the first year of commercial sales of DIFICID in the United States are below specified levels, subject to certain limitations.  In addition, the Company may terminate the agreement, subject to certain limitations, if (i) the Company withdraws DIFICID from the market in the United States, (ii) Cubist fails to comply with applicable laws in performing its obligations, (iii) Cubist undergoes a change of control, (iv) certain market events occur related to Cubist’s product CUBICIN® (daptomycin for injection) in the United States, or (v) Cubist undertakes certain restructuring activities with respect to its sales force.  In addition, Cubist may terminate the agreement, subject to certain limitations, if (i) the first commercial sale of DIFICID in the United States does not occur within one year from the effective date of the agreement, (ii) the Company experiences certain supply failures in relation to the demand for DIFICID in the United States, (iii) the Company is acquired by certain types of entities, including competitors of Cubist, (iv) certain market events occur related to CUBICIN in the United States, (v) the Company fails to comply with applicable laws in performing its obligations or (vi) the FDA-approved label for DIFICID does not include specified comparative data, or includes a black box safety warning.

24

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our consolidated financial statements and accompanying notes appearing elsewhere in this report, as well as the audited financial statements and accompanying notes included in our annual report on Form 10-K for the fiscal year ended December 31, 2010, as filed with the Securities and Exchange Commission, or SEC.  This discussion and other parts of this report may contain forward-looking statements based upon current expectations that involve risks and uncertainties.  Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under “Risk Factors” and elsewhere in this report.

Overview

We are a biopharmaceutical company focused on discovering, developing and commercializing innovative hospital specialty products. Our current development efforts are focused on products that treat gastrointestinal infections and related diseases where current therapies have limitations, including limited efficacy, serious adverse side effects, drug-to-drug interactions, difficult patient compliance and bacterial resistance.  We currently have two late-stage anti-infective product candidates, DIFICID™ (fidaxomicin) and Pruvel™ (prulifloxacin).

DIFICID, our lead product candidate, is a narrow spectrum antibiotic with minimal systemic absorption. We are developing DIFICID as a treatment for CDI, the most common nosocomial, or hospital acquired, diarrhea. We currently hold rights to DIFICID in all regions of the world except for Europe and certain other countries in the Middle East, Africa and the Commonwealth of Independent States, or CIS.

In July 2010, we filed, and in August 2010 the European Medicines Agency, or EMA, accepted for review an MAA to permit marketing of DIFICID in Europe.  In September 2010, we began a submission to the United States Food and Drug Administration, or FDA, of a rolling New Drug Application, or NDA, and in November 2010 we completed the submission of our NDA. In January 2011, the FDA accepted our NDA filing for the treatment of CDI and for reducing the risk of recurrence when used for treatment of initial CDI. The FDA has also granted our request for six-month priority review, and has assigned a Prescription Drug User Fee Act, or PDUFA, goal date of May 30, 2011 for its review of the NDA.

In April 2011, the FDA’s Anti-Infective Drugs Advisory Committee recommended that the FDA approve DIFICID for the treatment of CDI by voting 13-0 that the clinical evidence we submitted adequately demonstrated the safety and effectiveness of DIFICID for the treatment of CDI.

In February 2011, we entered into an exclusive collaboration and license agreement with Astellas to develop and commercialize DIFICID in Europe and certain other countries in the Middle East, Africa and the CIS, which we refer to as the Astellas territory. In return for an exclusive license to DIFICID in the Astellas territory, Astellas paid to us an upfront cash payment of $69.2 million and we are eligible to receive additional cash payments totaling up to 115 million Euros upon the

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achievement of certain regulatory and commercial milestones.  Furthermore, we will be entitled to receive escalating double-digit royalties ranging from the high teens to low twenties on net sales of DIFICID in the Astellas territory, if approved.  Astellas will be responsible for all future costs associated with the development and commercialization of DIFICID in the Astellas territory including the costs associated with the MAA for DIFICID in Europe.  In connection with the collaboration and license agreement, we also entered into a supply agreement with Astellas pursuant to which we will be the exclusive supplier of DIFICID to Astellas in the Astellas territory and Astellas is obligated to pay us an amount equal to cost plus an agreed mark-up for such supply.

In April 2011, we entered into a co-promotion agreement with Cubist pursuant to which we engaged Cubist as our exclusive partner for the promotion of DIFICID in the United States.  Under the terms of the agreement, we and Cubist have agreed to co-promote DIFICID to physicians, hospitals, long-term care facilities and other healthcare institutions as well as jointly provide medical affairs support for DIFICID. Under the terms of the agreement, we will be responsible for the distribution of DIFICID in the United States and for recording revenue from sales of DIFICID, and we agreed to use commercially reasonable efforts to maintain adequate inventory and third party logistics support for the supply of DIFICID in the United States.  The initial term of the agreement is two years from the date of first commercial sale of DIFICID in the United States, subject to renewal or early termination.

In exchange for Cubist’s co-promotion activities and personnel commitments, we will pay a quarterly fee of approximately $3.8 million to Cubist ($15.0 million per year) beginning as of the first commercial sale of DIFICID in the United States. Cubist is also eligible to receive an additional $5.0 million in the first year after first commercial sale and $12.5 million in the second year after first commercial sale if mutually agreed upon annual sales targets are achieved, as well as a portion of our gross profits derived from net sales above the specified annual targets, if any.

We have completed two DIFICID Phase 3 trials which showed that DIFICID achieved the primary endpoint of clinical cure and demonstrated a significantly higher global cure rate (defined as cure with no recurrence within four weeks of completing therapy) compared to Vancocin, the only FDA-approved antibiotic for the treatment of CDI.  In the two Phase 3 trials, among subjects who had experienced a prior CDI episode and recurred within three months of entering the study, treatment with DIFICID resulted in a 47% reduction in repeat CDI recurrence compared to Vancocin (p=0.045).  The data also indicated that treatment with DIFICID significantly improved the recurrence rate and global cure rate in CDI patients requiring concomitant antibiotics compared to Vancocin.  DIFICID was also well-tolerated in the trials. In February 2011, the New England Journal of Medicine published results from the first Phase 3 trial.  We have also reported additional data from the second Phase 3 trial showing a clinically meaningful reduction in recurrence rates and higher global cure rates compared to Vancocin in both the hyper-virulent BI/NAP1/027 and the non-BI strain type subgroups. Clinical cure rates for DIFICID and Vancocin were similar in these two strain type subgroups.

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Pruvel is a prodrug in the fluoroquinolone class of antibiotics, a widely-used class of broad-spectrum antibiotics. We are developing Pruvel as a treatment for infectious diarrhea.  In July 2008, we reported positive top-line data from the first Phase 3 trial conducted in Mexico and Peru and in February 2009, we reported positive top-line data from the second Phase 3 trial conducted in India, Guatemala and Mexico.  The top-line analysis of data from these studies showed that Pruvel met the primary endpoint of time to last unformed stool, or TLUS, compared to placebo. On November 9, 2010, due to a higher than expected incidence of cutaneous rash during the course of a study of the possible interaction between Pruvel and antacids, we informed the FDA that we were voluntarily terminating the research study.  All reported events of cutaneous rash from the drug interaction study were mild or moderate in severity and required little or no treatment and all resolved completely.   We are currently conducting an investigation into the cause of the rash prior to initiating any new study with Pruvel. Rashes are a known and infrequent side effect of fluoroquinolone antibiotics, such as Pruvel, and rashes occurred at or below the rate generally expected for other fluoroquinolones in both of our previous Pruvel Phase 3 clinical trials.  Pending the results of our investigation, we are not currently able to estimate when we will initiate any new study or the extent of the delay in our planned submission of an NDA for Pruvel. We currently hold rights to commercialize Pruvel in the United States, and it is sold by other parties in Japan, Italy and certain other European countries.

We are developing additional product candidates using our proprietary technology, including our OPopS drug discovery platform. OPopS is a computer-aided technology that allows the development of potential drug candidates through carbohydrate mediated medicinal chemistry and enables the rapid synthesis of a wide variety of proprietary molecules. It includes GlycoOptimization, which enables the modification of a carbohydrate group on an existing drug to improve its properties, and De Novo Glycosylation, which introduces new carbohydrate groups on existing drugs to create new patentable compounds with improvement of pharmacokinetics.

We previously acquired exclusive rights to OPT-822/821, a combination of a novel carbohydrate-based cancer immunotherapy together with an adjuvant, which we licensed from Memorial Sloan-Kettering Cancer Center, or MSKCC.  In October 2009, we assigned to OBI certain of our patent rights and know-how related to OPT-822/821 and also assigned to OBI our rights and obligations under a related license agreement with MSKCC. In April 2010, OBI filed an investigational new drug application, or IND, in Taiwan for OPT-822/821, and in January 2011, OBI initiated a Phase 2/3 clinical trial for the treatment of metastatic breast cancer and is currently conducting the clinical trial in Taiwan and Hong-Kong.  Other potential indications for OPT-822/821 are being evaluated.  We have the right to receive up to $10 million from OBI in future milestone payments related to the development of OPT-822/821 as well as royalties on net sales of this product candidate.  In February 2011, pursuant to an amendment to an October 2009 financing agreement, OBI sold newly-issued shares of its common stock for gross proceeds of approximately 462.0 million New Taiwan Dollars (approximately $15.5 million based on then- current exchange rates).  We purchased 277.2 million New Taiwan Dollars (approximately $9.3 million based on then-current exchange rates) of the shares issued in the financing, and we currently maintain a 60% equity interest in OBI.

We were incorporated in November 1998.  Since inception, we have focused on developing our product candidates, including DIFICID and Pruvel.  We have never been profitable in any fiscal year and have incurred significant net losses since our inception.  As of March 31, 2011, we had

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an accumulated deficit of $177.7 million.  These losses have resulted principally from costs incurred in connection with research and development activities, including the costs of clinical trial activities associated with our current lead product candidates, license fees and general and administrative expenses.  We expect to continue to incur operating losses for the next several years as we pursue the clinical development, regulatory approval and commercialization of our product candidates, as well as acquire or in-license additional products or product candidates, technologies or businesses that are complementary to our own.

Critical Accounting Policies

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our consolidated financial statements, which have been prepared in conformity with generally accepted accounting principles in the United States.  The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, expenses and related disclosures.  Actual results could differ from those estimates. While our significant accounting policies are described in more detail in Note 2 of the Notes to Consolidated Financial Statements appearing elsewhere in this report, we believe the following accounting policies to be critical to the judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition

Our license and collaboration agreements contain multiple elements, including non-refundable upfront fees, payments for reimbursement of third-party research costs, payments for ongoing research, payments associated with achieving specific development milestones and royalties based on specified percentages of net product sales, if any. Revenue recognition for agreements with multiple deliverables is based on the individual units of accounting determined to exist in the agreement. A delivered item is considered a separate unit of accounting when the delivered item has value to the customer on a stand-alone basis. Items are considered to have stand-alone value when they are sold separately by any vendor or when the customer could resell the item on a stand-alone basis.

For multiple deliverable agreements entered into after December 31, 2010, consideration is allocated at the inception of the agreement to all deliverables based on their relative selling price. The relative selling price for each deliverable is determined using vendor specific objective evidence, or VSOE, of selling price or third-party evidence of selling price if VSOE does not exist. If neither VSOE nor third-party evidence of selling price exists, we use our best estimate of the selling price for the deliverable.

Cash received in advance of services being performed is recorded as deferred revenue and recognized as revenue as services are performed over the applicable term of the agreement.

When a payment is specifically tied to a separate earnings process, revenues are recognized when the specific performance obligation associated with the payment is completed.  Performance obligations typically consist of significant and substantive milestones.  Revenues from milestone payments may be considered separable from funding for research services because of the uncertainty surrounding the achievement of milestones for products in early

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stages of development.  When determining whether or not to account for transactions under the milestone method, we make a determination of whether or not each milestone is considered substantive. During this assessment we consider if achievement of the milestone is based in whole or in part on our performance or on the occurrence of a separate outcome resulting from our performance, if there is substantive uncertainty at the date the arrangement is entered into that the event will be achieved, and if achievement will result in additional payments being due.  Accordingly, these milestone payments are allowed to be recognized as revenue if and when the performance milestone is achieved if they represent a substantive earnings process.

In connection with certain research collaboration agreements, revenues are recognized from non-refundable upfront fees, which we do not believe are specifically tied to a separate earnings process, ratably over the term of the agreement or the period over which we have significant involvement or perform services.  Research fees are recognized as revenue as the related research activities are performed.

With respect to revenues derived from reimbursement of direct out-of-pocket expenses for research costs associated with grants, where we act as a principal, with discretion to choose suppliers, bear credit risk and perform part of the services required in the transaction, we record revenue for the gross amount of the reimbursement. The costs associated with these reimbursements are reflected as a component of research and development expense in the consolidated statements of operations.

None of the payments that we have received from collaborators to date, whether recognized as revenue or deferred, are refundable even if the related program is not successful.

Research and Development

Research and development costs are expensed as incurred and consist primarily of costs associated with clinical trials, compensation, including stock-based compensation, and other expenses related to research and development, including personnel costs, facilities costs and depreciation.

When nonrefundable payments for goods or services to be received in the future for use in research and development activities are made, we defer and capitalize these types of payments. The capitalized amounts are expensed when the related goods are delivered or the services are performed.

Stock-Based Compensation

The FASB authoritative guidance requires that share-based payment transactions with employees be recognized in the financial statements based on their fair value and recognized as compensation expense over the vesting period.  We used the modified prospective method and accordingly we did not restate the results of operations for the prior periods.

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Total consolidated stock-based compensation expense of $2.2 million and $984,000 was recognized in the three months ended March 31, 2011 and 2010, respectively.  The stock-based compensation expense recognized during the three months ended March 31, 2011 included expense from performance-based stock options and restricted stock units.

Stock-based compensation expense is estimated as of the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which generally represents the vesting period. We estimate the fair value of our stock options using the Black-Scholes option-pricing model and the fair value of our stock awards based on the quoted market price of our common stock.

Estimating the fair value for stock options requires judgment, including estimating stock-price volatility, expected term, expected dividends and risk-free interest rates. Due to Optimer’s and OBI’s limited historical data, the expected volatility incorporates the historical volatility of comparable companies whose share prices are publicly available. The average expected term is calculated using the Simplified Method for Estimating the Expected Term.  Expected dividends are estimated based on Optimer’s and OBI’s dividend history as well as Optimer’s and OBI’s current projections. The risk-free interest rate for Optimer is based on the United States Treasury rate for U.S. Treasury zero-coupon bonds with maturities similar to the periods approximating the expected terms of the options. The risk-free rate for OBI is based on the Central Bank of China interest rates. These assumptions are updated on an annual basis or sooner if there is a significant change in circumstances that could affect these assumptions.

Equity instruments issued to non-employees are recorded at their fair value and are periodically revalued as the equity instruments vest and are recognized as expense over the related service period.

Income taxes

We estimate income taxes based on the jurisdictions where we conduct business.  Significant judgment is required in determining our worldwide income tax provision.  We estimate our current tax liability and assess temporary differences that result from differing treatments of certain items for tax and accounting purposes.  These differences result in net deferred tax assets and liabilities.   We then assess the likelihood that deferred tax assets will be realized.  A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized.  We review the need for a valuation allowance each interim period to reflect uncertainties about whether we will be able to utilize deferred tax assets before they expire.  The valuation allowance analysis is based on estimates of taxable income for the jurisdictions in which we operate and the periods over which our deferred tax assets may be realized.  Changes in our valuation allowance could result in material increases or decreases in our income tax expense in the period such changes occur, which could have a material impact on our operating results.

We estimate that our federal and state taxable income for the current year will be fully offset by net operating losses and research and development credit carryovers.  As such, no current tax provision has been recorded.  We also have recorded a full valuation allowance for the remaining net deferred tax benefits.

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We have completed a section 382/383 analysis regarding the limitation of the net operating losses and credit carryovers and have considered the annual limitation when determining the amount available for utilization in the current year.

We recognize and measure benefits for uncertain tax positions using a two-step approach.  The first step is to evaluate the tax position taken and expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained upon audit, including resolution of any related appeals or litigation processes.  For tax positions that are more likely than not to be sustained upon audit, the second step is to measure the tax benefit as the largest amount that has more than a 50% chance of being realized upon settlement.  Significant judgment is required to evaluate uncertain tax positions.  We evaluate uncertain tax positions on a quarterly basis.  The evaluations are based upon a number of factors, including changes in facts or circumstances, changes in tax law, correspondence with tax authorities during the course of audits and effective settlement of audit issues.  Changes in recognition or measurement of uncertain tax positions could result in material increases or decreases in our income tax expense in the period such changes occur, which could have a material impact on our effective tax rate and operating results.

Results of Operations

Comparison ofThree Months Ended March 31, 2011 and 2010

Total revenues.  Total revenues for the three months ended March 31, 2011 and 2010 were $69.3 million and $297,000, respectively. The increase of $69.0 million was due to the upfront payment we received from Astellas under the DIFICID collaboration and license agreement. The payment was earned upon delivery of the License and related know-how which occurred by March 31, 2011.

Cost of licensing.  Cost of licensing for the three months ended March 31, 2011 was $4.3 million.  This amount represents a 6.25% royalty payment we made to Par based on net revenue from the Astellas upfront payment. We did not have a similar expense in the same period of the prior year.

Research and development expense.  Research and development expense for the three months ended March 31, 2011 and 2010 was $8.5 million and $11.4 million, respectively, a decrease of $2.9 million.   The decrease was primarily due to the inclusion in the prior year period of an accrual of a $5.0 million milestone payment due to Par for the successful completion of the second DIFICID Phase 3 trial.  The decrease was partially offset by an increase in medical affairs and publication expenses.

Marketing expense.  Marketing expense for the three months ended March 31, 2011 and 2010 was $3.4 million and $269,000 respectively, an increase of $3.2 million.   The increase was primarily due to increased market research and pre-commercialization launch efforts related to our DIFICID program.

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General and administrative expense.  General and administrative expense for the three months ended March 31, 2011 and 2010 was $8.3 million and $2.4 million, respectively.  The increase of $5.9 million was due to higher compensation expenses, including $1.4 million of stock compensation expense, an increase of $948,000 over the same period in the prior year, as well as higher consulting expenses including advisory fees related to the Astellas collaboration.

Interest income and other, net.  Interest income and other, net of $23,000 for the three months ended March 31, 2011 was relatively consistent with the $25,000 for the three months ended March 31, 2010.

Income taxes. We did not record a provision for income taxes due to our anticipated ability to utilize existing net operating losses and credit carryovers.

Liquidity and Capital Resources

Sources of Liquidity

Since inception, our operations have been financed primarily through the sale of equity securities.  Through March 31, 2011, we received gross proceeds of approximately $333.8 million from the sale of shares of our preferred and common stock as follows:

·in May 2000, we sold a total of 1.6 million shares of Series A preferred stock for proceeds of $3.4 million;

·from March 2001 to December 2001, we sold a total of 4.1 million shares of Series B preferred stock for proceeds of $32.2 million;

·in April 2005, we sold a total of 1.5 million shares of Series C preferred stock for proceeds of $12.0 million;

·from April 2005 to November 2005, we sold a total of 2.9 million shares of Series D preferred stock for proceeds of $22.3 million;

·in February 2007, we sold a total of 7.0 million shares of our common stock in connection with our initial public offering for proceeds of $49.0 million;

·in October 2007, we sold a total of 4.6 million shares of our common stock in connection with a private placement offering for proceeds of $35.9 million;

·in July 2008, we sold a total of 1.7 million shares of our common stock in a registered direct offering for proceeds of $14.7 million;

·in March 2009, we sold a total of 3.3 million shares of our common stock and warrants to purchase up to an aggregate of 91,533 shares of our common stock in a registered direct offering for proceeds of $32.9 million;

·in March 2010, we sold a total of 4.9 million shares of our common stock in a public offering for proceeds of $53.8 million; and

·in February 2011, we sold a total of 6.9 million shares of our common stock in a public offering for proceeds of $77.6 million.

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In addition, in March 2011, pursuant to our collaboration and license agreement with Astellas, we received approximately $69.2 million as an upfront payment from Astellas.

Until required for operations, we invest a substantial portion of our available funds in money market funds, corporate debt securities, United States government instruments and other readily marketable debt instruments, all of which are investment-grade quality.  We have established guidelines relating to diversification and maturities of our investments to preserve principal and maintain liquidity.

Cash Flows

As of March 31, 2011, our consolidated cash, cash equivalents and short-term investments totaled approximately $180.1 million as compared to $49.4 million as of December 31, 2010, an increase of approximately $130.7 million.  During the three months ended March 31, 2011, we received net proceeds of $73.1 million in a public common stock offering. We also received a $69.2 million upfront payment from Astellas in connection with a collaboration and license agreement for DIFICID and OBI raised approximately $15.5 million in gross proceeds in a private placement of common shares. Of our consolidated cash, cash equivalents and short-term investments, $18.7 million was held by OBI as of March 31, 2011.

We cannot be certain if, when or to what extent we will receive cash inflows from the commercialization of our product candidates.  We expect our commercialization expenses to be substantial and to increase over the next few years assuming regulatory approval of DIFICID. We also expect to continue to incur development expenses as we pursue life cycle management opportunities and build our pipeline.

In February 2011, we entered into a collaboration and license agreement with Astellas pursuant to which we granted to Astellas an exclusive, royalty-bearing license under certain of our know-how and intellectual property to develop and commercialize DIFICID in the Astellas territory. Under the terms of the license agreement with Astellas, Astellas paid to us an upfront fee of $69.2 million, and we are eligible to receive additional cash payments totaling up to 115.0 million Euros upon the achievement by Astellas of specified regulatory and commercial milestones.  In addition, we will be entitled to receive escalating double-digit royalties ranging from the high teens to low twenties on net sales of DIFICID products in the Astellas territory, which royalties are subject to reduction in certain, limited circumstances.  Such royalties will be payable by Astellas on a product-by-product and country-by-country basis until a generic product accounts for a specified market share of the applicable DIFICID product in the applicable country.

On April 5, 2011, we entered into a co-promotion agreement with Cubist pursuant to which we engaged Cubist as our exclusive partner for the promotion of DIFICID in the United States.  Under the terms of the agreement, we and Cubist have agreed to co-promote DIFICID to physicians, hospitals, long-term care facilities and other healthcare institutions as well as jointly

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provide medical affairs support for DIFICID. In exchange for Cubist’s co-promotion activities and personnel commitments, we will pay a quarterly fee of approximately $3.8 million to Cubist ($15.0 million per year) beginning as of the first commercial sale of DIFICID in the United States. Cubist is also eligible to receive an additional $5.0 million in the first year after first commercial sale and $12.5 million in the second year after first commercial sale if mutually agreed upon annual sales targets are achieved, as well as a portion of our gross profits derived from net sales above the specified annual targets, if any.

In February 2007, we regained worldwide rights to DIFICID from Par under a prospective buy-back agreement.  We paid Par a one-time $5.0 million milestone payment in June 2010 for our successful completion of the second Phase 3 trial for DIFICID.  We are obligated to pay Par a 5% royalty on net sales by us or our affiliates of DIFICID in North America and Israel, and a 1.5% royalty on net sales by us or our affiliates of DIFICID in the rest of the world.  In addition, we are required to pay Par a 6.25% royalty on net revenues we receive from licensees of our right to market DIFICID in the rest of the world.  We are obligated to pay each of these royalties, if any, on a country-by-country basis for seven years commencing on the applicable commercial launch in each such country. In March 2011, we paid Par a $4.3 million royalty payment associated with the upfront payment we received under the Astellas agreement.

In May 2010, we entered into a long-term supply agreement with Biocon for the commercial manufacture of DIFICID’s active pharmaceutical ingredient, or API. Pursuant to the agreement, Biocon agreed to manufacture and supply to us, up to certain limits, DIFICID API and, subject to certain conditions, we agreed to purchase from Biocon at least a portion of our requirements for DIFICID API in the United States and Canada.  We previously paid to Biocon $2.5 million for certain equipment purchases and manufacturing scale-up activities, and we may be entitled to recover up to $1.5 million of this amount under the supply agreement in the form of discounted prices for DIFICID API.  We may be obligated to make additional payments to Biocon if we fail to meet minimum purchase requirements after Biocon has dedicated certain manufacturing capacity to the production of DIFICID API and if Biocon is unable to manufacture alternative products with the dedicated capacity.

In June 2004, we entered into a license agreement with Nippon Shinyaku to which we acquired the non-exclusive right to import and purchase Pruvel, and the exclusive right (with the right to sublicense), within the United States, to develop, make, use, offer to sell, sell and license products suitable for consumption by humans containing Pruvel.  Under the terms of the agreement, we will be required to pay Nippon Shinyaku a milestone payment in the amount of $1.0 million upon the submission, if any, of a NDA for Pruvel in the United States.

In October 2008, our Compensation Committee adopted a Severance Benefit Plan covering certain eligible employees of the Company, including executive officers.  In May 2010, the Severance Benefit Plan was amended and restated.  Pursuant to the plan, upon an involuntary termination other than for cause or a constructive termination, an eligible employee may be entitled to receive specified severance benefits. The benefits may include cash severance payments and acceleration of stock award vesting.  The level of benefits provided under the plan depends upon an eligible employee’s position and years of service, and whether the termination is related to a change in control.

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In October 2009, we entered into certain transactions with our subsidiary, OBI, pursuant to which we assigned certain intellectual property rights and license agreements to OBI related to our OPT-822/821 product candidate.  In connection with these transactions, we entered into a financing agreement with OBI and a group of new investors.  Under the terms of the financing agreement, if OBI achieves certain development milestones with respect to OPT-822/821, we and the group of new investors may be required to purchase approximately an additional $8.6 million and $5.7 million, respectively, of new OBI common shares.  In February 2011, pursuant to an amendment to an October 2009 financing agreement, OBI sold newly-issued shares of its common stock for gross proceeds of approximately 462.0 million New Taiwan Dollars (approximately $15.5 million based on then-current exchange rates).  We purchased 277.2 million New Taiwan Dollars (approximately $9.3 million based on then-current exchange rates) of the shares issued in the financing, and we currently maintain a 60% equity interest in OBI.

In July 2010, we received a $500,000 milestone payment from Cempra under the terms of a licensing agreement.   The milestone payment was made as a result of Cempra’s continuing development of a next-generation macrolide (CEM-101) for the treatment of respiratory infections. Cempra licensed CEM-101 from us and has successfully completed a Phase 1 study.

Funding Requirements

Our future capital uses and requirements depend on numerous factors including, but not limited to, the following:

·the costs of establishing sales or distribution capabilities and the timing of such efforts;

·the amount and timing of payments we may receive or be required to make under strategic collaborations, including licensing, co-promotion and other arrangements;

·our decision to conduct future clinical trials, including the timing and progress of such clinical trials;

·our ability to establish and maintain strategic collaborations, including licensing and other arrangements;

·the costs of preparing and pursuing applications for regulatory approvals and the timing of such approvals;

·the success of the commercialization of our products;

·the costs involved in prosecuting, enforcing or defending patent claims or other intellectual property rights; and

·the extent to which we in-license, acquire or invest in other indications, products, technologies and businesses.

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We believe that our existing cash and cash equivalents will be sufficient to meet our capital requirements for at least the next 18 months.

Until we can generate significant cash from our operations, we expect to continue to fund our operations with existing cash resources that were primarily generated from the proceeds of offerings of our equity securities and collaborations and government grants.  In addition, we may finance future cash needs through the sale of additional equity securities, strategic collaboration agreements and debt financing.  However, we may not be successful in completing future equity financings, in entering into additional collaboration agreements, in receiving milestone or royalty payments under new or existing collaboration agreements, in obtaining new government grants or in obtaining debt financing.  In addition, we cannot be sure that our existing cash and investment resources will be adequate, that financing will be available when needed or that, if available, financing will be obtained on terms favorable to us or our stockholders.  The credit markets and the financial services industry have been experiencing a period of unprecedented turmoil which has generally made equity and debt financing more difficult to obtain, and may negatively impact our ability to complete financing transactions.  Having insufficient funds may require us to delay, scale-back or eliminate some or all of our planned commercialization activities and development programs, relinquish some or even all of our rights to product candidates at an earlier stage of development or renegotiate less favorable terms than we would otherwise choose.  Failure to obtain adequate financing also may adversely affect our ability to operate as a going concern.  If we raise funds by issuing equity securities, substantial dilution to existing stockholders would likely result.  If we raise funds by incurring additional debt financing, the terms of the debt may involve significant cash payment obligations as well as covenants and specific financial ratios that may restrict our ability to operate our business.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Cash Equivalents and Marketable Securities Risk

Our cash and cash equivalents and short-term investments as of March 31, 2011 consisted primarily of money market funds and United States government instruments and other readily marketable debt instruments.  Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of U.S. interest rates.  The primary objective of our investment activities is to preserve principal while at the same time maximizing the income we receive from our investments without significantly increasing risk.  A hypothetical ten percent change in interest rates during the quarter ended March 31, 2011 would have resulted in approximately a $4,100 change in net income. Accordingly, we would not expect our operating results or cash flows to be affected to any significant degree by a sudden change in market interest rates applicable to our securities portfolio.  In general, money market funds are not subject to market risk because the interest paid on such funds fluctuates with the prevailing interest rate.

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Fair Value Measurements

All of our investment securities are available-for-sale securities and are reported on the consolidated balance sheet at market value except for one auction rate preferred security, or ARPS, with a par value of approximately $1.0 million. As a result of the negative conditions in the global credit markets, our ARPS is currently not liquid.  In the event we need to access the funds that are in an illiquid state, we will not be able to do so without a loss of principal, until the security is redeemed by the issuer or it matures.

Foreign Currency Risk

We have operated primarily in the United States of America and most transactions during the quarter ended March 31, 2011 have been made in U.S. dollars except that, under our agreement with Astellas, all milestone payments we may receive from Astellas are in Euros, though we receive payment in U.S. dollars based on an average exchange rate. Accordingly, other than with respect to these payments under the Astellas agreement, we have not had any material exposure to foreign currency rate fluctuations.

In addition, certain transactions related to us and our subsidiary, OBI, are denominated primarily in Taiwan dollars.  As a result, our financial results could be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in foreign markets where we conduct business, including the impact of the existing crisis in the global financial markets in such countries and the impact on both the U.S. dollar and the Taiwan dollars.

We do not use derivative financial instruments for speculative purposes. We do not engage in exchange rate hedging or hold or issue foreign exchange contracts for trading purposes. Currently, we do not expect the impact of fluctuations in the relative fair value of other currencies to be material.

Item 4. Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the rules and regulations thereunder, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Evaluation of disclosure controls and procedures. As required by Exchange Act Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end

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of the period covered by this report. Based on the foregoing, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in internal control over financial reporting. In connection with entering the Astellas collaboration agreement in February 2011, we have developed and will continue developing additional internal controls over our revenue recognition process. Except for the development of the additional internal controls over revenue recognition, there was no change in our internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1a. Risk Factors

The risk factors set forth below with an asterisk (*) next to the title are new risk factors or risk factors containing changes, including any material changes, from the risk factors previously disclosed in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2010, as filed with the SEC.

Risks Related to Our Business

We are a company with limited sources of revenue, and we are largely dependent on the success of our lead product candidate DIFICID and, to a lesser degree, our other lead product candidate Pruvel.*

We are a biopharmaceutical company with no products approved for commercial sale and, to date, we have not generated any revenues from product sales.  Our ability to generate future revenues depends heavily on our and our collaborators’ success in:

·developing and securing U.S. and foreign regulatory approvals for DIFICID and, to a lesser extent, Pruvel and our other product candidates; and

·commercializing, alone or with a partner, any product candidates for which we or our collaborators receive approval from the FDA and/or comparable foreign regulatory authorities.

Our ability to generate and sustain revenues in the long term will also depend on our success in generating a pipeline of innovative product candidates utilizing our drug discovery platform or through licensing strategies.

Our product candidates will generally require extensive clinical study and evaluation, regulatory approval in multiple jurisdictions, substantial investment and significant marketing efforts before we generate any revenues from product sales.  We and our collaborators are not permitted to market or promote our product candidates before receiving regulatory approval from the FDA or comparable foreign regulatory authorities.  We have submitted an NDA for DIFICID to the FDA

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and submitted a MAA for DIFICID to the EMA.  We had not previously submitted an NDA or MAA, nor have we or any collaborator received marketing approval for either DIFICID or Pruvel.  We cannot be certain that either of these product candidates will receive regulatory approval in a timely fashion, or at all.  If we and/or any collaborators do not receive regulatory approval for and successfully commercialize DIFICID and Pruvel, we will not generate any revenues from product sales for several years, if at all, and we may not be able to continue our operations.

We believe our initial success will be more dependent on DIFICID than Pruvel, because we believe that the market for the treatment of CDI is larger than the market for the treatment of infectious diarrhea.  Even if we or any collaborators successfully obtain regulatory approval to market DIFICID or Pruvel, our revenues for either drug candidate will be dependent upon the size of the markets in the territories for which we or any collaborators have commercial rights and our and our collaborators’ ability to successfully commercialize our drug candidates in those markets, either alone or with a partner.  If the markets for the treatment of CDI or infectious diarrhea are not as significant as we estimate or we or our collaborators are otherwise unsuccessful in commercializing our drug candidates, our business and prospects will be harmed.

If we are unable to obtain FDA approval of our product candidates, we will not be able to commercialize them in the United States.*

We need FDA approval prior to marketing our product candidates in the United States.  If we fail to obtain FDA approval to market our product candidates, we will be unable to sell our product candidates in the United States, which will significantly impair our ability to generate any revenues.

The FDA’s regulatory review and approval process, which includes evaluation of pre-clinical studies and clinical trials of our product candidates as well as the evaluation of our manufacturing processes and our third-party contract manufacturers’ facilities, is lengthy, expensive and inherently uncertain.  To receive approval for a product candidate, we must, among other things, demonstrate to the FDA’s satisfaction with substantial evidence from well-controlled clinical trials that the product candidate is both safe and effective for each indication for which approval is sought.  Satisfaction of the approval requirements typically takes several years and the time needed to satisfy them may vary substantially, based on the type, complexity and novelty of the pharmaceutical product candidate.  We cannot predict if or when we might receive regulatory approvals for any of our product candidates currently under development.

We may experience delays in the FDA’s review process of our NDA filing for DIFICID and may experience delays if we submit an NDA for Pruvel. We completed the submission of our NDA for DIFICID in November 2010.  The FDA accepted our NDA for filing in January 2011 and granted our request for a six-month priority review.  As part of the Prescription Drug User Fee Act, or PDUFA, the FDA has a goal to review and act on submissions in a given time frame. Accordingly, the FDA assigned our DIFICID NDA a PDUFA goal date of May 30, 2011 as the date by which the FDA intends to complete its review and issue a determination.  The FDA is not bound by, and has in the past missed, its PDUFA goals, and it is unknown whether the review of our NDA filing for DIFICID, any future NDA filing for Pruvel, or for any of our other

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drug candidates, will be completed within the FDA review goals or will be delayed. Moreover, the duration of the FDA’s review may depend on the number and type of other NDAs that are submitted with the FDA during the same time period.

With the exception of our DIFICID NDA, we have not previously submitted NDAs to the FDA. In addition, we have never obtained FDA approval for any drug. This lack of experience may impede our ability to obtain FDA approval in a timely manner, if at all, for DIFICID, Pruvel or our other product candidates.   We have also experienced delays in submitting our NDA for Pruvel to the FDA due to a pending investigation into an unexpectedly high incidence of cutaneous rash observed during a safety study.  From the rash investigation process we are also investigating inconsistent results related to accelerated stability studies of Pruvel.  We currently cannot predict if or when we will be able to initiate any new study for Pruvel or the ultimate extent of the delay in our planned submission of an NDA for Pruvel.  Any further impairment or delay in our ability to complete and submit an NDA for a product candidate could further impair our or a collaborator’s ability to successfully commercialize Pruvel and our ability to pursue a potential collaboration with respect to Pruvel.

Even if our product candidates receive regulatory approval from the FDA, any approvals that we obtain may not cover all of the clinical indications for which we are seeking approval, or could contain significant limitations in the form of narrow indications, warnings, precautions or contra-indications with respect to conditions of use, or the requirement that we implement a risk evaluation and mitigation strategy, or REMS. For instance, at the April 5, 2011 FDA advisory committee meeting to discuss our DIFICID NDA, the advisory committee was split on whether the finding of lower recurrence of CDI after 30 days in patients treated with DIFICID in our Phase 3 trials was clinically significant, though committee members supported including in a product label a description of DIFICID’s superiority over vancomycin in providing sustained resolution of CDI 30 days after treatment.  It is possible any product label for DIFICID may not describe this benefit or may describe it in a manner that limits our ability to successfully market DIFICID at premium prices compared to existing treatments.  If any of these events occur, our ability to generate revenues from our products would be greatly reduced and our business would be harmed.

The FDA has substantial discretion in the approval process and may either refuse to consider our applications for substantive review or may form the opinion after review of our data that our applications are insufficient to allow approval of our product candidates.  Even if we believe that data collected from our preclinical studies and clinical trials of our product candidates are promising, our data may not be sufficient to support marketing approval by the FDA, or regulatory interpretation of these data and procedures may be unfavorable. In addition, the FDA’s regulatory review of NDAs for product candidates intended for widespread use by a large proportion of the general population is becoming increasingly focused on safety. If the FDA does not consider or approve an application that we submit, it may require that we conduct additional clinical, pre-clinical or manufacturing validation studies and submit that data before it will reconsider our application.  Depending on the extent of these or any other studies, approval of any applications that we submit may be delayed by several years, or may require us to expend more resources than we have available.  For example, we intend to rely in part on certain legacy data from a third party to support an NDA for Pruvel. If the FDA deems this data to be insufficient, it may delay our submission of an NDA for Pruvel and could require us to complete

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additional studies.  It is also possible that additional studies, if performed and completed, may not be successful or considered sufficient by the FDA for approval or even to make our applications approvable.  If any of these outcomes occur, we may be forced to abandon one or more of our future applications for approval, which might significantly harm our business and prospects. As a result, we cannot predict when or whether regulatory approval will be obtained for any product candidate we develop.

Even after completing clinical trials and other studies, our product candidates could fail to receive regulatory approval for many reasons, including the following:

·the results of our clinical trials and other studies may not demonstrate to the satisfaction of or meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for any indication;

·the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials or other studies;

·the results of our clinical trials or other studies may not demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

·the results of our clinical trials or other studies may not demonstrate that a product candidate presents an advantage over existing therapies, or over placebo in any indications for which the FDA requires a placebo-controlled trial;

·the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from clinical trials or other studies;

·the data collected from clinical trials and other studies of our product candidates may not be sufficient to support the submission of an NDA or other submission or to obtain regulatory approval in the United States or elsewhere;

·the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical and other study data insufficient for approval; and

·FDA or comparable foreign regulatory authorities may not approve the proposed manufacturing processes and facilities for a product candidate.

Although we were granted priority review by the FDA of our NDA for DIFICID, there is no guarantee that the FDA will complete its review by its PDUFA goal date of May 30, 2011.  In addition, although the FDA has granted Fast Track status to DIFICID and selected it for participation in a CMA Pilot 2 Program, we cannot be certain that we will receive any benefits from these designations or that the designations will expedite regulatory review or approval of DIFICID.  Participation in these programs has not eliminated any phase of clinical development.  Moreover, our participation in the CMA Pilot 2 Program has involved and will continue to

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involve frequent discussions and other interactions with the staff of the FDA.  These frequent discussions could subject DIFICID to a greater level of scrutiny than it might otherwise have received or require us to make more frequent submissions and endure other burdens that would have been avoided if we had not participated in the program.  Therefore, despite any potential benefits of DIFICID’s Fast Track and CMA Pilot 2 Program designations, significant uncertainty remains regarding the regulatory approval process for DIFICID. In addition, although we received a unanimous of 13-0 decision from the FDA’s Anti-Infective Drugs Advisory Committee in April 2011 with respect to whether DIFICID should be approved, there can be no assurance that the FDA would follow this recommendation.

If we or our collaborators fail to gain and/or maintain marketing approvals from regulatory authorities in international markets for DIFICID and any future product candidates for which we have or license rights in international markets, our market opportunities will be limited.*

Sales of our product candidates outside of the United States will be subject to foreign regulatory requirements governing clinical trials and marketing approval.  Even if the FDA grants marketing approval for a product candidate, comparable regulatory authorities of foreign countries must also approve the marketing of the product candidate in those countries.  This is important for the commercialization of DIFICID for which we have granted an exclusive license to Astellas in the Astellas territory and for which we retain commercialization rights in the rest of the world.  We could experience significant delays and difficulties and incur significant costs in obtaining foreign regulatory approvals in the territories for which we retain commercialization rights.  Regulatory requirements can vary widely from country to country and could delay the introduction of our products in those countries.  Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not guarantee regulatory approval will be obtained in any other country.  In addition, our or our collaborators’ failure to obtain regulatory approval in any country may delay or have negative effects on the process for regulatory approval in others.  For example, if unanticipated concerns are raised by the EMA or the FDA in their review of the MAA or NDA for DIFICID, respectively, these concerns could negatively impact applications for marketing approval of DIFICID in a different country or territory. We have received correspondence from the EMA accepting our MMA for filing, as well as a list of questions setting forth the EMA’s requests for additional information pursuant to its review of our MMA submission. We submitted our response in April 2011 to the EMA’s requests and recommendations. If our response fails to satisfy the EMA, approval of the DIFICID MMA may be delayed or ultimately withheld.

Other than Pruvel, which is sold by other parties in Japan, Italy and certain other European countries, none of our product candidates is approved for sale in any international market for which we have or have licensed rights. If we or our collaborators fail to comply with regulatory requirements with respect to our product candidates in international markets or to obtain and maintain required approvals, our market opportunities and ability to generate revenues will be diminished, which would significantly harm our business, results of operations and prospects.

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Even if we and our collaborators receive regulatory approval for our product candidates, we and our collaborators will be subject to ongoing significant regulatory obligations and oversight.

Even if we and our collaborators receive regulatory approval to sell our product candidates, the FDA and foreign regulatory authorities will likely impose significant restrictions on the indicated uses or marketing of such products, or impose ongoing requirements for potentially costly post-approval studies.  In addition, following any regulatory approval of our product candidates, we and our collaborators will be subject to continuing regulatory obligations, such as requirements for testing, storage, recordkeeping and safety reporting, and additional post-marketing obligations, including regulatory oversight of the labeling, packaging, advertising, promotion and marketing of our products.  If we or our collaborators become aware of previously unknown problems with any of our product candidates in the United States or overseas or at our third-party manufacturers’ facilities, a regulatory agency may impose restrictions on our products, our third-party manufacturers or on us, including requiring us to reformulate our products, conduct additional clinical trials, make changes in the labeling of our products, implement changes to, or obtain re-approvals of, our third-party manufacturers’ facilities, or withdraw the product from the market.  In addition, we or our collaborators may experience a significant drop in the sales of the affected products and our product revenues will be reduced, our reputation in the marketplace may suffer and we may become the target of lawsuits, including class action suits.  Moreover, if we or our collaborators or third-party manufacturers fail to comply with applicable regulatory requirements, we may be subject to warning letters, civil or criminal fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions, costly new manufacturing requirements and criminal prosecution.  Any of these events could harm or prevent sales of the affected products and reduce our related revenues or could substantially increase the costs and expenses of commercializing and marketing these products, which would significantly harm our business, financial condition and prospects.

We have incurred significant operating losses since inception and anticipate that we will incur continued losses for the foreseeable future.*

We have experienced significant operating losses since our inception in 1998.  As of March 31, 2011, we had an accumulated deficit of approximately $177.7 million.  We have generated no revenues from product sales to date and we expect our expenses to increase substantially in the near term as we prepare for a potential commercial launch of DIFICID, including due to recent and planned increases to our head count and anticipated payments to Cubist pursuant to our co-promotion agreement,  and as we pursue additional research and development activities, including potential additional indications for DIFICID. We have funded our operations through March 31, 2011 from the sale of approximately $333.8 million of our securities and through payments received under collaborations with partners or government grants. We expect to continue to incur substantial additional operating losses for the next several years as we build our marketing and sales capabilities, prepare for the potential commercial launch of DIFICID and continue our clinical trial and research and development initiatives.  Because of the numerous risks and uncertainties associated with developing, obtaining regulatory approval for and commercializing our product candidates, we are unable to predict the extent of any future losses.

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We or our collaborators may never successfully commercialize our product candidates and thus we may never have any significant future revenues or achieve and sustain profitability.

The success of our efforts to commercialize DIFICID in the United States, if approved, will be partially dependent on our co-promotion agreement with Cubist.*

Pursuant to our co-promotion agreement with Cubist, we engaged Cubist as our exclusive partner for the promotion of DIFICID in the United States. We have limited control over the amount and timing of resources that Cubist may devote to the co-promotion of DIFICID. If Cubist fails to adequately promote DIFICID, or if Cubist’s efforts are not effective, our business may be negatively affected.  In particular, we are relying on our co-promotion agreement with Cubist to reach a broader segment of the CDI market than we could otherwise reach on our own.  If Cubist is unsuccessful or the co-promotion agreement is terminated earlier than we expect, we may not be able to address these broader CDI market segments, and the revenues we may generate from sales of DIFICID in the United States will be limited.

We are subject to a number of other risks associated with our dependence on our co-promotion agreement with Cubist, including:

·Cubist could fail to devote sufficient resources to the promotion of DIFICID, including by failing to maintain or train sufficient sales or medical affairs personnel to promote or provide information regarding DIFICID;

·Cubist may not comply with applicable regulatory guidelines with respect to the promotion of DIFICID, which could adversely impact sales of DIFICID in the United States;

·Cubist may not provide us with timely and accurate information regarding promotion activities with respect to DIFICID, which could adversely impact our ability to comply with our ability to supply and manage our own inventory of DIFICID in the United States, as well as our ability to generate accurate financial forecasts;

·We and Cubist may not be successful in coordinating our respective sales and promotion activities under the co-promotion agreement, which could lead to inefficiencies, the failure to maximize DIFICID sales in the Unites States, and/or disagreements between us and Cubist; or

·business combinations or significant changes in Cubist’s business strategy, including the acquisition by Cubist of other products, may adversely affect Cubist’s ability or willingness to perform its obligations under our co-promotion agreement.

