INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT

EXHIBIT 10.5

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

INTELLECTUAL PROPERTY ASSIGNMENT

AGREEMENT

BETWEEN

QLT USA, INC.

AND

ARIUS TWO, INC.

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

TABLE OF CONTENTS

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT

This Intellectual Property Assignment Agreement (the “Agreement”) is made as of September 5, 2007 (the “Effective Date”) by and between QLT USA, Inc. (formerly Atrix Laboratories, Inc.), a Delaware corporation with its principal office at 2579 Midpoint Drive, Fort Collins, CO 80525-4417 (“Seller”), and Arius Two, Inc., a Delaware corporation with its principal office at 2501 Aerial Center Parkway, Suite 205, Morrisville, NC 27560 (“Buyer”). Seller and Buyer are sometimes referred to collectively herein as the “Parties” or singly as a “Party.”

RECITALS

WHEREAS, Seller and Arius Pharmaceuticals, Inc. (“Arius”) entered into that certain License Agreement dated May 27, 2004, as amended July 14, 2005 and August 2, 2006 (as amended, the “License Agreement”); and

WHEREAS , Seller has agreed to sell to Buyer, and Buyer has agreed to purchase from Seller the BEMA assets related specifically to the United States.

NOW, THEREFORE , in consideration of the foregoing recitals and the mutual covenants and agreements contained herein, the Parties hereto, intending to be legally bound, do hereby agree as follows:

AGREEMENT

ARTICLE I

DEFINITIONS

Section 1.01 Definitions . The following terms as used in this Agreement shall have the meaning set forth below:

“ Affiliate ” means an individual, trust, business trust, joint venture, partnership, corporation, association or any other entity which owns, is owned by or is under common ownership with, a Party. For the purposes of this definition, the term “owns” (including, with correlative meanings, the terms “owned by” and “under common ownership with”) as used with respect to any Party, shall mean the possession (directly or indirectly) of more than 50% of the outstanding voting securities of a corporation or comparable equity interest in any other type of entity.

“ Applicable Laws ” means all applicable laws, rules, regulations and guidelines that may apply to the performance of either Party’s obligations under this Agreement.

“ Assumed Liabilities ” means all obligations and liabilities arising out of Buyer’s ownership of the Purchased Assets, whether arising prior to or after the Effective Date; except for such obligations and liabilities for which Seller is obligated to indemnify Buyer under Section 3.03 of this Agreement.

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

“ BEMA ” means Seller’s proprietary bioerodible, mucoadhesive multi-layer polymer film.

“ Claims ” shall mean and include all past, present and future disputes, claims, controversies, demands, rights, obligations, liabilities, actions and causes of action of every kind and nature.

“ Combination Product ” means a Worldwide Product (as defined below) that is sold together with any other products and/or services at a unit price, whether packaged together or separately with another pharmaceutical product or other device, equipment, instrumentation, or other components (other than solely containers or packaging exclusively for the Worldwide Product).

“ Commercially Reasonable Efforts ” shall mean, except as otherwise explicitly set forth in this Agreement, those efforts consistent with the exercise of prudent scientific and business judgment, as applied to products having comparable market potential within the relevant product lines of that Party and generally accepted practices in the pharmaceutical industry. “Comparable market potential” shall be fairly determined by a Party in good faith and without limitation may be based upon market size, price, competition, patent rights, product liability issues and general marketing parameters.

“ Competent Authorities ” means, collectively, all governmental entities, foreign or domestic, responsible for the regulation of medicinal products intended for human use.

“ Confidential Information ” means any confidential or proprietary information of a Party, whether in oral, written, graphic or electronic form. Confidential Information shall not include any information which the receiving Party can prove by competent evidence:

(a) is now, or hereafter becomes, through no act or failure to act on the part of the receiving Party, generally known by or available to the public;

(b) is known by the receiving Party at the time of receiving such information, as evidenced by its written records maintained in the ordinary course of business;

(c) is hereafter furnished to the receiving Party by a Third Party, as a matter of right and without restriction on disclosure;

(d) is independently developed by the receiving Party, as evidenced by its written records maintained in the ordinary course of business, without knowledge of, and without the aid, application or use of, the disclosing Party’s Confidential Information; or

(e) is the subject of a written permission to disclose provided by the disclosing Party.

2

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

“ Control ” means the possession of the ability to assign to Buyer as provided for herein without violating the terms of any agreement or other arrangement with any Third Party.

“ Encumbrance ” means any lien, pledge, hypothecation, mortgage, security interest, encumbrance, equitable interest, preference, right of possession, lease, tenancy, license, proxy, covenant, order, option, right of first refusal or preemptive right, whether arising out of an obligation to pay any taxes or otherwise.

“ BEMA Know-How ” means all Know-How related to BEMA or any Product which is under the Control of Seller as of the Effective Date, including, but not limited to, data and documentation of clinical trials, pharmacological, toxicological, clinical, assay, control, and manufacturing data, techniques, processes, methods, or systems, and any other information relating to BEMA, excluding the BEMA Patent Rights.

