10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2009

OR

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

For the transition period from                      to                     

Commission file number: 0-24274

LA JOLLA PHARMACEUTICAL COMPANY

(Exact name of registrant as specified in its charter)

Delaware	33-0361285
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
6455 Nancy Ridge Drive	92121
San Diego, CA	(Zip Code)
(Address of principal executive offices)

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

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 þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes 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 definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer þ 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 þ

The number of shares of the registrant’s common stock, $0.01 par value per share, outstanding at May 4, 2009 was 65,722,648.

LA JOLLA PHARMACEUTICAL COMPANY
FORM 10-Q
QUARTERLY REPORT

INDEX

PART I. FINANCIAL INFORMATION
ITEM 1. Condensed Financial Statements — Unaudited
Condensed Consolidated Balance Sheets as of March 31, 2009 and December 31, 2008	1
Condensed Consolidated Statements of Operations for the three months ended March 31, 2009 and 2008	2
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2009 and 2008	3
Notes to Condensed Consolidated Financial Statements	4
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk	15
ITEM 4. Controls and Procedures	15
PART II. OTHER INFORMATION
ITEM 1. A. Risk Factors	16
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	19
ITEM 6. Exhibits	20
SIGNATURES	21
Exhibit 10.1
Exhibit 10.2
Exhibit 10.3
Exhibit 10.4
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED FINANCIAL STATEMENTS — UNAUDITED

LA JOLLA PHARMACEUTICAL COMPANY

Condensed Consolidated Balance Sheets
(in thousands)

	March 31,			December 31,
	2009			2008
	(Unaudited)			(See Note)
ASSETS
Current assets:
Cash and cash equivalents	$	17,563		$	9,447
Short-term investments		—			10,000
Prepaids and other current assets		1,561			785
Total current assets		19,124			20,232
Property and equipment, net		302			357
Patent costs and other assets, net		252			250
Total assets	$	19,678		$	20,839
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	9,771		$	4,626
Accrued clinical/regulatory expenses		909			3,957
Accrued expenses		331			1,008
Accrued payroll and related expenses		782			1,549
Accrued severance		1,048			—
Credit facility		—			5,933
Current portion of obligations under notes payable		155			152
Current portion of obligations under capital leases		11			11
Total current liabilities		13,007			17,236
Non-current portion of obligations under notes payable		149			179
Non-current portion of obligations under capital leases		32			34
Commitments
Stockholders’ equity:
Common stock		657			555
Additional paid-in capital		425,772			418,522
Accumulated deficit		(419,939	)		(415,687	)
Total stockholders’ equity		6,490			3,390
Total liabilities and stockholders’ equity	$	19,678		$	20,839

Note: The condensed consolidated balance sheet at December 31, 2008 has been derived from the audited consolidated financial statements as of that date but does not include all of the information and disclosures required by U.S. generally accepted accounting principles.

See accompanying notes.

1

LA JOLLA PHARMACEUTICAL COMPANY

Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except per share amounts)

	Three Months Ended
	March 31,
	2009			2008
Revenue from collaboration agreement	$	8,125		$	—
Expenses:
Research and development		9,893			11,338
General and administrative		2,487			1,906
Total expenses		12,380			13,244
Loss from operations		(4,255	)		(13,244	)
Interest income		12			360
Interest expense		(9	)		(16	)
Realized loss on investments, net		—			(737	)
Net loss	$	(4,252	)	$	(13,637	)
Basic and diluted net loss per share	$	(0.08	)	$	(0.34	)
Shares used in computing basic and diluted net loss per share		56,115			39,631

See accompanying notes.

2

LA JOLLA PHARMACEUTICAL COMPANY

Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)

	Three Months Ended
	March 31,
	2009			2008
Operating activities:
Net loss	$	(4,252	)	$	(13,637	)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization		74			284
Loss on write-off/disposal of patents and property and equipment		—			23
Share-based compensation expense		542			1,117
Realized loss on investments, net		—			737
Amortization of investment premium		—			243
Change in operating assets and liabilities:
Prepaids and other current assets		(776	)		48
Accounts payable		5,145			875
Accrued clinical/regulatory expenses		(3,048	)		(2,175	)
Accrued expenses		(677	)		85
Accrued payroll and related expenses		(767	)		(498	)
Accrued severance		1,048			—
Net cash used for operating activities		(2,711	)		(12,898	)
Investing activities:
Sales of short-term investments		10,000			24,665
Additions to property and equipment		(18	)		(32	)
Increase in patent costs and other assets		(3	)		(99	)
Net cash provided by investing activities		9,979			24,534
Financing activities:
Net proceeds from issuance of common stock		—			71
Net proceeds from issuance of preferred stock		6,810			—
Payments on credit facility		(5,933	)		—
Payments on obligations under notes payable		(27	)		(42	)
Payments on obligations under capital leases		(2	)		(3	)
Net cash provided by financing activities		848			26
Net increase in cash and cash equivalents		8,116			11,662
Cash and cash equivalents at beginning of period		9,447			4,373
Cash and cash equivalents at end of period	$	17,563		$	16,035

See accompanying notes.

3

LA JOLLA PHARMACEUTICAL COMPANY

Notes to Condensed Consolidated Financial Statements
(Unaudited)

March 31, 2009

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of La Jolla Pharmaceutical Company and its wholly-owned subsidiary (the “Company”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals and the restructuring costs — see Note 6 for further details) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2009 are not necessarily indicative of the results that may be expected for other quarters or the year ended December 31, 2009. For more complete financial information, these unaudited condensed consolidated financial statements, and the notes thereto, should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2008 included in the Company’s Form 10-K filed with the Securities and Exchange Commission.

In February 2009, the Company announced that an Independent Monitoring Board for the Riquent^® Phase 3 ASPEN study had completed their review of the first interim efficacy analysis of Riquent and determined that continuing the study was futile. Based on these results, the Company immediately discontinued the Riquent Phase 3 ASPEN study and the development of Riquent. The Company had previously devoted substantially all of its research, development and clinical efforts and financial resources toward the development of Riquent. In connection with the termination of the clinical trials for Riquent, the Company subsequently initiated steps to significantly reduce its operating costs, including the termination of 75 employees which was effected in April 2009 (see Note 6), and ceased all Riquent manufacturing and regulatory activities.

The Company has a history of recurring losses from operations, and as of March 31, 2009, the Company had an accumulated deficit of $419,939,000, available cash and cash equivalents of $17,563,000 and working capital of $6,117,000. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business and this does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

In light of the Company’s decision to discontinue development of the Riquent clinical program, the Company is seeking to maximize the value of its remaining assets. The Company is currently evaluating its strategic alternatives, which include the following:

• Sell or out-license the Company’s remaining assets, including the Company’s SSAO compounds, although significant value is not expected to be received for them;

• Pursue other potential strategic transactions, which could include mergers, license agreements or other collaborations, with third parties; or

• Implement an orderly wind down of the Company if other alternatives are not deemed viable and in the best interests of the Company.

4

In considering its strategic alternatives, the Company does not expect to realize any value from its Riquent program and has therefore closed its New Drug Application for Riquent with the Food and Drug Administration and has withdrawn its orphan drug designation for Riquent in Europe.

2. Accounting Policies

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of La Jolla Pharmaceutical Company and its wholly-owned subsidiary, La Jolla Limited, which was incorporated in England in October 2004. There have been no significant transactions related to La Jolla Limited since its inception.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and disclosures made in the accompanying notes to the unaudited condensed consolidated financial statements. Actual results could differ materially from those estimates.

Recent Accounting Pronouncement

In December 2007, the Financial Accounting Standards Board (FASB) ratified the consensus reached by the Emerging Issues Task Force (EITF) on EITF Issue No. 07-1, Accounting for Collaborative Arrangements (EITF No. 07-1). EITF No. 07-1 requires collaborators to present the results of activities for which they act as the principal on a gross basis and report any payments received from (made to) other collaborators based on other applicable U.S. GAAP or, in the absence of other applicable U.S. GAAP, based on analogy to authoritative accounting literature or a reasonable, rational, and consistently applied accounting policy election. Further, EITF No. 07-1 clarified that the determination of whether transactions within a collaborative arrangement are part of a vendor-customer (or analogous) relationship subject to EITF No. Issue 01-9, Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products). On January 1, 2009, the Company adopted the provisions of EITF No. 07-1, which did not have a material effect on the Company’s unaudited condensed consolidated financial statements for the three months ended March 31, 2009, given that the Company’s only significant collaboration was entered into during that period.

Revenue Recognition

On January 4, 2009, the Company entered into a development and commercialization agreement (the “Development Agreement”) with BioMarin CF Limited (“BioMarin CF”), a wholly-owned subsidiary of BioMarin Pharmaceutical Inc. (“BioMarin Pharma”). The Development Agreement was terminated on March 27, 2009 following the failure of the ASPEN trial. See Note 4 for further details related to the Development Agreement.

The Development Agreement contained multiple potential revenue elements, including non-refundable upfront fees. The Company applies the revenue recognition criteria outlined in Staff Accounting Bulletin (“SAB”), No. 104, Revenue Recognition, Emerging Issues Task Force Issue 00-21, Revenue Arrangements with Multiple Deliverables (“EITF 00-21”), and EITF No. 07-1. In applying these revenue recognition criteria, 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.

Net Loss Per Share

Basic and diluted net loss per share is computed using the weighted-average number of common shares outstanding during the periods in accordance with SFAS No. 128, Earnings per Share, and Staff Accounting Bulletin No. 98. Basic earnings per share (“EPS”) is calculated by dividing the net income or loss by the weighted-average number of common shares outstanding for the period, without consideration for common share equivalents. Diluted EPS is computed by dividing the net income or loss by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method. For purposes of this calculation, stock options, common stock subject to repurchase by the Company, common stock issuable upon the conversion of Preferred stock and warrants are considered to be common stock equivalents and are only included in the calculation of diluted EPS when their effect is dilutive.

5

Because the Company has incurred a net loss for both periods presented in the unaudited condensed consolidated statements of operations, stock options, common stock subject to repurchase, common stock issuable upon the conversion of Preferred stock and warrants are not included in the computation of net loss per share because their effect is anti-dilutive. The shares used to compute basic and diluted net loss per share represent the weighted-average common shares outstanding, reduced by the weighted-average unvested common shares subject to repurchase, if any. There were no unvested common shares subject to repurchase for the three-month periods ended March 31, 2009 and 2008.

Comprehensive Loss

In accordance with SFAS No. 130, Reporting Comprehensive Income (Loss), unrealized gains and losses on available-for-sale securities are included in other comprehensive income (loss). There were no unrealized gains or losses on available-for-sale securities for the three-month period ended March 31, 2009. The Company’s comprehensive net loss was $13,651,000 for the three months ended March 31, 2008.

Impairment of Long-Lived Assets and Assets to Be Disposed Of

In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, if indicators of impairment exist, the Company assesses the recoverability of the affected long-lived assets by determining whether the carrying value of such assets can be recovered through the undiscounted future operating cash flows.

As a result of the futility determination in the Phase 3 ASPEN trial, the Company discontinued the Riquent Phase 3 ASPEN study and the development of Riquent. Based on these events, the future cash flows from the Company’s Riquent-related patents are no longer expected to exceed their carrying values and the assets became impaired as of December 31, 2008. This rendered substantially all of the Company’s laboratory equipment, as well as a large portion of its furniture and fixtures and computer equipment and software impaired as of December 31, 2008.

The Company recorded a non-cash charge for the impairment of long-lived assets of $2,810,000 for the year ended December 31, 2008 to write down the value of the Company’s long-lived assets to their estimated fair values. No additional impairment was required as of March 31, 2009 for the remaining $554,000 of impacted assets, as no additional impairment indicators exist.

3. Fair Value of Financial Instruments

Effective January 1, 2008, the Company adopted SFAS No. 157, Fair Value Measurements. SFAS 157 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined under SFAS 157 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under SFAS 157 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

• Level 1 — Quoted prices in active markets for identical assets or liabilities.

• Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

6

As of March 31, 2009, cash and cash equivalents were comprised of cash in checking accounts. The Company held no investments as of March 31, 2009.

As of December 31, 2008, cash and cash equivalents were comprised of short-term, highly liquid investments with maturities of 90 days or less from the date of purchase. Investments were comprised of available-for-sale securities recorded at estimated fair value determined using level 3 inputs. Unrealized gains and losses associated with the Company’s investments, if any, were reported in stockholders’ equity in accordance with SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities.

At December 31, 2008, short-term investments were comprised of $10,000,000 invested in auction rate securities, which were sold to UBS at par value in January 2009 pursuant to an Auction Rate Securities Agreement executed in November 2008.

4. Development and Stock Purchase Agreements

On January 4, 2009, the Company entered into the Development Agreement with BioMarin CF, a wholly-owned subsidiary of BioMarin Pharma, granting BioMarin CF co-exclusive rights to develop and commercialize Riquent (and certain potential follow-on products) (collectively, “Riquent”) in the “Territory,” and the non-exclusive right to manufacture Riquent anywhere in the world. The “Territory” includes all countries of the world except the “Asia-Pacific Territory” (i.e., all countries of East Asia, Southeast Asia, South Asia, Australia, New Zealand, and other countries of Oceania).

Under the terms of the Development Agreement, BioMarin CF paid the Company a non-refundable commencement payment of $7,500,000 and purchased, through BioMarin Pharma, $7,500,000 of a newly designated series of preferred stock (the “Series B-1 Preferred Stock”), pursuant to a related securities purchase agreement described more fully below.

Following the futile results of the first interim efficacy analysis of Riquent received in February 2009, BioMarin CF elected not to exercise its full license rights to the Riquent program under the Development Agreement. Thus, the Development Agreement between the parties terminated on March 27, 2009 in accordance with its terms. All rights to Riquent have been returned to the Company. Accordingly, the $7,500,000 non-refundable commencement payment received in connection with this Development Agreement was recorded as revenue in the quarter ended March 2009.

In connection with the Development Agreement, the Company also entered into a securities purchase agreement, dated as of January 4, 2009 with BioMarin Pharma. In accordance with the terms of the agreement, on January 20, 2009, the Company sold 339,104 shares of Series B-1 Preferred Stock to BioMarin Pharma at a price per share of $22.1171 and received $7,500,000. On March 27, 2009, in connection with the termination of the Development Agreement, the Series B-1 Preferred Stock converted into 10,173,120 shares of Common Stock pursuant to the terms of the securities purchase agreement. The total sales price included a premium over the fair value of the stock issued of $625,000, which was recorded as revenue in the quarter ended March 31, 2009.

5. Stockholders’ Equity

Share-Based Compensation

In June 1994, the Company adopted the La Jolla Pharmaceutical Company 1994 Stock Incentive Plan (the “1994 Plan”), under which, as amended, 1,640,000 shares of common stock were authorized for issuance. The 1994 Plan expired in June 2004 and there were 657,865 options outstanding under the 1994 Plan as of March 31, 2009.

7

In May 2004, the Company adopted the La Jolla Pharmaceutical Company 2004 Equity Incentive Plan (the “2004 Plan”), under which, as amended, 6,400,000 shares of common stock have been authorized for issuance. The 2004 Plan provides for the grant of incentive and non-qualified stock options, as well as other share-based payment awards, to employees, directors, consultants and advisors of the Company with up to a 10-year contractual life and various vesting periods as determined by the Company’s Compensation Committee or the Board of Directors, as well as automatic fixed grants to non-employee directors of the Company. As of March 31, 2009, there were a total of 5,244,214 options outstanding under the 2004 Plan and 876,567 shares remained available for future grant.

In August 1995, the Company adopted the La Jolla Pharmaceutical Company 1995 Employee Stock Purchase Plan (the “ESPP”), under which, as amended, 850,000 shares of common stock are reserved for sale to eligible employees, as defined in the ESPP. Employees may purchase common stock under the ESPP every three months (up to but not exceeding 10% of each employee’s base salary or hourly compensation, and any cash bonus paid, subject to certain limitations) over the offering period at 85% of the fair market value of the common stock at specified dates. The offering period may not exceed 24 months. As of March 31, 2009, 833,023 shares of common stock have been issued under the ESPP and 16,977 shares of common stock are available for future issuance.

Expenses allocable to options or stock awards issued to non-employees, other than non-employee directors, have been determined in accordance with Emerging Issues Task Force 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services. Options granted to such non-employees are periodically remeasured as the options vest.

Share-based compensation expense recognized under SFAS 123R for the three-month periods ended March 31, 2009 and 2008 was $542,000 and $1,117,000, respectively. As of March 31, 2009, there was $4,914,000 of total unrecognized compensation cost related to non-vested share-based payment awards granted under all equity compensation plans. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures. The Company expects to recognize this compensation cost over a weighted-average period of 1.4 years.

The following table summarizes share-based compensation expense related to employee and director stock options, restricted stock and ESPP purchases under SFAS 123R by expense category (in thousands):

	Three Months Ended
	March 31,
	2009		2008
Research and development	$	66	$	465
General and administrative		476		652
Share-based compensation expense included in operating expenses	$	542	$	1,117

The Company determines the fair value of share-based payment awards on the date of grant using the Black-Scholes option-pricing model, which is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. Option-pricing models were developed for use in estimating the value of traded options that have no vesting or hedging restrictions and are fully transferable. Although the fair value of the employee and director stock options granted by the Company is determined in accordance with SFAS 123R using an option-pricing model, that value may not be indicative of the fair value observed in a willing-buyer/willing-seller market transaction.

8

The Company estimated the fair value of each option grant and ESPP purchase right on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

	March 31,
	2009			2008
Options:
Risk-free interest rate		0.6	%		3.0	%
Dividend yield		0.0	%		0.0	%
Volatility		295.0	%		108.9	%
Expected life (years)		1.0			5.6

	March 31,
	2008
ESPP:
Risk-free interest rate		2.1	%
Dividend yield		0.0	%
Volatility		90.9	%
Expected life (months)		3

There were no purchases under the ESPP for the three months ended March 31, 2009.

The weighted-average fair values of options granted were $1.72 and $1.98 for the three months ended March 31, 2009 and 2008, respectively. For the ESPP, the weighted-average purchase price was $1.67 for the three months ended March 31, 2008.

A summary of the Company’s stock option activity and related data for the three months ended March 31, 2009 follows:

	Outstanding Options
				Weighted-
				Average
	Number of			Exercise
	Shares			Price
Balance at December 31, 2008		5,626,960		$	6.80
Granted		691,875		$	1.73
Exercised		—		$	—
Forfeited or expired		(416,756	)	$	9.47
Balance at March 31, 2009		5,902,079		$	6.01

6. Restructuring Costs

In connection with the termination of the clinical trials for Riquent, the Company ceased all manufacturing and regulatory activities related to Riquent and initiated steps to significantly reduce its operating costs, including the termination of 75 employees who received notification in February 2009 and were terminated in April 2009. Pursuant to SFAS No. 112, Employers’ Accounting for Postemployment Benefits and SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, the Company recorded a charge of approximately $1,048,000 in the quarter ended March 31, 2009, of which $668,000 was included in research and development and $380,000 was included in general and administrative expense. This amount is expected to be paid out by the end of the second quarter of 2009.

7. Commitments and Contingencies

The Company leases two adjacent buildings in San Diego, California covering a total of approximately 54,000 square feet. Both building leases expire in July 2009. Pursuant to one of the leases, the Company is responsible for completing modifications to the leased building prior to lease expiration. Management has accrued a reasonable estimate for the cost of these modifications as of March 31, 2009, however, an additional accrual may be required as further information becomes available related to these building modification costs.

The Company renewed certain of its liability insurance policies in March 2009 covering future periods.

9

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

Forward-Looking Statements

The forward-looking statements in this report involve significant risks, assumptions and uncertainties, and a number of factors, both foreseen and unforeseen, could cause actual results to differ materially from our current expectations. Forward-looking statements include those that express a plan, belief, expectation, estimation, anticipation, intent, contingency, future development or similar expression. The analysis of the data from our Phase 3 ASPEN trial of Riquent showed that the trial did not reach statistical significance with respect to its primary endpoint, delaying time to renal flare or for either secondary endpoint, improvement in proteinuria or time to major SLE flare and we decided to stop the study. Additional risk factors include the uncertainty and timing of initiating a strategic transaction to maximize the value of our remaining assets and continuing as a going concern. Accordingly, you should not rely upon forward-looking statements as predictions of future events. The outcome of the events described in these forward-looking statements are subject to the risks, uncertainties and other factors described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in the “Risk Factors” contained in our Annual Report on Form 10-K for the year ended December 31, 2008, and in other reports and registration statements that we file with the Securities and Exchange Commission from time to time and as updated in Part II, Item 1.A. “Risk Factors” contained in this Quarterly Report on Form 10-Q. We expressly disclaim any intent to update forward-looking statements.

Overview and Recent Developments

Since our inception in May 1989, we have devoted substantially all of our resources to the research and development of technology and potential drugs to treat antibody-mediated diseases. We have never generated any revenue from product sales and have relied on public and private offerings of securities, revenue from collaborative agreements, equipment financings and interest income on invested cash balances for our working capital.

On January 4, 2009, we entered into a development and commercialization agreement (the “Development Agreement”) with BioMarin CF Limited (“BioMarin CF”), a wholly-owned subsidiary of BioMarin Pharmaceutical Inc. (“BioMarin Pharma”). Under the terms of the Development Agreement, BioMarin CF was granted co-exclusive rights to develop and commercialize Riquent in the United States, Europe and all other territories of the world, excluding the Asia Pacific region, and the non-exclusive right to manufacture Riquent anywhere in the world. In connection with the Development Agreement, we also entered into a securities purchase agreement with BioMarin Pharma. In January 2009, BioMarin CF paid us a non-refundable commencement payment of $7.5 million pursuant to the Development Agreement and BioMarin Pharma paid us $7.5 million in exchange for a newly designated series of our preferred stock pursuant to the securities purchase agreement. As described below, the Development Agreement was terminated on March 27, 2009.

In February 2009, we were informed by an Independent Monitoring Board for the Riquent Phase 3 ASPEN study that the monitoring board completed its review of the first interim efficacy analysis of Riquent and determined that continuing the study was futile. We subsequently unblinded the data and found that there was no statistical difference in the primary endpoint, delaying time to renal flare, between the Riquent-treated group and the placebo-treated group, although there was a significant difference in the reduction of antibodies to double-stranded DNA. There were 56 renal flares in 587 patients treated with either 300-mg or 900-mg of Riquent, and 28 renal flares in 283 patients treated with placebo.

Based on these results, we immediately discontinued the Riquent Phase 3 ASPEN study and the further development of Riquent. We had previously devoted substantially all of our research, development and clinical efforts and financial resources toward the development of Riquent. In connection with the termination of our clinical trials for Riquent, we subsequently initiated steps to significantly reduce our operating costs, including the termination of 75 employees, which was effected in April 2009. We also ceased the manufacture of Riquent at our facility in San Diego, California, as well as all regulatory activities associated with Riquent. Pursuant to SFAS No. 112, Employers’ Accounting for Postemployment Benefits and SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, we recorded a charge of approximately $1.1 million in the quarter ended March 31, 2009, of which $0.7 million was included in research and development and $0.4 million was included in general and administrative expense. This amount is expected to be paid out by the end of the second quarter of 2009.

10

Following the futile results of the first interim efficacy analysis of Riquent, BioMarin CF has elected to not exercise its full license rights to the Riquent program under the Development Agreement. Thus, the Development Agreement between the parties terminated on March 27, 2009 in accordance with its terms. Pursuant to the securities purchase agreement between us and BioMarin Pharma, the Company’s Series B-1 preferred shares purchased by BioMarin Pharma were converted into 10,173,120 shares of common stock. Additionally, all rights to Riquent have been returned to us.

In light of our decision to discontinue development of our Riquent clinical program, we are seeking to maximize the value of our remaining assets. We are currently evaluating our strategic alternatives, which include the following:

• Sell or out-license our remaining assets, including our SSAO compounds, although we do not expect to receive any significant value for them;

• Pursue other potential strategic transactions, which could include mergers, license agreements or other collaborations, with third parties; or

• Implement an orderly wind down of the Company if other alternatives are not deemed viable and in the best interests of the Company.

In considering our strategic alternatives, we do not expect to realize any value from our Riquent program and we have therefore closed our New Drug Application (“NDA”) for Riquent with the Food and Drug Administration (“FDA”) and have withdrawn our orphan drug designation for Riquent in Europe.

Following the negative results of the ASPEN trial, we recorded a significant charge for the impairment of our Riquent assets in 2008, including our Riquent-related patents, and it is unlikely that we will realize any substantive value from these assets in the future. Additionally, there is a substantial risk that we may not successfully implement any of these strategic alternatives, and even if we determine to pursue one or more of these alternatives, we may be unable to do so on acceptable terms. Any such transactions may be highly dilutive to our existing stockholders and may deplete our limited remaining capital resources.

In January 2009, we sold all of our auction rate securities to our broker-dealer, UBS A.G. (“UBS”) at par value of $10.0 million. As of December 31, 2008, we had previously recognized a total impairment charge of $2.3 million as a result of the illiquidity of these securities, which was fully offset by a realized gain of $2.3 million from UBS’s repurchase agreement that provides for a put option on these securities. Following the sale of these investments, we no longer hold any auction-rate securities.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis, including those related to patent costs, clinical/regulatory expenses and the fair value of our financial instruments. We base our estimates on historical experience and on other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.

We believe the following critical accounting policies involve significant judgments and estimates used in the preparation of our condensed consolidated financial statements (see also Note 1 to our unaudited condensed consolidated financial statements included in Part I).

11

Revenue recognition

The Development Agreement contained multiple potential revenue elements, including non-refundable upfront fees. We apply the revenue recognition criteria outlined in Staff Accounting Bulletin (“SAB”), No. 104, Revenue Recognition, Emerging Issues Task Force (“EITF”) Issue 00-21, Revenue Arrangements with Multiple Deliverables (“EITF 00-21”), and EITF Issue No. 07-1, Accounting for Collaborative Arrangements (EITF No. 07-1). In applying these revenue recognition criteria, we consider 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.

Impairment and useful lives of long-lived assets

We regularly review our long-lived assets for impairment. Our long-lived assets include costs incurred to file our patent applications. We evaluate the recoverability of long-lived assets by measuring the carrying amount of the assets against the estimated undiscounted future cash flows associated with them. At the time such evaluations indicate that the future undiscounted cash flows of certain long-lived assets are not sufficient to recover the carrying value of such assets, the assets are adjusted to their fair values. The estimation of the undiscounted future cash flows associated with long-lived assets requires judgment and assumptions that could differ materially from the actual results.

Costs related to issued patents are amortized using the straight-line method over the lesser of the remaining useful life of the related technology or the remaining patent life, commencing on the date the patent is issued. Legal costs and expenses incurred in connection with pending patent applications have been capitalized. We expense all costs related to abandoned patent applications. If we elect to abandon any of our currently issued or unissued patents, the related expense could be material to our results of operations for the period of abandonment. The estimation of useful lives for long-lived assets requires judgment and assumptions that could differ materially from the actual results. In addition, our results of operations could be materially impacted if we begin amortizing the costs related to unissued patents.

For the year ended December 31, 2008, as a result of the futility determination in the ASPEN trial, we recorded a non-cash charge for the impairment of long-lived assets of $2.8 million to write down the value of our long-lived assets to their estimated fair values. No additional impairment losses have been recorded on our long-lived assets for the three months ended March 31, 2009.

Accrued clinical/regulatory expenses

We review and accrue clinical trial and regulatory-related expenses based on work performed, which relies on estimates of total costs incurred based on patient enrollment, sites activated and other events. We follow this method because reasonably dependable estimates of the costs applicable to various stages of a clinical trial can be made. Accrued clinical/regulatory costs are subject to revisions as trials progress to completion. Revisions are charged to expense in the period in which the facts that give rise to the revision become known. Historically, revisions have not resulted in material changes to research and development costs.

Share-based compensation

We adopted Statement of Financial Accounting Standard (“SFAS”) No. 123R, Share-Based Payment (“SFAS 123R”) using the modified prospective transition method, which requires the application of the accounting standard as of January 1, 2006. Share-based compensation expense recognized under SFAS 123R was approximately $0.5 million and $1.1 million for the three-month periods ended March 31, 2009 and 2008, respectively. As of March 31, 2009, there was approximately $4.9 million of total unrecognized compensation cost related to non-vested share-based payment awards granted under all equity compensation plans. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures. We currently expect to recognize the remaining unrecognized compensation cost over a weighted-average period of 1.4 years. Additional share-based compensation expense for any new share-based payment awards granted after March 31, 2009 under all equity compensation plans cannot be predicted at this time because it will depend on, among other matters, the amounts of share-based payment awards granted in the future.

12

Option-pricing models were developed for use in estimating the value of traded options that have no vesting or hedging restrictions and are fully transferable. Because the employee and director stock options granted by us have characteristics that are significantly different from traded options, and because changes in the subjective assumptions can materially affect the estimated value, in our opinion the existing valuation models may not provide an accurate measure of the fair value of the employee and director stock options granted by us. Although the fair value of the employee and director stock options granted by us is determined in accordance with SFAS 123R using an option-pricing model, that value may not be indicative of the fair value observed in a willing-buyer/willing-seller market transaction.

Recent Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board (FASB) ratified the consensus reached by the EITF on EITF No. 07-1. EITF No. 07-1 requires collaborators to present the results of activities for which they act as the principal on a gross basis and report any payments received from (made to) other collaborators based on other applicable U.S. GAAP or, in the absence of other applicable U.S. GAAP, based on analogy to authoritative accounting literature or a reasonable, rational, and consistently applied accounting policy election. Further, EITF No. 07-1 clarified that the determination of whether transactions within a collaborative arrangement are part of a vendor-customer (or analogous) relationship subject to EITF No. Issue 01-9, Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products). On January 1, 2009, we adopted the provisions of EITF No. 07-1 which did not have a material effect on our unaudited condensed consolidated financial statements for the three months ended March 31, 2009.

Results of Operations

For the three months ended March 31, 2009, revenue increased to $8.1 million as a result of the Development Agreement entered into with BioMarin CF in January 2009. The Development Agreement was terminated in March 2009 following the negative results from our Riquent Phase 3 ASPEN study.

For the three months ended March 31, 2009, research and development expense decreased to $9.9 million from $11.3 million for the same period in 2008 as a result of the discontinuation of the Riquent Phase 3 ASPEN study. This decrease was partially offset by an increase in termination expense, mainly relating to severance, of approximately $0.7 million related to the termination of research and development personnel. During April 2009, 65 research and development personnel were terminated.

For the three months ended March 31, 2009, general and administrative expense increased to $2.5 million from $1.9 million for the same period in 2008. This increase is primarily the result of an increase in termination expense, mainly relating to severance, of approximately $0.4 million related to the termination of general and administrative personnel as well as an increase in consulting and professional services. During April 2009, 10 general and administrative personnel were terminated.

Interest income, net, decreased to $0.03 million for the three months ended March 31, 2009, from $0.3 million for the same period in 2008. The decrease was primarily due to lower average balances of cash, cash equivalents and short-term investments and lower average interest rates as compared to 2008.

Realized loss on investments, net, of $0.7 million for the three months ended March 31, 2008 primarily consisted of the other-than-temporary impairment loss on our auction rate securities recorded in the first quarter of 2008, in connection with the adoption of SFAS 157. These securities were sold to UBS at par value in January 2009.

Liquidity and Capital Resources

From inception through March 31, 2009, we have incurred a cumulative net loss of approximately $419.9 million and have financed our operations through public and private offerings of securities, revenues from collaborative agreements, equipment financings and interest income on invested cash balances. From inception through March 31, 2009, we have raised approximately $410.8 million in net proceeds from sales of equity securities.

13

At March 31, 2009, we had $17.6 million in cash and cash equivalents as compared to $19.4 million of cash, cash equivalents and short-term investments at December 31, 2008. Our working capital at March 31, 2009 was $6.1 million, as compared to $3.0 million at December 31, 2008. The decrease in cash, cash equivalents and short-term investments resulted from the use of our financial resources to fund our clinical trial and manufacturing activities and for other general corporate purposes. This decrease was partially offset by the non-refundable commencement payment of $7.5 million received from BioMarin CF under the Development Agreement and the proceeds of $7.5 million from the sale of 339,104 shares of our preferred stock to BioMarin Pharma under the securities purchase agreement in January 2009.

As of March 31, 2009, approximately $3.8 million of equipment ($0.2 million net of depreciation and 2008 impairment charges) secured our notes payable and capital lease obligations. We lease certain equipment under operating leases.

We also lease two adjacent buildings in San Diego, California covering a total of approximately 54,000 square feet. Both building leases expire on July 31, 2009. Pursuant to one of the leases, we are responsible for completing modifications to the leased building prior to lease expiration. Management has accrued a reasonable estimate for the cost of these modifications as of March 31, 2009, however, should the landlord take a more aggressive position on the interpretation of the lease expiration obligations and prevail, the additional costs could be significant.

The following table summarizes our contractual obligations at March 31, 2009 (in thousands). Long-term debt obligations include interest.

			Payment due by period
			Less than						More than
	Total		1 Year		1-3 Years		3-5 Years		5 Years
Long-Term Debt Obligations	$	341	$	180	$	161	$	—	$	—
Capital Lease Obligations		51		15		36		—		—
Operating Lease Obligations		429		278		140		11		—
Purchase Obligations		50		50		—		—		—
Total	$	871	$	523	$	337	$	11	$	—

We intend to use our financial resources to fund our current obligations and to pursue other strategic alternatives that may become available to us. In the future, it is possible that we will not have adequate resources to support continued operations and we will need to cease operations.

Our future capital uses and requirements depend on numerous forward-looking factors. These factors include but are not limited to the following:

• our ability to sell, out-license or otherwise dispose of our assets, including our SSAO compounds, although we do not expect to receive any significant value for them;

• our ability to consummate a merger with another company; or

• our ability to negotiate favorable settlement terms with our creditors, as well as any actions that may be taken by our creditors, which could force us to wind down the Company.

There can be no assurance that we will be able to enter into any strategic transactions on acceptable terms, if any, and our negotiating position may worsen as we continue to utilize our existing resources.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our consolidated financial condition, changes in our consolidated financial condition, expenses, consolidated results of operations, liquidity, capital expenditures or capital resources.

14

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not utilize derivative financial instruments, derivative commodity instruments or other market risk sensitive instruments, positions or transactions in any material fashion. We currently do not invest in any securities that are materially and directly affected by foreign currency exchange rates or commodity prices.