Our co-promotion agreement with Cubist is subject to early termination, including through Cubist’s right to terminate if we experience certain supply failures in relation to the demand for DIFICID in the United States or if we are acquired by certain types of entities, including competitors of Cubist.  If the agreement is terminated early, we may not be able to find another partner to co-promote DIFICID in the United States on acceptable terms, or at all, and we may be unable to sufficiently promote and commercialize DIFICID in the United States on our own.

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We are dependent on our collaboration agreement with Astellas to commercialize and further develop DIFICID in the Astellas territory.  The failure to maintain this agreement or the failure of Astellas to perform its obligations under this agreement, could negatively impact our business.*

Pursuant to the terms of our collaboration agreement with Astellas, we granted to Astellas exclusive rights to develop and commercialize DIFICID in the Astellas territory, and pursuant to the terms of our supply agreement with Astellas, we are obligated to supply to Astellas all of its requirements of DIFICID for such development and commercialization activities.  Consequently, our ability to generate any revenues from DIFICID in the Astellas territory depends on Astellas’ ability to obtain regulatory approvals for and successfully commercialize DIFICID in the Astellas territory.  We have limited control over the amount and timing of resources that Astellas will dedicate to these efforts.

We are subject to a number of other risks associated with our dependence on our collaboration agreement with Astellas, including:

·Astellas may not comply with applicable regulatory guidelines with respect to developing or commercializing DIFICID, which could adversely impact sales or future development of DIFICID in the Astellas territory;

·we and Astellas could disagree as to future development plans and Astellas may delay future clinical trials or stop a future clinical trial;

·there may be disputes between us and Astellas, including disagreements regarding the collaboration agreement, that may result in (1) the delay of or failure to achieve regulatory and commercial objectives that would result in milestone or royalty payments, (2) the delay or termination of any future development or commercialization of DIFICID, and/or (3) costly litigation or arbitration that diverts our management’s attention and resources;

·because the milestone and royalty payments in the collaboration agreement are stated in terms of Euros but paid to us in U.S. Dollars, the amounts of any milestone or royalty payments that may be paid to us under the collaboration agreement could be less than what we expect, depending on the applicable exchange rate at the time of such payments;

·Astellas may not provide us with timely and accurate information regarding sales and marketing activities and supply forecasts, which could adversely impact our ability to comply with our supply obligations to Astellas and manage our own inventory of DIFICID, as well as our ability to generate accurate financial forecasts;

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·business combinations or significant changes in Astellas’ business strategy may adversely affect Astellas’ ability or willingness to perform its obligations under our collaboration and supply agreements;

·Astellas may not properly maintain or defend our intellectual property rights in the Astellas territory or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property rights or expose us to potential litigation;

·the royalties we are eligible to receive from Astellas may be reduced or eliminated based upon Astellas’ and our ability to maintain or defend our intellectual property rights and the presence of generic competitors in the Astellas territory;

·limitations on our or an acquiror’s ability to maintain or pursue development or commercialization of products that are competitive with DIFICID could deter a potential acquisition of us that our stockholders may otherwise view as beneficial; and

·if Astellas is unsuccessful in obtaining regulatory approvals for or commercializing DIFICID in the Astellas territory, we may not receive any additional milestone or royalty payments under the collaboration agreement and our business prospects and financial results may be materially harmed.

The collaboration and supply agreements are subject to early termination, including through Astellas’ right to terminate without cause upon advance notice to us.  If the agreements are terminated early, we may not be able to find another collaborator for the commercialization and further development of DIFICID in the Astellas territory on acceptable terms, or at all, and we may be unable to pursue continued commercialization or development of DIFICID in the Astellas territory on our own.

We may enter into additional agreements for the commercialization of DIFICID or other of our drug candidates, and may be similarly dependent on the performance of third parties with similar risk.

If we fail to obtain additional financing, we may be unable to commercialize DIFICID and Pruvel or develop and commercialize other product candidates, or continue our other research and development programs.*

We may require additional capital to commercialize our current lead product candidates, DIFICID and Pruvel.  We cannot be certain that additional funding will be available on acceptable terms, or at all.  To the extent that we raise additional funds by issuing equity securities, our stockholders may experience significant dilution.  Any debt financing, if available, may require us to pledge our assets as collateral or involve restrictive covenants, such as limitations on our ability to incur additional indebtedness, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could negatively impact our ability to conduct our business.  If we are unable to raise additional capital when required or

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on acceptable terms, we may have to significantly delay, scale back or discontinue the development or commercialization of one or more of our product candidates or one or more of our other research and development initiatives.  We also could be required to:

·seek collaborators for one or more of our current or future product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available; or

·relinquish or license on unfavorable terms our rights to technologies or product candidates that we otherwise would seek to develop or commercialize ourselves.

Any of the above events could significantly harm our business and prospects and could cause our stock price to decline.

To the extent we require addition resources to successfully commercialize our product candidates, and we are unable to raise additional capital or are unable to effectively collaborate with additional partners for the commercialization of DIFICID or Pruvel, we will not generate significant revenues from sales of these products and our business will be materially harmed.

Our management team has recently undergone significant change and expansion and we may experience difficulties or delays integrating our new executive level employees into our organization.*

Our success as an organization depends in part on our ability to successfully integrate new employees into our organization.  We recently hired Kurt Hartman to the position of General Counsel and Senior Vice President of Access, Gregory Papaz as our Senior Vice President of Commercial Operations, Linda Amper as our Senior Vice President of Human Resources, Hemal Shah as our Senior Vice President of Health, Economics & Outcomes Research, Glenn Tillotson as our Senior Vice President of Medical Affairs, John Womelsdorf as our Vice President of Business Development, Kasia Petchel as our Senior Vice President of Pharmacovigilance and Nancy Ruiz as our Senior Vice President of Research and Development. In addition, Sherwood Gorbach, M.D., has been promoted to the position of Chief Scientific Officer. We may experience delays in the execution of our business strategy as our new management team members become familiar with our company and integrate with our longer-term employees.  This process may be further complicated by the fact that certain of our newly-hired management team members will reside on the East Coast, while the substantial majority of our personnel are located in San Diego, California.

If we fail to attract and retain senior management and key scientific personnel, we may be unable to successfully develop or commercialize our product candidates.

Our success depends in part on our continued ability to attract, retain and motivate highly qualified management, sales and marketing, clinical and scientific personnel and on our ability to develop and maintain important relationships with leading academic institutions, clinicians and scientists.  We are highly dependent on our chief executive officer, and the other principal members of our executive and scientific teams. The unexpected loss of the service of any of

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these persons may significantly delay or prevent the achievement of research, development, commercialization and other business objectives.  Replacing key employees may be difficult and costly and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to develop and commercialize pharmaceutical products successfully.  We do not maintain “key person” insurance policies on the lives of these individuals or the lives of any of our other employees.  We employ these individuals on an at-will basis and their employment can be terminated by us or them at any time, for any reason and with or without notice.

We will need to hire additional personnel as we expand our commercial activities.  We may not be able to attract or retain qualified management, sales and marketing and scientific personnel on acceptable terms in the future due to the intense competition for qualified personnel among biotechnology, pharmaceutical and other businesses, particularly in the San Diego, California and New Jersey areas.  If we are not able to attract and retain the necessary personnel to accomplish our business objectives, we may experience constraints that will impede significantly the achievement of our commercialization and research and development objectives, our ability to raise additional capital and our ability to implement our business strategy.  In particular, if we lose any members of our senior management team, we may not be able to find suitable replacements, and our business and prospects may be harmed as a result.

We currently have a limited sales and marketing organization and have no experience as a company in marketing drug products.  If we are unable to expand our sales and marketing capabilities or enter into agreements with third parties to market and sell our product candidates in the territories in which we retain commercialization rights, we may not be able to generate product revenues.*

Our strategy is to build a fully-integrated U.S.-focused biopharmaceutical company to successfully execute the commercial launch of DIFICID in the U.S. market following regulatory approval.  Although we have engaged Cubist as our exclusive partner to co-promote DIFICID in the United States, we currently have only a limited sales and marketing organization for sales and distribution of pharmaceutical products and, as a company, we do not have any experience commercializing pharmaceutical products on our own. In order to commercialize any products, in addition to our engagement of Cubist as our exclusive co-promotion partner for DIFICID in the United States, we must build our own marketing, sales, distribution, managerial and other non-technical capabilities or make arrangements with third parties to perform these services. Our strategy within the United States includes a plan to establish a commercial organization based primarily in New Jersey, and our bicoastal organizational structure could create management challenges.  We own exclusive rights to commercialize Pruvel in the United States, and are evaluating our commercialization options for Pruvel in the United States. The establishment and development of our own sales force to market any products we may develop will be expensive and time consuming and could delay any product launch, and we cannot be certain that we will be able to successfully develop this capability. Although we have engaged Cubist to assist in the promotion of DIFICID in the United States, our agreement with Cubist could terminate early, and our commercial presence may not be sufficient to adequately market DIFICID in the United States on our own. We will also have to compete with other pharmaceutical and biotechnology companies to recruit, hire, train and retain marketing and sales personnel. To the extent we rely

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on third parties to commercialize our products, if any, we may receive less revenues than if we commercialized these products ourselves. In addition, we may have little or no control over the sales efforts of any third parties involved in commercializing our products, including those of Astellas in the Astellas territory and Cubist in the United States. In the event we are unable to develop our own marketing and sales force or collaborate with a third-party marketing and sales organization, we would not be able to commercialize our product candidates which would negatively impact our ability to generate product revenues.

We will need to increase the size of our organization, and we may experience difficulties in managing growth.

We are a small company with 114 employees as of April 29, 2011.  To commercialize our product candidates or commence new clinical trials, we will need to expand our employee base for managerial, operational, marketing, sales, financial and other resources.  Future growth will impose significant added responsibilities on members of management, including the need to identify, recruit, maintain and integrate additional employees and may take time away from running other aspects of our business, including development and commercialization of our product candidates.  Our future financial performance and our ability to commercialize our product candidates and to compete effectively will depend, in part, on our ability to manage any future growth effectively.  In particular, as our commercialization plans and strategies develop, we will need to recruit and train a substantial number of sales and marketing personnel and expect to need to expand the size of our employee base for managerial, operational, financial and other resources. To that end, we must be able to:

·manage our development efforts effectively;

·integrate additional management, administrative and manufacturing personnel;

·build a marketing and sales organization; and

·maintain sufficient administrative, accounting and management information systems and controls.

We may not be able to accomplish these tasks, and accordingly, may not achieve our research, development and commercialization goals.  Our failure to accomplish any of these goals could harm our financial results and prospects.

We currently depend, and will in the future continue to depend, on third parties to manufacture our product candidates, including DIFICID and Pruvel.  If these manufacturers fail to provide us and our collaborators with adequate supplies of clinical trial materials and commercial product or fail to comply with the requirements of regulatory authorities, we may be unable to develop or commercialize our products.*

We have outsourced all manufacturing of supplies of our product candidates to third parties.  We seek to establish long-term supply arrangements with third-party contract manufacturers. For example, in May 2010, we entered into a long-term supply agreement with Biocon for the

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commercial manufacturing of the active pharmaceutical ingredient, or API, for DIFICID.   We intend to continue outsourcing the manufacture of our product candidates to third parties for any future clinical trials and large-scale commercialization of any product candidates that receive regulatory approval and become commercial drugs.

Our ability and that of our collaborators to develop and commercialize DIFICID and Pruvel and any other product candidates will depend in part on our ability and that of our collaborators to arrange for third parties to manufacture our products at a competitive cost, in accordance with strictly enforced regulatory requirements and in sufficient quantities for regulatory approval, commercialization and any future clinical trials.  We have not yet manufactured commercial batches of DIFICID, Pruvel or any of our other product candidates.  Third-party manufacturers that we select to manufacture our product candidates for clinical testing or on a commercial scale may encounter difficulties with the small- and large-scale formulation and manufacturing processes required for such manufacture.  Further, development of large-scale manufacturing processes will require additional validation studies, which the FDA must review and approve.  Difficulties in establishing these required manufacturing processes could result in delays in clinical trials, regulatory submissions and approvals, or commercialization of our product candidates.

Our inability or that of our collaborators to enter into and maintain agreements with third-party manufacturers on acceptable terms could cause shortages of clinical trial supplies of our product candidates, thereby delaying or preventing regulatory approval and/or commercialization of the affected product candidate, and adversely affecting our ability to generate revenues.  Specifically, Biocon and Patheon are currently our sole suppliers of DIFICID API and drug product, respectively.  While it is our intention to establish a long-term supply agreement for DIFICID drug product, we currently do not have any such agreement and we may not be able to reach mutually agreeable terms with Patheon or alternative suppliers. Consequently, we cannot be certain that Patheon will continue to be willing to perform manufacturing services related to DIFICID drug product on acceptable terms to us or at all.  If Patheon becomes unwilling to continue performing manufacturing services under our current arrangements or if we are unable to establish a long-term supply arrangement for the commercial supply of DIFICID drug product, our ability to successfully and timely launch and commercialize DIFICID, if approved, would be subject to a substantial risk of supply failure.

While we work closely with our current suppliers to try to ensure continuity of supply while maintaining high quality and reliability, we cannot guarantee that these efforts will be successful.  Even if we are able to establish additional or replacement manufacturers, identifying these sources and entering into definitive supply agreements and obtaining regulatory approvals may involve a substantial amount of time and cost and such supply arrangements may not be available on acceptable economic terms.

A reduction or interruption in our supply of DIFICID API or drug product from our current suppliers, and an inability to develop alternative sources for such supply, could adversely affect our ability to manufacture DIFICID in a timely or cost effective manner to make our related product sales, and could result in a breach of our supply agreement with Astellas or our co-promotion agreement with Cubist, which could result in either or both of those parties terminating their respective agreements with us.

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In addition, we, our collaborators and other third-party manufacturers of our products must comply with strictly enforced current good manufacturing practices, or cGMP, requirements enforced by the FDA through its facilities inspection program.  These requirements include quality control, quality assurance and the maintenance of records and documentation.  We currently rely on Biocon to manufacture DIFICID API and rely on Patheon, Inc. to manufacture the drug product supplies.  As such, Biocon and Patheon will be subject to ongoing periodic unannounced inspections by the FDA and other agencies for compliance with current cGMP, and similar foreign standards. We also rely on Nippon Shinyaku, which contracts with Juzen Chemical Corporation, or Juzen, as well as Angelini Francesco Acraf SpA, or Angelini, and Patheon, to manufacture Pruvel drug supplies.  The manufacturing facilities of Biocon, Juzen and Patheon have been inspected and approved by the FDA for other companies’ drug products; however, none of Biocon’s, Juzen’s nor Patheon’s facilities have been inspected by the FDA for the manufacture of our drug supplies.  Angelini’s facilities have not been inspected or approved by the FDA.  We or other third-party manufacturers of our products may be unable to comply with cGMP requirements and with other FDA, state, local and foreign regulatory requirements.  We and our collaborators have little control over third-party manufacturers’ compliance with these regulations and standards.  A failure to comply with these requirements by our third-party manufacturers, including Biocon, Juzen, Angelini, and Patheon could result in the issuance of untitled letters and/or warning letters from authorities, as well as sanctions being imposed on us, including fines and civil penalties, suspension of production, suspension or delay in product approval, product seizure or recall or withdrawal of product approval.  In addition, we have no control over these manufacturers’ ability to maintain adequate quality control, quality assurance and qualified personnel.  If the safety of any quantities supplied by third parties is compromised due to their failure to adhere to applicable laws or for other reasons, we and our collaborators may not be able to obtain or maintain regulatory approval for or successfully commercialize one or more of our product candidates, which would significantly harm our business and prospects.

Other than our collaboration agreement with Astellas, we may not be able to enter into acceptable agreements to commercialize DIFICID outside of the United States or if, needed, adequately build our own marketing and sales capabilities.*

We intend to pursue the development and potential commercialize DIFICID outside of the United States through collaboration arrangements with third parties, such as our collaboration with Astellas.  We may be unable to enter into additional collaboration arrangements in international markets outside of the Astellas territory.  In addition, there can be no guarantee that Astellas or any other parties that we may enter into collaboration arrangements with will be successful or result in more revenues than we could obtain by marketing DIFICID on our own. If we are unable to enter into additional collaboration arrangements for our products or develop an effective international sales force, our ability to generate product revenues would be limited, which would adversely affect our business, financial condition, results of operations and prospects. If we are unable to enter into such collaboration arrangements for development of DIFICID in areas outside of the United States and outside of the Astellas territory, we may need to develop our own marketing and sales force to market DIFICID in these territories to hospital-

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based and long-term care physicians.  These efforts may not be successful as we have no relationships among such hospital-based and long-term care physicians and do not currently have sufficient funds to develop an adequate sales force in these regions.  There is no guarantee that we will be able to develop an effective international sales force to successfully commercialize our products in these international markets.  If we cannot commercialize DIFICID in any territory that represents a significant market opportunity, our ability to achieve and sustain profitability will be substantially limited.

If our product candidates are unable to compete effectively with branded and generic antibiotics, our commercial opportunity would be reduced or eliminated.*

If approved, our lead product candidates will compete against both branded antibiotic therapies, such as Vancocin Pulvules with respect to DIFICID and Xifaxan®/rifaxamin with respect to Pruvel, and generic antibiotics such as metronidazole and oral vancomycin with respect to DIFICID and ciprofloxacin with respect to Pruvel.  In addition, we anticipate that DIFICID will compete with other antibiotic and anti-infective product candidates currently in development for the treatment of CDI. Many of these products have been or will be developed and marketed by major pharmaceutical companies, who have significantly greater financial resources and expertise in research and development, pre-clinical testing, conducting clinical trials, obtaining regulatory approvals, manufacturing and marketing approved products than we do.  As a result, these companies may obtain regulatory approval more rapidly than we are able to and may be more effective in selling and marketing their products as well.  Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established pharmaceutical or other companies.

We anticipate that, if approved, DIFICID and Pruvel will face increasing competition in the form of generic versions of branded products of competitors that will lose their patent exclusivity.  For example, DIFICID, if approved, will immediately face steep competition from an inexpensive generic form of metronidazole.  DIFICID would currently face generic oral vancomycin competition in Europe and in the future may face competition from generic oral vancomycin in the United States as well.  In addition, our internal market research suggests that there is increasing use of oral reconstituted intravenous vancomycin “slurry” in the hospital setting.  Generic antibiotic therapies typically are sold at lower prices than branded antibiotics and are generally preferred by managed care providers of health services.  For example, because metronidazole and generic vancomycin “slurry” are available at such a low price, we believe it may be difficult to sell DIFICID as a first-line therapy for the treatment of CDI other than in certain limited circumstances, such as in patients at high risk of recurrence.  If we or our collaborators are unable to demonstrate to physicians and patients that, based on experience, clinical data, side-effect profiles and other factors, our products are preferable to these generic antibiotic therapies, we may never generate meaningful product revenues.  In addition, many antibiotics experience bacterial resistance over time because of their continued use.  There can be no guarantee that bacteria would not develop resistance to DIFICID, Pruvel or any of our other product candidates.  Our commercial opportunity would also be reduced or eliminated if our competitors develop and commercialize generic or branded antibiotics that are safer, more effective, have lower recurrence rates, have fewer side effects or are less expensive than our product candidates.

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The commercial success of our product candidates will depend upon attaining significant market acceptance of these product candidates among physicians, patients, healthcare payors and the medical community.*

Even if our product candidates are approved by the appropriate regulatory authorities for marketing and sale, physicians may not prescribe our product candidates, which would prevent us from generating revenues or becoming profitable.  Market acceptance of DIFICID, Pruvel and any of our future product candidates by physicians, patients and healthcare payors will depend on a number of factors, many of which are beyond our control, including:

·timing of market introduction of our product candidates as well as of competitive drugs;

·the clinical indications for which the product candidate is approved;

·acceptance by physicians and patients of each product candidate as a safe and effective treatment;

·perceived advantages over alternative treatments;

·the cost of treatment in relation to alternative treatments, including numerous generic antibiotics;

·the extent to which the product candidate is approved for inclusion on formularies of hospitals and managed care organizations;

·the extent to which bacteria develops resistance to the product candidate, thereby limiting its efficacy in treating or managing infections;

·whether the product candidate is designated under physician treatment guidelines as a first-line therapy or as a second- or third-line therapy for particular infections;

·the availability of adequate reimbursement by third parties, such as insurance companies and other healthcare payors;

·limitations or warnings contained in a product’s FDA-approved labeling;

·relative convenience and ease of administration; and

·prevalence and severity of adverse side effects.

Because DIFICID is a differentiated antibiotic for the treatment of CDI, it may encounter additional hurdles to market acceptance by physicians, who may be skeptical about its clinical benefits, or healthcare payors, who may resist reimbursing a premium-priced therapeutic particularly in light of the availability of generic alternatives.

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If approved, we plan to target our marketing of Pruvel primarily to high-prescribing physicians of antibiotics for infectious diarrhea, including those at travel clinics.  Because of the number of these physicians in the United States, we will be required to expend significant time and resources to obtain broad market acceptance of Pruvel among these physicians.  We do not have experience in marketing to this population of physicians and do not currently have the resources to be able to conduct such marketing efforts on our own.  As such, we may not be successful in any of these marketing efforts which would limit the commercial success of Pruvel.

In addition, in July 2008 the FDA notified makers of fluoroquinolone antimicrobial drugs for systemic use that a boxed warning is necessary for those products due to the risk of tendonitis and tendon rapture.  As prulifloxacin, the generic name for Pruvel, is a fluoroquinolone antibiotic it may be required to carry a black box warning.  Although these risks have been described for years on the product label of many fluoroquinolones, the increased awareness of this risk may impact the market potential for the fluoroquinolone class of antibiotics, including prulifloxacin.  Furthermore, because prulifloxacin has already been marketed by other companies outside the United States to treat a wide range of bacterial infections, including infectious diarrhea, urinary tract infections and respiratory tract infections, patients may be able to obtain prulifloxacin from these other companies, and not from us, if prulifloxacin is approved in the market where the patient is located.  We have rights to Pruvel only in the United States.  These patients may obtain prulifloxacin in these other markets from other companies even if these patients are from the United States.

Third-party payor coverage and reimbursement may be insufficient or unavailable altogether for our product candidates, which could diminish our or our collaborators’ sales or affect our or our collaborators’ ability to sell our products profitably.

Market acceptance and sales of our product candidates will depend on reimbursement policies and may be affected by future healthcare reform measures.  Government third-party payors, such as the Medicare and Medicaid programs, and private payors, including health maintenance organizations, decide which drugs they will pay for and establish reimbursement levels for these drugs. Because third-party payors increasingly are challenging prices charged and the cost-effectiveness of medical products, significant uncertainty exists as to the ability of our product candidates to receive adequate coverage and reimbursement.  We cannot be sure that third-party payors will place our product candidates on approved formularies or that reimbursement will be available in whole or in part for any of our product candidates.  Also, we cannot be sure that insufficient reimbursement amounts will not reduce the demand for, or the price of, our products, if approved.

Many healthcare providers, such as hospitals, receive a fixed reimbursement amount per procedure or other treatment therapy based on a prospective payment system, and these amounts are not necessarily based on the actual costs incurred.  As a result, these healthcare providers may be inclined to choose the least expensive therapies.  We cannot guarantee that our potential customers will find the reimbursement amounts sufficient to cover the costs of our product candidates or that our product candidates will be cost competitive compared to alternatives.

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We have not commenced efforts to have our product candidates covered and reimbursed by government or third-party payors.  If reimbursement is not available or is available only to limited levels, we may not be able to commercialize our products successfully or at all, which would harm our business and prospects.

If we fail to develop and commercialize other products or product candidates, we may be unable to grow our business.*

A key element of our strategy is to commercialize a portfolio of innovative hospital specialty products in addition to DIFICID and Pruvel.  As a significant part of our growth strategy, we intend to develop and commercialize, independently and/or through collaboration partners, additional products and product candidates through our discovery research program using our proprietary technology, including OPopS.  The success of this strategy depends upon our ability to identify, select and acquire pharmaceutical product candidates and products that fit into our development plans on terms that are acceptable to us. To supplement this strategy, we may also obtain rights to additional product candidates from third parties through acquisition or in-licensing transactions.

Any product candidate we identify or to which we acquire rights will likely require additional development efforts prior to commercial sale, including pre-clinical studies, extensive clinical testing and approval by the FDA and applicable foreign regulatory authorities.  All product candidates are prone to the risks of failure that are inherent in pharmaceutical product development, including the possibility that the product candidate will not be shown to be sufficiently safe and/or effective for approval by regulatory authorities.  In addition, we cannot assure you that any such products that are approved will be manufactured or produced economically, successfully commercialized or widely accepted in the marketplace or be more effective than other commercially available alternatives.

A significant portion of the research that we are conducting involves new and unproven technologies.  Research programs to identify new disease targets and product candidates require substantial technical, financial and human resources whether or not we ultimately identify any candidates.  Our research programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development.

If we are unable to develop suitable potential product candidates through internal research programs or by obtaining rights to novel therapeutics from third parties, our business and prospects will suffer.

Our focus on drug discovery and development using our technology platform, including our patented proprietary OPopS drug discovery platform, is novel and unique.  As a result, we cannot be certain that our product candidates will produce commercially viable drugs that safely and effectively treat infectious diseases or other diseases.  To date, our technology platform has yielded only a small number of anti-infective product candidates.  In addition, we do not have significant clinical data with respect to any of these potential product candidates.  Even if we or our collaborators are successful in completing clinical development and receiving regulatory approval for one commercially viable drug for the treatment of one disease using our technology

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platform and carbohydrate chemistry focus, we cannot be certain that we or our collaborators will also be able to develop and receive regulatory approval for other drug candidates for the treatment of other forms of that disease or other diseases.  If we fail to develop and commercialize, independently and/or through collaborators, viable drugs using our platform and specialized focus, we will not be successful in developing a pipeline of potential product candidates to follow DIFICID and Pruvel, and our business prospects would be significantly harmed.

Our future growth depends on our ability to identify and acquire or in-license products.  If we do not successfully identify and acquire or in-license related product candidates or integrate them into our operations, we may have limited growth opportunities.

We in-licensed the U.S. rights to Pruvel from Nippon Shinyaku who, along with Meiji-Seika Kaisha Ltd., conducted the initial development of this product candidate.  An important part of our business strategy is to continue to develop a pipeline of product candidates by acquiring or in-licensing products, businesses or technologies that we believe are a strategic fit for our business.  Future in-licenses or acquisitions, however, may entail numerous operational and financial risks, including:

·exposure to unknown liabilities;

·disruption of our business and diversion of our management’s time and attention to develop acquired products or technologies;

·incurrence of substantial debt or dilutive issuances of securities to pay for acquisitions;

·higher than expected acquisition and integration costs;

·increased amortization expenses;

·difficulty and cost in combining the operations and personnel of any acquired businesses with our operations and personnel;

·impairment of relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership; and

·inability to retain key employees of any acquired businesses.

We have limited resources to identify and execute the acquisition or in-licensing of third-party products, businesses and technologies and integrate them into our current infrastructure.  In particular, we may compete with larger pharmaceutical companies and other competitors in our efforts to establish new collaborations and in-licensing opportunities.  These competitors likely will have access to greater financial resources than us and may have greater expertise in identifying and evaluating new opportunities.  Moreover, we may devote resources to potential acquisitions or in-licensing opportunities that are never completed, or we may fail to realize the anticipated benefits of such efforts.

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Our ability to pursue the development and commercialization of Pruvel, our other product candidates and our future product candidates depends upon the continuation of our licenses from third parties.

Our license agreement with Nippon Shinyaku provides us with an exclusive license to develop and commercialize Pruvel for any indication in the United States, with a right to sublicense to third parties.  In the event Nippon Shinyaku is not able to supply us with Pruvel, the license agreement provides us with a non-exclusive, worldwide right and license to manufacture or have Pruvel manufactured for us.  Either we or Nippon Shinyaku may terminate the license agreement immediately upon the bankruptcy or dissolution of the other party or upon a breach of any material provision of the agreement if the breach is not cured within 60 days following written notice.  In addition, we are entitled to terminate the agreement in the event that the FDA compels us to cease sales of Pruvel in the United States.  If our license agreement with Nippon Shinyaku terminates, we will lose our rights to develop, manufacture and commercialize Pruvel and our potential revenues would be limited.  Similarly, if our agreement with TSRI, for the license of our OPopS technology is terminated, we will not be able to further develop future product candidates using our OPopS technology, and our third party licensees may be unable to continue development of our existing out-licensed product candidates.

We rely on our majority-owned subsidiary, OBI, for the development of one of our product candidates.

In October 2009, we completed a number of transactions involving our subsidiary, OBI, including the sale of 40% of our ownership interest in OBI to various third party investors.  In connection with these transactions, we assigned to OBI, and OBI assumed from us, our rights and obligations under our license agreement with MSKCC related to our OPT-822/821 product candidate.  We also assigned to OBI certain of our intellectual property and know-how related to this product candidate. In exchange for these assignments, we have the right to receive certain milestone or royalty payments relating to OPT-822/821.

We cannot assure you that OBI will successfully advance the development of OPT-822/821.  In addition, if OBI does not comply with its obligations under the agreement with MSKCC, the agreement may be terminated and we may not be able to re-assume our rights under the agreement.  If the agreement with MSKCC was terminated and we were unable to re-assume our rights, we would not be able to pursue further development of OPT-822/821.  Moreover, the addition of third party investors in OBI has also diminished our ability to control OBI, which is now subject in some respects to the rights of the third party minority stockholders.  In the future, additional equity financings or other issuances of equity securities or securities convertible into equity by OBI may further reduce our ownership position in OBI and we may not maintain a controlling interest in OBI.  To the extent that we do not maintain a controlling equity interest in OBI in the future, we would have to rely on OBI’s contractual obligations, including under our Intellectual Property Assignment and License Agreement, to ensure that OBI continues development of OPT-822/821 and complies with its obligations under the MSKCC agreement.

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Finally, OBI will need additional funds to further develop and commercialize OPT-822/821, and OBI may not be able to secure adequate funding or be able to do so on terms you or we believe are favorable.  If OBI is unable to raise additional funds to continue operations, or otherwise fails to advance the development of OPT-822/821, we will not receive milestone or royalty payments with respect to this product candidate, and the value of our OBI equity position would likely diminish. To the extent we provide funds to OBI through additional equity investments or otherwise, we may need to divert funds away from our other product candidate programs which could adversely affect the development and/or commercialization of those other product candidates.

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates.

We face an inherent risk of product liability lawsuits related to the testing of our product candidates, and will face an even greater risk if product candidates are introduced commercially.  An individual may bring a liability claim against us if one of our product candidates causes, or merely appears to have caused, an injury.  If we cannot successfully defend ourselves against the product liability claim, we may incur substantial liabilities.  Regardless of merit or eventual outcome, liability claims may result in:

·decreased demand for our product candidates;

·injury to our reputation;

·termination of clinical trial sites or entire clinical trial programs;

·withdrawal of clinical trial participants;

·significant litigation costs;

·substantial monetary awards to or costly settlement with patients;

·product recalls;

·loss of revenues; and

·the inability to commercialize our product candidates.

We may become dependent upon consumer perceptions of us and the safety and quality of our product candidates.  We could be adversely affected if we or our product candidates are subject to negative publicity.  We could also be adversely affected if any of our potential products or any similar products distributed by other companies prove to be, or are asserted to be, harmful to consumers.  Also, because of our dependence upon consumer perceptions, any adverse publicity associated with illness or other adverse effects resulting from consumers’ use or misuse of our potential products or any similar products distributed by other companies could have a material adverse impact on our results of operations.

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We have global clinical trial liability insurance that covers our clinical trials up to a $10.0 million annual aggregate limit.  Our current or future insurance coverage may prove insufficient to cover any liability claims brought against us.  We intend to expand our insurance coverage to include the sale of commercial products if marketing approval is obtained for our product candidates, which would increase our insurance premiums.  Because of the increasing costs of insurance coverage, we may not be able to maintain insurance coverage at a reasonable cost or obtain insurance coverage that will be adequate to satisfy any liability that may arise.

Clinical trials involve a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results.

Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain.  Failure can occur at any time during the clinical trial process. The results of pre-clinical studies and early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through pre-clinical studies and initial clinical testing.  In addition, sub-analysis of clinical trial data may reveal limitations of our product candidates even though top-line results are positive.  The type and amount of clinical data necessary to gain regulatory approval for our product candidates may also change during or after completion of our clinical trials or we may inaccurately characterize such requirements. Moreover, we cannot guarantee that the FDA or comparable foreign regulatory authorities will agree with our interpretation of clinical trial data, or find such data sufficient to grant product approval.

Delays in clinical trials are common and have many causes, and any such delays could result in increased costs to us and jeopardize or delay our ability to achieve regulatory approval and commence product sales as currently contemplated.

We have in the past experienced delays in clinical trials of our product candidates and we may experience delays in future clinical trials.  We do not know whether planned clinical trials will begin on time, will need to be redesigned or will be completed on schedule, if at all.  Clinical trials can be delayed for a variety of reasons, including delays in obtaining regulatory approval to commence a trial, in reaching agreement on acceptable terms with prospective clinical research organizations, or CROs, and clinical trial sites, in obtaining institutional review board approval at each site, in recruiting suitable patients to participate in a trial, in having patients complete a trial or return for post-treatment follow-up, in adding new sites or in obtaining sufficient supplies of clinical trial materials.  Many factors affect patient enrollment, including the size and nature of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, competing clinical trials, clinicians’ and patients’ perceptions as to the potential advantages of the drug being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating and whether the clinical trial design involves comparison to placebo.

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We could encounter delays if prescribing physicians encounter unresolved ethical issues associated with enrolling patients in clinical trials of our product candidates in lieu of prescribing existing antibiotics that have established safety and efficacy profiles or with administering placebo to patients in our placebo-controlled trials.  Further, a clinical trial may be suspended or terminated by us, our collaborators, the FDA or other regulatory authorities due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.  If we experience delays in the completion of, or termination of, any clinical trial of our product candidates, the commercial prospects of our product candidates may be harmed, and our ability to generate product revenues from any of these product candidates will be delayed.  In addition, any delays in completing our clinical trials will increase our costs, slow down our product development and approval process and jeopardize our ability to commence product sales and generate revenues.  Any of these occurrences may significantly harm our business, financial condition and prospects.

We may be required to suspend or discontinue clinical trials due to adverse events, adverse side effects or other safety risks that could preclude approval of our product candidates or negatively affect sales of any marketed product.*

Our clinical trials may be suspended at any time for a number of reasons.  We may voluntarily suspend or terminate our clinical trials if at any time we believe that they present an unacceptable risk to participants.  For example, in November 2010, due to a higher than expected incidence of cutaneous rash during the course of a study of the possible interaction between Pruvel and antacids, we informed the FDA that we were voluntarily terminating the research study.  In addition, regulatory agencies may order the temporary or permanent discontinuation of our clinical trials at any time if they believe that the clinical trials are not being conducted in accordance with applicable regulatory requirements or that they present an unacceptable safety risk to participants.  In our Phase 3 clinical trials of DIFICID, the most common drug-related side effects reported were nausea, vomiting, constipation, anorexia, headache and dizziness.  Patients treated with Pruvel have experienced drug-related side effects including abdominal pain, diarrhea, nausea, renal toxicities, cardiac arrhythmias, photosensitivity, rash, excessive flushing of the skin and central nervous system effects, such as seizures.  If adverse, drug-related events are encountered or suspected, our trials would be interrupted, delayed or halted and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny approval of our product candidates for any or all targeted indications.  Adverse events encountered in any post-approval studies may also harm our efforts and those of our collaborators to market our product candidates or could result in withdrawal of regulatory approvals.  Even if we believe our product candidates are safe, our data is subject to review by the FDA, which may disagree with our conclusions and delay or deny approval of our product candidates which would significantly harm the commercial prospects of such product candidates.  Moreover, we could be subject to significant liability if any volunteer or patient suffers, or appears to suffer, adverse side effects as a result of participating in our clinical trials.  Any of these occurrences may significantly harm our business and prospects.

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We have relied and in the future may rely on third parties to conduct our clinical trials.  If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we and our collaborators may not be able to obtain regulatory approval for or commercialize our product candidates.

We have in the past entered into agreements with third-party CROs, such as INC Research, to provide monitors for and to manage data for our clinical programs.

We and any CROs conducting clinical trials for our product candidates are required to comply with current good clinical practices, or GCPs, regulations and guidelines enforced by the FDA for all of our products in clinical development.  The FDA enforces GCPs through periodic inspections of trial sponsors, principal investigators and trial sites.  If we or the CROs that conduct clinical trials of our product candidates fail to comply with applicable GCPs, the clinical data generated in the clinical trials may be deemed unreliable and the FDA may require additional clinical trials before approving any marketing applications.  We cannot assure you that, upon inspection, the FDA will determine that any clinical trials of our product candidates comply with GCPs.  In addition, our clinical trials must be conducted with product produced under cGMP regulations, and require a large number of test subjects.  Our failure to comply with these regulations may require us to repeat clinical trials, which would be costly and delay the regulatory approval process and commercialization of our product candidates.

In addition, these third-party CROs are not our employees, and we cannot control whether or not they devote sufficient time and resources to our clinical programs.  These CROs may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical studies or other drug development activities, which could harm our competitive position.  If CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements, or for other reasons, our clinical trials may be extended, delayed or terminated or may have to be repeated, and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates.  As a result, our financial results and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenues could be delayed.

Current healthcare laws and regulations and future legislative or regulatory reforms to the healthcare system may affect our ability to sell our product candidates profitably.*

The U.S. and some foreign jurisdictions are considering or have enacted a number of legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell our products profitably. Among policy makers and payors in the U.S. and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the U.S., the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.

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In March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, or collectively, PPACA, became law in the U.S. PPACA substantially changes the way healthcare is financed by both governmental and private insurers and significantly affects the pharmaceutical industry. Among the provisions of PPACA of greatest importance to the pharmaceutical industry are the following:

·an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs;

·an increase in the rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13% of the average manufacturer price for branded and generic drugs, respectively;

·a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their overage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D;

·extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;

·expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals which began in April 2010 and by adding new mandatory eligibility categories for certain individuals with income at or below 133% of the Federal Poverty Level beginning in 2014, thereby potentially increasing manufacturers’ Medicaid rebate liability;

·expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;

·new requirements to report certain financial arrangements with physicians, including reporting any “transfer of value” made or distributed to prescribers and other healthcare providers, effective March 30, 2013, and reporting any investment interests held by physicians and their immediate family members during the preceding calendar year;

·      a new requirement to annually report drug samples that manufacturers and distributors provide to physicians, effective April 1, 2012;

·a licensure framework for follow-on biologic products; and

·a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.

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We anticipate that the PPACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and an additional downward pressure on the price that we receive for any approved product, and could seriously harm our business. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors.

We also cannot be certain that DIFICID and Pruvel or other current or future drug candidates will successfully be placed on the list of drugs covered by particular health plan formularies, nor can we predict the negotiated price for our drug candidates, which will be determined by market factors. Many states have also created preferred drug lists and include drugs on those lists only when the manufacturers agree to pay a supplemental rebate.  If DIFICID and Pruvel or other current or future drug candidates are not included on these preferred drug lists, physicians may not be inclined to prescribe them to their Medicaid patients, thereby diminishing the potential market for our products.

As a result of the PPACA and the trend towards cost-effectiveness criteria and managed healthcare in the United States, third-party payors are increasingly attempting to contain healthcare costs by limiting both coverage and the level of reimbursement of new drugs.  They may also refuse to provide any coverage of uses of approved products for medical indications other than those for which the FDA has granted market approvals.  As a result, significant uncertainty exists as to whether and how much third-party payors will reimburse for newly-approved drugs, which in turn will put pressure on the pricing of drugs.  Further, we do not have experience in ensuring approval by applicable third-party payors outside of the United States for coverage and reimbursement of our products.  The availability of numerous generic antibiotics at lower prices than branded antibiotics can also be expected to substantially reduce the likelihood of reimbursement for DIFICID and Pruvel.  We also anticipate pricing pressures in connection with the sale of our products due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative proposals.

We must comply with federal and state “fraud and abuse” laws, and, if we are unable to fully comply with such laws, we could face substantial penalties, which may adversely affect our business, financial condition and results of operations.

In the United States, we are also subject to healthcare fraud and abuse regulation and enforcement by both the federal government and the states in which we conduct our business. The laws that may affect our ability to operate include:

·the federal healthcare programs’ Anti-Kickback Law, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs;

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·federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false or fraudulent;

·the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created federal criminal laws that prohibit executing a scheme to defraud any health care benefit program or making false statements relating to health care matters;

·federal “sunshine” laws that require transparency regarding financial arrangements with health care providers, such as the reporting and disclosure requirements imposed by PPACA on drug manufacturers regarding any “transfer of value” made or distributed to prescribers and other health care providers; and

·state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers.

Some states, such as California, Massachusetts and Vermont, mandate implementation of comprehensive compliance programs to ensure compliance with these laws.

The risk of our being found in violation of these laws is increased by the fact that many of them have not been fully interpreted by applicable regulatory authorities or the courts, and their provisions are open to a variety of interpretations.  Moreover, recent healthcare reform legislation has strengthened these laws.  For example, the recently enacted PPACA, among other things, amends the intent requirement of the federal anti-kickback and criminal health care fraud statutes; a person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it.  In addition, PPACA provides that the government may assert that a claim including items or services resulting from a violation of the federal anti-kickback statute constitutes a false or fraudulent claim for purposes of the false claims statutes.  We also expect there will continue to be federal and state laws and/or regulations, proposed and implemented, that could impact our operations and business.  The extent to which future legislation or regulations, if any, relating to healthcare fraud abuse laws and/or enforcement, may be enacted or what effect such legislation or regulation would have on our business remains uncertain. Violations of these laws are punishable by criminal and civil sanctions, including, in some instances, exclusion from participation in federal and state healthcare programs, including Medicare and Medicaid, and the curtailment or restructuring of operations.  We believe that our operations are in material compliance with such laws and we are aware of the need to increase our compliance resources if we begin marketing products.  However, because of the far-reaching nature of these laws, there can be no assurance that we would not be required to alter one or more of our practices to be in compliance with these laws.  In addition, there can be no assurance that the occurrence of one or more violations of these laws or regulations would not result in a material adverse effect on our financial condition and results of operations.

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Our business involves the use of hazardous materials and we and our third-party manufacturers must comply with environmental laws and regulations, which can be expensive and restrict how we do business.

Our third-party manufacturers’ activities and, to a lesser extent, our own activities involve the controlled storage, use and disposal of hazardous materials, including the components of our product candidates and other hazardous compounds.  We and our manufacturers are subject to federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of these hazardous materials.  Although we believe that the safety procedures for handling and disposing of these materials comply with the standards prescribed by these laws and regulations, we cannot eliminate the risk of accidental contamination or injury from these materials.  We currently have insurance coverage in the amount of approximately $250,000 for damage claims arising from contamination on our property.  These amounts may not be sufficient to adequately protect us from liability for damage claims relating to contamination.  If we are subject to liability exceeding our insurance coverage amounts, our business and prospects would be harmed.  In the event of an accident, state or federal authorities may also curtail our use of these materials and interrupt our business operations.

Our business and operations would suffer in the event of computer, telecommunications or other system failure.*

Despite the implementation of security measures, our internal computer systems are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures.  Any system failure, accident or security breach that causes interruptions in our operations could result in a material disruption of our drug development programs.  For example, the loss of clinical trial information from completed or ongoing clinical trials for DIFICID or Pruvel, which is maintained by our third-party CRO, could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.  To the extent that any disruption or security breach results in a loss or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we may incur liability and the further development of our product candidates may be delayed.

Risks Related to Our Intellectual Property

It is difficult and costly to protect our intellectual property and our proprietary technologies, and we may not be able to ensure their protection.*

Our commercial success will depend in part on obtaining and maintaining patent protection and trade secret protection of the use, formulation and structure of our product candidates, and the methods used to manufacture them, as well as successfully defending these patents against third-party challenges, including those from generic drug manufacturers.  Our ability to protect our product candidates from unauthorized making, using, selling, offering to sell or importing by third parties is dependent upon the extent to which we have rights under valid and enforceable patents or trade secrets that cover these activities.

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The patent positions of pharmaceutical and biotechnology companies can be highly uncertain and involve complex legal and factual questions for which important legal principles remain unresolved.  No consistent policy regarding the breadth of claims allowed in biotechnology patents has emerged to date in the United States.  The biotechnology patent environment outside the United States is even more uncertain.  Changes in either the patent laws or in interpretations of patent laws in the United States and other countries may diminish the value of our intellectual property.  Accordingly, we cannot predict the breadth of claims that may be allowed or enforced in our licensed patents, our patents or in third-party patents.

The degree of future protection for our proprietary rights is uncertain, because legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep our competitive advantage.  For example:

·others may be able to make compounds that are similar to our product candidates but that are not covered by the claims of our issued patents and pending patent applications or licensed patents and pending patent applications, or for which we are not licensed under our license agreements;

·others may be able to make competing pharmaceutical formulations containing our product candidates or components of our product formulations that are either not covered by the claims of our issued patents or licensed patents, not licensed to us under our license agreements or are subject to patents that expire;

·we or our licensors might not have been the first to make the inventions covered by our issued patents and pending patent applications or the pending patent applications and issued patents of our licensors;

·we or our licensors might not have been the first to file patent applications for these inventions;

·others may independently develop similar or alternative technologies or duplicate any of our technologies;

·it is possible that our pending patent applications or our licensed patent applications will not result in issued patents;

·our issued patents and pending patent applications or the pending patent applications and issued patents of our licensors may not provide us with any competitive advantages, may be designed around by our competitors, including generic drug companies, or may be held invalid or unenforceable as a result of legal challenges by third parties;

·we may not develop additional proprietary technologies that are patentable; or

·the patents of others may have an adverse effect on our business.

