EXECUTIVE EMPLOYMENT AGREEMENT

Exhibit 99.5

EXECUTIVE EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is made and entered into effective as of December 21, 2006 (the “Effective Date”), by and between Intrabiotics Pharmaceuticals, Inc., (the “Company”), and Zhi Hong (the “Executive”). The Company and the Executive are hereinafter collectively referred to as the “Parties”, and individually referred to as a “Party”.

Recitals

A.       The Company desires assurance of the association and services of the Executive in order to retain the Executive’s experience, skills, abilities, background and knowledge, and is willing to engage the Executive’s services on the terms and conditions set forth in this Agreement.

B.       The Executive desires to be in the employ of the Company, and is willing to accept such employment on the terms and conditions set forth in this Agreement.

Agreement

In consideration of the foregoing Recitals and the mutual promises and covenants herein contained, and for other good and valuable consideration, the Parties, intending to be legally bound, agree as follows:

1.       Employment.

1.1       Title. The Executive shall initially have the title of the Executive Vice President of Research and Chief Scientific Officer of the Company and shall serve in such other capacity or capacities as the Company may from time to time prescribe. The Executive shall report to the Company’s Chief Executive Officer (“CEO”).

1.2       Duties. The Executive shall do and perform all services, acts or things necessary or advisable to manage and conduct the business of the Company and which are normally associated with the position of Executive Vice President of Research and Chief Scientific Officer, consistent with the bylaws of the Company and as required by the CEO.

1.3       Policies and Practices. The employment relationship between the Parties shall be governed by the policies and practices established by the Company and the Board. The Executive acknowledges that he has read the Company’s Employee Handbook and other governing policies, which will govern the terms and conditions of his employment with the Company, along with this Agreement. In the event that the terms of this Agreement differ from or are in conflict with the Company’s policies or practices or the Company’s Employee Handbook, this Agreement shall control.

1.4       Location. Unless the Parties otherwise agree in writing, during the term of this Agreement, the Executive shall perform the services the Executive is required to perform pursuant to this Agreement at the Company’s offices, located in San Diego, California, or at any other place at which the Company maintains an office; provided, however, that the Company may from time to time require the Executive to travel temporarily to other locations in connection with the Company’s business.

2.       Loyal and Conscientious Performance; Noncompetition.

2.1       Loyalty. During the Executive’s employment by the Company, the Executive shall devote the Executive’s full business energies, interest, abilities and productive time to the proper and efficient performance of the Executive’s duties under this Agreement.

2.2       Covenant not to Compete. Except with the prior written consent of the Company’s Board of Directors or the CEO, which shall not be unreasonably withheld, the Executive will not, during his employment by the Company, engage in competition with the Company and/or any of its Affiliates, either directly or indirectly, in any manner or capacity, as adviser, principal, agent, affiliate, promoter, partner, officer, director, employee, stockholder, owner, co-owner, consultant, or member of any association or otherwise, in any phase of the business of developing, manufacturing and marketing of products or services which are in the same field of use or which otherwise compete with the products or services or proposed products or services of the Company

and/or any of its Affiliates. For purposes of this Agreement, “Affiliate” means, with respect to any specific entity, any other entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified entity.

2.3       Agreement not to Participate in Company’s Competitors. During any period during which the Executive is receiving any compensation or consideration from the Company, the Executive agrees not to acquire, assume or participate in, directly or indirectly, any position, investment or interest known by the Executive to be adverse or antagonistic to the Company, its business or prospects, financial or otherwise or in any company, person or entity that is, directly or indirectly, in competition with the business of the Company or any of its Affiliates. Ownership by the Executive, as a passive investment, of less than two percent (2%) of the outstanding shares of capital stock of any corporation with one or more classes of its capital stock listed on a national securities exchange or publicly traded on the Nasdaq Stock Market or in the over-the-counter market shall not constitute a breach of this paragraph.

3.       Compensation of the Executive.

3.1       Base Salary. The Company shall pay the Executive a base salary of Two Hundred Eighty Thousand Dollars ($280,000) per year, less payroll deductions and all required withholdings payable in regular periodic payments in accordance with Company policy. Such base salary shall be prorated for any partial year of employment on the basis of a 365-day fiscal year.

