COLLABORATION AND DEVELOPMENT AGREEMENT

Exhibit 10.180

CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN FILED SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION

**** DENOTES CONFIDENTIAL TREATMENT REQUESTED

COLLABORATION AND DEVELOPMENT AGREEMENT

Collaboration and Development Agreement (this “AGREEMENT”) made as of April 6, 2005, by and between VALERA PHARMACEUTICALS, INC., a Delaware corporation, with its principal offices at 8 Clarke Drive, Cranbury, New Jersey 08512 (“Valera”) and ALPEX PHARMA S.A., a Switzerland Societe Anonyme with its principal offices at via Cantonale, Mezzovico-Vira, Switzerland (“Alpex”). Valera and Alpex are sometimes referred to herein individually as a “Party” and collectively as the “Parties”).

BACKGROUND

The following sets forth the background for this Agreement:

Alpex conducts pharmaceutical research and development and develops, acquires, and licenses proprietary drug delivery technologies that have application to a variety of pharmaceutical products, including fast-melt drug formulation processes and techniques applicable to pharmaceutical compounds including the Product (as hereinafter defined).

Valera, among other things, conducts marketing, sales, and distribution of pharmaceutical products for the treatment of a variety of disorders.

Valera and Alpex share a mutual interest in a collaboration aimed at the further development and commercialization of the Product incorporating Alpex Intellectual Property (as hereinafter defined).

Valera and Alpex intend to utilize their capabilities, capitalize on each other’s expertise, and put forth commercially reasonable efforts to achieve the objectives of this collaboration.

NOW, THEREFORE, in consideration of the mutual promises, covenants, agreements, representations and warranties hereinafter set forth, and intending to be legally bound, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS

“AB RATED EQUIVALENT” means a product which has been approved by the FDA with an approved drug application that contains adequate scientific evidence establishing the bioequivalence of the Product to be developed pursuant to this Agreement to the applicable referenced brand product.

“AFFILIATE” means any entity that directly or indirectly Owns, is Owned by, or is under common Ownership with a Party to this Agreement. “Owns” or “Ownership” means direct or indirect possession of more than fifty percent (50%) of the votes of holders of a corporation’s voting securities or a comparable equity interest in any other type of entity.

“AGENCY” means the FDA or any successor governmental regulatory authority responsible for granting approvals for the sale of the Product in the Territory.

“AGREEMENT” means this Agreement, together with all exhibits and attachments.

“ALPEX IMPROVEMENTS” means any improvements to the Alpex Platform Patents and Alpex Know-How, in each case owned by Alpex as of the date hereof, that are conceived, created, developed, and/or otherwise invented by Alpex, by Valera, or jointly by Alpex and Valera, under the Research and Development Plans pursuant to this Agreement.

“ALPEX INTELLECTUAL PROPERTY” means the Alpex Patents, Alpex Improvements, and the Alpex Know-how.

“ALPEX KNOW-HOW” means Technical Information owned, developed, or Controlled by Alpex as of the date of this Agreement or during the Term of this Agreement, including, without limitation, the Platform Technology, concerning the development, manufacture, production, quality control, storage, distribution, and sale of the Product.

“ALPEX PATENTS” means any valid claim of any Alpex Platform Patent or any Patents and patent applications based on Alpex Improvements as set forth in Annex C.

“ALPEX PLATFORM PATENTS” means Patents and applications therefor relating to the Platform Technology issued based on a patent application previously or hereafter filed by or on behalf of Alpex or subsequently assigned, licensed, or granted to, or acquired by Alpex relating to the Platform Technology as set forth in Annex C.

“ANDA” means an “abbreviated new drug application,” as defined in the United States Food, Drug, and Cosmetic Act, as amended, and applicable FDA rules and regulations.

“ARTICLE” means any article of this Agreement.

“BANKRUPTCY EVENT” has the meaning set forth in Section 13.5(b).

“BUSINESS DAY” means a day other than a Saturday, Sunday or day on which banking institutions are not required to be open in New Jersey.

“CLINICAL STUDIES” means all the studies of the intake of the Product on humans such as pivotal and non-pivotal bioequivalence or clinical studies performed by Valera for any purpose including without limitation for purposes of obtaining Regulatory Approval in the Territory, taste, and marketing of the Product.