At March 31, 2009, all of our cash and cash equivalents consisted of cash. At December 31, 2008, all of our investment securities, which consisted of money market funds, U.S. Treasury bills and asset-backed student loan auction rate securities, were classified as available-for-sale and were therefore reported on the balance sheet at market value.

ITEM 4. CONTROLS AND PROCEDURES

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2009. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2009, our principal executive officer and principal financial officer concluded that, as of such date, the Company’s disclosure controls and procedures were effective at the reasonable assurance level.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the quarter ended March 31, 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

15

PART II. OTHER INFORMATION

ITEM 1.A. Risk Factors

I. RISK FACTORS RELATING TO LA JOLLA PHARMACEUTICAL COMPANY AND THE INDUSTRY IN WHICH WE OPERATE.

We are updating and restating the risk factors included in our Annual Report on Form 10-K for our fiscal year ended December 31, 2008 as follows:

In light of our decision to discontinue development of our Riquent clinical program, we are seeking to maximize the value of our remaining assets, address our liabilities and attempt to pursue mergers or similar strategic transactions. We may be unable to satisfy our liabilities and can provide no assurances that we can be successful in pursuing a strategic transaction.

In February 2009, we were informed by an Independent Monitoring Board for the Riquent Phase 3 ASPEN study that the monitoring board completed its review of the first interim efficacy analysis and determined that continuing the study was futile. Based on these results, we immediately discontinued the Riquent Phase 3 ASPEN study and the development of Riquent. We had previously devoted substantially all of our research, development and clinical efforts and financial resources toward the development of Riquent and, in light of the failure of the trial, we subsequently incurred a significant impairment charge as we wrote down the value of our Riquent assets to near zero. In connection with the termination of our clinical trials for Riquent, we initiated steps to significantly reduce our operating costs including the termination of 75 employees, which was effected in April 2009. We also ceased the manufacture of Riquent at our facility in San Diego, California, as well as all regulatory activities associated with Riquent and have begun exploring strategic alternatives to maximize stockholder value, including the possible sale or licensing out of our remaining assets, a potential merger with another company or the winding down of operations. In considering our strategic alternatives, we do not expect to realize any value from the Riquent program and have therefore closed our NDA for Riquent with the FDA and have withdrawn our orphan drug designation for Riquent in Europe.

There is a substantial risk that we may not successfully implement any of these strategic alternatives, and even if we determine to pursue one or more of these alternatives, we may be unable to do so on acceptable financial terms. Any such transactions may require us to incur non-recurring or other charges and may pose significant integration challenges and/or management and business disruptions, any of which could materially and adversely affect our business and financial results. Additionally, pursuing these transactions would deplete some portion of our limited capital resources and may not result in a transaction that is ultimately consummated. We may be unable to discharge our liabilities or negotiate favorable settlement terms with our creditors.

Stockholders should recognize that in our efforts to address our liabilities and fund the future development of our Company, we may pursue strategic alternatives that result in the stockholders of the Company having little or no continuing interest in the assets or equity of the Company. We will continue to evaluate our alternatives in light of our cash position, including the possibility that we may need to seek protection under the provisions of the U.S. Bankruptcy Code.

We may need to liquidate the Company in a voluntary dissolution under Delaware law or seek protection under the provisions of the U.S. Bankruptcy Code, and, in either event, it is unlikely that stockholders would receive any value for their shares.

We have not generated any revenues from product sales, and have incurred losses in each year since our inception in 1989. We expect that it will be very difficult to raise capital to continue our operations and our independent registered public accounting firm has issued an opinion with an explanatory paragraph to the effect that there is substantial doubt about our ability to continue as a going concern. We do not believe that we could succeed in raising additional capital needed to sustain our operations without some strategic transaction, such as a merger. If we are unable to consummate such a transaction, we expect that we would need to cease all operations and wind down. Although we are currently evaluating our strategic alternatives with respect to all aspects of our business, we

16

cannot assure you that any actions that we take would raise or generate sufficient capital to fully address the uncertainties of our financial position. As a result, we may be unable to realize value from our assets and discharge our liabilities in the normal course of business. If we are unable to settle our obligations to our creditors or if we are unable to consummate a strategic transaction, we would likely need to liquidate the Company in a voluntary dissolution under Delaware law or seek protection under the provisions of the U.S. Bankruptcy Code. In that event, we, or a trustee appointed by the court, may be required to liquidate our assets. In either of these events, we might realize significantly less from our assets than the values at which they are carried on our financial statements. The funds resulting from the liquidation of our assets would be used first to satisfy obligations to creditors before any funds would be available to pay our stockholders, and any shortfall in the proceeds would directly reduce the amounts available for distribution, if any, to our creditors and to our stockholders. In the event we are required to liquidate under Delaware law or the federal bankruptcy laws, it is highly unlikely that stockholders would receive any value for their shares.

We recorded an impairment loss for the year ended December 31, 2008 and may need to record additional charges in the future.

In light of our decisions to discontinue the development of Riquent, reduce our workforce, evaluate the possible sale of our equipment and other personal property assets, and consider our strategic alternatives with respect to all aspects of our business, management concluded that, under Statement of Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, as of December 31, 2008, the carrying amount of the asset group was not fully recoverable and that a material impairment did exist. Accordingly, we recorded a non-cash charge of $2.8 million for impairment of assets during the fourth quarter of 2008. As we continue to evaluate our business and our assets under SFAS 144, we may need to reflect additional impairment charges in the future, which would negatively impact our financial results and our overall value of the Company.

We face environmental liabilities related to certain hazardous materials used in our operations.

Due to the nature of our manufacturing processes, we are subject to stringent federal, state and local laws governing the use, handling and disposal of certain materials and wastes. Historically, in our research and manufacturing activities we have used radioactive and other materials that could be hazardous to human health, safety or the environment. These materials and various wastes resulting from their use are stored at our facility pending ultimate use and disposal. The risk of accidental injury or contamination from these materials cannot be eliminated. In the event of such an accident, we could be held liable for any resulting damages, and any such liability could exceed our resources. Although we maintain general liability insurance, we do not specifically insure against environmental liabilities.

II. RISK FACTORS RELATED SPECIFICALLY TO OUR STOCK.

The price of our common stock has been volatile and has declined significantly and we may face delisting from Nasdaq.

Due to the futility determination of the Riquent clinical trial, our stock has experienced significant price and volume volatility since February 2009. Our stock is currently trading below $0.40 per share and we could continue to experience further declines in our stock price. Our stock is currently trading below the $1.00 minimum bid price required under Nasdaq’s continued listing requirements. Although Nasdaq has suspended the enforcement of rules requiring a minimum $1.00 closing bid price and the rules requiring a minimum market value of publicly held shares, this suspension is currently only in effect through July 19, 2009. We will likely be non-compliant with Nasdaq’s continued listing requirements when this suspension is lifted. If our stock continues to trade below $1.00 when the temporary suspension is lifted, Nasdaq may commence delisting procedures against us.

In addition to the minimum bid price rule, the Nasdaq Global Market has several other continued listing requirements and we currently are not in compliance with the continued listing standard regarding minimum stockholders’ equity. We have presented a plan to regain compliance with the minimum equity requirement, but we cannot be assured that Nasdaq will accept our plan or that we will be able to successfully execute our plan. Either Nasdaq’s refusal to accept our plan or our inability to successfully execute our plan could result in our delisting from The Nasdaq Global Market.

17

If we were delisted, the market liquidity of our common stock could be adversely affected and the market price of our common stock could decline further. Such a delisting could also adversely affect our ability to effect a strategic transaction, such as a merger with a third party. In addition, our stockholders’ ability to trade or obtain quotations on our shares could be severely limited because of lower trading volumes and transaction delays. These factors could contribute to lower prices and larger spreads in the bid and ask price for our common stock.

Specifically, you may not be able to resell your shares at or above the price you paid for such shares or at all. In addition, class action litigation has often been instituted against companies whose securities have experienced periods of volatility in market price. Any such litigation brought against us could result in substantial costs and a diversion of management’s attention and resources, which could hurt our business, operating results and financial condition.

Our common stock price is volatile and may continue to decline.

The market price of our common stock has been and is likely to continue to be highly volatile. Market prices for securities of biotechnology and pharmaceutical companies, including ours, have historically been highly volatile, and the market has from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. The following factors, among others, can have a significant effect on the market price of our securities:

• limited financial resources;

• announcements regarding mergers or other strategic transactions, as well as rumors and speculation around the potential events;

• future sales of significant amounts of our common stock by us or our stockholders;

• actions or decisions by our creditors;

• actions or decisions by The Nasdaq Stock Market with respect to the listing of our common stock;

• developments concerning potential and existing agreements with collaborators; and

• general market conditions and comments by securities analysts.

The realization of any of the risks described in these “Risk Factors” could have a negative effect on the market price of our common stock.

Failure to achieve and maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and stock price.

Section 404 of the Sarbanes-Oxley Act requires us to evaluate annually the effectiveness of our internal controls over financial reporting as of the end of each fiscal year and to include a management report assessing the effectiveness of our internal control over financial reporting in all annual reports. Section 404 also requires our independent registered public accounting firm to report on our internal control over financial reporting in our annual reports. We evaluated our internal control over financial reporting as of December 31, 2008 in order to comply with Section 404 and concluded that our disclosure controls and procedures were effective as of such date. If we fail to maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we cannot provide any assurances that we will be able to conclude in the future that we have effective internal control over financial reporting in accordance with Section 404. If we fail to achieve and maintain a system of effective internal control over financial reporting, it could have a material adverse effect on our business and stock price.

18

Anti-takeover devices may prevent changes in our board of directors and management.

We have in place several anti-takeover devices, including a stockholder rights plan, which may have the effect of delaying or preventing changes in our management or deterring third parties from seeking to acquire significant positions in our common stock. For example, one anti-takeover device provides for a board of directors that is separated into three classes, with their terms in office staggered over three-year periods. This has the effect of delaying a change in control of our board of directors without the cooperation of the incumbent board. In addition, our bylaws require stockholders to give us written notice of any proposal or director nomination within a specified period of time prior to the annual stockholder meeting, establish certain qualifications for a person to be elected or appointed to the board of directors during the pendency of certain business combination transactions, and do not allow stockholders to call a special meeting of stockholders.

We may also issue shares of preferred stock without further stockholder approval and upon terms that our board of directors may determine in the future. The issuance of preferred stock could have the effect of making it more difficult for a third party to acquire a majority of our outstanding stock, and the holders of such preferred stock could have voting, dividend, liquidation and other rights superior to those of holders of our common stock.

Future sales of our stock by our stockholders could negatively affect the market price of our stock.

Sales of our common stock in the public market, or the perception that such sales could occur, could result in a drop in the market price of our securities. As of May 4, 2009, 65,722,648 shares of our common stock were issued and outstanding.

We cannot estimate the number of shares of common stock that may actually be resold in the public market because this will depend on the market price for our common stock, the actions of the selling stockholder and other factors. During February 2009, of our three stockholders who owned 10% or more of our outstanding common stock as of December 31, 2008, two of them sold all of their stock ownership positions and one sold a substantial portion of its common stock ownership position to below 5%.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

On January 20, 2009, we sold 339,104 shares of Series B-1 Preferred Stock to BioMarin Pharma pursuant to the securities purchase agreement executed on January 4, 2009. Each share was sold for $22.1171, for an aggregate offering price of $7,500,000. This sale was exempt from registration with the Securities and Exchange Commission pursuant to Rule 506 of Regulation D promulgated under the Securities Act of 1933, as amended. The Series B-1 Preferred Stock is convertible into common stock on a 30:1 basis and automatically converted into 10,173,120 shares of common stock upon termination of the Development Agreement on March 27, 2009.

19

ITEM 6. EXHIBITS

Exhibit
Number		Description
	3.1	Restated Certificate of Incorporation (1)
	3.2	Amended and Restated Bylaws (2)
	3.3	Certificate of Designations of Series A Junior Participating Preferred Stock (3)
	4.1	Form of Common Stock Certificate (4)
	4.2	Rights Agreement, dated as of December 3, 1998, between the Company and American Stock Transfer & Trust Company (5)
	4.3	Amended and Restated Rights Agreement, dated as of December 2, 2008, between the Company and American Stock Transfer & Trust Company (3)
	4.4	Amendment No. 1 to Amended and Restated Rights Agreement, dated as of January 20, 2009, between the Company and American Stock Transfer & Trust Company (7)
	10.1	Development and Commercialization Agreement, dated as of January 4, 2009, by and between the Company and BioMarin CF Limited*†
	10.2	Securities Purchase Agreement, dated as of January 4, 2009, by and between the Company and BioMarin Pharmaceutical Inc.*†
	10.3	Amendment No. 1 to Development and Commercialization Agreement, dated as of January 4, 2009, by and between the Company and BioMarin CF Limited*
	10.4	Amendment No. 1 to Securities Purchase Agreement, dated as of January 4, 2009, by and between the Company and BioMarin Pharmaceutical Inc.*
	31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32.1	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*	Filed herewith.
†	Confidential treatment requested.
(1)	Previously filed with the Company’s Current Report on Form 8-K filed March 1, 2006 and incorporated by reference herein.
(2)	Previously filed with the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000 and incorporated by reference herein.
(3)	Previously filed with the Company’s Registration Statement on Form 8-A/A filed December 4, 2008 and incorporated by reference herein.
(4)	Previously filed with the Company’s Registration Statement on Form S-3 (Registration No. 333-131246) filed January 24, 2006 and incorporated by reference herein.
(5)	Previously filed with the Company’s Registration Statement on Form 8-A (Registration No. 000-24274) filed December 4, 1998 and incorporated by reference herein.
(6)	Previously filed with the Company’s Current Report on Form 8-K filed December 4, 2008 and incorporated by reference herein.
(7)	Previously filed with the Company’s Registration Statement on Form 8-A/A (Registration No. 000-24274) filed January 26, 2009 and incorporated by reference herein.

20

SIGNATURES

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

	La Jolla Pharmaceutical Company
Date: May 15, 2009	/s/ Deirdre Y. Gillespie
	Deirdre Y. Gillespie, M.D.
	President and Chief Executive Officer (On behalf of the Registrant)
	/s/ Gail A. Sloan
	Gail A. Sloan
	Vice President of Finance and Secretary (As Principal Financial and Accounting Officer)

21

LA JOLLA PHARMACEUTICAL COMPANY

INDEX TO EXHIBITS

Exhibit
Number		Description
	10.1	Development and Commercialization Agreement, dated as of January 4, 2009, by and between the Company and BioMarin CF Limited*†
	10.2	Securities Purchase Agreement, dated as of January 4, 2009, by and between the Company and BioMarin Pharmaceutical Inc.*†
	10.3	Amendment No. 1 to Development and Commercialization Agreement, dated as of January 4, 2009, by and between the Company and BioMarin CF Limited*
	10.4	Amendment No. 1 to Securities Purchase Agreement, dated as of January 4, 2009, by and between the Company and BioMarin Pharmaceutical Inc.*
	31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32.1	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*	Filed herewith.
†	Confidential treatment requested.

22

EX-10.1

Exhibit 10.1

EXECUTION VERSION

CONFIDENTIAL TREATMENT REQUESTED

Redacted Portions are indicated by [****]

DEVELOPMENT AND COMMERCIALIZATION AGREEMENT

THIS DEVELOPMENT AND COMMERCIALIZATION AGREEMENT (“Agreement”) dated as of January 4, 2009 (“Effective Date”), is entered into between La Jolla Pharmaceutical Company, a Delaware corporation having its principal place of business at 6455 Nancy Ridge Drive, San Diego, California 92121 (“La Jolla”) and BioMarin CF Limited, an Irish corporation having its registered place of business at 2 Earlsfort Terrace, Dublin 2, Ireland (“BioMarin CF”).

BACKGROUND

A. La Jolla is developing a formulation of abetimus sodium (as further defined below, a “Product”) for the treatment of lupus nephritis and systemic lupus erythematosus (“SLE”). La Jolla owns or controls certain patents, know-how and other intellectual property relating to such Products.

B. BioMarin CF, through its Affiliates, is an established biopharmaceutical company which focuses its experience and expertise in the development and commercialization of products for the treatment of rare diseases.

C. BioMarin CF desires to obtain a right to participate fully in the co-development and co-commercialization of Products in the United States, and exclusive rights in the development and commercialization of Products in all other countries except for the countries in the Asia-Pacific region.

D. La Jolla is willing to grant to BioMarin CF such rights on the terms and conditions set forth in this Agreement.

E. Concurrently with this Agreement, the Parties or their respective Affiliates are entering into a Securities Purchase Agreement under which La Jolla shall issue to an Affiliate of BioMarin CF shares of capital stock of La Jolla, all as set forth in such Securities Purchase Agreement (as further defined below, the “Securities Purchase 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, the Parties hereby agree as follows:

ARTICLE I
DEFINITIONS

1.1 “Adverse Event” or “AE” shall mean any untoward medical occurrence in a patient or clinical investigation subject administered a pharmaceutical product and which does not necessarily have a causal relationship with administration of a Product. AEs include, without limitation, any unfavorable and unintended sign (including an abnormal laboratory finding), symptom, or disease temporally associated with the use of a medicinal (investigational) product, whether or not related to the medicinal (investigational) product.

1.2 “Affiliate” of a Party shall mean any person, corporation or other 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, for as long as such control exists. As used in this Section 1.2, “control” shall mean: (a) to possess, directly or indirectly, the power to affirmatively direct the management and policies of such person, corporation or other entity, whether through ownership of voting stock or by contract relating to voting rights or corporate governance; or (b) direct or indirect beneficial ownership of at least fifty percent (50%) (or such lesser percentage that is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) of the voting stock or other ownership interest in such person, corporation or other entity. A “Controlled Affiliate” is an Affiliate that is controlled by a Party, or if such Party is Controlled by another entity as of the Effective Date, an Affiliate that is Controlled by the ultimate parent entity that Controls such Party as of the Effective Date.

1.3 “Annual Net Sales” shall mean total Net Sales of Products sold by BioMarin CF, BioMarin CF’s Affiliates or Sublicensees in the Territory in a particular calendar year. For such purposes, units of the Product shall be considered sold when the revenue from such sale is recognized by the seller for financial reporting purposes.

1.4 “Asia-Pacific Territory” shall mean the Asia-Pacific countries listed on Exhibit 1.4.

1.5 “ASPEN Study” shall mean the 90-14 Phase III clinical trial and the 90-18 QT study for the Product ongoing as of the Effective Date, each as further described on Exhibit 1.5.

1.6 “BioMarin CF” shall mean BioMarin CF and its respective Affiliates performing its obligations, exercising its rights or otherwise conducting activities hereunder, except to the extent specifically indicated otherwise.

1.7 “BioMarin CF Know-How” shall mean all scientific, medical, technical, marketing, regulatory, manufacturing and other information relating to the Compound and/or any Product (including Data), which are both: (i) developed, acquired or used by BioMarin CF in the performance of this Agreement, and (ii) needed by La Jolla to perform the Operating Plan/Budget, exercise its rights under this Agreement or manufacture or secure Marketing Approval for the Products for sale outside the Territory.

1.8 “Commercial Life” [****]

- 2 -

1.9 “Compound” shall mean that certain compound known as abetimus sodium, the structure of which is set forth on Exhibit 1.9, and any other nucleic acid based molecule that binds to or targets anti-double stranded DNA antibodies.

1.10 “Control” (including any variations such as “Controlled” and “Controlling”), in the context of intellectual property rights of a Party, shall mean that such Party or its Controlled Affiliate owns or possesses rights to intellectual property sufficient to grant the applicable license under this Agreement, without violating the terms of an agreement with a Third Party or as a result of obtaining a prior written consent from a Third Party.

1.11 “CTA” shall mean a clinical trial application (including any amendments thereto) as provided for in Directive 2001/20/EC and the regulations promulgated thereunder for initiating clinical trials in the European Union.

1.12 “Data” shall mean: (a) any and all research data, pharmacology data, preclinical data, and clinical data for the Compound and/or Products; (b) all regulatory documentation, information, filings and submissions pertaining to, or made in association with an IND, Marketing Application, Marketing Approval or the like, for a Product; and/or (c) any other data relating to the Compound and/or Products.

1.13 “Dosing Study” shall mean a clinical study evaluating dsDNA antibodies while administering the Product monthly at 300mg or 900mg, with the exact study protocol to be mutually agreed by the Parties, which may include an induction regimen of weekly dosing for up to twelve (12) weeks and which shall include at least one arm having monthly dosing of such Product. The Dosing Study (a) may also include measurement of proteinuria, and (b) will not be run for the purpose of changing the label for the Product.

1.14 “EMEA” shall mean the European Medicines Evaluation Agency, or any successor entity thereto performing similar functions.

1.15 “Existing In-License” shall mean the license agreement listed on Exhibit 1.15 between La Jolla and the Third Party identified on such exhibit in effect as of the Effective Date.

1.16 “FDA” shall mean the United States Food and Drug Administration, or any successor entity thereto performing similar functions.

1.17 “Financial Appendix” shall mean Appendix A to this Agreement.

1.18 “FTE” means a full-time equivalent person year (consisting of a total of at least 1,760 hours per year) from an employee of a Party or one of its Affiliates assigned to perform specific work, as specified in the Operating Plan/Budget.

- 3 -

1.19 “Full Participation Point” shall mean the date that BioMarin CF exercises its full license rights pursuant to Section 2.1(b) by paying to La Jolla (subject to any reduction provided by Section 7.18):

(a) Forty-Seven Million Five Hundred Thousand Dollars ($47,500,000), inclusive of the equity purchase, pursuant to Section 7.2(c);

(b) Fifty-Five Million Dollars ($55,000,000), inclusive of the equity purchase, pursuant to Section 7.3(a)(i);

(c) Fifteen Million Dollars ($15,000,000), inclusive of the equity purchase, pursuant to Section 7.3(a)(ii)(y);

(d) Fifty-Five Million Dollars ($55,000,000), inclusive of the equity purchase, pursuant to Section 7.4(b); or

(e) Fifty-Five Million Dollars ($55,000,000) less amounts paid under Section 7.13(a), inclusive of the equity purchase pursuant to Section 7.13(b).

The Full Participation Point shall occur at such time as any amount set forth in this definition is paid in full by BioMarin CF and does not depend on any further or other payment by BioMarin CF; provided that if BioMarin CF exercises its right to pay a portion of any such payment by purchasing shares of common stock of La Jolla pursuant to the Securities Purchase Agreement and as contemplated by Section 7.5 and thereafter due to the default, breach of a representation or failure of La Jolla to satisfy a condition to closing thereunder, BioMarin CF is not able to purchase such shares, the Full Participation Point shall nonetheless be deemed to have occurred notwithstanding that BioMarin CF has not paid to La Jolla that portion of the payment due that is attributable to the purchase of such shares.

1.20 “IND” shall mean any Investigational New Drug Application (including any amendments thereto) filed with the FDA pursuant to 21 C.F.R. § 312 before the commencement of clinical trials of a Product, or any comparable filings with any Regulatory Authority in any other jurisdiction, including any CTA.

1.21 “Interim Efficacy Analysis” shall mean individually, the First Interim Efficacy Analysis or the Second Interim Efficacy Analysis, each as defined in this Section 1.21; and “Interim Efficacy Analyses” shall mean the First Interim Efficacy Analysis and the Second Interim Efficacy Analysis, collectively.

(a) “First Interim Efficacy Analysis” shall mean the receipt by La Jolla of the Data Monitoring Board’s recommendation with respect to the continued conduct of the 90-14 portion of the ASPEN Study based upon the interim efficacy analysis conducted when ninety-two (92) renal flare events adjudicated as SLE-related are accrued in the ASPEN Study.

(b) “Second Interim Efficacy Analysis” shall mean the receipt by La Jolla of the Data Monitoring Board’s recommendation with respect to the continued conduct of the 90-14 portion of the ASPEN Study based upon the interim efficacy analysis conducted when one hundred and nine (109) renal flare events adjudicated as SLE-related have been accrued in the ASPEN Study.

- 4 -

For the purposes of this Section 1.21, renal flare events will be deemed to be SLE-related and to have accrued in the ASPEN Study if so determined by the Renal Events Committee.

1.22 “Joint Patent” shall mean any Patent with respect to an invention that is jointly owned pursuant to Section 11.1(a) within or outside the Territory.

1.23 “Know-How” shall mean La Jolla Know-How or BioMarin CF Know-How, as the context requires.

1.24 “La Jolla Know-How” shall mean all scientific, medical, technical, marketing regulatory, manufacturing, and other information, in each case relating to the Compound and/or any Product (including Data), that is (a) existing as of the Effective Date or that is developed, acquired or used by La Jolla in the performance of the Operating Plan/Budget, and (b) needed by BioMarin CF to perform the Operating Plan/Budget or exercise its rights under this Agreement.

1.25 “La Jolla Patents” shall mean (a) the Patents listed on Exhibit 1.25; (b) any other Patents in the Territory that are related to or otherwise necessary or reasonably useful to develop, manufacture, or commercialize a Compound and/or Product(s) in accordance with the Operating Plan/Budget that are or were developed, acquired or used by La Jolla; (c) any Patents based on any invention conceived or created solely by La Jolla personnel in connection with this Agreement pursuant to Section 11.1(a); and (d) all additions, divisions, continuations, continuations-in-part, substitutions, reissues, re-examinations, extensions, registrations, patent term extensions, supplemental protection certificates and renewals of any of the foregoing.

1.26 “La Jolla’s Knowledge” shall mean the actual knowledge of the members of La Jolla’s senior management team (as defined in Exhibit 1.26) after reasonable inquiry sufficient to express an informed view concerning the matters to which such representation or warranty relates.

1.27 “Major Market” [****].

1.28 “Marketing Approval” shall mean, with respect to each country or jurisdiction, approval of the Marketing Application filed in such country by the Regulatory Authority in such country or jurisdiction.

1.29 “Marketing Application” shall mean an NDA (or its equivalent) submitted to the FDA in the United States, an MAA (or its equivalent) submitted to the EMEA in the European Union, or a corresponding application that has been submitted to a Regulatory Authority in any other jurisdiction.

1.30 “MAA” shall mean a Marketing Authorization Application (including any amendments thereto) filed with the EMEA for approval to market and sell a Product within the European Union.

- 5 -

1.31 “NDA” shall mean a New Drug Application (including any supplements and amendments thereto) filed with the FDA pursuant to 21 U.S.C. Section 353(b)(1), or any equivalent application filed with the FDA for approval to market and sell a Product within the United States.

1.32 “Party” shall mean La Jolla or BioMarin CF individually, and “Parties” shall mean La Jolla and BioMarin CF collectively.

1.33 “Patent(s)” shall mean any patents and patent applications, together with all additions, divisions, continuations, continuations-in-part, substitutions, reissues, re-examinations, extensions, registrations, patent term extensions, supplemental protection certificates and renewals of any of the foregoing.

1.34 “Positive Dosing Study” shall mean a Dosing Study that demonstrates a reduction in dsDNA antibodies that, in monthly dosing of the Product, is approximately equivalent to the reduction observed in the control population in the Dosing Study receiving the Product weekly, and need not include achievement of any endpoint pertaining to proteinuria.

1.35 “Product” shall mean any product containing the Compound, alone or in combination with one or more other active pharmaceutical ingredients, in any dosage form or formulation.

1.36 “Product Trademarks” shall mean: (a) the trademarks owned by La Jolla and designated by La Jolla for use with a Product within the Territory, as reflected in Exhibit 1.36 hereto; or (b) any other trademarks mutually agreed upon by La Jolla and BioMarin CF for use with a Product within the Territory.

1.37 “PV Procedures” shall mean the pharmacovigilance procedures to be determined by BioMarin CF from time to time that are generally applicable to BioMarin CF’s distributors and marketing agents and are acknowledged by La Jolla.

1.38 “Regulatory Authority” shall mean the FDA, the EMEA, or a regulatory body with similar regulatory authority in any other jurisdiction within the Territory.

1.39 “Sales Representative” shall mean a professional pharmaceutical sales representative engaged or employed by either Party or one of its Affiliates to conduct sales activities and other promotional efforts with respect to a Product and the first line direct supervisors of those individuals.

1.40 “SOP” shall mean a standard operating procedure.

1.41 “Securities Purchase Agreement” shall mean the form of securities purchase agreement attached to this Agreement as Exhibit 1.41.

1.42 “Sublicensee” shall mean an entity to whom BioMarin CF has granted a right to manufacture, sell, market, distribute and/or promote a Product within the Territory pursuant to Section 2.2; and “Sublicense” shall mean an agreement or arrangement between BioMarin CF and a Sublicensee granting such rights.

- 6 -

1.43 “Territory” shall mean worldwide, except for the Asia-Pacific Territory.

1.44 “Third Party” shall mean any person, corporation, joint venture or other entity, other than La Jolla, BioMarin CF and their respective Affiliates.

1.45 “United States” shall mean the United States of America, including its territories and possessions.

1.46 Additional Definitions. In addition, each of the following terms shall have the meaning described in the corresponding section in the body of this Agreement or in the Financial Appendix referenced below:

Term	Section Defined
Agreement	Introduction
All Other Costs	Exhibit 4.2E
Asia-Pacific License	2.4(a)
Asia-Pacific Licensee	2.4(b)
Auditing Party	7.17(a)
BioMarin CF Improvements	11.1(c)
BioMarin CF Indemnitees	16.2
Capitalized Asset	Financial Appendix
Co-Chair	3.3
Collaboration Agreement	Financial Appendix
Completion Notice	7.7
Confidential Information	10.1
Contingent Right	2.4(f)
Controlled Affiliate	1.2
Cost Effective Price	9.1(a)
Data Monitoring Board	7.6(a)
Definitive Agreement	2.4(c)
Development Costs	Financial Appendix
Development Transition Period	14.4(a)(i)
Dispute	17.2
Distribution Costs	Financial Appendix
Effective Date	Introduction
Eliminated Party	14.4(a)(i)
Enforcement Action	11.3(b)(i)
Equity Election Notice	7.5
Fault of BioMarin CF	16.4(b)(ii)
Fault of La Jolla	16.4(b)(i)
Field-Based FTEs	6.2(a)(i)
First Commercial Sale	Financial Appendix
FTE Costs	Financial Appendix
Force Majeure Event	18.1
Forecast	Exhibit 9.1A
Futile Determination	7.6(b)
GAAP	Financial Appendix
GMP	5.4
Gross Sales	Financial Appendix
IFRS	Financial Appendix
Indemnitee	16.3
Indemnitor	16.3
Infringement	11.3(a)
Infringement Actions	11.4
Initial Operating Plan/Budget	4.2(b)
Initial Product	4.3(a)
Inspected Party	5.3
Interest Rate	7.14(b)
IP Management Costs	Financial Appendix
JAMS	17.3(a)
Joint Promotion Plan	6.2(c)
Joint Steering Committee or JSC	3.1(a)
JHU License	Exhibit 1.15
La Jolla Improvements	11.1(c)

- 7 -

Term	Section Defined
La Jolla Indemnitees	16.1
Launch-1st Year Period	Exhibit 4.2E
Liabilities	16.1
Manufacturing Costs	Financial Appendix
Manufacturing Process Development	4.2(e)(ii)
Marketing Costs	Financial Appendix
Maximum Regional Spend	Exhibit 4.2E
Multiple Product Sales	Financial Appendix
Negotiation Period	2.4(c)
New Technology	11.6(c)
Net Sales	Financial Appendix
Non-Futile Determination	7.6(b)
Objecting Party	17.2
Ongoing Trials	14.4(a)(i)
Operating Forecast	4.2(a)
Operating Plan/Budget	4.2(a)
Other Operating Expense	Financial Appendix
Other Operating Income	Financial Appendix
Out-of-Pocket Expenses	Financial Appendix
Paying Party	Financial Appendix
Phase IV Studies	Exhibit 4.2E
Prior Agreement	10.6
Producing Party	9.4(a)
Product Liability Claim	16.5(a)
Product Promotional Materials	12.1
Profit/Loss	Financial Appendix
Promotional/Sales/Marketing or PSM	Exhibit 4.2E
Proposed Territory	2.4(a)
Prosecution and Maintenance or Prosecute and Maintain	11.2(c)
Publication	10.4
Purchased Interests	14.2.2(a)
Purchase Notice	14.2.2(b)
Purchase Price	14.2.2(a)
Purchase Right	14.2.2(a)
P-Value Achievement	7.6(c)
Quarterly Measurement	Exhibit 4.2E
Q4, Q5 and Q6	Exhibit 9.1A
Recall Costs	16.4(b)
Region	Exhibit 4.2E
Remaining Party	14.4(a)(i)
Renal Events Committee	7.6(d)
Report Table	Financial Appendix
Responding Party	7.17(a)
ROT	Exhibit 4.2E
Royalty Notice	6.3
R&D/LCM	Exhibit 4.2E
Sale Price	14.2.1
Sale Right	14.2.1
Sales Costs	Financial Appendix
Sales Force Deployment Option	6.2(a)
Shared Costs	Financial Appendix
SEC	Financial Appendix
Secured Note	14.2.1
SLE	Background
Sold Interests	14.2.1
Third Party Claim	16.1
Wind-down Period	14.4(a)(ii)
Working Group	3.2
2nd Year of Sales	Exhibit 4.2E
128 Flare Topline Data	7.6(e)

- 8 -

ARTICLE II
GRANT OF LICENSE

2.1 License.

(a) Subject to the terms and conditions of this Agreement, La Jolla hereby grants to BioMarin CF a co-exclusive license during the term of this Agreement under the La Jolla Patents, Joint Patents, and La Jolla Know-How: (i) to develop, use, offer for sale, sell, import, export, market, distribute and promote the Compound as incorporated into any Product in the Territory in any and all fields, including the treatment and/or prevention of any disease or health condition in humans or animals in accordance with this Agreement; and (ii) to make or have made the Compound or any component of the Compound anywhere in the world provided that if it is made outside of the Territory it will only be sold in the Territory pursuant to the terms of this Agreement.