3.2       Performance Bonus. In addition to the Executive’s base salary, the Executive shall be eligible for a performance bonus based upon the Executive’s and the Company’s achievement of specified objectives established by the CEO and/or Company’s Board of Directors (the “Board”) during the first quarter of each year, as evaluated by the CEO and/or Board in its or their discretion. The target bonus for full achievement of all objectives shall be forty percent (40%) of the Executive’s Base Salary.

3.3       Signing Bonus. Within thirty (30) days of the Executive’s commencement of employment with the Company, the Executive shall be paid a signing bonus of one hundred fifty thousand dollars ($150,000), less standard deductions and withholdings.

3.4       Stock Options. Upon the commencement of the Executive’s employment and subject to approval of the Board and the terms of the Company’s 2004 Stock Equity Incentive Plan, (the “Plan”), the Executive will be granted a stock option under the Plan to purchase two hundred eighty thousand (280,000) shares of the Company’s Common Stock (the “Option”). To the maximum extent possible, the Option shall be an Incentive Stock Option as such term is defined in Section 422 of the Internal Revenue Code of 1986, as amended. The Option will be governed by and granted pursuant to a separate Stock Option Agreement and the Plan. The exercise price per share of the Option will be equal to the fair market value of the Common Stock established on the date of grant, subject to approval by the Board of Directors. The Option will vest over four (4) years for so long as the Executive continues to be employed by the Company, as follows: twenty-five percent (25%) shall vest on the first anniversary of the date of the grant of the Option, and 1/48^th shall vest on the final calendar day of each month thereafter.

3.5       Changes to Compensation. The Executive’s compensation will be reviewed on a regular basis by the Company and may be changed from time to time as deemed appropriate.

3.6       Employment Taxes. All of the Executive’s compensation shall be subject to customary withholding taxes and any other employment taxes as are commonly required to be collected or withheld by the Company.

4.       Termination.

4.1       Termination By the Company. The Executive’s employment by the Company shall be at will. The Executive’s employment with the Company may be terminated by the Company at any time and for any reason or no reason, with or without “Cause” (as defined below), subject to the provisions of this Section 4.

4.2       Termination by Mutual Agreement of the Parties. The Executive’s employment pursuant to this Agreement may be terminated at any time upon a mutual agreement in writing of the Parties. Any such termination of employment shall have the consequences specified in such agreement.

4.3       Termination by the Executive. The Executive’s employment by the Company shall be at will. The Executive shall have the right to resign or terminate the Executive’s employment at any time and for any reason, or no reason, with or without “Good Reason” (as defined below), subject to the provisions of this Section 4.

4.4       Compensation Upon Termination.

4.4.1       With Cause or Without Good Reason. If the Executive’s employment shall be terminated by the Company for Cause, or if the Executive terminates employment hereunder for other than Good Reason, the Company shall pay the Executive’s base salary and accrued and unused vacation benefits earned through the date of termination at the rate in effect at the time of termination, less standard deductions and withholdings, and the Company shall thereafter have no further obligations to the Executive under this Agreement.

4.4.2       Without Cause or With Good Reason. If the Executive’s employment shall be terminated by the Company without Cause, or by the Executive for Good Reason, the Executive shall receive the payments specified in Section 4.4.1, and, in addition, within ten (10) days of the Executive’s delivery to the Company of a fully effective Release and Waiver in the form attached hereto as Exhibit A, shall receive the following: i) a lump sum payment equal to the sum of the Executive’s annual base salary then in effect and the Executive’s target performance bonus then in effect, less required deductions and withholdings; and ii) provided that the Executive timely elects continued coverage under the Consolidated Comprehensive Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the COBRA benefit specified in Section 4(b) of the Company’s Senior Executive Severance Benefit Plan as it may be amended from time to time.

4.4.3       Change in Control. The provisions of Article Two, Section IVB(i) and (ii) of the Plan providing for acceleration of outstanding option rights in the event of a “Change in Control” (as defined in the Appendix, Section C, of the Plan) and an “Involuntary Termination” thereafter (as defined in the Plan) are hereby incorporated into this Agreement and shall apply in full.

4.4.4       Parachute Payment. If any payment or benefit Executive would receive pursuant to a Change of Control or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be reduced to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Executive’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order unless the Executive elects in writing a different order (provided, however, that such election shall be subject to Company approval if made on or after the effective date of the event that triggers the Payment): reduction of cash payments; cancellation of accelerated vesting of stock awards; reduction of employee benefits. In the event that acceleration of vesting of stock award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of Executive’s stock awards unless the Executive elects in writing a different order for cancellation.