“COMPETING PRODUCT” means in relation to a compound a bona fide ongoing project being conducted or to be conducted by or on behalf of Alpex to apply the Alpex Know-How to such compound: (a) pursuant to a written agreement between Alpex and a Third Party, (b) which project has commenced

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and is in circumstances where Alpex is engaged in bona fide discussions with a Third Party with a view to entering into such an agreement or an agreement for further development or commercialization of such compound, or (c) which is being conducted by Alpex or an Affiliate of Alpex with a bona fide view to commercialization of such product by Alpex, its Affiliates, or other licensees.

“CONFIDENTIAL INFORMATION” has the meaning set forth in Section 10.1.

“CONTROL” means, with respect to an item of information or intellectual property right, the possession of the ability to grant a license or sublicense as provided for herein under such item or right without violating the terms of any agreement or other arrangement, express or implied, with any Third Party.

“DEFAULT” means the material breach of a material term of this Agreement.

“DISCONTINUED PRODUCT” has the meaning set forth in Section 4.5(a).

“DISPUTE” has the meaning set forth in Section 14.3(b).

“FDA” means the United States Food and Drug Administration, or any successor thereto.

“FISCAL QUARTER” means each period of three (3) months ending on March 31, June 30, September 30, or December 31.

“GAAP” means generally accepted accounting principles as in effect from time to time in the United States, with respect to Valera, and in Switzerland, with respect to Alpex.

“IMPROVEMENT” means, as to the Product, any improvement, line extension, or modification (including in any such case whether to the same active ingredient molecule comprising the Product or to the same active ingredient molecule in conjunction with other active ingredient molecules comprising the Product in such combination), superior development of the Product, and/or delivery technologies (for example, faster onset of action), and other enhancements to the Product or any non-AB Rated Equivalent of the Product.

“INDEMNIFIED PARTY” and “INDEMNIFYING PARTY” have the meanings set forth in Section 12.2.

“LAUNCH” means the date of first commercial shipment of the Product by Valera, its Affiliates, distributors, or sublicensees to Third Party customers in the Territory after receipt of Regulatory Approval for the Product from the FDA or other relevant Agency, as may be necessary in the Territory.

“LOSS” has the meaning set forth in Section 12.1.

“MANUFACTURING AND SUPPLY AGREEMENT” means an agreement to be entered into between Valera and Alpex to set forth the circumstances, terms, and conditions under which Alpex shall manufacture the Products for sale by Valera in the Territory.

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“NDA” means a “new drug application,” as defined in the United States Food, Drug, and Cosmetic Act, as amended (the “Act”), and applicable FDA rules and regulations, including an application of the type described in Section 505(b)(2) of the Act.

“NET SALES” means the total gross proceeds to Valera on sales to Third Parties representing sales actually collected by Valera and its Affiliates of the Product in the Territory, less deductions for the following to the extent actually paid or allowed with respect to the Product sales:

(a) sales and excise taxes and duties (including import duties) paid or allowed by a selling party and any other governmental charges imposed upon the manufacture or sale of the Product, after giving effect to any rebates or refunds relating to such taxes or duties received by Valera;

(b) rebates and chargebacks (including rebates to social and welfare systems) actually paid;

(c) allowances, chargebacks, and credits to Third Parties on account of rejected, damaged, outdated, returned, withdrawn, or recalled Product or on account of retroactive price reductions affecting the Product; and

(d) amounts paid to Third Parties on account of rebate payments, including Medicaid rebates.

Taxes, the legal incidence of which is on the purchaser and separately shown on Valera’s or its Affiliates’ invoices, and transportation, insurance and postage charges, if prepaid by Valera or its Affiliates and billed on Valera’s or its Affiliates’ invoices as a separate item, shall not be considered a component of Net Sales. Components of Net Sales shall be determined in the ordinary course of business in accordance with Valera’s historical practice and using the accrual method of accounting in accordance with GAAP.

The supply of the Product as commercial samples or for use in Clinical Studies shall not be included within the computation of Net Sales. Where (i) the Product is sold by Valera or an Affiliate as one of a number of items without a separate price; or (ii) the consideration for the Product shall include any non-cash element; or (iii) the Product is transferred by Valera or an Affiliate in any manner other than an invoiced sale, the Net Sales price applicable to any such transaction shall be deemed to be Valera’s average Net Sales price for the applicable quantity of Products to the relevant class of customers at that time in the Territory.

For purposes of Sections 4.5(d) and 6.5, Net Sales shall refer to sales by Alpex to Third Parties.

“PATENTS” means all valid claims in all patent applications, and all continuing and divisional patent applications, continuations-in-part and reissue applications claiming priority to such applications and all patents issuing therefrom in the Territory together with all re-examinations and foreign equivalents of any of the foregoing.

“PLATFORM TECHNOLOGY” means the technology developed and owned by Alpex as of the date hereof relating to fast-melt drug formulation processes and techniques.

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“PRODUCT” means the finished pharmaceutical form of Desmopressin Acetate manufactured by Alpex for Valera.

“PRODUCT PATENT” means Patents and applications therefore issued based on a patent application previously or hereafter filed relating to the Product, including finished dosage form and its manufacture, or improvements thereof.

“PRODUCT SUCCESS CRITERIA” means, with respect to the Product, those criteria agreed between the Parties and set forth in the Research and Development Plan.

“PRODUCT TERMINATION NOTICE” has the meaning set forth in Section 4.5(a).

“REGULATORY APPROVAL” means the Product license or marketing approval necessary as a prerequisite for marketing the Product in a country of the Territory.

“RESEARCH AND DEVELOPMENT PLAN” means the development program for the Product as provided in Section 4.1 hereof.

“SECTION” means any section of this Agreement.

“TECHNICAL INFORMATION” means all techniques and data and other know-how and technical information, including inventions (including patentable inventions), practices, methods, concepts, know-how, trade secrets, documents, computer data, source code, apparatus, clinical and regulatory strategies and data, test data, analytical and quality control data, manufacturing data or descriptions, development information, drawings, specifications, designs, plans, proposals and technical data and manuals and all other proprietary information concerning the development, manufacture, production, quality control, storage, distribution and sale of the Product.

“TERM” means the period of time specified in Section 2.3.

“TERRITORY” means the United States, Canada, Mexico, and all of their states, territories and possessions.

“THIRD PARTY” means any entity other than Alpex or Valera.

ARTICLE II

OWNERSHIP OF INTELLECTUAL PROPERTY; LICENSE GRANTS

2.1. OWNERSHIP OF INVENTIONS.

(A) Except as provided in Sections 2.2 and 2.3 below Alpex shall own all right, title, and interest in and to the Alpex Intellectual Property.

(B) To the extent Valera obtains any right, title, or interest in any intellectual property or Technical Information with respect to the Platform Technology, Valera hereby assigns, and, to the extent such assignment cannot be made at present, agrees promptly to assign, to Alpex all of Valera’s right, title, and interest in and to the same. Without limiting the foregoing, with respect to any patent applications included in Alpex

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Patents and in which Valera employees or consultants are named as inventors, Valera shall, and shall use reasonable efforts to cause such employees and consultants to, at Alpex’s expense, cooperate in the filing, prosecution, and maintenance of such Alpex Patents, including making any assignments as Alpex may reasonably deem necessary, joining in any applications for letters patent on any invention deemed patentable included in such Alpex Patents, taking all steps as reasonably requested by Alpex to prosecute all pending and new patent applications included within such Alpex Patents, and responding to oppositions, nullity actions, re-examinations, revocation actions, and similar proceedings filed by Third Parties against the grant of letters patent for such applications.

(C) Valera shall own all right, title, and interest in and to the Product and Product Patents in the Territory. Alpex shall own all right, title, and interest in and to the Product Patents outside of the Territory.

(D) To the extent Alpex obtains any right, title, or interest in any intellectual property or Technical Information with respect to the Product or Product Patents in the Territory, Alpex hereby assigns, and, to the extent such assignment cannot be made at present, agrees promptly to assign, to Valera all of Alpex’s right, title, and interest in and to the same. Without limiting the foregoing, with respect to any patent applications included in Product Patents and in which Alpex employees or consultants are named as inventors, Alpex shall, and shall use reasonable efforts to cause such employees and consultants to, at Valera’s expense, cooperate in the filing, prosecution, and maintenance of such Product Patents in the Territory, including making any assignments as Valera may reasonably deem necessary, joining in any applications for letters patent on any invention deemed patentable included in such Product Patents, taking all steps as reasonably requested by Valera to prosecute all pending and new patent applications included within such Product Patents, and responding to oppositions, nullity actions, re-examinations, revocation actions, and similar proceedings filed by Third Parties against the grant of letters patent for such applications.

2.2. LICENSE GRANT

(A) Subject to the terms and conditions of this Agreement, Alpex hereby grants to Valera, and Valera hereby accepts from Alpex, a sole and exclusive, royalty-bearing right and license, including the right to sublicense, under and to Alpex Intellectual Property to use, import, export, sell, offer to sell and otherwise commercialize the Product in the Territory.