(b) The rights and license granted by La Jolla to BioMarin CF in Section 2.1(a) shall commence on the Effective Date, but BioMarin CF agrees not to exercise such rights or license unless and until BioMarin CF has effected the Full Participation Point in accordance with Sections 7.2, 7.3, 7.4 or 7.13(b) below, except that until the Full Participation Point BioMarin CF shall be able to exercise such rights as are necessary for manufacturing of the Product and/or Compound. As used in this Section 2.1, the term “co-exclusive” means that the rights and licenses granted: (i) under Section 2.1(a)(i) shall be exclusive even as to La Jolla, except with respect to: (A) La Jolla’s rights to co-develop Products in accordance with Article 4; and (B) La Jolla’s rights to co-commercialize, but expressly excluding the right to sell, Products solely in the United States in accordance with Article 6; and (ii) under Section 2.1(a)(ii) shall be exclusive, except with respect to the rights of La Jolla and its contractors to manufacture, pursuant to Article 9 below, Compounds and Products for sale by BioMarin CF pursuant to this Agreement and for La Jolla, an Asia-Pacific Licensee and/or their respective contractors to make, the Compound or Product or any component thereof, within or outside of the Territory for use and sale outside the Territory in every case subject to Section 2.3.

2.2 Sublicensees. After BioMarin CF has effected the Full Participation Point in accordance with Sections 7.2, 7.3, 7.4 or 7.13(b) below, BioMarin CF shall have the right to grant sublicenses under Section 2.1(a) to any of its Affiliates or to any Third Party in any country of the Territory; provided that any Sublicense to a Third Party that includes the right to substantially all of the sale, marketing and distribution of Products in any Major Market shall be subject to La Jolla’s prior written consent, which may be granted or withheld in La Jolla’s sole and absolute discretion. In any event, BioMarin CF shall ensure that each of its Sublicensees is bound by a written agreement containing provisions at least as protective of La Jolla as this Agreement; and BioMarin CF shall remain responsible to La Jolla for all activities of its Affiliates and Sublicensees to the same extent as if such activities had been undertaken by BioMarin CF itself. Promptly following the execution of each Sublicense, BioMarin CF shall inform La Jolla of the scope and territory of each Sublicense and the name and address of each Sublicensee.

- 9 -

2.3 Unauthorized Activities; Activities Outside the Territory.

(a) BioMarin CF Rights Limited. BioMarin CF agrees that neither it, nor any of its Affiliates, will develop, file for Marketing Approval with respect to, make, have made, use, market, offer for sale, sell, import, export, distribute or promote a Product anywhere in the world, except in the Territory and, within the Territory, only in accordance with this Agreement. BioMarin CF agrees that neither it, nor any of its Affiliates, will use or otherwise exploit, except as expressly licensed under this Agreement, any La Jolla Patents, La Jolla Know-How and/or Product Trademarks, or their counterparts in any country. Notwithstanding whether or not La Jolla has complied with Section 2.3(b)(i), in the event that any Product, other than Product that is manufactured for sale by BioMarin CF pursuant to this Agreement, is sold or distributed in the Territory other than by or through BioMarin CF or its Sublicensees, La Jolla shall pay to BioMarin CF an amount equal to three (3) times the Net Sales value of the Product so sold or distributed within five (5) business days of the date BioMarin CF provides evidence demonstrating such sale or distribution in the Territory.

(b) Territorial Integrity.

(i) [****]

(ii) [****]

(iii) It is understood that nothing in this Section 2.3(b) shall be deemed to prevent La Jolla or its designee from making the Compound and Products within or outside the Territory for supply to BioMarin CF in accordance with Article 9 below or for use or sale in the Asia-Pacific Territory.

2.4 Asia-Pacific Matching Right.

(a) [****].

(b) [****].

(c) [****]

(d) [****].

(e) [****]

- 10 -

(f) No Implied Obligations. The only obligations of BioMarin CF and La Jolla under this Section 2.4 are as expressly stated herein, and there are no further implied obligations relating to the matters contemplated therein. Without limiting the foregoing, it is understood that: (A) La Jolla is not at any time obligated to disclose the identity of a Third Party with whom it is discussing a Third Party agreement; (B) this Section 2.4 shall not be deemed to apply to a transaction by which a Third Party acquires substantially all of the business or assets of La Jolla so long as such acquiror remains bound by all of the terms and conditions hereof, nor any transaction pursuant to which La Jolla grants a license to a Third Party in the Asia-Pacific Territory solely for the purposes of acting a contract manufacturer to supply Compound or Product (or intermediate materials for either of the foregoing) to La Jolla; and (C) if La Jolla enters into a transaction with a Third Party, after making an offer to BioMarin CF that complies with this Section 2.4 (other than Section 2.4(e), which will continue to apply), that includes the grant by La Jolla of an option or other contingent right to acquire the right to market and/or distribute any Product in the Asia-Pacific Territory, or any portion thereof (a “Contingent Right”), then the grant of rights by La Jolla upon a Third Party’s exercise of such Contingent Right shall not be subject to this Section 2.4 so long as the grant of such Contingent Right was made in a transaction entered into with the Third Party in compliance with this Section 2.4.

(g) Audit Rights. If BioMarin CF does not enter into an Asia-Pacific License with La Jolla and La Jolla thereafter enters into an Asia-Pacific License with an Asia-Pacific Licensee, BioMarin CF shall have the right to have an accounting firm of its designation compare the Asia-Pacific License entered into by La Jolla to the final form of license agreement offered to BioMarin CF to determine if La Jolla has complied with Section 2.4(b) and all payments to be received by La Jolla through the date of such audit have been paid to La Jolla.

(h) Right to Share Information. Nothing contained in this Section 2.4 shall prohibit La Jolla from providing to an Asia-Pacific Licensee (or a prospective Asia-Pacific Licensee) the information permitted to be shared as specified in Section 4.3(a) (so long as La Jolla protects such information under an appropriate non-disclosure agreement and limits its use to the Proposed Territory as required by this Agreement).

ARTICLE III
GOVERNANCE

3.1 Joint Steering Committee.

(a) Establishment. Within thirty (30) days following the Effective Date, La Jolla and BioMarin CF shall establish a joint steering committee (“Joint Steering Committee” or “JSC”) to oversee, review and coordinate the activities of the Parties under this Agreement as provided in this Section 3.1, including, the development of Products for registration, and the marketing and distribution of Products, within the Territory, and the manufacture of the Compound and Products for use and sale in the Territory, all subject to the provisions of this Article 3.

(b) Duties. The JSC shall:

(i) Review and approve changes to each Operating Plan/Budget in accordance with this Agreement;

(ii) Provide a forum for the Parties to exchange information and coordinate their respective activities with respect to matters pertaining to the development, manufacture, and commercialization of the Products in the Territory, and matters pertaining to the registration of Products in the Territory;

- 11 -

(iii) Coordinate the overall activities and integration of the Working Group and functional sub-working groups and resolve matters specifically assigned to be decided by the Working Group in this Agreement that the Working Group is unable to resolve; and

(iv) Perform such other duties as are specifically assigned to the JSC in this Agreement or the Financial Appendix.

3.2 Establishment of Working Group. The JSC shall establish, and to the extent it deems appropriate, delegate duties to a working group to plan and coordinate particular projects or activities (the “Working Group”), including but not limited to: (i) plan and coordinate the conduct of the development activities and regulatory matters for the Products within the Territory, (ii) coordinate the manufacturing and supply of the Products for use or sale within the Territory or as otherwise contemplated in Article 9, and (iii) coordinate the conduct of the commercialization, marketing and promotion activities for the Products in the Territory and to plan and coordinate any joint promotion activities in the United States, if applicable. The Working Group and its activities shall be subject to the oversight, review and approval of, and shall report to, the JSC. The Working Group shall be composed of an equal number of representatives from each Party, selected by such Party, and the total number of members of the Working Group will be determined by the JSC, but in no event shall be less than three (3) representatives from each Party. The Working Group shall meet at such times as directed by the JSC or more frequently as determined by the Working Group, but in no event less than once each calendar quarter. The Working Group meetings may be conducted by telephone, video-conference or in-person as determined by the Working Group; provided, however, that the Working Group shall meet in-person at least once each calendar quarter and, unless otherwise agreed by the Parties, all in-person meetings of the Working Group shall be held on an alternating basis between La Jolla’s facilities and BioMarin CF’s facilities, in each event except as unanimously agreed by the JSC. In no event shall the authority of the Working Group exceed that specifically delegated to it by the JSC. The Working Group may establish subordinate committees to oversee or handle different aspects of the Working Group’s responsibilities.

- 12 -

3.3 JSC Membership. The JSC shall be composed of an equal number of representatives from each of BioMarin CF and La Jolla, selected by such Party. Unless the Parties otherwise agree, the exact number of representatives for each of BioMarin CF and La Jolla shall be three (3) representatives, with each representative at the Vice President (or its equivalent) level or above. Each Party shall designate a co-chair for the meetings of the JSC (each, a “Co-Chair”). The Co-Chairs shall: (i) coordinate and prepare the agenda for, and ensure the orderly conduct of, the JSC’s meetings; and (ii) within ten (10) business days after the JSC’s meeting, prepare and circulate the minutes of such meeting accurately reflecting the discussions and decisions of the JSC. Such minutes from the JSC’s meeting shall not be finalized until the applicable Co-Chair from each Party has reviewed and confirmed the accuracy of such minutes in writing. Either Party may replace its respective Co-Chairs and other representatives at any time with prior written notice to the other Party; provided that the criteria for composition of the JSC set forth above continues to be satisfied following any such replacement of a Party’s representative on the JSC. In the event the Co-Chair of the JSC from either Party is unable to attend or participate in a particular JSC meeting, such Party may designate a substitute Co-Chair for the meeting.

3.4 JSC Meetings. The JSC shall meet at least once each calendar quarter, or more or less often as otherwise agreed to by the Parties. The JSC meetings may be conducted by telephone, video-conference or in-person as agreed to by the Parties; provided, however, that the JSC shall meet in-person at least once each calendar quarter. Unless otherwise agreed by the Parties, all in-person meetings for the JSC shall be held on an alternating basis between La Jolla’s facilities and BioMarin CF’s facilities. Each Party shall bear its own personnel and travel costs and expenses relating to the JSC meetings. With the consent of the Parties (not to be unreasonably withheld or delayed), other employee representatives of the Parties may attend the JSC meeting as non-voting observers.

3.5 Decision-Making. Decisions of the JSC, as well as the decisions or recommendations of the Working Group, shall be made by unanimous vote, with at least one (1) representative from each Party participating in any vote. In the event that the Working Group or the JSC fails to reach unanimous agreement with respect to a particular matter within its authority, then such matter shall be resolved under the procedures set forth in Section 17.1.

3.6 Scope of Governance. Notwithstanding the creation of the JSC and the Working Group, each Party shall retain the rights, powers and discretion granted to it under this Agreement, and the JSC and the Working Group shall not be delegated or vested with rights, powers or discretion unless such delegation or vesting is expressly provided in this Agreement, or the Parties expressly so agree in writing. Neither the JSC, nor the Working Group, shall have the power to amend or modify this Agreement, and no decision of the JSC, nor any decision or recommendation of the Working Group, 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, or to the extent applicable, by the Working Group, are only those specific issues that are expressly provided in this Agreement to be decided by the JSC or, to the extent applicable, the Working Group.

- 13 -

ARTICLE IV
DEVELOPMENT; OPERATING PLAN BUDGET

4.1 Overall Efforts in Development.

(a) Prior to the Full Participation Point, La Jolla shall use its best efforts to prepare for the filing and prosecution and to maintain the NDA for the Product in the United States and the MAA in the European Union and shall otherwise conduct all development activities with respect to Products for the Territory in accordance with the Operating Plan/Budget, subject to the oversight of the JSC and the Working Group; provided that La Jolla is not hereby guaranteeing that the FDA will issue the NDA or that the EMEA will issue the MAA. Unless otherwise agreed by the Parties, BioMarin CF will not perform any development activities under the Operating Plan/Budget other than manufacturing related activities prior to the Full Participation Point. Prior to the Full Participation Point, La Jolla shall use diligent efforts to implement the Operating Plan/Budget in a prompt and expeditious manner and in a manner designed to obtain Marketing Approvals for the existing Product in the United States and the European Union; and La Jolla shall use diligent efforts to ensure that the Operating Plan/Budget provides at all times for adequate activities, resources and funding to achieve such results in an expeditious and efficient manner. Notwithstanding the foregoing prior to the Full Participation Point, such obligations shall not require La Jolla to initiate or conduct an efficacy trial in humans other than the ASPEN Study. The foregoing diligence obligations shall not apply if there is a Futile Determination or, if based upon receipt of the 128 Flare Topline Data, the ASPEN Study does not result in a P-Value Achievement. The Parties acknowledge that the up front payments to be, and such additional payments as are described in Sections 7.2-7.4 and 7.13(b) as may be, paid by BioMarin CF are in support of La Jolla’s conduct of the ASPEN Study and other research and development activities with respect to the Compound and Products and accordingly, prior to the Full Participation Point, La Jolla agrees that it shall not fund the development of any product, other than the Compound and Products if such funding causes La Jolla’s remaining net available cash to be less than one hundred ten percent (110%) of the amount reasonably necessary to fund the Operating Plan/Budget through receipt of the 128 Flare Topline Data. For clarity, subject to the preceding sentence, La Jolla may conduct research and development activities for any other programs or products.

(b) After the Full Participation Point, La Jolla and BioMarin CF shall each use diligent efforts to implement the Operating Plan/Budget in a prompt and expeditious manner, and in a manner designed to obtain Marketing Approvals for Products in each Major Market and for such other countries within the Territory as may be commercially reasonable and to commercialize the Products in such countries. The Parties shall use diligent efforts to ensure that the Operating Plan/Budget provides at all times for adequate activities, resources and funding to achieve such results, in an expeditious and efficient manner. Without limiting the foregoing, subject to Section 4.1(b) below, it is understood that after the Full Participation Point, the Operating Plan/Budget will at all times provide for both Parties to have significant roles in the development activities for Products within the Territory. In the case of La Jolla, such role in development activities for the Products shall included, at a minimum: (i) conducting Phase IV Studies (as defined in Exhibit 4.2E) for the existing Product in the United States; and the allocation of La Jolla FTEs for the performance of such Phase IV Studies; and (ii) reasonable consideration shall be given to La Jolla’s existing expertise in developing Products and, where appropriate, as determined by the JSC, such expertise will be utilized in the ongoing research and development and life cycle management of Products. Neither La Jolla nor BioMarin CF shall have an obligation to use diligent efforts to execute with respect to a Product in any country after the Commercial Life of such Product in such country.

- 14 -

(c) ASPEN Study. Unless the Parties otherwise mutually agree, La Jolla shall be responsible for the conduct and management of the ASPEN Study, both prior to and after the Full Participation Point, provided that BioMarin CF will be informed of the status of the ASPEN Study on a regular basis and will have complete access to all Data generated from the ASPEN Study at all times. Unless expressly agreed by both La Jolla and BioMarin CF, no Operating Plan/Budget will materially alter the conduct of the ASPEN Study as set forth in the protocol submitted to the FDA prior to the Effective Date.

(d) Development Costs. The costs of performing all development and regulatory activities pursuant to the Operating Plan/Budget prior to the Full Participation Point (including the performance of the ASPEN Study up to the Full Participation Point), shall be at La Jolla’s sole expense. After the Full Participation Point, the costs of implementing all development and regulatory activities pursuant to the Operating Plan/Budget (including the remaining portion of the ASPEN Study, if applicable) shall be shared equally by the Parties in accordance with Section 7.12 and the Financial Appendix, except as provided in Section 4.2(d)(ii) below.

(e) Dosing Study. [****]

4.2 Operating Plan/Budget.

(a) General. With the assistance of the Working Group, the JSC shall establish a rolling three (3) calendar year plan and budget for (i) the cooperative development of, and regulatory activities for, the Products, (ii) the manufacturing activities for the Products, including without limitation process development, and (iii) the marketing, promotion and commercialization of the Products within the Territory under this Agreement (as such plan and budget may be amended from time to time in accordance with this Agreement, and as approved by the JSC, the “Operating Plan/Budget”). The Operating Plan/Budget will be established in such a way as to incorporate the business objectives described in Section 4.1(b) and 6.1(a). [****] The Operating Plan/Budget will include sufficient funding for the Dosing Study. It is understood that the JSC will modify and update the Operating Forecast annually in connection with the procedure for amending and updating the Operating Plan/Budget under Sections 4.2(c) and 4.2(d) below.

(b) Initial Operating Plan/Budget. An initial Operating Plan/Budget for Products within the Territory is attached to this Agreement as Exhibit 4.2B (“Initial Operating Plan/Budget”). The Initial Operating Plan/Budget shall be deemed to be the Operating Plan/Budget for all purposes of this Agreement until such Initial Operating Plan/Budget is updated in accordance with Section 4.2(d) below.

(c) Amendments. The JSC shall review the Operating Plan/Budget on an ongoing basis, and in no event less frequently than once each calendar year (as set forth in Section 4.2(d) below), or more frequently as needed to take into account completion, commencement or cessation of activities not contemplated by the then-current Operating Plan/Budget. The Working Group shall submit to the JSC as a proposal an amendment to the Operating Plan/Budget in advance of implementation of such amendment, including any amendment that effects a material change in the budget or timeline in effect for the current year of such Operating Plan/Budget.

- 15 -

(d) Timing and Process for Annual Amendments.

(i) No later than [****] of each calendar year after the Effective Date commencing in 2009, the Working Group shall present to the JSC for its review and approval its plans and budget for its respective area to be included in the overall Operating Plan/Budget for the next three (3) calendar years in the form described in Section 4.2(a) above. If an Operating Plan/Budget is not approved by the JSC by [****] of a calendar year, then, until such time as an Operating Plan/Budget is either approved by the JSC or established pursuant to the dispute resolution procedure set forth in Section 17.1 below: (i) the preceding Operating Plan/Budget (including the Operating Forecast for the applicable period) shall continue to govern the Parties’ activities under this Agreement, (ii) each Party shall be permitted to conduct activities allocated to such Party in such preceding Operating Plan/Budget and incur costs consistent with such preceding Operating Plan/Budget, which costs shall be shared equally by the Parties in accordance with Section 7.12 below and the Financial Appendix, and (iii) in any case, without limiting the foregoing, each Party may continue any on-going trials initiated by such Party in accordance with such preceding Operating Plan/Budget, and the reasonable costs incurred by such Party in connection with such trials shall continue to be shared equally by the Parties in accordance with Section 7.12 below and the Financial Appendix; in each case, as if such costs were set forth in an approved Plan/Budget. [****]

(ii) [****]

(e) Operating Plan/Budget Content.

(i) In addition to the information described in Section 4.2(a) above, each Operating Plan/Budget shall designate responsibility and a reasonable timeline for completion for such activities.

(ii) The Operating Plan/Budget shall address: [****]

(iii) In addition, after receipt of the first Marketing Approval for a Product in the Territory, the Operating Plan/Budget shall include the requirements set out in Exhibit 4.2E hereto.

- 16 -

4.3 Exchange of Data and Know-How.

(a) By Either Party. During the term of this Agreement, each Party shall provide to the other Party all such Party’s Know-How (i.e., in case of La Jolla, La Jolla Know-How, and in the case of BioMarin CF, all BioMarin CF Know-How) that has not previously been provided hereunder, in each case promptly upon request by the other Party. The Party providing such Know-How shall provide the same in electronic form (to the extent the same exists in electronic form), and shall provide copies as reasonably requested and/or an opportunity for the other Party or its designee to inspect (and copy) all other materials comprising such Know-How (including for example, original patient report forms and other original source data). The Parties will cooperate and reasonably agree upon formats and procedures to facilitate the orderly and efficient exchange of the La Jolla Know-How and the BioMarin CF Know-How. Except as specifically provided in this Agreement, La Jolla may not provide, disclose or sublicense any BioMarin CF Know-How to any Third Party, and may not use, any BioMarin CF Know-How for any purpose other than to perform its obligations and exercise its rights under this Agreement. For avoidance of doubt, La Jolla may not provide or sublicense any BioMarin CF Know-How to the Asia-Pacific Licensee in the Asia-Pacific Territory or use any BioMarin CF Know-How to develop and/or commercialize the Products in the Asia-Pacific Territory; provided, however, that the Parties agree that La Jolla shall have the right to provide the NDA, all correspondence with the FDA relating to the NDA, the MAA and all correspondence with the EMEA relating to the MAA, in each case relating to the Product being used in the ASPEN Study and/or any modifications to such Product included in such NDA and/or MAA, as approved by the FDA or EMEA, and/or any supplements to the foregoing (such Product including modifications thereto, the “Initial Product”), any other filings with the FDA or EMEA associated with the Initial Product, all manufacturing information, and all clinical, preclinical and technical Data relating to the Initial Product and all pharmacovigilance and safety information relating to the Initial Product to any Affiliate or Third Party partner for the Asia-Pacific Territory for purposes of manufacturing, developing and commercializing the Compound and Product in the Asia-Pacific Territory. Additionally, upon BioMarin CF’s prior written consent, which may be granted or withheld in BioMarin CF’s sole and absolute discretion, La Jolla may disclose other BioMarin CF Know-How or other information that would otherwise be restricted by this Agreement to an Asia-Pacific Licensee in the Asia-Pacific Territory. Except as specifically provided in this Agreement, BioMarin CF may not provide or disclose any La Jolla Know-How to any Third Party, and may not use any La Jolla Know-How for any purpose other than to perform its obligations and exercise its rights under this Agreement.

(b) Provision of Data to JSC. Upon request by the JSC, each Party shall promptly provide the JSC with summaries in reasonable detail of all Data generated or obtained in the course of such Party’s performance of activities under the Operating Plan/Budget.

4.4 Term of Ongoing Obligations. The Parties’ obligations under Sections 4.1, 4.3 and 6.2, La Jolla’s obligation to perform activities under the Operating Plan/Budget, and La Jolla’s supply and manufacturing obligations under Article 9 and Section 5.3 below, any further right of La Jolla to have FTEs included in any Operating Plan/Budget pursuant to Section 4.1(b), 6.1, 6.2 or any other provision of this Agreement, and any right of La Jolla to manufacture or supply Product to BioMarin CF for sale in the Territory pursuant to any provision of this Agreement, shall terminate eighteen (18) years after the Effective Date, unless La Jolla requests to extend such period in writing at least two (2) years prior to such date. Upon termination of such obligations, the Working Group and the JSC will terminate. However, each Party will continue to have an approval right with respect to matters specified to be decided by the JSC under this Agreement. In such event, if the Parties are unable to reach agreement on a matter specified in this Agreement to have been decided by the JSC, the matter shall be resolved as if it were a dispute of the JSC in accordance with Article 17 below.

- 17 -

ARTICLE V
REGULATORY MATTERS

5.1 Regulatory Responsibilities. Unless otherwise agreed by the Parties:

(a) ASPEN Study and Dosing Study. La Jolla shall be responsible for filing, prosecuting, obtaining and maintaining, in its own name, all INDs, CTAs, and other regulatory filings with respect to the ASPEN Study and the Dosing Study.

(b) NDA Regulatory Responsibilities. La Jolla will make all necessary regulatory filings (including by way of amendment) for, and seek to obtain, an NDA for the Product currently under development, including filing a new NDA if agreed by the JSC or required by the FDA, in the United States in its own name. Promptly following the Full Participation Point and within thirty (30) days after such NDA is approved, La Jolla shall assign to BioMarin CF all of its rights, title and interest in and to such NDA. Notwithstanding the foregoing, BioMarin CF will have a co-lead role in connection with any negotiations with the FDA regarding labeling of the Products. Prior to the assignment of the NDA, La Jolla shall maintain the same and shall take such actions as are reasonably necessary to make available to BioMarin CF the benefits of such NDA to the extent required in connection with BioMarin CF’s activities under this Agreement. After the assignment, BioMarin CF will be responsible for any further regulatory matters involving the Products, and La Jolla will fully support and cooperate with BioMarin CF in connection with such activities.

(c) Other Regulatory Responsibilities. From and after the Full Participation Point, except as expressly provided in Section 5.1(a) and (b), BioMarin CF shall be responsible for filing, obtaining and maintaining, in its own name, all other INDs, Marketing Applications, Marketing Approvals and other regulatory filings related to the development and commercialization of Products within the Territory, provided that La Jolla will fully support and cooperate with BioMarin CF in connection with such activities to the extent requested by BioMarin CF. BioMarin CF shall also obtain any export approvals required by the FDA to import or export Products to any country within the Territory outside the United States. All such filings will be in the name of BioMarin CF, except where otherwise required by local law.

(d) Costs. Prior to the Full Participation Point, responsibility for the costs of preparing, filing, obtaining and maintaining regulatory filings and approvals, including INDs, the NDA, the MAA, and other Marketing Approvals, for Products within the Territory shall be paid by La Jolla. From and after the Full Participation Point, responsibility for the costs of filing, obtaining and maintaining regulatory filings and approvals, including INDs, NDAs, MAAs, and other Marketing Approvals, for Products within the Territory shall be shared equally by the Parties as provided in Section 7.12 and the Financial Appendix.

- 18 -

5.2 Filings and Meetings with Regulatory Authorities.

(a) Regulatory Filings and Correspondence. The Party with responsibility for regulatory matters in a Major Market country (as described in Section 5.1(a), (b) and (c) above) shall provide the other Party’s representatives on the JSC with copies of all material regulatory filings (including Marketing Approvals) and all minutes of any material meetings, telephone conferences and/or discussions with the Regulatory Authority of such Major Market country, and shall promptly notify the other Party’s representatives on the JSC with respect to any material changes or material matters that may arise in connection with such regulatory filings, including Marketing Approvals, of a Product within such Major Market country. Each Party will provide the other Party with translations of such documents into English to the extent prepared or obtained for its own use.

(b) Regulatory Interactions. [****]

(c) Role of JSC. The JSC shall approve the overall strategy and positioning of all material meetings, submissions and filings for Products with FDA, EMEA and Regulatory Authorities of other Major Market countries prior to their conduct, submission or filing, based upon reasonably detailed reports and summaries of such meetings, submissions and filings presented to the JSC by the Party with primary responsibility for such meeting, submission or filing (as described in Sections 5.1(a), (b) and (c) above), and all such meetings, submissions and filings shall conform with the strategy approved by the JSC. In connection with such review, such Party shall promptly provide to the JSC such additional information regarding a proposed meeting, submission or filing as the other Party may reasonably request.

(d) Other Regulatory Matters. Each Party will promptly provide the other Party with copies of all material documents, information and correspondence received from a Regulatory Authority (including a written summary of any material communications in which such other Party did not participate) pertaining to Products within the Territory and, upon reasonable request, with copies of any other documents, reports and communications from or to any Regulatory Authority within the Territory relating to a Product or activities under this Agreement.

5.3 Regulatory Inspections. [****]

5.4 Audit Rights. Each Party shall have the right, during normal business hours, and no more than once per calendar year, with more frequent audits upon agreement of the Parties (such agreement not to be withheld unreasonably), to inspect and audit: (a) those portions of the facilities of each Party, or any of its Affiliates, Sublicensees, subcontractors and investigator sites used in the performance of the Operating Plan/Budget, the manufacturing of Product to be supplied pursuant to this Agreement, and/or commercialization activities within the Territory, to ascertain compliance with applicable laws and Marketing Approvals, including current Good Laboratory Practices, Good Clinical Practices and Good Manufacturing Practices (“GMP”), and conformance with the applicable specifications and quality assurance standards, provided that the inspecting Party shall on such occasions be accompanied by a representative of the other Party (and such other Party must reasonably cooperate in making its representative available for such purpose); and (b) any of the other Party’s documentation or its Affiliates’, Sublicensees’, subcontractors’ or investigators’ documentation relating to the Operating Plan/Budget, the manufacturing of Product to be supplied pursuant to this Agreement, and/or commercialization activities within the Territory, including, to the extent permitted by law and any applicable privacy policies, the medical records of any patient participating in any clinical study under the Operating Plan/Budget. Notwithstanding the foregoing, in the event that BioMarin CF’s GMP compliance group determines that an audit is appropriate due to any issue relating to manufacturing, testing or other aspects of GMP compliance then BioMarin CF shall have the right to require additional audits of La Jolla, its Affiliates, Sublicensees, subcontractor and investigation sites until all such issues have been resolved. In addition, a Party’s audit right shall be limited by bona fide Third Party agreements or confidentiality obligations, provided, however, that each Party shall use its reasonable efforts to: (i) obtain audit rights for the other Party under such agreements; but (ii) cannot guarantee such other Party is granted audit rights to the same extent which a Party has audit rights in any agreements executed after the Effective Date; and if a Party is unable to obtain such audit rights for the other Party, then upon request it shall exercise its own rights with respect to such an audit for the benefit of the other Party.

- 19 -

5.5 Adverse Event Management.

(a) [****]

(b) [****].

(c) [****]

(d) [****]

ARTICLE VI
COMMERCIALIZATION AND PROMOTION

6.1 Commercialization.

(a) General. From and after the Full Participation Point, La Jolla and BioMarin CF shall each use diligent efforts to implement the commercialization activities under the Operating Plan/Budget described below with respect to each Product in a prompt and expeditious manner, and in a manner designed to achieve commercial success of such Products in each Major Market and for such other countries within the Territory as may be commercially reasonable.

(b) Territorial Allocation. In the United States, the Parties will jointly commercialize the Products as more fully described below, and in other countries of the Territory, BioMarin CF will be exclusively responsible for commercialization of the Products; in each case in accordance with the Operating Plan/Budget then in effect and subject to the oversight of the JSC.

(i) United States. In the United States, the Parties will be jointly responsible for the marketing activities outlined on Exhibit 6.1B hereto, and La Jolla shall have the right to provide fifty percent (50%) of the total number of FTEs allocated to the performance of such activities in the Operating Plan/Budget. In addition, La Jolla will have the right to deploy Sales Representatives detailing Products pursuant to Section 6.2 below and shall be afforded the opportunity to have input on the other major elements relating to marketing the Product. Subject to the foregoing, BioMarin CF shall have primary responsibility for other aspects of marketing and commercializing Products in the United States.

- 20 -

(ii) Countries of the Territory Outside the Unites States. In countries of the Territory outside the United States, BioMarin CF shall be exclusively responsible for performing all activities for the marketing, promotion, distribution and other commercialization of the Products, except as the JSC may otherwise determine is in the best interests of a Product, in accordance with the Operating Plan/Budget and the terms of this Agreement.

(iii) Promotion of the Products. [****]

(iv) Activities Prior to Full Participation Point. Notwithstanding the foregoing, prior to the Full Participation Point, except as the Parties may otherwise agree, La Jolla shall conduct any commercialization activities to be conducted with respect to the Products for all or any portion of the Territory at La Jolla’s sole expense.

6.2 La Jolla’s Sales Force Deployment Option.

(a) Exercise of Option. La Jolla shall have the right to deploy a portion of the total number of Sales Representatives for the Products in the United States (“Sales Force Deployment Option”) in accordance with this Section 6.2. To exercise the Sales Force Deployment Option, La Jolla shall notify BioMarin CF in writing no later than [****] after La Jolla’s receipt of the 128 Flare Topline Data as described in Section 7.6(e) below or earlier completion of the efficacy portion of the ASPEN Study. La Jolla shall only have the right to exercise the Sales Force Deployment Option once.

(i) La Jolla FTEs. If La Jolla exercises the Sales Force Deployment Option, La Jolla shall have the right to deploy up to [****]. Following La Jolla’s exercise of the Sales Force Deployment Option, La Jolla shall have the right and obligation to deploy toward the promotion of the Products in the United States the number of Sales Representatives specified in its notice of exercise. If La Jolla exercises its Sales Force Deployment Option within the time period specified in subparagraph (a), and the JSC determines to increase the total number of Sales Representatives that will promote Products in the United States from the number of such Sales Representatives allocated to such activities in the Operating Plan/Budget for the initial launch, La Jolla may increase the number of Sales Representatives that will promote the Products in the United States to maintain the same percentage of deployment as established through the exercise of the Sales Deployment Option by providing a notice to BioMarin CF in writing no later than thirty (30) days after such JSC determination. In the event that the JSC determines to reduce the total number of Sales Representatives that will promote the Products in the United States, such reduction shall be made proportionally between BioMarin CF and La Jolla Sales Representatives. For purposes of this Section 6.2(a)(i), [****]

- 21 -

(ii) Sales Activities. It is understood that the Sales Representatives to be deployed by La Jolla shall be deployed in a manner to ensure geographic dispersion of, and reasonable access to major metropolitan areas by such La Jolla Sales Representatives. Other than the personnel to be so deployed and details to be performed by La Jolla, BioMarin CF shall be responsible for the remaining promotional effort for the Products in the United States in accordance with the Joint Promotion Plan established in accordance with Section 6.2(c) below.

(b) Role of the Joint Steering Committee. The JSC shall be responsible for coordinating the joint promotional activities of the Parties within the United States in the event La Jolla exercises the Sales Force Deployment Option.

(c) Joint Promotion Plan. After La Jolla has exercised the Sales Force Deployment Option and promptly following request by either Party, the Working Group shall prepare an operating plan for joint promotion of the Products in the United States (“Joint Promotion Plan”), which shall be reviewed and approved by the JSC. The Joint Promotion Plan shall set out in reasonable detail: (i) overall strategies with respect to promoting and marketing the Products in the U.S.; (ii) the activities to be conducted and the responsibilities of each Party in connection with the promotion of the Products in the U.S.; (iii) the reach, frequency, deployment and call plan for the Sales Representatives promoting the Products in the U.S.; and (iv) a fair and reasonable allocation between BioMarin CF and La Jolla of activities under such Joint Promotion Plan in the U.S., consistent with Section 6.2(a) above, including a reasonable allocation of promotion responsibilities for channels and key opinion leaders. Further, the Joint Promotion Plan shall provide at all times for an equivalent allocation of resources between the Sales Representatives of each of BioMarin CF and La Jolla, including with respect to marketing tools, programs, corporate accounts and medical affairs support, and shall provide for reasonable consistency from period to period in the responsibilities allocated to each Party. After establishment of the initial Joint Promotion Plan, the JSC shall review the Joint Promotion Plan on an ongoing basis and in no event less frequently than once each calendar half-year. The Working Group may propose revisions to the then-current Joint Promotion Plan to the JSC; provided however that that Joint Promotion Plan in effect for any year shall not be materially modified except as approved by the JSC.

(d) Performance Standards. BioMarin CF, and to the extent La Jolla has exercised the Sales Force Deployment Option, La Jolla will promote, market, and sell the Products in accordance with any requirements of the Regulatory Authorities and the reasonable requirements and instructions of the JSC and BioMarin CF, consistent with the Joint Promotion Plan, as such may be amended from time to time. Each Party will use commercially reasonable efforts to promote, maintain, and extend the sale of the Products in the U.S. that will reflect favorably on the other Party’s name, the Product Trademarks, and the quality of the Products. Neither Party will make any representations, nor give any warranty or guarantee to any Third Party in relation to the Products other than as approved by the JSC in writing. At all times, each Party will conduct its business in an ethical and business-like manner and in such a way as to uphold the good name and reputation of the other Party and the Products. Each Party will ensure that all regulations and requirements relating to the distribution, sale, and commercialization of the Products in the U.S. are complied with, as they relate to such Party’s activities hereunder.