The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change of Control shall perform the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, then the Company shall appoint a nationally recognized accounting firm to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.

The accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Executive and the Company within fifteen (15) calendar days after the date on which the Executive’s right to a Payment is triggered (if requested at that time by the Executive or the Company) or such other time as requested by the Executive or the Company. If the accounting firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced Amount, it shall furnish the Executive and the Company with an opinion reasonably acceptable to the Executive that no Excise Tax will be imposed with respect to such Payment. Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Executive and the Company.

4.4.5       Application of Internal Revenue Code Section 409A. If the Company determines that any of the severance benefits provided by this Agreement in Section 4 fail to satisfy the distribution requirement of Section 409A(a)(2)(A) of the Internal Revenue Code as a result of Section 409A(a)(2)(B)(i) of the Internal Revenue Code, the payment of such benefit shall be accelerated to the minimum extent necessary so that the benefit is not subject to the provisions of Section 409A(a)(1) of the Internal Revenue Code. (It is the intention of the preceding sentence to apply the short-term deferral provisions of Section 409A of the Internal Revenue Code, and the regulations and other guidance thereunder, to the Severance Benefits payments, and the payment schedule as revised after the application of the preceding sentence shall be referred to as the “Revised Payment Schedule.”) However, if there is no Revised Payment Schedule that would avoid the application of Section 409A(a)(1) of the Internal Revenue Code, the payment of such benefits shall not be paid pursuant to a Revised Payment Schedule and instead shall be delayed to the minimum extent necessary so that such benefits are not subject to the provisions of Section 409A(a)(1) of the Internal Revenue Code. The Board may attach conditions to or adjust the amounts paid pursuant to Section 4.4.2 and/or 4.4.3 to preserve, as closely as possible, the economic consequences that would have applied in the absence of this Section 4.4.5; provided, however, that no such condition or adjustment shall result in the payments being subject to Section 409A(a)(1) of the Internal Revenue Code.

4.5       Definitions.

4.5.1       Cause. For purposes of this Agreement, “Cause” means that, in the reasonable determination of the Company, the Executive has:

i)             been indicted for or convicted of or pleaded guilty or no contest to any felony or crime involving dishonesty that is likely to inflict or has inflicted demonstrable and material injury on the business of the Company;

ii)            participated in any fraud against the Company;

iii)            willfully and materially breached a Company policy;

iv)            intentionally damaged any property of the Company thereby causing demonstrable and material injury to the business of the Company;

v)            willfully and materially breached the Executive’s Proprietary Information and Inventions Agreement with the Company; or

vi)            engaged in conduct that, in the reasonable determination of the Company, demonstrates gross unfitness to serve.

Notwithstanding the foregoing, Cause shall not exist based on conduct described in clause iii) or vi) above unless the conduct described in such clause has not been cured within fifteen (15) days following the Executive’s receipt of written notice from the Company specifying the particulars of the conduct constituting Cause.

4.5.2       Good Reason. For purposes of this Agreement, “Good Reason” means that the Executive voluntarily terminates employment with the Company within thirty (30) days after any of the following is undertaken without the Executive’s express written consent:

i)            a reduction in the Executive’s salary grade;

ii)            a change in the Executive’s reporting structure such that the Executive is required to report to someone other than the CEO;

iii)            a reduction by the Company in the Executive’s Base Salary by five percent (5%) or more; provided, however, that a reduction by the Company of the Executive’s Base Salary by up to ten percent (10%) shall not constitute Good Reason if it is made in connection with an across-the-board reduction by the Company of all executives’ annual base salaries by a percentage at least equal to the percentage by which the Executive’s Base Salary is reduced;

iv)            a relocation of the Executive’s business office to a location more than fifty (50) miles form the location at which the Executive performs his or her duties, except for required travel by the Executive on the Company’s business to an extent substantially consistent with the Executive’s business travel obligations; provided, however, that no relocation of the

Executive’s business office shall constitute Good Reason if the Executive provides services to the Company from a remote location (e.g., through telecommuting) at the time of the relocation; or

v)            any failure by the Company to obtain the assumption of this Plan by an successor or assign of the Company.

5.       Confidential And Proprietary Information; Nonsolicitation.

5.1       As a condition of employment the Executive agrees to execute and abide by the Proprietary Information and Inventions Agreement attached hereto as Exhibit B.