(B) In the event Alpex is not able to provide Valera with the requested amounts of the Product pursuant to the terms and conditions of the Manufacturing Agreement (including without limitation the price, forecast and ordering terms) Valera will have the right to have Product made for Valera by a Third Party. This have made right shall extend to the amounts and time periods as to which Alpex is not able to supply Product to Valera and shall not constitute a license to any Third Party to make or sell Products to a party other than Valera; provided, however, that Alpex shall not bring any action against such a Third Party for making Product for Valera for amounts and time periods for which Alpex is not able to supply Product to Valera.

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(C) Upon the expiration of the Agreement, Valera shall have a fully paid-up, perpetual, royalty-free, non-exclusive, irrevocable license, including the right to sublicense, under and to Alpex Intellectual Property to make, have made, use, import, export, sell, offer to sell and otherwise commercialize the Product in the Territory;

(D) Subject to the terms and conditions of this Agreement, Valera hereby grants to Alpex, and Alpex hereby accepts from Valera, a non- exclusive, royalty-free right and license, under and to the Valera Product Patents to make, use and sell the Product to Valera in the Territory as provided for herein, and for its own account as provided for in Sections 4.5 and 6.5 hereof.

2.3. MAINTENANCE OF RECORDS. Each Party shall maintain full and accurate records concerning their activities under this Agreement for the purpose of documenting any intellectual property developed hereunder. Such records shall be maintained for the later of either three (3) years after the end of the Term or for the pendency of any patent application covering any such Intellectual Property.

2.4. CERTAIN RIGHTS; NO IMPLIED LICENSES

(A) The Parties acknowledge and agree that the licenses granted by Alpex to Valera pursuant to Section 2.2 are limited solely to enable Valera to use, import, export, sell, offer to sell and otherwise commercialize the Product in the Territory and Alpex does not hereby grant to Valera a license to any Alpex Intellectual Property outside the Territory or for any other purpose in the Territory.

(B) Except as otherwise provided in this Agreement, under no circumstances shall a Party as a result of this Agreement obtain any ownership interest or other right in any technology, know-how, trade secrets, patents, pending patent applications, products, or other Technical Information of the other Party, including items owned, Controlled, developed by the other, or transferred by the other to such Party at any time pursuant to this Agreement.

ARTICLE III

OVERVIEW OF COLLABORATION

3.1. SCOPE OF COLLABORATION. The Parties shall work together to research and develop the Product pursuant to this Agreement. All such research and development work shall be conducted under Alpex’s direction and shall be allocated between the Parties according to the Research and Development Plan (as further described in Article IV hereof) included as Exhibit A to this Agreement.

3.2. RECORDKEEPING. Each Party shall record, to the extent practical, all Technical Information relating to its research and development activities under the Research and Development Plan in written form, which writing shall be consistent with standard practices of each Party and what is normal and customary in the pharmaceutical industry in the United States or as may be required by applicable law or regulation. All such written records of the Parties shall be maintained in a form sufficient to satisfy all Agencies.

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ARTICLE IV

RESEARCH AND DEVELOPMENT

4.1. RESEARCH AND DEVELOPMENT PLAN. The Research and Development Plan for the Product (including tasks, allocation of responsibilities, estimated development timelines, and estimated development budgets) is set forth on Exhibit A. The Parties may periodically modify the Research and Development Plan, within the scope of and in a manner consistent with this Agreement, further detail the responsibilities of each Party within the general scope of responsibilities set forth herein, and revise the Research and Development Plan accordingly. The Parties acknowledge that the timelines, dates and budgeted costs set forth in the Research and Development Plan are good faith estimates. However, in the event that an estimated development timeline will not be met, the Party with responsibility for meeting that timeline shall notify the other Party and the Parties shall work together in good faith to bring the project back on schedule. Each Party shall be responsible for its own cost overruns, if any.

4.2. JOINT OBLIGATIONS.

(A) Each Party will fund its own costs and expenses in the performance of its research and development obligations provided pursuant to this Agreement and the Research and Development Plan.

(B) Parties shall keep each other fully informed of the status of the development of the Product including, without limitation, providing written reports as requested throughout the performance of the Research and Development Plan, stating in reasonable detail all efforts made and in process, and all significant progress achieved.

(C) The Parties will each designate a primary project contact with respect to the Product throughout the performance of the Research and Development Plan.