- 22 -

(e) BioMarin CF Practices and Procedures. After La Jolla has exercised the Sales Force Deployment Option, La Jolla agrees to comply promptly with the reasonable policies and directives with regard to the promotion of the Products in the United States issued by BioMarin CF from time to time; provided that such policies and procedures are equally applicable to BioMarin CF and its Sales Representatives and do not otherwise conflict with the terms of this Agreement. BioMarin CF shall notify La Jolla of such policies or directives and any changes thereto in writing a reasonable period prior to the implementation of such policies or directives, or any changes thereto. If La Jolla exercises the Sales Force Deployment Option, La Jolla shall, as an essential part of its commitment under this Agreement, use diligent efforts to cause its Sales Representatives to perform such tasks or activities for the promotion of the Products in the United States as specified in any Operating Plan/Budget.

(f) Sales Efforts; Costs.

(i) Sales Efforts of the Parties. The Joint Promotion Plan for each calendar year shall specify the number of Sales Representatives to be deployed by each Party for such calendar year, consistent with the parameters set forth in Section 6.2(a)(i) above.

(ii) Costs. If La Jolla exercises its Sales Force Deployment Option, then for purposes of Section 7.12 below and the Financial Appendix, the costs of the Parties’ Sales Representatives promoting the Products in the United States shall be determined on a modified FTE basis, as follows: [****]

(iii) Sales Representative Compensation Weighting. [****]

(g) Timing. La Jolla and BioMarin CF shall cooperate to have the Sales Representatives of both Parties hired and trained prior to the commencement of their joint promotion activities. To the extent that either Party hires and trains additional Sales Representatives for such purposes, it is understood that reimbursement of such Sales Representatives in accordance with the Financial Appendix will commence as of such Sales Representative’s date of hire. The timing of hiring the Sales Representatives shall be determined by the JSC and, to the extent practical, shall be done in order to have the Sales Representatives of each Party hired and trained prior to the launch of the first Product in the United States and such hiring and training of Sales Representatives shall be conducted by BioMarin CF and La Jolla in parallel (i.e., at approximately the same time prior to launch).

6.3 Right to Seek to Change Structure to Royalties on Net Sales. [****]

6.4 Booking Sales. It is understood that, during the term of this Agreement, as between the Parties, BioMarin CF will book all sales for Product in each country of the Territory.

6.5 Commercialization Activities Outside the Territory. La Jolla shall keep the JSC reasonably informed as to the progress of its launch and commercialization activities relating to the Product in the Asia-Pacific Territory, to the extent La Jolla has the right to do so, including with respect to pricing, by way of updates to the JSC at least annually and as otherwise reasonably requested by the JSC.

- 23 -

ARTICLE VII
PAYMENTS

7.1 Commencement Payments.

(a) Within fifteen (15) days following the Effective Date:

(i) BioMarin CF shall pay to La Jolla Seven Million Five Hundred Thousand Dollars ($7,500,000); and

(ii) BioMarin CF shall purchase Seven Million Five Hundred Thousand Dollars ($7,500,000) worth of Series B Preferred Stock of La Jolla pursuant to the terms of the Securities Purchase Agreement at a price per common share equivalent (based on the conversion ratio provided for in the Certificate of Designations attached as an exhibit to the Securities Purchase Agreement) that represents a twenty percent (20%) premium over the average closing price of the Common Stock of La Jolla, as reported on the NASDAQ stock market, for the twenty (20) trading days ending on the day prior to the Effective Date.

7.2 Payments in Connection with First Interim Efficacy Analysis.

(a) Upon BioMarin CF’s receipt of a Completion Notice of the occurrence of the First Interim Efficacy Analysis and a Non-Futile Determination, BioMarin CF shall pay to La Jolla Fifteen Million Dollars ($15,000,000) within thirty (30) days.

(b) If the Completion Notice with respect to the occurrence of the First Interim Efficacy Analysis is accompanied by notice of a Futile Determination, then BioMarin CF shall have no further payment obligation to La Jolla under Sections 7.2, 7.3 and 7.4 and Section 7.13 shall thereafter apply to the continuing rights and obligations of the Parties under this Agreement.

(c) If the Completion Notice with respect to the occurrence of the First Interim Efficacy Analysis is accompanied by a notice of a P-Value Achievement, subject to Section 7.18, BioMarin CF shall have thirty (30) days to pay to La Jolla Forty-Seven Million Five Hundred Thousand Dollars ($47,500,000), Seven Million Five Hundred Thousand Dollars ($7,500,000) of which may be paid at BioMarin CF’s election in the form of an equity investment in La Jolla in accordance with Section 7.5.

- 24 -

7.3 Payments in Connection with Second Interim Efficacy Analysis.

(a) If BioMarin CF maintained its right to effect the Full Participation Point after the occurrence of the First Interim Efficacy Analysis by paying to La Jolla Fifteen Million Dollars ($15,000,000) in accordance with Section 7.2(a) of this Agreement, then within thirty (30) days of BioMarin CF’s receipt of a Completion Notice of the occurrence of the Second Interim Efficacy Analysis and:

(i) a P-Value Achievement, subject to Section 7.18, BioMarin CF shall pay to La Jolla Fifty-Five Million Dollars ($55,000,000), up to Ten Million Dollars ($10,000,000) of which may be paid at BioMarin CF’s election in the form of an equity investment in La Jolla in accordance with Section 7.5; or

(ii) a Non-Futile Determination, subject to Section 7.18, BioMarin CF may (x) maintain its right to effect the Full Participation Point by paying to La Jolla Twenty-Two Million Five Hundred Thousand Dollars ($22,500,000), up to Five Million Dollars ($5,000,000) of which may be paid at BioMarin CF’s election in the form of any equity investment in La Jolla in accordance with Section 7.5, or (y) effect the Full Participation Point by paying to La Jolla Fifteen Million Dollars ($15,000,000), up to Five Million Dollars ($5,000,000) of which may be paid at BioMarin CF’s election in the form of an equity investment in La Jolla in accordance with Section 7.5.

(b) If the Completion Notice with respect to the occurrence of the Second Interim Efficacy Analysis is accompanied by a Futile Determination, then BioMarin CF shall have no further payment obligation to La Jolla under Sections 7.3 and 7.4 and Section 7.13 shall thereafter apply to the continuing rights and obligations of the Parties under this Agreement.

7.4 Payment in Connection with 128 Flare Topline Data.

(a) If BioMarin CF effected the Full Participation Point after the occurrence of the Second Interim Efficacy Analysis in accordance with Section 7.3(b)(ii)(y) of this Agreement, then within thirty (30) days of BioMarin CF’s receipt of the Completion Notice relating to La Jolla’s receipt of the 128 Flare Topline Data and a P-Value Achievement, BioMarin CF shall pay to La Jolla Thirty Million Dollars ($30,000,000).

(b) If BioMarin CF maintained its right to effect the Full Participation Point after the occurrence of both the First Interim Efficacy Analysis in accordance with Section 7.2(a) and the Second Interim Efficacy Analysis in accordance with Section 7.3(a)(ii)(x) of this Agreement, then within thirty (30) days of BioMarin CF’s receipt of the Completion Notice relating to La Jolla’s receipt of the 128 Flare Topline Data and a P-Value Achievement, subject to Section 7.18, BioMarin CF shall pay to La Jolla Fifty-Five Million Dollars ($55,000,000), up to Fifteen Million Dollars ($15,000,000) of which may be paid at BioMarin CF’s election in the form of an equity investment in La Jolla in accordance with Section 7.5.

(c) If the Completion Notice provided to BioMarin CF with respect to the 128 Flare Topline Data indicates that the P-Value Achievement has not occurred, then BioMarin CF shall have no further payment obligation to La Jolla under Section 7.4 and Section 7.13 shall thereafter apply to the continuing rights and obligations of the Parties under this Agreement.

- 25 -

7.5 Partial Payments in Equity. To the extent that BioMarin CF elects to make a portion of any payments due to La Jolla in the form of an equity purchase as permitted under Sections 7.2, 7.3, or 7.4, then such equity investment shall be made pursuant to the terms of the Securities Purchase Agreement at a price per common share equivalent (based on the conversion ratio provided for in the Certificate of Designations attached as an exhibit to the Securities Purchase Agreement) equal to one hundred ten percent (110%) of the average closing price of the Common Stock of La Jolla, as reported on the NASDAQ stock market or such other reporting service as the stock is then quoted if not then quoted on NASDAQ (and if not then traded at the value determined by an investment bank selected consistent with the provisions of Section 14.3), for the ten (10) trading days commencing five (5) trading days immediately prior to the date La Jolla has publicly announced the event that triggered such payment (i.e., the P-Value Achievement, or in the case of such payment where there is no P-Value Achievement, La Jolla’s first public announcement of the results of the Second Interim Efficacy Analysis or the first public announcement of the approval of an NDA for the Product under Section 7.13). To effect the election to make such payments in the form of equity, BioMarin CF shall so notify La Jolla in writing within fifteen (15) days after receiving the Completion Notice that triggered such payment, specifying the amount of the payment relating to the Full Participation Point that BioMarin CF so elects to make in the form of such equity purchase (“Equity Election Notice”). All equity purchases pursuant to this Section 7.5 shall be subject to the provisions of Section 7.18.

7.6 Certain Terms. For purposes of the payments under this Section 7:

(a) “Data Monitoring Board” shall mean the expert advisory group appointed for the 90-14 portion of the ASPEN Study in accordance with the charter for such advisory group and which is charged with the responsibility, among other matters, of reviewing the results of the Interim Efficacy Analyses and making a recommendation in accordance with the protocol for the ASPEN Study based on the safety profile and the outcome of each Interim Efficacy Analysis as to whether La Jolla should continue to conduct the 90-14 portion of the ASPEN Study.

(b) “Non-Futile Determination” shall mean a recommendation by the Data Monitoring Board following the First Interim Efficacy Analysis or the Second Interim Efficacy Analysis, as applicable, as to the continuation of the 90-14 portion of the ASPEN Study other than (i) a recommendation that such continuation “may be futile” (as specified in Paragraph 7.1.2 of the Interim Analysis Plan for the 90-14 portion of the ASPEN Study), or (ii) P-Value Achievement has occurred; and “Futile Determination” shall mean a recommendation by the Data Monitoring Board following the First Interim Efficacy Analysis or the Second Interim Efficacy Analysis, as applicable, that the 90-14 portion of the ASPEN Study no longer has meaningful potential to meet its primary end point with statistical significance.

(c) “P-Value Achievement” shall mean: (A) in the case of the First Interim Efficacy Analysis or the Second Interim Efficacy Analysis, as applicable, the nominal p-value of the primary end point is less than 0.001; and (B) in the case of the analysis performed following La Jolla’s receipt of the 128 Flare Topline Data, the nominal p-value of the primary end point is less than 0.05.

- 26 -

(d) “Renal Events Committee” shall mean the committee of independent experts appointed for the 90-14 portion of the ASPEN Study in accordance with the charter for such committee and which shall provide an expert assessment of the renal flare data obtained as a result of the conduct of the 90-14 portion of the ASPEN Study and a determination as to whether such renal flares are attributable to SLE prior to the data from the 90-14 portion of the ASPEN Study being unblinded.

(e) “128 Flare Topline Data” shall mean summarized data tables for the first one hundred twenty eight (128) events of renal flare adjudicated to be SLE-related accrued in the 90-14 portion of the ASPEN Study calculating the time-to-renal flare for patients in the placebo and the combined active treatment groups in the 90-14 portion of the ASPEN Study, respectively, together with the results of the sensitivity analysis performed pursuant to Section 4.3 of the Statistical Analysis Plan for the 90-14 portion of the ASPEN Study and summaries of adverse events observed in such patients through the date of such 128th renal flare.

7.7 Notice by La Jolla. La Jolla shall promptly notify BioMarin CF in writing following the occurrence of each of the following events: (i) the First Efficacy Analysis; (ii) the Second Efficacy Analysis; (iii) Non-Futile Determination; (iv) Futile Determination; (v) a P-Value Achievement; (vi) La Jolla’s receipt of the 128 Flare Topline Data; and (vii) receipt of recommendation from the Data Mentoring Board to terminate any portion of the 90-14 portion of the ASPEN Study for any reason. A “Completion Notice” shall be any such notice issued by La Jolla under this Section 7.7 notifying BioMarin CF of the occurrence of one or more of the events described in paragraphs (i) through (vii).

7.8 Termination.

(a) BioMarin CF shall have the right to terminate this Agreement at any time and for any reason upon thirty (30) days written notice to La Jolla under this Section 7.8(a) prior to the date BioMarin CF effects the Full Participation Point pursuant to this Article 7. In the event that BioMarin CF so terminates this Agreement under this Section 7.8(a), BioMarin CF shall not be obligated to make any further payments under Sections 7.2, 7.3, 7.4, 7.9 or 7.10 that become due or otherwise are to be paid after the date of such notice of termination. For example, if BioMarin CF provides a notice of termination under this Section 7.8(a) after receipt of a Completion Notice from La Jolla of a P-Value Achievement at the Second Interim Efficacy Analysis, but prior to the date on which the corresponding payment in respect of the Full Participation Point becomes due (i.e., thirty (30) days after such notice from La Jolla), then this Agreement shall terminate and such payment in respect of the Full Participation Point shall not be due. Notwithstanding the foregoing or Section 13.3 below, BioMarin CF shall not have the right to terminate this Agreement prior making a payment to La Jolla pursuant to Section 7.2, unless Sections 7.2(b) or 7.2(c) apply.

(b) If the ASPEN Study terminates or is abandoned by La Jolla for any reason and at such time of termination or abandonment neither a P-Value Achievement has occurred nor the 128 Flare Topline Data has been received by La Jolla, then (i) La Jolla shall promptly notify BioMarin CF of such results, (ii) no further payment shall be due from BioMarin CF to La Jolla under Sections 7.2, 7.3 and 7.4 and (iii) Section 7.13 shall thereafter apply to the continuing rights and obligations of the Parties under this Agreement; provided that if the ASPEN Study has terminated or been abandoned and at such time a Party is in breach of its obligations hereunder, the applicability of Section 7.13 shall not affect the rights and claims of one Party against the other under this Agreement relating to such breach. Any such notice provided by La Jolla to BioMarin CF under this Section 7.8(b) shall be deemed to be a Completion Notice for the purposes of Sections 7.13 and 13.4 below.

- 27 -

(c) Any termination of this Agreement under this Section 7.8 shall be deemed a termination under Section 13.3, for the purposes of Article 14 below.

7.9 Regulatory Milestones. On and after the Full Participation Point, BioMarin CF shall pay to La Jolla the milestone payments set out below following the first achievement of the corresponding regulatory milestone set out below in accordance with the payment provisions of this Article 7:

	One Time Milestone
Regulatory Milestone	Payment Amount
1. First receipt of an approval of an NDA for the Product in the ASPEN Study:
a. if by such receipt La Jolla has completed a Positive Dosing Study	$	45,000,000
b. if by such receipt La Jolla has not completed a Positive Dosing Study	$	30,000,000
c. only in the circumstance that the P-Value Achievement occurs at the First Interim Efficacy Analysis or the Second Interim Efficacy Analysis and the Dosing Study is not complete at the time of approval of the NDA, if within one (1) year of such approval La Jolla completes a Positive Dosing Study	$	15,000,000
2. First receipt of an approval of an MAA (or Marketing Approval in all of the Major Markets other than the United States)	$	10,000,000

- 28 -

7.10 Net Sales Milestones. In addition, BioMarin CF shall pay to La Jolla the milestone payments set out below following the first achievement of the corresponding milestone set out below, in accordance with the payment provisions in this Article 7:

	One Time Milestone
Net Sales Milestone	Payment Amount
1. First time that Annual Net Sales of Products within the Territory equal or exceed Two Hundred Fifty Million Dollars ($250,000,000)	$	13,500,000
2. First time that Annual Net Sales of Products within the Territory equal or exceed Five Hundred Million Dollars ($500,000,000)	$	25,000,000
3. First time that Annual Net Sales of Products within the Territory equal or exceed Seven Hundred Fifty Million Dollars ($750,000,000)	$	37,500,000
4. First time that Annual Net Sales of Products within the Territory equal or exceed One Billion Dollars ($1,000,000,000)	$	50,000,000

7.11 Milestone Reporting and Payments. BioMarin CF shall notify La Jolla in writing within thirty (30) days after the achievement of each milestone set out in Section 7.9 or 7.10, and each such notice shall be accompanied by the appropriate milestone payment. Any milestone payable by BioMarin CF pursuant to Section 7.9 or Section 7.10 shall be made no more than once with respect to the achievement of each milestone set out in Section 7.9 or Section 7.10, as applicable, and in no event shall the aggregate amount to be paid by BioMarin CF under: (a) Section 7.9 exceed Fifty-Five Million Dollars ($55,000,000); and (b) Section 7.10 exceed One Hundred Twenty-Six Million Dollars ($126,000,000).

7.12 Cost-Profit Sharing. On and from the Full Participation Point, except as otherwise provided in this Agreement or the Financial Appendix, BioMarin CF and La Jolla shall share equally: (a) Shared Costs related to the development and commercialization of Products within the Territory, and the manufacture of Products for use and sale, within the Territory; and (b) the Profit/Loss from sales of Products within the Territory; in each case as and to the extent set forth in the Financial Appendix. For such purposes, if the Full Participation Point is triggered by a P-Value Achievement, then such sharing of costs shall commence as of the date BioMarin CF received the Completion Notice for such P-Value Achievement. Prior to the Full Participation Point, La Jolla shall be responsible for all costs that it incurs in accordance with the Operating Plan/Budget. Additional terms related to determining Shared Costs and Profit/Loss, and to financial planning, accounting policies and procedures to be followed with respect to Products within the Territory are set forth in the Financial Appendix.

- 29 -

7.13 Futile Determination or Failed P-Value Achievement.

(a) Adverse Outcome. [****]

(b) Rights Relating to Approval of the NDA without P-Value Achievement. [****]

7.14 Other Payment Terms.

(a) Payments Non-Refundable. For the avoidance of doubt, it is understood that the payments in Sections 7.1-7.4, 7.9 and 7.10 above shall not be refundable and shall not be creditable against future milestone payments or other payments by BioMarin CF to La Jolla under this Agreement, nor shall any such payments be taken into account in calculating the Parties’ sharing of costs and Profit/Loss pursuant to Section 7.12 and the Financial Appendix.

(b) Payment Method. All payments between the Parties under this Agreement (including the payments due under this Article 7 and the payments under the Financial Appendix) shall be made by bank wire transfer in immediately available funds to an account designated by the Party to which such payments are due. Any payments or portions thereof due under this Agreement that are not paid by the date such payments are due under this Agreement shall bear interest at a rate equal to: (i) the prime rate as reported by The Wall Street Journal (U.S. Western Edition), plus two percent (2%) per year; or (ii) if lower, the maximum rate permitted by law (the “Interest Rate”); calculated on the number of days such payment is delinquent, compounded annually and computed on the basis of a three hundred sixty five (365) day year. This Section 7.14(b) shall in no way limit any other remedies available to the Parties.

(c) Currency Conversion. Unless otherwise expressly stated in this Agreement, all dollars amounts in this Agreement are stated, and all payments under this Agreement shall be made, in United States Dollars. For any amounts invoiced or incurred in a currency other than United States Dollars, the amounts shall be expressed in the currency in which such sale was originally made, or in which such cost was incurred, together with the United States Dollar equivalent, calculated using the average exchange rate for the conversion of the applicable foreign currency into United States Dollars, quoted for current transactions for both buying and selling United States Dollars, as reported in The Wall Street Journal (U.S. Western Edition) (or any other publication as agreed to be the Parties) for all business days in the month in which transaction occurred.

7.15 Withholding Taxes. Any withholding or other taxes that either Party is required by law to withhold or pay on behalf of the other Party, with respect to any payments to such other Party under this Agreement, shall be deducted as required by law from such payment and shall be paid to the proper taxing authorities; provided that the withholding Party shall furnish to the other Party proper evidence of the taxes so paid. The Parties will exercise their reasonable efforts to ensure that any withholding taxes imposed are reduced as far as possible under the provisions of any applicable tax treaty, and shall cooperate in filing any forms required for such reduction. Notwithstanding the foregoing, BioMarin CF shall not make any deductions from any payments due La Jolla for any withholding taxes (and shall indemnify La Jolla against any such taxes) caused by the fact that BioMarin CF is not incorporated in, or a resident of, the United States.

- 30 -

7.16 Books and Records. Each Party shall keep, and shall require its Affiliates, and Sublicensees to keep, complete, true and accurate books of account and records reasonably sufficient to determine and establish the amounts payable pursuant to this Agreement. Such books and records shall also document all costs and expenses incurred or paid and, if applicable to a Party, its Affiliates or Sublicensees, Gross Sales and Annual Net Sales of Products received in connection with this Agreement and the Financial Appendix, including such other information as reasonably necessary to verify the reports to be provided under the Financial Appendix. All such books and records shall be maintained until the later to occur of: (a) three (3) years following the relevant calendar year to which such records pertain; or (b) the expiration of the period required by applicable laws and regulations.

7.17 Audit Rights.

(a) Request. Upon the prior written notice of no less than [****] to a Party (the “Auditing Party”) and not more than once each calendar year, the other Party (the “Responding Party”) shall permit the Auditing Party, accompanied by an independent certified public accounting firm of nationally recognized standing, selected by the Auditing Party and reasonably acceptable to the Responding Party, to have access during normal business hours to the records of the Responding Party and its Affiliates as may be reasonably necessary to verify the accuracy of the financial reports and calculations made under this Article 7 and the Financial Appendix for any and all quarters [****]. Each Party shall require its Affiliates, and BioMarin CF shall use its reasonable efforts to obtain in its agreements with its Sublicensees, audit rights for the other Party, at least to the same extent as such Party has such rights in such agreements. To the extent that BioMarin CF does not have the right to grant to the other Party the right to audit its Sublicensees’ books and records hereunder, BioMarin CF shall obtain for itself such rights and, at the request of La Jolla, shall exercise such audit rights with respect to such Sublicensees and provide the results of such audit for inspection by La Jolla pursuant to this Section 7.17.

(b) Discrepancies. If, as a result of such audit, it is established that additional amounts were owed by the Responding Party for the audited period, such Party shall pay such additional amounts within [****] after the date such discrepancy is established. In the event of a dispute as to whether there is a discrepancy, the matter shall be resolved under and utilizing the dispute resolution provisions of Sections 17.2 and 17.3. The fees charged by such accounting firm shall be paid by the Auditing Party; provided, however, that if the audit establishes that the aggregate amounts payable by the Responding Party for the period covered by the audit are more than [****] of the aggregate amounts actually paid for such period, then the Responding Party shall pay the reasonable fees and expenses charged by such accounting firm.

7.18 Restriction on Certain Equity Investments. [****]

- 31 -

ARTICLE VIII
CERTAIN COVENANTS

8.1 General Communications. Each Party shall keep the other Party fully and promptly informed as to its progress and activities relating to the development, commercialization, marketing and promotion of the Products within the Territory, including with respect to regulatory matters and meetings with Regulatory Authorities, by way of updates to the JSC at their meetings and as otherwise specified in this Agreement, or as reasonably requested by the other Party including providing the other Party promptly with all clinical and regulatory information, filings made prior to the Effective Date and all financial information and data related to its performance under the Agreement to the extent necessary for each Party, on a timely basis, to prepare its internal and external financial reports.

8.2 Conduct of Activities. Each Party shall conduct those activities allocated to such Party under the Operating Plan/Budget in compliance in all material respects with all applicable laws, rules and regulations and in accordance with good scientific and clinical practices, applicable under the laws and regulations of the country in which such activities are conducted.

ARTICLE IX
MANUFACTURING

9.1 Manufacturing.

(a) The Product will be manufactured in accordance with the Operating Plan/Budget adopted by the JSC. The JSC will, to the extent possible, in adopting each Operating Plan/Budget, direct that La Jolla’s existing facility as currently configured and with such improvements as are contemplated in the Initial Operating Plan/Budget be used to produce bulk Product on and subject to the terms described in Section 9.1(b). The JSC’s obligations under this Article 9 are subject to La Jolla’s facility maintaining all regulatory approvals and licenses necessary to manufacture the Products (including without limitation all manufacturing specifications) required by the FDA and the EMEA and for such facility to manufacture the Product at a Cost Effective Price, as defined below. If BioMarin CF does not obtain from La Jolla the right to sell Product in the Asia-Pacific Territory and La Jolla is not then producing any bulk Compound, then, at La Jolla’s request, BioMarin CF and La Jolla will negotiate a supply agreement for sale of Product meeting the specifications approved by either the EMEA or FDA (with such changes as are reasonably agreed, provided that La Jolla or the Asia-Pacific Licensee will be responsible for all costs associated with such changes) to La Jolla for the Asia-Pacific Territory on terms and conditions that are commercially reasonable and consistent with terms prevailing between suppliers and distributors in the industry; provided that the pricing terms will be subject to Section 9.3. For purposes of this Article 9, [****]

(b) [****]

9.2 Funding for La Jolla Facility. [****]

- 32 -

9.3 Cooperation. BioMarin CF shall cooperate fully with La Jolla to enable La Jolla to purchase raw materials, Compound and/or Product, for the Asia-Pacific Territory, directly from BioMarin CF’s vendors on the same terms (including pricing) as BioMarin CF. In addition, to the extent that BioMarin CF produces such items itself or La Jolla is unable to obtain such items directly from BioMarin CF’s vendors on the same terms as BioMarin CF, then BioMarin CF shall supply such items to La Jolla, in accordance with such procedures and specifications as are applicable to La Jolla’s supply to BioMarin CF under Section 9.1 above on a reciprocal basis (and to the extent such procedures or specifications are not applicable, on reasonable and customary terms).

(a) Materials Produced by Third Party Contractors. [****]

(b) Materials Produced by BioMarin CF. To the extent BioMarin CF manufactures such raw materials, Compound or Product itself, and supplies the same to La Jolla under this Section 9.3, then La Jolla shall reimburse BioMarin CF the Manufacturing Cost of such items.

9.4 Shortage of Supply. [****]

(a) Procedures. If at any time La Jolla or BioMarin CF (the “Producing Party”) becomes unable to supply the quantities of Compound or Product that such Producing Party is committed to supply hereunder, it shall immediately notify the other Party in writing. In such event, the JSC shall immediately convene to address the problem, including locating alternative suppliers and facilities to increase production and identifying other actions necessary to resolve the problem. Based on such interactions, the JSC shall reasonably establish appropriate measures to remedy the shortage and the Parties shall promptly implement such measures. In any event, both Parties agree to respond with the level of speed and diligence commensurate with the severity of the problem.

(b) Allocation. [****].

9.5 BioMarin CF Manufacturing. In the event that BioMarin CF manufactures the Compound, Product, any intermediate or raw material, such manufacturing shall be at a Cost Effective Price.

9.6 Restrictions on Manufacturing Locations. [****]

- 33 -

ARTICLE X
CONFIDENTIALITY

10.1 Confidential Information. Except as expressly provided in this Agreement or otherwise agreed in writing, the Parties agree that the receiving Party shall keep confidential and shall not publish or otherwise disclose or use for any purpose any information and other confidential and proprietary materials furnished to it or its respective agents or representatives by the other Party or its respective agents or representatives hereto pursuant to this Agreement (collectively, “Confidential Information”). Notwithstanding the foregoing, the obligations of non-use and non- disclosure set forth in this Article 10 shall not apply to the extent that the receiving Party can establish that any Confidential Information:

(a) was already known to the receiving Party, other than under an obligation of confidentiality remaining in effect, at the time of disclosure, as evidenced by written records kept in the ordinary course of business of the receiving Party;

(b) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving Party;

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

(d) was subsequently lawfully disclosed to the receiving Party by a Third Party, who had no obligation to the disclosing Party not to disclose such information to others; or

(e) was independently developed by the receiving Party prior to its disclosure by the disclosing Party and without use of or reference to any Confidential Information disclosed by the disclosing Party, as evidenced by written records kept in the ordinary course of business of the receiving Party.

10.2 Permitted Disclosures. Notwithstanding the provisions of Section 10.1 above and subject to Sections 10.3 and 10.4 below, each Party may use and disclose the other Party’s Confidential Information as follows: (a) under appropriate confidentiality obligations substantially equivalent to those in this Agreement, to its Affiliates, licensees, permitted Sublicensees, contractors and any other Third Parties to the extent such use and/or disclosure is necessary or reasonably useful to perform its obligations or to exercise the rights granted to it, or reserved by it, under this Agreement (including to grant licenses or permitted Sublicenses hereunder, and in the case of La Jolla, to develop, manufacture and commercialize Products for use in the Asia-Pacific Territory); or (b) to the extent such disclosure is reasonably necessary in filing or prosecuting intellectual property applications, complying with the terms of licenses from Third Parties, prosecuting or defending litigation, complying with applicable governmental laws or regulations, obtaining Marketing Approval, conducting clinical trials hereunder with respect to a Product, or submitting information to tax or other governmental authorities. If a Party is required by law or regulations (including securities laws, regulations or guidances) to make any such disclosure of the other Party’s Confidential Information, to the extent it may legally do so, it will give reasonable advance notice to the other Party of such disclosure requirement and, save to the extent inappropriate in the case of patent applications or otherwise, will use its good faith efforts to secure confidential treatment of such Confidential Information prior to its disclosure (whether through protective orders or otherwise). For any other disclosures of the other Party’s Confidential Information, including to Affiliates, licensees, permitted Sublicensees, contractors and other Third Parties, a Party shall ensure that the recipient thereof is bound by a written confidentiality agreement as materially protective of such Confidential Information as this Article 10.

- 34 -

10.3 Confidential Terms. Each Party agrees not to disclose to any Third Party the terms of this Agreement without the prior written consent of the other Party hereto, except each Party may disclose the terms of this Agreement: (a) to advisors (including financial advisors, attorneys and accountants), actual or potential acquisition partners or private investors, and others on a need to know basis, in each case under appropriate confidentiality provisions substantially equivalent to those in this Agreement; or (b) to the extent necessary to comply with applicable laws and court orders (including securities laws, regulations or guidances); provided that in the case of paragraph (b), the disclosing Party shall promptly notify the other Party and (other than in the case where such disclosure is necessary, in the reasonable opinion of the disclosing Party’s legal counsel, to comply with securities laws, regulations or guidances) allow the other Party a reasonable opportunity to oppose with the body initiating the process and, to the extent allowable by law, to seek limitations on the portion of the Agreement that is required to be disclosed.

10.4 Publication of Product Information. Prior to the first Marketing Approval for the first Product in the Territory, before publishing, publicly presenting and/or submitting for written or oral publication a manuscript, abstract or the like that includes Data or other information generated under this Agreement relating to the Compound or a Product that has not previously published pursuant to this Section 10.4 (each, a “Publication”), the Party proposing such Publication shall provide the other Party a copy thereof for its review for at least thirty (30) days or such shorter period as is reasonably practicable (unless such Party is required by law to publish such information sooner). Such Party shall consider in good faith any comments provided by the other Party during such period. After such first Marketing Approval, the JSC will develop procedures for reviewing and approving Publications, which procedures shall be consistent with the foregoing and shall permit any public disclosure as is required by law. The contribution of each Party shall be noted in all Publications by acknowledgment or co-authorship, whichever is appropriate.

10.5 Press Releases and Announcements.

(a) Initial Release. On the Effective Date or, if mutually agreed, promptly after the Effective Date, the Parties shall issue a joint press release to announce the execution of this Agreement and the relationship of the Parties. Such press release will include a description of the aggregate financial terms of the Agreement.

(b) Further Publicity. The Parties acknowledge the importance of supporting each other’s efforts to publicly disclose results and significant developments regarding the Products within the Territory and other activities in connection with this Agreement in the Territory that may include information that is not otherwise permitted to be disclosed under this Article 10, and that may be beyond what is required by law. The JSC shall develop a plan for the coordination, review and sign off by each Party of public disclosure of information relating to the Product. Each Party shall adhere to such disclosure plan, provided that each Party shall be free to make such public disclosures as it deems necessary to comply with all applicable law, rules and regulations.

(c) Certain Events. In the event this Agreement terminates under Section 13.3 or 7.8, neither Party shall make any disparaging comments about the other Party but shall otherwise be free to make such statements as such Party believes appropriate or necessary.

- 35 -

10.6 Prior Non-Disclosure Agreements. Upon execution of this Agreement, the terms of this Article 10 shall supersede any prior non-disclosure, secrecy or confidentiality agreement between the Parties, including that certain nondisclosure agreement between the Parties dated January 15, 2008 (the “Prior Agreement”). Any information disclosed under such prior agreements shall be deemed disclosed under this Agreement.

ARTICLE XI
INTELLECTUAL PROPERTY

11.1 Inventions and Other Intellectual Property.

(a) General Principles. Title to all inventions and other intellectual property conceived or created solely by BioMarin CF personnel in connection with this Agreement (and all intellectual property rights therein) shall be owned by BioMarin CF. Title to all inventions and other intellectual property conceived or created solely by La Jolla personnel in connection with this Agreement (and all intellectual property rights therein) shall be owned by La Jolla. Title to all inventions and other intellectual property conceived or created jointly by personnel of La Jolla and BioMarin CF in connection with this Agreement (and all intellectual property rights therein) shall be jointly owned by La Jolla and BioMarin CF.

(b) Joint Ownership. Except as expressly provided in this Agreement, it is understood that neither Party shall have any obligation to obtain any approval of, nor pay a share of the proceeds to, the other Party to practice, enforce, license, assign or otherwise exploit inventions or intellectual property owned jointly by the Parties, and each Party hereby waives any right it may have under the laws of any jurisdiction to require such approval or accounting. Each Party agrees to cooperate with the other Party, as reasonably requested, and to take such actions as may be required to give effect to this Section 11.1(b) in a particular country within or outside the Territory.