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In addition, to the extent we are unable to obtain and maintain patent protection for our product candidates or in the event such patent protection expires, it may no longer be cost effective to extend our portfolio by pursuing additional development of a product candidate for follow-on indications.

We have four issued patents and ten pending patent applications related to DIFICID in the U.S.  We also have six issued foreign patents related to DIFICID.

The patent and patent applications related to DIFICID encompass various topics relating to:

·composition of matter;

·pharmaceutical composition and methods of use;

·polymorphic forms and pharmaceutical compositions thereof;

·manufacturing processes;

·treatment of diseases;

·formulation;

·selected indications in CDI patients; and

·primary metabolites.

If we are unable to obtain sufficient patent protection encompassing DIFICID, our competitors, including generic drug companies, may be able to design other similar formulations of the active ingredient of DIFICID.  Furthermore, even though the manufacturing process patent has issued, and even if the formulation patent application results in an issued patent, our competitors, including generic drug companies, may be able to design around our manufacturing processes or formulation for DIFICID.  As a result, our competitors may be able to develop competing products without infringing our patents.

We plan to evaluate our commercialization options for Pruvel which we expect would be marketed to high-prescribing physicians of antibiotics for infectious diarrhea.  The primary patent covering Pruvel expired in February 2009.  In 2009, our licensor, Nippon Shinyaku, received an additional patent in the U.S. which relates to a key intermediate in the manufacturing process for Pruvel.  Despite its issuance, this patent may later be challenged by a third party or fail to prevent a third party from producing and marketing a generic form of Pruvel in the United States.   If the available protection afforded by this patent is insufficient, we will likely rely on one or more regulatory marketing exclusivities for Pruvel in the United States.  Specifically, if an NDA for Pruvel is approved, we expect to receive a five-year period of marketing exclusivity under the Hatch-Waxman Act. This exclusivity period is available to the first applicant to gain approval of an NDA for a new chemical entity, or NCE, that has not previously been approved as an active ingredient under Section 505(b) of the Food Drug and Cosmetic Act, or FDCA.  While we expect that the NCE exclusivity period will be available for Pruvel, if the recent patent is insufficient to maintain exclusivity in the United States with respect to Pruvel, we may face generic competition in the United States five years after our NDA for Pruvel is approved by the FDA. If we are unable to obtain marketing exclusivity beyond five years from the approval of our NDA, our potential revenues from Pruvel sales in the U.S. will be limited.

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We depend, in part, on our licensors and collaborators to protect a portion of our proprietary rights.  In such cases, our licensors and collaborators may be primarily or wholly responsible for the maintenance of patents and prosecution of patent applications relating to important areas of our business.  For example, Nippon Shinyaku is responsible for the maintenance of patents and prosecution of patent applications relating to Pruvel.  We may also be dependent on Par to provide technical support for patent applications relating to DIFICID.  If any of these parties fail to adequately protect these product candidates with issued patents, our business and prospects would be significantly harmed.

Under our agreement with Nippon Shinyaku, in the event Nippon Shinyaku fails to take all steps necessary to seek extension of the patents licensed to us in the United States 180 days after we request such action be taken, then we have the right to take all necessary actions to extend the licensed patents.  Our agreement with Par does not have explicit provisions regarding our rights to take necessary action with respect to maintenance of patents and prosecution of patent applications nor do such agreements provide us with any legal recourse in the event such parties do not so maintain and/or prosecute.  If any of these parties or others on which we rely for patent maintenance and prosecution fail to adequately maintain patents and prosecute patent applications relating to technology licensed to or from us, we may be required to take further action on our own to protect this technology.  However, we may not be successful in maintaining such patents or prosecuting such patent applications and if so, our business and prospects would be significantly harmed.

We also rely on trade secrets to protect our technology, especially where we do not believe patent protection is appropriate or obtainable.  However, trade secrets are difficult to protect.  Although we use reasonable efforts to protect our trade secrets, our employees, consultants, contractors, outside scientific collaborators and other advisors may unintentionally or willfully disclose our information to competitors.  Enforcing a claim that a third-party entity illegally obtained and is using any of our trade secrets is expensive and time consuming, and the outcome is unpredictable.  In addition, courts outside the United States are sometimes less willing to protect trade secrets.  Moreover, our competitors may independently develop equivalent knowledge, methods and know-how.

If we or our licensors fail to obtain or maintain patent protection or trade secret protection for our product candidates or our technologies, third parties could use our proprietary information, which could impair our ability to compete in the market and adversely affect our ability to generate revenues and attain profitability.

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We may incur substantial costs as a result of litigation or other proceedings relating to our patent, trademark and other intellectual property rights, and we may be unable to protect our rights to, or use, our technology.

If we or, as applicable, our commercialization partners, including Astellas pursuant to its first right to enforce the patents licensed to it in the Astellas territory, choose to go to court to stop someone else from using our inventions, that individual or company has the right to ask the court to rule that the underlying patents are invalid and/or should not be enforced against that third party.  These lawsuits are expensive and would consume time and other resources even if we or our commercialization partner were successful in stopping the infringement of these patents.  There is also the risk that, even if the validity of these patents is upheld, the court will refuse to stop the other party on the ground that such other party’s activities do not infringe our rights to these patents.

Furthermore, a third party may claim that we or our manufacturing or commercialization partners are using inventions covered by the third party’s patent rights and may go to court to stop us from engaging in our normal operations and activities, including making, using or selling our product candidates.  These lawsuits are costly and could affect our results of operations and divert the attention of managerial and technical personnel.  There is a risk that a court would decide that we or our commercialization partners are infringing the third party’s patents and would order us or our partners to stop the activities covered by the patents.  In addition, there is a risk that a court will order us or our partners to pay the other party damages for having violated the other party’s patents.  We have indemnified our commercialization partners, including Astellas, against patent infringement claims and thus would be responsible for any of their costs associated with such claims and actions.  The biotechnology industry has produced a proliferation of patents, and it is not always clear to industry participants, including us, which patents cover various types of products or methods of use.  The coverage of patents is subject to interpretation by the courts and the interpretation is not always uniform.  If we are sued for patent infringement, we would need to demonstrate that our products or methods of use either do not infringe the patent claims of the relevant patent and/or that the patent claims are invalid, and we may not be able to do this.  Proving invalidity, in particular, is difficult since it requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents.

Although we have conducted searches of third-party patents with respect to DIFICID and Pruvel, these searches may not have identified all third-party patents relevant to those products and we have not conducted an extensive search of patents issued to third parties with respect to our other product candidates.  Consequently, no assurance can be given that third-party patents containing claims covering our products, technology or methods do not exist, have not been filed, or could not be filed or issued.  Because of the number of patents issued and patent applications filed in our technical areas or fields, we believe there is a risk that third parties may allege they have patent rights encompassing our products, technology or methods.  In addition, we have not conducted an extensive search of third-party trademarks, so no assurance can be given that such third-party trademarks do not exist, have not been filed, could not be filed or issued, or could not exist under common trademark law.  While we have filed a trademark application for the names “Optimer”, “Optimer Pharmaceuticals” and “Pruvel”, we are aware that the name “Optimer” has been registered as a trademark with the U.S. PTO by more than one third party, including one in the biotechnology space.  As such, we believe there is a significant risk that third parties may allege they have trademark rights encompassing the names for which we have applied for protection.

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Because some patent applications in the United States may be maintained in secrecy until the patents are issued, because patent applications in the United States and many foreign jurisdictions are typically not published until eighteen months after filing, and because publications in the scientific literature often lag behind actual discoveries, we cannot be certain that others have not filed patent applications for technology covered by our licensors’ issued patents or our pending applications or our licensors’ pending applications, or that we or our licensors were the first to invent the technology.  Our competitors may have filed, and may in the future file, patent applications covering technology similar to ours.  Any such patent application may have priority over our or our licensors’ patent applications and could further require us to obtain rights to issued patents covering such technologies.  If another party has filed a U.S. patent application on inventions similar to ours, we may have to participate in an interference proceeding declared by the U.S. PTO to determine priority of invention in the United States.  The costs of these proceedings could be substantial, and it is possible that such efforts would be unsuccessful, resulting in a loss of our U.S. patent position with respect to such inventions.

Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources.  In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations.

Risks Related to the Securities Market and Ownership of Our Common Stock

The market price of our common stock may be highly volatile.*

Before our initial public offering in February 2007, there was no public market for our common stock.  We cannot assure you that an active trading market will exist for our common stock. You may not be able to sell your shares quickly or at the market price if trading in our common stock is not active.

The trading price of our common stock is likely to be highly volatile and could be subject to wide fluctuations in price in response to various factors, many of which are beyond our control, including:

·general economic and market conditions and other factors that may be unrelated to our operating performance or the operating performance of our competitors;

·announcement of FDA or comparable foreign regulatory agency approval or non-approval of our or our competitors’ product candidates, or specific label indications for their use, or delays in the FDA or comparable foreign regulatory agency review process;

·actions taken by the FDA or other regulatory agencies with respect to our product candidates, clinical trials, manufacturing process or marketing and sales activities;

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·any adverse development or perceived adverse development with respect to the FDA’s review of our NDA for DIFICID or the EMA’s review of our MAA for DIFICID, including a request for additional information;

·any delays in the FDA’s review of our NDA for DIFICID, including the FDA’s inability to complete its review by the PDUFA goal date of May 30, 2011;

·developments our ability to submit an NDA for Pruvel to the FDA, including as a result of our pending investigation of the safety of Pruvel;

·changes in laws or regulations applicable to our products, including but not limited to clinical trial requirements for approvals;

·the success of our development efforts and clinical trials, particularly with respect to DIFICID and Pruvel;

·announcements by our collaborators with respect to clinical trial results, regulatory submissions and communications from the FDA or comparable foreign regulatory agencies;

·the success of our efforts to acquire or in-license additional products or product candidates;

·developments concerning our collaborations and partnerships, including but not limited to those with our sources of manufacturing supply and our development and commercialization partners;

·our dependence on our collaborators, such as Astellas, to commercialize and further develop our products in foreign countries in compliance with foreign regulatory schemes;

·our failure to successfully execute our commercialization strategy with respect to our products following marketing approval thereof;

·the success of our continuing efforts to establish and build marketing and sales capabilities;

·inability to obtain adequate commercial supply for any product following marketing approval thereof, or inability to do so at acceptable prices;

·actual or anticipated variations in our quarterly operating results;

·announcements of technological innovations by us, our collaborators or our competitors;

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·new products or services introduced or announced by us or our commercialization partners, or our competitors and the timing of these introductions or announcements;

·the development of generic product alternatives to our or our competitors’ products;

·third-party coverage or reimbursement policies;

·actual or anticipated changes in earnings estimates or recommendations by securities analysts;

·conditions or trends in the biotechnology and biopharmaceutical industries;

·announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

·changes in the market valuations of similar companies;

·sales of common stock or other securities by us or our stockholders in the future;

·additions or departures of key scientific or management personnel;

·our ability to successfully integrate our new executive personnel into our organization;

·difficulties associated with the expansion of our domestic operations into a bicoastal organization;

·disputes or other developments relating to intellectual property, proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; and

·trading volume of our common stock.

In addition, the stock market in general and the market for biotechnology and biopharmaceutical companies in particular have experienced extreme price and volume fluctuations that have often been unrelated and/or disproportionate to the operating performance of those companies.  These broad market and industry factors may significantly harm the market price of our common stock, regardless of our operating performance.  In the past, following periods of volatility in the market, securities class-action litigation has often been instituted against companies.  Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention and resources, which could significantly harm our business, financial condition and prospects.

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Future sales of our common stock in the public market could cause our stock price to decline.

Persons who were our stockholders prior to our initial public offering continue to hold a substantial number of shares of our common stock. Many of these stockholders are able to sell their shares in the public market. Significant portions of these shares are held by a small number of stockholders. Sales by such stockholders of a substantial number of shares, or the expectation that such sales may occur, could significantly reduce the market price of our common stock.  Moreover, the holders of a substantial number of shares of our common stock have rights, subject to certain conditions, to require us to file registration statements to permit the resale of their shares in the public market or to include their shares in registration statements that we may file for ourselves or other stockholders.

We have also registered all common stock that we have issued under our employee benefits plans. As a result, these shares can be freely sold in the public market upon issuance, subject to any applicable restrictions under the securities laws. In addition, our directors and executive officers may in the future establish programmed selling plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, for the purpose of effecting sales of our common stock. If any of these events cause a large number of our shares to be sold in the public market, the sales could reduce the trading price of our common stock and impede our ability to raise future capital.

We will continue to incur significant costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.

As a public company, we will continue to incur significant legal, accounting and other expenses.  In addition, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, as well as rules subsequently implemented by the Securities and Exchange Commission, or SEC, and the Nasdaq Stock Market, or Nasdaq, impose various requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices.  Our management and other personnel need to devote a substantial amount of time to these compliance initiatives.  Moreover, these rules and regulations result in increased legal and financial compliance costs and will make some activities more time-consuming and costly.  For example, these rules and regulations make it more difficult and more expensive for us to maintain director and officer liability insurance, and we may be required to incur substantial costs in the future to maintain the same or similar coverage.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal controls for financial reporting and disclosure controls and procedures. We are required to perform an evaluation of our internal controls over financial reporting to allow management to report on the effectiveness of those controls, as required by Section 404 of the Sarbanes-Oxley Act. Additionally, our independent auditors were required to perform a similar evaluation and report on the effectiveness of our internal controls over financial reporting. At December 31, 2010, management and our independent auditors did not identify any material weaknesses in our internal controls over financial reporting. Our efforts to comply with Section 404 and related regulations have required, and continue to require, the commitment of significant financial and

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managerial resources. While we anticipate maintaining the integrity of our internal controls over financial reporting and all other aspects of Section 404, we cannot be certain that a material weakness will not be identified when we test the effectiveness of our control systems in the future. If a material weakness is identified, we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities, which would require additional financial and management resources, costly litigation or a loss of public confidence in our internal controls, which could have an adverse effect on the market price of our stock.

Some provisions of our charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders and may prevent attempts by our stockholders to replace or remove our current management.

Provisions in our amended and restated certificate of incorporation and bylaws, as well as provisions of Delaware law, could make it more difficult for a third party to acquire us, even if doing so would benefit our stockholders, or remove our current management.  These provisions include:

·a board of directors divided into three classes serving staggered three-year terms, such that not all members of the board will be elected at one time;

·authorizing the issuance of “blank check” preferred stock, the terms of which may be established and shares of which may be issued without stockholder approval;

·limiting the removal of directors by the stockholders;

·prohibiting stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of our stockholders;

·eliminating the ability of stockholders to call a special meeting of stockholders; and

·establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at stockholder meetings.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management.  In addition, we are subject to Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with a stockholder owning 15% or more of our outstanding voting stock for a period of three years following the date on which the stockholder became an interested stockholder, unless such transactions are approved by our board of directors.  This provision could have the effect of delaying or preventing a change of control, whether or not it is desired by or beneficial to our stockholders.  Such a delay or prevention of a change of control transaction could cause the market price of our stock to decline.

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Item 6.  Exhibits

Exhibit No.		Description of Document
3.1	(2)	Certificate of Incorporation of Optimer Pharmaceuticals, Inc., as amended and restated.
3.2	(4)	Bylaws of Optimer Pharmaceuticals, Inc., as amended.
4.1	(3)	Common Stock Certificate of Optimer Pharmaceuticals, Inc.
4.2	(1)	Investors’ Rights Agreement by and among Optimer Pharmaceuticals, Inc. and certain stockholders of Optimer Pharmaceuticals, Inc. dated November 30, 2005, as amended and restated.
4.3	(5)	Registration Rights Agreement, dated October 23, 2007, by and between Optimer Pharmaceuticals, Inc. and the purchasers listed on the signature pages thereto.
4.4	(6)	Form of Warrant to Purchase Common Stock.
10.1	(7)	2006 Equity Incentive Plan of Optimer Pharmaceuticals, Inc., as amended.
10.2	*	Collaboration and License Agreement between Optimer Pharmaceuticals, Inc. and Astellas Pharma Europe Ltd. dated February 2, 2011.
10.3	*	Supply Agreement between Optimer Pharmaceuticals, Inc. and Astellas Pharma Europe Ltd. dated February 2, 2011.
10.4	(8)	First Amendment to Financing Agreement between Optimer Pharmaceuticals, Inc., Optimer Biotechnology, Inc. and certain investors named therein, dated February 28, 2011.
10.5	(9)	Summary of Optimer Pharmaceuticals, Inc. 2011 Incentive Compensation Plan.
31.1		Certification of principal executive officer required by Rule 13a-14(a) or Rule 15d-14(a).
31.2		Certification of principal financial officer required by Rule 13a-14(a) or Rule 15d-14(a).
32		Certification by the Chief Executive Officer and the Chief Financial Officer of the Registrant, as required by Rule 13a-14(b) or 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350).

*	Confidential treatment has been requested with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission.
(1)	Filed with Registrant’s Registration Statement on Form S-1 November 9, 2006.
(2)	Filed with Registrant’s Amendment No. 3 to Registration Statement on Form S-1 January 22, 2007.
(3)	Filed with Registrant’s Amendment No. 4 to Registration Statement on Form S-1 February 5, 2007.
(4)	Filed with Registrant’s Current Report on Form 8-K on September 18, 2007.
(5)	Filed with Registrant’s Current Report on Form 8-K on October 29, 2007.
(6)	Filed with Registrant’s Current Report on Form 8-K on March 5, 2009.
(7)	Filed with Registrant’s Current Report on Form 8-K on March 25, 2011.
(8)	Filed with Registrant’s Current Report on Form 8-K on March 2, 2011.
(9)	Filed with Registrant’s Current Report on Form 8-K on April 29, 2011.

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SIGNATURE

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.

	OPTIMER PHARMACEUTICALS, INC.
Dated: May 5, 2011	By:	/s/ John D. Prunty
	Name:	John D. Prunty
	Title:	Chief Financial Officer
		(Duly Authorized Officer and Principal Financial and Accounting Officer)

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EX-10.2

Exhibit 10.2

***Text Omitted and Filed Separately with the Securities and Exchange Commission.

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

EXECUTION COPY

COLLABORATION AND LICENSE AGREEMENT

This COLLABORATION AND LICENSE AGREEMENT (“Agreement”) is entered into as of the 2nd day of February, 2011 (the “Effective Date”) between OPTIMER PHARMACEUTICALS, INC., a company organized under the laws of the State of Delaware (“Optimer”), having a principal place of business at 10110 Sorrento Valley Rd., Suite C, San Diego, California 92121, and ASTELLAS PHARMA EUROPE LTD, a company organized under the laws of England  (“Partner”), having a principal place of business at Lovett House, Lovett Road, Staines, Middlesex, TW18 3AZ, United Kingdom.

WHEREAS

WHEREAS, Optimer is developing fidaxomicin for the treatment of Clostridium difficile infection and owns or controls certain patents, know-how and other intellectual property relating to fidaxomicin;

WHEREAS, Partner is engaged in the research, development and commercialization of pharmaceutical products; and

WHEREAS, Partner desires to obtain from Optimer, and Optimer desires to grant to Partner, certain exclusive rights and licenses to develop and commercialize Products in the Territory (each as hereinafter defined), subject to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Optimer and Partner hereby agree as follows:

ARTICLE 1

DEFINITIONS

1.1“120 Day Responses” shall have the meaning set forth in Section 4.8(a).

1.2“Acquisition Transaction” shall have the meaning set forth in Section 14.1.

1.3“Affiliate” of a Party shall mean any entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such Party, as the case may be, but for only so long as such control exists.  As used in this Section 1.3 and in Section 1.74, “control” shall mean (a) to possess, directly or indirectly, the power to direct the management or policies of an entity, whether through ownership of voting securities, by contract relating to voting rights or corporate governance; or (b) direct or indirect beneficial ownership of more than fifty percent (50%) (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) of the voting share capital or other equity interest in such entity.

1.4“Alliance Manager” shall have the meaning set forth in Section 3.4.

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1.5“Applicable Laws” shall mean the applicable provisions of any and all national, supranational, regional, state and local laws, treaties, statutes, rules, regulations, administrative codes, guidance, ordinances, judgments, decrees, directives, injunctions, orders, permits (including Regulatory Approvals) of or from any court, arbitrator, Regulatory Authority or governmental agency or authority having jurisdiction over or related to the subject item.

1.6“Audit Disagreement” shall have the meaning set forth in Section 7.7.

1.7“Bankruptcy Laws” shall have the meaning set forth in Section 12.4.

1.8“Bundled Product” shall mean any pharmaceutical product containing or comprising a Compound as the sole active pharmaceutical ingredient sold together with another pharmaceutical product that does not contain or comprise a Compound for a single price including fixed combinations.

1.9“Business Day” shall mean a day other than a Saturday or Sunday or any public holiday in the United States or England.  For the avoidance of doubt, references in this Agreement to “days” shall mean calendar days.

1.10“Calendar Quarter” shall mean a period of three (3) consecutive months during a Calendar Year beginning on and including January 1st, April 1st, July 1st or October 1st.

1.11“Calendar Year” shall mean a period of twelve (12) consecutive months beginning on and including January 1st.

1.12“CDI” shall mean Clostridium  difficile infection in humans.

1.13“Change of Control Event” shall mean that Optimer (a) completes a transaction in which Optimer merges or consolidates with any other entity (other than a wholly-owned subsidiary of Optimer); or (b) effects any other transaction or series of transactions (other than a listing on a public recognized stock exchange or fund raising from existing or new investors in the ordinary course of business), such that in either case of clause (a) or (b) the stockholders of Optimer immediately prior thereto, in the aggregate, no longer own, directly or indirectly, beneficially or legally, at least fifty percent (50%) of the outstanding voting securities or capital stock of the surviving entity following the closing of such merger, consolidation, other transaction or series of transactions and where in the case of (a) or (b) the acquiring entity is (i) a […***…] or (ii) a […***…].

1.14“cGCP” or “current Good Clinical Practices” shall mean a set of internationally recognized ethical and scientific quality requirements which must be observed for designing, conducting, recording and reporting clinical trials that involve the participation of human subjects as set forth in European Union Commission Clinical Trial Directive 2001/20/EC relating to the implementation of good clinical practice in the conduct of clinical trials on medicinal products for human use, and brought into law by European Commission Directive  GCP

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2005/28/EC laying down the principles and detailed guidelines for good clinical practice as regards investigational medicinal products, as well as the requirements for authorization of the manufacturing and importation of such products and any subsequent modifications or amendments thereto and any laws that apply in the location of performance of the clinical trial.

1.15“cGLP” or “current Good Laboratory Practices” means a set of rules and criteria for the quality system concerned with the organizational process and the conditions under which non-clinical health and environmental safety studies are planned, performed, monitored, recorded, reported and archived, as defined in European Commission Directive 2004/9/EC and 2004/10/EC as amended and any subsequent modifications or amendments thereto and any laws that apply in the location of performance of the laboratory studies.

1.16“cGMP” or “current Good Manufacturing Practices” means all applicable standards relating to manufacturing practices for fine chemicals, active pharmaceutical ingredients, intermediates, bulk products or finished pharmaceutical products, including current good manufacturing practices and standards as provided for (and as amended or superseded from time to time) in:

(a)European Community Directive 2003/94/EC (Principles and guidelines of good manufacturing practice for medicinal products);

(b)21 C.F.R. §§ 210 and 211;

(c)ICH Guidance for Industry Q7 Good Manufacturing Practice Guidance for Active Pharmaceutical Ingredients; and

(d)Part II of Volume IV of the EU Guide to Good Manufacturing Practice.

1.17“CMC” shall mean chemistry, manufacturing and controls.

1.18“Combination Product” shall mean a pharmaceutical product containing or comprising both (a) a Compound and (b) one or more other pharmaceutically active ingredients.

1.19“Commercialization Plan” shall have the meaning provided in Section 5.1(b).

1.20“Commercially Reasonable Efforts” shall mean, with respect to a Product, those efforts and resources normally devoted by a Party or its Affiliates for the development or commercialization of a similarly situated anti-infective pharmaceutical product at a similar stage of development or commercialization, taking into account relative safety and efficacy, product profile, the competitiveness of the marketplace and the market potential of such productthe nature and extent of market exclusivity, including patent coverage and regulatory data protection, and the achievement of an optimum price and reimbursement status of such product as determined on a country-by-country basis.  The level of effort and resources may be different for different markets and may change over time, reflecting changes in the status of the Product and the market(s) involved. In the case of Partner, the fact that a Product is in-licensed, rather than developed internally by Partner or its Affiliates, shall not affect the application of the foregoing standard.

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1.21“Competing Entity” shall have the meaning provided in Section 2.5(c).

1.22“Competitive Product” shall mean, apart from the Existing Product, (a) any product containing a compound, the primary activity of which compound is inhibition of RNA polymerase, which compound is being developed for, or has received Regulatory Approval for, CDI and (b) any product containing a Compound.

1.23“Compound”  shall mean [...***...] or any salt, hydrate, solvate, polymorph, stereo-isomer, ester, chelate, clathrate, acid, base, epimer, enantiomer, crystalline form, metabolite or prodrug or any other non-covalent derivative or crystalline form thereof.

1.24“Confidential Information” shall have the meaning set forth in Section 8.1.

1.25“Confidentiality Agreement” shall mean that certain agreement dated 7 January 2009 between Optimer and Partner.

1.26“Control” (including any variations such as “Controlled” and “Controlling”) shall mean with respect to any Information, Patent or other intellectual property rights, possession by a Party of the ability (whether by ownership or license, other than pursuant to this Agreement) to grant the applicable license under this Agreement, without violating the terms of an agreement with a Third Party.

1.27“CRO” shall have the meaning set forth in Section 4.8(a).

1.28“CRO Agreement” shall have the meaning set forth in Section 4.8(a).

1.29“Data” shall mean any and all scientific, technical or test data pertaining to Product(s) (provided, that if any such scientific, technical and/or test data pertains to Product(s) and something other than Product(s), then only such scientific, technical and test data that pertains to Product(s) and not to something else) that is generated by or under the authority of Partner or its Sublicensees or by or under the authority of Optimer or Optimer Current Affiliates at any time before or after the Effective Date or by or under the authority of any Third Party licensee of Optimer outside the Territory after the Effective Date, including research data, clinical pharmacology data, CMC data (including analytical and quality control data and stability data), preclinical data, clinical data and/or all submissions made in association with an IND or MAA filed in or outside the Territory with respect to such Product(s), in each case to the extent such data either (a) is Controlled by Optimer on the Effective Date or (b) comes within a Party’s Control during the Term.

1.30“Develop” shall mean to develop (including clinical and non-clinical development), analyze, test and conduct preclinical, clinical and all other regulatory trials for a Compound or Product (but excluding any Post-Marketing Studies of a Product), as well as any and all activities pertaining to new indications, pharmacokinetic studies and all related activities

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including work on new formulations, new methods of treatment and CMC activities including new manufacturing methods.  “Developing” and “Development” shall have correlative meanings.

1.31“Developing Party” shall have the meaning set forth in Section 4.1(d).

1.32“Development Expenses” shall mean the Direct Costs incurred by a Party in accordance with the budget (with such Direct Costs not exceeding the applicable budget by more than [...***...]%) included in the applicable Development Plan for the Product.

1.33“Development Plan” shall have the meaning provided in Section 4.1(a).

1.34“Development Transition Period” shall have the meaning set forth in Section 4.1(b).

1.35“Direct Costs” shall mean the incurred variable costs and fixed costs for Development activities, including (a) costs of services provided by contract research organizations and individuals, consultants and contractors, (b) the efforts of the employees of a Party or its Affiliates in performing its activities under the applicable development plan charged at an FTE Rate, which FTE Rate: (i) shall be agreed upon by the JSC (through the JDC) and specified in the applicable development plan, (ii) shall be specific for the work to be conducted under the applicable development plan, and (iii) may be different for each Party, and (c) any other direct costs including out of pocket external costs.  In determining Direct Costs chargeable under this Agreement, each Party will use its respective project accounting systems consistent with GAAP, and will review its respective project accounting methodologies with the other Party upon the other Party’s reasonable request.

For the purpose of this definition, the following definitions shall apply and all cost determinations shall be made in accordance with GAAP:

(i)“variable costs” shall be deemed to be Third Party costs, the cost of labor, raw materials, supplies and other resources directly consumed in the Development of the Product, including the transfer price for clinical supplies of Product; and

(ii)“fixed costs” shall be deemed to be the costs of facilities, utilities, insurance, facility and equipment depreciation and other fixed costs allocable on a reasonable basis to the Development of the Product.

1.36“Disclosing Party” shall have the meaning set forth in Section 8.1.

1.37“Document” shall have the meaning set forth in Section 4.8(d)(iii).

1.38“Dominating Patent Rights” shall have the meaning set forth in Section 6.3(d).

1.39“Effective Date” shall mean the date at the head of this Agreement.

1.40“EMA” shall mean the European Medicines Agency and any successor thereto.

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1.41“Excluded Claim” shall have the meaning set forth in Section 13.3(f).

1.42“Executives” shall have the meaning provided in Section 3.1(d).

1.43“Existing MAA” means the MAA with number EMEA/H/C/002087 filed on behalf of Optimer with the EMA.

1.44“Existing Product” shall mean that certain pharmaceutical product containing or comprising a Compound as the sole active pharmaceutical ingredient that is the subject of the Existing MAA.

1.45“Field” shall mean the diagnosis, prevention and treatment of any disease or condition in humans, including CDI.

1.46“First Commercial Sale” shall mean, on a country-by-country basis and Product-by-Product basis, the first bona fide, arm’s length sale of a Product in a country following receipt of Regulatory Approval of such Product in such country.  Sales of a Product for registration samples, compassionate use sales, named patient use and inter-company transfers to Affiliates of a Party will not constitute a First Commercial Sale.

1.47“Floor” shall have the meaning set forth in Section 6.3(d).

1.48“[...***...]” shall have the meaning set forth in Section [...***...].

1.49“GAAP” shall mean generally accepted accounting principles in the United States, or internationally, as appropriate, consistently applied and shall mean the international financial reporting standards (“IFRS”) at such time as IFRS becomes the generally accepted accounting standard and applicable laws require that a Party use IFRS.

1.50“Generic Entry” shall have the meaning set forth in Section 6.3(e).

1.51“Generic Product” shall mean any product that is introduced in the applicable country by an entity other than Partner or its Affiliate or Sublicensee (but excluding any product that is introduced by or on behalf of Optimer or its Affiliate or any of their respective licensees in the exercise by Optimer of its right pursuant to Section 5.1(d) to convert to non-exclusive the license and sublicense granted under Section 2.1), which contains [...***...] as contained in  a Product sold by Partner or its Sublicensee [...***...].

1.52“IND” shall mean any Investigational New Drug application, as defined in Title 21 of the Code of Federal Regulations, on file with the FDA before the commencement of clinical trials of the applicable Product in humans, or any comparable filing with any relevant Regulatory Authorities in any country or jurisdiction in the Territory.

1.53“Indemnitee” shall have the meaning set forth in Section 11.3.

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1.54“Indemnitor” shall have the meaning set forth in Section 11.3.

1.55“Information” shall mean information, ideas, inventions, discoveries, concepts, formulas, practices, procedures, processes, methods, knowledge, know-how, trade secrets, technology, inventories, machines, techniques, development, designs, drawings, computer programs, skill, experience, documents, apparatus, results, clinical and regulatory strategies, documentation, information and submissions pertaining to, or made in association with, filings with any Regulatory Authority, data, including pharmacological, toxicological and clinical data, analytical and quality control data, manufacturing data and descriptions, patent and legal data, market data, financial data or descriptions, devices, assays, chemical formulations, specifications, material, compositions of matter, product samples and other samples, physical, chemical and biological materials and compounds, and the like, in written, electronic or other form, now known or hereafter developed, whether or not patentable.

1.56“Inventions” shall mean any discovery or invention, whether or not patentable, made by employees, agents or independent contractors of either Party or both Parties or their respective Affiliates during the course of the performance of activities pursuant to this Agreement during the Term, together with all intellectual property rights relating thereto.

1.57“JDC” shall have the meaning set forth in Section 3.2(a).

1.58“Joint Patents” shall have the meaning set forth in Section 9.4(b).

1.59“Joint Steering Committee” or “JSC” shall have the meaning set forth in Section 3.1.

1.60“Joint Transition Plan” shall have the meaning set forth in Section 4.1(b).

1.61“Launch” shall mean First Commercial Sale.

1.62“LCIA” shall mean the London Court of International Arbitration.

1.63“[...***...]” shall have the meaning set forth in Section [...***...].

1.64“Letter Agreement” shall mean that certain letter agreement of even date herewith by and between Optimer and Partner and all Exhibits thereto.

1.65“Licensed Know-How” shall mean Information (including Data) that Optimer or any Optimer Current Affiliate Controls as of the Effective Date or during the Term, which Information is necessary or useful to Develop, use, offer for sale, sell, and import Products (including any Compound contained therein) in the Field in the Territory, including any replication or any part of such Information.  For purposes of clarification, “Licensed Know-How” shall include all OPT-80 Data (as defined in the PAR Agreement) Controlled by Optimer.

1.66“Licensed Patents” shall mean all Patents that Optimer or any Optimer Current Affiliate Controls as of the Effective Date or during the Term, which Patents are necessary or useful to Develop, use, offer for sale, sell, and import Products (including any Compound

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contained therein) in the Field in the Territory including but not limited to those Patents set out in EXHIBIT A.

1.67“Licensed Technology” shall mean the Licensed Know-How and Licensed Patents.

1.68“Losses” shall have the meaning set forth in Section 11.1.

1.69“MAA” shall mean a marketing authorization application or equivalent application, and all amendments and supplements thereto, filed with the applicable Regulatory Authority in a country or jurisdiction in the Territory (including any supra-national agency such as the EMA in the European Union).

1.70“MAA Approval” shall mean, with respect to each country in or outside the Territory for a particular Product, approval by the applicable Regulatory Authority in such country of the MAA for such Product filed in such country and shall include such approval by the EMA.  It is understood that, as used herein, MAA Approval does not include pricing or reimbursement approval.

1.71“[...***...]” shall mean [...***...].

1.72“Materials” shall have the meaning set forth in Section 4.15.

1.73“Net Sales” shall mean, with respect to any Product, the gross amounts invoiced for sales or other dispositions of such Product by or on behalf of Partner or its Sublicensees, as applicable, to Third Parties (other than Sublicensees) less the following deductions to the extent included in the gross invoiced sales price for such Product or otherwise directly paid or incurred by Partner or its Sublicensees, as applicable, with respect to the sale or other disposition of such Product:

(a)normal and customary trade and quantity discounts actually allowed and properly taken directly with respect to sales of such Product (provided that such discounts are not applied disproportionately to such Product when compared to the other products of Partner or its Sublicensee, as applicable);

(b)credits or allowances given or made for rejection of or return of previously sold Products or for retroactive price reductions and billing errors;

(c)rebates and chargeback payments granted to managed health care organizations, pharmacy benefit managers (or equivalents thereof), national, state/provincial, local, and other governments, their agencies and purchasers and reimbursers, or to trade customers;

(d)costs of freight, insurance, and other transportation charges directly related to the distribution of such Product;

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(e)taxes, duties or other governmental charges (including any tax such as a value added or similar tax, other than any taxes based on income) levied on or measured by the billing amount for such Product, as adjusted for rebates and refunds; and

(f)an allowance of up to [...***...] for bad debts consistently applied in accordance with GAAP.

Upon any sale or other disposition of any Product that should be included within Net Sales for any consideration other than exclusively monetary consideration on bona fide arm’s-length terms, then for purposes of calculating Net Sales under this Agreement, such Product shall be deemed to be sold exclusively for money at the average sales price during the applicable reporting period generally achieved for such Product in the country in which such sale or other disposition occurred when such Product is sold alone and not with other products.

In no event will any particular amount, identified above, be deducted more than once in calculating Net Sales.  Sales of a Product between Partner and its Sublicensees for resale shall be excluded from the computation of Net Sales, but the subsequent resale of such Product to a Third Party shall be included within the computation of Net Sales.  Any free-of-charge disposal or use of a Product for development, regulatory or marketing purposes, such as clinical trials, compassionate use or indigent patient programs, shall not be deemed a sale or disposition for purposes of calculating Net Sales.

If any Product is sold as a Bundled Product for a single invoiced amount or if the Parties agree to Develop a Combination Product that is sold for a single invoiced amount (in each case, a “Combination Sale”), the Net Sales amount for the Product sold in such a Combination Sale shall be that portion of the gross amount invoiced for such Combination Sale (less all permitted deductions) determined as follows:

Except as provided below, the Net Sales amount for a Combination Sale shall equal the gross amount invoiced for the Combination Sale, reduced by the permitted deductions (the “Net Combination Sale Amount”), multiplied by the fraction A/(A+B), where:

[...***...]

In the event that the Compound Component included in a Bundled Product or Combination Product (as appropriate) is sold as a separate product in a country, but the Other Component included in such Bundled Product or Combination Product (as appropriate) is not sold separately

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in such country, the calculation of Net Sales resulting from such Combination Sale shall be determined by multiplying the Net Combination Sale Amount by the fraction A/C where:

[...***...]

In the event that the Compound Component included in a Bundled Product or Combination Product (as appropriate) is not sold as a separate product in the country where such Combination Sale occurs, but the Other Component included in such Bundled Product or Combination Product (as appropriate) is sold separately in such country, the calculation of Net Sales resulting from such Combination Sale shall be determined by multiplying the Net Combination Sale Amount by the fraction (C-D)/C, where:

[...***...]

Where the calculation of Net Sales resulting from a Combination Sale in a country cannot be determined by any of the foregoing methods, the calculation of Net Sales for such Combination Sale shall be that portion of the Net Combination Sale Amount reasonably determined in good faith by mutual agreement of the Parties as properly reflecting the relative value of the Compound Component included in the Bundled Product or Combination Product and the value of the Other Component(s) included in the Bundled Product or Combination Product.

1.74“Optimer Current Affiliate” shall mean any entity that is (a) an Affiliate of Optimer as of the Effective Date or (b) any subsidiary that is controlled (as the term is defined in Section 1.3) by Optimer at any time before or after the Effective Date.

1.75“Optimer Indemnitees” shall have the meaning set forth in Section 11.1.

1.76“Oral Product” shall mean the Existing Product or any other pharmaceutical product containing or comprising a Compound as the sole active pharmaceutical ingredient, in oral (including oral suspension) formulation only [...***...].

1.77“[...***...]” shall mean that certain [...***...] and all Exhibits thereto.

1.78“PAR” shall mean Par Pharmaceutical, Inc.

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1.79“PAR Agreement” shall mean that certain Prospective Buy-Back Agreement, dated January 19, 2007, by and between Optimer and PAR, as amended in accordance with its terms.

1.80“PAR Collaboration Agreement” shall mean that certain Collaboration Agreement, dated April 29, 2005, by and between Optimer and PAR, as amended in accordance with its terms.

1.81“PAR Tripartite Agreement” shall have the meaning provided in Section 6.3(b).

1.82“Partner Data” shall mean Data that Partner or any of its Affiliates Controls during the Term, which Data is necessary or useful to make, have made, use, offer for sale, sell, and import Products (including any Compound contained therein) in the Field, including any replication or any part of such Data.

1.83“Partner Patents” shall mean all Patents that Partner or any of its Affiliates Controls during the Term, which Patents (a) are filed in relation to Inventions made by employees, agents or independent contractors of Partner or its Affiliates, and (b) are necessary or useful to make, have made, use, offer for sale, sell, and import Products (including any Compound contained therein) in the Field.

1.84“Partner Technology” shall mean the Partner Data and Partner Patents and, for the purposes of the licenses under Sections 12.3(d)(vi), 12.3(e)(vi) and 12.3(f)(vi), Information (including Data) generated by or on behalf of Partner or any of its Sublicensees in the course of Development, registration, use, sale, offer for sale or import of Products in the Field in the Territory.

1.85“Party” shall mean Optimer or Partner individually, and “Parties” shall mean Optimer and Partner collectively.

1.86“Patent(s)” shall mean (a) all patents, certificates of invention, applications for certificates of invention, priority patent filings and patent applications, and (b) any renewal, division, continuation (in whole or in part), or request for continued examination of any of such patents, certificates of invention and patent applications, and any all patents or certificates of invention issuing thereon, and any and all reissues, reexaminations, extensions, restorations by existing or future extension or restoration mechanisms, divisions, renewals, substitutions, confirmations, registrations, revalidations, revisions, and additions of or to any of the foregoing.

1.87“Post-Marketing Studies” shall have the meaning set forth in Section 4.1(c)(iii).

1.88“Product” shall mean (a) any Oral Products and (b) as agreed by the Parties, any [...***...].  In the event that Partner terminates this Agreement with respect to a given Product, the definition of “Product” as used with respect to such country shall automatically be amended to remove such Product from the definition of “Product” for purposes of this Agreement.

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1.89“RDP Exclusivity” shall mean the period of [...***...] following MAA Approval, as set out in Article 10(1) of EC Directive 2001/83 (or such other period in any country where EC Directive 2001/83 does not apply) during which a Generic Product that references such MAA Approval cannot be placed on the market.

1.90“Receiving Party” shall have the meaning set forth in Section 8.1.

1.91“Regulatory Approval” shall mean any and all approvals (including price and reimbursement approvals, if required), licenses, registrations, or authorizations of Regulatory Authorities in any country that are necessary for the manufacture, use, storage, import, transport and/or sale of a Product in the Field in such country.

1.92“Regulatory Authority” shall mean any national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity whose review and/or approval is necessary for the manufacture, packaging, use, storage, import, export, distribution, promotion, marketing, offer for sale and sale of a Product in the Field, including the EMA.  For countries in the Territory where governmental approval is required for pricing or reimbursement for a Product to be reimbursed by national health insurance (or its local equivalent), “Regulatory Authority” shall also include any national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity whose review and/or approval of pricing or reimbursement is required. “Regulatory Authority” shall also include any organization that provides guidance to health professionals on the use of pharmaceutical products, including but not limited to the National Institute of Clinical Excellence in the United Kingdom.

1.93“Regulatory Filings” shall have the meaning set forth in Section 4.8(b).

1.94“Regulatory Request” shall have the meaning set forth in Section 4.8(c)(iii).

1.95“Representatives” shall have the meaning provided in Section 14.1.

1.96“Royalty Report” shall have the meaning set forth in Section 7.1.

1.97“SEC” shall have the meaning set forth in Section 8.5(a).

1.98“Standstill Period” shall have the meaning set forth in Section 14.1.

1.99“Sublicensee” shall mean an Affiliate of Partner or a Third Party to whom Partner grants a right to Develop, use, offer for sale, sell or import a Product in the Field in the Territory, beyond the mere right to purchase a Product from Partner or its Affiliates, and “Sublicense” shall mean an agreement or arrangement between Partner and a Sublicensee granting such rights.

1.100“Term” shall have the meaning set forth in Section 6.3(e).

1.101“Transfer Date” shall have the meaning set forth in Section 4.8(d).

1.102“Supply Agreement” shall have the meaning set forth in Section 5.2.

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1.103“Territory” shall mean Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Republic of Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, United Kingdom, Turkey, South Africa, Russia, Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Ukraine, Uzbekistan,Middle East (Bahrain, Gaza Strip, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, United Arab Emirates, West Bank (Palestine) and Yemen) and North Africa (Algeria, Egypt, Libya, Morocco and Tunisia).

1.104“Third Party” shall mean any person or entity other than Optimer, Partner and their respective Affiliates.

1.105“Third Party Claims” shall have the meaning set forth in Section 11.1.

1.106“United States” or “U.S.” shall mean the United States of America, including its territories and possessions and the District of Columbia.

1.107“Valid Claim” shall mean (a) an unexpired claim of an issued patent which has not been found to be unpatentable, invalid or unenforceable by a court or other authority in the subject country, from which decision no appeal is taken or can be taken; or (b) a claim of a pending patent application; provided, however, that if a claim of a pending patent application shall not have issued within [...***...] years after the earliest filing date from which such claim takes priority, such claim shall not constitute a Valid Claim for the purposes of this Agreement unless and until a patent issues with such claim.

1.108“Withdrawal Notice” shall have the meaning set forth in Section 3.1(e).

ARTICLE 2

GRANT OF LICENSE

2.1License Grant to Partner.  Subject to the terms and conditions of this Agreement, Optimer hereby grants to Partner an exclusive (even as to Optimer and its Affiliates, but subject to Article 4 as to Development and regulatory activities and subject to the last sentence of this Section 2.1 as to marketing activities), royalty-bearing license and sublicense, with the right to sublicense in accordance with Section 2.2, under the Licensed Technology (except as otherwise expressly provided in Section 4.1(d) with respect to certain Data generated in the Development of Oral Products) and Optimer’s interest in any Joint Patents solely (a) to register (including conducting such clinical trials as may be required to support and maintain such registrations) Products with a Regulatory Authority, and (b) to Develop, use, sell, offer for sale, and import Products, in each case of clauses (a) and (b) in the Field in the Territory during the Term.  The Parties agree that (a) Partner shall have certain rights to engage in marketing-related activities with respect to Products in cooperation with Optimer outside the Territory, for the purpose of promotion of Products by Partner and its Sublicensees in the Field in the Territory, and (b) Optimer shall have certain rights to engage in marketing-related activities with respect to Products in cooperation with Partner in the Territory, for the purpose of promotion of

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Products by Optimer and its Affiliates and licensees outside the Territory, in each case, strictly in accordance with EXHIBIT B.  For clarification, nothing herein or in EXHIBIT B shall give Partner any license or other right to Develop, use, sell, offer for sale, and import Products outside the Territory.

