COOPERATIVE DEVELOPMENT AGREEMENT

EXHIBIT 10.1

COOPERATIVE DEVELOPMENT AGREEMENT

     THIS AGREEMENT, entered into as of the 8th day of November, 2002, by and between ALTUS BIOLOGICS INC., a corporation organized and existing under the laws of the State of Delaware and having its principal place of business at 625 Putnam Avenue, Cambridge, MA 02139 (hereinafter called “ALTUS”), and AMANO ENZYME INC., a corporation organized and existing under the laws of Japan and having its principal place of business at 1-2-7, Nishiki, Naka-ku, Nagoya, Japan (hereinafter called “AMANO”),

WITNESSETH:

WHEREAS, ALTUS, through research and development for a long time, acquires and possesses certain valuable technologies pertaining to certain pharmaceutical products known as TheraCLEC™ Total and a method for manufacturing such products and continues to develop scientific techniques pertaining to the products, and owns and controls certain patent rights and trademark rights in the products, and

WHEREAS, AMANO has, over the years, demonstrated its expertise in development, manufacturing and worldwide marketing of many kind of enzymes for the commercial markets especially in food industry and pharmaceutical industry, and has thereby established a reputation of high regard in such markets, which reputation is believed by ALTUS to be of great value to the possible success of the joint development contemplated hereunder, and

WHEREAS, AMANO desires to undertake manufacture of enzyme materials to be used in the products of ALTUS,

WHEREAS, ALTUS and AMANO are willing to enter into a cooperative development of certain enzyme materials, which are fit for TheraCLEC™ Total, and entire specifications of which are instructed by ALTUS, and

WHEREAS, ALTUS and AMANO propose to decide at the end of Phase II of the U.S. clinical trial process whether they will enter into a further manufacturing agreement.

NOW, THEREFORE, ALTUS and AMANO agree as follows:

Article 1. Definitions

1.

The term “Products” shall mean the pharmaceutical products known as TheraCLEC™ Total, in a certain preparation form or forms intended for therapeutic use in humans specified, developed, manufactured, labeled and packaged and sold by or on behalf of ALTUS.

2.

The term “Materials” shall mean enzymes used as active ingredients in the Products, which are made up of selected lipase, protease and amylase prepared by AMANO in accordance with Specifications developed and submitted by ALTUS for use in manufacturing Products.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act.

3.

The term “Amano Enzymes” shall mean enzymes including but not limited to lipase, protease and amylase, which are discovered, invented, developed, produced, sold or otherwise disposed by Amano with its sole technologies and which are basis of Materials to be develop hereunder.

4.

The term “Technical Information” shall mean all of the information and knowledge now possessed by ALTUS or AMANO and those acquired by ALTUS or AMANO during the life of this Agreement, which relate to manufacturing process of Materials -or relate to Products.

5.

The term “ALTUS’s Development” shall mean any and all works of research and development made by ALTUS with respect to Materials and Products to be developed hereunder.

6.

The term “AMANO’s Development” shall mean any and all works of research and development made by AMANO with respect to Materials to be developed hereunder.

7.

The term “Joint Development” shall mean any and all technical works of research and development jointly made by ALTUS and AMANO with respect to Materials to be developed hereunder.

8.

The term “Development” shall mean ALTUS’s Development, AMANO’s Development and/or Joint Development.

9.

The term “ALTUS’s Technologies” shall mean any and all technologies now possessed by ALTUS and those acquired by ALTUS during the life of this Agreement.

10.

The term “AMANO’s Technologies” shall mean any and all technologies now possessed by AMANO and those acquired by AMANO during the life of this Agreement.

11.

The term “Joint Technologies” shall mean any and all technologies jointly developed by ALTUS and AMANO as the results of working together during the life of this Agreement, which relate to manufacturing process of Materials.

12.

The term “Patents” shall mean those patents and patent applications which either party owns or controls or which either party may obtain or both the parties may jointly obtain hereunder, the application date of which is on or before the date of this Agreement or during the life of this Agreement, and all of which are useful for or relating to Materials and/or Products.

13.

The term “Specifications” shall mean the written specifications established for the characteristics, quality and quality control testing procedures for each of Materials as developed by ALTUS, and as amended or supplemented from time to time.

14.

The term “Good Manufacturing Practices” shall mean good manufacturing practices as defined in applicable laws, regulations and guidelines.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act.

Article 2. Purposes

ALTUS and AMANO shall together and individually make Development toward the goal of successfully manufacturing Materials to be used in Products. ALTUS and AMANO shall exert [*****] to successfully complete Development under the terms and conditions of this Agreement.

Article 3. Respective Charges of Development

1.

ALTUS shall take charge of clinical development in the nature and characteristic of Materials used for the preparation of Products, and chemical reaction and effect against malabsorption resulting from pancreatic insufficiency including cystic fibrosis, and carry out such development at ALTUS’s laboratory and AMANO’s facility during the life of this Agreement. In the course of ALTUS’s Development, ALTUS shall:

	1)		develop and establish ALTUS’s Technologies utilized in Materials as bulk drug active for Products,
	2)		develop and establish the standard of Specifications of Materials to be manufactured by AMANO and prototype manufacturing processes therefor,
	3)		transfer to AMANO Specifications to be employed by AMANO and give AMANO a technical guidance in the manufacture of Materials, particularly TheraCLEC Lipase and [***] protease and amylase,
	4)		inspect and approve AMANO’s Development,
	5)		prepare and realize an Investigational New Drug application (“IND”) to the Food and Drug Administration (“FDA”) for Materials and/or Products,
	6)		provide assistance to AMANO in establishing Good Manufacturing Practices, and
	7)		perfect the regulatory process and retain records pertaining to development of the Materials and Products.

2.

AMANO shall take charge of development in the manufacture of Materials and carry out such development at AMANO’s laboratory during the life of this Agreement. In the course of AMANO’s Development, AMANO shall:

	1)		arrange production facility located in Japan for Materials, which meets requirement of Good Manufacturing Practices,
	2)		establish AMANO’s Technologies of [**********] and [*********] for Materials,
	3)		establish AMANO’s Technologies of the [*****] and [****] for materials,

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act.

	4)		develop technologies manufacturing TheraCLEC lipase and [***] protease and amylase under AMANO’s Technologies in accordance with ALTUS’s Technologies disclosed to AMANO,
	5)		develop AMANO’s Technologies of manufacturing Materials in accordance with Specifications and guidance given by ALTUS, and
	6)		support the regulatory process and retain records pertaining to development of the Materials.

3.

ALTUS and AMANO shall jointly develop and establish a standard manufacturing management protocol for Materials on the basis of quality control procedures originally developed by Altus, that may need to be modified to fulfill requirements for an FDA regulated product or other product.

Article 4. Exchange of Technical Information

Forthwith after the execution of this Agreement, both parties. shall disclose to the other party Technical Information owned and possessed in the respective field of which either party takes charge hereunder from time to time during the life of this Agreement. All Technical Information that was exchanged between or developed jointly by the parties [*******] shall be deemed to be information exchanged between or developed jointly by the parties pursuant to this Article 4. All intellectual property provisions in this Agreement shall be effective as of the earliest date that the parties began working together.

Article 5. Supply of Materials

1.

ALTUS shall provide AMANO with forecasts setting out the amounts of Materials it expects it will require for each month during the [***] period from the time of preparation of the relevant forecast. The forecasts shall be updated [******]. ALTUS shall prepare a separate forecast for the [*****] required for any [****]. Upon ALTUS’s request, AMANO shall supply ALTUS with reasonable quantities of Materials manufactured by AMANO in accordance with Specifications, regardless of fully finished or not, be necessary for ALTUS’s Development.

2.

If ALTUS places an order for Materials with AMANO for the purpose of ALTUS’s Development pursuant to this Agreement that does not exceed the amount of Materials set forth in the most recent forecast for the relevant month, AMANO shall [*****]; provided, however, if ALTUS places an order for Materials in excess of the volume specified in the applicable forecast, supply by AMANO of such excess Materials shall be subject to [*********] and to [******]. Supply of Materials by AMANO hereunder may be conducted through AMANO’s subsidiary, Amano Enzyme USA Co., Ltd. based in U. S. A.

3.

The parties hereto shall make a supply contract or contracts in accordance with the terms of this Agreement, on a bona fide basis, from case to case relating to the supply of Materials as provided hereinabove. The supply contract shall definitely provide terms

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act.

and conditions including but not limited to kind of Materials, quantities, Specifications, time of shipment, trade terms, price, payment and etc.

4.

AMANO shall not supply [****] other than to ALTUS without prior written consent from ALTUS except as otherwise provided in Article 12.3, provided that nothing herein contains any restriction of supplying other party than ALTUS with any of Amano Enzymes or materials manufactured [*********] and/or other technologies of any third party.

5.

Being understood that evaluate, use or application of Materials and Specifications for medical products are decided by ALTUS at its sole discretion, AMANO shall incur no liability on Materials supplied hereunder, whatsoever for (a) all or any consequential or indirect losses or damages or loss of profit suffered or incurred by ALTUS or any third party howsoever caused; or (b) all or any actions, proceedings, demands or claims made against ALTUS or any third party by any person whatsoever, provided AMANO prepares the Materials in accordance with the Specifications and Good Manufacturing Practices. ALTUS shall indemnify and hold AMANO harmless from all cost, expense and liability arising out of or related to injury to persons or property resulting from ALTUS’s use of Materials, provided AMANO prepares the Materials in accordance with the Specifications and Good Manufacturing Practices. ALTUS halt obtain and maintain, at its own expense, during the life of this Agreement and thereafter, sufficient insurance covering product liability, tort liability and other liability relating to Materials and Products written by an insurer satisfactory to AMANO and in which insurance AMANO shall be named as additional insured.

Article 6. Joint Development Committee

1.

ALTUS and AMANO shall, within [****] after the execution of this Agreement, establish a Joint Development Committee (“JDC”) to (a) elaborate and confirm the plan of Development contemplated herein; (b) give each other the progress condition of Development at the time of the meeting; (c) oversee the compliance of the facility with Good Manufacturing Practices and the transfer of the prototype process of manufacturing Materials from ALTUS to AMANO; (d) coordinate Development to the manufacturing process of Materials; and (e) to exercise decision making authority, and, further, shall make the plan and schedule of Development within [******] after the first meeting of JDC.

2.

The JDC shall be comprised of [***] ALTUS representatives and [***] AMANO representatives, who will initially be the business and technical mangers. Each party may replace its JDC representative at any time, after discussion with the other party, with subsequent written notice to the other party.

3.

Decisions of the JDC shall be made by consensus approval. In the event the parties are unable to agree on any issue, the dispute will be referred to the President or a person designated by the President of each party, who shall promptly meet in person or by means of telephone or video conference and endeavor to resolve the dispute in a timely manner.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act.

In the event such individuals are unable to resolve the dispute, it shall be settled by [****], or as otherwise agreed.

4.

On and after the execution of this Agreement, the JDC shall meet at least quarterly at regular intervals, or more often as agreed by the parties, in person at such locations as the parties agree, or by means of telephone or video conference. With the consent of the parties, other representatives of each party may attend JDC meetings as nonvoting observers.

5.

Each party shall each bear the expenses of their respective JDC members related to their participation on the JDC and attendance at JDC meetings.

Article 7. Expenses

1.

Each party hereto shall [***], including but not limited to, the [****] in its laboratory [****] for Development from time to time, and such party [***].

2.

During ALTUS’s stay in Japan for Development, ALTUS may, [***] use all equipment in AMANO’s laboratory, which are necessary for Development, and, during AMANO’s stay in U.S.A. for Development, AMANO may, [*****], use all equipment in ALTUS’s laboratory, which are necessary for Development.

3.

Each party hereto [****], including but not limited to, [****] from U.S.A. to Japan and back, [*****], which would be incurred on ALTUS or AMANO under this Agreement.

Article 8. Patents and etc.

1.

Subject to Article 8(4) below, Patents and/or other industrial property rights, inventions, discoveries, know-how and other technologies (collectively, “Intellectual Property Rights”) solely developed, acquired or owned by either party during the life of this Agreement [*******] Patents and/or other industrial property rights, inventions, discoveries, know-how and other technologies in any country without a prior written consent of such party.

2.

Each party [**********] of Patents and/or other Intellectual Property Rights concerning all discoveries, inventions and/or other technologies acquired by such party in the course of or as the result of Development. The [***] of such Intellectual Property Rights [***] shall be ALTUS or AMANO and[*********] for such Patents and/or other Industrial Property Rights [*****].

3.

Each party [*****] for its own Intellectual Property Rights [********].

4.

All Intellectual Property Rights which constitute Joint Technologies shall be the joint property of both parties. As to Joint Technologies resulted from Joint Development, Intellectual Property Rights for such Joint Technologies shall be applied and registered, in Japan and in any overseas countries, in both the names of ALTUS and AMANO as to the co-owners and the parties shall share the costs incurred in connection with such registrations; provided, however, that either party may refuse to apply for co-registration

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act.

of Intellectual Property Right in case such party has, a sufficient reason not to apply or a thought to hold Joint Technologies as trade secrets; and that where one party refuses or fails to apply for co-registration of such Intellectual Property Rights within 90 days of a request for such co-registration by the other party without such a reason or a thought, then the other party shall be free at their own expense to file an application for registration of the Intellectual Property Rights as sole registrant and thereafter utilize such Intellectual Property Rights without any requirement to pay a royalty.

5.

Either party may not assign, transfer, sell or otherwise dispose of its Intellectual Property Rights and know-how acquired in Joint Development to any third party without a prior written consent of the other party. In case either party desires to dispose such technologies, the other party [****] as negotiated between the parties in good faith.

6.

Subject to the terms of this agreement, the parties [*******] any Intellectual Property Rights they own in accordance with Articles 8(1) and (4) above, in any manner they deem fit, and [***], provided that, if either party desire to have a third party utilize any Joint Technologies, such either party shall obtain a prior written consent of the other party.

Article 9. Plan, Schedule and Reports of Development

1.

Both the parties apply due diligence to Development in accordance with the plan and schedule of Development which should be prepared and amended from time to time during the life of this Agreement by mutual consultation. Provided, however, that; (a) in the event that Development of either party should be delayed by the force majeure or other reasonable causes to such party, the other party shall agree to the extension [****] in the plan and schedule of Development and continue Development during such extended period; (b) in case any alteration of a part of whole of the plan and schedule of Development is required by any reason, either of the parties having or knowing such reason shall notify the other party to that effect in advance.

2.

ALTUS and AMANO shall provide the other party with the written report on the results of Development [****************] reasonably requested by the other party.

Article 10. NDA Application

1.

ALTUS shall use best efforts to research, develop and conduct such research, development and preclinical and human clinical trials as necessary or desirable to obtain all regulatory approvals to manufacture and market, and to obtain necessary approval to market, commence marketing and market Products in U. S. A. and any other countries in the world as ALTUS determines are commercially feasible.

2.

Within [*****] following the end of each [*****] period during the life of this Agreement, ALTUS shall prepare and deliver to AMANO a written report which shall describe, in reasonably sufficient detail, (a) the research performed to date employing Materials; (b) the progress of the development, and testing of Materials and Products in all studies including clinical trials; and (c) the status of obtaining the necessary approvals to market Products. In addition, ALTUS shall provide AMANO with a minimum of

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act.

[****] advance written notice of the contemplated filing of an NDA application, written notice of other significant regulatory filings and submiss