(c) Grant-Back License. BioMarin CF hereby grants to La Jolla a non-exclusive, non-transferable (except pursuant to Section 18.8 below), royalty-free, limited license (without the right to sublicense except in connection with an Asia-Pacific License, which shall be subject to Section 4.3) to use any BioMarin CF Improvements solely to: (i) make and have made and import the Products for BioMarin CF as authorized by the JSC or for use and sale outside the Territory, (ii) to use any BioMarin CF Improvements for development purposes as provided in Article 4 or in connection with an Asia-Pacific License, and sell or offer for sale the Products as provided in Article 6 during the term of this Agreement within the Territory or (iii) to develop, use, sell, offer for sale and otherwise commercialize the Compound or Products in the Asia-Pacific Territory; provided that, as applied to the Asia-Pacific Territory, such right to sublicense to an Asia-Pacific Licensee shall only apply to BioMarin CF Improvements relating to the Initial Product. As used herein, “BioMarin CF Improvements” means any inventions or intellectual property (including Data and know-how) (and all intellectual property rights) that is: (a) owned, licensed to, or acquired by, BioMarin CF and, as directed by the JSC or BioMarin CF, is applied to the development, use, manufacture and/or commercialization of any Compound or any Product under this Agreement, including but not limited to, (i) a modification or derivative of the Compound, or an intermediate thereof, or (ii) a method of synthesis or manufacture of the Compound, or any biologically active materials, or an intermediate or by-product used or created in such synthesis or manufacture, or (b) made solely by BioMarin CF using Confidential Information of La Jolla; and any Patent claiming or disclosing such an invention or intellectual property. As used herein, “La Jolla Improvements” means any inventions or intellectual property (including Data and know-how) (and all intellectual property rights) made solely by or under authority of, or is acquired by, La Jolla using Confidential Information of BioMarin CF, and any Patent claiming or disclosing such an invention or intellectual property. To the extent any La Jolla Improvements do not fall within the definition of La Jolla Know-How or La Jolla Patents, La Jolla hereby grants to BioMarin CF a license to La Jolla Improvements commensurate in scope as provided in Section 2.1.

- 36 -

11.2 Prosecution and Maintenance of Patents.

(a) Control of Prosecution Prior to Full Participation. As between the Parties and prior to the Full Participation Point, La Jolla shall control the Prosecution and Maintenance of all La Jolla Patents in the Territory and all Joint Patents (both within and outside the Territory) in consultation with BioMarin CF using counsel selected by La Jolla and reasonably acceptable to BioMarin CF. La Jolla agrees to: (i) keep BioMarin CF fully informed with respect to the status of Prosecution and Maintenance of such La Jolla Patents and Joint Patents; and (ii) consult in good faith with BioMarin CF regarding the Prosecution and Maintenance of such La Jolla Patents and Joint Patents, including providing copies of all material communications to and from the patent offices, including without limitation, office actions, responses to office actions, notices of allowance, and notices of issuance, and providing BioMarin CF a reasonable opportunity to review and comment on any responses to office actions and claim amendments prior to filing. If La Jolla determines not to file any Patent, or to abandon any Patent, that is: (A) within the La Jolla Patents in any country of the Territory; or (B) within the Joint Patents in any country within or outside the Territory, as applicable; then La Jolla shall provide BioMarin CF with written notice of such decision at least sixty (60) days (or if a shorter period is afforded to La Jolla to make such decision, as soon as possible) prior to the deadline for filing any such Patent or the date on which such abandonment would become effective, as applicable. In such event, BioMarin CF shall have the right, at its option and cost, to control the Prosecution and Maintenance of such La Jolla Patent or such Joint Patent, as applicable, and keep La Jolla reasonably informed of BioMarin CF’s activities with respect to such Prosecution and Maintenance.

(b) Control of Prosecution After Full Participation. On and after the Full Participation Point, BioMarin CF shall control the Prosecution and Maintenance of all La Jolla Patents in the Territory and all Joint Patents (both within and outside the Territory) in consultation with La Jolla, including matters then existing that arose prior to the Full Participation Point, using counsel selected by BioMarin CF and reasonably acceptable to La Jolla. BioMarin CF agrees to: (i) keep La Jolla fully informed with respect to the Prosecution and Maintenance of such La Jolla Patents and Joint Patents; and (ii) consult in good faith with La Jolla regarding the Prosecution and Maintenance of such La Jolla Patents and Joint Patents, including providing copies of all material communications to and from the patent offices, including without limitation, office actions, responses to office actions, notices of allowance, and notices of issuance, and providing La Jolla a reasonable opportunity to review and comment on any responses to office actions and claim amendments prior to filing. If BioMarin CF determines not to file any Patent, or to abandon any Patent, that is: (A) within the La Jolla Patents in any country of the Territory; or (B) within the Joint Patents in any country within or outside the Territory, as applicable; then BioMarin CF shall provide La Jolla with written notice of such decision at least sixty (60) days (or if a shorter period is afforded to BioMarin CF to make such decision, as soon as possible) prior to the deadline for filing any such Patent or the date on which such abandonment would become effective, as applicable. In such event, La Jolla shall have the right, at its option and cost, to control the Prosecution and Maintenance of such La Jolla Patent or such Joint Patent, as applicable, and keep BioMarin CF reasonably informed of La Jolla’s activities with respect to such Prosecution and Maintenance.

- 37 -

(c) Scope of Activities. For the purposes of this Section 11.2, “Prosecution and Maintenance” (including variations such as “Prosecute and Maintain”) shall mean, with respect to a Patent, the preparing, filing, prosecuting and maintenance of such Patent, as well as continuations, divisionals, continuations-in-part, re-examinations, reissues and requests for Patent term extensions and the like with respect to such Patent, together with the conduct of interferences, the defense of oppositions and other similar proceedings with respect to a Patent. Notwithstanding Sections 11.2(a) and (b) above, BioMarin CF shall not have the right to conduct or control the Prosecution and Maintenance of La Jolla Patents if such Patents (or the claims thereof) are not directed or related to the Compound, a Product and/or in each case the manufacture or use thereof.

(d) Cooperation. Each Party shall cooperate with the other Party in connection with all activities relating to the Prosecution and Maintenance of the La Jolla Patents and Joint Patents undertaken by such other Party pursuant to this Section 11.2, including: (i) making available in a timely manner any documents or information such other Party reasonably requests to facilitate such other Party’s Prosecution and Maintenance of the La Jolla Patents and/or Joint Patents, as applicable, pursuant to this Section 11.2; and (ii) if and as appropriate, signing (or causing to have signed) all documents relating to the prosecution and maintenance of any La Jolla Patents and/or Joint Patents by such other Party; and (iii) signing any power of attorney required to enable the other Party to Prosecute and Maintain the La Jolla Patents and Joint Patents as described above in Section 11.2(a) or 11.2(b), as applicable. Each Party shall also promptly provide to the other Party all information reasonably requested by such other Party with regard to such Party’s activities pursuant to this Section 11.2. Each Party shall hold all information disclosed to it by the other Party under this Section as Confidential Information of the other Party.

(e) Prosecution and Maintenance Costs. Costs incurred in connection with the Prosecution and Maintenance activities undertaken by a Party pursuant to this Section 11.2 shall: (i) be borne exclusively by La Jolla if incurred prior to the Full Participation Point; and (ii) be taken into account as set forth in the Financial Appendix when calculating Other Operating Expense, if incurred on or after the Full Participation Point. Notwithstanding the foregoing, any FTE Costs or Out-of-Pocket Expenses attributable to the transition of Prosecution and Maintenance of the La Jolla Patents to BioMarin CF’s counsel after the Full Participation Point shall be borne exclusively by BioMarin CF and shall not be Shared Costs.

- 38 -

11.3 Enforcement.

(a) Notice. If either Party becomes aware of any actual or threatened infringement of any La Jolla Patent in the Territory, or Joint Patent, by the manufacture, use, development or commercialization in the Territory of a product containing a Compound (each, an “Infringement”), that Party shall promptly notify the JSC and the other Party in writing.

(b) Enforcement Actions.

(i) Except as otherwise agreed, prior to the Full Participation Point, La Jolla shall have the first right (but not the obligation) to bring and control any action or proceeding with respect to the Infringement of any La Jolla Patent in the Territory and/or Joint Patent, or to defend any declaratory judgment action with respect thereto (for the purposes of this Section 11.3, an “Enforcement Action”). La Jolla agrees not to settle any Enforcement Action, or make any admissions or assert any position in such Enforcement Action, in a manner that would adversely affect BioMarin CF’s rights or interests, including with respect to BioMarin CF’s rights and interests in the Compound and/or Products within the Territory, or in the La Jolla Patent within the Territory, and/or the Joint Patent, without the prior written consent of BioMarin CF, which shall not be unreasonably withheld or delayed.

(ii) After the Full Participation Point, BioMarin CF shall have the first right (but not the obligation) to bring and control any Enforcement Action. BioMarin CF agrees not to settle any Enforcement Action, or make any admissions or assert any position in such Enforcement Action, in a manner that would adversely affect the rights or interests of La Jolla in the Compound and/or a Product, or the validity, enforceability or scope of any La Jolla Patent within the Territory, without the prior written consent of La Jolla, which shall not be unreasonably withheld or delayed. The out-of-pocket costs incurred by the Parties in pursuing an Enforcement Action in accordance with this Section 11.3 shall be shared as Other Operating Expense pursuant to the Financial Appendix, if incurred on or after the Full Participation Point.

(c) Cooperation. The Party initiating or defending any Enforcement Action pursuant to this Section 11.3 shall keep the other Party reasonably informed of the progress and status of any such Enforcement Action. The Parties shall assist one another and cooperate in any such Enforcement Action at the other’s reasonable request (including joining as a party plaintiff to the extent necessary or so requested by the other Party).

(d) Recoveries. Any recovery obtained by a Party as a result of any Enforcement Action pursuant to this Section 11.3, by settlement or otherwise, shall be included as Other Operating Income for purposes of determining Profit/Loss under Section 7.12 above and the Financial Appendix.

- 39 -

11.4 Third Party Infringement Claims. If the production, sale, offer for sale, or use of the Compound or Product pursuant to this Agreement results in a claim, suit or proceeding alleging patent infringement against La Jolla or BioMarin CF (or their respective Affiliates, licensees or Sublicensees) (collectively, “Infringement Actions”), such Party shall promptly notify the other Party hereto in writing, and the Parties shall promptly confer to consider the claim or assertion and the appropriate course of action. Unless the Parties otherwise agree in writing, each Party shall have the right to defend itself against a suit that names such Party as a defendant; provided, however, that the other Party may participate in the defense and/or settlement thereof at its own expense with counsel of its choice. The Party who is subject to the Infringement Action agrees not to settle such Infringement Action, or make any admissions or assert any position in such Infringement Action, in a manner that would adversely affect the manufacture, use or sale of the Compound or Products within the Territory, or that admits the infringement or validity of any Third Party Patent, without the approval of the other Party, such approval not to be unreasonably withheld. In any event, each Party shall reasonably assist the other Party and cooperate in connection with any litigation in which such Party is not that named as a defendant, at the defending Party’s request and expense. Further, the Party that is subject to the Infringement Action agrees to keep the other Party hereto reasonably informed of all material developments in connection with any such Infringement Action. The out-of-pocket costs incurred by the Parties in defending an Infringement Action (other than any expenses incurred by the Party who has elected to participate in the defense and/or settlement thereof at its own expense with counsel of its choice as provided above) shall in accordance with this Section 11.4 shall be shared as Other Operating Expense pursuant to the Financial Appendix.

11.5 Patent Marking. BioMarin CF agrees to mark, and have its Affiliates and Sublicensees mark, all patented Products or packaging thereof sold or distributed in the Territory pursuant to this Agreement in accordance with the applicable patent statutes or regulations in the country or countries of manufacture or sale thereof.

11.6 Third Party Technologies.

(a) Existing Third Party Technology. With respect to the Prosecution and Maintenance, and enforcement, of La Jolla Patents licensed by La Jolla from a Third Party, except as provided in Exhibit 11.6, La Jolla shall cooperate with BioMarin CF to Prosecute and Maintain, and to enforce, such La Jolla Patents in the Territory in the same manner as set forth in Sections 11.2 and 11.3 above. As between La Jolla and BioMarin CF, any recoveries from enforcement of such La Jolla Patents licensed from a Third Party (including any amounts that La Jolla receives from the Third Party licensor as a result of such enforcement) shall be shared in accordance with Section 11.3(d), after deducting from such recoveries any amounts owed to the Third Party licensor for such enforcement; provided that any Enforcement Actions initiated by the Third Party licensor shall be deemed initiated by La Jolla for purposes of Section 11.3(d), and the costs and expenses incurred by La Jolla in such Enforcement Action shall include the costs and expenses reimbursed or required to be reimbursed by La Jolla to the Third Party licensor in such Enforcement Action.

(b) Provisions of Existing In-License. It is understood that the Existing In-License may require that particular provisions be incorporated into a sublicense granted thereunder. The text of any such provisions in the Existing In-License is set out on Exhibit 11.6 attached hereto and shall be deemed incorporated by reference into this Agreement. BioMarin CF agrees to be bound by the provisions set out on Exhibit 11.6 to the extent applicable to BioMarin CF in its capacity as a sublicensee under the Existing In-License. In addition, BioMarin CF, in its capacity as a sublicensee under the Existing In-License, agrees to comply with the obligations applicable to sublicensees under such agreement, as set forth on Exhibit 11.6.

(c) New Technology. [****]

- 40 -

ARTICLE XII
TRADEMARKS

12.1 Display. BioMarin CF shall be responsible, in consultation with La Jolla, for the development of all packaging materials, labels and promotional materials relating to Products (“Product Promotional Materials”) for use in the Territory. All Product Promotional Materials for use in the Territory shall display the Product Trademarks and no other product-specific trademarks or branding. The trade marks of BioMarin CF, trade dress, style of packaging and the like with respect to each Product within the Territory may be determined by BioMarin CF in a manner that is consistent with BioMarin CF’s standard trade dress and style. To the extent permissible by law and, if necessary, as approved by an applicable Regulatory Authority, BioMarin CF shall also include La Jolla’s trademark and/or tradename on the label, primary packaging and package inserts for each Product and all promotional materials for the Product in equal size and prominence, as nearly as allowed by applicable regulations in the relevant jurisdiction.

12.2 Title. As between the Parties, La Jolla shall own, and is hereby assigned, all right, title and interest in and to the Product Trademarks, and all good will arising out of the use of the Product Trademarks shall inure to the benefit of La Jolla. Subject to the foregoing, BioMarin CF shall own all right, title and interest in and to the copyright of all Product Promotional Materials.

12.3 Grant of License. Subject to the terms and conditions of this Agreement, La Jolla hereby grants to BioMarin CF a co-exclusive license to use the Product Trademarks in the United States, and an exclusive license to use the Product Trademarks in each other country of the Territory, for the packaging, marketing, distributing, sale and promotion of the Products in accordance with this Agreement. The rights and license granted by La Jolla to BioMarin CF in this Section 12.3 and in Section 12.4 below shall commence on the Effective Date, but BioMarin CF agrees not to exercise such rights or license prior to the Full Participation Point.

12.4 Registration of Trade Marks. Subject to Section 12.3 above, BioMarin CF shall file, register and maintain, for the term of this Agreement appropriate registrations for the Product Trademarks, as mutually agreed by La Jolla and BioMarin CF, in each country of the Territory in which Products are or will be sold. Such registrations for the Product Trademarks shall be obtained by BioMarin CF in La Jolla’s name.

12.5 Certain Covenants. BioMarin CF agrees that neither it, nor any of its Affiliates, shall at any time during the term of this Agreement: (a) challenge the Product Trademarks or the registration thereof in any country; or (b) register, or attempt to register, any trademarks or trade names that are confusingly similar to the Product Trademarks; or (c) use any Product Trademark in connection with any product other than a Product for use within the Territory; nor shall BioMarin CF or any of its Affiliates authorize or assist any Third Party to do any of the foregoing.

- 41 -

12.6 Recordation of Licenses. In those countries where a trademark license may be recorded, La Jolla will provide to BioMarin CF, on BioMarin CF’s written request, a separate trademark license for the Product Trademarks and BioMarin CF will arrange for the recordation of such trade mark license with the appropriate governmental agency, promptly following receipt of such license from La Jolla. BioMarin CF shall cooperate in the preparation and execution of such documents.

12.7 Approval of Packaging and Promotional Materials. To the extent required by law to protect and preserve La Jolla’s rights in a Product Trademark or La Jolla’s trade name, then as reasonably requested by La Jolla, BioMarin CF shall submit representative Product Promotional Materials, packaging and samples of Product displaying the Product Trademarks and/or La Jolla’s trade name to La Jolla for La Jolla’s review and approval, prior to the first use of such Product Promotional Materials, packaging or Product and prior to any subsequent change or addition to such Product Promotional Materials, packaging or Product. If La Jolla has not responded within three (3) business days after the submission of such promotional materials, packaging or Product, La Jolla’s approval will be deemed to have been received.

12.8 Enforcement. La Jolla and BioMarin CF shall reasonably cooperate with each other to protect Product Trademarks in the Territory. The Parties shall cooperate reasonably and in good faith to determine whether and to what extent to institute and prosecute or defend any actions or proceedings involving or affecting Product Trademarks in the Territory, and all settlements relating thereto are subject to the mutual agreement of the Parties (such agreement not to be unreasonably withheld by either Party). The Parties shall reasonably cooperate in any action taken to enforce or defend their rights in Product Trademarks in the Territory, including taking appropriate appeals.

12.9 Termination of Trade Mark License. BioMarin CF’s right to use the Product Trademarks and the La Jolla trade name shall terminate in each country of the Territory in which BioMarin CF’s rights to distribute the Products are terminated or expire. BioMarin CF shall take all such steps as La Jolla may reasonably request to give effect to the termination of the license to the Product Trademarks and La Jolla trade name in such country and to record any documents that may be required to evidence the termination of such license.

12.10 Trademark Costs. Costs incurred in connection with the filing, prosecuting and maintaining and enforcing the Product Trademarks in the Territory, and the recordation of Product Trademark licenses for use with Products within the Territory shall be taken into account as set forth in the Financial Appendix when calculating Other Operating Expense, if incurred on or after the Full Participation Point.

ARTICLE XIII
TERM AND TERMINATION

13.1 Term. This Agreement shall commence on the Effective Date, and unless terminated earlier as provided in Section 7.8, or this Article 13, shall continue in full force and effect until there is no further Net Sales of any Product and no further development activities with respect to any Product within the Territory and thereafter until disposition, redeployment or shutdown of all operations and assets related to the Products.

- 42 -

13.2 Breach. Either Party to this Agreement may terminate this Agreement in the event (a) the other Party shall have materially breached or defaulted in the performance of any of its material obligations under this Agreement, and such default shall have continued for [****] after written notice thereof was provided to the breaching Party by the non-breaching Party (provided that if such breach is not reasonably curable within [****], but a cure is possible, then for such longer period as necessary so long as the defaulting Party is diligently and in good faith working on a cure [****] or (b)(x) the other Party (i) applies for or consents to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property; (ii) becomes unable, or admits in writing its inability, to pay its debts generally as they mature; (iii) makes a general assignment for the benefit of its or any of its creditors; (iv) is dissolved or liquidated in full or in part; (v) commences a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consents to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it; or (iv) takes any action for the purpose of effecting any of the foregoing; or (y) proceedings for the appointment of a receiver, trustee, liquidator or custodian of the other Party or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to the other Party or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect, shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within sixty (60) calendar days of commencement. In the case of clause (a), any such termination shall become effective upon written notice by the non-breaching Party to the breaching Party issued after the expiration of the applicable cure period unless the breaching Party has cured any such breach or default prior to the expiration of such cure period. In the case of clause (b) any such termination shall become effective immediately. A material breach or default in the performance of any of a Party’s material obligations under the Securities Purchase Agreement shall be deemed to be a material breach or default under this Agreement.

13.3 Convenience. BioMarin CF may terminate this Agreement in its entirety for any reason upon [****] prior written notice to La Jolla and upon exercise of its rights hereunder no further payment shall be due to La Jolla under Article 7 subsequent to the exercise of such right.

13.4 Election Not to Pay Under Sections 7.2, 7.3, 7.4 and 7.13. [****]

ARTICLE XIV
EFFECT OF TERMINATION

14.1 Accrued Obligations. The expiration or termination of this Agreement for any reason shall not release either Party from any liability that, at the time of such expiration or termination, has already accrued to the other Party or that is attributable to a period prior to such expiration or termination, nor will any termination of this Agreement preclude either Party from pursuing all rights and remedies it may have under this Agreement, or at law or in equity, with respect to breach of this Agreement.

- 43 -

14.2 Right of Sale/Right of Purchase.

14.2.1 Right of Sale. [****]

14.2.2 Right of Purchase.

(a) [****]

(b) [****]

(c) [****]

(d) [****]

(e) [****]

(f) [****]

14.3 Procedure. The Purchase Price under Section 14.2.2(b) and (c) above shall be determined by the mutual agreement of BioMarin CF and La Jolla. In determining the Purchase Price of the Purchased Interests, the Parties shall take into account the present value of all milestone payments remaining to be paid and the likelihood of such payments being made to La Jolla. [****]

14.4 Termination under Sections 13.2 or 13.3. If this Agreement is terminated pursuant to Section 13.2 and the terminating Party does not exercise its right of purchase pursuant to Section 14.2.2, then such termination will be treated as a termination of this Agreement on expiration of term in accordance with Section 14.5. If this Agreement is terminated pursuant to (x) Section 13.2 and the terminating Party triggers its right of purchase pursuant to Section 14.2.2, or in the case of Section 14.2.1, BioMarin CF triggers its Sale Right pursuant to Section 14.2.1, or (y) Section 13.3, then such termination will be subject to the following terms:

(a) Wind-down Period.

(i) Development. If, on the date of notice of such termination, the breaching Party in the case of a termination under Section 13.2 and BioMarin CF in the case of a termination under Section 13.3 (the “Eliminated Party”) or any of its Affiliates was conducting any ongoing clinical trials of a Product in the Territory (“Ongoing Trials”), then, to the extent and as requested by the other Party (the “Remaining Party”), the Eliminated Party shall promptly transition to the Remaining Party or its designee such Ongoing Clinical Trials or portions thereof or continue such trials for a period requested by the Remaining Party [****] (“Development Transition Period”). The Development Costs that the Eliminated Party reasonably incurs during the remaining term of this Agreement in performing such Ongoing Trials shall be shared equally by the Parties in accordance with Section 7.12 and the Financial Appendix.

- 44 -

(ii) Commercialization. With respect to Products being commercialized within the Territory at the time of such termination, to avoid a disruption in the supply of such Products to patients, the Eliminated Party, its Affiliates and its Sublicensees may cease all promotion of such Product as of the effective date such termination, but shall continue to sell and distribute each such Product in each country of the Territory for which Marketing Approval for such Product has been obtained, in accordance with the terms and conditions of this Agreement, for a period requested by the Remaining Party not to exceed [****] (the “Wind-down Period”); provided that the Eliminated Party, its Affiliates and its Sublicensees shall cease such activities, or any portion thereof, in a given country upon [****] by the Remaining Party requesting that such activities (or portion thereof) be ceased. Notwithstanding any other provision of this Agreement, during the Wind-down Period, the Eliminated Party’s and its Affiliates’ and Sublicensees’ rights with respect to the Compound and Products within the Territory shall be non-exclusive and, without limiting the foregoing, the Remaining Party shall have the right to engage one or more other distributor(s) and/or licensee(s) of any Product in all or part of the Territory. During the Wind-down Period, the Parties’ sharing of Profit/Loss shall continue with respect to any Product sold or disposed by the Eliminated Party, its Affiliates or Sublicensees in the Territory. Within [****] after the expiration of the Wind-down Period, the Eliminated Party shall notify the Remaining Party of any quantity of Products remaining in the Eliminated Party’s inventory and the Remaining Party shall have the option, upon notice to the Eliminated Party, to repurchase any such quantities of Product from the Eliminated Party at a price equal to the transfer price paid by the Eliminated Party for such Product.

(iii) Manufacturing. [****]

(b) Assignment of Regulatory Filings and Marketing Approvals. At the Remaining Party’s option, which shall be exercised by written notice to the Eliminated Party, the Eliminated Party shall assign or cause to be assigned to the Remaining Party or its designee (or, to the extent not so assignable, the Eliminated Party shall take all reasonable actions to make available to the Remaining Party or its designee the benefits of) all regulatory filings and registrations (including INDs, MAAs and Marketing Approvals) for all Products within the Territory, including any such regulatory filings and registrations made or owned by the Eliminated Party’s Affiliates and/or Sublicensees. In each case, unless otherwise required by any applicable law or regulation, the foregoing assignment (or availability) shall be made within [****].

(c) Data and Know-How Disclosure. Within [****], the Eliminated Party shall provide to the Remaining Party all Data and the Eliminated Party Know-How pertaining to all Products in the Territory. Such disclosure shall be in electronic form reasonably usable by the Remaining Party and, if reasonably necessary in connection with the Remaining Party’s (or its designee’s) further development, manufacture and/or commercialization of Products, shall include original hardcopies or duplicate copies thereof, as required. The Remaining Party shall have the right to use and disclose all Data and Know-How of the Eliminated Party following termination of this Agreement as provided in Section 14.4(e) below.

- 45 -

(d) Transition. The Eliminated Party shall use diligent efforts to cooperate with the Remaining Party and/or its designee to effect a smooth and orderly transition in the development, sale and ongoing marketing, promotion and commercialization of the Products in the Territory during the Wind-down Period, including making its personnel and other resources reasonably available to the Remaining Party. If the Eliminated Party has entered into contracts with contractors or vendors that are necessary or useful for the Remaining Party to take over responsibility with respect to the Products in the Territory, then the Eliminated Party shall, to the extent possible and requested in writing by the Remaining Party, assign all of the relevant Third Party agreements to the Remaining Party, or otherwise cooperate to make such arrangements available to the Remaining Party or its designee for purposes of the Products. Without limiting the foregoing, the Eliminated Party shall use diligent efforts to conduct in an expeditious manner any activities to be conducted under this Section 14.4.

(e) Licenses. [****]

(f) Sublicensees. Any contracts with Sublicensees of a Product within the Territory engaged by the Eliminated Party other than the Eliminated Party’s Affiliates shall be assigned to the Remaining Party to the extent the Eliminated Party has the right to do so and the Remaining Party so requests. In the event such assignment is not requested by the Remaining Party, or the Eliminated Party does not have the right to do so, then the rights of such Sublicensees shall terminate upon termination of the Eliminated Party’s rights with respect to the Territory. The Eliminated Party shall ensure that its Affiliates and such Sublicensees (if not assigned to the Remaining Party pursuant to this Section 14.4(f) shall transition all Products back to the Remaining Party in the manner set forth in this Section 14.4 as if such Affiliate or Sublicensee were named herein.

(g) Return of Materials. Within [****] upon request by the Remaining Party, the Eliminated Party shall either return to the Remaining Party or destroy all Confidential Information of the Remaining Party that is in the Eliminated Party’s possession and shall provide the Remaining Party with written confirmation of such destruction or return, as applicable. Effective upon the end of the Wind-down Period, the Eliminated Party shall cease to use all trademarks and trade names of the Remaining Party (including the Product Trademarks) in the Territory, and, except as provided in Section 14.6 below, all rights granted to the Eliminated Party hereunder with respect to the Compound and Products in the Territory shall terminate. In addition, all Data generated by or under authority of the Eliminated Party hereunder during the term of the Agreement shall, to the extent it specifically pertains to the Compound or the Product, be deemed Confidential Information of the Remaining Party and not Confidential Information of the Eliminated Party (and will not be subject to the exclusion under Section 10.1(a) and (e) above).

14.5 Expiration of Term. [****]

- 46 -

14.6 Surviving Sections and Articles. Articles 1, 13, 14, 15 (but only to the extent necessary for a Party to enforce its rights as of the date of termination of this Agreement), 16 (but only to the extent necessary to cover sales of Products and the performance of each Party’s obligations under this Agreement up to and including the date of termination of this Agreement) and 18 and Sections 10.1, 10.2, 10.3, 10.5(c), 10.6, 11.1 and, only to the extent of matters existing as of or occurring prior to the date of termination of this Agreement, 11.4 and 11.6, shall survive the termination of this Agreement for any reason and all other Articles and Sections shall expire and be of no further force and effect as of the date of termination of this Agreement except that Sections 7.14(b), 7.14(c), 7.15, 7.16, 7.17 and 7.18 shall survive for as long as necessary solely for the purpose of settlement of accounts relating to periods prior to the date of the termination of this Agreement, and provided further that upon an expiration of this Agreement pursuant to Sections 13.1 and 14.5, Section 12.3 will survive on a non-exclusive basis and Section 12.9 will not thereafter apply to BioMarin CF. Notwithstanding the foregoing, Sections 11.2 and 11.3 shall survive as contemplated in Section 14.4. In addition, during the Wind-down Period, a Party’s rights under Section 4.3(a), 5.3 and 5.4 shall survive to the extent such Party has surviving rights under this Agreement to commercialize Products and Compounds in the Territory and to use Know-How of the other Party; except that any sublicenses granted by La Jolla to an Asia-Pacific Licensee prior to the date of termination of this Agreement in accordance with Section 4.3(a) under the BioMarin CF Know-How or Patents claiming BioMarin CF Improvements shall also survive and continue in effect. Except as otherwise provided in this Article 14, all rights and obligations of the Parties under this Agreement shall terminate upon the expiration or termination of this Agreement for any reason. In the event that this Agreement expires or is terminated under Article 13 above, the Securities Purchase Agreement shall survive in accordance with its terms. In addition, all obligations of one Party to another at the time of expiration under any representation, warranty, covenant or agreement or in respect of any breach thereof or default thereunder shall remain in full force and effect without waiver thereof by a Party hereunder to enforce its rights in respect thereof.

ARTICLE XV
REPRESENTATIONS, WARRANTIES AND COVENANTS

15.1 General Representations. Each Party hereby represents and warrants to the other Party that, as of the Effective Date:

(a) Duly Organized. Such Party is a corporation duly organized, validly existing and is 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 Execution; Binding Agreement. This Agreement is a legal and valid obligation binding upon such Party and enforceable in accordance with its terms. The execution, delivery and performance of this Agreement by such Party have been duly authorized by all necessary corporate action and do not and will not: (i) require any consent or approval of its stockholders; (ii) to such Party’s knowledge, 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 (iii) 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.

- 47 -

(c) Authorizations. Such Party has obtained all necessary consents, approvals and authorizations of all Regulatory Authorities, other governmental authorities and other persons or entities required to be obtained by such Party in order to enter into this Agreement and to otherwise perform such Party’s obligations under this Agreement.

(d) No Other Affiliates. As of the Effective Date, such Party does not have any Affiliates that are not Controlled Affiliates.

15.2 Representations and Warranties of La Jolla. La Jolla represents, warrants and covenants to BioMarin CF that, as of the Effective Date:

(a) it exclusively owns all right title, and interest in or otherwise has full rights and authority to grant the rights and licenses under the La Jolla Patents and the La Jolla Know-How; except as described in Exhibit 15.2;

(b) it has not previously granted, and will not grant during the term of this Agreement, any right, security interest, option, lien, license, or encumbrance of any nature under the La Jolla Patents and/or La Jolla Know-How, or any portion thereof, that conflicts with the rights and licenses granted to BioMarin CF under this Agreement;

(c) to La Jolla’s Knowledge, there are no actual, pending, alleged or threatened actions, suits, claims, interference or governmental investigations in the Territory involving the Compound, Products, the La Jolla Patents or the La Jolla Know-How by or against La Jolla. In particular, to La Jolla’s Knowledge, (i) there is no pending or threatened litigation involving any claims based on product liability or infringement or misappropriation of any intellectual property rights of any Third Party in relation to the Compound or Products, and (ii) there is no pending or threatened reexamination, opposition, or interference proceeding involving any La Jolla Patent or any other pending or threatened proceeding or action challenging the validity or enforceability of any La Jolla Patent. In addition, La Jolla has not received notice of and has not filed any suit, claim, action or proceeding related to any of the foregoing matters;

(d) to La Jolla’s Knowledge, developing, using, making, selling, offering for sale, importing, or exporting the Compound or a Product, BioMarin CF’s exercise of the rights licensed hereunder, or BioMarin CF’s performance of the activities contemplated herein shall not infringe, directly or indirectly, any patent or other intellectual property right of a Third Party under the laws of any country within the Territory;

(e) to La Jolla’s Knowledge, there is no actual, pending, alleged or threatened infringement by a Third Party of any of the La Jolla Patents or misappropriation by a Third Party of any of the La Jolla Know-How; and

(f) to La Jolla’s Knowledge, none of the issued La Jolla Patents are invalid or unenforceable;

(g) except as described in Exhibit 15.2, all La Jolla Patents have been filed, prosecuted, and maintained at the respective patent offices in accordance with applicable laws and regulations;

- 48 -

(h) Exhibit 1.25 includes all pending patent applications and issued patents owned by or licensed to La Jolla that claim or relate to the development, manufacture and/or commercialization of the Compound and/or the Products;

(i) except as set forth on Exhibit 1.25, the Existing In-License is the only agreement entered into before the Effective Date between La Jolla and a Third Party under which La Jolla is granted a license under or is assigned any of such Third Party’s intellectual property rights that are used in or relate to the development, manufacture, and/or commercialization of the Compound and/or the Products by BioMarin CF in accordance with this Agreement and prior to the Effective Date La Jolla has secured the consent of the Existing In-License licensor to the transactions contemplated by this Agreement in the form attached hereto as Exhibit 15.2I;

(j) as of the Effective Date, the Existing In-License is in full force and effect in accordance with its terms, and La Jolla is not in breach of the Existing In-License and has not received any notice from the licensor that La Jolla is in breach of the Existing In-License;

(k) La Jolla has provided BioMarin CF a true, correct, and complete copy of the Existing In-License; and

(l) La Jolla does not have any knowledge that any of BioMarin CF’s representations, warranties and covenants set forth in Section 15.1 above and Section 15.3 below are inaccurate.

15.3 Representations and Warranties of BioMarin CF. BioMarin CF represents, warrants and covenants to La Jolla that, as of the Effective Date:

(a) it has the full right and authority to grant the rights and licenses granted herein;

(b) it has not previously granted, and will not grant during the term of this Agreement, rights under any Patents owned by BioMarin CF and/or BioMarin CF Know-How, or any portion thereof, that conflict with the rights and licenses granted to La Jolla under this Agreement;

(c) neither BioMarin CF nor its Affiliates have initiated any human clinical trials or other development activities with respect to, and are not commercializing, any products specifically directed to the treatment of lupus, and are not engaged in contract negotiations with respect to in-licensing or acquiring any specific product directed to the treatment of lupus; and

(d) neither BioMarin CF nor any of its Affiliates owns or Controls: (i) any Patents containing claims covering the Compound or a Product, nor (ii) Patents or other intellectual property that are necessary for the development or commercialization of the Compound or Products; and

(e) BioMarin CF does not have any knowledge that any of La Jolla’s representations and warranties set forth in Sections 15.1 and 15.2 above are inaccurate.

- 49 -

15.4 DISCLAIMER. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTIES OF ANY KIND EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OR VALIDITY OF ANY PATENTS ISSUED OR PENDING.

ARTICLE XVI
INDEMNIFICATION

16.1 Indemnification of La Jolla. BioMarin CF shall indemnify and hold harmless each of La Jolla, its Affiliates and the directors, officers, stockholders and employees of such entities and the successors and assigns of any of the foregoing (the “La Jolla Indemnitees”), from and against any and all liabilities, damages, penalties, fines, costs, expenses (including, reasonable attorneys’ fees and other expenses of litigation) (“Liabilities”) from any claims, actions, suits or proceedings brought by a Third Party (a “Third Party Claim”) incurred by any La Jolla Indemnitee, arising from, or occurring as a result of: (a) any material breach of any representations, warranties or covenants by BioMarin CF in Article 15 above; (b) any Products Liability Claim (subject to and shared in accordance with the mechanism set forth in Section 16.5 below); or (c) the gross negligence or willful misconduct of a BioMarin CF Indemnitee; except to the extent such Third Party Claims fall within the scope of La Jolla’s indemnification obligations set forth in Section 16.2 below.

16.2 Indemnification of BioMarin CF. La Jolla shall indemnify and hold harmless each of BioMarin CF, its Affiliates and Sublicensees and the directors, officers and employees of BioMarin CF, its Affiliates and Sublicensees and the successors and assigns of any of the foregoing (the “BioMarin CF Indemnitees”), from and against any and all Liabilities from any Third Party Claims incurred by any BioMarin CF Indemnitee, arising from, or occurring as a result of: (a) any material breach of any representations, warranties or covenants by La Jolla in Article 15 above; (b) any Products Liability Claim (subject to and shared in accordance with the mechanism set forth in Section 16.5 below); or (c) the gross negligence or intentional misconduct of a La Jolla Indemnitee; except to the extent such Third Party Claims fall within the scope of BioMarin CF’s indemnification obligations set forth in Section 16.1 above.

16.3 Procedure. Except with respect to Product Liability Claims subject to Section 16.5 below, a Party that intends to claim indemnification under this Article 16 (the “Indemnitee”) shall promptly notify the other 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 16.3 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, if prejudicial to its ability to defend such action, shall relieve such Indemnitor of any liability to the Indemnitee under this Section 16.3, but the omission to so deliver written notice to the Indemnitor shall not relieve the Indemnitor of any liability that it may have to any Indemnitee otherwise than under this Section 16.3. The Indemnitee under this Section 16.3 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.

- 50 -

16.4 Recalls.

(a) Voluntary and Mandatory Recalls; Decision-Making. To the extent that: (a) any Regulatory Authority in the Territory issues a directive or order that a Product be recalled or withdrawn in any country within the Territory; (b) a court of competent jurisdiction orders a recall or withdrawal of a Product in any country within the Territory, or (c) the JSC determines that the Product should be recalled or withdrawn voluntarily in any country within the Territory, the Parties shall recall or withdraw a Product as set forth in this Section 16.4. As between the Parties, BioMarin CF shall implement and coordinate all activities that the JSC determines are reasonably necessary in connection with such recall or withdrawal of the Product within the Territory, including making all contact with relevant Regulatory Authorities; provided, however, that BioMarin CF shall not take any material action with respect to any such recall without first consulting in good faith with La Jolla and obtaining approval of the JSC, to the extent practicable, and BioMarin CF shall consider in good faith any comments of La Jolla in connection with any aspect of the management of any such recall. In any event, BioMarin CF shall undertake all activities in connection with such recall or withdrawal of a Product within the Territory in accordance with any procedures or instructions of the JSC and, in any event, in a manner designed to minimize any harm to the marketability of the Products and the reputation of each Party. La Jolla shall have the right to participate, upon its request, in any statements relating to such action to the extent feasible in the circumstances, and the Parties shall keep each other informed with respect to the status thereof. At a Party’s request, the other Party shall provide reasonable assistance in conducting such recall, market withdrawal or other corrective actions, including, providing all pertinent records that such Party may reasonably request to assist in effecting such action. For clarity, all matters relating to a withdrawal or recall of a Product in the Asia-Pacific Territory shall be determined, controlled and coordinated by La Jolla.

(b) Costs of Recall. All Out-Of-Pocket Expenses and FTE Costs (each as defined in the Financial Appendix) incurred by a Party for the execution of any recall or withdrawal of the Product (“Recall Costs”) pursuant to Section 16.4(a) above shall be included in the calculation of Profit/Loss pursuant to the Financial Appendix; except to the extent that [****]:

(i) [****];

(ii) [****].

16.5 Products Liability Claims.

(a) Each Party shall notify the other Party as promptly as practicable if any Third Party Claim is commenced or threatened against such Party alleging product liability, product defect, design, packaging or labeling defect, failure to warn, or any similar action relating to the use or safety of a Product in the Territory (“Product Liability Claim”).

- 51 -

(b) Each Party shall cooperate with the other Party in connection with any such Product Liability Claim that is commenced or threatened against the other Party. If a Product Liability Claim is asserted against both Parties, each Party will have the right to designate counsel to defend itself in the Product Liability Claim. If a Product Liability Claim is brought against one Party but not the other Party, the named Party shall control the defense and/or settlement thereof at its own expense with counsel of its choice, subject to this Section 16.5. In such case, the other Party may participate in the defense and/or settlement thereof to the extent related to Products in the Territory at its own expense with counsel of its choice. In any event, the Party that is subject to the Product Liability Claim to the extent related to Products in the Territory (if not asserted against both Parties) agrees to keep the other Party hereto reasonably informed of all material developments in connection with any such Product Liability Claim.

(c) Neither Party shall settle any Product Liability Claim, or make any admissions or assert any position in such Product Liability Claim, in a manner that would adversely affect a Product or the manufacture, use or sale thereof without the prior written consent of the other Party, which shall not be withheld unreasonably.

(d) To the extent a Product Liability Claim is caused by: [****].

16.6 WAIVER OF CERTAIN CLAIMS. THE PARTIES AGREE THAT IN ENFORCING ANY RIGHT TO INDEMNITY UNDER THIS AGREEMENT OR IN MAKING ANY CLAIM FOR BREACH OF THIS AGREEMENT, A PARTY SHALL HAVE NO RIGHT OR CLAIM FOR SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES AND ALL SUCH SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL AND PUNITIVE DAMAGES ARE HEREBY WAIVED; PROVIDED HOWEVER THAT NOTHING IN THIS SECTION 16.6 SHALL BE DEEMED TO LIMIT THE INDEMNIFICATION OBLIGATIONS OF EITHER PARTY UNDER THIS ARTICLE 16 TO THE EXTENT A THIRD PARTY RECOVERS ANY SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES FROM AN INDEMNITEE.

ARTICLE XVII
DISPUTE RESOLUTION

17.1 Determination by CEOS.[****]

17.2 Arbitration Proceedings. Notwithstanding anything to the contrary contained in Section 17.1, if a dispute (the “Dispute”) exists with respect to the approval under Section 4.2 of an Operating Plan/Budget, or any material amendment thereto, and such dispute is submitted to dispute resolution as contemplated by Section 17.1, then if the Chief Executive officer of one Party makes a determination to approve an Operating Plan/Budget over the objection of the Chief Executive Officer of the other Party (the “Objecting Party”) as permitted by Section 17.1, within seven (7) calendar days of such decision the Objecting Party may demand that such Operating Plan/Budget be submitted to arbitration as contemplated by Section 17.3 [****] or (iii) the settlement of a dispute under Section 7.17 shall also be deemed to be a Dispute and shall be resolved by arbitration in accordance with Section 17.3 below.

- 52 -

17.3 Conduct of Arbitration.

(a) General Provisions. The arbitration contemplated by Section 17.2 shall be conducted by the Judicial Arbitration and Mediation Services, Inc. (or its successor entity) (“JAMS”) under its Streamlined Arbitration Rules and Procedures, as modified by this Section 17.3. The arbitration shall be conducted in the English language, by a single arbitrator. If the Parties are unable to agree on an arbitrator, the arbitrator shall be selected in accordance with the JAMS rules, or if the JAMS rules do not provide for such selection, by the chief executive of JAMS. At his or her election, the arbitrator may engage an independent expert with experience in the subject matter of the Dispute to advise the arbitrator, but final decision making authority shall remain in the arbitrator. Each Party shall provide the arbitrator and the other Party with a written report setting forth its position with respect to the substance of the Dispute and may submit a revised report and position to the arbitrator within five (5) business days of receiving the other Party’s report. If so requested by the arbitrator, each Party shall make oral submissions to the arbitrator based on such Party’s written report delivered pursuant to Section 17.3 (provided that the other Party shall have the right to be present during any such oral submissions) and each Party shall comply with any other procedures requested by the arbitrator.

(b) Decision of Arbitrator. In the case of a Dispute as to an Operating Plan/Budget or any modification thereof, after reviewing the written submissions and hearing any oral submissions of the Parties, the arbitrator shall determine whether the Operating Plan/Budget that is the subject of the Dispute is materially unfair to the Objecting Party based upon the criteria set forth in Section 17.2. In any case, the Parties agree that the decision of the arbitrator shall be the sole, exclusive and binding remedy between them regarding any Dispute presented to the arbitrator. The arbitration proceedings and the decision of the arbitrator shall be deemed Confidential Information of both Parties under Article 10 above.

(c) Location; Costs. Unless otherwise mutually agreed upon by the Parties, the arbitration proceedings shall be conducted in San Francisco, California. The Parties agree that they shall share equally the cost of the arbitration filing and hearing fees, the cost of the independent expert retained by the arbitrator and the cost of the arbitrator and administrative fees of JAMS. Each Party shall bear its own costs and attorney’ and witnesses’ fees and associated costs and expenses.

(d) Timetable for Completion in Thirty (30) Days. In any arbitration under this Section 17.3, the Parties and the arbitrator shall use all reasonable efforts to resolve such Dispute within thirty (30) days after the section of the arbitrator, or as soon thereafter as is reasonably practicable.

- 53 -

ARTICLE XVIII
GENERAL PROVISIONS

18.1 Force Majeure. If the performance of any part of this Agreement by either Party is prevented, restricted, interfered with or delayed by an occurrence beyond the reasonable control of the affected Party, including, fire, flood, embargo, power shortage or failure, acts of war, insurrection, riot, terrorism, strike, lockout or other labor disturbance or acts of God (a “Force Majeure Event”), the Party so affected shall, upon giving written notice to the other Party, be excused from such performance to the extent of such prevention, restriction, interference or delay; provided that the affected Party shall use its reasonable efforts to avoid or remove such causes of non-performance and shall continue performance with the utmost dispatch whenever such causes are removed. Neither Party shall be entitled to rely on a Force Majeure Event to relieve it from an obligation to pay money (including any interest for delayed payment) which would otherwise be due and payable under this Agreement.

18.2 Governing Law; Venue. This Agreement, and all questions regarding their respective validity or interpretation, or the breach or performance of this Agreement, shall be governed by, and construed and enforced in accordance with, the laws of the State of California, without reference to conflict of law principles. Except for Disputes expressly provided to be determined pursuant to Section 17.2 and 17.3 above, any dispute as to the performance, enforcement, termination, validity or interpretation of this Agreement shall be brought only in a federal court of competent jurisdiction (or a state court if no federal court has jurisdiction) located in Northern District of California and the Parties hereby submit to the exclusive jurisdiction and venue of such courts.

18.3 Waiver of Breach. Except as otherwise expressly provided in this Agreement, as applicable, any term of this Agreement may be waived only by a written instrument executed by a duly authorized representative of the Party waiving compliance. The delay or failure of either Party at any time to require performance of any provision of this Agreement shall in no manner affect such Party’s rights at a later time to enforce the same. No waiver by either Party of any condition or term in any one or more instances shall be construed as a further or continuing waiver of such condition or term or of another condition or term.

18.4 Modification. No amendment or modification of any provision of this Agreement shall be effective unless in writing signed by a duly authorized representative of each Party. No provision of this Agreement shall be varied, contradicted or explained by any oral agreement, course of dealing or performance or any other matter not set forth in an agreement in writing and signed by a duly authorized representative of each Party.

18.5 Severability. In the event any provision of this Agreement should be held invalid, illegal or unenforceable in any jurisdiction, the Parties shall negotiate in good faith a valid, legal and enforceable substitute provision that most nearly reflects the original intent of the Parties and all other provisions of this Agreement shall remain in full force and effect in such jurisdiction. Such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction. [****]

18.6 Entire Agreement. This Agreement (including Financial Appendix and the Exhibits attached hereto) and the Securities Purchase Agreement constitute the entire understanding between the Parties as of the Effective Date with respect to the subject matter hereof and supersede all prior or contemporaneous agreements, understandings or representations, either written or oral, between La Jolla and BioMarin CF with respect to such subject matter, including the Prior Agreement.

- 54 -

18.7 Notices. Unless otherwise agreed by the Parties or specified in this Agreement, all communications between the Parties relating to, and all written documentation to be prepared and provided under, this Agreement shall be in the English language. Any notice required or permitted under this Agreement shall be in writing in the English language and shall be sufficient if: (a) delivered personally; (b) sent by registered or certified mail (return receipt requested and postage prepaid); (c) sent by express courier service providing evidence of receipt, postage pre-paid where applicable; or (d) sent by facsimile (receipt verified and a copy promptly sent by another permissible method of providing notice described in paragraphs (b), (c) or (d) above), to the following addresses of each Party or such other address for a Party as may be specified by like notice:

To La Jolla:	With a copy to:
La Jolla Pharmaceutical Company	Wilson, Sonsini, Goodrich & Rosati
6455 Nancy Ridge Drive	650 Page Mill Road
San Diego, CA 92121	Palo Alto, CA 94304
Telephone: (858) 452-6600	Telephone: (650) 493-9300
Facsimile: (858) 626-2851	Facsimile: (650) 493-6811
Attention: Chief Executive Officer	Attention: Kenneth A. Clark
	Goodwin Procter, LLP
	53 State Street
	Boston, MA 02109
	Fax: (617) 523-1231
	Attention: Mitchell Bloom and Ryan A. Murr
To BioMarin CF:	With a copy to:
BioMarin CF Limited	BioMarin Pharmaceutical Inc.
Dominion House	105 Digital Drive
60 Montrose Avenue	Novato, CA 94949
Nassau, New Providence, The Bahamas	Telephone: (415) 506-6307
Telephone: (415) 506-6307	Facsimile: (415) 506-6425
Facsimile: (415) 382-7889	Attention: General Counsel
Attention: Managing Director

Any notice required or permitted to be given concerning this Agreement shall be effective upon receipt by the Party to whom it is addressed or within seven (7) days of dispatch whichever is earlier.

- 55 -

18.8 Assignment. Except as otherwise expressly provided herein, either Party may assign, license or otherwise transfer this Agreement, or any of its rights or obligations hereunder, to an Affiliate or to any Third Party without the written consent of the other Party hereto; provided that (a) the assigning Party provides notice of such assignment to the other Party; (b) the Affiliate or Third Party to whom this Agreement, or any of the assigning party’s rights or obligations are assigned has sufficient financial resources at the time of such assignment to allow such Affiliate or Third Party to perform the assigning Party’s obligations under this Agreement (or the portion thereof being assigned) as fully and expeditiously as the assigning Party; and (c) the entity to whom this Agreement, or any such rights or obligations are assigned, assumes in writing this Agreement, or such rights and obligations being assigned; which writing shall be in the form of a novation that relieves the assigning Party of all of its rights, obligations and liabilities under this Agreement (or the portion of this Agreement being assigned), effective on and from the date of such assignment. In the event of any such assignment by a Party, the other Party agrees to cooperate with the assigning Party and to take such actions as may be required (including executing any documents) to give effect to the foregoing. Notwithstanding the foregoing, with respect to any assignment or other transfer of this Agreement (or any part thereof) to an Affiliate, if the non-assigning Party reasonably believes such assignment or other transfer could result in material adverse tax consequences to the non-assigning Party, such assignment or other transfer shall not be made without the non-assigning Party’s consent (which shall not be unreasonably withheld). If an Affiliate of a Party books sales of Products in any country of the Territory, or receives any cash payments derived from Products in the Territory, then such Affiliate shall agree in writing to be bound by the terms and conditions of this Agreement as applicable to such Affiliate. Subject to the foregoing, this Agreement shall inure to the benefit of each Party, its successors and permitted assigns. Any assignment of this Agreement in contravention of this Section 18.8 shall be null and void.

18.9 No Partnership or Joint Venture. The Parties are and shall at all times be independent contractors. In performing under this Agreement, neither Party is an agent, employee, employer, joint venturer, or partner. Nothing in this Agreement is intended, or shall be deemed, to establish a joint venture, partnership or other fiduciary relationship between La Jolla and BioMarin CF. Neither Party to this Agreement shall have any express or implied right or authority to assume or create any obligations on behalf of, or in the name of, the other Party, or to bind the other Party to any contract, agreement or undertaking with any Third Party.

18.10 Interpretation. The captions to the several Articles and Sections of this Agreement are not a part of this Agreement, but are included for convenience of reference and shall not affect its meaning or interpretation. In this Agreement: (a) the word “including” shall be deemed to be followed by the phrase “without limitation” or like expression; (b) the singular shall include the plural and vice versa; and (c) masculine, feminine and neuter pronouns and expressions shall be interchangeable. Each accounting term used herein that is not specifically defined herein shall have the meaning given to it under U.S. Generally Accepted Accounting Principles, or other generally accepted cost accounting principles in the United States, but only to the extent consistent with its usage and the other definitions in this Agreement.

- 56 -

18.11 Export Laws. Notwithstanding anything to the contrary contained herein, all obligations of La Jolla and BioMarin CF are subject to prior compliance with the export regulations of the United States, the European Union or any other relevant country and such other laws and regulations in effect in the United States, the European Union or any other relevant country as may be applicable, and to obtaining all necessary approvals required by the applicable agencies of the governments of the United States, the countries within the European Union and any other relevant countries. La Jolla and BioMarin CF shall cooperate with each other and shall provide assistance to the other as reasonably necessary to obtain any required approvals.

18.12 Counterparts; Facsimile Signatures. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Signatures provided by facsimile transmission shall be deemed to be original signatures.

[Remainder of page intentionally left blank; signature page follows.]

- 57 -

IN WITNESS WHEREOF, the Parties have caused this Development and Commercialization Agreement to be executed as of the date first set forth above.

LA JOLLA PHARMACEUTICAL COMPANY			BIOMARIN CF LIMITED
By:	/s/ Deirdre Y. Gillespie		By:	/s/ G. Eric Davis
	Name:	Deirdre Y. Gillespie, M.D.		Name:	G. Eric Davis
	Title:	President and Chief Executive Officer		Title:	Managing Director

Exhibit List

Exhibit 1.4 — Asia-Pacific Territory

Exhibit 1.5 — ASPEN Study

Exhibit 1.9 — Compound

Exhibit 1.15 — Existing In-License

Exhibit 1.25 — La Jolla Patents

Exhibit 1.26 — La Jolla Senior Management Team

Exhibit 1.36 — Product Trademarks

Exhibit 1.41 — Securities Purchase Agreement

Exhibit 4.2B — Initial Development Plan/Budget

Exhibit 4.2E — Operating Plan/Budget Requirements

Exhibit 6.1B — Joint US Marketing Activities

Exhibit 9.1A — Manufacturing

Exhibit 11.6 — Existing Third Party Technology and Existing In-Licenses Provisions

Exhibit 15.2 — Exceptions to La Jolla’s Representations and Warranties

Exhibit 15.2I — Form of Consent of Existing In-License Licensor

Appendix List

Appendix A — Financial Appendix

Exhibit 1.4

Asia-Pacific Territory

Territories of East Asia, Southeast Asia, South Asia, and Oceania as follows:

East Asia: Mainland China, Hong Kong, Japan, Macau, Mongolia, North Korea, South Korea, Taiwan

Southeast Asia: Brunei, Cambodia, East Timor, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam

South Asia: Bangladesh, British Indian Ocean Territory, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka, Afghanistan

Oceania: New Zealand, Australia, Papua New Guinea, and neighboring islands in the Pacific Ocean, Melanesia, Micronesia, Polynesia

Exhibit 1.5

ASPEN Study

Protocol LJP 394-90-14: A Randomized, Double-Blind, Placebo-Controlled, Three-Arm, Parallel-Group, Multicenter, Multinational Safety and Efficacy Trial of 300 mg, and 900 mg of Abetimus Sodium In Systemic Lupus Erythematosus (SLE) Patients with a History of Renal Disease

Protocol LJP 394-90-18: A Double-Blind Randomized Cross-Over Trial to define the ECG effects of ABETIMUS using a Clinical and a Supratherapeutic Single Dose compared to Placebo and Moxifloxacin (a Positive Control) in Healthy Men and Women: A Thorough ECG ICH E14 Trial

Exhibit 1.9

Compound

Exhibit 1.15

Existing In-License

Exclusive License Agreement between The Johns Hopkins University and La Jolla (JHU Ref: DM-2179), dated November 25, 2002, as amended (the “JHU License”)

Exhibit 1.25

La Jolla Patents

ISSUED PATENTS
AS OF DECEMBER 8, 2008

Patent No.

US 5,606,047

US 5,633,395

US 7,115,581

US 7,351,855

US 5,276,013

US 5,552,391

PT 100691

CA 2073846

IE 82814

EP 523978¹

JP 3836888

EP 642798²

JP 2899111

AU 686911

AU 677710

1	Validated in AT, BE, DK, FR, DE, GR, IT, LU, MC, NL, PT, ES, SE, CH and GB.
2	Validated in AT, BE, CH, DE, DK, ES, FR, GB, GR, IE, IT, LU, NL, PT and SE. IT patent status being confirmed. See Exhibit 15.2 below.

ISSUED PATENTS
AS OF DECEMBER 8, 2008

Patent No.

CN 941939936

FI 117322³

KR 361933

NO 319084

AU 703715

JP 3188243

HK 1014240

HK 1014369

JP 3488435

CN ZL2004100621268

US 5,786,512

US 5,726,329

US 5,874,552

US 7,081,242

EP 0438259⁴

IE 82012

CA 2034197

PT 96503

AU 640730

3	Patent abandoned for failure to pay annuity. Petition to reinstate in preparation. See Exhibit 15.2 below.
4	Validated in AT, BE, CH, DE, DK, FR, GB, GR, IT, LU, NL, ES and SE.

ISSUED PATENTS
AS OF DECEMBER 8, 2008

Patent No.

FI 107514

NO 303940

Licensed Patents

US 6,022,544

US 6,375,951

US 6,340,460

US 5,126,131

US 7,083,959

PENDING PATENT APPLICATIONS
AS OF DECEMBER 8, 2008

Patent Application No.

US 12/100,356

CA 2171434

EP 070049655

HK 071088550

US 11/081,309

CA 2,391,944

MX PA/a/2002/005236

NO 2002-2441

EP 009922527

PENDING PATENT APPLICATIONS
AS OF DECEMBER 8, 2008

Patent Application No.

US 10/219,238

US 12/263,239

CA 2355348

US 10/748,541

US 11/562,174

US 10/814,555

US 11/565,467

US 11/373,699

Exhibit 1.26

La Jolla’s Senior Management Team

[****]

Exhibit 1.36

Product Trademarks

Mark/Serial Number/Registration Number	Country
RIQUENT Serial No: 78/102,996 Reg. No: 2,787,557	United States
RIQUENT Serial No: 78/947,249 Reg. No: 3,318,222	United States
RIQUENT Serial No: 1144359 Reg. No: TMA624679	Canada
RIQUENT Serial No: 002675601 Reg. No: 002675601	Europe *
RIQUENT Serial No: IR954406 Reg. No: IR954406	International (designating Europe)*

^* European Community Trademark Countries: Austria, Benelux (Belgium, The Netherlands & Luxembourg), Bulgaria, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Portugal, Romania, Spain, Sweden, United Kingdom, Cyprus, The Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia.

Exhibit 1.41

Securities Purchase Agreement

(See attached.)

Exhibit 4.2B

Initial Development Plan/Budget

For purposes of this Exhibit 4.2B, “Lightning” shall mean La Jolla and “Bordeaux” shall mean BioMarin CF.

[****]

Exhibit 4.2E

Operating Plan/Budget Requirements

[****]

Exhibit 6.1B

Joint US Marketing Activities

[****]

Exhibit 9.1A

Manufacturing

[****]

Exhibit 11.6

Existing In-License Provisions

Pursuant to Section 2.2 of the Existing In-License (as defined in Section 1.15), BioMarin CF agrees to be bound by, and comply with, Section 5.2 of the Existing In-License, the text of which is included below and incorporated herein by reference, to the extent applicable to BioMarin CF in its capacity as a sublicensee thereunder. In addition, BioMarin CF, in its capacity as a sublicensee under the Existing In-License, specifically agrees to comply with the following provisions of the Existing In-License: (a) the confidentiality obligations under Sections 8.1 and 8.2, with respect to any confidential information of JHU disclosed to BioMarin CF; and (b) the patent acknowledgment obligations under Section 5.4 to mark all patented Products (as defined in the Existing In-License) in a manner conforming to the patent laws and practices of applicable countries. Further, pursuant to Section 9.4 of the Existing In-License, BioMarin CF, in its capacity as a sublicensee under the Existing In-License, shall become a direct licensee of JHU upon the termination of the Existing In-License.

BioMarin CF acknowledges and agrees that, pursuant to Article 4 of the Existing In-License: (i) JHU has the right to Prosecute and Maintain all La Jolla Patents covered by the Existing In-License; and La Jolla’s (and BioMarin CF’s) only rights with respect to the Prosecution and Maintenance of such Patents are to receive the information described in Section 4.1 of the Existing In-License; and (ii) the rights of BioMarin CF to enforce the La Jolla Patents covered by the Existing In-License shall be subject to the provisions of Sections 4.2, 4.3 and 4.4 of the Existing In-License.

Provisions extracted from Existing In-License

Capitalized terms in the following provisions of the Existing In-License shall have the meaning set forth in the Existing In-License.

“5.2 Records. Company shall make and retain, for a period of three (3) years following the period of each report required by Paragraph 5.1, true and accurate record, files and books of account containing all the data reasonably required for the full computation and verification of sales and other information required in Paragraph 5.1. Such books and records shall be in accordance with generally accepted accounting principles consistently applied. Company shall permit the inspection of such records, files and books of account by JHU or its independent agents reasonably acceptable to Company during regular business hours upon ten (10) business days’ written notice to Company. Such inspection shall not be made more than once each calendar year. JHU or such agents shall be under a confidentiality obligation to Company to disclose to JHU only (i) the accuracy of NET SALES and NET SERVICE REVENUES reported and the basis for royalty payments made to JHU under this Agreement, and (ii) the difference, if any, such reported and paid amounts vary from amounts determined as a result of the examination. A copy of any report prepared by such independent accounting firm shall be delivered to Company. All costs of such inspection and copying shall be paid by JHU, provided that if any such inspection shall reveal that an error has been made in the amount equal to ten percent (10%) or more of such payment, such costs shall be borne by Company. Company shall include in any agreement with its AFFILIATED COMPANIES or its SUBLICENSEE which permits such party to make, use or sell the LICENSED PRODUCT or provide LICENSED SERVICE, a provision requiring such party to retain records of sales of LICENSED PRODUCT and records of LICENSED SERVICE and other information as required in Paragraph 5.1 and permit JHU and its independent agents reasonably acceptable to Company’s AFFILIATED COMPANIES or SUBLICENSEE to inspect such records as required by the Paragraph.”

Exhibit 15.2

Exceptions to La Jolla’s Representations and Warranties

1. La Jolla was informed by its outside annuity provider that the Italian Patent based on EP 642798 lapsed due to non-payment of a European patent post-granting fee. La Jolla’s European and Italian counsel have informed La Jolla’s patent counsel that all fees appear to have been paid and have produced an official receipt of payment for the 15^th annuity that was due by December 30, 2007 or by June 30, 2008 with a fine. Furthermore, Eponline (an electronic service associated with the European Patent Office) indicates that the Italian Patent based on EP 642798 has lapsed, which La Jolla believes is incorrect or reflects that the Italian Patent Office has not updated the listing. La Jolla’s patent counsel has instructed the European and Italian patent counsel to forward the receipt of payment of annuity to the Italian Patent Office, confirm with the Italian Patent Office that the patent is active and in good standing and to request that the Italian Patent Office correct their status data for this patent and communicate the same to the EPO register.

2. Finish patent No. 117322 was inadvertently abandoned for failure to pay a post-grant annuity. La Jolla’s patent counsel has been informed that it is possible under Finnish law to reinstate a lapsed patent if certain criteria are met. La Jolla’s patent counsel is working with Finnish patent counsel to prepare a petition to reinstate the lapsed patent.

Exhibit 15.2I

Form of Consent of Existing In-License Licensor

(See attached.)

[LJP LETTERHEAD]

December 20, 2008

VIA EMAIL AND FEDERAL EXPRESS

Andrea Doering, Ph.D., MBA
Portfolio Director
Johns Hopkins Technology Transfer
100 N Charles Street, 5th Floor
Baltimore MD 21201

Re: Exclusive License Agreement between The Johns Hopkins University (“JHU”) and La Jolla Pharmaceutical Company (“LJP”) effective as of November 25, 2002, as amended (“License Agreement”)

Dear Andrea:

As we have recently discussed, LJP is proposing to enter into a collaboration agreement with respect to LJP’s product known as RIQUENT^® with BioMarin Pharmaceutical Inc. or one of its affiliates (“BioMarin”), being the party identified as BORDEAUX in the documents that I provided to by email dated October 30, 2008. The final terms of the transaction between LJP and BioMarin are as outlined in the Development and Commercialization Agreement and the Securities Purchase Agreement that I provided to you by email dated December 20, 2008.

JHU’s consent may be required in connection with the transaction between LJP and BioMarin, and LJP hereby requests such consent. In particular, LJP requests JHU’s approval for: (a) the grant of a sublicense by LJP to BioMarin under LJP’s rights under the PATENT RIGHTS, pursuant to Section 2.2 of the License Agreement; and (b) the assignment by LJP to BioMarin, pursuant to Section 10.8 of the License Agreement, of all of LJP’s rights and obligations under the License Agreement if LJP determines that such an assignment to BioMarin is appropriate and so long as BioMarin retains rights to LJP’s product known as RIQUENT^® at the time of such assignment.

Please confirm JHU’s approval and consent to the transaction between LJP and BioMarin, including the specific items noted above, by signing, or arranging for another appropriate authorized representative of JHU to sign, the attached copy of this letter. I would appreciate if you would return one (1) original executed copy of this letter to me at the address indicated above at your earliest convenience.

JHU’s execution of this letter will also confirm JHU’s agreement to treat the documents provided to you on October 30, 2008 and December 20, 2008, as well as the contents of this letter, as confidential information of LJP and subject to the terms of Article 8 of the License Agreement.

We greatly appreciate all your assistance with this matter.

Yours sincerely,

Niv Caviar
EVP, Chief Business and Financial Officer

CONSENTED AND AGREED BY THE JOHNS HOPKINS UNIVERSITY

By:
	Name:
	Title:
	Date:

Appendix A

Financial Appendix

[****]

EX-10.2

EXHIBIT 10.2

EXECUTION VERSION

CONFIDENTIAL TREATMENT REQUESTED

Redacted Portions are indicated by [****]

LA JOLLA PHARMACEUTICAL COMPANY

SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of January 4, 2009, is executed by and between La Jolla Pharmaceutical Company, a Delaware corporation (the “Company”), and BioMarin Pharmaceutical Inc., a Delaware corporation (the “Purchaser”).

RECITALS

WHEREAS, the Purchaser and the Company are parties to a Development and Commercialization Agreement dated as the date hereof relating to the development and commercialization of Riquent^® (the “Collaboration Agreement”);

WHEREAS, as partial consideration for certain obligations pursuant to the Collaboration Agreement, the Purchaser and the Company have agreed that the Company will issue and sell to the Purchaser and the Purchaser will purchase from the Company shares of the Company’s Series B-1 Convertible Preferred Stock, $0.01 par value per share, and possibly shares of the Company’s Series B-2 Convertible Preferred Stock and Series B-3 Convertible Preferred Stock, each $0.01 par value per share (the Series B-1 Convertible Preferred Stock, the Series B-2 Convertible Preferred Stock and the Series B-3 Convertible Preferred Stock being collectively referred to hereinafter as the “Series B Convertible Preferred Stock”), at such times or in connection with such events as are specified herein and in Sections 7.2-7.5 of the Collaboration Agreement;

WHEREAS, the shares of Series B Convertible Preferred Stock issued to the Purchaser shall have the rights, preferences and privileges and be convertible into shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”) all as specified in each series’ applicable certificate of designation, the form of which shall be equivalent to the Certificate of Designation for the Series B-1 Convertible Preferred Stock attached hereto as Exhibit A (the “Certificate of Designation”); and

WHEREAS, the Company and the Purchaser are entering into this Agreement to reflect the terms and conditions with respect to the Purchaser’s purchase of shares of Series B Convertible Preferred Stock from the Company (any such shares as purchased by the Purchaser are hereinafter referred to as the “Shares”)).

NOW, THEREFORE, in respect of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as set forth below. Any capitalized terms that are not defined herein shall have the meaning defined for such term in the Collaboration Agreement.

AGREEMENT

SECTION 1. PURCHASE OF SHARES

1.1 Authorization of Sale. On or prior to the date of this Agreement, the Company’s Board of Directors (the “Board”) shall have authorized the sale and issuance of the Shares and the transactions contemplated by this Agreement, subject to the terms and conditions contained herein.