2.2Sublicenses by Partner.

(a)Right to Sublicense.  Subject to Section 2.2(b), Partner shall have the right to sublicense the rights granted to it under Section 2.1 in any country in the Territory.

(b)Sublicense Agreements.  Any Sublicense shall be in writing and, with the exception of the financial terms, on substantially the same terms as this Agreement, except that the Sublicensee shall not have the right to further sublicense, and, to the extent such Sublicense grants a sublicense of the rights licensed to Optimer under the PAR Agreement, shall be consistent with the terms of the PAR Agreement.  Partner shall be responsible for the acts or omissions of its Sublicensees in exercising rights under the Sublicenses which would constitute a breach hereunder.  Within ten (10) days after execution or receipt thereof, as applicable, Partner shall provide Optimer with a full and complete copy of each Sublicense granted (provided that Partner may redact any confidential information contained therein that is not necessary to disclose to ensure compliance with this Agreement).

(c)Partner shall not be required to provide Optimer with copies of agreements relating to contract sales organizations, contract research organizations, contract manufacturing organizations or any consultants relating to the research, Development, regulation and/or commercialization of Products.

2.3License Grant to Optimer.  Subject to Section 2.5(b), Partner hereby grants to Optimer:

(a)An exclusive royalty-free license and sublicense, with the right to sublicense through multiple tiers of sublicenses, under the Partner Technology (except as otherwise expressly provided in Section 4.1(d) with respect to certain Data generated in the Development of Oral Products) and Partner’s interest in any Joint Patents, solely to (1) register (including conducting such clinical trials as may be required to support and maintain such registrations) Products and (2) Develop, make, have made, use, sell, offer for sale, and import products that contain or comprise a Compound, alone or in combination with any other active pharmaceutical ingredient, in any form or formulation, in each case outside the Territory both during and after the Term; and

(b)After termination of this Agreement, the exclusive royalty bearing licenses and sublicenses, with the right to sublicense through multiple tiers of sublicenses, under the Partner Technology and Partner’s interest in any Joint Patents in accordance with Sections 12.3(d)(vi), 12.3(e)(vi) and 12.3(f)(vi) inside the Territory.

2.4No Other Rights; Other Limitations. Except for the rights and licenses expressly granted in this Agreement, Optimer retains all rights under the Licensed Technology

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and its share in the Joint Patents, and Partner retains all rights under the Partner Technology and its share in the Joint Patents, and no rights shall be deemed granted by one Party to the other Party by implication, estoppel or otherwise.  Partner agrees not to practice any Licensed Technology except to Develop, use, sell, offer for sale, and import Products in the Field in the Territory during the Term in accordance with the terms of this Agreement.  Partner further acknowledges that certain rights granted by Optimer to Partner under Section 2.1 with respect to the Licensed Technology were transferred from PAR to Optimer, or licensed by PAR to Optimer, pursuant to the PAR Agreement, and that such rights are granted subject to, and Partner (on behalf of itself and its Sublicensees) agrees to be bound by, all applicable terms and conditions of the PAR Agreement.  Optimer agrees not to practice any Partner Technology except as expressly licensed to Optimer under Section 2.3 (including the sections referenced therein).

2.5Negative Covenant.

(a)Partner agrees, on a country-by-country basis, that it will not, itself or with any of its Affiliates or any Third Party, in any country in the Territory conduct any clinical trials, sales, marketing, promotion or distribution activities in respect of any product containing a compound, the primary activity of which compound is inhibition of RNA polymerase, which compound is being developed for, or has received Regulatory Approval for, CDI, other than Products Developed and commercialized pursuant to the terms and conditions of this Agreement.  The agreement set forth in this Section 2.5(a) will be in effect from the Effective Date until the earlier to occur of (i) [...***...] and (ii) [...***...].

(b)Except through rights granted to Partner or as otherwise provided in any particular development plan under Article 4 of this Agreement, and subject to Section 2.5(c), Optimer agrees, on a country-by-country basis, that it will not itself or with any Optimer Affiliates or any Third Party, in any country in the Territory conduct any clinical trials, sales, marketing, promotion or distribution activities in the Field in respect of a Competitive Product.

(c)In the event that Optimer or any of its Affiliates is absorbed by or acquired by or merges with a Third Party (“Competing Entity”) and such Competing Entity or any of its affiliates is manufacturing, using, marketing, promoting, distributing, offering for sale, commercialising or selling a Competitive Product in the Field in the Territory then Optimer shall [...***...].

The agreement set forth in Sections 2.5(b) and (c) will be in effect in each country in the Territory from the Effective Date until royalties under Section 6.3(e) are no longer payable by Partner in such country.

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ARTICLE 3

GOVERNANCE

3.1Joint Steering Committee.  The Parties will establish a joint steering committee (the “Joint Steering Committee” or “JSC”) to oversee the activities of the Parties pursuant to this Agreement.

(a)Composition.  The JSC will be comprised of three (3) members appointed by Partner and two (2) members appointed by Optimer, which members shall be senior level employees of each Party with decision-making authority.  Each Party will notify the other Party of its initial JSC members within a reasonable amount of time after the Effective Date.  The Parties, through the JSC, may change the number of JSC members.  Each Party may change its JSC members at any time by written notice to the other Party, which may be delivered at a scheduled meeting of the JSC.  Any member of the JSC may designate a substitute to attend and perform the functions of that member at any meeting of the JSC.  The JSC shall appoint one (1) of its members as chairman, whose role shall be to convene and preside at meetings of the JSC, but the chairman shall not be entitled to prevent items from being discussed or to cast any tie-breaking vote.  Each Party may, with the consent of the other Party, such consent not to be unreasonably withheld or delayed, invite non-member, non-voting representatives of such Party to attend meetings of the JSC.

(b)Responsibilities.  The JSC shall be responsible for oversight of the Parties’ activities under this Agreement with respect to development, regulatory approval, manufacturing and commercialization (including marketing and sales) of Products in the Field in the Territory.  Without limiting the foregoing, the JSC shall:

(i)provide a forum for review and discussion of the Commercialization Plan, and for Optimer to provide input with regard to the Commercialization Plan, including with respect to any Post-Marketing Studies of Products in the Field in the Territory;

(ii)provide a forum for Optimer to provide input with regard to the target aggregate Net Sales of Products in the Territory for purposes of Section 5.1(c)(ii);

(iii)periodically review the results of the Development Plan and Commercialization Plan to ensure, to the extent reasonably practical, compliance with obligations under this Agreement;

(iv)review the publication strategy with respect to Products in the Field in the Territory;

(v)review and oversee supply chain strategy and Product manufacturing;

(vi)provide a forum in which Optimer updates Partner and for Partner to provide input with regard to the development, regulatory strategy, and commercialization of

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Products outside the Territory in the Field, including with respect to any Post-Marketing Studies of Products in the Field;

(vii)coordinate the Development of Products in the Territory with Optimer’s and its licensees’ development of Products outside the Territory;

(viii)review protocols for any clinical studies and the regulatory filings, including any MAA filings, for Products in the Territory and outside the Territory;

(ix)facilitate the exchange of Data and/or materials between the Parties;

(x)provide a forum for resolving matters to be decided by any committee or subcommittee formed pursuant to Section 3.2; and

(xi)perform such other duties as are specifically assigned by the Parties to the JSC in this Agreement.

(c)Meetings.  The JSC will hold meetings at such frequency as determined by the JSC members, but no less than once each Calendar Quarter.  Such meetings may be in person, via videoconference, or via teleconference.  The location of in-person JSC meetings will alternate between Optimer’s offices in San Diego, California and Partner’s offices in Staines, UK, unless the Parties otherwise agree.  At least seven (7) days prior to each JSC meeting, each Party shall provide written notice to the other Party of agenda items proposed by such Party for discussion or decision at such meeting, together with appropriate information related thereto.  Reasonably detailed written minutes will be kept of all JSC meetings and will reflect material decisions made at such meetings.  Meeting minutes will be prepared by the Party at whose office such meeting is held and sent to each member of the JSC for review and approval within ten (10) days after the meeting.  Minutes will be deemed approved unless a member of the JSC objects to the accuracy of such minutes within fifteen (15) days of receipt.

(d)Decisions.  The JSC may make decisions with respect to any subject matter that is within the JSC’s decision-making authority.  Subject to this Section 3.1(d), all decisions of the JSC shall be made by unanimous vote, with the representatives of Optimer collectively having one (1) vote and the representatives of Partner collectively having one (1) vote in all such decisions.  If the JSC cannot reach consensus with regard to any matter to be decided by the JSC within ten (10) Business Days after such matter has been brought to the JSC’s attention, then such matter shall be referred to the Chief Executive Officer of Optimer and the Chief Executive Officer  of Partner (the “Executives”) for resolution.  If the Executives cannot resolve the issue within ten (10) Business Days after the matter has been brought to their attention then, subject to good faith consideration of the views of the other Party, (i) Optimer’s Executive shall have the tie-breaking vote on any issue regarding Development of Products (including changes to the Development Plan), but excluding the [...***...] described in Section 4.1(c)(i) and any [...***...] required by any Regulatory Authority in the Territory that are performed by Partner alone at Partner’s expense as described in Section 4.1(c)(ii), and (ii) Partner’s Executive shall have the tie-breaking vote on any issue

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regarding the [...***...] described in Section 4.1(c)(i), any [...***...] required by any Regulatory Authority in the Territory that are performed by Partner alone at Partner’s expense as described in Section 4.1(c)(ii) and on any issue regarding the commercialization of Products in the Territory; provided, that if Optimer provides reasonable evidence that a decision of Partner regarding commercialization of Products in the Territory would have an adverse effect on Optimer’s commercialization of Products outside the Territory, the Parties must promptly meet to discuss in good faith and reach a mutually agreed-upon solution to such issue. For the avoidance of doubt, (a) neither Party shall have a tie-breaking vote in respect of Post-Marketing Studies inside and outside the Territory, the approval procedure for which is set out in Section 4.2 and (b) Optimer cannot exercise its tie-breaking vote to increase Partner’s liability for any expenses relating to Development.

(e)Withdrawal.  At any time during the Term and for any reason, Optimer shall have the right to withdraw from participation in the JSC and all JSC Subcommittees upon written notice to Partner, which notice shall be effective immediately upon receipt (“Withdrawal Notice”).  Following the issuance of a Withdrawal Notice and subject to this Section 3.1(e), Optimer’s representatives to the JSC and all JSC Subcommittees shall not participate in any meetings of the JSC and all JSC Subcommittees, nor shall Optimer have any right to vote on decisions within the authority of the JSC and any JSC Subcommittee.  If, at any time, following the issuance of a Withdrawal Notice, Optimer wishes to resume participation in the JSC and all JSC Subcommittees, Optimer shall notify Partner in writing and, thereafter, Optimer’s representatives to the JSC and JSC Subcommittees shall be entitled to attend any subsequent meeting of the JSC and JSC Subcommittees (as appropriate) and to participate in the activities of, and decision-making by, the committees as provided in this Section 3 as if a Withdrawal Notice had not been issued by Optimer.  Following Optimer’s issuance of a Withdrawal Notice, unless and until Optimer resumes participation in the JSC and JSC Subcommittees in accordance with this Section 3.1(e):  (i) all meetings of the JSC shall be held at Partner’s facilities; (ii) Partner shall have the right to make the final decision on all matters within the scope of authority of the JSC and all JSC Subcommittees;  (iii) Optimer shall have the right to continue to receive the minutes of the JSC meetings, but shall not have the right to approve the minutes for any JSC meeting held after Optimer’s issuance of a Withdrawal Notice; and (iv) Optimer shall provide Partner every three months with  a summary update regarding the matters set out in Sections 3.1(b) (v), (vi) and (vii).  For clarity, if Optimer withdraws and then resumes participation in the JSC, it shall not have any right to retroactively review or modify any decision made by the JSC during Optimer’s withdrawal period.

3.2JSC Subcommittees.

(a)Formation and Purpose. The JSC shall have ultimate responsibility to establish one or more subcommittees from time to time as and when it deems appropriate to oversee specific aspects of the Development, Regulatory Approval and manufacturing of Products, for example a Joint Development Subcommittee (“JDC”) and a Joint Manufacturing Subcommittee.  The JSC subcommittees shall operate by the procedures set forth in Section 3.1 (unless otherwise agreed by the JSC) and shall report directly into the JSC.

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(b)Specific Responsibilities.  The specific responsibilities of each JSC subcommittee will be agreed by the JSC at the time that the relevant subcommittee is established and shall have such decision-making authority delegated to them as the JSC shall determine provided that no subcommittee will have authority to make any decisions:

(i)which would change the responsibilities or decision-making power or procedures of the JSC;

(ii)which change any agreed budget in any Development Plan;

(iii)which would have or would be reasonably expected to have a material impact on a Product; or

(iv)regarding any matter which either Party believes should only be dealt with by the JSC.

3.3Expenses.  Each Party shall bear all its own costs, including expenses incurred by the members nominated by it in connection with their activities as members of the JSC and any subcommittees.

3.4Alliance Managers.  Promptly after the Effective Date, each Party shall appoint an individual to act as the alliance manager for such Party (the “Alliance Manager”).  Each Alliance Manager shall be permitted to attend meetings of the JSC as non-voting participants.  The Alliance Managers shall be the primary contact for the Parties regarding the activities contemplated by this Agreement and shall facilitate all such activities hereunder.  Each Party may replace its Alliance Manager with an alternative representative at any time with prior written notice to the other Party.  Any Alliance Manager may designate a substitute to temporarily perform the functions of that Alliance Manager.  Each Alliance Manager shall be charged with creating and maintaining a collaborative work environment within and among the committees.

3.5Scope of Governance.  Notwithstanding the creation of the JSC or any other committee or subcommittee, each Party shall retain the rights, powers and discretion granted to it hereunder, and neither the JSC nor any other committee or subcommittee shall be delegated or vested with rights, powers or discretion unless such delegation or vesting is expressly provided herein, or the Parties expressly so agree in writing.  Neither the JSC nor any other committee or subcommittee shall have the power to amend or modify this Agreement, and no decision of the JSC or any committee or subcommittee shall be in contravention of any terms and conditions of this Agreement.  It is understood and agreed that issues to be formally decided by the JSC are only those specific issues that are expressly provided in this Agreement to be decided by the JSC or the committee or subcommittee, as applicable. For clarification, in no event shall the JSC have any decision-making authority with respect to matters relating to Products outside the Territory.  It is understood between the Parties that under no circumstances are the activities to be performed by the JSC (or any subcommittee) intended or allowed to violate any Applicable Law (including but not limited to any competition and/or antitrust law).

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3.6Change of Control.  If a Change of Control Event occurs, the Parties will implement procedures with the purpose of protecting Confidential Information of each of the Parties and ensuring that Confidential Information shared through the JSC or JDC will be specific to Products in the Field (and not any other products) and will be used by the Receiving Party and its representatives on the JSC and JDC only as expressly permitted by this Agreement and, without limiting the foregoing, not for the purpose of research, development, manufacture or commercialization of any other products.  It is anticipated that such procedures will include establishment of firewalls within their respective organizations so that access to and use of Confidential Information of the Disclosing Party shared with the Receiving Party through the JSC or JDC is strictly limited to the Receiving Party’s representatives on the JSC and JDC and only such other employees, representatives, consultants and contractors of the Receiving Party and its Affiliates with a need to know such information for purposes of this Agreement, and access to such Confidential Information (including its storage in any computer or electronic information retrieval system) is not available to any other employees, representatives, consultants and contractors of the Receiving Party and its Affiliates. Each Party shall ensure that its representatives on the JSC and JDC and any other employees, representatives, consultants and contractors of such Party and its Affiliates to whom access to such Confidential Information of the other Party shared through the JSC or JDC after will be made aware of its confidential nature and the firewall procedures in place to protect such Confidential Information and shall be contractually bound to comply with them and such Receiving Party shall take such steps as may be reasonably desirable to enforce such obligations.  The Parties will work together to agree to and document such procedures within one hundred and twenty (120) days of the Effective Date.

ARTICLE 4

DEVELOPMENT AND REGULATORY ACTIVITIES

4.1Development of Products.

(a)Development Plan.  The Development of Products in the Field in the Territory shall be governed by a comprehensive development plan.  The initial version of a development plan for the Development of the Existing Product in the Field in the Territory will be prepared by Partner and delivered to Optimer within [...***...] after the requirements of the EMA in respect of the [...***...] and [...***...] have been finalized.  Further, the Parties may agree to collaborate in the [...***...] other than the Existing Product pursuant to Section 4.1(d) and/or [...***...] pursuant to Section 4.1(e), in the Field both inside and outside the Territory, in which case Optimer would prepare, subject to mutual agreement by the Parties, one or more additional comprehensive development plans describing the respective responsibilities of the Parties with respect to such activities.  The development plan for the Development of the Existing Product in the Field in the Territory and any other development plan for the Development of Products in the Field agreed to by the Parties shall be updated as frequently as needed to take into account completion, commencement or cessation of studies not contemplated by such development plan, but in any event at least annually, and any such development plan with respect to the applicable Product, as updated or amended, is referred to as the “Development Plan.”  Partner (in the case of any Development Plan for Development of a Product in the Territory only) or Optimer (in the case of any Development Plan for global

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Development of a Product) shall be responsible for updating the Development Plan and all material changes to the Development Plan shall be subject to approval by the JDC and ultimately the JSC.

(b)Transition Plans for Existing Product.  Partner and Optimer shall perform all activities and make all decisions in connection with Development of Products in the Field in the Territory pursuant to the terms of this Agreement and the applicable Development Plan.  Optimer shall do all things, at its cost, reasonably requested by Partner to transfer Development responsibility for the Existing Product in the Field in the Territory to Partner.  Without limiting the generality of the foregoing, in order to transfer such Development responsibility to Partner, promptly after the Effective Date, the Parties will develop a joint transition plan (“Joint Transition Plan”) within sixty (60) days after the Effective Date (or such longer period as agreed by the Parties), [...***...]. The Joint Transition Plan will be discussed and, if reasonably practicable, finalized at the meeting between the Parties referred to in Section 4.16. The period after the execution of this Agreement that includes activities designed to effect the handover of responsibilities according to the Development Plan shall be considered the “Development Transition Period”.  The Parties shall use reasonable efforts to keep this period as short as possible.  Each Party shall bear its own costs associated with implementing the Joint Transition Plan.  During the Development Transition Period Optimer will perform all activities with respect to the Development of the Existing Product in accordance with the Joint Transition Plan or the Development Plan.

(c)[...***...] for Existing Product.

(i)[...***...] in the European Union.  MAA Approval for the Existing Product in the European Union requires the conduct of Development (including clinical trials) related to the [...***...].  As of the Effective Date, Optimer is conducting the [...***...] as described in the Development Plan.  Responsibility for such [...***...], including any ongoing trials, will be transferred to Partner in accordance with Section 4.1(b) above.  The Parties recognize that additional [...***...] of the Existing Product will be required, and any such additional [...***...], including clinical trials (but excluding the Development of any [...***...] of a Product) together with any other ongoing clinical trials relating to the [...***...] shall be conducted by Partner in accordance with the Development Plan.  Partner shall be solely responsible for planning and overseeing the performance of the [...***...] and liaising with the Regulatory Authorities, provided that Partner shall keep the JDC informed about all study activities and provided that Partner shall give reasonable consideration to any comments of the JDC. For the avoidance of doubt Partner will be the sponsor of (a) any existing [...***...] once responsibility for such clinical trials has been transferred to it in accordance with Section 4.1(b) above; and (b) any new [...***...] set out the Development Plan. Partner shall be responsible for all expenses relating to the [...***...], excluding any Development of [...***...] of Existing Product, which shall be addressed in Section 4.1(d) below.

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(ii)Additional [...***...].  The Parties acknowledge that each of Optimer and Partner may be required by the applicable Regulatory Authorities outside the Territory and in the Territory, respectively, to conduct [...***...] (which, in the case of the Existing MAA, shall include [...***...]) (collectively, “[...***...]”).  Promptly following receipt by a Party of notice from the applicable Regulatory Authority of [...***...] required by such Regulatory Authority, such Party shall provide notice thereof to the other Party, and the Parties shall discuss in good faith through the JSC the possibility of collaborating in the performance of such [...***...] to the extent the [...***...] are relevant to obtaining MAA Approval of the Existing Product both in the Territory and outside the Territory or if it is otherwise reasonable to do so in light of the Development and regulatory goals of the Parties.  In the event the Parties elect to collaborate in the performance of [...***...], the Parties shall update the Development Plan for the Existing Product to incorporate such [...***...], shall perform such Development in accordance with the Development Plan, and shall each bear [...***...] of the total Development Expenses incurred by the Parties therefor.  If, following such good faith discussion by the JSC, the Parties elect not to collaborate in the performance of any particular [...***...], Partner shall be solely responsible for planning and performing any such [...***...] as required by any Regulatory Authority in the Territory, at Partner’s sole expense, and Optimer shall be solely responsible for planning and performing any such [...***...] as required by any Regulatory Authority outside the Territory, at Optimer’s sole expense. For the avoidance of doubt, neither Party shall be under any obligation to collaborate in the performance of any particular [...***...] with the other Party. With respect to any [...***...] performed by a Party pursuant to this Section, Partner shall be responsible for liaising with the Regulatory Authorities in the Territory with respect thereto and Optimer shall be responsible for liaising with the Regulatory Authorities outside the Territory with respect thereto; provided, that each Party shall keep the JDC informed about all [...***...] and shall give reasonable consideration to any comments of the JDC.

(d)Development of [...***...].  If a Party wishes to Develop [...***...] other than the Existing Product (such as an [...***...]) or to Develop any [...***...] (including the Existing Product) for any indication other than CDI, then it shall propose such Development to the JSC.  The Parties, through the JSC, will determine whether (i) to collaborate in the [...***...], subject to agreement to a Development Plan for such [...***...] and agreement that each Party shall be responsible for [...***...] of all Development Expenses incurred by the Parties in the Development of such [...***...] in the Field, or (ii) to proceed with Development of such [...***...] in the Field separately in their respective territories. If the Parties do not agree to collaborate in the global Development of such [...***...], then (A) Optimer shall be free (itself or with any Affiliate or Third Party) to Develop such [...***...] at its own expense, but will conduct such Development activities only outside the Territory to the extent required to comply with Section 2.5(b), and (B) Partner shall be free (itself or with any Affiliate or Third Party) to Develop such [...***...] at its own expense, but will conduct such Development activities only in the Territory.  Partner shall not have the right to access or use any Data generated by or on behalf of Optimer with respect such [...***...], and

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Optimer shall not have the right to access or use any Data generated by or on behalf of Partner with respect such [...***...]; provided that the foregoing shall not prevent a Party from providing Data generated by or on behalf of the other Party to a Regulatory Authority to the extent required by Applicable Laws.  If a Party subsequently wishes to use any of the Data that has been generated by or on behalf of the other Party (the “Developing Party”) with respect to such [...***...] in its respective territory, then such other Party can only do so if it reimburses the Developing Party [...***...] of all Development Expenses incurred in relation to Development of such [...***...]. If Optimer is the Developing Party in respect of any modified Product other than an [...***...] of the Existing Product under this Section and if Partner reimburses Optimer [...***...] of all Optimer’s Development Expenses in respect of such modified Product, then Optimer shall supply Partner with such modified Product under the terms of the Supply Agreement. Optimer shall be solely responsible for Development Expenses it incurs in Developing [...***...] of the Existing Product and shall supply Partner with any such [...***...] of the Existing Product under the terms of the Supply Agreement without Partner having to reimburse Optimer for any expenses incurred in the Development of such [...***...].

(e)Development of [...***...].

(i)If Optimer wishes to Develop and commercialize any [...***...], Optimer shall provide notice thereof to Partner through the JSC, including a summary of the proposed Development of such [...***...].  Partner shall have the right, exercisable within [...***...]of such notice by written notice to Optimer, to include such [...***...] as a Product on the terms set forth in this Agreement, subject to (A) agreement by the Parties to a Development Plan for such [...***...] and to agreement that each Party shall be responsible for [...***...] of all Development Expenses incurred by the Parties in the Development of such [...***...] in the Field, and (B) reimbursement by Partner of [...***...] of the Development Expenses incurred by Optimer with respect to such [...***...] up to the date of such notice (for which Optimer shall provide reasonable supporting documentation). Effective upon exercise of such right in accordance with this Section 4.1(e)(i), such [...***...] shall thereafter be deemed a Product, and shall be subject to all terms applicable to Products as set forth herein, including the payment of royalties with respect to Net Sales of such [...***...] in accordance with Section 6.3; provided, however, that Partner shall not pay Optimer any additional upfront fees or regulatory and Launch milestone payments for [...***...] (but shall pay milestone payments as set forth in Section 6.2(a) if the first Product with respect to which the applicable milestone event described in Section 6.2(a) is achieved is such [...***...]).

(ii)If Partner does not exercise the right within the specified period described in Section 4.1(e)(i), such [...***...] shall not be a Product under this Agreement, and Optimer may (itself or with any Affiliate or Third Party)  proceed with Development of the [...***...] at its own expense, but will conduct such Development activities outside the Territory to the extent required to comply with Section 2.5(b).  If Optimer completes a [...***...], Optimer shall present to Partner the results of such [...***...]

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[...***...], and a summary of the Development Expenses incurred by Optimer with respect to such [...***...] to date (with reasonable supporting documentation).  During a period of [...***...] from Partner’s receipt of such information and documentation from Optimer, Partner shall consider such documentation and Optimer shall promptly respond to any of Partner’s questions.  If Partner so desires, Partner may obtain scientific advice from the EMA regarding whether such [...***...] is capable of obtaining MAA Approval and if it does so it shall notify Optimer of the same.  Provided that Partner approaches the EMA for such scientific advice within [...***...] from Partner’s receipt of such information and documentation from Optimer, then such [...***...] period shall, if necessary, be extended until [...***...] after the EMA has provided its written advice, with a maximum extension of [...***...].  Partner shall have the right, exercisable within such [...***...] (or other appropriately extended) period by written notice to Optimer, to include such [...***...] as a Product on the terms set forth in this Agreement, subject to (A) agreement by the Parties to a Development Plan for further Development of such [...***...] and to agreement that each Party shall be responsible for [...***...] of all Development Expenses incurred by the Parties in such further Development of such [...***...] in the Field, and (B) reimbursement by Partner of [...***...] of the Development Expenses incurred by Optimer with respect to such [...***...] up to the date of such notice (for which Optimer shall provide reasonable supporting documentation). Effective upon exercise of such right in accordance with this Section 4.1(e)(ii), such [...***...] shall thereafter be deemed a Product, and shall be subject to all terms applicable to Product as set forth herein, including the payment of royalties with respect to Net Sales of such [...***...] in accordance with Section 6.3; provided, however, that Partner shall not pay Optimer any additional upfront fees or regulatory and Launch milestone payments for such [...***...] (but shall pay milestone payments as set forth in Section 6.2(a) if the first Product with respect to which the applicable milestone event described in Section 6.2(a) is achieved is such [...***...]).

(iii)If Partner does not exercise the right within the specified period described in Section 4.1(e)(ii), such [...***...] shall not be a Product under this Agreement, and Optimer shall be free (itself or with any Affiliate or Third Party) to Develop the [...***...] at its own expense, but will conduct such Development activities outside the Territory to the extent required to comply with Section 2.5(b).  Optimer shall keep the JSC reasonably informed of its progress with respect to further Development of such [...***...].

(iv)If, Partner has not exercised the right within the period specified in Section 4.1(e)(ii), but subsequently Partner desires to obtain a license to Develop and commercialize such [...***...] in the Field in the Territory, it shall provide written notice thereof to Optimer, and the Parties shall discuss in good faith for a period not to exceed [...***...] (unless otherwise agreed by the Parties) the financial and other terms pursuant to which Optimer would be willing to grant such license to Partner, taking into account how much Development, regulatory and/or commercialization progress has been made by Optimer with respect to such [...***...] (and which financial terms shall in no event be less favorable than those set forth herein for Products), which terms shall include the payment by Partner of [...***...] of all past and future Development Expenses incurred by the Parties in the Development of such [...***...] in the Field and the agreement that Partner shall be solely responsible for any Development Expenses incurred in Development of the [...***...] that is necessary

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solely for obtaining any Regulatory Approval in the Territory.  For clarification, in no event shall the Parties be obligated to enter into an agreement with respect to a license to such [...***...] pursuant to this Section 4.1(e)(iv).

(f)Joint Development of [...***...].  If the Parties agree to collaborate in the [...***...] pursuant to Section 4.1(d) or an [...***...] pursuant Section 4.1(e), such Development shall be performed in accordance with the Development Plan for such Product, which shall be prepared by the Parties and submitted to the JSC for approval.  The JDC shall oversee the performance of such Development and shall allocate responsibility for the performance of the various tasks required in connection with such studies based upon which Party is better situated to perform such tasks, taking into account among other things, the estimated costs associated with having each Party perform such task. The aim of the Development Plan will be to generate clinical data which is intended for, and in the correct format for, submission to satisfy the requirements of both the EMA and the FDA (and any other Regulatory Authorities agreed by the Parties). Each Party shall be responsible for [...***...] of the Development Expenses incurred by the Parties in the Development of such Product in accordance with the Development Plan (including the budget for Development Expenses included therein), regardless of whether any activity is necessary to satisfy the requirements of the EMA or the FDA.  If the Parties agree to collaborate in the [...***...] then, unless both Parties agree, neither Party shall be able to terminate its involvement in such Development except at [...***...].

4.2Post-Marketing Studies.  The Parties anticipate that it will be desirable to conduct certain post-marketing studies of the Products in the Field (including Phase 4 studies) in order to maximize the potential market for Products in or outside the Territory (“Post-Marketing Studies”).  The Parties shall discuss all proposed Post-Marketing Studies at the JSC.  In relation to the Territory, Partner shall prepare a protocol for any Post-Marketing Study and present it to the JSC for comment. Partner shall be responsible for planning and overseeing the performance of any such Post-Marketing Studies in the Territory, subject to the oversight of the JSC, and shall update the JSC on the progress of such studies.  Partner shall be responsible for the expenses of performing Post-Marketing Studies in the Territory. Optimer shall be responsible for planning and overseeing the performance of any Post-Marketing Studies outside the Territory and shall prepare a protocol for any such Post-Marketing Studies and present it to the JSC for comment. Optimer shall be responsible for planning and overseeing the performance of any such Post-Marketing Studies outside the Territory, subject to the oversight of the JSC, and shall update the JSC on the progress of such studies.  Optimer shall be responsible for the expenses of performing Post-Marketing Studies outside the Territory. Notwithstanding the foregoing, if, following the presentation by a Party to the JSC of the protocol for such a Post-Marketing Study, the other Party promptly provides written notice to the Party proposing to perform the Post-Marketing Study that it reasonably believes, as supported by documentation, that such proposed Post-Marketing Study  is reasonably likely to have a material adverse effect on such other Party’s Regulatory Approval for or commercialization of the applicable Product,  then such Post-Marketing Study may not be performed, unless the Parties agree in writing that such Post-Marketing Studies may proceed following good faith discussions by the Parties.

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4.3Compliance with Laws.  Each Party or its permitted Third Party contractors shall perform its responsibilities under this Section 4 in accordance with all Applicable Laws, including, without limitation, cGLPs, cGCPs and cGMPs to the extent applicable.

4.4Exchange of Data.  Optimer and Partner, respectively, shall provide to each other (a) all Data generated by or on behalf of either Party with respect to the Existing Product (including any Data generated by either Party in its performance of [...***...] or [...***...]), irrespective of whether responsibility for the Development Expenses incurred in connection therewith was shared by the Parties, (b) all Data generated by or on behalf of either Party with respect to other Products for which the Parties have each paid [...***...] of the Development Expenses, and (c) all other Data generated by or on behalf of either Party with respect to Products that is required to be provided to the applicable Regulatory Authority in accordance with Applicable Laws, in each case in a timely fashion and as promptly as possible upon request of each of Partner or Optimer for use by each of Partner and Optimer as permitted under this Agreement.  Each Party shall have the right to withhold Data Controlled by it for a reasonable period to allow it to file for Patent protection relating to such Data.

4.5Use; Disclosure.

(a)Partner.  Partner will only use and disclose Data Controlled by Optimer and provided pursuant to Section 4.4 to Affiliates and Third Parties as required to Develop, file for, obtain and maintain MAA Approval for, and commercialize Products in the Field in the Territory pursuant to the license granted in Section 2.1.  Partner may cross reference drug master files or other regulatory filings outside the Territory that contain such Data solely for commercialization of Products in the Field inside the Territory and Optimer gives Partner the right to so cross-reference, and Partner may use and disclose such Data to Affiliates and Third Parties in connection with Development activities, marketing activities, medical education activities, professional services activities and public relations activities; or for purposes of obtaining consultation services in the normal course of business (such as business consultants, advertising agencies, law firms, accounting firms, etc.) in each case solely to the extent necessary for Development, filing for, obtaining and maintaining MAA Approval and commercialization of Products in the Field in Territory; or as may otherwise be agreed in writing by Optimer and Partner.  Any disclosure of such Data shall be subject to Article 8.  During the Term, Partner may not use any such Data (or permit any Affiliate or Third Party to use Data) outside the Territory, or outside the Field or for any products other than the Products, except for the assessment and validation of the Data by Affiliates or Third Party consultants outside the Territory but solely for purposes of Developing, filing for, obtaining and maintaining MAA Approval or commercializing Products in the Field within the Territory.

(b)Optimer.  Optimer will only use and disclose Data Controlled by Partner and provided pursuant to Section 4.4 to Affiliates and Third Parties as required to Develop, file for, obtain and maintain MAA Approval for, and commercialize Products in the Field outside the Territory pursuant to the license granted in Section 2.3.  Optimer may cross reference drug master files or other regulatory filings in the Territory that contain such Data solely for commercialization of Products in the Field outside the Territory and Partner gives Optimer the

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right to so cross-reference, and Optimer may use and disclose such Data to Affiliates and Third Parties in connection with Development activities, marketing activities, medical education activities, professional services activities and public relations activities; or for purposes of obtaining consultation services in the normal course of business (such as business consultants, advertising agencies, law firms, accounting firms, etc.) in each case solely to the extent necessary for Development, filing for, obtaining and maintaining MAA Approval and commercialization of Products in the Field outside Territory; or as may otherwise be agreed in writing by Optimer and Partner.  Any disclosure of such Data shall be subject to Article 8.  During the Term,  Optimer may not use any such Data (or permit any Affiliate or Third Party to use Data) inside the Territory (except as required to fulfill any Development obligations it may have under a Development Plan), or outside the Field or for any products other than the Products, except for the assessment and validation of the Data by Affiliates or Third Party consultants inside the Territory but solely for purposes of developing, filing for, obtaining and maintaining MAA Approval or commercializing Products in the Field outside the Territory.

(c)Third Parties.

(i)In all agreements after the Effective Date with Third Parties or Affiliates involving the development of Data, Partner and Optimer, respectively, shall require that such Third Parties and Affiliates provide the other Party access to all such Data, to the extent that such Data is required for preparation of MAAs and filing of MAAs with the applicable Regulatory Authorities in and outside the Territory in accordance with this Agreement.

(ii)All MAAs and MAA Approvals and any other regulatory filings relating to Development of the Products in the Field in the Territory shall be owned by Partner or its nominated Affiliate.  All MAAs and MAA Approvals and any other regulatory filings relating to Development of the Products in the Field outside the Territory shall be owned by Optimer or its nominated Affiliate.

4.6Information Regarding Development Activities.  Each Party shall maintain records, in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, which shall fully and properly reflect all work done and results achieved by or on behalf that Party in the performance of Development activities pursuant to this Agreement.  Each Party shall keep the JSC appropriately informed of the status of clinical, pre-clinical, non-clinical and post-approval studies and other activities with respect to Compounds and Products in the Field conducted by it pursuant to this Agreement.

4.7Information Regarding Development Expenses. Each Party shall keep records of all of its Development Expenses that are to be shared equally by the Parties and make them available for inspection by the other Party in accordance with Article 7. Within forty-five (45) days after the end of each Calendar Quarter in which the Parties are Developing Products under Section 4.1(c), (d) or (e) for which the Parties are each responsible for [...***...] of the Development Expenses, each Party shall provide the other with records of all of such Development Expenses and each Party shall calculate any amount due to it from the other in

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respect of such Development Expenses incurred in the preceding Calendar Quarter.  The Party claiming a contribution to its Development Expenses shall submit an invoice to the other Party within twenty (20) Business Days after receipt of the other Party’s records relating to its Development Expenses and the other Party shall pay such invoice within thirty (30) days after its date in US dollars to the bank account specified by the receiving Party.  Any disagreement as to the amount or reimbursement of the Development Expenses under Section 4.1(c), (d) or (e), as applicable, shall be resolved in accordance with Article 7.

4.8Regulatory Activities; Transfer of Regulatory Documents.

(a)Conduct of Regulatory Activities in the Territory.  As at the Effective Date the Existing MAA is in the name of Optimer’s CRO, [...***...] (“CRO”) and under the terms of that certain [...***...] Agreement dated [...***...] between Optimer and CRO (the “CRO Agreement”) Optimer is the sponsor of the Existing MAA and has the power to direct the prosecution of the Existing MAA through CRO. Just prior to the Effective Date Optimer and CRO have received the 120 Day questions from the EMA in relation to the Existing MAA, to which Optimer has to respond (the “120 Day Responses”). The following terms shall apply to the ownership of Regulatory Filings, the provision of the 120 Day Responses, formal transfer of the Regulatory Filings other than the Existing MAA to Partner and the subsequent responsibility for preparing, filing, obtaining and maintaining Regulatory Approvals.

(b)On the Effective Date all MAAs including the Existing MAA, Regulatory Approvals, CTAs, and any other regulatory filings, applications or licenses and related filings, filed or received for Products in the Field in the Territory (“Regulatory Filings”) shall be the property of Partner, and before the Regulatory Filings are transferred to Partner or its designated Affiliate pursuant to Section 4.8(d), Optimer shall hold the Regulatory Filings for the benefit of and at the direction of Partner.

(c)From the Effective Date until the Transfer Date:

(i)Optimer shall maintain in force the Regulatory Filings (at Partner’s reasonable cost and expense in relation to any out of pocket expenses incurred by Optimer), and shall not encumber, amend, cancel or surrender the Regulatory Filings.

(ii)It shall be the responsibility of Optimer through the CRO to collate and provide the 120 Day Responses to the EMA. Prior to providing any 120 Day Response to the EMA, Optimer shall first have such 120 Day Response reviewed and approved by Partner or its designee. The Parties will work together to agree a process whereby as each 120 Day Response is finalized by Optimer it will pass it for review by Partner or its designee which will endeavor to provide comments, suggestions and ultimately approval within twenty-four (24) hours of receipt. Optimer shall not submit any 120 Day Response to the EMA without the approval of Partner, such approval to be provided in sufficient time to enable Optimer to reply to the EMA on a timely basis.

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(iii)Subject to Section 4.8(c)(ii), Optimer shall not and shall procure that CRO shall not take any step in relation to any Regulatory Filing unless requested to do so by Partner or any applicable Regulatory Authority (any such request of a Regulatory Authority a “Regulatory Request”).  Before taking any such step pursuant to a Regulatory Request, Optimer shall act in accordance with any reasonable instruction given by Partner in relation to such Regulatory Request unless action is required to be taken urgently by the relevant Regulatory Authority, in which case Optimer shall inform Partner of such action as soon as possible thereafter.

(iv)Optimer shall provide Partner with a copy of all material correspondence received from any Regulatory Authority in the Territory or provided to any Regulatory Authority in the Territory with respect to Products, including minutes of all material communications with Regulatory Authorities. Optimer shall not, and shall procure that any Third Parties acting on its behalf shall not, take any step in relation to any communications with any Regulatory Authority in the Territory with respect to Products in the Field without the prior approval of Partner, such approval to be provided in sufficient time to enable Optimer to reply to such Regulatory Authority on a timely basis.

(v)Optimer shall provide Partner with reasonable advance notice of all material meetings, conferences, and discussions scheduled with Regulatory Authorities in any country in the Territory concerning any pending MAA or other regulatory matters relating to the Products promptly after it receives notice of the scheduling of such meeting, conference, or discussion.  Optimer shall not conduct any meetings, conferences, or discussions with Regulatory Authorities in any country in the Territory concerning any pending MAA or other regulatory matters relating to the Products in the Field without the prior approval of Partner, such approval to be provided in sufficient time to enable Optimer to comply with its regulatory obligations on a timely basis, and Partner shall be entitled to have reasonable representation present at all such meetings, conferences, or discussions and shall be able to participate in such meetings, conferences, or discussions as an observer (in each case only if permitted by the relevant Regulatory Authority).

(d)Following submission of the 120 Day Responses, the Parties shall agree a date around the 150 day regulatory milestone but in any event before the 180 day regulatory milestone in respect of the Existing MAA, on which date (the “Transfer Date”) Partner will take responsibility for the Regulatory Filings and direct negotiations with the Regulatory Authorities, in particular the EMA. Optimer shall or shall procure that any of its Affiliates shall:

(i)on or about the Transfer Date, assign the CRO Agreement to Partner in accordance with Section 4.9 free of charges, liens and encumbrances;

(ii)on the Transfer Date, in respect of any Regulatory Filing other than the Existing MAA, where any such Regulatory Filing is held in the name of Optimer or an Optimer Affiliate, transfer the Regulatory Filing to Partner in accordance with this Agreement.  Such transfer will be made free of any charges, liens or encumbrances.  Partner shall be solely responsible (at its cost) for preparing and submitting all notices, applications, submissions,

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documents, correspondence or filings necessary to obtain a transfer to Partner of the  Regulatory Filings (including the payment of any fees payable in connection therewith) with reasonable assistance from Optimer which shall be provided at no cost to Partner.

(iii)as soon as reasonably possible after the Transfer Date, sign any notices, applications, submissions, reports and other instruments, documents, correspondence or filings reasonably requested by Partner or its designated Affiliate (any of these a “Document”) that are necessary for (A) the transfer to Partner or its designated Affiliate of the Regulatory Filing or (B) maintaining, renewing or varying the Regulatory Filings in the period from the Effective Date until the transfer of the Regulatory Filings;

(iv)as soon as reasonably possible after the Transfer Date, provide notice of its consent to the transfer of Regulatory Filings to Partner or its designated Affiliate if required by any applicable Regulatory Authority after the Effective Date;

(v)as soon as reasonably possible after the Transfer Date, where permitted and reasonably practicable, conduct all communications with the EMA or any other Regulatory Approval relating to the transfer of the Regulatory Filings at the direction of Partner; and

(vi)as soon as reasonably possible after the Transfer Date, provide such reasonable assistance as Partner (or its designated Affiliate) may reasonably request, at no cost to Partner (or its designated Affiliate), that is necessary to facilitate the transfer of the Regulatory Filings other than the Existing MAA to Partner (or its designated Affiliate).

(e)Following the effective transfer of the CRO Agreement and Regulatory Filings other than the Existing MAA, Partner shall be solely responsible for formulating regulatory strategy and for preparing, filing, obtaining and maintaining Regulatory Approvals, including all regulatory authorizations, for Products in the Field in the Territory.  Partner shall be the holder of all Regulatory Approvals for Products in the Field in the Territory and shall have responsibility for interactions with Regulatory Authorities with respect to Products in the Field in the Territory.  Partner agrees to consult with Optimer through the JSC regarding, and, through the JSC, keep Optimer regularly and fully informed of, the preparation, Regulatory Authority review and approval of submissions and communications with Regulatory Authorities with respect to Products in the Field in the Territory.  In addition, Partner shall through the JSC promptly provide Optimer with copies of all material documents, information and correspondence received from a Regulatory Authority and, upon reasonable request, with copies of any other documents, reports and communications from or to any Regulatory Authority relating to Compounds, Products and/or activities under this Agreement.  Partner shall bear all costs and expenses incurred in connection with regulatory activities with respect to Products in the Field in the Territory pursuant to this Agreement.

4.9Optimer shall assign the CRO Agreement and the [...***...] to Partner in accordance with this Section.

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(a)As neither the CRO Agreement nor the [...***...] can be transferred to Partner except by an assignment made with CRO’s and [...***...] consent, respectively, or by a novation agreement:

(i)this Agreement does not constitute an assignment or an attempted assignment of the CRO Agreement or the [...***...];

(ii)after Effective Date Optimer shall make all reasonable efforts to obtain CRO’s consent and [...***...] consent to the assignment, or achieve the novation, of the CRO Agreement and the [...***...], respectively;

(iii)until the consent is obtained or novation is achieved, Optimer shall, at Partner’ sole cost and risk, do each act and thing reasonably requested of it by Partner to enable performance of the CRO Agreement and the [...***...] and to provide for Partner the benefits of the CRO Agreement and the [...***...];

(iv)until the consent is obtained or novation is achieved, Optimer shall hold the benefit of the CRO Agreement and the [...***...] solely for the benefit of Partner; and

(v)if CRO refuses to consent to the assignment, or achieve the novation, of the CRO Agreement then Optimer shall terminate the CRO Agreement and assign the Existing MAA directly to Partner.

(b)Following such assignment, Optimer shall indemnify Partner in full in respect of any loss, damage, claim, cost or expense arising out of Optimer’s or its Affiliates’ performance (including any breach) of the obligations under the CRO Agreement and the [...***...] before the date of assignment except to the extent such performance was requested by Partner pursuant to Section 4.9(a) together with all sums payable to [...***...] and CRO under the [...***...] and the CRO Agreement, respectively, before the date of assignment.  After the date of assignment Partner shall perform all obligations of Optimer under the CRO Agreement and the [...***...] in accordance with its respective terms.