4.3. ALPEX OBLIGATIONS.

(A) Alpex shall use commercially reasonable efforts to diligently perform its obligations under this Agreement, including, without limitation, those set forth in the Research and Development Plan, all in accordance with all applicable laws, ordinances, rules, regulations, orders, licenses and other requirements now or hereafter in effect.

(B) Alpex shall make available to Valera all Alpex Intellectual Property and Technical Information and assistance as may reasonably be necessary for Valera’s development, submission for applicable Regulatory Approval, and commercialization of the Product, including formulation and process development, development of stability indicating methods (including methods for dissolution, assay and stability), and achievement of stability under accelerated stability conditions for two months or under ambient conditions for six months, stability data, methods validation, formulation trials, in-process and finished Products specifications, Product development reports for the Product, and identification and sourcing of any excipients used in the formulation of the Product, all as more particularly described herein and in the Research and Development Plan.

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(C) Alpex shall maintain records in sufficient detail and otherwise in accordance with good laboratory practices or current good manufacturing practices, as the case may be, and as are required to properly reflect, and will document in a manner appropriate for purposes of supporting any Agency filings, and pre-approval inspections, all work done and results achieved by Alpex in the performance of the Research and Development Plan (including all data in a form required under any applicable governmental regulations). Subject to the confidentiality provisions of Article X hereof, Alpex shall provide Valera with copies of all such records relating to the Product.

4.4. VALERA OBLIGATIONS.

(A) Valera shall use commercially reasonable efforts to diligently perform its obligations under this Agreement, including, without limitation, those set forth in the Research and Development Plan, all in accordance with all applicable laws, ordinances, rules, regulations, orders, licenses and other requirements now or hereafter in effect.

(B) Valera shall maintain records in sufficient detail and otherwise in accordance with good laboratory practices, good clinical practices, or current good manufacturing practices, as the case may be, and as are required to properly reflect, and will document all work done and results achieved in the performance of the Research and Development Plan including all records of any Clinical Studies. Subject to the confidentiality provisions of Article X hereof, Valera shall provide Alpex with the right to inspect such records relating to the Product.

(C) Valera shall keep Alpex fully informed as to the continuing status of its Clinical Studies and development efforts for the Product pursuant to the Research and Development Plan, including the status of the preparation and filing of any Regulatory Approvals with applicable Agencies as well as the anticipated Launch of the Product and the status of the conduct and completion of Clinical Studies. In connection therewith, Valera shall provide to Alpex quarterly reports during the Term, stating in reasonable detail all efforts made and in process, and significant progress achieved. In addition, Valera shall promptly communicate to Alpex any material issues or problems. Valera shall include in such reports information concerning the status of the regulatory filings for the Product in the Territory and shall notify Alpex of the substance of all material written communications with any Agencies relating to the Product.

(D) Valera will provide Alpex, at no cost other than routine costs of photocopy and shipping, all Valera documentation with respect to the Product and Clinical Studies as may be requested by Alpex including without limitation all documentation necessary for the purpose of Alpex obtaining marketing approval for the Product outside of the Territory. Such documentation will be provided to Alpex at Valera’s facility or an Alpex facility as designated by Alpex.

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4.5. DISCONTINUATION OF THE PRODUCT.

(A) Valera may terminate the continuation of the obligations of Alpex and Valera relating to the Product if Valera in its sole discretion should it determine that the development and/or commercialization of the Product has been impaired due to (i) difficulties in the development and/or formulation of the Product, (ii) unfavorable action by the FDA relating to the Product, (iii) the likelihood of failing to obtain applicable Agency approvals for the Product (regardless of further steps or submissions that could be made), (iv) concerns with possible infringement claims of Third Parties relating to the Product, and (v) unfavorable market conditions for the Product, including, without limitation, the entry of other competing products and/or price erosion. Upon making such a determination, Valera shall provide written notice to Alpex (a “Product Termination Notice”), which shall provide in reasonable detail the basis on which Valera has elected to discontinue and terminate any further continued efforts relating to the Product (a “Discontinued Product”).

(B) Upon provision of a Product Termination Notice, (i) the licenses granted to Valera pursuant to Section 2.2 hereof with respect to the Discontinued Product shall terminate and (ii) Valera shall pay to Alpex all accrued license and milestone payments earned by Alpex up to the date of such termination but not previously paid that relate to the Discontinued Product. Other than as provided in Section 4.5(c) and Section 13.6 hereof, Valera shall have no further obligations to Alpex under this Agreement relating to the Discontinued Product including, without limitation, any milestone or royalty payment obligations.

(C) In the event that Alpex elects to continue or resume the development, commercialization or sale, alone or with others, of a Discontinued Product, then (i) it shall reimburse Valera for all development costs and raw material costs associated therewith that were previously incurred by Valera, including any license or milestone payments received from Valera pursuant to Article VIII hereof (“Development Reimbursement”), and (ii) Valera shall (A) deliver and assign to Alpex all Technical Information, test data, bioequivalence study results, regulatory filings, Regulatory Approvals, pending patent applications, reports, records, and materials in Valera’s possession or control that relate to the Discontinued Product, and (B) return to Alpex all relevant records and materials in Valera’s possession or control containing Confidential Information of Alpex that relate to the Discontinued Product.

(D) If Alpex elects to pursue development of the Discontinued Product (i) in the Territory, then Alpex’s payment of the Development Reimbursement to Valera shall be made in monthly installments over a period of time equivalent to the period from the date of Valera’s first milestone payment in respect of the Discontinued Product to the date of the Product Termination Notice, (ii) outside the Territory, then Alpex’s payment of the Development Reimbursement shall be limited to payment by Alpex of 6% of the Net Sales of the Product made by Alpex anywhere in the world. The payments provided for in (i) and (ii) of the preceding sentence shall both be made, as applicable, until such time as Valera has received the entire reimbursement amount.

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ARTICLE V

MANUFACTURING OF THE PRODUCT

5.1. MANUFACTURING OF THE PRODUCT. Alpex shall manufacture and supply sufficient quantities of the Product for the Clinical Trials and commercial sale in the Territory to meet Valera’s needs during the Term in accordance with current good manufacturing practices (cGMP). Prior to Launch of the Product, Alpex and Valera shall use their best efforts to enter into a Manufacturing and Supply Agreement on terms agreed in good faith on the basis of the principles set forth in Exhibit B hereto.

ARTICLE VI

HEALTH REGISTRATION OBLIGATION

6.1. REGULATORY APPROVALS. Valera shall use its commercially reasonable efforts to prepare, file, and prosecute all Agency filings and applications to obtain all Regulatory Approvals for the Product in each country of the Territory which are required to sell, use, and market the Product in the Territory, all at Valera’s sole expense. Valera shall own all right, title, and interest in any FDA or other Regulatory Approvals which are obtained for the Product, including all data generated in the course of Clinical Trials and all applications and data submitted to the FDA or other Agency.

6.2. MAINTENANCE OF REGULATORY APPROVALS. Valera shall use commercially reasonable efforts to maintain the Regulatory Approvals for use, sale and marketing of the Product in each country of the Territory at Valera’s sole expense.

6.3. ALPEX ASSISTANCE. Alpex shall provide such assistance to Valera in obtaining and maintaining Regulatory Approvals in the Territory as reasonably requested by Valera.

6.4. TIMING OF AGENCY FILINGS. Valera shall use commercially reasonable efforts to file an NDA or ANDA, as determined in the sole discretion of Valera, to seek Regulatory Approval to use and sell the Product in the Territory upon satisfaction of the Product Success Criteria within six (6) months after such satisfaction; provided, however, that if in Valera’s reasonable determination there shall exist in the Territory a patent or other intellectual property of a Third Party that would prevent or substantially impair the manufacture, use, sale, offer for sale, or importation by or on behalf of Valera of the Product, then Valera may in its discretion elect not to file for Regulatory Approval until the date that is six (6) months after the expiry of such patent or other right.

6.5. FAILURE TO FILE NDA OR ANDA. In the event Valera fails to file an NDA or ANDA within six (6) months after satisfaction of the Product Success Criteria, the license granted by Alpex to Valera pursuant to Section 2.2 relating to the Product shall, at the election of Alpex by 60 days written notice to Valera, during which time Valera shall be entitled to cure such failure, become a non-exclusive, perpetual, royalty-free license in the Territory upon Alpex’s election and Alpex’s reimbursing Valera all milestone payments received for the Product up to the date of such election (“Milestone Reimbursement”), provided that if Alpex elects to pursue commercialization of the Product (i) in the Territory then Alpex’s payment of the Milestone Reimbursment shall be made in monthly installments over a period of time

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equivalent to the period from the date of Valera’s first milestone payment in respect of the Product in question to the effective date of the conversion of Valera’s license into a royalty-free non-exclusive license and (ii) outside the Territory, then Alpex’s payment of the Milestone Reimbursment shall be limited to 6% of the Net Sales of the Product by Alpex anywhere in the world. The payments provided for in (i) and (ii) of the preceding sentence shall both be made, as applicable, until such time as Valera has received the Milestone Reimbursement.

ARTICLE VII

MARKETING AND SALE OF THE PRODUCT

7.1. MARKETING AND SALE OF THE PRODUCT.

(A) Upon the Launch of the Product, Valera, either itself or through its Affiliates, or distributors, shall use its commercially reasonable efforts to market, distribute, and sell the Product in the Territory and shall exercise such diligence in this regard as shall be reasonable in light of the size of the market and potential market for the Product and in a manner consistent with which it markets other Valera products of comparable market size in the particular country of the Territory.

(B) Valera shall control and make all decisions regarding the strategy and tactics of marketing, selling, and otherwise commercializing the Product, including, without limitation, the method of sales and distribution, organization and management of sales and marketing, packaging and labeling, appointment of distributors pursuant to Section 7.2, and other terms and conditions for such sales and marketing, and shall exercise commercially reasonable efforts in such regard to maximize the economic opportunity for the Product.

7.2. DISTRIBUTORS; SUBLICENSEES. Valera may designate and appoint one or more Third Parties to act as its agent(s) or sublicensees in connection with the marketing, sale and distribution of the Product in the Territory.

7.3. REGULATORY COMPLIANCE. Valera shall use commercially reasonable efforts to comply with applicable regulations regarding procedures for reporting to appropriate Agencies in the Territory, and to report, investigate, issue responses and execute any corrective action plan to post-marketing Product complaints/field reports in a timely manner in accordance with applicable regulations.

7.4. SALES WITHIN THE TERRITORY. Alpex shall not, and Alpex shall use commercially reasonable efforts to cause its Affiliates or licensees not to, directly or indirectly, without the prior written consent of Valera, sell the Product inside the Territory, or knowingly manufacture, supply or sell the Product to any Person outside the Territory for resale or use inside of the Territory.

7.5. NO COMPETING PRODUCTS. Alpex shall not, and shall cause its Affiliates or licensees not to, directly or indirectly, jointly or in conjunction with any other Person, whether as principal, agent, shareholder, employee, independent contractor, or in any other manner whatsoever, develop, market, distribute or sell in the Territory any products that contain the same active ingredient as that which is contained in the Product, during the Term.

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7.6. NO RESTRICTIONS ON BUSINESS. Alpex agrees that Valera is in the business of developing, and selling pharmaceutical products and that nothing in this Agreement shall be construed as restricting such business or imposing on Valera the duty to develop, register, market, and/or to sell the Product hereunder to the exclusion of or in preference to any other product or otherwise preclude Valera from developing or practicing any Valera Intellectual Property or developing pharmaceutical products which are independent of the Alpex Intellectual Property. Correspondingly, except as expressly set forth herein, nothing herein shall be construed as restricting the business of Alpex.

ARTICLE VIII

MILESTONES, FEES, AND ROYALTY PAYMENTS; ACCOUNTING

8.1. MILESTONES.

(A) In consideration of Alpex’s commitment to provide its research and development obligations as provided herein, including, without limitation, under the Research and Development Plan, Valera agrees to pay to Alpex, for the Product developed hereunder, the following one-time milestone payments:

(I) **** upon execution of this Agreement, such payment being intended to cover in advance feasibility studies and analytical work by Alpex for the Product;

(II) **** within thirty (30) days of completion of Phase II of the Research and Development Plan for the Product;

(III) **** within thirty (30) days of completion of Phase IV of the Research and Development Plan for the Product; and

(IV) **** within thirty (30) days of completion of Phase VI of the Research and Development Plan for the Product.

(B) Notwithstanding anything to the contrary contained herein, in the event Valera exercises its right to terminate the continued development and commercialization of the Product pursuant to Sections 13.2 or 13.3 hereof prior to the achievement of any or all of the applicable milestones provided in Section 8.1 relating to the Product, Valera shall be required to make payment to Alpex only with respect to the milestones which were achieved prior to the Termination Date and no further milestone payments relating to the Product shall accrue after the Termination Date.

8.2. LICENSE FEE. In consideration for the license granted to Valera under Section 2.1 of this Agreement, Valera agrees to pay to Alpex, the following:

(A) **** within thirty (30) days of the NDA or ANDA for the Product, as the case may be, being filed with the FDA; and

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(B) **** within thirty (30) days of the receipt of final approval by the FDA of the NDA or ANDA, as the case may be, relating to the Product.