5.2       While employed by the Company and for one (1) year thereafter, the Executive agrees that in order to protect the Company’s Confidential and Proprietary Information from unauthorized use, that the Executive will not, either directly or through others, solicit or attempt to solicit any employee, consultant or independent contractor of the Company to terminate his or her relationship with the Company in order to become an employee, consultant or independent contractor to or for any other person or business entity; or the business of any customer, supplier, service provider, vendor or distributor of the Company which, at the time of termination or one (1) year immediately prior thereto, was doing business with the Company or listed on Company’s customer, supplier, service provider, vendor or distributor list.

6.       Assignment and Binding Effect.

This Agreement shall be binding upon and inure to the benefit of the Executive and the Executive’s heirs, executors, personal representatives, assigns, administrators and legal representatives. Because of the unique and personal nature of the Executive’s duties under this Agreement, neither this Agreement nor any rights or obligations under this Agreement shall be assignable by the Executive. This Agreement shall be binding upon and inure to the benefit of the Company and its successors, assigns and legal representatives.

7.       Choice of Law.

This Agreement is made in California. This Agreement shall be construed and interpreted in accordance with the internal laws of the State of California.

8.       Integration.

This Agreement, including Exhibits A and B, contains the complete, final and exclusive agreement of the Parties relating to the terms and conditions of the Executive’s employment and the termination of Executive’s employment, and supersedes all prior and contemporaneous oral and written employment agreements or arrangements between the Parties. To the extent this Agreement conflicts with the Proprietary Information and Inventions Agreement attached as Exhibit B hereto, the Proprietary Information and Inventions Agreement controls. To the extent this Agreement conflicts with the terms of the Employee Handbook, this Agreement controls.

9.       Amendment.

This Agreement cannot be amended or modified except by a written agreement signed by the Executive and the Company.

10.       Waiver.

No term, covenant or condition of this Agreement or any breach thereof shall be deemed waived, except with the written consent of the Party against whom the wavier is claimed, and any waiver or any such term, covenant, condition or breach shall not be deemed to be a waiver of any preceding or succeeding breach of the same or any other term, covenant, condition or breach.

11.       Severability.

The finding by a court of competent jurisdiction of the unenforceability, invalidity or illegality of any provision of this Agreement shall not render any other provision of this Agreement unenforceable, invalid or illegal. Such court shall have the authority to modify or replace the invalid or unenforceable term or provision with a valid and enforceable term or provision which most accurately represents the Parties’ intention with respect to the invalid or unenforceable term or provision.

12.       Interpretation; Construction.

The headings set forth in this Agreement are for convenience of reference only and shall not be used in interpreting this Agreement. This Agreement has been drafted by legal counsel representing the Company, but the Executive has been encouraged to consult with, and has consulted with, the Executive’s own independent counsel and tax advisors with respect to the terms of this Agreement. The Parties acknowledge that each Party and its counsel has reviewed and revised, or had an opportunity to review and revise, this Agreement, and the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.

13.       Representations and Warranties.

The Executive represents and warrants that the Executive is not restricted or prohibited, contractually or otherwise, from entering into and performing each of the terms and covenants contained in this Agreement, and that the Executive’s execution and performance of this Agreement will not violate or breach any other agreements between the Executive and any other person or entity.

14.       Counterparts.

This Agreement may be executed in two counterparts, each of which shall be deemed an original, all of which together shall contribute one and the same instrument.

15.       Arbitration.

To ensure the rapid and economical resolution of disputes that may arise in connection with the Executive’s employment with the Company, the Executive and the Company agree that any and all disputes, claims, or causes of action, in law or equity, arising from or relating to the Executive’s employment, or the termination of that employment, will be resolved pursuant to the Federal Arbitration Act and to the fullest extent permitted by law, by final, binding and confidential arbitration in San Diego, California conducted by the Judicial Arbitration and Mediation Services (“JAMS”), or its successors, under the then current rules of JAMS for employment disputes; provided that the arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written arbitration decision including the arbitrator’s essential findings and conclusions and a statement of the award. Both the Executive and the Company shall be entitled to all rights and remedies that either the Executive or the Company would be entitled to pursue in a court of law. The Company shall pay all fees in excess of those which would be required if the dispute was decided in a court of law, including the arbitrator’s fee. Nothing in this Agreement is intended to prevent either the Executive or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration.