CO-DEVELOPMENT AND COMMERCIALIZATION AGREEMENT BETWEEN HUMAN GENOME SCIENCES, INC. AND GLAXO GROUP LIMITED

Exhibit 10.25

CO-DEVELOPMENT AND COMMERCIALIZATION AGREEMENT

BETWEEN

HUMAN GENOME SCIENCES, INC.

AND

GLAXO GROUP LIMITED

     THIS CO-DEVELOPMENT AND COMMERCIALIZATION AGREEMENT is made effective as of the 1st day of August, 2006 (“Effective Date”) by and between Human Genome Sciences, Inc., a Delaware corporation having its principal place of business at 14200 Shady Grove Road, Rockville, Maryland 20850 (“HGS”) and Glaxo Group Limited, a company organized under the laws of England and Wales with its principal place of business at GlaxoWellcome House, Berkeley Avenue, Greenford, Middlesex, UB6 0NN, United Kingdom (“GSK”). HGS and GSK shall be referred to herein collectively as “Parties” and individually as a “Party.”

RECITALS

WHEREAS, pursuant to the SB/HGS License Agreement entered into on June 28, 1996 by and among HGS, SmithKline Beecham Corporation (“SB Corp.”) and SmithKline Beecham p.l.c. (“SB PLC”), SB Corp. and SB PLC retained an option to co-develop and commercialize certain HGS products.

WHEREAS, SB Corp. and SB PLC have assigned its rights related to such option under the SB/HGS License Agreement to GSK.

WHEREAS, HGS has developed a compound know as belimumab, a human monoclonal antibody that neutralizes BLyS, B-lymphocyte stimulator.

WHEREAS, pursuant to the rights under the June 28, 1996 SB/HGS License Agreement which were assigned to GSK, GSK has exercised its option to co-develop and co-promote belimumab.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises, terms and conditions hereafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, HGS and GSK hereby agree to be legally bound as follows:

ARTICLE 1

DEFINITIONS

The following terms shall have the following meanings as used in this Agreement:

1.1 “Active Period” shall mean the period commencing upon the First Commercial Sale of a Collaboration Product and expiring on the later to occur of (i) the expiration of the last Valid Claim of HGS Existing Patent Rights claiming Collaboration Product sold in the Territory or (ii) ten (10) years after the First Commercial Sale of the Collaboration Product by HGS or GSK in the Territory.

1.2 “Additional Indications” shall mean any indication except the Lead Indication and Minor Indications.

1.3 “Adverse Event” shall mean any untoward medical occurrence in a patient or clinical investigation subject administered Collaboration Product which does not necessarily have to have a causal relationship with this administration. An Adverse Event can therefore be any unfavorable and unintended sign (including an abnormal laboratory finding), symptom or disease temporally associated with the use of Collaboration Product, whether or not considered related to Collaboration Product. Notwithstanding the above, all spontaneously reported Adverse Events involving Collaboration Product sold as a marketed product should be considered Adverse Drug Reactions (implied causal relationship) for regulatory reporting purposes.

1.4 “Affiliate” shall mean any corporation, firm, partnership or other legal entity, which directly or indirectly controls, is controlled by or is under common control with a party to this Agreement. A party shall be deemed to “control” another entity if it (a) owns at least fifty percent (50%) of the equity (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) of such other entity or (b) has the power by contract or otherwise to vote on or direct the management and policies of the entity.

1.5 “All Other Countries” shall mean all countries of the world other than the United States, Japan and those countries in the European Union.

1.6 “Alliance Manager” shall have the meaning set forth in Section 3.7.

1.7 “belimumab” shall mean the human monoclonal antibody that neutralizes BLyS with the sequence listed in Appendix E.

1.8 “BLyS” shall mean B-lymphocyte stimulator.

1.9 “Calendar Quarter” shall mean each of the four successive three calendar month periods in a Calendar Year.

1.10 “Calendar Year” shall mean each successive period of twelve (12) months commencing on January 1 and ending on December 31, for so long as this Agreement is in effect.

1.11 “Call” shall mean a personal visit by a Sales Representative to a member of the Target Audience legally permitted to prescribe prescription drugs during which such Sales Representative Details a Collaboration Product. The Parties may, by mutual agreement, designate additional types of Calls.

1.12 “Claims” shall have the meaning set forth in Section 14.1.

1.13 “Clinical Studies” shall mean Phase I Clinical Studies, Phase II Clinical Studies, and/or Phase III Clinical Studies.

1.14 “Clinical Supplies” shall mean supplies of Collaboration Product for pre-clinical and/or Clinical Studies for the Territory.

1.15 “Collaboration Product” shall mean any product incorporating belimumab, or a derivative, fragment, or modification thereof which retains neutralizing activity against BLyS, for any indication, in all dosage forms, delivery systems, formulations, presentations, line extensions and package configurations thereof. “Collaboration Product” shall include combination products incorporating belimumab as the therapeutically active ingredient.

1.16 “Collaboration Technology” shall mean HGS Existing Patent Rights, HGS Existing Know-How, GSK Arising Patent Rights, GSK Arising Know-How, HGS Arising Patent Rights, HGS Arising Know-How, Joint Arising Patent Rights and Joint Arising Know-How.

1.17 “Commercial Supplies” shall mean supplies of Collaboration Product for commercial sale in the Territory.

1.18 “Commercialization” shall mean all activities regarding the sale, distribution, Co-Promotion and Detailing of a Collaboration Product, and any pre-marketing or post-marketing studies (other than Phase I, Phase II or Phase III Clinical Studies) conducted to obtain or maintain all Regulatory Approvals, including market research and pharmaco-economic research. When used as a verb, “Commercialize” shall mean to make, have made, use, sell, offer to sell or import Collaboration Product.

1.19 “Committee” shall mean any of the JSC, JDC, GJMC, RJMC or JMC.

1.20 “Confidential Information” shall mean all technical and scientific know-how and information, pre-clinical and Clinical Studies results, computer programs, knowledge, technology, means, methods, processes, practices, formulas, techniques, procedures, technical assistance, designs, drawings, apparatus, written and oral representations of data, specifications, assembly procedures, schematics and other valuable information of whatever nature and all other scientific, clinical, regulatory, marketing, financial and commercial information or data, whether communicated in writing, verbally or electronically, which is provided by one party to the other party in connection with this Agreement.

1.21 “Control” shall mean possession of the ability to grant licenses or sublicenses to intellectual property as contemplated by this Agreement without violating the terms of any agreement or other arrangement with any Third Party.

1.22 “Co-Promotion” shall mean those marketing and promotional activities, other than Detailing, undertaken by GSK or HGS to implement the Marketing Plans and strategies with respect to a Collaboration Product under a single Product Trademark, where permitted, wherein only one Party sells the Collaboration Product. When used as a verb, “Co-Promote” shall mean to engage in such activities.

1.23 “Cost of Goods” or “CoGs” shall mean the fully allocated cost of Manufacturing Commercial Supplies of Collaboration Product, as such costs are specifically allocated to such Collaboration Product and as computed in accordance with U.S. generally accepted accounting principles (“GAAP”), including, without limitation, the following:

     (a) Materials cost, which means the price paid for raw material, intermediates, components and finished goods which are purchased from outside vendors as well as any freight and duty where applicable;

     (b) Direct labor costs, which means the allocable employment cost of all personnel engaged in the Manufacture of the Collaboration Product including, without limitation, salary and employee benefits within the relevant manufacturing operating unit wherein allocable employment costs shall mean only those direct labor costs applied to the actual Manufacture of the Collaboration Product;

     (c) Direct costs and factory overhead costs, which means the cost of specific activities that are provided by support functions either on or off-site, provided they are directly related to the Manufacture or packaging of Collaboration Product and not a general overhead allocation or charge. Overhead costs include, but are not limited to, expenses associated with quality assurance testing, quality compliance, stability testing, batch review, equipment maintenance costs, manufacturing utilities, waste removal, storage, transportation, insurance for the factory, its contents or other directly related items, factory management and factory administrative expenses, factory facilities costs which shall include lease payments made by HGS, environmental engineering and property taxes. These expenses shall be reasonably allocated to the Manufacture of Collaboration Product on a pro rata basis based on the allocation methodology appropriate at the Manufacturing site. Such expenses shall exclude costs relating to available capacity which is not used in or reserved for the Manufacture of the Collaboration Product.

     (d) Depreciation costs, which represent the annual amortization of original purchase costs reasonably allocated to the Manufacture of Collaboration Product on a pro rata basis based on the allocation methodology appropriate at the Manufacturing site over the useful life of the asset, and

     (e) the out-of-pocket costs of freight and tariffs and other expenses associated with transporting Collaboration Product from the source of manufacture to a distribution center, inclusive of any interim points of delivery, but excluding (i) any such costs which are separately invoiced to a customer, and (ii) FTEs involved in the management of supply chain logistics.

     For the sake of clarity, if a cost is an addition to the COGs calculation herein, such cost shall not also be accounted for as a deduction in the Net Sales calculation and vice versa. Notwithstanding the foregoing, HGS shall not be entitled to include as COGS those overhead and depreciation costs referenced in (c) and (d) above that were incurred prior to the Effective Date and that are solely attributable to reserved capacity. After the Effective Date, HGS shall use reasonable efforts to mitigate costs attributable to reserved capacity by utilizing such reserved capacity until such time as it is needed.

1.24 “Costs” shall have the meaning set forth in Section 14.1.

1.25 “CTA” shall mean a clinical trial application filed in accordance with ICH guidelines.

1.26 “Current Good Manufacturing Practices” or “cGMPs” shall mean all applicable standards relating to manufacturing practices for fine chemicals, intermediates, bulk products or finished pharmaceutical products. For purposes of this Agreement, cGMPs shall mean the principles (i) detailed in the U.S. Current Good Manufacturing Practices, 21 CFR Parts 210 and The Rules Governing Medicinal Products in the European Community, Volume IV Good Manufacturing Practice for Medicinal Products as each may be amended from time to time or (ii) promulgated by any Governmental Authority having jurisdiction over the manufacture of the Collaboration Product, in the form of Laws, (iii) promulgated by any Governmental Authority having jurisdiction over the manufacture of the Collaboration Product, in the form of guidance documents (including but not limited to advisory opinions, compliance policy guides and guidelines) which guidance documents are being implemented within the pharmaceutical

manufacturing industry for such products and subject to any arrangements, additions or clarifications agreed to from time to time by the Parties in the Quality Agreement to be negotiated pursuant to Article 9.

1.27 “Detail” or “Detailing” shall mean, a Primary Detail or a Secondary Detail. When used as a verb, Detail shall mean to engage in the activities set forth herein. For the avoidance of doubt, discussions at conventions shall not constitute “Details” or “Detailing”.

1.28 “Detail Requirements” shall have the meaning set forth in Section 5.5.2.

1.29 “Development” shall mean all activities relating to the research and development of a Collaboration Product as approved by the JDC, including, but not limited to, the conduct of all pre-clinical and Clinical Studies and the submission of all Regulatory Applications for all Regulatory Approvals necessary for the manufacture, sale, marketing, and distribution of a Collaboration Product. When used as a verb, “Develop” shall mean to engage in such activities.

1.30 “Development Expenses” shall mean, the FTE costs and direct out-of-pocket cash costs recorded as an expense in accordance with GAAP by or on behalf of a Party or any of its Affiliates after June 30, 2006, related to the Development of the Lead Indication, Minor Indications and Additional Indications that are specifically identifiable or reasonably allocable to the Development of a Collaboration Product, which Development activities are set forth in the approved Development Plan or otherwise approved in advance by the Joint Development Committee or Joint Steering Committee in accordance with Section 3.2.5. Subject to the foregoing, Development Expenses shall include such costs in connection with the following activities:

     (a) pre-clinical activity costs such as toxicology and formulation development, test method development, stability testing, quality assurance, quality control development and statistical analysis;

     (b) clinical costs, except for costs associated with Phase IV Clinical Studies;

     (c) regulatory expenses relating to the conduct of Clinical Studies, wherever performed, for a Collaboration Product;

     (d) Manufacturing Clinical Supplies of Collaboration Product for use in Clinical Studies and any pre-clinical activities in support thereof;

     (e) The Manufacture, purchase or packaging of comparators or placebo for use in Clinical Studies (with the Manufacturing costs for comparators or placebo to be determined in the same manner as Manufacturing costs are determined for Clinical Supplies of any Collaboration Product);

     (f) Direct costs and expenses of disposal of Clinical Supplies of Collaboration Product and other supplies used in such Clinical Studies and pre-clinical activities, and

     (g) Development of the Manufacturing process for Commercial Supplies of a Collaboration Product, scale-up, Manufacturing process validation, Manufacturing improvements and qualification and validation of Third Party contract manufacturers..

1.31 “Development Plan” shall mean the plan for the Collaboration Product designed to achieve the Development for such Collaboration Product for the Lead Indication as well as Minor Indications and Additional Indications, including, without limitation, the budget and nature, number and schedule of Development activities.

1.32 “Diligent Efforts” shall mean, with respect to the research, development, manufacture or commercialization of a Collaboration Product, efforts and resources that would be used by a Party consistent with its normal business practices for a similar product, which in no event shall be less than the level of efforts and resources standard in the pharmaceutical industries for a company similar in size and scope to that Party with respect to such activity, subject always to the requirement to take into account, without limitation, matters such as efficacy and safety profile of any such product, the development stage of the product, the commercial potential of the product, the degree of technical complexity and the scientific characteristics of the product, the competitiveness of alternative products that are in the marketplace or under development, and the patent and other intellectual property and proprietary position of any product. Diligent Efforts requires that: (i) each Party promptly assigns responsibility for such obligations to specific employees who are held accountable for progress and monitor such progress on an on-going basis, (ii) each Party sets and consistently seeks to achieve the objectives assigned to such party as set forth in the Development Plan, and (iii) each Party consistently makes and

implements decisions and allocates resources designed to meet such objectives. For avoidance of doubt, Diligent Efforts as applied through this Agreement is to be applied to a Party with respect to how that Party would progress a similar product in that Party’s own pipeline.

1.33 “Dispute Detailing Audit Data” shall mean the absolute number of Details performed by a Party’s Sales Representatives for a given Calendar Year, as reflected in the Personal Selling Audit and Hospital Personal Selling Audit of Scott-Levin Associated or IMS America. In the event the Personal Selling Audit or Hospital Personal Selling Audit for any given period or periods does not report details for the physician specialties which correspond to the Target Audience, the Parties shall mutually agree upon an alternative methodology to verify the internal Detailing records of a Party.

1.34 “Distribution Costs” shall mean the supply price paid by GSK to HGS for supplies of Collaboration Product to be distributed by GSK as set forth in Article 9 herein and the supply and distribution agreement and quality agreement to be negotiated pursuant to Article 9, as well as all costs associated with order entry, billing, credit, collection, handling, storage, importation and distribution of the Collaboration Product in the Territory while in GSK’s possession (such costs to be calculated as a percentage of Net Sales, such percentage to be agreed by the GJMC pursuant to Section 3.3.1(ii) and to be reconciled and adjusted periodically thereafter), whether Collaboration Product is owned by GSK or HGS, including without limitation costs of the vials necessary for quality control testing, brokerage costs, and transportation costs.

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

1.36 “Field” shall mean all human therapeutic, diagnostic, palliative and prophylactic indications.

1.37 “First Commercial Sale” shall mean the date on which Collaboration Product is first shipped to wholesalers and retailers by GSK in commercial quantities from its distribution centers for commercial sale to a Third Party in any country after receipt of Marketing

Authorization Approval for such Collaboration Product in such country. Sales for test marketing, sampling and promotional uses or Clinical Studies or research purposes or compassionate uses will not be considered a First Commercial Sale.

1.38 “FTE” shall mean full-time equivalent employment.

1.39 “FTE Cost” shall mean, unless otherwise agreed to by the Parties, the specific dollar amount agreed upon by the Parties hereto for each FTE, where the number of and rate for the FTEs shall be determined by the appropriate Committee.

1.40 “GJMC” shall mean the Global Joint Marketing Committee, as further defined in Section 3.3.1.

1.41 “Governmental Authority” shall mean any court, tribunal, arbitrator, agency, commission, official or other instrumentality of any government or of any federal, state, county, city or other political subdivision, domestic or foreign, including Regulatory Authorities.

1.42 “GSK Arising Know-How” shall mean any inventions, discoveries, information, data and know-how, whether or not patentable, pertaining to improvements, modifications, and adaptations to any part of the Collaboration Technology which is developed during the term of and pursuant to this Agreement by or on behalf of GSK.

1.43 “GSK Arising Patent Rights” shall mean rights under any patents or patent applications which are owned or Controlled by GSK, and any and all substitutions, continuations, divisionals, continuations-in-part, reissues, renewals, registrations, confirmations, reexaminations, extensions including supplementary protection certificates, foreign equivalents or counterparts, and other filings thereof, containing claims that specifically cover patentable GSK Arising Know-How.

1.44 “GSK Indemnitee” shall have the meaning set forth in Section 14.2.

1.45 “HGS Arising Know-How” shall mean any inventions, discoveries, information, data or know-how, whether or not patentable, pertaining to improvements, modifications, and adaptations to any part of the Collaboration Technology which is developed during the term of this Agreement by or on behalf of HGS pursuant to this Agreement.

1.46 “HGS Arising Patent Rights” shall mean rights under any patent or patent applications owned or Controlled by HGS, and any and all substitutions, continuations, divisions, continuations-in-part, reissues, renewals, registrations, confirmations, reexaminations, extensions including supplementary protection certificates, foreign equivalents or counterparts, and other filings thereof, containing claims that specifically cover patentable HGS Arising Know-How.

1.47 “HGS Existing Know-How” shall mean any inventions, discoveries, information, data or know-how, whether or not patentable, specifically relating to the research, development, registration, marketing, use, sale or Commercialization of Collaboration Product, which were developed by or on behalf of HGS or were in HGS’ possession or Control through a license or otherwise prior to the Effective Date.

1.48 “HGS Existing Patent Rights” shall mean rights under any patents or patent applications specifically related to belimumab or Collaboration Product which are owned or Controlled by HGS as of the Effective Date and which are listed in Appendix A attached hereto and incorporated herein by reference. Collaboration Patent Rights shall also include all United States and foreign patents with claims entitled to the priorities of any of the patent applications and patents listed in Appendix A, including any continuation, continuation-in-part or divisional applications thereof.

1.49 “HGS Indemnitee” shall have the meaning set forth in Section 14.1.

1.50 “Housemarks” shall mean the names of a Party or its Affiliate, or variations of the names, and all related logotypes and symbols used by a Party in connection with its products.

1.51 “Internal Detailing Report” shall have the meaning set forth in Section 5.5.3.

1.52 “JDC” shall mean the Joint Development Committee, as further defined in Section 3.2.

1.53 “JMC” shall mean the Joint Manufacturing Committee, as further defined in Section 3.4.

1.54 “JSC” shall mean the Joint Steering Committee, as further defined in Section 3.1.

1.55 “Joint Arising Know-How” shall mean any inventions, discoveries, information, data and know-how, whether or not patentable, pertaining to improvements, modifications, and adaptations to any part of the Collaboration Technology which is developed during the term of this Agreement by or on behalf of HGS and GSK jointly.

1.56 “Joint Arising Patent Rights” shall mean rights under any patents or patent applications owned or Controlled jointly by the Parties, and any and all substitutions, continuations, divisionals, continuations-in-part, reissues, renewals, registrations, confirmations, reexaminations, extensions including supplementary protection certificates, foreign equivalents or counterparts, and other filings thereof, containing claims that specifically cover patentable Joint Arising Know-How.

1.57 “Laws” shall mean all laws, statutes, rules, regulations, ordinance, guidances and other pronouncements having the effect of law of any government or Governmental Authority.

1.58 “Lead Indication” shall mean the indication of SLE.

1.59 “Losses” shall mean any and all damages, fines, fees, penalties, judgments, deficiencies, losses and expenses (including without limitation interest, court costs, reasonable fees of attorneys, accountants and other experts or other expenses of litigation or other proceedings or of any claim, default or assessment).

1.60 “Manufacture” or “Manufacturing” shall mean all activities directly related to the manufacture of Clinical Supplies and Commercial Supplies of the Collaboration Product, including, without limitation, the planning, purchasing, manufacture, transportation, processing, compounding, quality assurance testing, quality control, regulatory compliance, storage and maintenance of cell banks, manufacture and testing of future cell banks, waste disposal, sample retention, formulation, stability testing, storage, filling, packaging, labeling, leafleting, release and dispatch and such other matters in each case as specifically applicable to the relevant Collaboration Product.

1.61 “Marketing Approval Application” or “MAA” shall mean, with respect to any country outside the United States, any application submitted to the relevant Regulatory Authorities seeking authorization to market a Collaboration Product in the Territory.

1.62 “Marketing Expenses” shall mean, excluding any Development Expenses, all external costs and expenses incurred (i.e., paid or accrued) by a Party, whether incurred by HGS or its Affiliates, or GSK or its Affiliates, to the extent provided for in an approved Marketing Plan or otherwise approved in advance by the RJMC or the Joint Steering Committee, and solely to the extent related to Collaboration Products, for Commercialization in connection with: marketing, advertising, sampling and promoting a Collaboration Product, including without limitation costs associated with Phase IV Clinical Studies, development of training plans, educational expenses, programs in any format that are related to patient education, physician education and disease management, including speakers’ programs and symposia, and joint marketing and sales meetings; primary and secondary market research; and Promotional Materials; and Samples. For clarity, Marketing Expenses shall include sales force FTE Costs. For the sake of clarity, internal marketing personnel expenses shall not be included in this definition.

1.63 “Marketing Plan” shall mean for the Collaboration Product a plan and budget for the promotion and marketing of the Collaboration Products as developed by the RJMC and approved by the GJMC.

1.64 “Minor Indications” shall mean those minor indications [***] that are agreed by the JDC to be supportive of and/or incremental to the Development and Commercialization of the Lead Indication, [***].

1.65 “NDA” shall mean, with respect to the United States, a New Drug Application or Biologics License Application (or their equivalent) filed with the United States Food and Drug Administration seeking authorization to market a Collaboration Product in the United States.

1.66 “Net Profit” shall mean Net Sales in a given country or region minus the Cost of Goods (except for Cost of Goods for which GSK reimburses HGS pursuant to Section 9.2.2) and Distribution Costs of Collaboration Product in such country minus any Third Party royalties paid by either HGS or GSK on such Net Sales in such country.

1.67 “Net Sales” shall mean the gross amount invoiced by a Party, its Affiliates, or sublicensees for sales, transfer or disposition to independent, unrelated Third Parties of a Collaboration Product (such Collaboration Product being in the final form intended for use by the end user), during such time period (including the fair market value of all other consideration received for the sale, transfer or other disposition of a Collaboration Product by a Party, its Affiliates, or sublicensees, whether such consideration is in cash, payments in kind, exchange or other forms), exclusive of (i) inter-company transfers or sales to or from its Affiliates or sublicensees, (ii) transfers of samples of the Collaboration Product such as for physician samples and indigent patient and similar programs (including registration samples), and (iii) transfers of the Collaboration Product for use in post-launch Clinical Studies, less the Permitted Deductions. The Permitted Deductions shall include only the following, to the extent each is actually incurred and is not otherwise recovered by or reimbursed to GSK or HGS, its Affiliates, or sublicensees (which are to be determined under generally accepted accounting principles (“GAAP”) in the United States) and does not exceed the reasonable and customary amount for such item in the market in which the sale occurred:

     (a) trade, cash and quantity discounts or rebates on any Collaboration Products;

     (b) credits, allowances, rebates or chargebacks given or made to a customer for retroactive price reductions (including rebates similar to Medicaid);

     (c) sales taxes, excise taxes and duties or other governmental charges levied on or measured by the billing amount, as adjusted for rebates or refunds, imposed upon the importation, use or sale of a Collaboration Product;

     (d) charges for freight and insurance directly related to the distribution of the Collaboration Products (to the extent not paid by the Third Party customer); and

     (e) The lesser of (i) [***] of the aggregate gross amount billed or invoiced on sales of Collaboration Product in the relevant country or (ii) the actual amount of any write-offs for bad debt relating to such sales.

The provisions of (a) through (e) above shall be adjusted periodically as necessary to reflect amounts actually incurred.

1.68 “PDMA” shall mean the U.S. Federal Food, Drug and Cosmetics Act of 1938, as amended, and the Prescription Drug Marketing Act of 1987, as amended.

1.69 “Phase I Clinical Study” shall mean a human clinical study in any country conducted in accordance with good clinical practices (“GCPs”) in a small number of healthy volunteers or patients designed or intended to establish an initial safety profile, pharmacodynamics or pharmacokinetics of product, or that would otherwise satisfy the requirements of 21 CFR §312.21(a) or any successor regulation thereto or foreign equivalents.

1.70 “Phase II Clinical Study” shall mean a human clinical study in any country that is conducted in accordance with GCPs and is intended to initially evaluate the effectiveness of a product for a particular indication or indications in patients with the disease or indication under study, or that would otherwise satisfy the requirements of 21 CFR §312.21(b) or any successor regulation thereto or foreign equivalents.

1.71 “Phase III Clinical Study” shall mean a human clinical study in any country that is conducted in accordance with GCPs and the results of which could be used as pivotal to establish safety and efficacy of a product as a basis for a marketing approval application submitted to the FDA or the appropriate regulatory authority of such other country, or that would otherwise

satisfy the requirements of 21 CFR §312.21(c), or any successor regulation thereto or foreign equivalents.

1.72 “Phase IV Clinical Study” shall mean human clinical studies that are supportive of post-launch activities, including Commercialization and Co-Promotion of Collaboration Product.

1.73 “Primary Detail” shall mean a face-to-face presentation by a Sales Representative with the Target Audience in which Collaboration Product is either the only pharmaceutical product which is presented or is given a majority of the emphasis during the presentation in which other pharmaceutical products are also discussed.

1.74 “Product Labeling” shall mean all labels and other written, printed, or graphic matter upon (a) any container or wrapper utilized with Collaboration Product during the Active Period and Tail Period in the Territory or (b) any written material accompanying any container or wrapper utilized with the Collaboration Product during the Active Period and Tail Period, including, package inserts.

1.75 “Product Trademarks” shall mean all trademarks, other than Housemarks, used or intended for use on or in connection with a Collaboration Product in the Territory.

1.76 “Promotional Materials” shall mean all written, printed, video or graphic advertising, promotional, educational and communication materials (other than Collaboration Product Labeling) for marketing, advertising and promotion of the Collaboration Products for use by (a) a Sales Representative or (b) advertisements or direct mail pieces, in accordance with the terms of the applicable Marketing Plan.

1.77 “RJMC” shall mean the Regional Joint Marketing Committee as further defined in Section 3.3.2.

1.78 “Region” means any of the United States, the European Union, Japan or All Other Countries.

1.79 “Regulatory Application” shall mean any application or request necessary for the development, manufacture, distribution, marketing, promotion, offer for sale, use, import, export, sale, reimbursement or pricing of a Collaboration Product, including but not limited to any applications or requests for (i) approval of Collaboration Product, including NDAs and MAAs, abbreviated new drug applications or supplemental new drug applications or any supplements or amendments thereto (as defined in 21 C.F.R. § 314.50 et. seq .) submitted to the FDA or foreign equivalent; (ii) pre- and post-approval marketing applications for prerequisite manufacturing approval or authorization related thereto); (iii) labeling approval; (iv) technical, medical and scientific licenses; and (v) registrations or authorizations from any national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity necessary for the development, manufacture, distribution, marketing, promotion, offer for sale, use, import, export or sale of Collaboration Product.

1.80 “Regulatory Approval” shall mean all official approvals by a Regulatory Authority in a country or region which are required for the use and/or sale of a Collaboration Product in that country or region including applicable development, manufacture, distribution, marketing, promotion, offer for sale, use, importation, exportation, sale, pricing and reimbursement approvals.

1.81 “Regulatory Authority” shall mean any applicable government regulatory authority involved in granting Regulatory Approvals for the development, manufacture, distribution, marketing, promotion, offer for sale, use, import, export, sale, reimbursement or pricing of any Collaboration Product, including, in the United States, the FDA.

1.82 “SLE” shall mean Systemic Lupus Erythematosus.

1.83 “Sales Representative” shall mean a professional pharmaceutical sales representative engaged or employed by either Party to conduct, among other sales responsibilities, Detailing and other promotional efforts with respect to the Collaboration Products and who has been trained by either Party in accordance with a training protocol to be agreed upon by the GJMC.

1.84 “Samples” shall mean Collaboration Product packaged and distributed to members of the Target Audience as a complimentary trial for use with patients.

1.85 “Secondary Detail” shall mean a face-to-face presentation by a Sales Representative with the Target Audience in which Collaboration Product is not presented as a Primary Detail but is given an important emphasis during the presentation, but not less than that given to other pharmaceutical products discussed during the presentation; provided, however, that a Detail during a sales call in which greater emphasis is placed upon two or more other products than the emphasis placed upon Collaboration Product shall not be considered a Secondary Detail.

1.86 “Senior Officers” shall have the meaning set forth in Section 3.1.3.

1.87 “Tail Period” shall mean the period commencing on the expiration date of the Active Period and continuing for three (3) years thereafter.

1.88 “Target Audience” shall mean the physician specialties with authority to prescribe a pharmaceutical product or issue hospital orders for a pharmaceutical product, as may be amended from time to time by the RJMC.

1.89 “Target Product Profile” shall mean the description of the commercially relevant range of acceptable product performance of a compound against key characteristics used to shape the progressions and development decisions and attached hereto as Appendix C and hereby incorporated by reference.

1.90 “Term” shall have the meaning set forth in Section 12.1.

1.91 “Territory” shall mean all of the countries and territories of the world.

1.92 “Third Party” shall mean any person or entity other than HGS, GSK, their respective Affiliates, or their employees.

1.93 “United States” shall mean the fifty states and District of Columbia that comprise the United States of America.

1.94 “Valid Claim” shall mean a claim of an issued, unexpired patent owned or Controlled by HGS, which claim has not lapsed, been abandoned, been revoked or been held to be invalid or unenforceable by a final judgment of a court or other governmental agency or competent jurisdiction from which no appeal can be or is taken within the time allowed for appeal and which has not been admitted to be invalid or unenforceable through reissue, re-examination, disclaimer or otherwise.

ARTICLE 2

LICENSES

2.1 License Grants to HGS Existing Patent Rights and HGS Existing Know-How .

          2.1.1 Co-Development License. Subject to the terms of this Agreement, HGS hereby grants to GSK an exclusive (except as to HGS and its Affiliates and permitted sublicensees), sublicensable (only in accordance with Section 2.3) license under the HGS Existing Patent Rights and HGS Existing Know-How to Develop Collaboration Products for Commercialization in the Territory during the Active Period, pursuant to the terms of this Agreement.

          2.1.2 Commercialization License. HGS hereby grants to GSK an exclusive (except as to HGS and its Affiliates and permitted sublicensees), sublicensable (only in accordance with Section 2.3) license under the HGS Existing Patent Rights and HGS Existing Know-How to Commercialize Collaboration Products with HGS in the Territory during the Active Period, pursuant to the terms of this Agreement and further subject to HGS’ right to Manufacture Collaboration Product in Article 9 herein, provided, however, that if HGS does not Manufacture Collaboration Product as contemplated in Article 9, GSK’s license under this Section 2.1.2 shall remain unchanged during the Active Period.

2.2 License Grants for Arising Patent Rights and Arising Know-How.

          2.2.1 Subject to the terms of this Agreement, GSK hereby grants to HGS, an exclusive (except as to GSK and its Affiliates and permitted sublicensees), sublicensable (only in accordance with Section 2.3) license under the GSK Arising Patent Rights, GSK Arising Know-How and GSK’s rights in the Joint Arising Patent Rights and Joint Arising Know-How to Develop and Commercialize Collaboration Products in the Territory, pursuant to the terms of this Agreement.

          2.2.2 Subject to the terms of this Agreement, HGS hereby grants to GSK, an exclusive (except as to HGS and its Affiliates and permitted sublicensees), sublicensable (only in accordance with Section 2.3) license under the HGS Arising Patent Rights, HGS Arising Know-How and HGS’ rights in the Joint Arising Patent Rights and Joint Arising Know-How to Develop and Commercialize Collaboration Products in the Territory during the Active Period, pursuant to the terms of this Agreement.

2.3 Sublicensing.

          2.3.1 GSK Sublicensing or Subcontracting to Affiliates and Contract Research Organizations. GSK may sublicense or subcontract its rights to use the Collaboration Technology or Product Trademarks to Develop or Commercialize Collaboration Products in whole or in part to one or more of its Affiliates or a contract research organization performing work for GSK under this Agreement on a fee-for-service basis, provided that the rights sublicensed or subcontracted to any Affiliate shall automatically terminate upon a change of control of such Affiliate in connection with which such Affiliate ceases to be an Affiliate of GSK.

          2.3.2 GSK Sublicensing or Subcontracting to Third Parties. GSK shall have the right to sublicense or subcontract its rights to use the Collaboration Technology and Product Trademarks to Commercialize Collaboration Products to any Third Party, provided GSK obtains

the prior written consent of HGS, such consent not to be unreasonably withheld. Upon notification by GSK of its desire to sublicense its rights hereunder, HGS shall have [***] to review such proposal. If HGS fails to notify GSK in writing of its decision within such [***] period, HGS shall be deemed to have consented to such sublicense.

          2.3.3 HGS Sublicensing or Subcontracting to Affiliates and Contract Research Organizations. HGS shall have the right to sublicense or subcontract its rights to use the Collaboration Technology to Develop and Commercialize Collaboration Products in whole or in part to one or more of its Affiliates or to a contract research organization performing work for HGS under this Agreement on a fee-for-service basis, provided that the rights sublicensed or subcontracted to any Affiliate shall automatically terminate upon a change of control of such Affiliate in connection with which such Affiliate ceases to be an Affiliate of HGS.

          2.3.4 HGS Sublicensing or Subcontracting to Third Parties. HGS shall have the right to sublicense or subcontract its rights to use the Collaboration Technology to Commercialize Collaboration Products to any Third Party, provided HGS obtains the prior written consent of GSK, such consent not to be unreasonably withheld. Upon notification by HGS of its desire to sublicense its rights hereunder, GSK shall have [***] to review such proposal. If GSK fails to notify HGS in writing of its decision within such [***] period, GSK shall be deemed to have consented to such sublicense.

          2.3.5 Liability for Affiliates, Sublicensees and Subcontractors. Each Party shall ensure that each of its Affiliates and sublicensees or subcontractors accepts and complies with all of the terms and conditions of this Agreement as if such Affiliates or sublicensees or subcontractors were a party to this Agreement and each Party shall be primarily liable for its Affiliates’ and sublicensees’ or subcontractors’ performance under this Agreement.

2.4 Product Trademarks for Collaboration Products. The Parties shall agree on the Product Trademarks to be used for the Collaboration Product through the GJMC, as set forth in Section 3.3.1. Unless otherwise agreed by the Parties, HGS shall exclusively own all Product Trademarks approved by the GJMC. Subject to the terms of this Agreement, HGS hereby grants

to GSK, an exclusive (except as to HGS and its Affiliates and permitted sublicensees), sublicensable (in accordance with Section 2.3) license under the Product Trademarks to Commercialize Collaboration Products in the Territory, pursuant to the terms of this Agreement. Upon the Parties agreement on the Product Trademarks to be used for the Collaboration Product and prior to using such Product Trademarks in the Commercialization of the Collaboration Product, the Parties shall enter into a formal trademark license agreement which shall set forth the license grant in this Section 2.4 and quality control provisions. Such formal trademark license agreement shall be used for recordation purposes of such trademark licenses in countries in the Territory where such recordation is required. Such separate formal trademark license agreement shall also include a license to use each Party’s Housemarks in Commercializing Collaboration Products.

2.5 In the event of any bankruptcy or insolvency of a Party hereto, or in the event of any default or material breach by a Party of the terms of any agreement granting rights to the other Party under the HGS Existing Know-How, HGS Existing Patent Rights, HGS Arising Know-How, HGS Arising Patent Rights, GSK Arising Know-How or GSK Arising Patent Rights, and in order to preserve the non-defaulting Party’s rights to practice the licenses granted to such Party under this Article 2, the defaulting Party hereby agrees to provide reasonable assistance in the event that the non-defaulting party and/or its Affiliate desires to obtain contractual privity directly with any Third Party licensor to establish the non-defaulting Party and/or its Affiliate as a stand-in licensee under any agreement granting the defaulting Party rights under the HGS Existing Patent Rights, HGS Existing Know-How, HGS Arising Patent Rights, HGS Arising Know-How, GSK Arising Know-How or GSK Arising Patent Rights, such that the non-defaulting Party and/or its Affiliate may continue to practice as a licensee under the HGS Existing Patent Rights, HGS Existing Know-How, HGS Arising Patent Rights, HGS Arising Know-How, GSK Arising Know-How or GSK Arising Patent Rights.

2.6 HGS and GSK hereby hold each other harmless and covenant not to sue for any use of intellectual property by the other Party during the term of this Agreement and in furtherance of this Agreement, whether or not such use is specifically included in this Agreement.

ARTICLE 3

GOVERNANCE OF DEVELOPMENT AND COMMERCIALIZATION OF

COLLABORATION PRODUCTS

3.1 Joint Steering Committee .

          3.1.1 Members. As soon as reasonably practicable following the Effective Date, HGS and GSK will establish a joint steering committee (the “JSC”) made up of six (6) representatives (three (3) representatives to be appointed by GSK and three (3) representatives to be appointed by HGS). HGS and GSK will co-chair the JSC and the chairpersons shall be members of the JSC. HGS’ representatives on the JSC will include HGS’ [***] and GSK’s representatives on the JSC will include GSK’s [***]. Representatives from both Parties must be at the vice president level or above, unless otherwise mutually agreed by the Parties. Each of GSK and HGS may replace any or all of its representatives on the JSC at any time upon written notice to the other Party, provided such new representatives are at the vice president level or above and further provided that such representatives have the requisite experience and expertise in pharmaceutical drug development and commercialization.

          3.1.2 Responsibilities. The JSC shall perform the following functions: (a) review and resolve any issues presented to it by the JDC, the GJMC, the RJMCs or the JMC; (b) establish the GJMC at a time deemed appropriate by the JSC; (c) resolve disputes, disagreements and deadlocks unresolved by the JDC, the GJMC, or the JMC; (d) review and approve, when necessary or appropriate, the Development Plans and Marketing Plans for Collaboration Products and any material amendments to the Development Plans and Marketing Plans; and (e) have such other responsibilities as may be assigned to the Joint Steering Committee pursuant to this Agreement or as may be mutually agreed upon by the Parties from time to time.

               (i)  Meetings. The Joint Steering Committee shall meet in person at least one (1) time during every Calendar Year and at least two (2) times in person or by telephone or videoconference during every Calendar Year, and more frequently as GSK and HGS deem appropriate or as required to resolve disputes, disagreements or deadlocks in the other committees, on such dates, and at such places and times, as such Parties shall agree;

provided that the Parties shall endeavor to have the first meeting of the Joint Steering Committee within thirty (30) days after the establishment of the Joint Steering Committee. Meetings of the Joint Steering Committee that are held in person shall alternate between offices of GSK and HGS, or such other place as such Parties may agree. The members of the Joint Steering Committee also may convene or be polled or consulted from time to time by means of telecommunications, video conferences, electronic mail or correspondence, as deemed necessary or appropriate. Meetings of the JSC may be held in person or by teleconference, as may be determined by the JSC.

          3.1.3 Decision Making. All decisions of the JSC shall be made by unanimous vote, with each Party having one vote. Reasonable efforts will be made to come to a consensus decision. With respect to any issue, if the Joint Steering Committee cannot reach consensus within [***] after the matter has been brought to the Joint Steering Committee’s attention, then all Development issues shall be referred to the Chief Executive Officer of HGS and the Chairman , Research & Development of GSK for resolution and all Commercialization issues shall be referred to the Chief Executive Officer of HGS and the President of Pharmaceutical Operations of GSK for resolution (in each case, the “Senior Officers”).

3.2 Joint Development Committee.

          3.2.1 Members. Within thirty (30) days after the Effective Date, the Parties shall establish a joint development committee (the “JDC”), and GSK and HGS shall designate representatives, up to a maximum total of eight (8) members on such Joint Development Committee. HGS and GSK will co-chair the JDC. The chairpersons shall be members of the JDC. The representation of the Parties on the JDC shall be determined by the Parties. Functional areas required to participate at JDC meetings will be determined by the Parties based on topics and agendas scheduled for such meeting. Each of GSK and HGS may replace any or all of its representatives on the Joint Development Committee at any time upon written notice to the other Party. Such functional-area representatives shall include individuals who have experience in Clinical Studies, clinical operations, regulatory activities, Commercialization, and expertise in pharmaceutical drug development. GSK and HGS each may, on advance written

notice to the other Party, invite non-voting, ad hoc representatives of such Party to attend meetings of the Joint Development Committee.

          3.2.2 Responsibilities. The JDC will perform the following functions: (i) evaluate the scientific and commercial feasibility for, and direct, any Development of Collaboration Product for all indications being jointly Developed by the Parties pursuant to Section 4.2 below and/or additional dosage forms in the Territory, and recommend and approve the budget for the Development Expenses for related Development of the Lead Indication, Minor Indications and Additional Indications; (ii) manage and oversee the preparation and implementation of Development Plans including agreeing to any future Development work required, including but not limited to clinical protocol design and endpoint measures for Phase III Clinical Studies and Phase IV Clinical Studies on the Collaboration Product for the Lead Indication in the Territory (including all post-approval studies and activities required to obtain desired Collaboration Product Labeling), and recommend the budget for any such Phase III Clinical Studies and Phase IV Clinical Studies for Minor Indications and Additional Indications; (iii) approve the Target Product Profile for the Collaboration Product, which will include clinical and commercial attributes, for the Lead Indication and each Additional Indication approved by the JDC in accordance with Section 3.2.5; (iv) each year beginning with the first full Calendar Year after the Effective Date, update and amend the initial Development Plans for the following Calendar Year; (v) determine whether the Collaboration Product achieved the mutually agreed Target Product Profile for the relevant indication; (vi) make any material amendments or modifications to the Development Plans; (vii) coordinate and monitor regulatory strategy and activities for the Collaboration Products in accordance with Article 8; (viii) at each meeting of the Joint Development Committee, review a comparison of actual Development Expenses for the Lead Indication as well as Development Expenses for Minor Indications and Additional Indications to the budgeted Development Expenses for such indications for the United States in the Development Plan for the year-to-date, as current as practicable to a date immediately prior to the date of the meeting; (ix) review and approve decisions to either move forward or abandon the Development of Collaboration Products; (x) establish FTE rates for tracking and reimbursement of internal costs that form part of the Development Expenses for the Lead Indication, Minor Indications and Additional Indications; and (xi) have such other responsibilities as may be assigned to the Joint

Development Committee pursuant to this Agreement or as may be mutually agreed upon by the Parties from time to time.

          3.2.3 Meetings. The Joint Development Committee shall meet in person at least once during every Calendar Quarter, and more frequently as GSK and HGS deem appropriate or as reasonably requested by either such Party, on such dates, and at such places and times, as such Parties shall agree; provided that the Parties shall endeavor to have the first meeting of the Joint Development Committee within thirty (30) days after the establishment of the Joint Development Committee. Meetings of the Joint Development Committee shall alternate between the offices of GSK and HGS, or such other place as the Parties may agree. The members of the Joint Development Committee also may convene or be polled or consulted from time to time by means of telecommunications, video conferences, electronic mail or correspondence, as deemed necessary or appropriate.

          3.2.4 Development Budget. The Joint Development Committee shall review on a quarterly basis the actual Development Expenses against the budget for such expenses in the applicable Calendar Year. If in the course of its quarterly review of Development Expenses, the Joint Development Committee should determine that for any study or activity the actual amounts incurred are likely to be higher than budgeted, the Joint Development Committee shall review the reasons for such potential overrun and determine whether such overrun is appropriate. If the Joint Development Committee determines that such overrun is appropriate, the Joint Development Committee will assess whether such overrun is likely to result in an overrun of the budget for Development Expenses and if required, will agree on a revised budget for such Development Expenses for subsequent approval by the Joint Steering Committee.

          3.2.5 Decision Making. All decisions of the JDC shall be made by unanimous vote, with each Party having one vote. Reasonable efforts will be made to come to a consensus decision, but any matters that cannot be resolved by the JDC will be presented to the JSC for resolution, in accordance with Section 3.1 above.

3.3 Global and Regional Joint Marketing Committees.

          3.3.1 Global Joint Marketing Committee.

               (i)  Members. At a time agreed upon by the JSC, the Parties shall form a global joint marketing committee (“GJMC”). The Parties shall each designate up to eight (8) representatives for membership on the GJMC. Membership shall include representation from among each Party’s commercial development and finance departments. The GJMC shall be co-chaired by GSK and HGS and each chairperson shall be a member of the GJMC. Each Party shall have one (1) vote on each matter brought before the GJMC, regardless of the number of representatives present from each Party. At least two (2) representatives from each Party shall be present to represent a quorum for voting purposes. In addition, the GJMC may from time to time include additional non-voting ad-hoc representatives from either Party on specific issues as the need arises.

               (ii)  Responsibilities. The purpose of the initial meeting shall be to review the current status of the Commercialization of Collaboration Product in the Territory, prepare the Marketing Plan, and agree on an operational charter that shall set forth the principles and guidelines for the governance of the GJMC. Furthermore, the GJMC shall (a) determine and establish, and as required from time to time to modify, the Marketing Plan for Collaboration Product for each Region, including the establishment of the Regional Joint Marketing Committees (“RJMCs”) for each Region in the Territory; (b) approve the budget for the Marketing Expenses for Commercialization of the Collaboration Product; (c) oversee the Commercialization of Collaboration Product, as managed and implemented by the applicable Regional Joint Marketing Committee, including approving the pricing in all markets and Third Party commercial partners in all countries in the Territory; (d) approve the Product Trademarks for the Collaboration Product (e) establish sales force FTE rates for tracking and reimbursement of costs that form part of the Marketing Expenses, including sales force FTE Costs, (f) upon determining the price for the Collaboration Product, agree on Distribution Costs as percentage of Net Sales, to be reconciled and adjusted periodically thereafter, and (g) unless as otherwise set forth in this Agreement, settle unresolved disputes or disagreements of a RJMC.

               (iii)  Meetings. The first meeting of the GJMC shall occur within thirty (30) days after the formation of the GJMC. Thereafter, meetings shall be held once each Calendar Quarter. The location of such meetings shall alternate between sites selected by GSK and HGS, unless otherwise agreed upon between the Parties. GJMC meetings need not necessarily be face-to-face meetings but, upon the agreement of both Parties, can be via other methods of communication such as teleconferences and/or videoconference.

               (iv)  Decision Making . All decisions of the GJMC shall be made by unanimous vote of the Parties, with each Party getting one (1) vote. All such decisions shall be final and binding upon both Parties; provided that if a dispute cannot be settled by the GJMC after good faith attempts, then such matter shall be presented to the JSC for resolution in accordance with Section 3.1 above.

          3.3.2 Regional Joint Marketing Committees.

               (i)  Members. At a time agreed on by the GJMC, the Parties shall form teams of appropriate personnel from both GSK and HGS to manage and implement the Marketing Plan for Collaboration Product in each Region. The RJMCs shall each consist of representatives from GSK and HGS. HGS and GSK will co-chair the RJMC for the United States and GSK shall chair the RJMCs for the remaining Regions. The timing of the first meeting of each RJMC shall be determined by the GJMC.

               (ii)  Responsibilities. The RJMCs shall oversee aspects of the Co-Promotion and Commercialization of a Collaboration Product for the relevant Region, including but not limited to: (a) determining the budget for Marketing Expenses and reviewing and approving the strategy and tactics for Co-Promoting Collaboration Product in the respective Regions; (b) developing the regional Marketing Plan for approval by the GJMC, (c) recommending to the GJMC in which countries in the respective Regions the Collaboration Product will be Co-Promoted and sold; (d) recommending to the GJMC pricing for the Collaboration Product; (e) determining the respective number of Sales Representatives from each Party that will Co-Promote the Collaboration Product to deliver the agreed number of Details for

the desired coverage, and (f) creating, reviewing and approving the content of Promotional Materials, and level of promotional spend, based on market potential and best commercial judgment, all in conformance with applicable Laws.

               (iii)  Meetings. Meetings of each RJMC shall be held on a quarterly basis. The location of each RJMC’s meetings shall alternate between sites selected by GSK and HGS, unless otherwise agreed upon between the Parties, with the first meeting to be held at GSK’s offices. RJMC meetings need not necessarily be face-to-face meetings, but upon the agreement of both Parties can be via other methods of communication such as teleconferences and/or videoconferences.

               (iv)  Decision Making. All decisions of the RJMC shall be made by unanimous vote of the Parties, with each Party getting one (1) vote. All such decisions shall be final and binding upon both Parties, provided that, if any dispute cannot be settled by a RJMC after good faith attempts, then such decision shall be presented to the head of each Party’s pharmaceutical division for such country, or their designee. If the dispute remains unresolved after [***] following such presentation, then such dispute shall be referred to the GJMC for resolution in accordance with Section 3.3.1(iv) above.

          3.3.3 Marketing Budget. The Global Joint Marketing Committee shall review each Calendar Quarter the actual Marketing Expenses against the budgeted Marketing Expenses as developed by the RJMC in the applicable Calendar Year. If in the course of its quarterly review of Marketing Expenses, the GJMC should determine for any Collaboration Product that for any study or activity the actual amounts incurred are likely to be higher than those budgeted, the GJMC shall review the reasons for such potential overrun and determine whether such overrun is appropriate. If the GJMC determines that such overrun is appropriate, the GJMC will assess whether such overrun is likely to result in an overrun of the budget for Marketing Expenses for such Collaboration Product on an annual basis and if required, will agree on a revised budget for such Marketing Expenses for such Collaboration Product for subsequent approval by the GJMC. If the GJMC determines that such overrun is not appropriate, the GJMC will take such actions as required to remedy the situation.

3.4 Joint Manufacturing Committee. As soon as reasonably practicable after the execution by the Parties of a separate manufacture, supply and quality agreement in accordance with Article 9 herein, the Parties shall form a joint manufacturing committee (“JMC”). The separate manufacture, supply and quality agreement entered into by the Parties in accordance with Article 9 shall govern the structure of the JMC, including the JMC’s membership, responsibilities, and decision-making authority, provided that the JMC shall be responsible, at a minimum, for reviewing and approving the Development Expenses that are associated with the Manufacture of Clinical Supplies of Collaboration Product and Cost of Goods and further provided that all unresolved disputes shall be referred to the JSC for resolution.

3.5 Minutes of Committee Meetings. Definitive minutes of all Committee meetings shall be finalized no later than thirty (30) days after the meeting to which the minutes pertain as follows:

          3.5.1 Distribution of Minutes. Within ten (10) days after a Committee meeting, the secretary of such Committee shall prepare and distribute to all members of such Committee draft minutes of the meeting. Such minutes shall provide a list of any issues yet to be resolved, either within such Committee or through the relevant resolution process.

          3.5.2 Review of Minutes. The members of each Committee shall have ten (10) days after receiving such draft minutes to collect comments thereon and provide them to the secretary of such Committee.

          3.5.3 Discussion of Comments. Upon the expiration of such second ten (10) day period, the Parties shall have an additional ten (10) days to discuss each other’s comments and finalize the minutes.

          3.5.4 The secretary from each RJMC shall provide the GJMC with a copy of the minutes no later than thirty (30) days after they have been approved by the RJMC.

3.6 Expenses. Each Party shall be responsible for all travel and related costs and expenses for its members and other representatives to attend meetings of, and otherwise participate on, a Committee. All travel and related costs and expenses to attend Committee meetings shall not be considered part of the Development Expenses or the Promotional Expenses.

3.7 Alliance Managers. Promptly after the Effective Date, each Party shall appoint an individual(s) to act as the alliance manager for such Party (“Alliance Manager”) during the term of this Agreement. Each Alliance Manager shall thereafter be permitted to attend any Committee meeting as a non-voting observer. The Alliance Managers shall be the primary point of contact for the Parties regarding activities contemplated by this Agreement and shall facilitate all such activities hereunder, including, but not limited to, the exchange of information between the Parties. The Alliance Managers shall be responsible for assisting the Committees in performing their oversight responsibilities. The name and contact information for such Alliance Managers, as well as any replacements chosen by HGS or GSK, in their sole discretion, from time to time, shall be promptly provided to the other Party in accordance with Section 16.3 of this Agreement.

ARTICLE 4

DEVELOPMENT OF COLLABORATION PRODUCTS

4.1 Responsibilities of the Parties. Subject to the general oversight of the JDC, and subject in all instances to the specific provisions relating to regulatory matters referred to in Article 8, the Parties shall use Diligent Efforts to Develop the Collaboration Products for Commercialization. Each Party shall perform the Development activities assigned to it pursuant to the Development Plan, all in accordance with the Development Plan for a Collaboration Product. Additionally, GSK shall provide three (3) expert clinical operations personnel to assist HGS with the enrollment and monitoring of the Phase III Clinical Studies, particularly outside the United States and western European countries.

4.2 Development Expenses. The Parties agree that all JDC-approved Development Expenses for the Lead Indication arising after June 30, 2006 and all Development Expenses for Minor

Indications will be shared equally by GSK and HGS, through reimbursement of such Development Expenses as set forth in Section 6.6.1 below, if necessary.

4.3 Development Expenses for Additional Indications. At any time after the Effective Date, either Party may make a written proposal to the Joint Development Committee regarding the Development of a Collaboration Product in an Additional Indication. Such proposal shall include (i) any data and other information in its possession which may be relevant to the use of the Collaboration Product in the proposed Additional Indication, (ii) a reasonably detailed outline of the major Development activities required to obtain Regulatory Approval for the Collaboration Product for such proposed Additional Indication in the Territory, including a timeline for performing such activities, (iii) an estimated budget for the expected Development Expenses to be incurred in Developing the Collaboration Product for such proposed Additional Indication, (iv) an appropriate market analysis of the for the Collaboration Product for the proposed Additional Indication (including market size and competitive analysis), and (v) preliminary sales forecasts for the sale of the Collaboration Product for the proposed Additional Indication. Thereafter, the JDC shall meet in order to review such proposal.

          4.3.1 Co-Development of Additional Indication. With respect to a proposal pursuant to Section 4.3, if the JDC unanimously accepts, or if the JDC cannot agree and the JSC unanimously accepts, such proposal, the Joint Development Committee shall prepare a Development Plan for Development of the Collaboration Product for such Additional Indication and all JDC-approved Development Expenses for the Development of the Collaboration Product for the Additional Indication shall be shared equally by the Parties.

          4.3.2 Independent Development and Commercialization of Additional Indications. If the JDC or the JSC, as applicable, cannot agree to jointly Develop the Collaboration Product in an Additional Indication pursuant to the procedure set forth in Sections 4.3 and 4.3.1 above due to a Party deciding in good faith, using its normal decision making practices for a similar product, that such Party does not wish to pursue such Additional Indication, and if one Party still desires to Develop and Commercialize the Collaboration Product for such Additional Indication (“Developing Party”), the Developing Party may do so on its own,

at its sole cost and expense and without the oversight of the JDC, provided that: (i) the Development or Commercialization of such Additional Indication does not adversely impact the Development and Commercialization of the Collaboration Product in the Lead Indication; and (ii) the Developing Party takes into account the goal of optimizing the best overall commercial potential of the Collaboration Products in the Lead Indication. The other Party (“Non-Developing Party”) retains the right to opt-in to further Develop and Commercialize the Collaboration Product for the Additional Indication in concert with the Developing Party [***]. In the event the Non-Developing Party exercises its right to opt in to the Development of the Collaboration Product for the Additional Indication, the Parties shall thereafter share equally in the Development Expenses for such Additional Indication, subject to Section 4.3.3 below, and all terms and conditions of this Agreement shall apply to the further Development of the Collaboration Product for such Additional Indication. Furthermore, upon opting in to the Development of the Collaboration Product for such Additional Indication, the Non-Developing Party shall reimburse the Developing Party [***] of all Development Expenses actually incurred prior to the exercise by the Non-Developing Party of its right to opt-in to the Development of the Collaboration Product for such Additional Indication, provided all such Development Expenses to be reimbursed will be reviewed and approved prior to such payment by the JDC. If the Non-Developing Party elects not to exercise its opt-in right [***], the Non-Developing Party shall have no further rights or obligations with respect to the Development and Commercialization of the Collaboration Product for such Additional Indication. For clarity, the Developing Party shall not enter into any agreement with any Third Party which would in any way limit the rights of the Non-Developing Party to opt-in to the Development of the Additional Indication.

          4.3.3 Right to Reduce Level of Funding of Development of Collaboration Product for Additional Indications Only. On an Additional Indication-by-Additional Indication basis, each Party shall have the right to bear less than fifty percent (50%) of the Development Expenses for Phase III Clinical Studies incurred in the Development of the Collaboration Product for an Additional Indication, and thereby receive [***]. In order for a Party to receive any share of the Net Profits on the sale of the Collaboration Product for a specific indication, a Party must bear at least [***] of the Development Expenses for Phase III Clinical Trials incurred in the Development of the Collaboration Product for such indication.

               (i) In the event a Party bears at least [***] of such Development Expenses, that Party shall have the right to actively participate in the Development and Commercialization of the Collaboration Product for such Additional Indication, through either conducting Development activities pursuant to the Development Plan or through its participation on the JDC and receive [***].

               (ii) In the event one Party elects not to bear at least [***] of the Development Expenses for Phase III Clinical Studies incurred in the Development of the Collaboration Product for a specific Additional Indication, then the other Party has the right to control all Development and Commercialization activities associated with the Collaboration Product for such Additional Indication and shall assume one hundred percent (100%) of the Development Expenses and Marketing Expenses incurred in the Development and Commercialization of the Collaboration Product for such Additional Indication and thereby receive one hundred percent (100%) of the Net Profits on the sale of such Collaboration Product for such Additional Indication.

               (iii) If a Party’s election to bear less than fifty percent (50%) of all Development Expenses incurred in the Development of the Collaboration Product for an Additional Indication in any country will affect that Party’s level of effort and personnel involved in the Development of the Collaboration Product in such country, the Parties will work together, through the appropriate Committee, to amend the Development Plan to properly reflect each Party’s responsibilities for Development of the Collaboration Product for such Additional Indication in such country.

4.4 Costs Incurred Prior to July 1, 2006. HGS will be solely responsible for all costs associated with the Collaboration Product and incurred prior to July 1, 2006.

4.5 Capital Expenditures. Any capital expenditures incurred by either Party after the Effective Date of the Agreement which a Party seeks to include as Development Expenses must be approved in advance by the JDC. The JDC will determine the percentage of such capital expenditures that

were incurred in order to enable the Development of the Collaboration Product for the Lead Indication and Additional Indications that are being Developed by both Parties and such percentage will [***].

4.6 Payment of Expenses; Development Expense Account. Subject to each Party’s [***] to fund Development Expenses for Additional Indications as set forth in Section 4.3 above and Reconciliation as provided in Article 6, each Party shall be responsible to pay for all Development Expenses incurred in performing its obligations in connection with any Development activities under a Development Plan. Each Party shall charge all such Development Expenses so incurred to a separate account created by it on its books and records solely for the purpose of tracking Development Expenses, and identifying all Development Expenses by Collaboration Product and indication being Developed on an indication-by-indication basis.

4.7 Other Development Expenses. Neither Party shall have the right to obligate the other Party to finance any Development Expenses or conduct any Development activities to which it has not agreed, through the JDC.

4.8 Development Plans. The Development Plan for the Collaboration Product for the Lead Indication, which the Parties hereby approve, is attached to this Agreement as Appendix B. Prior to the end of each Calendar Year beginning with the first full Calendar Year after the Effective Date, the Joint Development Committee shall review and approve any proposed Development Plan for the Development of the Lead Indication and for Minor Indications and Additional Indications and, prior to the end of each Calendar Year, the Joint Development Committee shall update and amend any Development Plan in order to prepare for the Development of the Collaboration Product for such indication for the following Calendar Year.

          4.8.1 Criteria for Development Plans. The Development Plan shall contain at a minimum a list and description of preclinical and clinical activities, timelines for the performance of studies in support of the Development activities for such Collaboration Product and a budget for the Development Expenses to complete such Development activities.

          4.8.2 Implementation of Development Plans. Each Party will inform the Joint Development Committee of ongoing implementation of the Development Plan and consider timely recommendations for improving Development activities assigned to such Party under the Development Plan. In connection with the preparation and implementation of the Development Plan, HGS and GSK will make available to the Joint Development Committee any information then in their possession pertaining to the Collaboration Products useful for such Development activities.

          4.8.3 Budget for Development Expenses. The budget for proposed Development Expenses for the Lead Indication and for Additional Indications of the Collaboration Product to be Developed and Commercialized shall be set forth in the Development Plan. Such budget shall be sufficient to fund all necessary Clinical Studies and related activities necessary to obtain Regulatory Approval for such Collaboration Product in the relevant indication and generate data otherwise necessary for Commercialization as agreed by the JSC.

ARTICLE 5

CO-PROMOTION, DETAILING AND COMMERCIALIZATION

5.1 Co-Promotion.

          5.1.1 The Parties shall Commercialize and Co-Promote Collaboration Products in each country in the Territory in which the Parties, through the GJMC, mutually agree that Commercialization and Co-Promotion is desirable. The Parties shall attempt to coordinate their Co-Promotion efforts in the Territory to the extent legally permissible.

          5.1.2 The Parties agree that all JDC-approved Marketing Expenses incurred for Phase IV Clinical Studies for the Lead Indication for the Collaboration Product shall be shared equally by the Parties, through reimbursement of such Marketing Expenses as set forth in Section 6.6.1 below. With respect to all other Marketing Expenses, [***]. Each Party shall charge all such Marketing Expenses so incurred to a separate account created by it on its books

and records solely for the purpose of tracking Marketing Expenses, and identifying all Marketing Expenses by Collaboration Product being Commercialized on an indication-by-indication basis.

          5.1.3 During the Active Period, each Party shall Detail and Co-Promote Collaboration Product in the Territory in accordance with the Marketing Plan, as amended from time to time and maximize sales and market share of Collaboration Product in the Territory. HGS shall Develop and Commercialize Collaboration Product in the Territory during the Tail Period. During the Active Period, each Party shall provide the number of Details in the Territory as set forth in the Marketing Plan.

5.2 Marketing Plans. The RJMC shall be responsible for preparing and implementing a Marketing Plan for the each Region for each Collaboration Product, subject to the approval of the Marketing Plan by the GJMC. Each Marketing Plan shall define the goals and objectives for Commercializing the Collaboration Products in the pertinent Calendar Year consistent with the applicable Development Plan and the Laws of the respective Regions.

          5.2.1 Updating Marketing Plan. Each year beginning with the first full Calendar Year after the establishment of the GJMC, each RJMC shall review and propose any amendments to the Marketing Plan for submission of such proposed amendments to the Global Joint Steering Committee no later than October 1 of such year for review and approval. The Parties shall obtain final corporate approval for the final budgets for the amendments to the Marketing Plan prior to the end of each Calendar Year.

          5.2.2 Contents of Each Marketing Plan. Each Marketing Plan shall encompass Commercialization activities for one (1) Calendar Year, or as otherwise agreed by the Parties. The Marketing Plan shall contain at a minimum: (a) minimum Detail Requirements for each Party, including a firm indication of the number of Sales Representatives and Details to be provided by each party in such period; (b) the rate for sales force FTE Costs for each Party; (c) market research and strategy, including market size, dynamics, growth, customer segmentation, competitive analysis and Collaboration Product positioning; (d) annual sales forecasts; (e) advertising and promotion programs and strategies, including sales literature, promotional

premiums, media plans, symposia and speaker programs; (f) sales plans and activity, including sales force training, and for each Party, development of appropriate sales training materials, and strategy and budget for Samples, and (g) the budgeted Marketing Expenses for the Collaboration Product for each indication.

          5.2.3 Budget for Marketing Expenses. Each Marketing Plan shall set forth the total budget for Marketing Expenses for such Collaboration Product. Such Marketing Expense budget shall be sufficient to fund all necessary pre-launch, launch and related activities necessary to optimize Commercialization of each Collaboration Product for each indication approved by the JDC or JSC, as applicable, including sales force FTE Co