4.10Trade Name.  [...***...].  Prior to the Effective Date, Optimer has submitted to the EMA [...***...] for the Existing Product.  After MAA sponsorship is transferred to the Partner in accordance with Section 4.9, the Partner shall be responsible for all communications with the EMA regarding the proposed trade names for Existing Product and for otherwise choosing the trade name(s) for use in connection with the Existing Product in the Territory, and applying to register the trade name(s) with the Regulatory Authorities within the Territory. After the Effective Date, and before sponsorship of the MAA is transferred, all correspondence submitted to the EMA related to the invented trade name by Optimer will be reviewed and approved by the Partner prior to submission.

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4.11Conduct of Regulatory Activities outside the Territory.  Optimer agrees to consult with Partner regarding, and keep Partner regularly and fully informed of, the preparation, Regulatory Authority review and approval of submissions and communications with Regulatory Authorities with respect to Products in the Field outside the Territory.  In addition, Optimer shall promptly provide Partner with copies of all material documents, information and correspondence received from a Regulatory Authority and, upon reasonable request, with copies of any other documents, reports and communications from or to any Regulatory Authority relating to Compounds or Products outside the Territory.

4.12Adverse Event Reporting.  As between the Parties, (i) until the effective transfer of the Regulatory Filings pursuant to Section 4.8(d), Optimer shall be responsible for the timely reporting of all relevant adverse drug reactions/experiences, Product quality, Product complaints and safety data relating to Compounds and Products to the appropriate Regulatory Authorities in the Territory; (ii) following the effective transfer of the Regulatory Filings pursuant to Section 4.8(d), Partner shall be responsible for the timely reporting of all relevant adverse drug reactions/experiences, Product quality, Product complaints and safety data relating to Compounds and Products to the appropriate Regulatory Authorities in the Territory; all in accordance with the Applicable Laws of the relevant countries and Regulatory Authorities in the Territory.  Optimer shall be responsible for the timely reporting of all relevant adverse drug reactions/experiences, Product quality, Product complaints and safety data relating to Compounds and Products to the appropriate Regulatory Authorities outside the Territory.

4.13Global Safety Database; Pharmacovigilance.  Optimer shall maintain the global safety database with respect to Compounds and Products under development. Each Party shall cooperate, and shall cause its Affiliates, licensees and Sublicensees to cooperate, in implementing and adhering to a pharmacovigilance mutual alert process with respect to Products to comply with Applicable Laws and that shall be set forth in a Safety Data Exchange Agreement, which will be agreed to by the Parties prior to the Launch of a Product.

4.14Diligence.  Save in respect of the Development of any [...***...] carried out solely by Partner at Partner’s sole expense, Partner shall use Commercially Reasonable Efforts to Develop Products in the Field and in the Territory, including conducting and completing the studies and activities assigned to it in the Development Plan in accordance with the timelines specified therein, and to prepare, file for, obtain and maintain Regulatory Approvals for Products in the Field in the Territory. Without limiting the foregoing, in respect of [...***...] and [...***...] jointly Developed by the Parties, each Party shall use Commercially Reasonable Efforts to Develop such Products, including conducting and completing the studies and activities assigned to it in the Development Plan in accordance with the timelines specified therein.

4.15Use of Subcontractors.  Each Party may perform some of its development activities under this Agreement through one or more subcontractors, provided that (a) none of the other Party’s rights hereunder are diminished or otherwise adversely affected as a result of such subcontracting, and (b) the subcontractor undertakes in writing obligations of confidentiality and non-use regarding Confidential Information which are substantially the same as those undertaken by the Parties pursuant to Article 8.  In the event a Party performs any of its development

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activities hereunder through a subcontractor, then such Party will at all times be fully responsible for the performance and payment of such subcontractor.

4.16Transfer of Know-How.  Promptly following the Effective Date, Optimer will make available to Partner, at no additional cost or expense to Partner, the Licensed Know-How that exists as of the Effective Date together with assistance to enable Partner to understand and use such Licensed Know How. The Parties shall meet face to face within thirty (30) days of the Effective Date to transfer Licensed Know-How relating to the Existing Product from Optimer to Partner and to finalize the Joint Transition Plan. Members of each Party’s regulatory, Development and CMC teams shall attend the meeting. During the Term, Optimer shall provide to Partner, at no additional cost or expense to Partner, any Licensed Know-How that has not previously been provided hereunder promptly upon such Licensed Know-How being obtained or generated by Optimer.

4.17Materials Transfer.  In order to facilitate the development activities contemplated by this Agreement, either Party may provide to the other Party certain biological materials or chemical compounds Controlled by the supplying Party (collectively, “Materials”) for use by the other Party in furtherance of such development activities.  Except as otherwise provided for under this Agreement, all such Materials delivered to the other Party will remain the sole property of the supplying Party, will be used only in furtherance of the Development activities conducted in accordance with this Agreement, will not be used or delivered to or for the benefit of any Third Party, except for subcontractors pursuant to Section 4.15, without the prior written consent of the supplying Party, and will be used in compliance with all Applicable Laws.  The Materials must be used with prudence and appropriate caution in any experimental work because not all of their characteristics may be known.  Except as expressly set forth in this Agreement, THE MATERIALS ARE PROVIDED “AS IS” AND WITHOUT ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR ANY PARTICULAR PURPOSE OR ANY WARRANTY THAT THE USE OF THE MATERIALS WILL NOT INFRINGE OR VIOLATE ANY PATENT OR OTHER PROPRIETARY RIGHTS OF ANY THIRD PARTY.

ARTICLE 5

COMMERCIALIZATION; SUPPLY

5.1Commercialization of Products.

(a)Partner Responsibilities.  Partner shall have the exclusive right, to the exclusion of Optimer and its Affiliates, to commercialize Products in the Field in the Territory, at its sole cost and expense, subject to the terms and conditions of this Agreement.  Without limiting the foregoing, Partner will have the exclusive right and responsibility, to the exclusion of Optimer and its Affiliates, in the Field in the Territory for the following:

(i)designing the commercialization and marketing strategy and tactics for Products;

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(ii)choosing and registering the trade names for the Products;

(iii)undertaking all promotional activities for Products;

(iv)establishing pricing and reimbursement for Products;

(v)payer contracting for Products;

(vi)receiving, accepting and filling orders for Products from customers;

(vii)warehousing and distributing Products to customers;

(viii)controlling invoicing, order processing and collection of accounts receivable for sales of Products; and

(ix)recording sales of Products in the Territory in its books of account for sales.

Partner shall provide updates regularly to the JSC relating to commercialization activities for the Products in the Field in the Territory.

(b)Commercialization Plan.  Partner shall be responsible for the creation and implementation of an annual, regional plan and budget for the commercialization of Products in the Field in the Territory, which will include any further development and marketing studies of Products in the Field in the Territory (the “Commercialization Plan”).  Partner shall prepare and submit to Optimer the initial Commercialization Plan no later than [...***...] after the Effective Date for review and discussion through the JSC and thereafter shall submit a Launch Commercialization Plan at least [...***...] before the first anticipated Launch in any country in the Territory which plan shall set out the activities surrounding the Launch of the Existing Product in the Territory. Subsequent updated Commercialization Plans shall be submitted by Partner to Optimer on an annual basis on the anniversary of the date of the initial Launch Commercialization Plan for review and discussion through the JSC.  Partner shall regularly consult with and provide updates to Optimer regarding the commercialization strategy and the commercialization of Products in the Field in the Territory.  Partner shall consider in good faith Optimer’s input regarding such commercialization strategy and the Commercialization Plan; provided, however, that Partner shall have final decision-making authority with respect to commercialization of Products in the Field in the Territory , including the right to set the terms of sales and book all sales of Products in the Field in the Territory.

(c)Diligence.  During the Term, Partner shall use Commercially Reasonable Efforts to market, promote and commercialize Products in the Field in the Territory in accordance with the Commercialization Plan and the terms of this Agreement.  Without limiting the foregoing, Partner shall:

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(i)Launch in [...***...] of the [...***...] within [...***...] in that country in accordance with the marketing, medical affairs and sales force activities described for such countries in the Launch Commercialization Plan; and

(ii)achieve [...***...] in the Territory, [...***...], beginning with the [...***...] following First Commercial Sale of a Product in the Territory.

The achievement of Partner’s diligence obligations under Sections 5.1(c) (i) and (ii) shall be taken into account in determining whether Partner has used Commercially Reasonable Efforts to market, promote and commercialize Products in the Field in the Territory in accordance with the Commercialization Plan and the terms of this Agreement.

(d)Partner’s Diligence Failure. This Section 5.1(d) shall not limit any other remedies in damages that Optimer may have under this Agreement or Applicable Law.

(i)In the event that Optimer determines that Partner has failed to achieve the diligence obligations set forth in Section 5.1(c)(i), Optimer shall provide written notice thereof to Partner, and the Parties shall promptly discuss in good-faith for a period not to exceed thirty (30) days (or such longer period as may be agreed by the Parties) following the date of such notice.  Such notice shall specify in reasonable detail the facts and circumstances constituting Optimer’s reasons for reaching such a determination.  Following such thirty (30)day period (or such longer period as may be agreed by the Parties), unless otherwise agreed by the Parties, if Partner (a) has not cured such failure, or (b) in the event that such failure is not capable of being cured in thirty (30) days, is not using best efforts to cure such failure, Optimer shall have the right, exercisable in its sole discretion and effective upon written notice thereof by Optimer to Partner, to (A) convert the license and sublicense granted to Partner in Section 2.1 to a non-exclusive license and sublicense in the Field in the Territory (and upon delivery of such notice such license and sublicense shall automatically be deemed non-exclusive without any further action or amendment by the Parties), and, without limiting the foregoing, Optimer shall have the right to develop, use, sell, offer for sale, and import Products in the Field in the Territory (either itself or through a licensee or otherwise), or (B) terminate this Agreement pursuant to Section 12.2(b).  For the avoidance of doubt Partner shall always retain the right to resort to the dispute resolution procedure in Section 13 to challenge Optimer’s determination that Partner has failed to achieve the diligence obligations set forth in Section 5.1(c)(i).

(ii)In the event that Optimer determines that Partner has failed to achieve the diligence obligations set forth in Section 5.1(c)(ii) for a particular [...***...], Optimer shall provide written notice thereof to Partner, and the Parties shall promptly discuss in good-faith for a period not to exceed thirty (30) days (or such longer period as may be agreed by the Parties) following the date of such notice.  Such notice shall specify in reasonable detail the facts and circumstances constituting Optimer’s reasons for reaching such

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a determination.  Not earlier than fourteen (14) days after the end of such thirty (30) day period (or such longer period as may be agreed by the Parties), unless otherwise agreed by the Parties, Optimer shall have the right, exercisable in its sole discretion and effective upon written notice thereof by Optimer to Partner, to (A) convert the license and sublicense granted to Partner in Section 2.1 to a non-exclusive license and sublicense in the Field in the Territory (and upon delivery of such notice such license and sublicense shall automatically be deemed non-exclusive without any further action or amendment by the Parties), and, without limiting the foregoing, Optimer shall have the right to develop, use, sell, offer for sale, and import Products in the Field in the Territory (either itself or through a licensee or otherwise), or (B) terminate this Agreement pursuant to Section 12.2(b); provided, that such rights are not exercisable by Optimer if within the said fourteen (14) day period Partner has paid Optimer an amount equal to [...***...]. This right of Partner to pay [...***...] unless a failure to achieve the [...***...]. For the avoidance of doubt Partner shall always retain the right to resort to the dispute resolution procedure in Section 13 to challenge Optimer’s determination that Partner has failed to achieve the diligence obligations set forth in Section 5.1(c)(ii).

(e)Any failure of Partner to achieve the diligence obligations set forth in Section 5.1 shall not be considered a breach of this Agreement to the extent such failure was caused by (a) Optimer’s failure to meet timeframes hereunder or inability or failure to supply the Products in accordance with the terms of the Supply Agreement or any Data, or  (b) a Third Party owner of any Dominating Patent Rights refusing to grant a license to Partner on commercially reasonable terms.

5.2Supply.  The Parties acknowledge and agree that Optimer shall retain all rights to make and have made Compound and Products in the Territory.  Optimer shall supply Products to Partner and its Sublicensees for all development and commercialization of Products in the Field in the Territory in accordance with the supply agreement of even date herewith between Optimer and Partner (the “Supply Agreement”).

ARTICLE 6

PAYMENTS

6.1Upfront Fee.  Partner shall make a one-time, non-refundable, non-creditable payment to Optimer of €50,000,000 (fifty million Euros) within thirty (30) days after the Effective Date.

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6.2Milestone Payments.

(a)[...***...] Milestones.  Within thirty (30) days following the first occurrence of each of the milestone events set forth below, Partner shall pay to Optimer the corresponding payment set forth below in cash (whether such milestone is achieved by Partner or any of its Sublicensees):

Milestone Event	Milestone Payment
[...***...]	€	[...***...]
[...***...]	€	[...***...]

(b)[...***...] Milestones.  Within thirty (30) days following the [...***...], Partner shall pay to Optimer the corresponding payment set forth below in cash:

Milestone Event	Milestone Payment
[...***...]	€	[...***...]
[...***...]	€	[...***...]
[...***...]	€	[...***...]
[...***...]	€	[...***...]

For clarity, if [...***...] satisfies more than one milestone event set forth above, then payment shall be made for each such milestone event that is satisfied.  For example, if, [...***...], then Partner shall pay to Optimer [...***...].

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(c)One-Time, Non-Refundable, Non-Creditable Payments.  The payments set forth above in this Section 6.2 shall be payable only once for each milestone event, upon the first occurrence of such milestone event, regardless of the number of times each event occurs, and shall not be refundable or creditable against any other payments by Partner to Optimer.

6.3Royalty Payments.

(a)Royalty Rate. Subject to the terms and conditions of this Agreement, Partner shall pay to Optimer royalties as set forth below on aggregate annual Net Sales of Products in the Territory:

Aggregate Annual Net Sales in the Territory	Royalty Rate
[...***...]	[...***...]% [...***...]
[...***...]	[...***...]% [...***...]

By illustration but not in limitation, where [...***...], the royalties shall be calculated as follows:  [...***...].  Depending upon the actual facts and circumstances, this total may be subject to further adjustment under Section 6.3(d). The principles of the above calculation are also to be applied when the royalty rates are reduced pursuant to Section 6.3(e)(ii), save that the [...***...] royalty rates are to be replaced with [...***...] royalty rates, respectively.

(b)Existing Third Party Payment Obligations.  Optimer shall be responsible for any payments to any other Third Parties for Patents or Information licensed or acquired by Optimer prior to the Effective Date, which are included in the Licensed Technology including, without limitation, any payments to PAR under the PAR Agreement.  In the event the rights to the Licensed OPT-80 Data (as defined in the PAR Agreement) cease to be licensed to Optimer by Par under the Par Agreement for any reason and Partner obtains a license with respect to such OPT-80 Data directly from PAR pursuant to that certain agreement

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by and among PAR, Partner and Optimer dated as of the Effective Date and attached hereto as Exhibit C (the “PAR Tripartite Agreement”), then Partner may deduct from the applicable payments owed to Optimer hereunder the amount actually paid by Partner to PAR under the PAR Tripartite Agreement for such license with respect to such OPT-80 Data up to the amount that Optimer would have been obligated to pay to PAR under the PAR Agreement with respect to such payment.

(c)Third Party Intellectual Property Rights.  Subject to Section 6.3(d), Partner shall be responsible for payment of any and all fees, milestones, royalties or other payments owed to any Third Party for any Patents, Information or other intellectual property rights licensed or acquired after the Effective Date, which are necessary or useful to use, sell, offer for sale or import any Product in the Field in the Territory.

(d)Royalty Stacking.  On a Product-by-Product and country-by-country basis, in the event Partner or its Affiliates is required to pay to a Third Party royalties or amounts payable in lieu of royalties (including without limitation any lump sum payments) in order to obtain a license under Dominating Patent Rights covering a Product, Partner may [...***...] of the amounts actually paid to such Third Party in consideration for such license under Dominating Patent Rights from any royalty payments owing to Optimer under this Agreement, provided that in no event shall the royalties due to Optimer in any Calendar Quarter with respect to such Product be so reduced to [...***...] of the amount that would otherwise be due to Optimer under Section 6.3(a) (the “Floor”). If the [...***...] then Partner [...***...].  As used herein, “Dominating Patent Rights” shall mean issued Patents of Third Parties, including without limitation issued Patents of Third Parties which form the basis of infringement actions under Section 9.6, without a license to which the use, marketing, sale, offer for sale, packaging, promotion, import, export or other commercialization of the applicable Product in the relevant country of the Territory would infringe such Third Party Patent.

(e)Term.  Subject to Sections 6.3(f) and 6.3(g), royalty payments pursuant to Section 6.3(a) shall be payable upon a Product-by-Product and country-by-country basis from the First Commercial Sale of a Product in a given country in the Territory until the last day of the first Calendar Quarter during which a Generic Product is sold in such country and sales of the Generic Product are greater than twenty-five percent (25%) of total quarterly sales by volume of all sales of such Product (including such Generic Product) in such country in such Calendar Quarter (“Generic Entry”) (the “ Term”).

(f)In respect of any Product, if in any country on the date that is the later to occur of: (i) the expiration of the last-to-expire Valid Claim within the Licensed Patents or Joint Patents that claims such Product or Compound contained therein or a method of manufacture or use of such Product or Compound, and (ii) [...***...] years from First Commercial Sale of such Product in a such country, Generic Entry has not occurred, then the royalty rates

*** Confidential Treatment Requested

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payable under Section 6.3(a) shall be [...***...] until Generic Entry occurs in such country, following which no further royalties will be payable in such country in respect of such Product.

(g)If following Generic Entry in a country and the consequent termination of Partner’s obligation to make royalty payments in such country, all sales of Generic Products in such country cease as a result of patent infringement proceedings in respect of the Licensed Patents or Joint Patents brought by either Party in accordance with Section 9.5, then royalty payments in accordance with Section 6.3(a) or Section 6.3(f) (as appropriate) shall become payable until any subsequent Generic Entry. Such revival of royalty payments shall only be effective once in any country in the Territory.

ARTICLE 7

PAYMENTS, BOOKS AND RECORDS

7.1Reports and Royalty Payment.  During the Term, within thirty (30) days after the end of each Calendar Quarter, Partner shall deliver to Optimer a report setting forth (on a country-by-country basis and in the aggregate) the gross sales of Products and Net Sales in the relevant Calendar Quarter, any exchange rate conversion in accordance with Section 7.3, and a calculation of the payments due under Section 6.3, including the applicable royalty rate applied in calculating such payments (a “Royalty Report”).  Following receipt of any Royalty Report Optimer shall raise an invoice for the amount stated by Partner to be payable to Optimer in such Royalty Report. Payment shall be due from Partner within thirty (30) days of its receipt of such an invoice.

7.2Payment Method.  All amounts specified to be payable under this Agreement are in United States Dollars and shall be paid in United States Dollars.  All payments under this Agreement shall be made by bank wire transfer in immediately available funds to a U.S. account designated in writing by Optimer or by other mutually acceptable means.  Payments hereunder will be considered to be made as of the day on which they are received by Optimer’s designated bank.

7.3Exchange Rate Conversion.  When conversion of payments from any currency other than United States Dollars is required, such conversion shall be at an exchange rate equal to the previous month end’s exchange rate which is downloaded from Reuters set on the last working day of the previous month for the currency of the country where such Net Sales occurred.

7.4Taxes.  Optimer will pay any and all taxes levied on account of any payments made to it under this Agreement.  If any taxes are required to be withheld by Partner from any payment made to Optimer under this Agreement, Partner will (a) deduct such taxes from the payment made to Optimer, (b) timely pay the taxes to the proper taxing authority, and (c) send proof of payment to Optimer and certify its receipt by the taxing authority within thirty (30) days following such payment.

*** Confidential Treatment Requested

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7.5Records.  Partner shall keep, and require its Sublicensees to keep, complete, fair and true books of accounts and records for the purpose of determining the amounts payable to Optimer pursuant to this Agreement.  Such books and records shall be kept for such period of time required by law, but no less than at least three (3) years following the end of the Calendar Quarter to which they pertain.  Such records shall be subject to inspection in accordance with Section 7.6.

7.6Audits.  Upon not less than sixty (60) days’ prior written notice, Partner shall permit an independent, certified public accountant selected by Optimer and/or PAR (to the extent of its audit right with respect to payments of “Net Revenues” (as defined in the Par Agreement)  due to it as provided under Section 2.4 of the PAR Agreement) and reasonably acceptable to Partner, which acceptance will not be unreasonably withheld or delayed, to audit or inspect those books or records of Partner and its Sublicensees that relate to Net Sales and Royalty Reports for the sole purpose of verifying the:  (a) payments due hereunder in respect of Net Sales; (b) withholding taxes, if any, required by Applicable Law to be withheld by Partner; and (c) exchange rates used in determining the amount of United States Dollars.  Such accountant will disclose to Optimer and/or PAR only the amount and accuracy of payments reported and actually paid or otherwise payable under this Agreement (in the case of PAR, limited to such payments paid or otherwise payable to PAR based on payments made to Optimer under this Agreement).  Such accountant will send a copy of the report to Partner at the same time it is sent to Optimer and/or PAR.  As a condition to such inspection, the independent public accountant selected shall execute a written agreement, reasonably satisfactory in form and substance to Partner, to maintain in confidence all information obtained during the course of any such examination except for disclosure as necessary for the above purpose and all reasonable documents will be delivered to the accountant under these confidential terms. Additionally no accountant may be employed on a contingency basis. Such inspections may be made no more than once each Calendar Year and during normal business hours, with reasonable efforts to minimize disruption of Partner’s normal business activities.  Such records for any particular Calendar Quarter shall be subject to no more than one (1) inspection.  Inspections conducted under this Section 7.6 shall be at the expense of Optimer or PAR, as applicable, unless a variation or error producing an underpayment in amounts payable exceeding ten percent (10%) of the amount paid for a period covered by the inspection is established, in which case all reasonable costs relating to the inspection for such period and any unpaid amounts that are discovered shall be paid by Partner.

7.7Audit Disagreement. If there is a dispute between the Parties related to GAAP compliance following any audit performed pursuant to Sections 4.7 or 7.6, either Party may refer the issue (an “Audit Disagreement”) to an independent certified public accountant for resolution.  In the event an Audit Disagreement is submitted for resolution by either Party, the Parties shall comply with the following procedures

(a)The Party submitting the Audit Disagreement for resolution shall provide written notice to the other Party that it is invoking the procedures of this Section.

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(b)Within thirty (30) days of the giving such notice, the Parties shall jointly select a recognized international accounting firm to act as an independent expert to resolve such Audit Disagreement.

(c)The Audit Disagreement submitted for resolution shall be described by the Parties to the independent expert, which description may be in written or oral form, within ten (10) days of the selection of such independent expert.

(d)The independent expert shall render a decision on the matter as soon as practicable.

(e)The decision of the independent expert shall be final and binding and shall not be subject to Article 13 hereof, unless such Audit Disagreement involves alleged fraud, breach of this Agreement or construction or interpretation of any of the terms and conditions hereof.

(f)All fees and expenses of the independent expert, including any Third Party support staff or other costs incurred with respect to carrying out the procedures specified at the direction of the independent expert in connection with such Audit Disagreement, shall be borne by the Party against whom such expert rules.

7.8Late Payments.  In the event that any payment due under this Agreement is not made when due, the payment shall accrue interest from the date due at a rate per annum equal to one percent (1%) above the U.S. Prime Rate (as set forth in the Wall Street Journal, Eastern U.S. Edition) for the date on which payment was due, calculated daily on the basis of a 365-day year, or similar reputable data source; provided that, in no event shall such rate exceed the maximum legal annual interest rate.  The payment of such interest shall not limit the Party entitled to receive such payment from exercising any other rights it may have as a consequence of the lateness of any payment.

ARTICLE 8

CONFIDENTIALITY

8.1Confidential Information.  Except to the extent expressly authorized by this Agreement or otherwise agreed in writing by the Parties, the Parties agree that the receiving Party (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 Information and materials furnished to it by the other Party (the “Disclosing Party”) pursuant to this Agreement or the Confidentiality Agreement, in any form (written, oral, photographic, electronic, magnetic, or otherwise), including, but not limited to, all information concerning any Compound and/or Product and any other technical or business information of whatever nature (collectively, “Confidential Information”).  For purposes of clarification, all Licensed Technology shall be Confidential Information of Optimer and all Partner Technology shall be Confidential Information of Partner.  Each Party may use such Confidential Information only to the extent required to accomplish the purposes of this Agreement.  Each Party will use at least the same

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standard of care as it uses to protect proprietary or confidential information of its own (but in no event less than reasonable care) to ensure that its employees, agents, consultants and other representatives do not disclose or make any unauthorized use of the Confidential Information.  Each Party will promptly notify the other upon discovery of any unauthorized use or disclosure of the Confidential Information.

8.2Exceptions.  Notwithstanding Section 8.1 above, the obligations of confidentiality and non-use shall not apply to information that the Receiving Party can prove by competent written evidence: (a) is now, or hereafter becomes, through no act or failure to act on the part of the Receiving Party or any of its Affiliates, generally known or available; (b) is known by the Receiving Party or any of its Affiliates, other than under an obligation of confidentiality to the Disclosing Party, at the time of receiving such information; (c) is hereafter furnished to the Receiving Party or any of its Affiliates by a Third Party, which Third Party did not receive such information directly or indirectly from the Disclosing Party under an obligation of confidence; (d) is independently discovered or developed by the Receiving Party or any of its Affiliates without the use of Confidential Information belonging to the Disclosing Party; or (e) is the subject of a written permission to disclose provided by the Disclosing Party.

8.3Permitted Disclosures.  Notwithstanding the provisions of Section 8.1, the Receiving Party may disclose Confidential Information of the Disclosing Party as expressly permitted by this Agreement or if and to the extent such disclosure is reasonably necessary in the following instances:

(a)filing or prosecuting Patents as permitted by this Agreement;

(b)prosecuting or defending litigation as permitted by this Agreement;

(c)complying with applicable court orders or governmental regulations;

(d)disclosure to PAR under terms of confidentiality to the extent necessary to fulfill obligations under the PAR Agreement;

(e)disclosure to Affiliates (in the case of Optimer), Sublicensees and potential Sublicensees (in the case of Partner), contractors, employees and consultants who need to know such information for the development, manufacture and commercialization of Products in accordance with this Agreement, on the condition that any such Third Parties agree to be bound by confidentiality and non-use obligations that are no less stringent than those confidentiality and non-use provisions contained in this Agreement; and

(f)disclosure to Third Parties in connection with due diligence or similar investigations by such Third Parties, and disclosure to potential Third Party investors in confidential financing documents, provided, in each case, that any such Third Party agrees to be bound by confidentiality and non-use obligations that are no less stringent than those confidentiality and non-use provisions contained in this Agreement.

Notwithstanding the foregoing, in the event a Party is required to make a disclosure of the other Party’s Confidential Information pursuant to Section 8.3(b) or (c), it will, except where

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impracticable, give reasonable advance notice to the other Party of such disclosure and use efforts to secure confidential treatment of such information at least as diligent as such Party would use to protect its own confidential information, but in no event less than reasonable efforts.  In any event, the Parties agree to take all reasonable action to avoid disclosure of Confidential Information hereunder.

8.4Confidentiality of this Agreement and its Terms.  Except as otherwise provided in this Article 8, each Party agrees not to disclose to any Third Party the existence of this Agreement or the terms of this Agreement without the prior written consent of the other Party hereto, except that each Party may disclose the terms of this Agreement that are not otherwise made public as contemplated by Section 8.5 as permitted under Section 8.3.

8.5Public Announcements.

(a)As soon as practicable following the date hereof, the Parties shall each issue a mutually agreed to press release announcing the existence of this Agreement.  Except as required by Applicable Law (including disclosure requirements of the U.S. Securities and Exchange Commission (“SEC”) or any stock exchange on which securities issued by a Party or its Affiliates are traded), neither Party shall make any other public announcement concerning this Agreement or the subject matter hereof without the prior written consent of the other, which shall not be unreasonably withheld or delayed; provided that each Party may make any public statement in response to questions by the press, analysts, investors or those attending industry conferences or financial analyst calls, or issue press releases, so long as any such public statement or press release is not inconsistent with prior public disclosures or public statements approved by the other Party pursuant to this Section 8.5 and which do not reveal non-public information about the other Party.  In the event of a required public announcement, to the extent practicable under the circumstances, the Party making such announcement shall provide the other Party with a copy of the proposed text of such announcement sufficiently in advance of the scheduled release to afford such other Party a reasonable opportunity to review and comment upon the proposed text.

(b)The Parties will coordinate in advance with each other in connection with the filing of this Agreement (including redaction of certain provisions of this Agreement) with the SEC or any stock exchange or governmental agency on which securities issued by a Party or its Affiliate are traded, and each Party will use reasonable efforts to seek confidential treatment for the terms proposed to be redacted; provided that each Party will ultimately retain control over what information to disclose to the SEC or any stock exchange or other governmental agency, as the case may be, and provided further that the Parties will use their reasonable efforts to file redacted versions with any governing bodies which are consistent with redacted versions previously filed with any other governing bodies.  Other than such obligation, neither Party (or its Affiliates) will be obligated to consult with or obtain approval from the other Party with respect to any filings to the SEC or any stock exchange or other governmental agency.

8.6Publication of the Product Information.  At least thirty (30) days prior to publishing, publicly presenting, and/or submitting for written or oral publication a manuscript,

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abstract or the like that includes Information relating to any Compound or Product that has not been previously published, each Party shall provide to the other Party’s Alliance Manager a draft copy thereof for its  review (unless such Party is required by law to publish such Information sooner, in which case such Party shall provide such draft copy to the other Party’s Alliance Manager as much in advance of such publication as possible).  The publishing Party shall consider in good faith any comments provided by the other Party during such thirty (30) day period.  In addition, the publishing Party shall, at the other Party’s reasonable request, remove therefrom any Confidential Information of such other Party, except each Party shall have the right to publicly disclose any information, including Confidential Information, pertaining to safety or efficacy of the Product that such Party believes in good faith it is obligated by Applicable Law or appropriate to conform to applicable regulatory requirements to disclose; provided that it shall delay publication for a period not to exceed two (2) months in order to allow the other Party to file for patent protection as permitted by this Agreement in relation to its Data and Confidential Information.  The contribution of each Party shall be noted in all publications or presentations by acknowledgment or co-authorship, whichever is appropriate.

8.7Prior Non-Disclosure Agreements.  As of the Effective Date, the terms of this Article 8 shall supersede any prior non-disclosure, secrecy or confidentiality agreement between the Parties (or their Affiliates) dealing with the subject of this Agreement, including without limitation the Confidentiality Agreement.  Any information disclosed under such prior agreements shall be deemed disclosed under this Agreement.

8.8Equitable Relief.  Given the nature of the Confidential Information and the competitive damage that would result to a party upon unauthorized disclosure, use or transfer of its Confidential Information to any Third Party, the Parties agree that monetary damages may not be a sufficient remedy for any breach of this Article 8.  In addition to all other remedies, a Party shall be entitled to seek specific performance and injunctive and other equitable relief as a remedy for any breach or threatened breach of this Article 8.

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ARTICLE 9

PATENT PROSECUTION AND ENFORCEMENT

9.1Ownership of Licensed Technology.Optimer has, and shall retain all right, title and interest in and to, the Licensed Patents and Licensed Know-How.

9.2Ownership of Inventions. Each Party shall solely own, and, except as otherwise provided herein, that Party alone shall have the right to apply for, Patents claiming any Inventions made solely by that Party or its Affiliate or their respective employees or independent contractors in the course of performing work pursuant to this Agreement.  Inventions made jointly by employees or independent contractors of Optimer and Partner or their respective Affiliates (“Joint Inventions”) shall be owned jointly by Optimer and Partner.  Each Party shall be free (without requiring the consent of, or accounting for any sums to the other Party) to exploit and to grant licenses or other rights under Joint Inventions and Joint Patents except to the extent that such Joint Inventions or Joint Patents are exclusively licensed to the other Party pursuant to this Agreement.

9.3Disclosure of Inventions.  Each Party shall promptly disclose to the JSC all Inventions arising under this Agreement prior to the filing of any patent application claiming such Invention.

9.4Patent Prosecution and Maintenance.

(a)Licensed Patents.  Optimer shall have the first right, but not the obligation, to control and manage the preparation, filing, prosecution (including any interferences, reissue proceedings and reexaminations) and maintenance of all Licensed Patents in the Territory by counsel of its own choice.  Optimer shall bear all costs and expenses incurred by Optimer in connection with the preparation, filing, prosecution and maintenance by Optimer of the Licensed Patents in [...***...] (the “[...***...]”).  In the event Partner wishes Optimer to prepare, file, prosecute or maintain a particular Licensed Patent in any country in the Territory other than the [...***...] (the “Additional Countries”), it shall provide written notice thereof to Optimer, and Partner shall be solely responsible for all reasonable costs and expenses incurred by Optimer in connection with the preparation, filing, prosecution and maintenance of the Licensed Patents in the Additional Countries.  Partner shall reimburse Optimer for such reasonable costs and expenses incurred by Optimer in connection with the preparation, filing, prosecution and maintenance of the Licensed Patents in the Additional Countries within forty five (45) days from the date of invoice for such costs and expenses by Optimer.  Optimer shall keep Partner reasonably informedof progress with regard to the preparation, filing, prosecution and maintenance of Licensed Patents in the Territory including the countries in the Territory in which it intends to file, maintain or abandon a given Patent.  Optimer will notify the Partner of all warning letters, conflict proceedings, reexaminations, reissuance, oppositions, revocation proceedings or any other material challenge relating to a

*** Confidential Treatment Requested

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given Licensed Patent in the Territory.Optimer will consult with, and consider in good faith the requests and suggestions of, Partner with respect to strategies for filing and prosecuting Licensed Patents in the Territory.  Optimer shall keep Partner regularly updated as to the progress of prosecution of and all other proceedings relating to the filing, maintenance and any challenge to the Licensed Patents in the Territory. Optimer shall provide reasonable prior written notice to Partner before taking any material step in relation to the prosecution or maintenance of or any other proceedings relating to the Licensed Patents in the Territory and shall allow Partner to make comments and recommendations in relation thereto, which Optimer shall reasonably consider in good faith.  If Partner reasonably believes that a representation or omission  made or proposed to be made by Optimer or its patent counsel is liable to mislead a patent office then the Parties will discuss the issue. If Optimer is not willing to change its view then to the extent necessary to comply with anti-trust law, Partner shall be entitled to contact such patent office directly in respect of such representation or omission.  In the event that Optimer desires to abandon or cease prosecution or maintenance of any Licensed Patent in the Territory, or not defend proceedings in relation to any Licensed Patent in the Territory, Optimer shall provide reasonable prior written notice to Partner of such intention to abandon, cease prosecution or maintenance or not defend proceedings (which notice shall, to the extent possible, be given no later than thirty (30) days prior to the next deadline for any action that must be taken with respect to any such Licensed Patent in the relevant patent office or proceeding).  In such case, at Partner’s sole discretion, upon written notice to Optimer from Partner, Partner may elect to continue prosecution and/or maintenance of any such Licensed Patent in the Territory,at its sole cost and expense and by counsel of its own choice and such Licensed Patent shall not be included in the definition of Valid Claim.

(b)Joint Patents.Optimer shall have the first right, but not the obligation, to control and manage the preparation, filing, prosecution (including any interferences, reissue proceedings and reexaminations) and maintenance of all Patents that claim Joint Inventions (herein referred to as “Joint Patents”).  The determination of the countries in which to file Joint Patents shall be made by Optimer and Optimer shall have the right to direct and control all material actions relating to the prosecution or maintenance of Joint Patents, subject to Partner’s ability to comment on such filings and Optimer’s reasonable consideration of such comments. If Partner reasonably believes that a representation or omission made or proposed to be made by Optimer or its patent counsel is liable to mislead a patent office then the Parties will discuss the issue. If Optimer is not willing to change its view then to the extent necessary to comply with anti-trust law, Partner shall be entitled to contact such patent office directly in respect of such representation or omission All out of pocket costs of filing, prosecuting and maintaining Joint Patents shall be shared 50/50, unless otherwise agreed or unless Partner provides notice to Optimer that it does not wish to share such costs in relation to any particular Joint Patent in which case (a) Partner shall have no liability for such costs in relation to such Joint Patent, (b) Partner shall not be able to exploit itself or through any third party or license or assign its share in such Joint Patent and (c) Optimer may elect to continue prosecution and/or maintenance of such Joint Patent at its sole cost and expense.  In the event that Optimer desires not to file a Joint Patent in any particular country or to abandon or cease prosecution or maintenance of any Joint Patent, or not defend proceedings in relation to any Joint Patent, Optimer shall provide reasonable prior written notice to Partner of such intention not to file or to abandon or cease prosecution or maintenance or not defend proceedings (which notice shall,

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to the extent possible, be given no later than thirty (30) days prior to the next deadline for any action that must be taken with respect to any such Joint Patent in the relevant patent office or proceeding).  In such case, at Partner’s sole discretion, upon written notice to Optimer from Partner, Partner may elect to file and/or continue prosecution and/or maintenance of any such Joint Patent,at its sole cost and expense and by counsel of its own choice and (a) such Joint Patent shall not be included in the definition of Valid Claim (b) Optimershall not be able to exploit itself or through any Third Party or license or assign its share in such Joint Patent.

(c)Partner Patents.  Partner shall have the first right, but not the obligation, to control and manage the preparation, filing, prosecution (including any interferences, reissue proceedings and reexaminations) and maintenance of all Partner Patents, at Partner’s sole cost and expense and by counsel of its own choice.  Partner shall keep Optimer reasonably informed of progress with regard to the preparation, filing, prosecution and maintenance of Partner Patents. In the event that Partner desires to abandon or cease prosecution or maintenance of any Partner Patent, or not defend proceedings in relation to any Partner Patent, outside the Territory (and, if Optimer has obtained an exclusive license under such Partner Patent in the Territory under Section 12.3, in the Territory) Partner shall provide reasonable prior written notice to Optimer of such intention to abandon or cease prosecution or maintenance of or not defend proceedings (which notice shall, to the extent possible, be given no later than thirty (30) days prior to the next deadline for any action that must be taken with respect to any such Partner Patent in the relevant patent office or proceeding).  In such case, at Optimer’s sole discretion, upon written notice to Partner from Optimer, Optimer may elect to continue prosecution and/or maintenance of any such Partner Patent outside the Territory (and, if Optimer has obtained an exclusive license under such Partner Patent in the Territory under Section 12.3, in the Territory),at its sole cost and expense and by counsel of its own choice.

9.5Infringement by Third Parties.

(a)Notice.  In the event that either Optimer or Partner becomes aware of any infringement or threatened infringement by a Third Party of any Licensed Patents or Partner Patents, it will notify the other Party in writing to that effect.  Any such notice shall include evidence to support an allegation of infringement or threatened infringement by such Third Party.

(b)Licensed Patents and Joint Patents.  Partner shall have the first right to bring and control any action or proceeding with respect to alleged or threatened infringement of any Licensed Patent or Joint Patent in the Territory, at Partner’s sole cost and expense and by counsel of its own choice.  Partner shall reasonably cooperate with Optimer in strategizing with respect to, and preparing and presenting, any such action.  Optimer shall have the right, at its own expense, to be represented in any such action by counsel of its own choice.  If Partner fails to bring any such action within (i) ninety (90) days following the notice of alleged infringement, or (ii) ten (10) days before the time limit, if any, set forth in the appropriate laws and regulations for the filing of such action, whichever comes first, then Optimer shall have the right to bring and control any such action, at Optimer’s sole cost and expense and by counsel of its own choice.  Partner shall have the right, at its own expense, to be represented in any such action by counsel of its own choice.

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(c)Partner Patents.  Partner shall have the first right to bring and control any action or proceeding with respect to alleged or threatened infringement of any Partner Patent, at Partner’s sole cost and expense and by counsel of its own choice.  Partner shall reasonably cooperate with Optimer in strategizing with respect to, and preparing and presenting, any such action.  Optimer shall have the right, at its own expense, to be represented in any such action by counsel of its own choice.  If Partner fails to bring any such action outside the Territory (or, if Optimer has obtained an exclusive license under such Partner Patent in the Territory under Section 12.3, in the Territory) within (i) ninety (90) days following the notice of alleged infringement, or (ii) ten (10) days before the time limit, if any, set forth in the appropriate laws and regulations for the filing of such action, whichever comes first, then Optimer shall have the right to bring and control any such action outside the Territory (and, if Optimer has obtained an exclusive license under such Partner Patent in the Territory under Section 12.3, in the Territory), at Optimer’s sole cost and expense and by counsel of its own choice.  Partner shall have the right, at its own expense, to be represented in any such action by counsel of its own choice.

(d)Cooperation; Award.  In the event a Party brings an infringement action in accordance with this Section 9.5, the other Party shall cooperate fully, including, if required to bring such action, the furnishing of a power of attorney or being named as a party.  Neither Party shall enter into any settlement or compromise of any action under this Section 9.5 which would in any manner alter, diminish, or be in derogation of the other Party’s rights under this Agreement without the prior written consent of such other Party, which shall not be unreasonably withheld.  Except as otherwise agreed to in writing by the Parties, any recovery realized as a result of such action shall be used first to reimburse the documented out-of-pocket legal expenses of the Parties relating to such action, and any remainder shall be retained by the Party that brought and controlled such action for purposes of this Agreement, except that any such remainder retained by Partner shall be treated as Net Sales for purposes of this Agreement.

9.6Infringement of Third Party Rights.  Each Party shall promptly notify the other Party in writing of any allegation by a Third Party that the activity of either Party pursuant to this Agreement infringes or may infringe the intellectual property rights of such Third Party.  Optimer shall have the sole right to control any defense of any such claim involving alleged infringement of Third Party rights by Optimer’s activities, at Optimer’s sole cost and expense and by counsel of its own choice, and Partner shall have the right, at its own expense, to be represented in any such action by counsel of its own choice.  Partner shall have the sole right to control any defense of any such claim involving alleged infringement of Third Party rights by Partner’s activities, at Partner’s sole cost and expense and by counsel of its own choice, and Optimer shall have the right, at its own expense, to be represented in any such action by counsel of its own choice.  Neither Party shall enter into any settlement or compromise of any action under this Section 9.6 which would in any manner alter, diminish, or be in derogation of the other Party’s rights under this Agreement without the prior written consent of such other Party, which shall not be unreasonably withheld.

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9.7Patent Term Restoration.  At the request of the Party owning any Patents subject to this Agreement, the Parties hereto will cooperate with each other in obtaining patent term restoration, extensions and/or any other extensions of such Patents as available under Applicable Laws.

9.8Trademarks.  Partner shall own and be responsible for all trademarks, trade names (including the trade names referred to in Section 4.10), branding, or logos related to Products in the Field in the Territory, and will be responsible for selecting, registering, defending, and maintaining the same at Partner’s sole cost and expense.

ARTICLE 10

REPRESENTATIONS, WARRANTIES AND COVENANTS; LIMITATION OF LIABILITY

10.1Mutual Representations, Warranties and Covenants.  Each Party hereby represents and warrants to the other Party, as of the Effective Date, as follows:

(a)Duly Organized.  Such Party is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, is qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which the conduct of its business or the ownership of its properties requires such qualification and failure to have such would prevent such Party from performing its obligations under this Agreement.

(b)Due Authorization; Binding Agreement.  The execution, delivery and performance of this Agreement by such Party have been duly authorized by all necessary corporate action.  This Agreement is a legal and valid obligation binding on such Party and enforceable in accordance with its terms and does not: (i) to such Party’s knowledge and belief, violate any law, rule, regulation, order, writ, judgment, decree, determination or award of any court, governmental body or administrative or other agency having jurisdiction over such Party; nor (ii) conflict with, or constitute a default under, any agreement, instrument or understanding, oral or written, to which such Party is a party or by which it is bound.

(c)Consents.  Such Party has obtained, or is not required to obtain, the consent, approval, order or authorization of any Third Party, or has completed, or is not required to complete any registration, qualification, designation, declaration, or filing with, any Regulatory Authority or governmental authority, in connection with the execution and delivery of this Agreement and the performance by such Party of its obligations under this Agreement.

(d)No Conflicting Grant of Rights.  Such Party has the right to grant the licenses contemplated under this Agreement and has not, and will not during the Term, grant any right to any Third Party which would conflict with the rights granted to the other Party hereunder.

(e)Employee/Contractor Agreements.  All of such Party’s employees or contractors acting on its behalf pursuant to this Agreement are and will be obligated under a

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binding written agreement to assign to such party or its designee all Inventions and to comply with obligations of confidentiality and non-use consistent with those set forth in Article 8.

(f)Debarment.Such Party is not debarred under the United States Federal Food, Drug and Cosmetic Act or comparable Applicable Laws in the Territory and it does not, and will not during the Term, employ or use the services of any person or entity who is debarred, in connection with the development, manufacture or commercialization of the Products.  In the event that either Party becomes aware of the debarment or threatened debarment of any person or entity providing services to such Party, including the Party itself and its Affiliates or Sublicensees, which directly or indirectly relate to activities under this Agreement, the other Party shall be immediately notified in writing.