“ Marks ” means all right, title, and interest in “BEMA” or any additional trademarks or service marks owned by Seller with respect to the BEMA Technology, alone or accompanied by any logo or design and any non-English language equivalents in figure, sound or meaning, whether registered or not, including but not limited to any and all such rights in the Territory existing solely under common law, statute, or similar bases not requiring explicit government notice or registration.

“ BEMA Patent Rights ” means all Patent Rights claiming BEMA or any Improvement, or which are necessary, useful, or appropriate to develop, manufacture, or commercialize Products, and under the Control of Seller as of the Effective Date, which shall include but not be limited to the patents and patent applications listed on Exhibit A .

“ BEMA Technology ” means the BEMA Patent Rights and the BEMA Know-How.

“ Books and Records ” means, in whatever media, any and all books and records, reports and accounts and data in connection with or related to any Product, BEMA Technology, or Marks, or any research, development, or other activities primarily related to the foregoing (including but not limited to those related to filing, prosecution, and/or maintenance of the BEMA Patent Rights).

“ US Patent Term ” means, on a Product-by-Product basis, the period of time ending on the expiration of the last to expire of the BEMA Patent Rights covering such Product in the Territory.

“ Ex-US Purchase Agreement ” means that certain Intellectual Property Assignment Agreement, dated August 2, 2006, between the Parties.

“ Ex-US BEMA Patent Rights ” means all Patent Rights assigned to Buyer pursuant to the Ex-US Purchase Agreement.

“ Ex-US Product ” means individually and collectively any product which would infringe one or more valid claims of the Ex-US BEMA Patent Rights.

3

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

“ Territory ” means the United States.

“ FDA ” means the Food and Drug Administration, the governmental entity responsible in the United States for the regulation of medicinal products intended for human use.

“ GAAP ” means generally accepted accounting principles of the United States consistently applied on a basis consistent throughout the periods indicated and consistent with each other.

“ Governmental Approval ” means all permits, licenses and authorizations, including but not limited to, import permits and Marketing Authorizations required by any Competent Authority as a prerequisite to the manufacturing, marketing or selling of the Product for human therapeutic use.

“ Guaranty ” means that certain Guaranty to be executed by BioDelivery Sciences International, Inc. (“BDSI”), owner of all of the outstanding capital stock of Buyer, in the form attached hereto as Exhibit B .

“ Improvement ” means any and all developments, inventions or discoveries directly relating to the BEMA Technology developed or acquired by, or under the Control of, a Party at any time prior to or following the Effective Date and shall include, but not be limited to, such developments intended to enhance the safety and/or efficacy of any Product.

“ Know-How ” means all know-how, trade secrets, inventions, data, processes, techniques, procedures, compositions, devices, methods, formulas, protocols and information, whether or not patentable, which are not generally publicly known, including, without limitation, all chemical, biochemical, toxicological, and scientific research information, whether in written, graphic or video form or any other form or format.

“ Marketing Authorization ” means all necessary and appropriate regulatory approvals, including but not limited to, variations thereto, and Pricing and Reimbursement Approvals to put a Product on the market in a particular jurisdiction.

“ Net Sales ” means the gross amounts invoiced by Buyer, its Affiliates or sublicensees for sales of the Worldwide Product by Buyer, its Affiliates, or its sublicensees, as applicable, to a Third Party in a bona fide arm’s length transaction, less the following items: *** . Net Sales shall not include any sales or transfers of Worldwide Products by Buyer or its Affiliates to Affiliates or sublicensees pursuant to manufacturing or distribution agreements where such Affiliate or sublicensee will ultimately sell such Worldwide Product and such amounts received in connection with sale will be included in Net Sales.

A Worldwide Product shall be considered sold when billed out or invoiced. Components of Net Sales shall be determined in the ordinary course of business in accordance with historical practice and using the accrual method of accounting in accordance with GAAP.

In the event Buyer transfers Worldwide Product to a Third Party in a bona fide arm’s length transaction, for consideration, in whole or in part, other than cash or to a Third Party in

4

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

other than a bona fide arm’s length transaction, the Net Sales price for such Worldwide Product shall be deemed to be the standard invoice price then being invoiced by Buyer in an arms length transaction with similar customers. The Net Sales of a Combination Product shall be calculated as if the invoiced sales price for a Product included within the Combination Product is *** . In the event that Buyer includes a Worldwide Product as part of a single bundled sale of separate products with separately stated prices, the Net Sales attributable to such Worldwide Product shall be the higher of *** .

“ Patent and Trademark Assignment Agreement ” means the Patent and Trademark Assignment Agreement executed by Seller in the form attached hereto as Exhibit C .

“ Patent and Trademark Security Agreement ” means that certain Patent and Trademark Security Agreement between Buyer and Seller in the form attached hereto as Exhibit D .

“ Patent Rights ” means all rights under patents and patent applications, and any and all patents issuing therefrom (including utility, model and design patents and certificates of invention), together with any and all substitutions, extensions (including supplemental protection certificates), registrations, confirmations, reissues, divisionals, continuations, continuations-in-part, re-examinations, renewals and foreign counterparts of the foregoing, and all improvements, supplements, modifications or additions.

“ Pricing and Reimbursement Approvals ” means any pricing and reimbursement approvals which may or must be obtained before placing a Product on the market in a particular jurisdiction.

“ Product ” means a Product, as defined in the License Agreement, excluding an Ex-US Product.

“ Purchased Assets ” means (i) the Marks, (ii) BEMA Technology, (iii) Books and Records, (iv) all Government Approvals (as defined in the License Agreement) and appropriate correspondence, clearance or transfer letters, or any other form of authorization, license, permit, or the like from regulatory authorities with respect to Government Approvals, to the extent not previously assigned to Buyer under the License Agreement, and (v) any and all benefits, privileges, causes of action, and remedies relating to any of the foregoing, whether before or hereafter accrued, including, without limitation, all rights in, to and under applications for, filings, registrations or renewals, and rights to apply for, file, register, maintain, extend or renew any of the foregoing and the right to bring actions for past, present or future infringement of or otherwise enforce any of the foregoing and to settle and retain the proceeds of such actions (including, without limitation, all causes of actions relating to any of the foregoing, claims and demands or other rights accruing with respect to any of the foregoing, or arising from any infringement of the BEMA Technology and the Marks, before or after the Effective Date), and any and all other rights corresponding thereto throughout the world.

“ Secured Promissory Note ” means that certain secured promissory note made by Buyer in favor of Seller in the form attached hereto as Exhibit E , the terms and conditions of which are incorporated herein by reference.

5

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

“ Security Agreement ” means that certain Security Agreement between Buyer and Seller in the form attached hereto as Exhibit F .

“ Third Party ” means any entity other than: (a) Seller, (b) Buyer or (c) an Affiliate of Seller or Buyer.

“ United States ” or “US” means the United States of America, its territories and possessions, including the Commonwealth of Puerto Rico.

“ Worldwide Product ” means, collectively, all Ex-US Products and Products.

Section 1.02 Defined Terms . Each of the following terms is defined in the Section set forth opposite such term below:

Section 1.03 No Amendment to License Definitions . The definition of certain terms above which are also separately defined above shall not in any way alter, amend, or be used to interpret the definitions established under the License Agreement.

ARTICLE II

PURCHASE, SALE, ASSIGNMENT, AND LICENSE

Section 2.01 Purchase and Sales . Subject to the terms and conditions set forth in this Agreement, effective on the Effective Date, Seller hereby conveys, assigns, and transfers to Buyer, and Buyer hereby acquires from Seller, for the Purchase Price, free and clear of all Encumbrances, the Purchased Assets and shall assume, pay, discharge, and perform all Assumed Liabilities. For a period of three months following the Effective Date, Seller will cooperate with Buyer, as reasonably requested by Buyer and at Buyer’s expense, which expense shall be commercially reasonable and documented, in effecting the transfer of the Marks to Buyer and enabling Buyer to file registrations, applications therefor, or equivalent formal legal recognition of, or rights with respect to, the Marks in Buyer’s name in the Territory, and Buyer shall own all right, title, and interest thereto in the Territory.

6

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

Section 2.02 Know-How License . To the extent any BEMA Know-How or Improvement cannot be severed from Know-How related to technology or intellectual property other than BEMA Technology and assigned to Buyer as contemplated by this Agreement, Seller hereby grants to Buyer an exclusive, perpetual, royalty-free, fully-paid license in the Territory, with rights of sublicense, under and to such Know-How and Improvements (to the extent not claimed in any BEMA Patent Rights and concerning or related to BEMA (and not any technology other than BEMA)) made, obtained, or Controlled by Seller and related Books and Records to use, develop, market, advertise, promote, distribute, offer for sale, sell, export and import, manufacture, and have manufactured Products, provided that, following the expiration of the US Patent Term, such license shall be non-exclusive, fully-paid, perpetual and royalty-free.

Section 2.03 Consideration . As consideration for the Purchased Assets, Buyer shall pay to Seller total consideration of $7,000,000 (the “Purchase Price”). The Purchase Price shall be payable as follows:

(a) $3,000,000 (the “Closing Cash Payment”), by wire transfer of immediately available funds on the Effective Date to an account designated by Seller; and

(b) $4,000,000, as evidenced by a secured promissory note, to Seller as follows:

(i) $2,000,000, within ten (10) business days after the initial Governmental Approval of a Product in the United States; and

(ii) $2,000,000, the first time that cumulative Net Sales exceed $30,000,000. Such payment shall be made within 30 days following the end of the calendar quarter during which cumulative Net Sales exceed such amount.

For the avoidance of doubt, each payment referred to in this Section 2.03(b) shall be paid only once by Buyer and only be become due and payable at such time as the event described in the relevant subsection has occurred.

Section 2.04 Termination of License Agreement . Pursuant to the form of termination agreement attached hereto as Exhibit G (the “Termination Agreement”), to be executed by Arius, Seller, and CDC prior to or as of the Effective Date, the License Agreement shall termina