8.3. ROYALTY PAYMENTS.

(A) In addition to the foregoing milestone payments, during the Term, Valera will pay to Alpex a royalty equal to the percentage set forth below on all Net Sales of the Product sold by Valera and its Affiliates in the Territory, as follows:

(B) Unless terminated by mutual agreement or pursuant to Article XIII hereof, Valera’s royalty payment obligations for the Product shall expire on the date that is twenty (20) years following Launch of the Product in the Territory, whereupon the license shall become a royalty-free, non-exclusive, perpetual, worldwide license pursuant to the terms of Section 2.2(b).

(C) In the event Valera is required to pay patent royalties to a Third Party with respect to the sale of the Product, and the claims of such Third Party patents cover either a process used by Alpex in making the Product or an aspect of the Product other than the active ingredient, then Valera may reduce the amount of royalty paid to Alpex pursuant to this Section by the amount of royalties paid to such Third Party; provided, however, that the amount of such reduction shall in no event exceed fifty percent (50%).

(D) If no valid claim of an issued Alpex Patent covers the Product (including the process used by Alpex in manufacturing the Product) in a country of the Territory or all such claims covering the Product expire or are held invalid in a country of the Territory, then the royalties shall be reduced by fifty percent (50%) for Net Sales in such country of the Territory.

(E) The Parties acknowledge and agree that other than the royalty payments provided in this Section 8.3, the license payments provided in Section 8.2 hereof and the milestone payments provided in Section 8.1 hereof, and all other payment, indemnity and reimbursement obligations set forth in this Agreement, Alpex shall not be entitled to any amounts received by Valera or its Affiliates and sublicensees from the use, commercialization, license or sale of its rights under this Agreement, regardless of the form or manner of payment (including milestones, royalties or other amounts).

8.4. SUBLICENSE PAYMENTS.

(A) In the event Valera elects to sublicense its rights to use or sell the Products, Valera will pay to Alpex **** of all payments received by Valera from such sublicensees. Any sublicense will be on commercially reasonable terms with the intent of creating the greatest overall return to Valera and Alpex. In the event the royalties to be paid by a sublicensee will result in Alpex receiving an amount less than 50% of the

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royalties it would receive pursuant to Section 8.3 (a), Valera will provide Alpex notice of such sublicense no later than thirty (30) days following its execution. Alpex shall have right, exercisable within thirty (30) days of its receipt of notice from Valera to reject such sublicense, in which event Valera will terminate the sublicense. By way of example, if Valera sublicenses sales of Products in exchange for a **** royalty, Alpex’s **** share of such royalty would be **** or **** of the 8.3(a) royalty for sales up to ****, in which event Alpex would not have the right to reject the sublicense. If Valera sublicenses sales of Products in exchange for a **** royalty, Alpex’s **** share of such royalty would be **** or **** of the 8.3(a) royalty for sales up to ****, in which event Alpex would have the right to reject the sublicense. In no event will sublicensees have the right to have Product made for such sublicensees by Third Parties.

8.5. PAYMENTS.

(A) The license and milestone payments payable under Section 8.1 will be paid within the time period specified for such payment.

(B) The Party having primary responsibility for the completion of the applicable milestone shall provide written notice to the other Party not later than fifteen (15) days following the satisfaction of such milestone trigger.

(C) Royalties payable under Section 8.3 will be paid not later than forty-five (45) days following the end of each Fiscal Quarter, or not later than forty-five (45) days from the date that is as soon thereafter as may be practicable in order for Valera to determine the royalty payable. All payments shall be accompanied by a report in writing showing for the quarter for which such royalty payment applies: (i) the Net Sales (along with a reasonably detailed description of the calculation thereof); (ii) the royalties payable pursuant to Section 8.3 in United States dollars; and (iii) the withholding taxes, if any, required by law to be deducted with respect to such royalties and the amounts paid to the appropriate governmental authority with respect to such royalties.

8.6. WITHHOLDING TAXES. Valera shall be entitled to deduct from its payments to Alpex the amount of any withholding taxes, value-added taxes or other taxes, levies or charges with respect to such amounts payable by Valera, or any taxes in each case required to be withheld by Valera to the extent Valera pays the appropriate governmental authority on behalf of Alpex such taxes, levies or charges. Valera shall deliver to Alpex, upon reasonable request, proof of payment of all such taxes, levies and other charges and appropriate documentation which is necessary to obtain a tax credit, to the extent such tax credit can be obtained.

8.7. AUDIT. Valera shall maintain and shall require its Affiliates and sublicensees to mai