10.2Representations and Warranties of Optimer.  Optimer represents and warrants to Partner that, as of the Effective Date (save in respect of the representations and warranties in Sections 10.2(h) and (k) which are given for the Term):

Intellectual Property

(a)the rights or licenses granted to Partner under this Agreement are not subject to any right, license or interest by the U.S. Federal Government or any US state government (including any divisions thereof) due to funding obtained with respect to Products or clinical trials carried out in government-owned hospitals;

(b)to the actual knowledge of Optimer’s [...***...] (“Optimer’s Actual Knowledge”), no Third Party is infringing or is threatening to infringe or make unauthorized use of the any of the Licensed Technology;

(c)to Optimer’s Actual Knowledge, there are no threatened or pending actions, suits, claims, interference proceedings or governmental investigations in any court, arbitration, patent office, administrative or other tribunal which are concerned with a challenge to the validity or ownership of any of  the Compounds or the Licensed Technology by or against Optimer or any Optimer Current Affiliates and neither Optimer nor any Optimer Current Affiliate has received written notice of the same;

(d)Neither Optimer nor any Optimer Current Affiliate has received written notice of any pending or threatened claims or actions claiming that the manufacture, sale or use of the Products would infringe the intellectual property rights of any Third Party and to Optimer’s Actual Knowledge no action, suit or claim has been initiated or threatened against Optimer, or against PAR, with respect to the Licensed Technology or Optimer’s right to enter into and perform its obligations under this Agreement;

(e)the details of the Licensed Patents that are set out in EXHIBIT A are correct. Without derogation from the generality of the foregoing, the granted Patents are subsisting and all applications for Patents indicated in EXHIBIT A as pending are pending.  The

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legal and beneficial owner or applicant for registration of each of the Patents specified in EXHIBIT A is correctly stated;

(f)the Licensed Technology is the only intellectual property Controlled by Optimer or any Optimer Current Affiliates and used in relation to the Existing Product in the Territory;

(g)to Optimer’s Actual Knowledge, all actions required to be taken before the Effective Date to prosecute and maintain the Licensed Patents set out in EXHIBIT A (including payment of all applicable fees due and payable before such date) have been taken;

(h)Optimer shall not grant any lien or security interest in favor of a Third Party in respect of the Licensed Technology or any revenue payable by Partner to Optimer pursuant to this Agreement unless such lien or security interest is subordinate and subject to the rights granted to Partner under the Licensed Technology as set forth in this Agreement or would not otherwise be reasonably expected to adversely affect such rights;

Licenses

(i)Optimer has provided Partner a true and complete copy of the PAR Agreement, the PAR Agreement is in full force and effect in accordance with its terms as of the Effective Date and is binding on the parties thereto, the execution and delivery of this Agreement by Optimer and the performance by Optimer of its obligations under this Agreement in accordance with its terms do not and will not conflict with, or constitute a default under the PAR Agreement and to Optimer’s Actual Knowledge neither PAR nor Optimer is in material breach of any of its obligations under the PAR Agreement;

(j)The PAR Collaboration Agreement has terminated in all respects and the assignment in Section 2.6(g)(i) of the PAR Agreement has taken effect and the license in Section 2.6(g)(ii) of the PAR Agreement has been granted;

(k)Optimer (i) is not in breach of and shall not breach its obligations under the PAR Agreement or take any other actions, in each case which would result in the termination of such agreement  and shall promptly inform Partner in the event that it receives written notice from PAR purporting to unilaterally terminate the PAR Agreement and (ii) shall not amend the PAR Agreement in a manner that would be to the detriment of the rights and obligations of Partner under this Agreement without Partner’s prior written consent;

(l)This Agreement is consistent with the PAR Agreement in all material respects;

Regulatory

(m)EMA MAA Number EMEA/H/C/002087 is the only MAA held by Optimer or its Affiliates in relation to the marketing and sale of the Products in the Territory;

(n)Partner has been granted access to true and complete copies of all of Optimer’s and the Optimer Current Affiliates’ Regulatory Filings;

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(o)all clinical trials for the Existing Product conducted by or on behalf of Optimer and the Optimer Current Affiliates’ and included in Optimer’s Regulatory Filings with the EMA have been carried out in all material respects in accordance with all Applicable Laws and cGCP to the extent required to satisfy the requirements of the EMA;

(p)it Controls or has a right of reference with respect to the Data used to support EMA MAA Number EMEA/H/C/002087;

(q)it has disclosed to Partner all clinical data generated by or on behalf of Optimer relating to SAEs relating to Products, such SAEs being set out in the clinical study reports for the Existing Product.

(r)Neither Optimer nor any Optimer Current Affiliate has knowingly withheld from any Regulatory Authority any material information in the possession of Optimer or its Affiliates related to the safety, toxicity, quality or efficacy of the Existing Product (i) that has been requested by a Regulatory Authority, or (ii) that it reasonably considers to be material for the EMA’s evaluation of the safety, toxicity, quality and/or efficacy of the Existing Product;

(s)to Optimer’s Actual Knowledge, neither Optimer nor its Affiliates or any of its or their officers, agents or employees (during the course of their duties) in relation to researching, and developing the Existing Product has done or omitted to do anything which is a material contravention of any Applicable Law;

(t)there has been no failure to obtain and valid consents from data subjects involved in any clinical trials of the Existing Product;

(u)EMA MAA  Number EMEA/H/C/002087 is applied for upon the submission by Optimer of a full dossier presented in accordance with Article 8.3 of EC Directive 2001/83 and does not refer to any other marketing approval;

(v)If granted, EMA MAA  Number EMEA/H/C/002087 will have the benefit of 10 years RDP Exclusivity;

(w)the application for EMA MAA Number EMEA/H/C/002087 includes the results of all clinical trials that have been started (i.e., in which patients have been enrolled) by or on behalf of Optimer and the Optimer Current Affiliates relating to the Existing Product whether discontinued or completed except for the clinical trials identified to Partner as [...***...];

(x)there are no ongoing clinical studies anywhere in the world relating to the Compound;

General

(y)neither Optimer nor any Optimer Affiliate is engaged in any litigation, opposition or arbitration proceedings affecting or relating to the Products anywhere in the world (including but not limited to claims relating to product liability) as plaintiff or defendant and

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there are no such proceedings pending or threatened by, or against Optimer or any Optimer Affiliate and there are no material facts which Optimer believes are likely to result in a material judgment against Optimer or any Optimer Affiliate relating to the Products;

(z)Optimer has not knowingly withheld from Partner any material CMC Information in the possession of Optimer or the Optimer Current Affiliates regarding the Existing Product (i) that has been requested by Partner, or (ii) that it reasonably considers to be material to Partner’s evaluation of the quality of the Existing Product.  As used herein, “CMC Information” means information of the type required to appear in Module 3 of EMA MAA No. EMEA/H/C/002087;

(aa)Optimer has not knowingly withheld from Partner any material information in the possession of Optimer or the Optimer Current Affiliates related to the market and sales potential of the Existing Product (i) that has been requested by Partner, or (ii) that it reasonably considers to be material to Partner’s evaluation of the market and sales potential of the Existing Product in the Territory;

(bb)Optimer and the Optimer Current Affiliates have no employees in the Territory;

(cc)other than with respect to Iran and Syria, no US export control license is required in order (i) for Optimer to enter into this Agreement, (ii) for Optimer to transfer Licensed Know-How and Data to Partner, (iii) to Optimer’s Actual Knowledge, for Partner to purchase any Existing Products, or (iv) to Optimer’s Actual Knowledge, in order to enable Partner to exercise its rights under this Agreement;

(dd)except as otherwise set forth in Section 10.2(cc), no approval from U.S. federal government or any U.S. state government (including any agency or division thereof) or to Optimer’s Actual Knowledge under any Applicable Law, is required (i) in order to enter into this Agreement, (ii) transfer Licensed Know-How and Data to Partner, (iii)for Existing Products to be manufactured for commercial distribution of such Products either inside or outside the US or (iv) in order to enable Partner to exercise its rights under this Agreement;

(ee)except with respect to potential [...***...] and [...***...] other than Existing Product, there are (i) no Competitive Products under development or being commercialized that are Controlled by or on behalf of Optimer or its Affiliates and (ii) no products are under development by or on behalf of Optimer or its Affiliates that are aimed to result in a pharmaceutical product for the treatment of CDI;

(ff)all material information referred to in Sections 10.2(q), (r), (z) and (aa) has been made available to Partner at least twenty one (21) days prior to the Effective Date; and

(gg)Optimer and the Optimer Current Affiliates control all material Information used by or on behalf of Optimer and the Optimer Current Affiliates in relation to the Existing Product.

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10.3Disclaimer.  EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, OR ANY OTHER AGREEMENT CONTEMPLATED HEREUNDER, NEITHER PARTY MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, AND EACH PARTY EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE OR USE, NON-INFRINGEMENT, VALIDITY AND ENFORCEABILITY OF PATENTS, OR THE PROSPECTS OR LIKELIHOOD OF DEVELOPMENT OR COMMERCIAL SUCCESS OF THE PRODUCTS.

10.4Limitation of Liability.  EXCEPT FOR LIABILITY FOR BREACH OF ARTICLE 8, NEITHER PARTY SHALL BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT OR ANY LICENSE GRANTED HEREUNDER; provided however, that this Section 10.4 shall not be construed to limit either Party’s indemnification obligations under Article 11.  For clarification, payments under Article 6 shall not be considered special, incidental, consequential or punitive damages.

ARTICLE 11

INDEMNIFICATION

11.1Indemnification of Optimer.  Partner shall indemnify and hold harmless each of Optimer and its Affiliates and their respective directors, officers, shareholders, employees, agents, servants, successors and assigns of any of the foregoing (the “Optimer Indemnitees”), from and against any and all losses, liabilities, damages, penalties, fines, costs and expenses (including reasonable attorneys’ fees and other expenses of litigation) (“Losses”) incurred by any Optimer Indemnitee resulting from any claims, actions, suits or proceedings brought by a Third Party (a “Third Party Claim”) arising from, or occurring as a result of:  (a) the Development by Partner alone at its own expense, use, handling, storage, import, offer for sale, sale or other disposition of Products in the Territory by Partner or its Affiliates or Sublicensees; (b) gross negligence or willful misconduct in connection with Partner’s performance of its obligations or exercise of its rights under this Agreement; or (c) any material breach of any representations, warranties or covenants by Partner set out in Section 10 of this Agreement; except to the extent such Third Party Claims fall within the scope of the indemnification obligations of Optimer set forth in Section 11.2 or arise out of the material breach by Optimer of any of the terms of the Supply Agreement.

11.2Indemnification of Partner.  Optimer shall indemnify and hold harmless each of Partner and its Affiliates and the directors, officers and employees of such entities, and the successors and assigns of any of the foregoing (the “Partner Indemnitees”), from and against any and all Losses incurred by any Partner Indemnitee resulting from any Third Party Claims arising from, or occurring as a result of: (a)  the Development, manufacture, use, handling, storage, sale or other disposition of Products outside the Territory by Optimer or its Affiliates or licensees or inside the Territory by Optimer or its Affiliates or licensees following the termination of this Agreement or any part of the Territory becoming non-exclusive in accordance with Section 5.1(d); (b) gross negligence or willful misconduct in connection with Optimer’s

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performance of its obligations or exercise of its rights under this Agreement;or (c) any material breach of any representations, warranties or covenants by Optimer set out in Section 10 of this Agreement, except to the extent such Third Party Claims fall within the scope of the indemnification obligations of Partner set forth in Section 11.1 or arise out of the material breach by Partner of any of the terms of the Supply Agreement.

11.3Procedure.  A party that intends to claim indemnification under this Article 11 (the “Indemnitee”) shall promptly notify the indemnifying Party (the “Indemnitor”) in writing of any Third Party Claim, in respect of which the Indemnitee intends to claim such indemnification, and the Indemnitor shall have sole control of the defense and/or settlement thereof.  The indemnity arrangement in this Article 11 shall not apply to amounts paid in settlement of any action with respect to a Third Party Claim, if such settlement is effected without the consent of the Indemnitor, which consent shall not be withheld or delayed unreasonably.  The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any action with respect to a Third Party Claim shall only relieve the Indemnitor of its indemnification obligations under this Article 11 if and to the extent the Indemnitor is actually prejudiced thereby.  The Indemnitee shall cooperate fully with the Indemnitor and its legal representatives in the investigation of any action with respect to a Third Party Claim covered by this indemnification.

11.4Insurance.  Each Party, at its own expense, shall maintain product liability and other appropriate insurance (or self-insure) in an amount consistent with industry standards during the Term and shall name the other Party as an additional insured with respect to such insurance.  Each Party shall provide a certificate of insurance (or evidence of self-insurance) evidencing such coverage to the other Party upon request.

ARTICLE 12

TERM AND TERMINATION

12.1Term.  This Agreement shall commence on the Effective Date, and unless terminated earlier as provided in this Article 12, shall continue in full force and effect on a country-by-country and Product-by-Product basis until the end of the Term.

12.2Early Termination.

(a)Mutual Agreement.  The Parties may terminate this Agreement in its entirety before the end of the Term by mutual written agreement of the Parties.

(b)Material Breach.  A Party shall have the right to terminate this Agreement in its entirety before the end of the Term upon written notice to the other Party if such other Party is in material breach of this Agreement and has not cured such breach within ninety (90) days (thirty (30) days with respect to any payment breach) after notice from the terminating Party requesting cure of the breach.  Any such termination shall become effective at the end of such ninety (90) day (thirty (30) day with respect to any payment breach) period unless the breaching Party has cured any such breach or default prior to the end of such period.

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(c)Bankruptcy.  A Party shall have the right to terminate this Agreement in its entirety before the end of the Term upon written notice to the other Party upon the bankruptcy, dissolution or winding up of such other Party, or the making or seeking to make or arrange an assignment for the benefit of creditors of such other Party, or the initiation of proceedings in voluntary or involuntary bankruptcy, or the appointment of a receiver or trustee of such other Party’s property that is not discharged within ninety (90) days.

(d)Other Optimer Termination Right.  Optimer shall have the right to terminate this Agreement in its entirety before the end of the Term immediately upon written notice to Partner if Partner or any of its Affiliates or Sublicensees, directly or indirectly through any Third Party, commences any interference or opposition proceeding with respect to, challenges the validity or enforceability of, or opposes any extension of or the grant of a supplementary protection certificate with respect to, any Licensed Patent.

(e)Other Partner Termination Right.  Partner shall have the right to terminate this Agreement as a whole, or on a country-by-country basis and a Product-by-Product basis, before the end of the Term for any reason or for no reason at any time upon at least one hundred eighty (180) days’ prior written notice to Optimer.

12.3Rights on Expiration and Termination.

(a)Termination of Rights and Obligations.  Upon expiration or termination of this Agreement, all rights and obligations of the Parties under this Agreement shall terminate, except as provided in Sections 12.3, 12.4 and 12.5.

(b)Disbanding of the Committees.  Expiration or termination of this Agreement for any reason shall result in the immediate disbanding and termination of all committees.

(c)Rights on Expiration.  Upon the expiration, but not an earlier termination, of this Agreement with respect to a particular country in relation to a particular Product, Partner will have a fully paid-up, non-exclusive license, which includes the right to sublicense, under the Licensed Technology and Optimer’s share in Joint Patents to Develop, use, promote, market, sell, offer for sale, import, export and otherwise commercialize such Product within the Field in such country.  For clarity, Partner shall retain ownership of all MAA Approvals on expiration of this Agreement.

(d)Rights on Termination of License With Respect to a Product, Except for Termination for Cause by Partner under Section 12.2(b) or (c).  Upon any termination of this Agreement under Section 12.2 in respect of a particular Product (but not the whole Agreement), except termination of this Agreement by Partner pursuant to Section 12.2(b) or (c):

(i)Development Transition.  The Parties shall work together in good faith to adopt, and Optimer shall have the final decision-making power with respect to, a plan to

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wind-down any Development activities with respect to the terminated Product in the Territory in an orderly fashion or, at Optimer’s election, promptly transition such Development activities to Optimer or its designee, with due regard for patient safety and the rights of any subjects that are participants in any clinical trials of such Product and take any actions it deems reasonably necessary or appropriate to avoid any human health or safety problems and in compliance with all Applicable Laws.  Partner shall perform or cause to be performed its outstanding non-cancellable obligations with respect to Development of such terminated Product that existed or accrued prior to the notice date of termination; provided, however, that in no case shall Partner be obligated to pursue such activities for a period exceeding [...***...] after the date of notice of such termination.

(ii)Commercialization Transition.  Partner and its Sublicensees shall continue, to the extent that Partner and its Sublicensees continue to have an inventory of such Product, to fulfill orders received from customers for such Product in the Territory until up to [...***...] after the later of (A) the date upon which Optimer notifies Partner in writing that Optimer has secured an alternative distributor or licensee for the Product and (B) Partner has initiated transition of the MAAs and Regulatory Approvals for the Product in the Territory to such distributor or licensee, but in no event for more for than [...***...] after the date of notice of termination.  For any items of such Product sold by Partner or its Sublicensees after the effective date of termination, Partner shall continue to make payments to Optimer in accordance with Article 6.  Notwithstanding the foregoing, Partner and its Sublicensees shall cease such activities upon [...***...]days’ written notice given by Optimer at any time after the effective date of a termination requesting that such activities cease.  Within [...***...] days after Optimer has given notice to Partner requesting the cessation of activities pursuant to the provision of this Section 12.3(d)(ii), Partner shall notify Optimer of an estimate of the quantity of such Product and shelf life remaining in Partner’s inventory and Optimer shall have the right to purchase any such quantities of such Product from Partner at a price mutually agreed by the Parties.  To the extent Optimer does not purchase such quantities, Partner may sell such quantities during the [...***...] days after the effective date of such termination within the shelf life remaining for such Product.

(iii)Assignment of Filings and Marketing Approvals.  At Optimer’s option, which shall be exercised by written notice to Partner, to the extent permitted under Applicable Law, Partner shall assign or cause to be assigned to Optimer or its designee (or to the extent not so assignable, Partner shall take all reasonable actions to make available to Optimer or its designee the benefits of) all regulatory filings and registrations (including MAAs and Regulatory Approvals) for the terminated Product in the Territory, including any such regulatory filings and registrations made or owned by its Affiliates and/or Sublicensees.  Optimer shall notify Partner before the effective date of termination whether the regulatory filings and registrations should be assigned to Optimer or its designee, and if the latter, identify the designee, and provide Partner with all necessary details to enable Partner to effect the assignment (or availability).  If Optimer fail to provide such notification prior to the effective date of termination, Partner shall assign the regulatory filings and registrations to Optimer.

(iv)Transition.  Partner shall use Commercially Reasonable Efforts to cooperate with Optimer and/or its designee to effect a smooth and orderly transition in the

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Development, sale and marketing, promotion and commercialization of the terminated Product in the Territory during the notice and the wind-down periods referenced in this Section 12.3(d).  Without limiting the foregoing, Partner shall use Commercially Reasonable Efforts to conduct, in an expeditious manner, any activities to be conducted under this Section 12.3(d).  Optimer shall use Commercially Reasonable Efforts to identify and finalize an agreement or other arrangement with a Third Party in relation to the Product and/or, to the extent Optimer is able to take over such activities under Applicable Law, take over, directly or through an Affiliate, all activities related to such Product, and in particular development activities on-going at the time of the effective date of the termination and the transfer of the regulatory filings and registrations (including MAAs and Regulatory Approvals) into the name of Optimer or Optimer’s designee so that the wind-down period shall be as limited as possible.

(v)Rights Become Non-Exclusive.  Notwithstanding any other provision of this Agreement, following the effective date of termination and during the wind-down periods referenced in this Section 12.3(d), the license granted to Partner with respect to the terminated Product in the Field in the Territory shall be non-exclusive and limited to the activities expressly contemplated by this Section 12.3(d), and, without limiting the foregoing, Optimer shall have the right to engage one or more other distributors and/or licensees of the Product in the Field in the Territory.

(vi)License Grant.  Partner shall, and it hereby does, grant to Optimer, effective upon such termination, (x) an exclusive (even as to Partner), worldwide, irrevocable license, with the right to sublicense through multiple tiers of sublicense, under the Partner Technology and Partner’s share in the Joint Patents, to Develop, make, have made, use, sell, offer for sale, and import the terminated Product and (y) an exclusive, worldwide,  irrevocable license, with the right to sublicense through multiple tiers of sublicense, to use and display trademarks owned by Partner or its Affiliates solely related to the terminated Product in connection with the manufacture, use, offer for sale, sale, and import of such terminated Product subject in each case to compliance by Optimer with the surviving provisions of this Agreement.  Such licenses shall be royalty bearing at the rate of [...***...] percent of net sales of all such terminated Products, provided that such terminated Products are either (A) the Existing Product or (B) [...***...] to which Partner has participated in their Development, and shall be granted on the terms of Sections 1.73, 1.99, 1.107, 2.2, 6.3(d) and 6.3(e) and Article 7 of this Agreement whereby the name “Optimer” is replaced by the name “Partner” and the name “Partner” by the name “Optimer” and whereby, in Section 6.3(e), the reference to Valid Claim shall be to a Valid Claim of Partner Patents or Joint Patents. Optimer shall be obliged to use the trademarks owned by Partner or its Affiliates solely related to the terminated Product in relation to all  manufacture, use, offer for sale, sale, and importation such terminated Product.

(vii)Sublicensees; Third Party Agreements.    At the written request of Optimer, Partner will assign any Third Party agreements exclusively related to the terminated Product, to the furthest extent possible, provided that such assignment is permitted under the Product-specific supply Agreement or is accepted by the Third Party.  In the event such assignment is not requested by Optimer or is not accepted by such Third Party, then the rights of such Third Party with respect to such terminated Product shall terminate upon termination of Partner’s rights.  Partner shall ensure that Sublicensees and such Third Parties (if its contract is

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not assigned to Optimer pursuant to this Section 12.3(d)(vii)) shall transition any remaining terminated Product back to Optimer in the manner set forth in this Section 12.3(d) as if such Affiliate or Third Party were named herein.  Partner shall include provisions requiring compliance with these provisions in the agreements with Sublicensees and Third Parties.

(e)Rights on Termination of License With Respect to a Country in the Territory, Except for Termination for Cause by Partner under Section 12.2(b) or (c). Upon any termination of this Agreement under Section 12.2 in respect of a particular country (but not the whole Agreement), except termination of this Agreement by Partner pursuant to Section 12.2(b) or (c):

(i)Development Transition.  The Parties shall work together in good faith to adopt, and Optimer shall have the final decision-making power with respect to, a plan to wind-down any Development activities with respect to Products in the terminated country in an orderly fashion or, at Optimer’s election, promptly transition such Development activities to Optimer or its designee, with due regard for patient safety and the rights of any subjects that are participants in any clinical trials of Products in that country and take any actions it deems reasonably necessary or appropriate to avoid any human health or safety problems and in compliance with all Applicable Laws in that country.  Partner shall perform or cause to be performed its outstanding non-cancellable obligations with respect to Development of any Compounds and Products that existed or accrued in that country prior to the notice date of termination; provided, however, that in no case shall Partner be obligated to pursue such activities for a period exceeding [...***...] after the date of notice of such termination.

(ii)Commercialization Transition.  Partner and its Sublicensees shall continue, to the extent that Partner and its Sublicensees continue to have an inventory of Products in the terminated country, to fulfill orders received from customers for Products in the terminated country until up to [...***...] after the later of (A) the date upon which Optimer notifies Partner in writing that Optimer has secured an alternative distributor or licensee for the Products in that country and (B) Partner has initiated transition of the MAAs and Regulatory Approvals for the Products in that country to such distributor or licensee, but in no event for more for than [...***...] after the date of notice of termination.  For the Products sold by Partner or its Sublicensees in the terminated country after the effective date of termination, Partner shall continue to make payments to Optimer in accordance with Article 6.  Notwithstanding the foregoing, Partner and its Sublicensees shall cease such activities upon [...***...] days’ written notice given by Optimer at any time after the effective date of a termination requesting that such activities cease.  Within [...***...] days after Optimer has given notice to Partner requesting the cessation of activities in that country pursuant to the provision of this Section 12.3(e)(ii), Partner shall notify Optimer of an estimate of the quantity of Products labeled such that they can only be sold in that terminated country and shelf life remaining in Partner’s inventory and Optimer shall have the right to purchase any such quantities of such Products from Partner at a price mutually agreed by  the Parties.    To the extent Optimer does not purchase such quantities, Partner may sell such quantities in such country during the [...***...] days after

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the effective date of such termination within the shelf life remaining for such Products or relabel them for sale elsewhere in the Territory.

(iii)Assignment of Filings and Marketing Approvals.  At Optimer’s option, which shall be exercised by written notice to Partner, to the extent permitted under Applicable Law in that terminated country, Partner shall assign or cause to be assigned to Optimer or its designee (or to the extent not so assignable, Partner shall take all reasonable actions to make available to Optimer or its designee the benefits of) all regulatory filings and registrations (including MAAs and Regulatory Approvals) for Products solely in the terminated country, including any such regulatory filings and registrations made or owned by its Affiliates and/or Sublicensees.  Optimer shall notify Partner before the effective date of termination in that country whether such regulatory filings and registrations should be assigned to Optimer or its designee, and if the latter, identify the designee, and provide Partner with all necessary details to enable Partner to effect the assignment (or availability).  If Optimer fail to provide such notification prior to the effective date of termination, Partner shall assign the regulatory filings and registrations to Optimer.

(iv)Transition.  Partner shall use Commercially Reasonable Efforts to cooperate with Optimer and/or its designee to effect a smooth and orderly transition in the Development, sale and marketing, promotion and commercialization of Products in the terminated country during the notice and the wind-down periods referenced in this Section 12.3(e).  Without limiting the foregoing, Partner shall use Commercially Reasonable Efforts to conduct, in an expeditious manner, any activities to be conducted under this Section 12.3(e).  Optimer shall use Commercially Reasonable Efforts to identify and finalize an agreement or other arrangement with a Third Party in relation to the Products in the terminated country and/or, to the extent Optimer is able to take over such activities in that country under Applicable Law in that country, take over, directly or through an Affiliate, all activities related to Products in that country, and in particular Development activities on-going in that country at the time of the effective date of the termination and the transfer of the regulatory filings and registrations (including MAAs and Regulatory Approvals) relating to that country into the name of Optimer or Optimer’s designee so that the wind-down period shall be as limited as possible.

(v)Rights Become Non-Exclusive.  Notwithstanding any other provision of this Agreement, following the effective date of termination and during the wind-down periods referenced in this Section 12.3(e), the license granted to Partner with respect to Products in the Field in the terminated country shall be non-exclusive and limited to the activities expressly contemplated by this Section 12.3(e), and, without limiting the foregoing, Optimer shall have the right to engage one or more other distributors and/or licensees of the Products in the Field in the terminated country.

(vi)License Grant.  Partner shall, and it hereby does, grant to Optimer, effective upon such termination, (x) an exclusive (even as to Partner), irrevocable license, with the right to sublicense through multiple tiers of sublicense, under the Partner Technology and Partner’s share in Joint Patents, to Develop, make, have made, use, sell, offer for sale, and import products that include a Compound, alone or in combination with any other active pharmaceutical ingredient, in any form or formulation, in the terminated country and any

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other countries outside the Territory, and (y) an exclusive, specific, irrevocable license, with the right to sublicense through multiple tiers of sublicense, to use and display trademarks owned by Partner or its Affiliates solely related to Products solely in the terminated country in connection with the manufacture, use, offer for sale, sale, and import of products that include a Compound, alone or in combination with any other active pharmaceutical ingredient, in any form or formulation into the terminated country, subject in each case to compliance by Optimer with the surviving provisions of this Agreement. Such licenses shall be royalty bearing at the rate of [...***...] percent of net sales of all Products in the terminated country, provided that such Products are either (A) the Existing Product or (B) [...***...] to which Partner has participated in their Development, and shall be granted on the terms of Sections 1.73, 1.99, 1.107, 2.2, 6.3(d) and 6.3(e) and Article 7 of this Agreement whereby the name “Optimer” is replaced by the name “Partner” and the name “Partner” by the name “Optimer” and whereby, in Section 6.3(e), the reference to Valid Claim shall be to a Valid Claim of Partner Patents or Joint Patents.

(vii)Sublicensees; Third Party Agreements.    At the written request of Optimer, Partner will assign any Third Party agreements that exclusively relate to Products in the terminated country, to the furthest extent possible, provided that such assignment is permitted under such supply Agreement or is accepted by the Third Party.  In the event such assignment is not requested by Optimer or is not accepted by such Third Party, then the rights of such Third Party with respect to Products in that terminated country shall terminate upon termination of Partner’s rights.  Partner shall ensure that Sublicensees and such Third Parties in such country (if its contract is not assigned to Optimer pursuant to this Section 12.3(e)(vii)) shall transition any remaining Products specifically labeled for sale in that country back to Optimer in the manner set forth in this Section 12.3(e) as if such Affiliate or Third Party were named herein.  Partner shall include provisions requiring compliance with these provisions in the agreements with Sublicensees and Third Parties.

(f)Rights on Termination of the whole Agreement, Except for Termination for Cause by Partner under Section 12.2(b) or (c). Upon any termination of the whole Agreement under Section 12.2, except termination of this Agreement by Partner pursuant to Section 12.2(b) or (c):

(i)Development Transition.  The Parties shall work together in good faith to adopt, and Optimer shall have the final decision-making power with respect to, a plan to wind-down any Development activities with respect to the terminated Products in the Territory in an orderly fashion or, at Optimer’s election, promptly transition such Development activities to Optimer or its designee, with due regard for patient safety and the rights of any subjects that are participants in any clinical trials of Products and take any actions it deems reasonably necessary or appropriate to avoid any human health or safety problems and in compliance with all Applicable Laws.  Partner shall perform or cause to be performed its outstanding non-cancellable obligations with respect to Development of any Compounds and Products that existed or accrued prior to the notice date of termination; provided, however, that in no case shall Partner be obligated to pursue such activities for a period exceeding [...***...] after the date of notice of such termination.

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(ii)Commercialization Transition.  Partner and its Sublicensees shall continue, to the extent that Partner and its Sublicensees continue to have an inventory of Products, to fulfill orders received from customers for Products in the Territory until up to [...***...] after the later of (A) the date upon which Optimer notifies Partner in writing that Optimer has secured an alternative distributor or licensee for the Products and (B) Partner has initiated transition of the MAAs and Regulatory Approvals for the Products in the Territory to such distributor or licensee, but in no event for more for than [...***...] after the date of notice of termination.  For the Products sold by Partner or its Sublicensees after the effective date of termination, Partner shall continue to make payments to Optimer in accordance with Article 6.  Notwithstanding the foregoing, Partner and its Sublicensees shall cease such activities upon [...***...] days’ written notice given by Optimer at any time after the effective date of a termination requesting that such activities cease.  Within [...***...] days after Optimer has given notice to Partner requesting the cessation of activities pursuant to the provision of this Section 12.3(f)(ii), Partner shall notify Optimer of an estimate of the quantity of Products and shelf life remaining in Partner’s inventory and Optimer shall have the right to purchase any such quantities of Products from Partner at a price mutually agreed by the Parties.  To the extent Optimer does not purchase such quantities, Partner may sell such quantities during the [...***...] days after the effective date of such termination within the shelf life remaining for such Products.

(iii)Assignment of Filings and Marketing Approvals.  At Optimer’s option, which shall be exercised by written notice to Partner, to the extent permitted under Applicable Law, Partner shall assign or cause to be assigned to Optimer or its designee (or to the extent not so assignable, Partner shall take all reasonable actions to make available to Optimer or its designee the benefits of) all regulatory filings and registrations (including MAAs and Regulatory Approvals) for Products in the Territory, including any such regulatory filings and registrations made or owned by its Affiliates and/or Sublicensees.  Optimer shall notify Partner before the effective date of termination whether the regulatory filings and registrations should be assigned to Optimer or its designee, and if the latter, identify the designee, and provide Partner with all necessary details to enable Partner to effect the assignment (or availability).  If Optimer fail to provide such notification prior to the effective date of termination, Partner shall assign the regulatory filings and registrations to Optimer.

(iv)Transition.  Partner shall use Commercially Reasonable Efforts to cooperate with Optimer and/or its designee to effect a smooth and orderly transition in the Development, sale and marketing, promotion and commercialization of Products in the Territory during the notice and the wind-down periods referenced in this Section 12.3(f).  Without limiting the foregoing, Partner shall use Commercially Reasonable Efforts to conduct, in an expeditious manner, any activities to be conducted under this Section 12.3(f).  Optimer shall use Commercially Reasonable Efforts to identify and finalize an agreement or other arrangement with a Third Party in relation to the Products and/or, to the extent Optimer is able to take over such activities under Applicable Law, take over, directly or through an Affiliate, all activities related to Products, and in particular development activities on-going at the time of the effective date of the termination and the transfer of the regulatory filings and registrations (including MAAs and Regulatory Approvals) into the name of Optimer or Optimer’s designee so that the wind-down period shall be as limited as possible.

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(v)Rights Become Non-Exclusive.  Notwithstanding any other provision of this Agreement, following the effective date of termination and during the wind-down periods referenced in this Section 12.3(f), the license granted to Partner with respect to Products in the Field in the Territory shall be non-exclusive and limited to the activities expressly contemplated by this Section 12.3(f), and, without limiting the foregoing, Optimer shall have the right to engage one or more other distributors and/or licensees of the Products in the Field in the Territory.

(vi)License Grant.  Partner shall, and it hereby does, grant to Optimer, effective upon such termination, (A) an exclusive (even as to Partner), worldwide license, with the right to sublicense through multiple tiers of sublicense, under the Partner Technology and Partner’s share in Joint Patents, to Develop, make, have made, use, sell, offer for sale, and import products that include a Compound, alone or in combination with any other active pharmaceutical ingredient, in any form or formulation, and (y) an exclusive, irrevocable license, with the right to sublicense through multiple tiers of sublicense, to use and display trademarks owned by Partner or its Affiliates solely related to Products in the Territory in connection with the manufacture, use, offer for sale, sale, and import Products into the Territory, subject in each case to compliance by Optimer with the surviving provisions of this Agreement.  Such licenses shall be royalty bearing at the rate of [...***...] percent of net sales of all Products, provided that such Products are either (A) the Existing Product or (B) [...***...] to which Partner has participated in their Development, and shall be granted on the terms of Sections 1.73, 1.99, 1.107, 2.2, 6.3(d) and 6.3(e) and Article 7 of this Agreement whereby the name “Optimer” is replaced by the name “Partner” and the name “Partner” by the name “Optimer” and whereby, in Section 6.3(e), the reference to Valid Claim shall be to a Valid Claim of Partner Patents or Joint Patents.

(vii)Sublicensees; Third Party Agreements.  Any agreements with Sublicensees shall terminate upon termination of this Agreement, subject to rights during the wind-down period as referenced in this Section 12.3(f).  At the written request of Optimer, Partner will assign any Product-specific Third Party agreements, to the furthest extent possible, provided that such assignment is permitted under the Product-specific supply Agreement or is accepted by the Third Party.  In the event such assignment is not requested by Optimer or is not accepted by such Third Party, then the rights of such Third Party with respect to Products shall terminate upon termination of Partner’s rights.  Partner shall ensure that Sublicensees and such Third Parties (if its contract is not assigned to Optimer pursuant to this Section 12.3(f)(vii)) shall transition any remaining Products back to Optimer in the manner set forth in this Section 12.3(f) as if such Affiliate or Third Party were named herein.  Partner shall include provisions requiring compliance with these provisions in the agreements with Sublicensees and Third Parties.

(g)Termination for Cause by Partner under Section 12.2(b) or (c).  Upon any termination of this Agreement by Partner pursuant to Section 12.2(b) or (c):

(i)Development Wind-Down.  The Parties shall work together in good faith to adopt, and Partner shall have the final decision-making power with respect to, a plan to wind-down any development activities with respect to Compounds and Products in the Territory in an orderly fashion, with due regard for patient safety and the rights of any subjects

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that are participants in any clinical trials of Products and take any actions it deems reasonably necessary or appropriate to avoid any human health or safety problems and in compliance with all Applicable Laws.  Partner shall perform or cause to be performed its outstanding non-cancellable obligations with respect to development of any Compounds and Products that existed or accrued prior to the notice date of termination; provided, however, that in no case shall Partner be obligated to pursue such activities for a period exceeding [...***...] after the date of notice of such termination.

(ii)Commercialization Wind-Down.  Partner and its Sublicensees may continue, to the extent that Partner and its Sublicensees continue to have an inventory of Products, to fulfill orders received from customers for Products in the Territory until up to [...***...] after the effective date of termination.  For the Products sold by Partner or its Sublicensees after the effective date of termination, Partner shall continue to make payments to Optimer in accordance with Article 6.

12.4Rights Upon Bankruptcy.  All rights and licenses granted under or pursuant to this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title 11 of the United States Code and other similar laws in any jurisdiction in the Territory (collectively, the “Bankruptcy Laws”), licenses of rights to be “intellectual property” as defined under the Bankruptcy Laws.  If a case is commenced during the Term by or against a Party under Bankruptcy Laws then, unless and until this Agreement is rejected as provided in such Bankruptcy Laws, such Party (in any capacity, including debtor-in-possession) and its successors and assigns (including a trustee) shall perform all of the obligations provided in this Agreement to be performed by such Party.  If a case is commenced during the Term by or against a Party under the Bankruptcy Laws, this Agreement is rejected as provided in the Bankruptcy Laws and the other Party elects to retain its rights hereunder as provided in the Bankruptcy Laws, then the Party subject to such case under the Bankruptcy Laws (in any capacity, including debtor-in-possession) and its successors and assigns (including a Title 11 trustee), shall provide to the other Party copies of such intellectual property and all embodiments thereof  necessary for such other Party to prosecute, maintain and enjoy its rights under the terms of this Agreement promptly upon such other Party’s written request therefor.  All rights, powers and remedies of the non-bankrupt Party as provided herein are in addition to and not in substitution for any and all other rights, powers and remedies now or hereafter existing at law or in equity (including, without limitation, the Bankruptcy Laws) in the event of the commencement of a case by or against a Party under the Bankruptcy Laws.

12.5PAR Tripartite Agreement.  Prior to the execution of this Agreement PAR, Partner and Optimer have executed the PAR Tripartite Agreement by which PAR confirms that the rights granted to Optimer under the PAR Agreement shall be transferred directly to Partner in the event that the PAR Agreement terminates for any reason or that Optimer ceases to exist for any reason.

12.6Exercise of Right to Terminate.  The use by either Party hereto of a termination right provided for under this Agreement shall not give rise to the payment of damages or any other form of compensation or relief to the other Party with respect thereto.

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12.7Damages; Relief.  Subject to Section 12.6 above, termination of this Agreement shall not preclude either Party from claiming any other damages, compensation or relief that it may be entitled to upon such termination.

12.8Accrued Obligations; Survival.  The expiration or termination of this Agreement, in whole or part, for any reason shall not release either Party from any liability which, at the time of such expiration termination, has already accrued to such Party or which is attributable to a period prior to such expiration or termination, nor will any expiration or termination of this Agreement preclude either Party from pursuing all rights and remedies it may have under this Agreement, at law or in equity, with respect to breach of this Agreement. For clarity, any sums owed to Partner or Optimer as a result of any overpayment or underpayment by Partner, respectively, determined pursuant to Section 7.6 and 7.7 shall be immediately due and payable on termination. In addition, upon expiration or termination of this Agreement, all rights and obligations of the Parties under this Agreement shall terminate, except those described in the following Articles and Sections: Sections 2.3, 4.7 (with respect to Development Expenses incurred prior to expiration or termination) 7.6, 7.7, 9.1, 9.2, 9.4(c), 9.5(c) and 9.5(d) (to the extent Optimer has an exclusive license under such Partner Patent(s) in the applicable territory after expiration or termination), 10.3, 10.4, 12.1, 12.3, 12.4, 12.5, 12.6, 12.7 and 12.8 and Articles 1, 8, 11 (in respect of acts carried out prior to expiration or termination, provided that the Third Party Claim arising as a result of such acts may be brought after expiration or termination), 13 and 14.

ARTICLE 13

DISPUTE RESOLUTION

13.1Objective.  The Parties recognize that disputes as to matters arising under or relating to this Agreement or either Party’s rights and/or obligations hereunder may arise from time to time.  It is the objective of the Parties to establish procedures to facilitate the resolution of such disputes in an expedient manner by mutual cooperation and without resort to litigation.  To accomplish this objective, the Parties agree to follow the procedures set forth in this Article 13 to resolve any such dispute if and when it arises.

13.2Resolution by Executives.  Except as otherwise provided in Article 3, if an unresolved dispute as to matters arising under or relating to this Agreement or either Party’s rights and/or obligations hereunder arises, either Party may refer such dispute to the Executives, who shall meet in person or by telephone within thirty (30) days after such referral to attempt in good faith to resolve such dispute.  If such matter cannot be resolved by discussion of such officers within such thirty (30)-day period (as may be extended by mutual written agreement), such dispute shall be resolved in accordance with Section 13.3.

13.3Arbitration.

(a)If the Parties do not resolve a dispute as provided in Section 13.2, and a Party wishes to pursue the matter, each such dispute that is not an “Excluded Claim” shall be resolved by binding arbitration in accordance with the LCIA Rules as then in effect, which

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Rules are deemed to be incorporated by reference into this clause and judgment on the arbitration award may be entered in any court having jurisdiction thereof.  The decision rendered in any such arbitration will be final and not appealable.  If either Party intends to commence binding arbitration of such dispute, such Party will provide written notice to the other Party informing the other Party of such intention and the issues to be resolved.  Within thirty (30) days after the receipt of such notice, the other Party may by written notice to the Party initiating binding arbitration, add additional issues to be resolved.

(b)The arbitration shall be conducted by a panel of three (3) arbitrators appointed in accordance with the LCIA Rules, none of whom shall be a current or former employee or director, or a then-current stockholder, of either Party, their respective Affiliates or any Sublicensee. The place of arbitration shall be New York, New York, and all proceedings and communications shall be in English.

(c)It is the intention of the Parties that discovery, although permitted as described herein, will be limited except in exceptional circumstances.  The arbitrators will permit such limited discovery necessary for an understanding of any legitimate issue raised in the arbitration, including the production of documents.  No later than thirty (30) days after selection of the arbitrators, the Parties and their representatives shall hold a preliminary meeting with the arbitrators, to mutually agree upon and thereafter follow procedures seeking to assure that the arbitration will be concluded within six (6) months from such meeting.  Failing any such mutual agreement, the arbitrators will design and the Parties shall follow procedures to such effect.

(d)Either Party may apply to the arbitrators for interim injunctive relief until the arbitration award is rendered or the controversy is otherwise resolved.  Either Party also may, without waiving any remedy under this Agreement, seek from any court having jurisdiction any injunctive or provisional relief necessary to protect the rights or property of that Party pending the arbitration award.  The arbitrators shall have no authority to award punitive or any other non-compensatory damages, except as may be permitted by Section 10.4.  The arbitrators shall have the power to order that all or part of the legal or other costs incurred by a Party in connection with the arbitration be paid by the other Party. Each Party shall bear an equal share of the arbitrators’ and any administrative fees of arbitration.  In addition, in the event the arbitrators award damages to Partner pursuant to this Article 13 and Optimer is then, or becomes at any point,  bankrupt or insolvent, the amount of such damages shall be applied as a credit to royalty payments otherwise owed to Optimer under Section 6.3.

(e)Except to the extent necessary to confirm or enforce an award or as may be required by Applicable Law, neither a Party nor an arbitrator may disclose the existence, content, or results of an arbitration without the prior written consent of both Parties.  In no event shall an arbitration be initiated after the date when commencement of a legal or equitable proceeding based on the dispute, controversy or claim would be barred by the applicable New York statute of limitations.

(f)As used in this Section, the term “Excluded Claim” shall mean a dispute, controversy or claim that concerns (i) the validity, enforceability or infringement of a patent,

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trademark or copyright; or (ii) any antitrust, anti-monopoly or competition law or regulation, whether or not statutory.

ARTICLE 14

GENERAL PROVISIONS

14.1Standstill Agreement.  During the Term and for a period of [...***...] years thereafter (the “Standstill Period”), neither Partner nor any of Partner’s Representatives (as defined below) will, in any manner, directly or indirectly:

(a)make, effect, initiate, directly participate in or cause (i) any acquisition of beneficial ownership of any securities of Optimer or any securities of any subsidiary or other Affiliate of Optimer, if, after such acquisition, Partner would beneficially own more than [...***...] of the outstanding common stock of Optimer, (ii) any acquisition of any assets of Optimer or any assets of any subsidiary or other Affiliate of Optimer, (iii) any tender offer, exchange offer, merger, business combination, recapitalization, restructuring, liquidation, dissolution or extraordinary transaction involving Optimer or any subsidiary or other Affiliate of Optimer, or involving any securities or assets of Optimer or any securities or assets of any subsidiary or other affiliate of Optimer, or (iv) any “solicitation” of “proxies” (as those terms are used in the proxy rules of the SEC) or consents with respect to any securities of Optimer provided that nothing in this Section 14.1 shall preclude any activities of Partner or its Representatives with respect to the grant by Optimer or any subsidiary or other Affiliate of Optimer of any licence, or the supply by Optimer or any subsidiary or other Affiliate of Optimer of any products, in each case to Partner or any of its Affiliates;

(b)form, join or participate in a group (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) with respect to the beneficial ownership of any securities of Optimer;

(c)act, alone or in concert with others, to seek to control the management, board of directors or policies of Optimer;

(d)take any action that might require Optimer to make a public announcement regarding any of the types of matters set forth in Section 14.1(a);

(e)agree or offer to take, or encourage or propose (publicly or otherwise) the taking of, any action referred to in Section 14.1(a), (b), (c) or (d);

(f)assist, induce or encourage any Third Party to take any action of the type referred to in Section 14.1(a), (b), (c), (d) or (e);

(g)enter into any discussions, negotiations, arrangement or agreement with any Third Party relating to any of the foregoing; or

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(h)request or propose that Optimer or any of Optimer’s Representatives amend, waive or consider the amendment or waiver of any provision set forth in this Section 14.1.

For purposes of this Agreement, a Party’s “Representatives” will be deemed to include each person or entity that is or becomes (i) a subsidiary or other Affiliate of such Party, or (ii) an officer, director, employee, partner, attorney, advisor, accountant, agent or representative of such Party or of any of such Party’s subsidiaries or other affiliates, providing such person is acting on behalf of such Party.