1.2 Purchase and Sale. Subject to the terms and conditions of this Agreement and the Collaboration Agreement, on the date hereof, the Company agrees to sell to the Purchaser, and the Purchaser agrees to purchase from the Company, 3,391,035 Shares (the “Initial Investment”) at a purchase price per share of $2.21171, in the case of the Initial Closing, or, in the case of a Subsequent Closing (as defined below) at a price per common share equivalent (based on the conversion ratio provided for in the applicable Certificate of Designation, as adjusted) equal to one hundred ten percent (110%) of the average closing price of the Common Stock of the Company as reported on the NASDAQ stock market or such other reporting service as the stock is then quoted if not then quoted on NASDAQ (and if not then traded at the value determined by an investment bank selected consistent with the provisions of Section 14.3 of the Collaboration Agreement), for the ten (10) consecutive trading days commencing five (5) trading days immediately prior to the date the Company has publicly announced the event that triggered such payment (i.e., the P-Value Achievement, or in the case of such payment where there is no P-Value Achievement, the Company’s first public announcement of the results of the Second Interim Efficacy Analysis or the first public announcement of the approval of an NDA for the Product under Section 7.13 of the Collaboration Agreement (the “Announcement of Results”)). Notwithstanding the foregoing, in no event will the price per common share equivalent for the Shares issued in a Subsequent Closing (based on the conversion ratio provided for in the applicable Certificate of Designation, as adjusted) be less than $0.73724.

1.3 Purchase and Sale of Additional Shares.

(A) The Company has granted the Purchaser the right to purchase shares of Series B-2 Convertible Preferred Stock and Series B-3 Convertible Preferred Stock pursuant to the Collaboration Agreement. If the Purchaser exercises its right to purchase such additional Shares then, subject to the terms and conditions of this Agreement, the Company agrees to sell to the Purchaser, and the Purchaser agrees to purchase from the Company, that number of Shares determined by dividing the amount of the dollar investment by the Purchaser by the purchase price per share calculated in accordance with Section 1.2 of this Agreement. Each closing relating to the purchase of Shares following the Initial Closing shall be defined herein as a “Subsequent Closing,” and the Initial Closing and the Subsequent Closings shall be defined herein as the “Closings.”

-2-

(B) Notwithstanding anything to the contrary set forth in subsection 1.3(A), if the number of Shares agreed to be purchased by the Purchaser at any Subsequent Closing, when coupled with all other shares of Series B Convertible Preferred Stock owned by the Purchaser, would exceed the maximum number of Shares allowed by NASDAQ Marketplace Rule 4350(i)(1)(B) without the approval of a majority of the total votes cast on the proposal by the stockholders of the Company, and such stockholder approval has not yet been obtained prior to such Subsequent Closing then at the relevant Closing, the Purchaser shall only be obligated to purchase that number of Shares permissible without stockholder approval under NASDAQ Marketplace Rule 4350(i)(1)(B). The Purchaser shall thereafter be obligated to purchase any Shares originally agreed to be purchased but not so purchased at such Closing due to the provisions of the previous sentence, subject to reduction as provided for in the next sentence, as promptly as practicable following such time as stockholder approval has been obtained by the Company (but in no event later than thirty (30) days following such approval). If the Company’s stockholders do not approve all purchases of Shares in accordance with NASDAQ Marketplace Rule 4350(i)(1)(B) on or before July 1, 2009, then any pending or future obligations to purchase Shares under this Agreement in excess of the maximum number of shares allowable under NASDAQ Marketplace Rule 4350(i)(1)(B) without stockholder approval shall be terminated or disallowed and the amounts payable to the Company under Sections 7.2, 7.3, 7.4 and 7.13 of the Collaboration Agreement shall be correspondingly reduced by the amount of money the Purchaser was entitled to invest in the Company but could not due to the limitations imposed by NASDAQ Marketplace Rule 4350(i)(1)(B) without any further obligation of the Purchaser to provide such monies to the Company. By way of example, if under Section 7.3(a)(ii)(x) of the Collaboration Agreement the Purchaser receives notice of a Non-Futile Determination and the Purchaser determines to continue its participation under the Collaboration Agreement by paying to the Company $22,500,000, including $5,000,000 in the form of an equity investment, but because the Company has not yet received stockholder approval under NASDAQ Marketplace Rule 4350(i)(1)(B), the Purchaser can only purchase $3,000,000 of Shares, then the Purchaser shall purchase the $3,000,000 of Shares and the Purchaser’s obligation to purchase the additional $2,000,000 of Shares shall be deferred until such stockholder approval is obtained. Notwithstanding the foregoing, if such stockholder approval is not obtained by July 1, 2009, then the Purchaser’s obligation under Section 7.3(a)(ii)(x) of the Collaboration Agreement shall be reduced from $22,500,000 to $20,500,000 and the Purchaser shall have been deemed to satisfy in full its payment obligation to the Company under such provision and if thereafter under Section 7.4 of the Collaboration Agreement the Purchaser receives notice of a P-Value Achievement, the Purchaser’s payment obligation shall be reduced from $55,000,000 to $40,000,000 and the right to pay a portion of such amount by making an equity investment shall be extinguished.

SECTION 2. CLOSING, DELIVERY AND PAYMENT

2.1 Initial Closing. The initial closing of the sale and purchase of the Initial Investment (the “Initial Closing”) shall take place on January 20, 2009, at the offices of Wilson Sonsini Goodrich & Rosati, Professional Corporation, 650 Page Mill Road, Palo Alto, California 94304, or at such other time or place, if any, as the Company and the Purchaser may mutually agree. As used herein, a “Business Day” means any day which is not (i) a Saturday or a Sunday, or (ii) a day on which banking institutions in California are authorized or obligated by law or regulation to close, and the “Closing Date” shall mean the date on which the applicable Closing, takes place.

-3-

2.2 Subsequent Closings. In accordance with the Collaboration Agreement, if any Subsequent Closing occurs, the purchase and sale of that number of Shares calculated in accordance with Section 7.5 of the Collaboration Agreement shall take place at the offices of Wilson Sonsini Goodrich & Rosati, Professional Corporation, 650 Page Mill Road, Palo Alto, California 94304 within fifteen (15) Business Days (subject to the closing conditions in Section 5 being satisfied) following receipt by the Company of the written notice specified in Section 7.5 of the Collaboration Agreement, or at such other place and/or time, if any, as the Company and the Purchaser may mutually agree.

2.3 Delivery. At each Closing, subject to the terms and conditions hereof, the Company will deliver to the Purchaser a certificate representing the number of Shares to be purchased by the Purchaser, against payment of the purchase price therefor in immediately available funds by check or wire transfer to an account designated by the Company.

SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

As a material inducement to the Purchaser to enter into and perform its obligations under this Agreement, the Company hereby represents and warrants to the Purchaser as of the date hereof, and with respect to a Subsequent Closing, as of the Closing Date thereof (except for representations and warranties that speak only as of a specific date (which shall true and correct as of such date)), as follows:

3.1 Organization and Standing. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has full corporate power and authority to conduct its business as currently conducted and to enter into and perform this Agreement, to issue Shares being purchased by the Purchaser at each Closing and to carry out the transactions contemplated by this Agreement. The Company is duly qualified or otherwise authorized to do business as a foreign corporation or other organization and is in good standing as such in every jurisdiction in which the failure to so qualify would (i) have a material adverse effect on the business, assets, liabilities (contingent or otherwise), operations, condition (financial or otherwise) and results of operations of the Company and the Subsidiary, taken as a whole, or (ii) prevent or adversely affect the enforceability or binding effect of this Agreement or the ability of the Company to perform its obligations under this Agreement (a “Company Material Adverse Effect”).

3.2 Subsidiary. As of the date hereof, the Company has one wholly-owned subsidiary, La Jolla Limited (the “Subsidiary”), which is incorporated in England. All of the outstanding shares of capital stock of the Subsidiary and any other subsidiary established by the Company after the date hereof are duly and validly authorized, are validly issued and are fully paid and nonassessable, have been offered, issued, sold and delivered in compliance in all material respects with applicable foreign, federal and state securities laws, and are owned by the Company free and clear of any Security Interest (as defined below).

-4-

3.3 Issuance of Shares. The issuance, sale and delivery of all Shares to be sold by the Company at each Closing (only with respect to Shares issued in such Closing) in accordance with this Agreement have been duly authorized by all necessary corporate action on the part of the Company. Each Share when issued, sold and delivered in accordance with the provisions of this Agreement will be duly and validly issued, fully paid and nonassessable, free of all liens, claims and encumbrances and will not be issued in violation of any co-sale, right of first refusal, preemptive rights or any other similar rights of stockholders. The Company has reserved from its duly authorized capital stock a number of shares of Common Stock at least equal to the amount of Common Stock issuable upon conversion of the Shares (only with respect to Shares issued in such Closing) in accordance with the terms specified in the Certificate of Designation applicable to such Shares. Additionally, as of the Initial Closing, the Company has reserved from its duly authorized capital stock 37,301,387 shares of Common Stock that may be issued upon conversion of the Shares purchased at the Initial Closing as well as Shares that may be issued at any Subsequent Closing (based upon an assumed issue price equal to the floor price established in Section 1.2).

3.4 Authority for Agreement. The Company has full corporate power and authority to execute and deliver this Agreement, to issue all Shares being purchased by the Purchaser at each Closing (only with respect to Shares issued in such Closing) and to perform its other obligations hereunder and thereunder. The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action by the Company and, when executed and delivered by the Company, this Agreement will be the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.

3.5 No Conflict. The execution, delivery and performance of this Agreement, the issuance of all Shares being purchased by the Purchaser at each Closing (only with respect to Shares issued in such Closing) and the consummation of the other transactions contemplated hereby by the Company including the conversion of the Shares into shares of Common Stock will not (a) conflict with or violate any provision of the Company’s Certificate of Incorporation (as currently in effect, the “Certificate”) or its corporate By-laws (as currently in effect, the “By-Laws”), or (b) conflict with, result in a breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice, consent or waiver under, any material contract, lease, sublease, license, sublicense, franchise, permit, indenture, agreement or mortgage for borrowed money, instrument of indebtedness, Security Interest (as defined below) or other material arrangement to which the Company or the Subsidiary is a party. For purposes of this Agreement, “Security Interest” means any mortgage, pledge, security interest, encumbrance, charge, lien or similar right (whether arising by contract or by operation of law).

-5-

3.6 Consents. No consent, permit, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any court, arbitrational tribunal, administrative agency or commission or other governmental or regulatory authority or agency, including any Self-Regulatory Organization (including NASDAQ) (each of the foregoing is hereafter referred to as a “Governmental Entity”) or any other Person is required to be made or obtained by the Company or any of its subsidiaries in connection with the offer, issuance, sale and delivery of all Shares being purchased by the Purchaser in each Closing (only with respect to Shares issued at such Closing) or the other transactions to be consummated hereunder, as contemplated by this Agreement, including the conversion of the Shares into shares of Common Stock, except for any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”), such filings as shall have been made prior to and shall be effective on and as of the Initial Closing, and with respect to a Subsequent Closing, as of the Closing Date thereof, and such filings required to be made after the Initial Closing, and with respect to a Subsequent Closing, after the Closing Date thereof, under applicable federal and state securities laws. Based in part on the representations made by the Purchaser in Section 4 of this Agreement, the offer and sale of Shares to the Purchaser will be in compliance with applicable federal and state securities laws.

3.7 No Solicitation or Advertisement. Neither the Company nor the Subsidiary nor any person acting on their behalf has engaged, in connection with the offering or sale of Shares, in any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act, as defined below.

3.8 Securities Act Registration. Assuming that the representations and warranties of the Purchaser contained herein are true, it is not necessary in connection with the offer, sale and delivery of Shares, in the manner contemplated by this Agreement to register the Shares under the Securities Act of 1933, as amended (the “Securities Act”) or under applicable state securities or Blue Sky laws regulating the issuance or sale of securities.

3.9 Capitalization. As of the date hereof, the authorized capital stock of the Company consists of 225,000,000 shares of Common Stock and 8,000,000 shares of Preferred Stock. As of September 30, 2008, the issued and outstanding capital stock of the Company consists of 55,421,634 shares of Common Stock. The shares of issued and outstanding capital stock of the Company have been duly authorized and validly issued, are fully paid and nonassessable and have not been issued in violation of any state or federal laws, rules or regulations, or in violation of (and are not otherwise subject to) any preemptive or other similar rights. Options and warrants to purchase an aggregate of 14,061,010 shares of Common Stock were outstanding as of September 30, 2008. Except as disclosed in or contemplated by the SEC Filings, as defined below, the Company does not have outstanding any options to purchase, or any preemptive rights or other rights to subscribe for or to purchase, any securities or obligations convertible into, or any contracts or commitments to issue or sell, shares of its capital stock or any such options, rights, convertible securities or obligations other than options granted under the Company’s stock option plans.

3.10 SEC Filings. The Company is a reporting company and has filed all reports required to be filed by it under the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including pursuant to Section 13(a), 14(a) or 15(d) thereof, or the rules and regulations thereunder, for the three years preceding the date hereof (the foregoing materials and any materials incorporated therein by reference being collectively referred to herein as the “SEC Filings”) on a timely basis or has received a valid extension of such time of filing or waiver thereof and has filed any such SEC Filings prior to the expiration of any such extension. As of their respective dates, the SEC Filings complied in all material respects with the requirements of the Exchange Act and the Securities Act and the rules and regulations of the SEC promulgated thereunder, and none of the SEC Filings, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The SEC Filings, for purposes of all representations in this Section 3 as of a Subsequent Closing, shall include all filings filed by the Company with the SEC up to and including the date on which the Announcement of Results occurs.

-6-

3.11 Financial Statements. The financial statements filed with the SEC as a part of the SEC Filings present fairly, in all material respects, the financial position of the Company and its consolidated subsidiaries as of and at the dates indicated and the results of their operations and cash flows for the periods specified therein, subject, in the case of interim financial statements, to the normal year-end adjustments which are not expected to be material in amount. Such financial statements have been prepared in conformity with generally accepted accounting principles as applied in the United States and in effect as of the date of the applicable financial statements and supporting schedules, as applicable, applied on a consistent basis throughout the periods involved, except as may be expressly stated in the related notes thereto, and comply in all material respects with the Securities Act, the Exchange Act and the applicable rules and regulations of the SEC thereunder. Except as set forth in such financial statements included in the SEC Filings filed prior to the date hereof, neither the Company nor the Subsidiary has incurred any liabilities, contingent or otherwise, except those incurred in the ordinary course of business consistent with past practice, none of which ordinary course liabilities, individually or in the aggregate, would reasonably be expected to result in a Company Material Adverse Effect.

3.12 Eligibility for Form S-3. The Company represents and warrants that on the date hereof the Company meets the requirements for the use of Form S-3 for registration of the sale by the Purchaser of all Shares being purchased by the Purchaser hereunder and the Company has filed all reports required to be filed by the Company with the SEC in a timely manner so as to obtain eligibility for the use of Form S-3.

3.13 No Change. Since the filing with the SEC of the Company’s most recently filed quarterly report on Form 10-Q or annual report on Form 10-K, or with respect to the Initial Closing, as set forth on Schedule 3.13, (i) the Company has not incurred any material liabilities or material obligations, indirect, or contingent, or entered into any material oral or written agreement or other transaction which is not in the ordinary course of business and which could reasonably be expected to result in a Company Material Adverse Effect; (ii) the Company has not sustained any material loss or interference with its businesses or properties; (iii) the Company has not paid or declared any dividends or other distributions with respect to its capital stock; (iv) the Company and the Subsidiary are not in default in the payment of principal or interest on any outstanding debt obligations; (v) there has not been any change in the capital stock of the Company other than the sale of Shares hereunder and shares or options issued pursuant to the Company’s stock option plan or employee stock purchase plan and any options outstanding as of the date hereof, or indebtedness, liens or claims (other than in the ordinary course of business); (vi) the Company has not experienced any loss of the services of any key employee or material change in the composition or duties of the senior management of the Company or the Subsidiary; (vii) the Company has not made any material change to its methods of accounting; and (viii) neither the Company nor the Subsidiary has experienced any other event or condition of any character that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect.

-7-

3.14 No Actions. Except as disclosed in the SEC Filings, (i) there are no legal or governmental actions, suits, claims, investigations or proceedings pending or threatened to which the Company or the Subsidiary is or may be a part or of which property owned or leased by the Company or the Subsidiary is or may be the subject, or related to environmental or discrimination matters, which actions, suits or proceedings, individually or in the aggregate, might prevent or might reasonably be expected to materially and adversely affect the transactions contemplated by this Agreement; and (ii) no labor disturbance by the employees of the Company or the Subsidiary exists, or is threatened which would reasonably be expected to result in a Company Material Adverse Effect. Except as disclosed in the SEC Filings, neither the Company nor the Subsidiary is a party to or subject to the provisions of any injunction, judgment, decree or order of any court, regulatory body administrative agency or other governmental body which could reasonably be expected to result in a Company Material Adverse Effect.

3.15 Compliance. To the Company’s knowledge, except as disclosed in the SEC Filings, the Company and the Subsidiary have been and are conducting their respective businesses in compliance with all applicable laws, rules and regulations of the jurisdictions in which they are each conducting business, including, without limitation, all applicable local, state, federal and foreign drug or environmental laws and regulations, the violation of which could reasonably be expected to result in a Company Material Adverse Effect. Neither the Company nor the Subsidiary is in violation of any order of any court, arbitrator or governmental body. The Company is in compliance with the applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations thereunder, except where such noncompliance would not have or reasonably be expected to result in a Company Material Adverse Effect.

3.16 Intellectual Property. Except as disclosed in the SEC Filings, (i) the Company believes it owns or possesses the necessary trademarks, trademark applications, service marks, service names, trade name rights, patents, patent rights, patent applications, copyrights, licenses, know-how, trade secrets and other intellectual property rights (the “Intellectual Property”) to enable it to conduct its business as it is being conducted as of the date hereof and as specifically described in the SEC Filings and to enter into and perform its obligations under the Collaboration Agreement; and (ii) the Company has no knowledge of any infringement by it of any trademark, trade name rights, patent rights, copyrights, trade secret or any other intellectual property rights of third parties, or of any claim made against the Company regarding any such an infringement, and no third party, to the Company’s knowledge, is infringing the Intellectual Property, in each case, which could reasonably be expected to result in a Company Material Adverse Effect. Except as disclosed in the SEC Filings, there are no material options, licenses or agreements relating to the Intellectual Property, nor is the Company bound by or a party to any options, licenses or agreements relating to the patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications, service marks, service names, trade names or copyrights or other intellectual property rights of any other Person. As of the date hereof, there is no claim, action or proceeding pending or, to the Company’s knowledge, threatened, that challenges the right of the Company with respect to any Intellectual Property.

-8-

3.17 Listed Securities. As of the date hereof, the Common Stock of the Company is quoted on the Nasdaq Global Market and the Company has not received any written notice with respect to the delisting of its Common Stock from NASDAQ. The Company will continue to use commercially reasonable efforts to comply with all quantitative and qualitative requirements of the NASDAQ Marketplace Rules to the extent such compliance is within the control of the Company.

3.18 No Integrated Offering. Neither the Company nor any Person acting on its behalf has, directly or indirectly, made any offers or sales of any Company security or solicited any offers to buy any security, under circumstances that would adversely affect reliance by the Company on Regulation D or Section 4(2) of the Securities Act for the exemption from registration for the transactions contemplated hereby or would require registration of any Shares under the Securities Act or would be integrated under the NASDAQ Marketplace Rules.

3.19 Investment Company. The Company is not an “investment company” or an “affiliated person” of, or “promoter” or “principal underwriter” for an investment company, within the meaning of the Investment Company Act of 1940, as amended.

3.20 Full Disclosure. All representations and warranties of the Company and all statements, schedules or certificates furnished by or on behalf of the Company to the Purchaser or its agents pursuant to this Agreement, the Collaboration Agreement or in connection with the transactions contemplated hereby and thereby, are true and correct in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

3.21 Waiver with Respect to Rights Plan. The Company has waived the application of that certain Rights Agreement dated as of December 2, 2008 by and between the Company and American Stock Transfer & Trust Company, LLC (the “Rights Plan”) to any acquisition by the Purchaser of securities of the Company pursuant to this Agreement in any Closing.

SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser hereby represents and warrants to the Company as follows:

4.1 Investment. The Purchaser is acquiring Shares for its own account, for investment and not with a view to, or for sale in connection with, any distribution thereof, nor with any present intention of distributing or selling the same; and the Purchaser has no present or contemplated agreement, undertaking, arrangement, obligation, indebtedness or commitment providing for the disposition thereof. The Purchaser is an “accredited investor” as defined in Rule 501(a) under the Securities Act.

4.2 Authority. The Purchaser has full corporate power and authority to execute and deliver this Agreement and to perform its other obligations hereunder. The execution, delivery and performance by the Purchaser of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action by the Purchaser and, when executed and delivered by the Purchaser, this Agreement will be the valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms.

-9-

4.3 Experience. The Purchaser has made inquiry concerning the Company, its business and its personnel and the Purchaser has sufficient knowledge and experience in finance and business that it is capable of evaluating the risks and merits of its investment in the Company and the Purchaser is able financially to bear the risks thereof. The Purchaser acknowledges that an investment in the Company has a high degree of risk.

4.4 Restricted Shares. The Purchaser understands that (a) the Shares (and the shares of Common Stock underlying the Shares) have not been registered under the Securities Act by reason of their issuance in a transaction exempt from the registration requirements of the Securities Act pursuant to Section 4(2) thereof or Regulation D promulgated under the Securities Act, (b) the Shares (and the shares of Common Stock underlying the Shares) must be held indefinitely unless a subsequent disposition thereof is registered under the Securities Act or is exempt from such registration and (c) the Company will make a notation on its transfer books to such effect. The Purchaser represents that it is familiar with Rule 144, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act. The Purchaser acknowledges that the Shares (and the shares of Common Stock underlying the Shares) have not been registered under the Securities Act or qualified under any applicable blue sky laws in reliance, in part, on the representations and warranties herein.

4.5 Legend. The Purchaser understands that any certificates evidencing the Shares or the shares of Common Stock into which the Shares are converted may bear the following legend:

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO SUCH SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.”

The legend set forth above shall be removed and the Company hereby agrees to issue the Shares (and the shares of Common Stock underlying the Shares) without such legends to the holder thereof, (i) if such Shares (and the shares of Common Stock underlying the Shares) are registered for resale under the Securities Act, (ii) if such holder provides the Company with an opinion of counsel or other evidence reasonably acceptable to the Company to the effect that a public sale, assignment or transfer of such Shares (and the shares of Common Stock underlying the Shares) may be made without registration under the Securities Act, or (iii) upon expiration of the applicable period under Rule 144(k) of the Securities Act (or any successor rule).

4.6 Organization and Standing. The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of formation and has full corporate power and authority to enter into and perform this Agreement, and to carry out the transactions contemplated by this Agreement.

-10-

SECTION 5. CONDITIONS TO CLOSING

5.1 Conditions to the Purchaser’s Obligation to Close. The obligation of the Purchaser to purchase Shares at a Closing is subject to the fulfillment or the waiver, of each of the following conditions on or before the applicable Closing:

(A) The representations and warranties contained in Section 3 shall be true and correct on and as of the applicable Closing Date except for representations and warranties that speak only as of a specific date (which shall be true and correct as of such date).

(B) The Company shall have delivered to the Purchaser: (i) certificates, as of a recent practicable date, as to the corporate good standing of the Company issued by the Secretaries of State of the States of Delaware and California and the Secretary of each other State in which the Company is qualified to do business, (ii) a certificate executed by its Chief Executive Officer or Chief Financial Officer, dated as of the applicable Closing Date, to the effect that the representations and warranties of the Company set forth in Section 3 hereof are true and correct in all respects on and as of the applicable Closing Date (except for representations and warranties that speak only as of a specific date (which shall be true and correct as of such date)) and that the Company has otherwise complied in all material respects with all of its obligations under this Agreement and the Collaboration Agreement, and (iii) a certificate of the Secretary or Assistant Secretary of the Company, dated as of the applicable Closing Date, certifying as to (a) the By-Laws of the Company, (b) the signatures and titles of the officers of the Company executing this Agreement, and (c) resolutions of the Board of the Company, authorizing and approving all matters in connection with this Agreement which have not been revoked.

(C) The satisfaction, at or prior to the applicable Closing, of all applicable requirements of the HSR Act, including the expiration or early termination of any HSR Act waiting period, if any.

(D) The Company shall have delivered to the Purchaser an opinion of counsel, dated as of the applicable Closing Date, in the form attached hereto as Exhibit B.

(E) The Collaboration Agreement shall not have terminated effective as of the date of such Closing.

5.2 Conditions to the Company’s Obligation to Close. The obligation of the Company to sell any Shares to the Purchaser under this Agreement is subject to fulfillment, or the waiver in writing by the Company, of the following conditions on or before the applicable Closing:

(A) The representations and warranties of the Purchaser contained in Section 4 shall be true and correct in all respects except for representations and warranties that speak only as of a specific date (which shall be true and correct as of such date).

-11-

(B) The Purchaser shall have delivered to the Company a certificate executed by its Chief Executive Officer or Chief Financial Officer, dated as of the applicable Closing Date, to the effect that the representations and warranties of the Purchaser set forth in Section 4 hereof are true and correct on and as of the applicable Closing Date (except for representations and warranties that speak only as of a specific date (which shall be true and correct as of such date)) and that the Purchaser has otherwise complied in all material respects with all of its obligations under this Agreement and the Collaboration Agreement.

(C) The satisfaction, at or prior to the applicable Closing, of all applicable requirements of the HSR Act, including the expiration or early termination of any HSR Act waiting period, if any.

(D) The Collaboration Agreement shall not have terminated effective as of the date of such Closing.

SECTION 6. REGISTRATION RIGHTS

6.1 Demand Registration.

(A) Subject to subsection (C) hereof, if the Company receives a written request from the Purchaser that the Company effect any registration with respect to all or a part of the shares of Common Stock issuable upon conversion of the Shares that are held by the Purchaser and/or its controlled Affiliates (such shares, to the extent that the registration of such number of Shares is permitted pursuant to then applicable rules, regulations and staff guidance of the SEC) are hereinafter referred to as “Registrable Securities”), the Company shall:

(1) As soon as practicable, but in no event later than ninety (90) days following the receipt of such request, prepare and file with the SEC a registration statement on Form S-3 (the “Registration Statement”) relating to the resale of Registrable Securities by the Purchaser from time to time through the automated quotation system of NASDAQ or the facilities of any national securities exchange or trading system on which the Common Stock of the Company is then traded or in privately negotiated transactions;

(2) Subject to receipt of necessary information from the Purchaser, use commercially reasonable efforts to cause the SEC to notify the Company of its willingness to declare the Registration Statement effective within ninety (90) days after the Registration Statement is filed by the Company, and notify the Purchaser of such notification from the SEC within three (3) Business Days of receipt;

(3) Promptly prepare and file with the SEC such amendments and supplements to the Registration Statement and the prospectus used in connection therewith as may be necessary to keep each Registration Statement effective until the earlier of (i) 120 days following the date on which the registration first became effective, or (ii) such time as all Registrable Securities held by the Purchaser have been sold pursuant to a registration statement (the “Registration Period”);

-12-

(4) So long as the Registration Statement is effective covering the resale of Registrable Securities owned by the Purchaser, furnish to the Purchaser with respect to the Common Stock registered under the Registration Statement such reasonable number of copies of prospectuses and such other documents as the Purchaser may reasonably request, in order to facilitate the public sale or other disposition of all or any Registrable Securities by the Purchaser;

(5) File documents required of the Company for normal blue sky clearance in states specified in writing by the Purchaser; provided, however, that the company shall not be required to qualify to do business in any jurisdiction in which it is not now so qualified;

(6) Bear all expenses in connection with the procedures in subsection (A) of this Section 6.1 and the registration of Registrable Securities pursuant to the Registration Statement; and

(7) Notwithstanding the foregoing, (i) the Company shall not be obligated to effect a registration pursuant to this Section 6.1 during the period starting with the date sixty (60) days prior to the Company’s estimated date of filing of, and ending on a date sixty (60) days following the effective date of, a registration statement pertaining to an underwritten public offering of the Company’s securities, provided that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective and that the Company’s estimate of the date of filing such registration statement is made in good faith, and (ii) if the Company shall furnish to the Purchaser a certificate signed by the Chief Executive Officer of the Company stating that in the good faith judgment of the Board it would be seriously detrimental to the Company or its stockholders for a registration statement to be filed in the near future, then the Company’s obligation to use its best efforts to file a registration statement shall be deferred for a period not to exceed one hundred twenty (120) days.

(8) If the Purchaser intends to distribute Registrable Securities covered by its demand by means of an underwriting, it shall so advise the Company as part of its demand made pursuant to this Section 6.1. The Company shall, together with the Purchaser, enter into an underwriting agreement in customary form with the underwriter or underwriters selected by the Purchaser and reasonably satisfactory to the Company. If the underwriter has not limited the number of Registrable Securities to be underwritten, the Company may include securities for its own account (or for the account of other stockholders) in such registration if the underwriter so agrees and if the number of Registrable Securities that would otherwise have been included in such registration and underwriting will not thereby be limited.

(9) The Company shall enter into all such agreements (including without limitation an underwriting agreement) and perform all such actions as is customary for a company to facilitate the sale of its securities pursuant to registration rights.

-13-

(B) With a view to making available to the Purchaser the benefits of Rule 144 under the Securities Act (“Rule 144”) (or its successor rule) and any other rule or regulation of the SEC that may at any time permit the Purchaser to sell Registrable Securities to the public without registration, the Company covenants and agrees to: (i) make and keep public information available, as those terms are understood and defined in Rule 144, until such date as all of the Purchaser’s Registrable Securities shall have been resold; (ii) file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and under the Exchange Act; and (iii) furnish to the Purchaser upon request, as long as the Purchaser owns any Registrable Securities, (x) a written statement by the Company that it has complied in all material respects with the reporting requirements of the Securities Act and the Exchange Act, and (y) such other information as may be reasonably requested in order to avail the Purchaser of any rule or regulation of the SEC that permits the selling of such Registrable Securities without registration.

(C) The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to this Section 6.1:

(1) During the period commencing on the date of execution of the Collaboration Agreement and continuing until the earlier to occur of (1) the Release Date (as defined in Section 7.1), (2) the date of the Announcement of Results, or (3) if the Collaboration Agreement is terminated by the Purchaser for any reason, the effective date of such termination;

(2) During the one hundred eighty (180) day period following the effective date of the first Registration Statement filed pursuant to this Section 6.1; provided that if the number of shares of Common Stock are limited pursuant to Section 6.1(A), the Purchaser may require an additional registration as soon as such additional registration would be legally permissible;

(3) After the Purchaser has made two (2) demands for registration pursuant to this Section 6.1, and such demands have been declared or ordered effective by the SEC; provided that the Purchaser may require an additional registration for each time the number of shares of Common Stock registered are limited pursuant to Section 6.1(A); or

(4) If the Purchaser holds five percent (5%) or less of the outstanding Common Stock of the Company (calculated based on the number of shares held by the Purchaser and its Controlled Affiliates and the number of shares of Common Stock into which Shares held by the Purchaser and its Controlled Affiliates are convertible), after the date on which the Purchaser is able to immediately sell all Registrable Securities held or entitled to be held by the Purchaser under Rule 144.

-14-

6.2 Piggy-Back Registration.

(A) So long as the Purchaser holds more than five percent (5%) (measured on an as-converted to common stock basis) of the outstanding Common Stock (calculated based on the number of shares held by the Purchaser and its Controlled Affiliates and the number of shares of Common Stock into which Shares held by the Purchaser and its Controlled Affiliates are convertible), if the Company proposes to file with the SEC a registration statement relating to an offering of any of its securities for its own account or the account of security holders exercising their demand registration rights (other than on Form S-4 or Form S-8 or their then equivalents relating to securities to be issued solely in connection with an acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans), the Company shall promptly send to the Purchaser written notice of the Company’s intention to file such a registration statement and of the Purchaser’s rights under this Section 6.2 and, if within fifteen (15) days after receipt of such notice, the Purchaser shall so request in writing, the Company shall include in such registration statement all or any Registrable Securities the Purchaser requests to be registered. No right to registration of Registrable Securities under this Section 6.2 shall be construed to limit any registration rights granted under Section 6.1.

(B) The Company shall bear and pay all expenses incurred in connection with any registration, filing or qualification of Registrable Securities to be registered pursuant to this Section 6.2, including all registration, filing, qualification, printing and accounting fees relating or apportionable thereto, and the reasonable fees and expenses of counsel for the Purchaser not to exceed $10,000 per registration.

(C) If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so indicate in the notice given pursuant to this Section 6.2. In such event the right of the Purchaser to registration pursuant to this Section 6.2 shall be conditioned upon the Purchaser’s agreeing to participate in such underwriting and in the inclusion of the Purchaser’s Registrable Securities in the underwriting to the extent provided herein. The Purchaser shall (together with the Company and the other holders distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company or by other holders exercising any demand registration rights. Notwithstanding any other provision of this Section 6.2, if the underwriter determines that marketing factors require a limitation of the number of shares to be underwritten, the underwriter may exclude some or all Registrable Securities or other securities from such registration and underwriting (hereinafter an “Underwriter Cutback”). In the event of an Underwriter Cutback, the Company shall so advise the Purchaser and the other holders distributing their securities through such underwriting, and the number of shares that may be included in the registration and the underwriting shall be allocated in proportion, as nearly as practicable, to the respective amounts of shares of Common Stock held by the Purchaser and such other holders distributing their securities through the underwriting. If the Purchaser disapproves of the terms of any such underwriting, the Purchaser may elect to withdraw therefrom by written notice to the Company and the underwriter. Any securities excluded or withdrawn from such underwriting shall be withdrawn from such registration.

-15-

6.3 Indemnification.

In the event any Registrable Securities are included in a Registration Statement under this Section 6:

(A) To the extent permitted by law, the Company will indemnify and hold harmless the Purchaser, each of the Purchaser’s officers, directors and agents, each person who participates in the offering of Registrable Securities, including underwriters (as defined in the Securities Act) and each person, if any, who controls the Purchaser (or other participating person) within the meaning of the Securities Act, or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act, or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”): (i) any untrue statement or alleged untrue statement of a material fact contained in such Registration Statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, including any information deemed to be a part thereof as of the time of effectiveness pursuant to paragraph (b) of Rule 430A of the Rules and Regulations under the Securities Act, or the prospectus, in the form first filed with the SEC pursuant to Rule 424(b) of the Rules and Regulations under the Securities Act, or filed as part of such Registration Statement at the time of effectiveness if no Rule 424(b) filing is required (the “Prospectus”), or any amendment or supplement thereto, (ii) the omission or alleged omission to state a material fact required to be stated in such Registration Statement or necessary to make the statements in such Registration Statement not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, or the Exchange Act, or any state securities law; and the Company will pay to the Purchaser or controlling person, any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, or action promptly as such expenses are incurred; provided, however, that the indemnity agreement contained in this subsection 6.3(A) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld or delayed), nor shall the Company be liable in any such case for any such loss, claim, damage, liability, or action to the extent that it solely arises out of or is based upon the Company’s reliance upon written information furnished expressly for use in connection with such registration by the Purchaser or an officer, director or agent thereof;

(B) To the extent permitted by law, the Purchaser will, if Registrable Securities held by the Purchaser are included in the registration, indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement and each person who controls the Company within the meaning of the Securities Act (and subject to any underwriting or other separate agreement wherein the Purchaser may agree to indemnify an underwriter, such underwriter), against any losses, claims, damages, or liabilities (joint or several) to which any of the foregoing persons may become subject, under the Securities Act, the Exchange Act, or other federal, state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereto) arise out of or are based upon the Company’s reliance upon written information furnished by the Purchaser expressly for use in connection with such registration; and the Purchaser will pay, as incurred, any legal or other expenses reasonably incurred by the Company, in connection with investigating or defending any such loss, claim, damage, liability, or action; provided however, that the indemnity agreement contained in this subsection 6.3(B) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Purchaser, which consent shall not be unreasonably withheld or delayed; provided, further, that the amount of the indemnity shall be limited to the proceeds of sale received by the Purchaser unless such indemnity obligation arises from the Purchaser’s commission of fraud or intentional misrepresentation;

-16-

(C) Promptly after receipt by an indemnified party under this Section 6.3 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 6.3, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 6.3, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 6.3;

(D) If the indemnification provided for in this Section 6.3 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage, or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; and

(E) The obligations of the Company and the Purchaser under this Section 6.3 shall survive the completion of any offering of Registrable Securities in a registration statement, as applicable, under this Section 6.3, and otherwise.

6.4 Further Obligations. The Company shall be required to take such other further actions as are customary in connection with the registration obligations of the Company pursuant to this Section 6.

SECTION 7. CERTAIN COVENANTS

7.1 Restriction on Sale. [****].

7.2 Dissenters Rights. [****].

-17-

7.3 Lock-Up Agreement. Subject to the Company complying with Section 6.2, the Purchaser hereby agrees that the Purchaser and its Controlled Affiliates shall not offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of in any manner, either directly or indirectly, or otherwise transfer any Shares or shares of Common Stock held by them (other than those included in a registration) during the one hundred eighty (180) day period following the effective date of the any registration statement involving a public offering of the Company’s securities filed under the Securities Act, provided that all Section 16(b) reporting officers and directors of the Company, and holders of at least ten percent (10%) of the Company’s voting securities (who are affiliates of the Company) (collectively, the “Lock-Up Persons”) are bound by and have entered into similar agreements; and provided further that the lock-up agreed to hereby shall expire if during the term of the lock-up any other Lock-Up Person is released from his, her or its lock-up obligations with respect to any security of the Company. The obligations described in this Section 7.3 shall not apply to a registration relating solely to employee benefit plans on Form S-l or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions and may stamp each such certificate with the second legend with respect to the Shares (or shares of Common Stock into which the Shares are converted) subject to the foregoing restriction until the end of such one hundred eighty (180) day period. The Purchaser agrees to execute (and cause any applicable Controlled Affiliates to execute) a market standoff agreement with said underwriters in customary form consistent with the provisions hereof.

7.4 Stockholder Vote. The Company shall take all appropriate and necessary action to seek the approval of its stockholders by July 1, 2009, whether at the 2009 annual meeting or otherwise, of the issuance to the Purchaser of Shares in excess of limitations placed on such issuances under NASDAQ Marketplace Rule 4350(i)(1)(B) without such stockholder approval.

SECTION 8. RIGHT TO PARTICIPATE IN FUTURE SALES OR ISSUANCES OF COMMON STOCK

8.1 The Company hereby grants the Purchaser a right to participate with respect to any sale or issuance by the Company after the date hereof of any shares of, or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock (collectively, the “Additional Stock”); provided that “Additional Stock” does not include any (i) shares of Common Stock (or options therefor) issued to officers, directors or employees of, or consultants to, the Company pursuant to Company stock plans or agreements on terms approved by the Board of Directors; provided that such securities are issued under compensation plans that have been approved by the Company’s stockholders and are awarded solely for compensation for serving as such officer, director, employee or consultant; (ii) shares of Common Stock, or options or warrants to purchase Common Stock, issued pursuant to joint ventures, technology licensing or research and development activities; or (iii) shares of Common Stock, or options or warrants to purchase Common Stock, issued in connection with bona fide acquisitions, mergers or similar transactions; and provided further that such right to participate shall only apply if, at the time of such offering of Additional Stock, the Purchaser holds ten percent (10 %) or more of the outstanding Common

-18-

Stock of the Company (calculated based on the number of outstanding shares of Common Stock without conversion of outstanding options or warrants and taking into account the number of shares of Common Stock into which Shares held by the Purchaser and its Controlled Affiliates are convertible as being shares of Common Stock beneficially owned by the Purchaser and its Controlled Affiliates). If the Company proposes to offer Additional Stock to a third party prior to the earlier of (i) termination of the Collaboration Agreement or (ii) the first date on which Purchaser has transferred any Shares to any third party, the Company shall also make an offering of the Additional Stock to the Purchaser in accordance with the provisions of this Section 8.1 and the Purchaser may elect to purchase up to the Purchaser’s Pro Rata Share (as defined below) of the Additional Stock offered by the Company in accordance with the following provisions:

(A) The Company shall deliver a written notice (the “Offering Notice”) to the Purchaser, prior to or concurrently with any written communication being delivered to any potential investor or party concerning such Additional Stock, stating (i) the Company’s intention to offer such Additional Stock in a bona fide transaction, (ii) the number of shares of Additional Stock to be offered, (iii) the price and other material terms and conditions, if any, upon which the Company proposes to offer the Additional Stock and (iv) a statement as to the number of days from receipt of the Offering Notice within which the Purchaser must respond to the Offering Notice (which period shall not be less [****] (the “Response Period”). The Offering Notice shall constitute a binding offer by the Company to sell Additional Stock to the Purchaser up to the Purchaser’s Pro Rata Share of the Additional Stock at the price per share and on the terms designated in the Offering Notice, subject to and in accordance with the terms of this Section 8.1; provided, however, that the Purchaser shall not be required to meet the non-monetary consideration set forth in the Offering Notice, if any, including, without limitation, delivery of other securities or property in exchange for the Additional Stock to be sold, if the Purchaser pays alternative, but comparable, consideration in cash as determined in good faith by the Board of Directors of the Company. The price per share and the terms of the Additional Stock designated in the Offering Notice shall not be any less favorable than (x) the price per share and terms offered by the Company to any other party with respect to the Additional Stock; or (y) the price per share and terms accepted by the Company from any other party with respect to the Additional Stock.

(B) Prior to the expiration of the Response Period, the Purchaser shall notify the Company in writing of the number of shares of Additional Stock, if any, the Purchaser intends to purchase pursuant to the terms of the Offering Notice up to the Purchaser’s Pro Rata Share of the Additional Stock. If the Purchaser fails to timely deliver its written acceptance to purchase up to its Pro Rata Share of the Additional Stock, the Purchaser shall be deemed to have waived its right to purchase Additional Stock pursuant to this Section 8.1 with respect to that particular offer by the Company of Additional Stock. The closing of the purchase by the Purchaser of Additional Stock shall be conditioned on the sale of all of the Additional Stock and take place at the same closing as that of any third-party purchasers, at the principal executive offices of the Company (or such other location as the parties may agree on) on the fifth business day after the expiration of the Response Period. At such closing, the Purchaser shall make payment in the appropriate amount by means of a cashiers check or by a wire transfer to the Company against delivery of stock certificates representing the Additional Stock so purchased.

-19-

(C) After expiration of the Response Period, the Company may for a period of [****] offer the remaining unsubscribed portion of the Purchaser’s Pro Rata Share of the Additional Stock, if any, to any other party at a price not less than, and upon terms no more favorable to the offeree than, those specified in the Offering Notice. If the Company does not enter into an agreement for the sale of the remaining unsubscribed portion the Additional Stock within such period, or if such agreement is not consummated within [****] of the execution thereof, the right provided pursuant to this Section 8.1 shall be deemed to be revived and such remaining unsubscribed portion the Additional Stock shall not be offered unless first reoffered to the Purchaser in accordance with this Section 8.1.

(D) [****]

(E) The Purchaser shall keep the information received by it in an Offering Notice confidential to the extent necessary to comply with applicable securities laws (including, without limitation, Regulation FD).

SECTION 9. MISCELLANEOUS

9.1 Successors and Assigns. This Agreement, and the rights and obligations of the Parties hereunder, may not be assigned to a Third Party, other than a permitted assignee of the Collaboration Agreement. Except as otherwise provided herein, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the respective successors, assigns, heirs, executors, and administrators of the parties hereto.

9.2 Expenses. Except as provided in Section 6 hereof, each party to the Agreement will pay its own expenses in connection with the transactions contemplated by this Agreement, whether or not the transactions are consummated.

9.3 Indemnification. The Company and the Purchaser will indemnify and hold the other parties harmless from and against any and all claims, liabilities or obligations with respect to investment banking, brokerage or finders’ fees or commissions, or consulting fees in connection with the transactions contemplated by this Agreement asserted by any person on the basis of any agreement, statement or representation alleged to have been made by such indemnifying party.

9.4 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

-20-

9.5 Governing Law; Venue; Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance with the laws of the State of California and the laws of the United States applicable therein (in each case without giving effect to any choice or conflict of laws provision or rule that would cause the application of the laws of any other jurisdiction) and shall be treated in all respects as a California contract. Any action, suit or proceeding arising out of or relating to this Agreement shall be brought in San Francisco County, California or, if it has or can acquire jurisdiction, any Federal court located in such State and County, and EACH OF THE PARTIES HERETO, AFTER CONSULTING WITH OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS AND WAIVES TRIAL BY JURY (AND AGREES NOT TO REQUEST TRIAL BY JURY), IN EACH CASE IN CONNECTION WITH ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. Each of the parties hereto hereby irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in the courts of the State of California or the United States of America, in each case located in San Francisco County, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such matter brought in any such court has been brought in an inconvenient forum. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.

9.6 Injunctive Relief. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed by the parties that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this remedy being in addition to any other remedy to which they are entitled to at law or in equity.

9.7 Notice. All notices, requests, consents, and other communications under this Agreement shall be in writing and shall be deemed delivered (a) three Business Days after being sent by registered or certified mail, return receipt requested, postage prepaid, (b) one Business Day after being sent via a reputable nationwide overnight courier service guaranteeing next Business Day delivery, or (c) upon delivery when sent by facsimile (with confirmation of receipt), in each case to the intended recipient as set forth below:

If to the Company:

La Jolla Pharmaceutical Company
6455 Nancy Ridge Drive
San Diego, CA 92121
Attention: Chief Executive Officer
Fax: (858) 626-2851

-21-

or at such other address as may have been furnished in writing by the Company to the other parties hereto, with a copies to:

Wilson Sonsini Goodrich & Rosati PC
650 Page Mill Road
Palo Alto, CA 94304
Attention: Kenneth A. Clark and Troy Foster
Fax: (650) 493-6811

Goodwin Procter, LLP
53 State Street
Boston, MA 02109
Attention: Mitchell Bloom and Ryan A. Murr
Fax: (617) 523-1231

If to the Purchaser, at its address set forth on Schedule A, or at such other address as may have been furnished in writing by such party to the Company, with a copy to its legal counsel set forth on Schedule A.

Any party may give any notice, request, consent or other communication under this Agreement using any other means (including, without limitation, personal delivery, messenger service or electronic mail), but no such notice, request, consent or other communication shall be deemed to have been duly given unless and until it is actually received by the party for whom it is intended. Any party may change the address to which notices, requests, consents or other communications hereunder are to be delivered by giving the other parties notice in the manner set forth in this Section.

9.8 Entire Agreement. This Agreement and the Collaboration Agreement (and the schedules and exhibits hereto and thereto) contain the entire agreement and understanding among the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, written or oral.

9.9 Amendment. This Agreement may be amended or terminated and the observance of any term of this Agreement may be waived with respect to all parties to this Agreement (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Purchaser.

9.10 Rights Cumulative. The rights and remedies of the parties to this Agreement are cumulative and not alternative. Except as set forth in this Agreement, no failure or delay by any party in exercising any right, power, or privilege under this Agreement will operate as a waiver of the right, power, or privilege, and no single or partial exercise of any right, power, or privilege will preclude any other or further exercise of the right, power, or privilege or the exercise of any other right, power, or privilege. To the maximum extent permitted by applicable law (a) no claim or right arising out of this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing, (b) no waiver that may be given by a party will be applicable except in the specific instance for which it is given, and (c) no notice to or demand on one party will be deemed to be a waiver of any obligation of that party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement or the documents referred to in this Agreement.

-22-

9.11 Interpretation. Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural, and vice versa.

9.12 Counterparts. This Agreement may be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to each other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

9.13 Headings. The section headings are for the convenience of the parties and in no way alter, modify, amend, limit or restrict the contractual obligations of the parties. Any reference in this Agreement to a particular section or subsection shall refer to a section or subsection of this Agreement, unless specified otherwise.

9.14 Confidentiality. This Agreement shall be governed by the confidentiality provisions of Article X of the Collaboration Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

-23-

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written.

PURCHASER:	BIOMARIN PHARMACEUTICAL INC.
	By:	/s/ Jean-Jacques Bienaimé
		Name:	Jean-Jacques Bienaimé
		Title:	Chief Executive Officer
COMPANY:	LA JOLLA PHARMACEUTICAL COMPANY
	By:	/s/ Deirdre Gillespie
		Name:	Deirdre Y. Gillespie, M.D.
		Title:	President and Chief Executive Officer

[Signature Page to Securities Purchase Agreement]

SCHEDULE A

Purchaser

BioMarin Pharmaceutical Inc.
105 Digital Drive
Novato, CA 94949
Attention: Chief Executive Officer
Fax: (415) 382-7889

With a copy to:

BioMarin Pharmaceutical Inc.
105 Digital Drive
Novato, CA 94949
Attention: General Counsel
Fax: (415) 506-6425

Counsel to Purchaser

Paul, Hastings, Janofsky & Walker LLP
55 Second Street, 24th Floor
San Francisco, CA 94105
Attention: Thomas R. Pollock
Fax: (415) 856-7100

EXHIBIT A

Certificate of Designation

-2-

EXHIBIT B

Form of Legal Opinion

-3-

EX-10.3

Exhibit 10.3

EXECUTION COPY

AMENDMENT NO. 1
TO
DEVELOPMENT AND COMMERCIALIZATION AGREEMENT

THIS AMENDMENT NO. 1 (the “Amendment”), dated January 16, 2009, amends that certain Development and Commercialization Agreement, dated as of January 4, 2009 (the “Development Agreement”), by and between La Jolla Pharmaceutical Company, a Delaware corporation (the “Company”), and BioMarin CF Limited, an Irish corporation (“BioMarin CF”).

RECITALS

A. WHEREAS, in connection with the Development Agreement, the Company and BioMarin Pharmaceutical Inc., a Delaware corporation (“BioMarin Pharmaceutical”), entered into that certain Securities Purchase Agreement, dated as of January 4, 2009 (the “Securities Purchase Agreement”);

B. WHEREAS, the Company and BioMarin Pharmaceutical have made certain changes to the Securities Purchase Agreement in the form of an amendment to the Securities Purchase Agreement (the “Amendment to the Securities Purchase Agreement”); and

C. WHEREAS, the Company and BioMarin CF desire to make conforming changes to the Development Agreement to reflect certain changes made by the Amendment to the Securities Purchase Agreement.

NOW, THEREFORE, in consideration of the foregoing, the parties agree as follows:

1. Section 1.41 of the Development Agreement is amended and restated in its entirety as follows:

“1.41 “Securities Purchase Agreement” shall mean the form of securities purchase agreement, as amended by the Amendment to the Securities Purchase Agreement, each as attached to this Agreement as Exhibit 1.41.”

2. Exhibit 1.41 to the Development Agreement shall be amended and restated in its entirety in the form of Exhibit 1.41 attached hereto.

3. Undefined capitalized terms used in this Amendment shall have the meanings ascribed to them in the Development Agreement.

4. Except as expressly set forth in this Amendment, all other terms of the Development Agreement shall remain in full force and effect and once this Amendment is executed by the parties hereto, all references in the Development Agreement to “the Agreement” or “this Agreement,” as applicable, shall refer to the Development Agreement, as modified by this Amendment.

5. This Amendment shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and to be performed entirely within such State without regard to conflict of laws principles thereof.

6. This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

* * *

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed as of the date first set forth above.

 

LA JOLLA PHARMACEUTICAL COMPANY			BIOMARIN CF LIMITED
By:	/s/ Deirdre Y. Gillespie		By:	/s/ G. Eric Davis
	Name:	Deirdre Y. Gillespie, M.D.		Name:	G. Eric Davis
	Title:	President and Chief Executive Officer		Title:	Managing Director

Exhibit 1.41

Securities Purchase Agreement

[Filed as Exhibit 10.30 to BioMarin’s Annual Report on Form 10-K
for the year ended December 31, 2008]

EX-10.4

Exhibit 10.4

EXECUTION COPY

AMENDMENT NO. 1
TO
SECURITIES PURCHASE AGREEMENT

THIS AMENDMENT NO. 1 (the “Amendment”), dated January 16, 2009, amends that certain Securities Purchase Agreement, dated as of January 4, 2009 (the “Agreement”), by and between La Jolla Pharmaceutical Company, a Delaware corporation (the “Company”), and BioMarin Pharmaceutical Inc., a Delaware corporation (the “Purchaser”).

RECITALS

A. WHEREAS, the Purchaser and the Company are parties to the Agreement, which provides for the issuance of shares of the Company’s Series B Convertible Preferred Stock on the terms set forth therein;

B. WHEREAS, Exhibit A to the Agreement sets forth the form of Certificate of Designation to be filed with the Delaware Secretary of State to designate the rights, preferences and privileges of the Company’s Series B-1 Convertible Preferred Stock (the “Certificate”);

C. WHEREAS, the Certificates of Designation to be filed with respect to the Company’s Series B-2 Convertible Preferred Stock and Series B-3 Convertible Preferred Stock are to be in substantially the form of the Certificate, with any appropriate adjustments needed to reflect the issuance price for such shares;

D. WHEREAS, under the terms of the Certificate, the Series B Convertible Preferred Stock is convertible into Common Stock at an initial ratio of one-for-three (i.e., three shares of Common Stock for every one share of Series B Convertible Preferred Stock); and

E. WHEREAS, the Company and the Purchaser wish to amend the form of Certificate and certain related terms of the Agreement to change the initial conversion ratio for the Common Stock to one-for-thirty (i.e., thirty shares of Common Stock for every one share of Series B Convertible Preferred Stock).

Now therefore, in consideration of the foregoing, the parties agree as follows:

1. Section 1.2 of the Agreement is amended and restated in its entirety as follows:

“1.2 Purchase and Sale. Subject to the terms and conditions of this Agreement and the Collaboration Agreement, on the date hereof, the Company agrees to sell to the Purchaser, and the Purchaser agrees to purchase from the Company, 339,104 Shares (the “Initial Investment”) at a purchase price per share of $22.1171, in the case of the Initial Closing, or, in the case of a Subsequent Closing (as defined below) at a price per common share equivalent (based on the conversion ratio provided for in the applicable Certificate of Designation, as adjusted) equal to one hundred ten percent (110%) of the average closing price of the Common Stock of the Company as reported on the NASDAQ stock market or such other reporting service as the stock is then quoted if not then quoted on NASDAQ (and if not then traded at the value determined by an investment bank selected consistent with the provisions of Section 14.3 of the Collaboration Agreement), for the ten (10) consecutive trading days commencing five (5) trading days immediately prior to the date the Company has publicly announced the event that triggered such payment (i.e., the P-Value Achievement, or in the case of such payment where there is no P-Value Achievement, the Company’s first public announcement of the results of the Second Interim Efficacy Analysis or the first public announcement of the approval of an NDA for the Product under Section 7.13 of the Collaboration Agreement (the “Announcement of Results”)). Notwithstanding the foregoing, in no event will the price per common equivalent for the Shares issued in a Subsequent Closing (based on the conversion ratio provided for in the applicable Certificate of Designation, as adjusted) be less than $0.73724.

2. Exhibit A, as attached to the Agreement, is hereby amended and restated in its entirety and is replaced with Exhibit A attached to this Amendment. The defined term “Certificate of Designation,” as used in the Agreement, shall hereafter be deemed to refer to the Certificate of Designation for the Series B-1 Convertible Preferred Stock attached as Exhibit A to this Amendment.

3. Section 3.3 is hereby amended to substitute 37,301,327 for 37,301,387.

4. Undefined capitalized terms used in this Amendment shall have the meanings ascribed to them in the Agreement.

5. Except as expressly set forth in this Amendment, all other terms of the Agreement shall remain in full force and effect and once this Amendment is executed by the parties hereto, all references in the Agreement to “the Agreement” or “this Agreement,” as applicable, shall refer to the Agreement, as modified by this Amendment.

6. This Amendment shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and to be performed entirely within such State without regard to conflict of laws principles thereof.

7. This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

* * *

2

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment as of the date first above written.

PURCHASER:	BIOMARIN PHARMACEUTICAL INC.
	By:	/s/ G. Eric Davis
		Name:	G. Eric Davis
		Title:	VP, General Counsel
COMPANY:	LA JOLLA PHARMACEUTICAL COMPANY
	By:	/s/ Deirdre Y. Gillespie
		Name:	Deirdre Y. Gillespie
		Title:	President and Chief Executive Officer

3

EXHIBIT A

Certificate of Designation

LA JOLLA PHARMACEUTICAL COMPANY

CERTIFICATE OF DESIGNATIONS
OF
SERIES B-1 CONVERTIBLE PREFERRED STOCK

(Pursuant to Section 151 of the Delaware General Corporation Law)

La Jolla Pharmaceutical Company, a Delaware corporation (the “Corporation”), in accordance with the provisions of Section 103 of the Delaware General Corporation Law (the “DGCL”) does hereby certify that, in accordance with Section 151(g) of the DGCL, the following resolution was duly adopted by the Board of Directors of the Corporation as of December 18, 2008:

RESOLVED, that the Board of Directors of the Corporation pursuant to authority expressly vested in it by the provisions of the Amended and Restated Certificate of Incorporation of the Corporation, hereby authorizes the issuance of a series of preferred stock designated as the Series B-1 Convertible Preferred Stock, par value $0.01 per share, of the Corporation and hereby fixes the designation, number of shares, powers, preferences, rights, qualifications, limitations and restrictions thereof (in addition to any provisions set forth in the Amended and Restated Certificate of Incorporation of the Corporation which are applicable to the preferred stock of all classes and series) as follows:

SERIES B-1 CONVERTIBLE PREFERRED STOCK

1. Designation, Amount and Par Value. The series of preferred stock shall be designated as the Corporation’s Series B-1 Convertible Preferred Stock (the “Series B-1 Preferred Stock”), and the number of shares so designated shall be 339,104. Each share of Series B-1 Preferred Stock shall have a par value of $0.01 per share.

2. Liquidation; Dissolution or Winding Up. In the event of any liquidation (other than a liquidation following an M&A Event (as defined below)), dissolution or winding up (either voluntary or involuntary) of the Corporation, subject to the rights of any series of Preferred Stock or other class of stock of the Corporation whose terms expressly provide that it ranks senior to the Series B-1 Preferred Stock as to dividends and distributions, upon dissolution or winding up of the Corporation (the “Senior Stock”), the holders of Series B-1 Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Corporation to the holders of the Corporation’s common stock, par value $0.01 per share (the “Common Stock”) and pari passu with any distribution of any of the assets of the Corporation to the holders of any other series of Preferred Stock or other class of stock of the Corporation whose terms expressly provide that they rank pari passu with the Series B-1 Preferred Stock as to dividends and distributions upon the liquidation, dissolution or winding up of the Corporation (“Parity Stock”) by reason of their ownership thereof, an amount per share equal to the sum of (i) $22.1171, plus (ii) an amount equal to accrued but unpaid dividends on such share. If upon the occurrence of such event, the assets and funds to be distributed among the holders of the Series B-1 Preferred Stock and the Parity Stock shall be insufficient to permit the payment to such holders of the full aforesaid preferential amounts that such holders are entitled to, then, the entire assets and funds of the Corporation remaining legally available for distribution shall be distributed ratably among the holders of the Series B-1 Preferred Stock and the Parity Stock in proportion to their respective liquidation preferences. The Corporation shall mail to each holder of Series B-1 Preferred Stock, at least ten (10) days prior to any liquidation event, a notice setting forth the date on which such event is expected to become effective and the type and amount of anticipated proceeds per share of Common Stock to be distributed with respect thereto and shall afford each such holder the opportunity to convert such shares of Series B-1 Preferred Stock into Common Stock pursuant to Section 5 (conditional upon the consummation of such liquidation event) prior to the consummation thereof.

3. Consolidation; Merger; Sale of Assets; Stock Splits; Consolidations, Etc.

(a) Mandatory Conversion. In case the Corporation shall consummate any consolidation, merger or sale of all or substantially all of the assets of the Corporation (other than a recapitalization, subdivision, combination, reclassification, exchange or substitution of shares provided for elsewhere in Sections 3(b) or 6 hereof) (each, an “M&A Event”), then immediately prior to consummation of such consolidation, merger or asset sale, all shares of Series B-1 Preferred shall automatically be converted into Common Stock in accordance with the ratio provided in Section 5(a) and the procedures described in Section 5(b). The conversion of the shares shall take place without regard to the delivery of certificates to the Corporation as provided for in Section 5(b).

(b) In the event the Corporation shall (i) effect a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater number of shares of Common Stock (without a corresponding subdivision of the Series B-1 Preferred Stock), then the Series B-1 Conversion Rate in effect immediately before that subdivision shall be proportionately increased; or (ii) effect a combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise) into a lesser number of shares of Common Stock (without a corresponding combination or consolidation of the Series B-1 Preferred Stock), then the Series B-1 Conversion Rate in effect immediately before that combination or consolidation shall be proportionately decreased. Any adjustment under this Section shall become effective at the close of business on the date the subdivision, combination or consolidation becomes effective.

4. Mandatory Conversion Upon Termination of Development Agreement. Immediately upon termination of that certain Development and Commercialization Agreement dated as of January 4, 2009 by and between La Jolla Pharmaceutical Company and BioMarin CF Limited for any reason in accordance with the terms thereof, each share of Series B-1 Preferred Stock shall automatically be converted into that number of fully paid and nonassessable shares of Common Stock equal to the Series B-1 Conversion Rate. The “Series B-1 Conversion Rate” shall initially be one for thirty (i.e., thirty shares of Common Stock for every one share of Series B-1 Preferred Stock). The “Series B-1 Conversion Rate” shall be subject to adjustment from time to time in accordance with Sections 3 and 6. All references herein to the Series B-1 Conversion Rate herein shall mean the Series B-1 Conversion Rate as so adjusted.

5. Optional Conversion. The holders of the Series B-1 Preferred Stock shall have optional conversion rights as follows, which must be exercised as to all shares of Series B-1 Preferred Stock outstanding:

(a) Conversion Ratio. Subject to Section 5(b) below, each share of Series B-1 Preferred Stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share, at the office of the Corporation or any transfer agent for the Series B-1 Preferred Stock, into that number of fully paid and non-assessable shares of Common Stock determined by multiplying such share of Series B-1 Preferred Stock and the then-applicable Series B-1 Conversion Rate.

(b) Mechanics of Conversion. Before any holder of Series B-1 Preferred Stock shall be entitled to convert the same into shares of Common Stock pursuant to this Section 5, such holder shall surrender the certificate or certificates therefor, duly endorsed in blank, at the office of the Corporation or of any transfer agent for the Series B-1 Preferred Stock, and shall give written notice by mail, postage prepaid, to the Corporation at its principal corporate office, of the election to convert the same and shall state therein the name or names (so long as such certificate is in the name of the holder or an affiliate of the holder) in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder of Series B-1 Preferred Stock, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Series B-1 Preferred Stock to be converted, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock as of such date. If the conversion is in connection with an underwritten offer of securities registered pursuant to the Securities Act of 1933, as amended, the conversion may, at the option of any holder tendering Series B-1 Preferred Stock for conversion, be conditioned upon the closing with the underwriter of the sale of securities pursuant to such offering, in which event the person(s) entitled to receive the Common Stock issuable upon such conversion of the Series B-1 Preferred Stock shall not be deemed to have converted such Series B-1 Preferred Stock until immediately prior to the closing of such sale of securities.

6. Adjustment for Common Stock Dividends, Distributions, Reclassification, Exchange and Substitution.

(a) In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock or other distribution payable in additional shares of Common Stock, then the holders of the outstanding shares of Series B-1 Preferred Stock shall be entitled to receive such dividend or other distribution on an as-converted to Common Stock basis.

(b) If at any time the Common Stock issuable upon the conversion of the Series B-1 Preferred is changed into the same or a different number of shares of any class or classes of stock, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination of shares or stock dividend or a reorganization, merger, consolidation or sale of assets provided for in Sections 3 or 6(b)), in any such event each holder of Series B-1 Preferred shall have the right thereafter to convert such stock into the kind and amount of stock and other securities and property receivable upon such recapitalization, reclassification or other change by holders of the maximum number of shares of Common Stock into which such shares of Series B-1 Preferred could have been converted immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein or with respect to such other securities or property by the terms thereof.

7. Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting the conversion of the shares of the Series B-1 Preferred Stock such number of its shares of Common Stock or other securities into which the Series B-1 Preferred Stock is then convertible as shall from time to time be sufficient to effect the conversion of all outstanding shares of the Series B-1 Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series B-1 Preferred Stock, in addition to such other remedies as shall be available to the holder of such Series B-1 Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes.

8. Cash and Property Dividends. In the event dividends are paid in cash or property of the Corporation on shares of Common Stock, an additional dividend in cash or property of the Corporation shall be paid with respect to all outstanding shares of Series B-1 Preferred in an amount per share (on an as-if-converted to Common Stock basis) equal to the amount paid or set aside for each share of Common Stock. So long as any shares of Series B-1 Preferred shall be outstanding, no dividend, whether in cash or property, shall be paid or declared, nor shall any other distribution be made, on any Parity Stock or Common Stock until all dividends (set forth herein) on the Series B-1 Preferred shall have been paid or declared and set apart. The provisions of this Section shall not, however, apply to (i) a dividend payable in Common Stock, (ii) the acquisition of shares of any Common Stock in exchange for shares of any other Common Stock, or (iii) any repurchase of any outstanding securities of the Corporation that is approved by the Corporation’s Board of Directors.

9. No Voting Rights. Except as provided herein, the holders of shares of Series B-1 Preferred Stock shall have no voting rights.

10. No Redemption. The shares of Series B-1 Preferred Stock shall not be redeemable.

11. Reacquired Shares. Any shares of Series B-1 Preferred Stock converted, purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein, in the Amended and Restated Certificate of Incorporation, or in any other Certificate of Designations creating a series of Preferred Stock or any similar stock or as otherwise required by law.

12. Notices. Any notice required to be given to the holders of shares of Series B-1 Preferred Stock shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to the holder of record at its address appearing on the books of the Corporation.

13. Headings. The headings herein are for convenience only, do not constitute a part of this Certificate of Designations and shall not be deemed to limit or affect any of the provisions hereof.

14. Ranking. The Series B-1 Preferred Stock shall, with respect to distributions of assets in the event of any liquidation (other than a liquidation following an M&A Event), dissolution or winding up of the Corporation rank senior to the Common Stock and the Series A Junior Participating Cumulative Preferred Stock of the Corporation.

15. Amendments. No provision of this Certificate of Designations may be amended, altered or repealed (including by merger, consolidation or otherwise), without the affirmative vote of the holders of a majority of the shares of Series B-1 Preferred Stock then outstanding. Any of the rights of the holders of Series B-1 Preferred Stock set forth herein may be waived by the affirmative vote of the holders of a majority of the shares of Series B-1 Preferred Stock then outstanding. No waiver of any default with respect to any provision, condition or requirement of this Certificate of Designations shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

[End of text. Signature page follows.]

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designations to be duly executed as of this 16th day of January, 2009.

LA JOLLA PHARMACEUTICAL COMPANY
By:
	Name:	Deirdre Y. Gillespie, M.D.
	Title:	President and Chief Executive Officer

EX-31.1

LA JOLLA PHARMACEUTICAL COMPANY
Exhibit 31.1

EXHIBIT 31.1

SECTION 302 CERTIFICATION

I, Deirdre Y. Gillespie, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of La Jolla Pharmaceutical Company;

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(s) 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(s) 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 15, 2009	/s/ Deirdre Y. Gillespie
	Deirdre Y. Gillespie, M.D.
	President and Chief Executive Officer

EX-31.2

LA JOLLA PHARMACEUTICAL COMPANY
Exhibit 31.2

EXHIBIT 31.2

SECTION 302 CERTIFICATION

I, Gail A. Sloan, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of La Jolla Pharmaceutical Company;

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(s) 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(s) 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 15, 2009	/s/ Gail A. Sloan
	Gail A. Sloan
	Vice President of Finance and Secretary

EX-32.1

LA JOLLA PHARMACEUTICAL COMPANY
Exhibit 32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned, in his or her capacity as an officer of La Jolla Pharmaceutical Company (the “Registrant”), hereby certifies, for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

• the Quarterly Report of the Registrant on Form 10-Q for the quarter ended March 31, 2009 (the “Report”), which accompanies this certification, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

• the information contained in the Report fairly presents, in all material respects, the financial condition of the Registrant at the end of such quarter and the results of operations of the Registrant for such quarter.

Dated: May 15, 2009

/s/ Deirdre Y. Gillespie  

Deirdre Y. Gillespie, M.D. 

President and Chief Executive Officer 

/s/ Gail A. Sloan  

Gail A. Sloan 

Vice President of Finance and Secretary 

Note: A signed original of this written statement required by Section 906 has been provided to La Jolla Pharmaceutical Company and will be retained by La Jolla Pharmaceutical Company and furnished to the Securities and Exchange Commission or its staff upon request.