The obligations of Partner under this Section 14.1 above shall terminate in the event of (i) any bona fide unsolicited Third Party tender or exchange offer for at least fifty percent (50%) of the outstanding voting capital stock of Optimer, (ii) Optimer enters into any agreement for an Acquisition Transaction (as defined below) with any Third Party, or (iii) Optimer, upon the decision of Optimer’s Board of Directors, initiates a structured auction process with regard to an Acquisition Transaction, but excluding any market check in response to an unsolicited proposal made by any Third Party.  All of the provisions of this Section 14.1 above shall be reinstated and shall apply in full force according to their terms in the event that:  (A) if the provisions of Section 14.1 above shall have terminated as the result of a tender or exchange offer, such tender or exchange offer (as originally made or as amended or modified) shall have terminated (without closing) prior to the commencement of a tender or exchange offer by Partner or any of its Affiliates that would have been permitted to be made pursuant to the first sentence of this paragraph as a result of such Third Party tender or exchange offer; (B) any tender or exchange offer by Partner or any of its Affiliates (as originally made or as extended or modified) that was permitted to be made pursuant to this paragraph shall have terminated (without closing); or (C) if the provisions of Section 14.1 above shall have terminated as a result of any action by Optimer referred to in this paragraph, Optimer shall have determined not to take any of such actions (and no such transaction shall have closed) prior to the commencement of any action by Partner or any of its Affiliates that would have been permitted to be made pursuant to this paragraph as a result of the initial determination of Optimer referred to in this paragraph.  Upon reinstatement of the above provisions of Section 14.1, the provisions of this paragraph shall continue to govern in the event that any of the events described in this paragraph shall occur.

The term “Acquisition Transaction” shall mean (1) any sale, license, lease, exchange, transfer or other disposition of the assets of Optimer constituting more than fifty percent (50%) of the consolidated assets of Optimer or accounting for more than fifty percent (50%) of the consolidated revenues of Optimer in any transaction or series of related transactions (but excluding any development and/or commercial collaboration involving any of Optimer’s product candidates); (2) any offer to purchase, tender offer, exchange offer or any similar transaction or series of related transactions made by any person involving more than fifty percent (50%) of the outstanding shares of voting capital stock of Optimer; or (3) any merger, consolidation, business combination, share exchange, reorganization or similar transaction or series of related transactions involving Optimer, in each case excluding any such transaction whereby the holders of voting capital stock of Optimer immediately prior to any such transaction hold more than fifty percent (50%) of the voting capital stock of the acquiring or surviving entity (or its parent entity ) immediately after the consummation of any such transaction.

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The expiration of the Standstill Period will not terminate or otherwise affect any of the other provisions of this Agreement.

14.2Governing Law.  This Agreement and all questions regarding its existence, validity, interpretation, breach or performance of this Agreement and any dispute or claim arising out of or in connection with it (whether contractual or non-contractual in nature such as claims in tort, from breach of statute or regulation or otherwise), shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, United States, without reference to its conflicts of law principles with the exception of sections 5-1401 and 5-1402 of New York General Obligations Law (without limiting the Parties’ rights and obligations under Article 13).  The United Nations Conventions on Contracts for the International Sale of Goods shall not be applicable to this Agreement.

14.3Force Majeure.  Neither Party shall be held liable to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in performing any obligation under this Agreement (other than failure to make payment when due) when such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party including embargoes, war, acts of war (whether war be declared or not), insurrections, riots, civil commotions, fire, floods, or other acts of God, or acts, omissions or delays in acting by any governmental authority or the other Party.  The affected Party shall notify the other Party of such force majeure circumstances as soon as reasonably practical, and shall promptly undertake all reasonable efforts necessary to cure such force majeure circumstances.  Such excuse from liability shall be effective only to the extent and duration of the event(s) causing the failure or delay in performance and provided that the Party has not caused such event(s) to occur.

14.4Assignment.  Except as expressly provided hereunder, neither this Agreement nor any rights or obligations hereunder may be assigned or otherwise transferred by either Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld; provided, however, that either Party may assign this Agreement and its rights and obligations hereunder without the other Party’s consent:

(a)in connection with the transfer or sale of all or substantially all of the business of such Party relating to Products to a Third Party, whether by merger, sale of stock, sale of assets or otherwise, provided that in the event of a transaction (whether this Agreement is actually assigned or is assumed by the acquiring party by operation of law (e.g., in the context of a reverse triangular merger)), intellectual property rights of the acquiring party in such transaction (if other than one of the Parties to this Agreement) shall not be included in the intellectual property rights licensed under this Agreement; or

(b)to an Affiliate, provided that the assigning Party shall remain liable and responsible to the non-assigning Party hereto for the performance and observance of all such duties and obligations by such Affiliate.

This Agreement shall be binding upon successors and permitted assigns of the Parties.  Any

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assignment not in accordance with this Section 14.4 will be null and void.

14.5Severability.  If any one or more of the provisions contained in this Agreement is held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, unless the absence of the invalidated provision(s) adversely affects the substantive rights of the Parties.  The Parties shall in such an instance use their best efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) which, insofar as practical, implement the purposes of this Agreement.

14.6Notices.  All notices which are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by facsimile (and promptly confirmed by personal delivery, registered or certified mail or overnight courier), sent by nationally-recognized overnight courier or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

If to Optimer, addressed to:

Optimer Pharmaceuticals, Inc.

10110 Sorrento Valley Rd., Suite C

San Diego, CA 92121, U.S.A.

Attention: Chief Executive Officer

Fax: (858) 909-0737

If to Partner, addressed to:

Astellas Pharma Europe Ltd.

Lovett House, Lovett Road

Staines, Middlesex TW18 3AZ

UK

Attention: General Counsel

or to such other address as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith.  Any such notice shall be deemed to have been given: (a) when delivered if personally delivered or sent by facsimile on a Business Day; (b) on the Business Day after dispatch if sent by nationally recognized overnight courier; and/or (c) on the third Business Day following the date of mailing if sent by mail.

14.7Entire Agreement; Amendments.  This Agreement, together with the exhibit hereto, the Supply Agreement and the Letter Agreement contain the entire understanding of the Parties with respect to the subject matter hereof and thereof and supersede and cancel all previous express or implied agreements and understandings, negotiations, writings and commitments, either oral or written, in respect to the subject matter hereof and thereof, including

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the Confidentiality Agreement.  This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by authorized representatives of both Parties hereto.

14.8Headings.  The captions to the several Articles and Sections hereof are not a part of this Agreement, but are merely for convenience to assist in locating and reading the several Sections hereof.

14.9Independent Contractors.  It is expressly agreed that Optimer and Partner shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint venture or agency.  Neither Optimer nor Partner shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other Party, without the prior written consent of the other Party.

14.10Waiver.  The waiver by either Party hereto of any right hereunder, or the failure of the other Party to perform, or a breach by the other Party, shall not be deemed a waiver of any other right hereunder or of any other breach or failure by such other Party whether of a similar nature or otherwise.

14.11Cumulative Remedies.  No remedy referred to in this Agreement is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law.

14.12Waiver of Rule of Construction.  Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement.  Accordingly, the rule of construction that any ambiguity in this Agreement shall be construed against the drafting Party shall not apply.

14.13Interpretation.  All references in this Agreement to an Article, Section or Exhibit shall refer to an Article, Section or Exhibit in or to this Agreement, unless otherwise stated.  Any reference to any federal, national, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise.  The word “including” and similar words means including without limitation.  The words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision.  All references to days, months, quarters or years are references to calendar days, calendar months, calendar quarters, or calendar years, unless stated otherwise.  References to the singular include the plural.

14.14No Third Party Beneficiaries.  This Agreement is neither expressly or impliedly made for the benefit of any Party other than Optimer and Partner, except as otherwise provided in this Agreement with respect to provisions in Section 7.6 for the benefit of PAR and with respect to Optimer Indemnitees under Section 11.1 and Partner Indemnitees under Section 11.2. This Agreement may be terminated, varied or amended in accordance with its terms or with the agreement of Partner and Optimer without the consent of the Optimer Indemnitees and/or Partner Indemnitees.

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14.15English Language.  This Agreement is in the English language, and the English language shall control their interpretation.  In addition, all notices required or permitted to be given under this Agreement, and all written, electronic, oral or other communications between the Parties regarding this Agreement, shall be in the English language.

14.16Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the Parties have executed this Collaboration and License Agreement as of the Effective Date.

ASTELLAS PHARMA EUROPE LTD		OPTIMER PHARMACEUTICALS, INC.
By:	/s/ M. Yoshida	By:	/s/ Pedro Lichtinger
Name:	M. Yoshida	Name:	Pedro Lichtinger
Title:	President and CEO	Title:	President and CEO

SIGNATURE PAGE TO COLLABORATION AND LICENSE AGREEMENT

EXHIBIT A

Licensed Patents

[...***...]

*** Confidential Treatment Requested

EXHIBIT B

COOPERATION TERMS

1.Trade Meetings.   If, in respect of a Product, (i) Optimer or one of its Affiliates or licensees outside the Territory wishes to attend any professional or trade meeting inside the Territory or (ii) Partner or one of its Sublicensees wishes to attend any professional or trade meeting outside the Territory, then each such Party shall notify the JSC.  The Parties shall endeavour to cooperate in respect of their participation in organized events and organizing non-core events relating to the Product during such meeting. In no event will any such activities of Optimer or its Affiliates or licensees be directed at sales of Products by or on behalf of Partner or its Sublicensees in the Territory, and in no event will any such activities of Partner or its Sublicensees be directed at sales of Products by or on behalf of Partner or its Sublicensees anywhere in the world except in the Territory. Each Party shall bear its own costs of participation at any such meeting.

2.Key Opinion Leaders

(a)The Parties acknowledge that, from time to time, Partner or its Sublicensees may be interested in engaging Outside Territory KOLs for the purposes of providing consultancy services to Partner in connection with the Products within the Territory.  To the extent that such services or interactions with such KOLs do not constitute a promotional or marketing activity, Partner shall have the right to conduct such activities outside the Territory; provided, however, that Partner shall previously inform Optimer of such any activities and coordinate such activities through the JSC.  For the avoidance of doubt, confidential advisory boards and confidential consultancy meetings with KOLs do not constitute promotional or marketing activity.

(b)The Parties acknowledge that, from time to time, Optimer or its Affiliates or licensees may be interested in engaging Territory KOLs for the purposes of providing consultancy services to Optimer in connection with Products outside the Territory.  To the extent that such services or interactions with KOLs do not constitute a promotional or marketing activity, Optimer shall have the right to conduct such activities inside the Territory; provided, however, that Optimer shall previously inform Partner of such any activities and coordinate such activities through the JSC.  For the avoidance of doubt, confidential advisory boards and confidential consultancy meetings with KOLs do not constitute promotional or marketing activity.

(c)For the purpose of this paragraph 2:

“Outside Territory KOL” means healthcare providers outside of the Territory that have administered a Product in clinical trials, have published academic articles relating to a Product, or are otherwise regarded by Optimer, its Affiliates and licensees or Partner, as the case may be, as a key opinion leader for a Product outside of the Territory.

“Territory KOL” means healthcare providers in the Territory that have administered a Product in clinical trials, have published academic articles relating to a Product, or are otherwise regarded by Optimer, its Affiliates and licensees or Partner, as the case may be, as a key opinion leader for a Product in the Territory.

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EXHIBIT C

PAR Tripartite Agreement

THIS AGREEMENT is made as of February 2, 2011

BETWEEN

(1)PAR PHARMACEUTICAL, INC., a company organized under the laws of the State of Delaware, having a place of business at 300 Tice Boulevard, Woodcliff Lake, NJ 07677, USA (“Par”);

(2)OPTIMER PHARMACEUTICALS, INC a company organized under the laws of the State of Delaware, having a principal place of business at 10110 Sorrento Valley Rd., Suite C, San Diego, California 92121, USA (“Optimer”); and

(3)ASTELLAS PHARMA EUROPE LIMITED, a company organized under the laws of England, having a principal place of business at Lovett House, Lovett Road, Staines, Middlesex, TW18 3AZ, United Kingdom (“Astellas”).

BACKGROUND

(A)Par and Optimer are parties to a Prospective Buy-Back Agreement, dated January 19, 2007 (the “Par Agreement”). Under the Par Agreement Par has, amongst other things, assigned to Optimer all of its right, title and interest in all OPT-80 Data solely and exclusively related to the Product and has granted Optimer a non-exclusive, fully-paid up, perpetual, royalty-free worldwide license, including the right to grant and authorize sublicenses, to use all OPT-80 Data primarily related to the Product but not assigned to Optimer (the “Licensed OPT-80 Data”) for any and all uses in connection with the Product (as the terms “OPT-80 Data” and “Product” are defined in the Par Agreement).

(B)Optimer and Astellas are about to enter into an agreement providing for the license to Astellas of all of Optimer’s rights in the product fidaxomicin (otherwise known as Opt-80), including its rights to the Opt-80 Data.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1Agreement of the Parties

1.1Capitalized terms used but not defined herein shall have their respective meanings assigned thereto in the Par Agreement.

1.2In the event that, to the extent permitted by the Par Agreement, the rights to the Licensed OPT-80 Data cease to be licensed to Optimer by Par under the Par Agreement for any reason, including, without limitation, the liquidation or dissolution of Optimer, and the agreement between Optimer and Astellas is continuing (or Astellas continues to have rights to develop and commercialize the Product in the Territory (as defined

below), including, without limitation, through the operation of Section 365(n) of Title 11 of the U.S. Code), then, subject to the terms and conditions hereof, the parties hereby agree that following shall apply:

(a)Par shall forthwith grant to Astellas a non-exclusive, fully-paid up, perpetual, royalty-free license, including the right to grant and authorize sublicenses, to use all OPT-80 Data primarily related to the Product but not assigned to Optimer under Section 2.6(g)(i) of the Par Agreement for any and all uses in connection with the Product in the Territory.  The term “Territory” shall mean Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Republic of Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, United Kingdom, Turkey, South Africa, Russia, Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Ukraine, Uzbekistan, Middle East (Bahrain, Gaza Strip, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, United Arab Emirates, West Bank (Palestine) and Yemen) and North Africa (Algeria, Egypt, Libya, Morocco and Tunisia); provided that, in the event that Astellas terminates the agreement between Optimer and Astellas with respect to the Product in a given country, the definition of “Territory” shall automatically be amended to remove such country.

(b)If Par does not receive from Optimer the six and one-quarter percent (6.25%) of all Net Revenues as set out in Section 2.3(c) of the Par Agreement attributable to payments from Astellas to Optimer (the “Par Payment”), then Astellas shall pay Par amounts equal to six and one-quarter percent (6.25%) of the Net Revenues that Astellas would have had to pay to Optimer had the circumstances set forth in Section 1.2 not occurred.  Such payments shall be in accordance with Section 2.3(c) of the Par Agreement and end on the seventh (7th) anniversary of the first Commercial Launch.  For clarification, Par acknowledges and agrees that there shall not be any double-payment to Par to the extent that Par has received any Par Payment from Optimer, and Optimer acknowledges and agrees that there shall not be any double-payment by Astellas to Optimer to the extent that Astellas has paid any Par Payment to Par pursuant to this Agreement.

(c)Par shall hereby have the same right to audit Astellas’ books and records as provided to Par in Section 2.4 of the Par Agreement with respect to Optimer’s books and records.

(d)Astellas shall promptly reimburse, defend and indemnify the Par Indemnitees, and hold each of them harmless from and against, any and all Liabilities suffered, incurred, or sustained by any Par Indemnitee or to which a Par Indemnitee becomes subject, resulting from, arising out of, or relating to, the making, using, selling, offering for sale, promoting, distributing and/or otherwise commercializing Product distributed by or on behalf of Astellas or its Affiliates, agents, contractors or licensees.

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(e)Indemnification Procedure.  In the event that Par intends to claim indemnification under Section 1.2(d), Par shall promptly notify Astellas in writing of any claim, complaint, suit, proceeding or cause of action in respect of which Par intends to claim such indemnification (for purposes of this Section 1.2(e), each a “Claim”), and Astellas shall have sole control of the defense and/or settlement thereof; provided that Par shall have the right to participate, at its own expense, with counsel of its own choosing in the defense and/or settlement of such Claim. The indemnification under Section 1.2(d) shall not apply to amounts paid with respect to settlement of any Claim if such settlement is effected without the consent of Astellas, which consent will not be unreasonably withheld or delayed. The failure to deliver written notice to Astellas within a reasonable period of time after the commencement of any such claim, suit or proceeding, if prejudicial to its ability to defend such action, shall relieve Astellas of any liability to Par under Section 1.2(d), but the omission to so deliver written notice to Astellas shall not relieve Astellas of any liability to Par under this Agreement otherwise than under Section 1.2(d). Without limiting the foregoing, Par shall keep Astellas fully informed of the progress of any Claim for which it intends to claim indemnification under Section 1.2(d). Par under Section 1.2(d), and its employees, at Astellas’s request and expense, shall provide full information and reasonable assistance to Astellas and its legal representatives with respect to such Claims covered by this indemnification.

1.3Except as provided herein, no other terms of the Par Agreement shall apply as between Par and Astellas.

2General

2.1The terms of this Agreement and the discussions, correspondence and negotiations leading to the making of this Agreement shall remain confidential to the parties who shall not disclose the terms of this Agreement to any other person save that  the obligations of confidentiality in this Section 2.1 shall not extend to any matter which a party can show is in or has become part of the public domain other than as a result of a breach of the obligations of confidentiality under this Agreement; or was in its written records prior to the date of this Agreement; was independently disclosed to it by a third party entitled to disclose the same; or is required to be disclosed under any applicable law, or by order of a court or governmental body or other competent authority, including the requirements of the U.S. Securities and Exchange Commission and any stock exchange on which a party’s or its parent company’s capital stock is listed.

2.2No party shall assign, delegate, sub-contract, transfer, charge or otherwise dispose of all or any of its rights under this Agreement without the other parties’ prior written consent.  Notwithstanding the foregoing, a party may assign this Agreement and its rights and obligations hereunder without the other parties’ consent in connection with the transfer or sale of all or substantially all of the business of such party relating to fidaxomicin to a third party, whether by merger, sale of stock, sale of assets or otherwise.

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2.3Nothing in this Agreement shall create or be deemed to create a partnership or joint venture or relationship of employer and employee or principal and agent between the parties.

2.4This Agreement sets out the entire agreement between the parties in relation to its subject matter and overrides any prior correspondence or representations.  All warranties and conditions not set out in this Agreement whether implied by statute or otherwise are excluded to the extent permitted by law. No party shall have any claim against another for any misrepresentation unless such misrepresentation was made fraudulently.

2.5Any variation to this Agreement must be in writing and signed by a duly authorised representative of each of the parties to this Agreement.

2.6The waiver by any party of any breach of this Agreement shall not prevent the subsequent enforcement of that provision and shall not be deemed to be a waiver of any subsequent breach of that or any other provision.  Any waiver of any breach of this Agreement shall be in writing.

2.7If any provision of this Agreement is ruled to be invalid for any reason, that invalidity will not affect the rest of this Agreement which will remain valid and enforceable in all respects.

2.8This Agreement shall be entered into in the form of counterparts executed by each of the Parties.  A facsimile, scanned or other electronic signature shall be valid and binding upon the signatory.

2.9Any notice or other document to be given to a party under this Agreement shall be given by sending the same by any postal service requiring proof of receipt by signature to the address of the party specified in this Agreement or its registered office, attention: Chief Legal Officer.

2.10This Agreement and any issues, disputes or claims arising out of or in connection with it (whether contractual or non-contractual in nature such as claims in tort, from breach of statute or regulation or otherwise) shall be governed by, and construed in accordance with, the substantive law of the State of Delaware, without regard to the conflicts of law provisions thereof. The parties hereby submit to the exclusive jurisdiction of the courts of the State of Delaware.

IN WITNESS OF THE ABOVE the parties have signed this Agreement on the date written at the head of this Agreement.

ASTELLAS PHARMA EUROPE LTD		OPTIMER PHARMACEUTICALS, INC.
By:	/s/ M. Yoshida	By:	/s/ Pedro Lichtinger
Name:	M. Yoshida	Name:	Pedro Lichtinger
Title:	President and CEO	Title:	President and CEO

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Date:	2/2/2011	Date:	2/2/2011
PAR PHARMACEUTICAL, INC.
By:	/s/ Thomas J. Haughey
Name:	Thomas J. Haughey
Title:	EVA, CAO & General Counsel
Date:	2/2/2011

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EX-10.3

Exhibit 10.3

***Text Omitted and Filed Separately

with the Securities and Exchange Commission.

Confidential Treatment Requested

Under 17 C.F.R. Sections 200.80(b)(4)

and 230.406.

EXECUTION COPY

SUPPLY AGREEMENT

THIS SUPPLY AGREEMENT (the “Agreement”) is entered into as of the 2nd day of February, 2011 (the “Effective Date”) between OPTIMER PHARMACEUTICALS, INC., a company organized under the laws of the State of Delaware (“Optimer”), having a principal place of business at 10110 Sorrento Valley Rd., Suite C, San Diego, California 92121, and ASTELLAS PHARMA EUROPE LTD, a company organized under the laws of England (“Partner”), having a principal place of business at Lovett House, Lovett Road, Staines, Middlesex, TW18 3AZ, United Kingdom.

RECITALS

WHEREAS, Optimer is developing fidaxomicin for the treatment of Clostridium difficile infection and owns or controls certain patents, know-how and other intellectual property relating to fidaxomicin;

WHEREAS, Partner is engaged in the research, development and commercialization of pharmaceutical products;

WHEREAS, Partner and Optimer are entering into a Collaboration and License Agreement on even date herewith (as may be amended, the “License Agreement”) under which Partner is receiving a license to develop and commercialize Products in the Territory; and

WHEREAS, Optimer desires to supply Product to Partner in connection with the License Agreement and on the terms and conditions set forth herein.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1.DEFINITIONS

1.1“Additional Product” shall mean any pharmaceutical product containing or comprising a Compound as the sole active pharmaceutical ingredient, […***…], to which Partner has a license under the License Agreement, other than the Existing Product.

1.2“Affiliate” of a Party shall mean any entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such Party, as the case may be, but for only so long as such control exists.  As used in this Section 1.2, “control” shall mean (a) to possess, directly or indirectly, the power to direct the management or policies of an entity, whether through ownership of voting securities, by contract relating to voting rights or corporate governance; or (b) direct or indirect beneficial ownership of more than fifty percent (50%) (or such lesser percentage which is the maximum allowed to be owned by a

***Confidential Treatment Requested

foreign corporation in a particular jurisdiction) of the voting share capital or other equity interest in such entity.

1.3“API” shall mean the active pharmaceutical ingredient of the Existing Product.

1.4“Applicable Laws” shall mean the applicable provisions of any and all national, supranational, regional, state and local laws, treaties, statutes, rules, regulations, administrative codes, guidance, ordinances, judgments, decrees, directives, injunctions, orders, permits (including Regulatory Approvals) of or from any court, arbitrator, Regulatory Authority or governmental agency or authority having jurisdiction over or related to the subject item.

1.5“Audit Disagreement” shall have the meaning provided in Section 4.3(e).

1.6“Bankruptcy Laws” shall have the meaning provided in Section 11.6.

1.7“Buffer Stock” shall have the meaning provided in Section 7.6(a).

1.8“Bulk Product” shall mean the Existing Product in tablet form without being packaged in a blister.

1.9“Business Day” shall mean a day other than a Saturday or Sunday or any public holiday in the United States, England or the Netherlands.  For the avoidance of doubt, references in this Agreement to “days” shall mean calendar days.

1.10“Calendar Quarter” shall mean a period of three (3) consecutive months during a Calendar Year beginning on and including January 1st, April 1st, July 1st or October 1st.

1.11“Calendar Year” shall mean a period of twelve (12) consecutive months beginning on and including January 1st.

1.12“CDI” shall mean Clostridium difficile infection in humans.

1.13“Certificate of Analysis” shall have the meaning provided in Section 6.1(b).

1.14“cGMP” or “current Good Manufacturing Practices” means all applicable standards relating to manufacturing practices for fine chemicals, active pharmaceutical ingredients, intermediates, bulk products or finished pharmaceutical products, including current good manufacturing practices and standards as provided for (and as amended or superseded from time to time) in:

(a)European Community Directive 2003/94/EC (Principles and guidelines of good manufacturing practice for medicinal products);

(b)21 C.F.R. §§ 210 and 211;

(c)ICH Guidance for Industry Q7 Good Manufacturing Practice Guidance for Active Pharmaceutical Ingredients; and

(d)Part II of Volume IV of the EU Guide to Good Manufacturing Practice.

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1.15“CMC” shall mean chemistry, manufacturing and controls.

1.16“Compound”[…***…] or any salt, hydrate, solvate, polymorph, stereo-isomer, ester, chelate, clathrate, acid, base, epimer, enantiomer, crystalline form, metabolite or prodrug or any other non-covalent derivative or crystalline form thereof.

1.17“Confidential Information” shall have the meaning provided in Section 10.1.

1.18“Confidentiality Agreement” shall mean that certain agreement dated 7 January 2009 between Optimer and Partner.

1.19“Cost of Goods” shall have the meaning provided in Section 4.1(b).

1.20“Control” (including any variations such as “Controlled” and “Controlling”) shall mean with respect to any Information, Patent or other intellectual property rights, possession by a Party of the ability (whether by ownership or license, other than pursuant to this Agreement) to grant the applicable license under this Agreement, without violating the terms of an agreement with a Third Party.

1.21“Develop” shall mean to research, develop, analyze, test and conduct preclinical, clinical and all other regulatory trials for a compound or product, as well as any and all activities pertaining to new indications, pharmacokinetic studies and all related activities including work on new formulations, new methods of treatment and CMC activities including new manufacturing methods.  “Developing” and “Development” shall have correlative meanings.

1.22“Disclosing Party” shall have the meaning provided in Section 10.1.

1.23“Effective Date” shall mean the date at the head of this Agreement.

1.24“EMA” shall mean the European Medicines Agency and any successor thereto.

1.25“Excluded Claim” shall have the meaning provided in Section 13.3(f).

1.26“Existing Product” shall mean that certain pharmaceutical product containing or comprising a Compound as the sole active pharmaceutical ingredient that is the subject of the MAA with number EMEA/H/C/002087 filed on behalf of Optimer with the EMA.

1.27“FDA” shall mean the United States Food and Drug Administration, or any successor agency or agencies thereto having the administrative authority to regulate the marketing of human pharmaceutical products in the United States.

1.28“Field” shall mean the diagnosis, prevention and treatment of any disease in humans, including CDI.

***Confidential Treatment Requested

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1.29“First Commercial Sale” shall mean, on a country-by-country basis and Product-by-Product basis, the first bona fide, arm’s length sale of a Product in a country following receipt of Regulatory Approval of such Product in such country.  Sales of a Product for registration samples, compassionate use sales, named patient use and inter-company transfers to Affiliates of a Party will not constitute a First Commercial Sale.

1.30“Indemnitee” shall have the meaning provided in Section 12.3.

1.31“Indemnitor” shall have the meaning provided in Section 12.3.

1.32“Information” shall mean information, ideas, inventions, discoveries, concepts, formulas, practices, procedures, processes, methods, knowledge, know-how, trade secrets, technology, inventories, machines, techniques, development, designs, drawings, computer programs, skill, experience, documents, apparatus, results, clinical and regulatory strategies, documentation, information and submissions pertaining to, or made in association with, filings with any Regulatory Authority, data, including pharmacological, toxicological and clinical data, analytical and quality control data, manufacturing data and descriptions, patent and legal data, market data, financial data or descriptions, devices, assays, chemical formulations, specifications, material, compositions of matter, product samples and other samples, physical, chemical and biological materials and compounds, and the like, in written, electronic or other form, now known or hereafter developed, whether or not patentable.

1.33“Latent Defect” means a defect that causes Supplied Product to fail to conform to the warranties set forth in Section 9.1, which defect is not discoverable upon reasonable physical inspection and testing performed pursuant to Section 6.2 but is discovered at a later time (e.g., in the course or as a result of long-term stability studies).

1.34“Launch Quantities” shall have the meaning provided in Section 3.1.

1.35“LCIA” shall mean the London Court of International Arbitration.

1.36“Letter Agreement” shall mean that certain letter agreement of even date herewith by and between Optimer and Partner and all Exhibits thereto.

1.37“Losses” shall have the meaning provided in Section 12.1.

1.38“MAA” shall mean a marketing authorization application or equivalent application, and all amendments and supplements thereto, filed with the applicable Regulatory Authority in a country or jurisdiction in the Territory (including any supra-national agency such as the EMA in the European Union).

1.39“MAA Approval” shall mean, with respect to each country in or outside the Territory for a particular Product, approval by the applicable Regulatory Authority in such country of the MAA for such Product filed in such country and shall include such approval by the EMA.  It is understood that, as used herein, MAA Approval does not include pricing or reimbursement approval.

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1.40“Manufacture” shall mean all activities related to the manufacturing of a pharmaceutical product, or any ingredient thereof, including manufacturing Supplied Product or supplies for Development, manufacturing of Supplied Product for commercial sale, in-process and semi-finished product testing, release of Supplied Product or any component or ingredient thereof, quality assurance activities related to manufacturing and release of Supplied Product, ongoing stability tests and regulatory activities related to any of the foregoing.  “Manufactured” or “Manufacturing” shall have correlative meaning.

1.41“Manufacturing Process” shall have the meaning provided in Section 7.4.

1.42“Objection Notice” shall have the meaning provided in Section 6.2(d).

1.43“Optimer Indemnitee” shall have the meaning provided in Section 12.1.

1.44“Optimer Manufacturing Technology” shall have the meaning provided in Section 2.4(b).

1.45“PAR” shall mean Par Pharmaceutical, Inc.

1.46“PAR Agreement” shall mean that certain Prospective Buy-Back Agreement, dated January 19, 2007, by and between Optimer and PAR, as amended in accordance with its terms.

1.47“Partner Indemnitee” shall have the meaning provided in Section 12.2.

1.48“Partner Manufacturing Notice” shall have the meaning provided in Section 2.4(b).

1.49“Party” shall mean Optimer or Partner individually, and “Parties” shall mean Optimer and Partner collectively.

1.50“Product” shall mean (a) the Existing Product, and (b) as agreed by the Parties, any Additional Product(s).  In the event that Partner terminates the License Agreement with respect to a given Product, the definition of “Product” as used with respect to such country shall automatically be amended to remove such Product for purposes of this Agreement.

1.51“Product Specifications” shall mean the specifications for the Supplied Product contained in the applicable Regulatory Approval and any specifications mutually agreed to by the Parties established in connection with the Supplied Product and changes to such specifications made at the request of a Regulatory Authority in the applicable country or jurisdiction in the Territory or by mutual agreement of the Parties from time to time, including the specifications set forth on Exhibit A.  In the event Additional Product(s) become subject to this Agreement as agreed by the Parties, Exhibit A shall be revised to include the specifications mutually agreed to by the Parties with respect to such Additional Product(s).

1.52“Quality Agreement” shall have the meaning provided in Section 6.3.

1.53“Raw Materials” shall have the meaning provided in Section 7.1.

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1.54“Receiving Party” shall have the meaning provided in Section 10.1.

1.55“Regulatory Approval” shall mean any and all approvals (including price and reimbursement approvals, if required), licenses, registrations, or authorizations of Regulatory Authorities in any country that are necessary for the manufacture, use, storage, import, transport and/or sale of a Product in the Field in such country.

1.56“Regulatory Authority” shall mean any national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity whose review and/or approval is necessary for the manufacture, packaging, use, storage, import, export, distribution, promotion, marketing, offer for sale and sale of a Product in the Field in the Territory, including the EMA.  For countries in the Territory where governmental approval is required for pricing or reimbursement for a Product to be reimbursed by national health insurance (or its local equivalent), “Regulatory Authority” shall also include any national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity whose review and/or approval of pricing or reimbursement is required. “Regulatory Authority” shall also include any organization that provides guidance to health professionals on the use of pharmaceutical products, including but not limited to the National Institute of Clinical Excellence in the United Kingdom.

1.57“SEC” shall have the meaning provided in Section 10.5(a).

1.58“Sublicensee” shall mean an Affiliate of Partner or a Third Party to whom Partner grants a right to Develop, use, offer for sale, sell or import a Product in the Field in the Territory under the License Agreement, beyond the mere right to purchase a Product from Partner or its Affiliates, and “Sublicense” shall mean an agreement or arrangement between Partner and a Sublicensee granting such rights.

1.59“Supplied Product” shall mean (a) Bulk Product, or (b) if agreed by the Parties pursuant to Section 2.3(b), API, or (c) any Additional Products in the form agreed to by the Parties.

1.60“Term” shall have the meanings provided in Section 11.1.

1.61“Territory” shall mean Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Republic of Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, United Kingdom, Turkey, South Africa, Russia, Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Ukraine, Uzbekistan, Middle East (Bahrain, Gaza Strip, Iran, Iraq,Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, United Arab Emirates, West Bank (Palestine) and Yemen) and North Africa (Algeria, Egypt, Libya, Morocco and Tunisia).  In the event that Partner terminates the License Agreement with respect to a given Product in a given country, the definition of “Territory” as used with respect to such Product shall automatically be amended to remove such country for purposes of this Agreement.

1.62“Third Party” shall mean any entity other than Optimer or Partner or an Affiliate of Optimer or Partner.

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1.63“Third Party Claims” shall have the meaning provided in Section 12.1.

1.64“Transfer Price” shall have the meaning provided in Section 4.1(a).

2.SUPPLY OF SUPPLIED PRODUCTS.

2.1Supply by Optimer.  Optimer will Manufacture or have Manufactured and supply or have supplied to Partner such quantities of Supplied Productsas requested by Partner to cover total commercial requirements of Partner and its Sublicensees for Supplied Products in the Territory, including Supplied Products requested by Partner for promotional activities.  In addition, Optimer will provide or have provided Supplied Products to Partner for any Development activities permitted under the License Agreement.  Optimer will be the exclusive supplier to Partner and its Sublicensees of Supplied Products during the Term. Partner agrees that in no event shall Partner or its Sublicensees Manufacture or have Manufactured Supplied Products, or purchase Supplied Products from any party other than Optimer.  Optimer shall require its Third Party manufacturer(s) to comply in all material respects with the requirements set forth in this Agreement and the Quality Agreement, including the establishment and deployment of regular and as-needed inspections of the facilities of such Third Party manufacturer(s) by Partner and the execution of regular and as-needed audits of such Third Party manufacturer(s).  Optimer shall not amend those agreements with Third Party manufacturer(s) to the extent they apply to the Territory in a manner inconsistent with this Agreement and the Quality Agreement nor terminate them to the extent they apply to the Territory without prior written consent of Partner, not to be unreasonably withheld.

2.2Partner Responsibilities.  Partner shall have the right and responsibility, at its expense, for all activities required to make finished Products ready for sale to the market, from Supplied Products in the Territory.  Without limiting the foregoing, Partner shall be responsible, at its expense, for (a) all labeling and other written, printed or graphic content, (i) affixed to the applicable Products or any container or wrapper utilized with Products, or (ii) accompanying the applicable Products, including package inserts, and (b) all primary containers for Products, including bottles, cartons, shipping cases or any other like matter used in packaging or accompanying the Products.

2.3Form of Supplied Product.

(a)Bulk Products.

(i)Supplied Products shall initially be in the form of Bulk Products.  Partner shall be responsible, at its own expense, for developing and obtaining approval of Regulatory Authorities for packaging of the Bulk Products in the Territory. Partner intends to carry out primary and secondary packaging activities in the Territory but if this proves to be impractical then Partner may decide that such packaging shall be carried out by Optimer’s Third Party packager outside the Territory. In this event Partner shall contract directly with such Third Party packager and Optimer shall assist Partner in any negotiations with such packager. If in the course of supplying packaged Bulk Product to both Optimer and Partner such Third Party packager has limited available production capacity at a particular time such that it cannot fulfil both Partner’s and Optimer’s requirements for packaged Bulk Products then Optimer and Partner

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shall jointly instruct such Third Party packager to allocate its available production capacity for the production of packaged Bulk Product in a manner proportional to the actual requirements of Optimer and Partner for such products at that time.

(ii)Partner and Optimer shall work together to generate protocols and reports arising out of any transport studies relating to Bulk Product carried out by Optimer.

(b)API.  The Parties may agree that Optimer will supply API, rather than Bulk Products, as Supplied Products.  If Optimer supplies API, rather than Bulk Products, as Supplied Products, then Partner shall have the right to tablet or otherwise formulate API into Products and blister and package API into Products.  Partner shall be responsible, at its own expense, for developing and obtaining approval of Regulatory Authorities for manufacturing activities relating to tableting or other formulation of API into Product in the Territory done by Partner or any of its Affiliates or any Third Party on their behalf.

2.4Post-Expiration.

(a)Coordination of Supply.  At least […***…] prior to expected expiration of the Term, the Parties will discuss supply of Supplied Products and will use good faith efforts to coordinate obtaining the supply of Supplied Products for Partner and its Sublicensees in the Territory and for Optimer outside the Territory from one or more suppliers to enable the Parties to optimize supply costs of Supplied Products.

(b)Manufacturing Right; Manufacturing Technology Transfer.  Partner shall notify Optimer in writing at least […***…] prior to expected expiration of the Term if Partner plans to Manufacture itself or have Manufactured by any Third Party Supplied Products for the Territory pursuant to this Section 2.4(b) following expiration of the Term (“Partner Manufacturing Notice”).  Promptly following the date of such Partner Manufacturing Notice, the Parties shall work together to agree to a plan for transitioning responsibility for Manufacturing of Supplied Products for the Territory to Partner or its designated Third Party contract manufacturer effective upon expiration of the Term, and the Parties shall use commercially reasonable efforts to implement such plan.  Such plan shall provide for the transfer by Optimer to Partner or its designated Third Party contract manufacturer, all Optimer Manufacturing Information and for Optimer to provide reasonable assistance to enable Partner or its designated Third Party contract manufacturer to Manufacture and supply Supplied Products in accordance with the license granted under Section 2.4(c), such transfer and assistance to be provided at Partner’s expense according to a budget included in such plan.  “Optimer Manufacturing Technology” shall mean all (a) intellectual property rights Controlled by Optimer or any Optimer Current Affiliates and (b) Information Controlled by Optimer or any Optimer Current Affiliates in Optimer’s possession and/or that it can obtain by exercising its rights under its agreements with its Third Party manufacturers, in each case (a) and (b) that are necessary for the Manufacture of Supplied Products.

(c)Manufacturing License.  Upon expiration (but not early termination) of the Term, unless the Parties have agreed under Section 2.4(a) to obtain the supply of Products for Partner and its Sublicensees in the Territory and for Optimer outside the Territory from the same supplier(s) prior to the expiration of the Term, Optimer shall grant, and hereby grants effective at

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that time, to Partner, a non-exclusive, fully paid up license under the Optimer Manufacturing Technology to Manufacture itself or to have Manufactured by any Third Party Supplied Products solely for use and sale in the Field and in the Territory in order to satisfy Partner’s and its Sublicensees’ requirements of Supplied Products.  Partner may not grant a sublicense under such license except to its Affiliate or to any designated Third Party contract manufacturer. The location of Manufacture of Supplied Products under this license is limited to the Territory, the United States of America, Optimer’s Third Party manufacturers outside the Territory or as agreed by the Parties.  In the event that the Parties have agreed under Section 2.4(a) to obtain the supply of Products for Partner and its Sublicensees in the Territory and for Optimer outside the Territory from the same supplier(s) prior to the expiration of the Term but subsequently that arrangement terminates then the license in this Section 2.4(c) shall be effective at the date of such termination.

2.5Protection of Optimer Manufacturing Technology.  In addition to the provisions of Section 10, Partner recognizes that maintaining the confidentiality and trade secret nature of the Optimer Manufacturing Technology requires a higher level of vigilance than other Confidential Information, and agrees to (i) maintain in confidence Optimer Manufacturing Technology with the same degree of care that Partner uses to protect its own like information, (ii) strictly limit access to and use of Optimer Manufacturing Technology to employees, representatives, consultants and contractors of Partner and its designated Third Party contract manufacturers with a need to know such information, and (iii) use Optimer Manufacturing Technology and trade secrets only for producing Supplied Products in the Field for use and sale in the Territory.  Partner shall ensure that any person having access to the Optimer Manufacturing Technology will be made aware of its highly confidential nature and will agree to be bound by confidentiality terms no less stringent than those in this Agreement.  The obligations under this Section 2.5 shall survive and continue in effect following any expiration or termination of this Agreement.

3.FORECASTS AND PURCHASE ORDERS.

3.1Commercial Launch.  Partner shall notify Optimer approximately […***…] in advance of the anticipated First Commercial Sale of the Existing Product and approximately […***…] in advance of the anticipated First Commercial Sale of any Product other than the Existing Product.  Such notification shall include a preliminary estimate of the quantity of Supplied Product needed for the commercial launch.  Partner may change the estimated date of the First Commercial Sale and the estimated quantity of Supplied Product needed for such commercial launch at any time by notifying Optimer; provided, however, that Partner will provide Optimer with an estimate of the minimum amount of Supplied Product that will be necessary for commercial launch at least […***…] prior to such launch (the “Launch Quantities”).

3.2Quarterly Forecasts.  In the first week of each month, Partner shall provide Optimer with a written […***…] rolling forecast of its anticipated requirements for Supplied Product in the Territory (each a “Forecast”).  Each Forecast is a non-binding estimate and shall not obligate Partner to purchase the volume of Supplied Product set forth in it; provided, however, that the volume forecasted for the […***…] of each Forecast shall

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be binding upon Partner.  Optimer shall not be obligated to Manufacture or supply Partner with quantities of Supplied Product in excess of […***…] percent ([…***…]%) of the most recent quarterly estimate provided to Optimer in a Forecast with respect to such Supplied Product but agrees to use commercially reasonable efforts to do so.

3.3Purchase Orders.  Partner shall order Supplied Product by submitting written purchase orders, in such form as the Parties shall agree from time to time, to Optimer specifying the quantities of Supplied Product ordered, the desired shipment date for such Supplied Product and any special shipping instructions.  Partner shall order Supplied Product in lots of a defined number of units/lot pursuant to each purchase order as reasonably specified by Optimer and in respect of Bulk Products shall be as described in Section 3.4.  Partner shall submit each purchase order to Optimer at least […***…] in advance of the desired shipment date specified in such purchase order.  Optimer shall use commercially reasonable efforts to make each shipment of Supplied Product in the quantity and on the shipment date specified for it on Partner’s purchase order, via the mode(s) of transportation and to the party and destination specified on such purchase order.  Any purchase orders for Supplied Product submitted by Partner to Optimer shall reference this Agreement and shall be governed exclusively by the terms contained herein.  The Parties hereby agree that the terms and conditions of this Agreement shall supersede any term or condition in any order, confirmation or other document furnished by Partner or Optimer that is in any way inconsistent with these terms and conditions.

3.4Quantity of Orders.  The Parties agree that Forecasts and orders of Supplied Products that are in the form of Bulk Products will be expressed by multiples of whole batches  of Supplied Product.  Each batch of Supplied Product that is Bulk Product shall contain […***…].  In the event that Supplied Products are API, Forecasts and orders of Supplied Products will be expressed in quantities mutually agreed to by the Parties.

4.PRICE AND TAXATION.

4.1Price.

(a)Transfer Price.  Partner will pay Optimer a transfer price equal to the Cost of Goods (as defined in Section 4.1(b)) plus […***…] (the “Transfer Price”) for Supplied Products supplied by Optimer to Partner or its Sublicensees under this Agreement.

(b)Cost of Goods.  “Cost of Goods” means all out-of-pocket costs incurred by Optimer for Supplied Products, including (i) all payments made to Third Parties for products and services purchased from such Third Parties, including payments for API, tableting or other formulation of API, and packaging in blister packaged form, and (ii) all costs incurred by Optimer for purchasing materials, including sales and excise taxes imposed thereon, customs duties and charges levied by government authorities, and for shipping, storage and insurance with respect to Supplied Products.

4.2Invoices; Method of Payments.

(a)Optimer shall invoice Partner for the aggregate Transfer Price of each shipment of Supplied Products at the time of such shipment.

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(b)All payments due hereunder to Optimer shall be paid to Optimer in U.S. Dollars not later than thirty (30) days following the date of receipt of the applicable invoice but not earlier than the date of shipment, unless such shipment of Supplied Product is rejected in accordance with the provisions of Section 6.2.  Any payments […***…] but […***…] shall not be […***…]. All payments under this Agreement shall be made by bank wire transfer in immediately available funds to a U.S. account designated in writing by Optimer or by other mutually acceptable means.  Payments hereunder will be considered to be made as of the day on which they are received by Optimer’s designated bank.

(c)In the event that any payment due under this Agreement is not made when due, the payment shall accrue interest from the date due at a rate per annum equal to one percent (1%) above the U.S. Prime Rate (as set forth in the Wall Street Journal, Eastern U.S. Edition) for the date on which payment was due, calculated daily on the basis of a 365-day year, or similar reputable data source; provided that, in no event shall such rate exceed the maximum legal annual interest rate.

4.3Records.

(a)During the Term, and for a period of three (3) years thereafter, Optimer shall, and shall ensure that its Affiliates shall, keep at either its normal place of business, or at an off-site storage facility, detailed, accurate and up to date: (i) records and books of account sufficient to confirm the calculation of the Cost of Goods; and (ii) information and data contained in any invoices provided to Partner in connection with this Agreement.

(b)On no less than sixty (60) days’ prior written notice from Partner, Optimer shall make all such records, books of account, information and data concerning the Cost of Goods available for inspection during normal business hours by an independent, certified public accountant selected by Partner and reasonably acceptable to Optimer, which acceptance will not be unreasonably withheld or delayed, for the purpose of general review or audit; provided that Partner may not request such inspection more than once in any calendar year.  As a condition to such inspection, the independent public accountant selected shall execute a written agreement, reasonably satisfactory in form and substance to Optimer, to maintain in confidence all information obtained during the course of any such examination and all reasonable documents will be disclosed to the accountant under these confidential terms.  Additionally no accountant may be employed on a contingency basis.

(c)Partner shall be solely responsible for its costs in making any such review and audit, unless Partner identifies a discrepancy in the calculation of the Cost of Goods paid by Partner to Optimer under this Agreement in any calendar year from those properly payable for that calendar year of ten percent (10%) or greater, in which event Optimer shall be solely responsible for the cost of such review and audit and refund Partner any overpayment.  All information disclosed by Optimer or its Affiliates pursuant to this Section 4.3 shall be deemed Confidential Information of Optimer.

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(d)In the event the auditor determines Optimer’s statement was inaccurate, any overpayment to Optimer by Partner shall be promptly refunded to Partner or credited toward any unpaid invoice by Optimer to Partner, and any underpayment by Partner shall be promptly paid to Optimer.

(e)If there is a dispute between the Parties related to GAAP compliance following any audit performed pursuant to Section 4.3, either Party may refer the issue (an “Audit Disagreement”) to an independent certified public accountant for resolution. In the event an Audit Disagreement is submitted for resolution by either Party, the Parties shall comply with the following procedures:

(i)The Party submitting the Audit Disagreement for resolution shall provide written notice to the other Party that it is invoking the procedures of this Section.

(ii)Within thirty (30) days of the giving such notice, the Parties shall jointly select a recognized international accounting firm to act as an independent expert to resolve such Audit Disagreement.

(iii)The Audit Disagreement submitted for resolution shall be described by the Parties to the independent expert, which description may be in written or oral form, within ten (10) days of the selection of such independent expert.

(iv)The independent expert shall render a decision on the matter as soon as practicable.

(v)The decision of the independent expert shall be final and binding and shall not be subject to Article 13 hereof, unless such Audit Disagreement involves alleged fraud, breach of this Agreement or construction or interpretation of any of the terms and conditions hereof.

(vi)All fees and expenses of the independent expert, including any Third Party support staff or other costs incurred with respect to carrying out the procedures specified at the direction of the independent expert in connection with such Audit Disagreement, shall be borne by the Party against whom such expert rules.

5.SHIPMENT AND DELIVERY.

5.1Delivery Terms.  Optimer will ship Supplied Products to Partner in such quantities and on such monthly shipment dates as are specified in purchase orders.  The Launch Quantities shall be shipped to Partner at least […***…] before the anticipated First Commercial Sale provided that Partner submits a binding forecast/purchase order for Launch Quantities no less than […***…] before anticipated First Commercial Sale.  Deliveries shall be made […***…] (Incoterms 2010) Optimer’s or its Third Party manufacturer’s designated facility.  All shipments of the Supplied Products to Partner shall be made via such carrier(s) as Partner may direct.  Title and risk of loss shall pass to Partner upon delivery to the carrier.  Freight charges shall be billed ship collect to Partner.

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5.2Shelf Life.  Supplied Products which are Bulk Product supplied by Optimer will have a remaining shelf life of at least […***…] from the date of shipment.  The Parties will discuss steps to increase the remaining shelf life of such Supplied Products at the time of shipment to Partner to […***…]. The Parties will also discuss steps to enable extension of the shelf life of Bulk Products from […***…] to […***…], and upon approval by the applicable Regulatory Authorities, the Parties would agree to extend the period set forth in the preceding sentence from […***…] from the date of shipment to […***…] from the date of shipment.

6.QUALITY ASSURANCE; ACCEPTANCE.

6.1Specifications; Testing.

(a)Batch Testing.  Optimer will have standard analytical testing performed on each Manufactured batch of Supplied Product to be shipped to Partner to verify that it meets the Product Specifications, according to the procedure described in the corresponding documentation and that the Supplied Product was Manufactured in accordance with Applicable Laws.

(b)Certificate of Compliance.  In connection with shipment of any batch of Supplied Product, Optimer shall provide Partner with a document certifying with respect to a particular batch (identified by batch number) that such batch was Manufactured in accordance with applicable cGMP, all other Applicable Laws and the Product Specifications.

(c)Quality Control Problem.  In addition, in the event Partner or Optimer identifies a quality problem with respect to any batch of Supplied Product, then, if requested by Partner in writing, Optimer shall authorize Partner to consult at Optimer’s facilities the full batch records corresponding to the applicable batch.

(d)Certificate of Analysis.In connection with shipment of any batch of Supplied Product, Optimer shall provide Partner with a certificate of analysis (the “Certificate of Analysis”).  Such Certificate of Analysis shall certify with respect to each shipment and batch (identified by batch number) (i) the quantity of the shipment, and (ii) that Supplied Product delivered conforms to the Product Specifications, as well as any further information required by the relevant regulatory authorities that Partner may have previously notified Optimer is necessary.  Partner shall be under no obligation to accept any shipment of Supplied Product without an accompanying Certificate of Analysis.

6.2Acceptance and Rejection.

(a)Technology Transfer of Analytical Methods.Optimer shall coordinate the transfer of analytical methods for analysis and testing Supplied Products to Partner in accordance with Applicable Laws in the Territory. Optimer shall use commercially reasonable efforts to complete such transfer […***…] before the date of the first shipment of any particular Supplied Product to Partner.  Partner shall reimburse Optimer for expenses it incurs in connection with such technology transfer within thirty (30) days of invoice.

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(b)Supplied Product Testing.  Partner, at its expense, shall perform such samplings and tests that are designed, in accordance with the methods of analysis and the Product Specifications, to determine whether the batch of Supplied Product shipped to Partner meets the Product Specifications.  Partner may reject any shipment (or portion thereof) of Supplied Product if the Supplied Product fails to conform to any warranty set forth in Section 9.1 of this Agreement based on Partner’s test results by providing to Optimer written notice of such rejection and the reasons therefor within thirty (30) days of delivery of such Supplied Product; otherwise, Partner shall be deemed to have accepted such shipment of Supplied Product; provided, however, that in the case of Supplied Product having any Latent Defect, Partner shall notify Optimer promptly once it discovers the possibility that a Supplied Product may have a Latent Defect and subsequently may reject such Supplied Product by giving written notice to Optimer of Partner’s rejection of such Supplied Product within thirty (30) days after such discovery of such Latent Defect.

(c)Replacement of Supplied Product and Dispute Procedure.  If Optimer notifies Partner in writing, within thirty (30) days of Optimer’s receipt of notice that Partner is rejecting the Supplied Product, that Optimer disagrees with Partner’s test results (an “Objection Notice”), the following procedures shall apply.  Partner and Optimer will review Partner’s test results and attempt to reach agreement as to whether or not the Supplied Product fails to conform to any warranty set forth in Section 9.1 of this Agreement.  If Partner and Optimer fail within ten (10) days after delivery of the Objection Notice to agree as to whether the Supplied Product is defective, representative samples of the batch of Supplied Product in question shall be submitted to a mutually-acceptable independent laboratory or consultant for analysis or review.  The results of such evaluation shall be binding upon the Parties.  The Parties shall share equally the cost of such evaluation except that the Party that is determined to have been incorrect in its determination of whether the Supplied Product should be rejected shall assume the responsibility for, and pay, the costs of any such evaluation and reimburse the other for any amounts previously paid to the independent laboratory or consultant in connection with that determination.

(d)Cost of Replacement of Rejected Product.  If any shipment of Supplied Product is rejected by Partner, Partner’s duty to pay all amounts payable to Optimer in respect of the rejected Supplied Product shall be suspended unless and until there is a determination by the independent laboratory or consultant in support of Optimer’s Objection Notice in accordance with Section 6.2(c).  If only a portion of a shipment is rejected, Partner’s duty to pay the amount allocable to the defective portion only shall be suspended.

(e)Return of Rejected Product.  If a shipment or partial shipment is rejected by Partner pursuant to the provisions of this Section 6.2 and there is not a determination by the independent laboratory or consultant in support of Optimer’s Objection Notice in accordance with Section 6.2(d), Partner shall return to Optimer at Optimer’s request and expense (or, at the election of Optimer, destroy at Optimer’s cost and provide evidence of such destruction to Optimer) any such rejected Supplied Product (provided that if the Supplied Product has been packaged by or on behalf of Partner at the time of rejection Partner shall not be obliged to remove any packaging prior to its return).  Optimer shall (i) credit the original invoice in respect of the rejected Supplied Product, and (ii) adjust the invoice to Partner for any Supplied Product that was not rejected, payment of which is due in accordance with the terms of the original invoice.

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(f)Supply of Replacement Product.  During the pendency of any rejection discussions Optimer shall use commercially reasonable efforts to supply Partner with additional Supplied Product which Partner shall purchase on the same terms as the Supplied Product that is the subject of the rejection discussions.

6.3Quality Agreement.  Within ninety (90) days from the Effective Date (or such longer period as agreed by the Parties but in any event at least three (3) months prior to the first shipment of Supplied Product to Partner), the Parties will enter into an agreement that details the quality assurance obligations of each Party (the “Quality Agreement”).  In the event of a conflict between the terms of the Quality Agreement and the terms of this Agreement, the provisions of this Agreement shall govern; provided, however, that the Quality Agreement shall govern in respect of quality issues.

7.MANUFACTURE OF SUPPLIED PRODUCT.

7.1Raw Materials.  Optimer shall be responsible for obtaining, and shall store at no cost to Partner, any raw materials, components, other ingredients and materials for blister packaging (“Raw Materials”) required for the Manufacture of Supplied Products, in reasonable quantities consistent with Partner’s Forecasts and purchase orders.

7.2Manufacture of Supplied Product.  Optimer will Manufacture Supplied Products in accordance with the Product Specifications, cGMPs and Applicable Laws.  The Parties shall notify each other within five (5) Business Days of any new instructions or specifications required by Regulatory Authorities with jurisdiction over the Manufacture, import, export, use or sale of Supplied Products.  The Parties shall confer with each other with respect to any response regarding such instruction or specification and the best means to comply with such requirements and the Parties will share equally the costs for implementing such changes.

7.3Packaging.  Optimer shall package Supplied Product to be supplied in accordance with the standard operating procedures to be used by Optimer in manufacturing the Supplied Product under this Agreement in accordance with the Product Specifications and Applicable Laws.

7.4Changes to the Product Specifications or to the Manufacturing Process.  A Party proposing a change to the Product Specifications or the Raw Materials, equipment, process or procedures used to Manufacture the Supplied Product (the “Manufacturing Process”) shall provide written notice to the other Party.  If the proposed change is required by a Regulatory Authority, then such notice shall include disclosure of the Regulatory Authority request and relevant correspondence.  Any changes to the Product Specifications or to the Manufacturing Process shall be in compliance with all Regulatory Approvals for the Supplied Product in the Territory.  Optimer shall notify Partner of any proposed change to the Product Specifications or to the Manufacturing Process.  If Partner does not notify Optimer of an objection within ten (10) Business Days of receipt of Optimer’s notice and, as far as Optimer is aware having made due enquiry, such change would not require approval or notification of the applicable Regulatory Authority in the Territory, then Optimer may proceed with the change without the prior written approval of Partner. If Partner notifies Optimer within such ten (10) Business Days period that such change would require approval or notification of the applicable Regulatory Authority in the

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Territory then Optimer shall not make such change without the prior written consent of Partner.  In respect of any changes which would not require approval or notification of the applicable Regulatory Authority in the Territory, if Partner notifies  Optimer of an objection to such change within ten (10) Business Days of Optimer’s notice, the Parties will discuss the change in good-faith for up to an additional ten (10) Business Days (or longer, if agreed by the Parties) in the interest of reaching a mutually agreeable resolution; provided, that if agreement is not reached on such change (and that change does not require notification or approval of the applicable Regulatory Authority in the Territory) then Optimer may proceed with such change following such discussions. If the change is proposed by Partner or is required by a Regulatory Authority in the Territory (but not outside the Territory), then Partner shall bear any expenses of implementing such change.  If the change is proposed by Optimer or is required by a Regulatory Authority outside the Territory (but not in the Territory), then Optimer shall bear any expenses of implementing such change.  If the change is required by a Regulatory Authority or Applicable Laws both in and outside the Territory, then the Parties shall share any expenses of implementing such change equally.  The Parties agree that the notification and approval procedures with respect to changes to the Product Specifications and the Manufacturing Process set forth in this Section 7.4 will take effect commencing on MAA Approval of the applicable Supplied Product.

7.5Buffer Stock.

(a)Requirement of Optimer Buffer Stock.  Optimer shall have available a buffer stock of API (the “Buffer Stock”) in the following amounts at the following times:

(i)Beginning on the date that is […***…] prior to the anticipated date of the First Commercial Sale anywhere in the Territory until […***…] after First Commercial Sale anywhere in the Territory: […***…] of Buffer Stock based upon the quantities of Bulk Product forecast to be ordered by Partner in the most recent applicable months of the Forecast;

(ii)from […***…] after First Commercial Sale anywhere in the Territory to […***…] after First Commercial Sale anywhere in the Territory: […***…] of Buffer Stock based upon the quantities of Bulk Product ordered by Partner in the […***…] period after First Commercial Sale;

(iii)from […***…] after First Commercial Sale anywhere in the Territory to […***…] after First Commercial Sale anywhere in the Territory: […***…] of Buffer Stock based upon the quantities of Bulk Product ordered by Partner in the […***…] period after First Commercial Sale;

(iv)from […***…] after First Commercial Sale anywhere in the Territory to […***…] after First Commercial Sale anywhere in the Territory: […***…] of Buffer Stock based upon the quantities of Bulk Product ordered by Partner in […***…] period after First Commercial Sale; and

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(v)at any time after […***…] after First Commercial Sale anywhere in the Territory: […***…] of Buffer Stock based upon the quantities of Bulk Product ordered by Partner in the previous […***…] period.

(b)Optimer shall store such Buffer Stock at one or more locations separate from the site of its Third Party manufacturer of API.

(c)Inventory.  Partner shall carry and cause its Sublicensees to carry reasonable quantity of inventory of Supplied Product, at their own expense.

7.6Discussion Regarding Second Source.  The Parties will assess the desirability of identifying a second source for supply of Supplied Product and discuss whether to qualify a second source of Supplied Product, taking into account pricing, regulatory and other relevant issues.

7.7Supplied Product Shortfall.  Optimer shall use commercially reasonable efforts to avoid shortfalls in supply of Supplied Products based on the Forecasts provided by Partner.  Subject to Section 14.2, in the event Optimer is unable to supply to Partner, in whole or in part, Supplied Products requested for any reason (except to the extent caused by Partner), then Optimer shall promptly notify Partner, in writing, of such shortage, or potential shortage, or inability to timely supply Supplied Product and, if possible, the date when Optimer will again be able to supply Supplied Product.  Optimer will use commercially reasonable efforts to remedy any shortfall of Supplied Product as soon as practicable and Optimer will allocate its available production capacity for the production of Supplied Product in a manner proportional to the utilization of all customers (including Optimer) of such capacity in the prior […***…] period and will allocate such Supplied Product on a proportional basis with respect to remaining shelf-life as well.  In no event shall the delay in any of the Development activity due to supply shortage by Optimer amount to a breach of the License Agreement by Partner.

8.REGULATORY.

8.1Regulatory Compliance.  Optimer shall comply with all regulatory requirements with respect to Supplied Product imposed by Applicable Laws upon Optimer as the Manufacturer of the Supplied Product.  Optimer shall, on a timely basis, provide Partner with such information in Optimer’s possession as the Manufacturer of Supplied Product.  Optimer shall also provide, upon request by Partner, information concerning its production processes and quality control procedures with respect to the Supplied Product.

8.2cGMP Compliance and QA Audits.  Upon no less than sixty (60) days’ advance written notice to Optimer, Partner shall have the right to have representatives visit Optimer’s Manufacturing facilities during normal business hours to discuss any related issues with Optimer’s Manufacturing and management personnel and to review and inspect (a) Optimer’s Manufacturing and storage facilities, (b) the quality control procedures, and/or (c) any records and reports pertinent to the Manufacture, disposition or transport of Supplied Product as may be necessary to evidence Optimer’s compliance with all applicable Regulatory Approvals for the Manufacture of Supplied Product, including compliance with cGMP.  Such visits shall occur no more than once per year, except in the case of audits by Partner that are required by Applicable

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Laws, and except that additional visit(s) may occur in the event of significant deviations, quality problems or recalls requiring resolution by the Parties.  Partner shall also have the right to be present at audits and inspections conducted by Optimer of its third party Manufacturer(s) and Optimer shall give Partner thirty (30) days notice of such audits and inspections. Partner representatives will be advised of the confidentiality obligations of Partner under this Agreement and will follow such security, safety and facility access procedures as are reasonably designated by Optimer and its Third Party manufacturer(s), as applicable. Optimer shall provide to Partner any audit reports generated by or prepared for Optimer in the conduct of any inspections or audits, which reports shall be deemed Confidential Information of Optimer.

8.3Recall of Supplied Product.  For any Supplied Product, in the event that: (a) any Regulatory Authority in the Territory issues a request, directive or order that Supplied Product be recalled or retrieved; (b) a court of competent jurisdiction orders that Supplied Product be recalled or retrieved; or (c) Partner reasonably determines, after reasonable, good faith discussion with Optimer to the extent that time allows, that Supplied Product should be recalled or retrieved, Partner shall promptly notify Optimer of such event (to the extent time allows) and shall conduct such activity and take appropriate corrective actions, and Optimer shall provide such assistance to Partner as is reasonably necessary to carry out such activities.  All reasonable costs and expenses of such recall and corrective actions shall be equitably allocated between the Parties taking into account the relative fault of Partner and the relative fault of Optimer.

8.4Compliance with Laws.  Optimer shall comply with all Applicable Laws in performing its obligations under this Agreement.  Optimer represents and warrants to Partner that it has and will maintain during the Term all government permits, including, health, safety and environmental permits, necessary for the conduct of the actions and procedures that it undertakes pursuant to the Agreement.

8.5Documentation.  Optimer shall keep complete, accurate and authentic accounts, notes, data and records of the work performed under this Agreement (including batch records) and shall maintain complete and adequate records pertaining to the methods and facilities used for the Manufacture, processing, testing, packing, labeling, holding and distribution of a Supplied Product in accordance with Applicable Laws so that such Supplied Product may be used in humans.

8.6Samples.  Optimer shall retain samples of Supplied Product for a period of […***…] (or, if longer, the minimum period required by Applicable Law) after Partner’s acceptance of such batch.

9.REPRESENTATIONS AND WARRANTIES.

9.1Supplied Product Warranty.  Optimer represents and warrants that Supplied Product delivered hereunder will (a) be Manufactured by Optimer in accordance with all applicable Regulatory Approvals, cGMPs and other Applicable Laws, (b) conform to the Product Specifications at the time of delivery (c) if the Supplied Product is Bulk Product, have a remaining shelf life of no less than […***…] from date of shipment to Partner, (c) not be adulterated under Applicable Laws, (d) at the time of shipment, be free and clear of any lien or encumbrance, and (e) be supplied in accordance with the Quality Agreement.

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9.2No Debarred or Disqualified Persons.  Optimer represents and warrants that it shall not employ, contract with, or retain any person directly or indirectly to perform any services under this Agreement if such a person (a) is under investigation by the FDA for debarment or is presently debarred by the FDA pursuant to 21 U.S.C. § 335a or its successor provisions, or (b) has a disqualification hearing pending or has been disqualified by the FDA pursuant to 21 C.F.R. § 312.70 or its successor provisions.  In addition, Optimer represents and warrants that it has not engaged in any conduct or activity which could lead to any of the above-mentioned disqualification or debarment actions.  If, during the Term, Optimer or any person employed or retained by it to perform under this Agreement (i) comes under investigation by the FDA for a debarment action or disqualification, (ii) is debarred or disqualified, or (iii) engages in any conduct or activity that could lead to any of the above-mentioned disqualification or debarment actions, Optimer shall immediately notify Partner of same.

9.3Mutual Representations and Warranties.  Each Party represents and warrants to the other that:  (a) it is duly organized and validly existing under the laws of its jurisdiction of incorporation or formation, and has full corporate or other power and authority to enter into this Agreement and to carry out the provisions hereof; (b) it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the person or persons executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate or partnership action; and (c) this Agreement is legally binding upon it, enforceable in accordance with its terms, and 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 law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it.

9.4Disclaimer.  EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, OR ANY OTHER AGREEMENT CONTEMPLATED HEREUNDER, NEITHER PARTY MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, AND EACH PARTY EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE OR USE, NON-INFRINGEMENT, VALIDITY AND ENFORCEABILITY OF PATENTS, OR THE PROSPECTS OR LIKELIHOOD OF DEVELOPMENT OR COMMERCIAL SUCCESS OF THE PRODUCTS.

9.5Limitation of Liability.  EXCEPT FOR LIABILITY FOR BREACH OF ARTICLE 10, NEITHER PARTY SHALL BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT; provided however, that this Section 9.5 shall not be construed to limit either Party’s indemnification obligations under Article 12.  Notwithstanding anything contained in any other provision of this Agreement, exceptfor liability for breach of Article10, and except Losses caused by fraud or fraudulent misrepresentation, Optimer’s aggregate liability for the Term to Partner and its Affiliates and their respective employees, directors, officers, shareholders and agents, for any Losses arising under, in connection with or otherwise in relation to this Agreement shall not exceed […***…] and shall not exceed […***…]

***Confidential Treatment Requested

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[…***…]; provided, however, that the foregoing shall not limit Optimer’s indemnification obligations set forth in this Article 12 with respect to bodily injury (including death). For clarification, payments under Article 4 shall not be considered special, incidental, consequential or punitive damages.

10.CONFIDENTIALITY

10.1Confidential Information.  Except to the extent expressly authorized by this Agreement or otherwise agreed in writing by the Parties, the Parties agree that the receiving Party (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 or any other written agreement between the Parties any information and materials furnished to it by the other Party (the “Disclosing Party”), in any form (written, oral, photographic, electronic, magnetic, or otherwise), including, but not limited to, all information concerning any Compound and/or Product and any other technical or business information of whatever nature (collectively, “Confidential Information”).  Each Party may use such Confidential Information only to the extent required to accomplish the purposes of this Agreement or any other written agreement between the Parties.  Each Party will use at least the same standard of care as it uses to protect proprietary or confidential information of its own (but in no event less than reasonable care) to ensure that its employees, agents, consultants and other representatives do not disclose or make any unauthorized use of the Confidential Information.  Each Party will promptly notify the other upon discovery of any unauthorized use or disclosure of the Confidential Information.

10.2Exceptions.  Notwithstanding Section 10.1 above, the obligations of confidentiality and non-use shall not apply to information that the Receiving Party can prove by competent written evidence: (a) is now, or hereafter becomes, through no act or failure to act on the part of the Receiving Party or any of its Affiliates, generally known or available; (b) is known by the Receiving Party or any of its Affiliates, other than under an obligation of confidentiality to the Disclosing Party, at the time of receiving such information; (c) is hereafter furnished to the Receiving Party or any of its Affiliates by a Third Party, which Third Party did not receive such information directly or indirectly from the Disclosing Party under an obligation of confidence; (d) is independently discovered or developed by the Receiving Party or any of its Affiliates without the use of Confidential Information belonging to the Disclosing Party; or (e) is the subject of a written permission to disclose provided by the Disclosing Party.

10.3Permitted Disclosures.  Notwithstanding the provisions of Section 10.1, the Receiving Party may disclose Confidential Information of the Disclosing Party as expressly permitted by this Agreement or if and to the extent such disclosure is reasonably necessary in the following instances:

(a)complying with applicable court orders or governmental regulations;

(b)disclosure to PAR under terms of confidentiality to the extent necessary to fulfill obligations under the PAR Agreement;

(c)disclosure to Affiliates (in the case of Optimer), sublicensees and potential sublicensees (in the case of Partner), contractors, employees and consultants who need to know

***Confidential Treatment Requested

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such information for the Manufacture of Supplied Products in accordance with this Agreement, on the condition that any such Third Parties agree to be bound by confidentiality and non-use obligations that are no less stringent than those confidentiality and non-use provisions contained in this Agreement; and

(d)disclosure to Third Parties in connection with due diligence or similar investigations by such Third Parties, and disclosure to potential Third Party investors in confidential financing documents, provided, in each case, that any such Third Party agrees to be bound by confidentiality and non-use obligations that are no less stringent than those confidentiality and non-use provisions contained in this Agreement.

Notwithstanding the foregoing, in the event a Party is required to make a disclosure of the other Party’s Confidential Information pursuant to Section 10.3(a), it will, except where impracticable, give reasonable advance notice to the other Party of such disclosure and use efforts to secure confidential treatment of such information at least as diligent as such Party would use to protect its own confidential information, but in no event less than reasonable efforts.  In any event, the Parties agree to take all reasonable action to avoid disclosure of Confidential Information hereunder.

10.4Confidentiality of this Agreement and its Terms.  Except as otherwise provided in this Article 10, each Party agrees not to disclose to any Third Party the existence of this Agreement or the terms of this Agreement without the prior written consent of the other Party hereto, except that each Party may disclose the terms of this Agreement that are not otherwise made public as contemplated by Section 10.5 or as permitted under Section 10.3.

10.5Public Announcements.

(a)As soon as practicable following the date hereof, the Parties shall each issue a mutually agreed to press release announcing the existence of this Agreement and the License Agreement.  Except as required by Applicable Law (including disclosure requirements of the U.S. Securities and Exchange Commission (“SEC”) or any stock exchange on which securities issued by a Party or its Affiliates are traded), neither Party shall make any other public announcement concerning this Agreement or the subject matter hereof without the prior written consent of the other, which shall not be unreasonably withheld or delayed; provided that each Party may make any public statement in response to questions by the press, analysts, investors or those attending industry conferences or financial analyst calls, or issue press releases, so long as any such public statement or press release is not inconsistent with prior public disclosures or public statements approved by the other Party pursuant to this Section 10.5 and which do not reveal non-public information about the other Party.  In the event of a required public announcement, to the extent practicable under the circumstances, the Party making such announcement shall provide the other Party with a copy of the proposed text of such announcement sufficiently in advance of the scheduled release to afford such other Party a reasonable opportunity to review and comment upon the proposed text.

(b)The Parties will coordinate in advance with each other in connection with the filing of this Agreement (including redaction of certain provisions of this Agreement) with the SEC or any stock exchange or governmental agency on which securities issued by a Party or

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its Affiliate are traded, and each Party will use reasonable efforts to seek confidential treatment for the terms proposed to be redacted; provided that each Party will ultimately retain control over what information to disclose to the SEC or any stock exchange or other governmental agency, as the case may be, and provided further that the Parties will use their reasonable efforts to file redacted versions with any governing bodies which are consistent with redacted versions previously filed with any other governing bodies.  Other than such obligation, neither Party (or its Affiliates) will be obligated to consult with or obtain approval from the other Party with respect to any filings to the SEC or any stock exchange or other governmental agency.

10.6Equitable Relief.  Given the nature of the Confidential Information and the competitive damage that would result to a Party upon unauthorized disclosure, use or transfer of its Confidential Information to any Third Party, the Parties agree that monetary damages may not be a sufficient remedy for any breach of this Article 10.  In addition to all other remedies, a Party shall be entitled to seek specific performance and injunctive and other equitable relief as a remedy for any breach or threatened breach of this Article 10.

11.TERM AND TERMINATION

11.1Term.  The term of this Agreement (the “Term”) shall commence on the Effective Date and continue until the expiration or termination of the License Agreement in its entirety unless terminated earlier pursuant to Section 11.2.

11.2Early Termination.

(a)Mutual Agreement.  The Parties may terminate this Agreement in its entirety before the end of the Term by mutual written agreement of the Parties.

(b)Material Breach.  A Party shall have the right to terminate this Agreement in its entirety before the end of the Term upon written notice to the other Party if such other Party is in material breach of this Agreement and has not cured such breach within ninety (90) days (thirty (30) days with respect to any payment breach) after notice from the terminating Party requesting cure of the breach.  Any such termination shall become effective at the end of such ninety (90) day (thirty (30) day with respect to any payment breach) period unless the breaching Party has cured any such breach or default prior to the end of such period.

(c)Bankruptcy.  A Party shall have the right to terminate this Agreement in its entirety before the end of the Term upon written notice to the other Party upon the bankruptcy, dissolution or winding up of such other Party, or the making or seeking to make or arrange an assignment for the benefit of creditors of such other Party, or the initiation of proceedings in voluntary or involuntary bankruptcy, or the appointment of a receiver or trustee of such other Party’s property that is not discharged within ninety (90) days.

11.3Effect of Expiration or Termination; Surviving Obligations.

(a)Effect of Termination.  Upon termination or expiration of this Agreement all rights and obligations of the Parties under this Agreement shall terminate.

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(b)Return of Confidential Information.  Within thirty (30) days following the expiration or termination of this Agreement, each Party shall deliver to the other Party any and all Confidential Information of such Party then in its possession, except for one (1) copy which may be kept in such Party’s counsel’s office for archival purposes and except to the extent a Party retains the right to use such Confidential Information pursuant to any license granted under the License Agreement which survives termination or expiration of the License Agreement, as applicable.

(c)Surviving Obligations.  Expiration or termination of this Agreement shall not relieve the Parties of any obligation accruing prior to such expiration or termination.  Except as set forth below or elsewhere in this Agreement, including Section 11.3(a), the obligations and rights of the Parties under the following provisions of this Agreement shall survive expiration or termination of this Agreement:

Section 1 — Definitions

Section 2.4(c) — Manufacturing License

Section 2.5 — Protection of Optimer Manufacturing Technology

Section 4.3 — Records

Section 10 — Confidentiality

Section 11.3 — Effect of Termination; Surviving Obligations

Section 11.4 — Exercise of Right to Terminate

Section 11.5 — Damages; Relief

Section 11.6 — Rights Upon Bankruptcy

Section 12 — Indemnification

Section 13 — Dispute Resolution

Section 14 — General Provisions

11.4Exercise of Right to Terminate.  The rightful use by either Party hereto of a termination right provided for under this Agreement shall not give rise to the payment of damages or any other form of compensation or relief to the other Party with respect thereto.

11.5Damages; Relief.  Subject to Section 11.4 above, termination of this Agreement shall not preclude either Party from claiming any other damages, compensation or relief that it may be entitled to upon such termination.

11.6Rights Upon Bankruptcy.  All rights and licenses granted under or pursuant to this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title 11 of the United States Code and other similar laws in any jurisdiction in the Territory (collectively, the “Bankruptcy Laws”), licenses of rights to be “intellectual property” as defined under the Bankruptcy Laws.  If a case is commenced during the Term by or against a Party under Bankruptcy Laws then, unless and until this Agreement is rejected as provided in such Bankruptcy Laws, such Party (in any capacity, including debtor-in-possession) and its successors and assigns (including a trustee) shall perform all of the obligations provided in this Agreement to be performed by such Party.  If a case is commenced during the Term by or against a Party under the Bankruptcy Laws, this Agreement is rejected as provided in the Bankruptcy Laws and the other Party elects to retain its rights hereunder as provided in the Bankruptcy Laws, then the Party subject to such case under the Bankruptcy Laws (in any capacity, including debtor-in-

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possession) and its successors and assigns (including a Title 11 trustee), shall provide to the other Party copies of such intellectual property and all embodiments thereof  necessary for such other Party to prosecute, maintain and enjoy its rights under the terms of this Agreement promptly upon such other Party’s written request therefor.  All rights, powers and remedies of the non-bankrupt Party as provided herein are in addition to and not in substitution for any and all other rights, powers and remedies now or hereafter existing at law or in equity (including, without limitation, the Bankruptcy Laws) in the event of the commencement of a case by or against a Party under the Bankruptcy Laws.

12.INDEMNIFICATION

12.1Indemnification of Optimer.  Partner shall indemnify and hold harmless each of Optimer and its Affiliates and their respective directors, officers, shareholders, employees, agents, servants, successors and assigns of any of the foregoing (the “Optimer Indemnitees”), from and against any and all losses, liabilities, damages, penalties, fines, costs and expenses (including reasonable attorneys’ fees and other expenses of litigation) (“Losses”) incurred by any Optimer Indemnitee resulting from any claims, actions, suits or proceedings brought by a Third Party (“Third Party Claims”) arising from, or occurring as a result of:  (a) gross negligence or willful misconduct in connection with Partner’s performance of its obligations or exercise of its rights under this Agreement; or (b) any material breach of any representations, warranties or covenants by Partner under this Agreement; except to the extent such Third Party Claims fall within the scope of the indemnification obligations of Optimer set forth in Section 12.2.

12.2Indemnification of Partner.  Optimer shall indemnify and hold harmless each of Partner and its Affiliates and the directors, officers and employees of such entities, and the successors and assigns of any of the foregoing (the “Partner Indemnitees”), from and against any and all Losses incurred by any Partner Indemnitee resulting from any Third Party Claims arising from, or occurring as a result of: (a) gross negligence or willful misconduct in connection with Optimer’s performance of its obligations or exercise of its rights under this Agreement;or (b) any material breach of any representations, warranties or covenants by Optimer under this Agreement, except to the extent such Third Party Claims fall within the scope of the indemnification obligations of Partner set forth in Section 12.1.

12.3Procedure.  A party that intends to claim indemnification under this Section 12 (the “Indemnitee”) shall promptly notify the indemnifying party (the “Indemnitor”) in writing of any Third Party Claim, in respect of which the Indemnitee intends to claim such indemnification, and the Indemnitor shall have sole control of the defense and/or settlement thereof.  The indemnity arrangement in this Section 12 shall not apply to amounts paid in settlement of any action with respect to a Third Party Claim, if such settlement is effected without the consent of the Indemnitor, which consent shall not be withheld or delayed unreasonably.  The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any action with respect to a Third Party Claim shall only relieve the Indemnitor of its indemnification obligations under this Section 12 if and to the extent the Indemnitor is actually prejudiced thereby.  The Indemnitee shall cooperate fully with the Indemnitor and its legal representatives in the investigation of any action with respect to a Third Party Claim covered by this indemnification.

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13.DISPUTE RESOLUTION

13.1Objective.  The Parties recognize that disputes as to matters arising under or relating to this Agreement or either Party’s rights and/or obligations hereunder may arise from time to time.  It is the objective of the Parties to establish procedures to facilitate the resolution of such disputes in an expedient manner by mutual cooperation and without resort to litigation.  To accomplish this objective, the Parties agree to follow the procedures set forth in this Article 13 to resolve any such dispute if and when it arises.

13.2Resolution by Executives.  If an unresolved dispute as to matters arising under or relating to this Agreement or either Party’s rights and/or obligations hereunder arises (other than any dispute to be resolved as provided in Section 6.2), either Party may refer such dispute to the Chief Executive Officer of Optimer and the Chief Executive Officer of Partner, who shall meet in person or by telephone within thirty (30) days after such referral to attempt in good faith to resolve such dispute.  If such matter cannot be resolved by discussion of such officers within such thirty (30)-day period (as may be extended by mutual written agreement), such dispute shall be resolved in accordance with Section 13.3.

13.3Arbitration.

(a)If the Parties do not resolve a dispute as provided in Section 13.2 (other than any dispute to be resolved as provided in Section 6.2), and a Party wishes to pursue the matter, each such dispute that is not an “Excluded Claim” shall be resolved by binding arbitration in accordance with the LCIA Rules as then in effect, which Rules are deemed to be incorporated by reference into this clause and judgment on the arbitration award may be entered in any court having jurisdiction thereof.  The decision rendered in any such arbitration will be final and not appealable.  If either Party intends to commence binding arbitration of such dispute, such Party will provide written notice to the other Party informing the other Party of such intention and the issues to be resolved.  Within thirty (30) days after the receipt of such notice, the other Party may by written notice to the Party initiating binding arbitration, add additional issues to be resolved.

(b)The arbitration shall be conducted by a panel of three (3) arbitrators appointed in accordance with the LCIA Rules, none of whom shall be a current or former employee or director, or a then-current stockholder, of either Party, their respective Affiliates or any Sublicensee. The place of arbitration shall be New York, New York, and all proceedings and communications shall be in English.

(c)It is the intention of the Parties that discovery, although permitted as described herein, will be limited except in exceptional circumstances.  The arbitrators will permit such limited discovery necessary for an understanding of any legitimate issue raised in the arbitration, including the production of documents.  No later than thirty (30) days after selection of the arbitrators, the Parties and their representatives shall hold a preliminary meeting with the arbitrators, to mutually agree upon and thereafter follow procedures seeking to assure that the arbitration will be concluded within six (6) months from such meeting.  Failing any such mutual agreement, the arbitrators will design and the Parties shall follow procedures to such effect.

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(d)Either Party may apply to the arbitrators for interim injunctive relief until the arbitration award is rendered or the controversy is otherwise resolved.  Either Party also may, without waiving any remedy under this Agreement, seek from any court having jurisdiction any injunctive or provisional relief necessary to protect the rights or property of that Party pending the arbitration award.  The arbitrators shall have no authority to award punitive or any other non-compensatory damages, except as may be permitted by Section 9.5.  The arbitrators shall have the power to order that all or part of the legal or other costs incurred by a Party in connection with the arbitration be paid by the other Party. Each Party shall bear an equal share of the arbitrators’ and any administrative fees of arbitration.

(e)Except to the extent necessary to confirm or enforce an award or as may be required by Applicable Laws, neither a Party nor an arbitrator may disclose the existence, content, or results of an arbitration without the prior written consent of both Parties.  In no event shall an arbitration be initiated after the date when commencement of a legal or equitable proceeding based on the dispute, controversy or claim would be barred by the applicable New York statute of limitations.

(f)As used in this Section, the term “Excluded Claim” shall mean a dispute, controversy or claim that concerns (i) the validity, enforceability or infringement of a patent, trademark or copyright; or (ii) any antitrust, anti-monopoly or competition law or regulation, whether or not statutory.

14.GENERAL PROVISIONS

14.1Governing Law.  This Agreement and all questions regarding the existence, validity, interpretation, breach or performance of this Agreement and any dispute or claim arising out of or in connection with it (whether contractual or non-contractual in nature such as claims in tort, from breach of statute or regulation or otherwise), shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, United States, without reference to its conflicts of law principles with the exception of sections 5-1401 and 5-1402 of New York General Obligations Law.  The United Nations Conventions on Contracts for the International Sale of Goods shall not be applicable to this Agreement.

14.2Force Majeure.  Neither Party shall be held liable to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in performing any obligation under this Agreement (other than failure to make payment when due) when such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party including embargoes, war, acts of war (whether war be declared or not), insurrections, riots, civil commotions, fire, floods, or other acts of God, or acts, omissions or delays in acting by any governmental authority or the other Party.  The affected Party shall notify the other Party of such force majeure circumstances as soon as reasonably practical, and shall promptly undertake all reasonable efforts necessary to cure such force majeure circumstances.  Such excuse from liability shall be effective only to the extent and duration of the event(s) causing the failure or delay in performance and provided that the Party has not caused such event(s) to occur.

14.3Assignment.  Except as expressly provided hereunder, neither this Agreement nor any rights or obligations hereunder may be assigned or otherwise transferred by either Party

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without the prior written consent of the other Party, which consent shall not be unreasonably withheld; provided, however, that either Party may assign this Agreement and its rights and obligations hereunder without the other Party’s consent:

(a)in connection with the transfer or sale of all or substantially all of the business of such Party relating to Products to a Third Party, whether by merger, sale of stock, sale of assets or otherwise, provided that in the event of a transaction (whether this Agreement is actually assigned or is assumed by the acquiring party by operation of law (e.g., in the context of a reverse triangular merger)), intellectual property rights of the acquiring party in such transaction (if other than one of the Parties to this Agreement) shall not be included in the intellectual property rights licensed under this Agreement; or

(b)to an Affiliate, provided that the assigning Party shall remain liable and responsible to the non-assigning Party hereto for the performance and observance of all such duties and obligations by such Affiliate.

This Agreement shall be binding upon successors and permitted assigns of the Parties.  Any assignment not in accordance with this Section 14.3 will be null and void.

14.4Optimer Third Party Manufacturer.  The Parties acknowledge and agree that Optimer plans to use a Third Party manufacturer to Manufacture and supply Supplied Products under this Agreement and that the terms “Optimer shall” or “Optimer will” or the like, shall be deemed to be followed by the words “or Optimer’s designated Third Party manufacturer will” or “or “Optimer’s designated Third Party manufacturer shall” or “Optimer shall require that its designated Third Party manufacturer shall” or the like, with respect to Optimer’s Manufacturing and supply obligations herein. Optimer shall consult Partner on the terms of any agreements with any Third Party manufacturers relating to Products that will be or may be supplied under this Agreement that are being negotiated by Optimer at the Effective Date or negotiated afterwards and take Partner’s reasonable comments and suggestions into account.

14.5Severability.  If any one or more of the provisions contained in this Agreement is held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, unless the absence of the invalidated provision(s) adversely affects the substantive rights of the Parties.  The Parties shall in such an instance use their best efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) which, insofar as practical, implement the purposes of this Agreement.

14.6Notices.  All notices which are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by facsimile (and promptly confirmed by personal delivery, registered or certified mail or overnight courier), sent by nationally-recognized overnight courier or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

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If to Optimer, addressed to:
	Optimer Pharmaceuticals, Inc.
	10110 Sorrento Valley Rd., Suite C
	San Diego, CA 92121, U.S.A.
	Attention: Chief Executive Officer
	Fax: (858) 909-0737
If to Partner, addressed to:
	Astellas Pharma Europe Ltd.
	Lovett House, Lovett Road
	Staines, Middlesex TW18 3AZ
	UK
	Attention: General Counsel

or to such other address as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith.  Any such notice shall be deemed to have been given: (a) when delivered if personally delivered or sent by facsimile on a Business Day; (b) on the Business Day after dispatch if sent by nationally recognized overnight courier; and/or (c) on the third Business Day following the date of mailing if sent by mail.

14.7Entire Agreement; Amendments.  This Agreement, together with the exhibit hereto, and the License Agreement and Letter Agreement, contain the entire understanding of the Parties with respect to the subject matter hereof and thereof and supersede and cancel all previous express or implied agreements and understandings, negotiations, writings and commitments, either oral or written, in respect to the subject matter hereof and thereof, including the Confidentiality Agreement.  This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by authorized representatives of both Parties hereto.

14.8Headings.  The captions to the several Articles and Sections hereof are not a part of this Agreement, but are merely for convenience to assist in locating and reading the several Sections hereof.

14.9Independent Contractors.  It is expressly agreed that Optimer and Partner shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint venture or agency.  Neither Optimer nor Partner shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other Party, without the prior written consent of the other Party.

14.10Waiver.  The waiver by either Party hereto of any right hereunder, or the failure of the other Party to perform, or a breach by the other Party, shall not be deemed a waiver of any other right hereunder or of any other breach or failure by such other Party whether of a similar nature or otherwise.

14.11Cumulative Remedies.  No remedy referred to in this Agreement is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law.

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14.12Waiver of Rule of Construction.  Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement.  Accordingly, the rule of construction that any ambiguity in this Agreement shall be construed against the drafting Party shall not apply.

14.13Interpretation.  All references in this Agreement to an Article, Section or Exhibit shall refer to an Article, Section or Exhibit in or to this Agreement, unless otherwise stated.  Any reference to any federal, national, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise.  The word “including” and similar words means including without limitation.  The words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision.  All references to days, months, quarters or years are references to calendar days, calendar months, calendar quarters, or calendar years, unless stated otherwise.  References to the singular include the plural.

14.14No Third Party Beneficiaries.  This Agreement is neither expressly or impliedly made for the benefit of any Party other than Optimer and Partner, except as otherwise provided in this Agreement with respect to Optimer Indemnitees under Section 12.1 and Partner Indemnitees under Section 12.2.  This Agreement may be terminated, varied or amended in accordance with its terms or with the agreement of Partner and Optimer without the consent of the Optimer Indemnitees and/or Partner Indemnitees.

14.15English Language.  This Agreement is in the English language, and the English language shall control their interpretation.  In addition, all notices required or permitted to be given under this Agreement, and all written, electronic, oral or other communications between the Parties regarding this Agreement, shall be in the English language.

14.16Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

[Remainder of this page intentionally left blank]

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IN WITNESS WHEREOF, the Parties hereto have executed this Supply Agreement as of the Effective Date.

ASTELLAS PHARMA EUROPE LTD		OPTIMER PHARMACEUTICALS, INC.
By:	/s/ M. Yoshida	By:	/s/ Pedro Lichtinger
Name:	M. Yoshida	Name:	Pedro Lichtinger
Title:	President and CEO	Title:	President and CEO

EXHIBIT A

Product Specifications

[…***…]

***Confidential Treatment Requested

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Pedro Lichtinger, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Optimer 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 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 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: May 6, 2011

/s/ Pedro Lichtinger

Pedro Lichtinger

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, John D. Prunty, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Optimer 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 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 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: May 6, 2011

/s/ John D. Prunty

John D. Prunty

Vice-President and Chief Financial Officer

(Principal Financial and Accounting Officer)

EX-32

Exhibit 32

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350, as adopted), Pedro Lichtinger, the Chief Executive Officer of Optimer Pharmaceuticals, Inc. (the “Company”), and John D. Prunty, the Chief Financial Officer of the Company, each hereby certifies that, to the best of his knowledge:

1.The Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, to which this Certification is attached as Exhibit 32 (the “Quarterly Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Quarterly Report and results of operations of the Company for the period covered by the Quarterly Report.

Dated: May 6, 2011
/s/ Pedro Lichtinger	/s/ John D. Prunty
Pedro Lichtinger	John D. Prunty
Chief Executive Officer	Chief Financial Officer
(Principal Executive Officer)	(Principal Financial and Accounting Officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.