AMENDED AND RESTATED LICENSE AGREEMENT

Exhibit 10.3

AMENDED AND RESTATED LICENSE AGREEMENT

This Amended and Restated License Agreement (the “Agreement”) is made and entered into as of the 24 ^th day of May, 2007 (the “Effective Date”), by and between the UNIVERSITY OF PITTSBURGH OF THE COMMONWEALTH SYSTEM OF HIGHER EDUCATION, a non-profit corporation, organized and existing under the laws of the Commonwealth of Pennsylvania, having its principal office at 4200 Fifth Avenue, Pittsburgh, Pennsylvania 15260 (“UNIVERSITY”) and NOVACEA, INC., a Delaware corporation having its primary place of business at 601 Gateway Boulevard, Suite 800, South San Francisco, California 94080 (“LICENSEE”).

WHEREAS, UNIVERSITY and LICENSEE entered into a License Agreement with an effective date of July 1, 2002, (the “Original License Agreement”),

WHEREAS, UNIVERSITY and LICENSEE now wish to amend and restate the Original License Agreement herein,

WHEREAS, UNIVERSITY is the owner of certain PATENT RIGHTS and KNOW-HOW (as hereinafter defined) and has the right to grant licenses under such PATENT RIGHTS and KNOW-HOW,

WHEREAS, UNIVERSITY desires to have the PATENT RIGHTS and KNOW-HOW utilized in the public interest;

WHEREAS, LICENSEE has represented to UNIVERSITY, to induce UNIVERSITY to enter into this Agreement, that LICENSEE, shall commit itself to a thorough, vigorous and diligent program of exploiting the PATENT RIGHTS and KNOW-HOW so that public utilization results therefrom; and

WHEREAS, LICENSEE desires to obtain a license under the PATENT RIGHTS and KNOW-HOW upon the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto, intending to be legally bound, agree as follows:

ARTICLE 1 - DEFINITIONS

For purposes of this Agreement, the following words and phrases shall have the following meanings:

1.1 “ AFFILIATE ” shall mean, with respect to UNIVERSITY, any clinical or research entity that is operated or managed as a facility under the UPMC Health System, whether or not owned by UNIVERSITY.

1.2 “ KNOW-HOW ” shall mean any and all non-patented, proprietary technology and information (including, without limitation, research data, designs, formulas, process information, clinical data, and other information pertaining or relating to any technology or invention claimed in the Patent Rights) existing as of the effective date of the Original License

Agreement as a result of activities conducted in the laboratories of Drs. Donald Trump and/or Candace Johnson, which is necessary or useful for the practice of the Patent Rights, or for the manufacture, use, offer for sale or sale of a Licensed Product.

1.3 “ LICENSED PRODUCT ” shall mean VITAMIN D and one or more cytotoxic agents administered or otherwise used or offered for use in a manner which would, but for the license granted herein, infringe one or more of the PATENT RIGHTS.

1.4 “ LICENSEE ” shall mean NOVACEA, INC. and all entities directly or indirectly controlling, controlled by or under common control with NOVACEA, INC.

1.5 “ NET SALES ” shall mean LICENSEE’s and any sublicensee’s invoiced price for LICENSED PRODUCTS, less the sum of the following:

1.6 “ PATENT RIGHTS ” shall mean the interest of UNIVERSITY in:

1.7 “REASONABLE COMMERCIAL EFFORTS” shall mean efforts and resources commonly used in the pharmaceutical industry for a drug of similar commercial potential at a similar stage in its lifecycle, taking into consideration its safety and efficacy.

1.8 “ SUB-LICENSE REVENUES ” shall mean all consideration paid to LICENSEE in return for the grant of a sub-license under the PATENT RIGHTS, including license fees and

2

milestone payments but excluding: (i) the purchase of equity in LICENSEE, (ii) payments or reimbursement for consulting, research, development, or other services. (iii) reimbursement for patent expenses or other actual disbursements of LICENSEE, and (iv) running royalties payable as a function of the manufacture, sale or use of a LICENSED PRODUCT.

1.9 “ VITAMIN D ” shall mean cholecalciferol, as well as all derivatives and analogs thereof or thereto.

ARTICLE 2 - GRANT

2.1 To the extent it may lawfully do so, UNIVERSITY hereby grants to LICENSEE a worldwide sole and exclusive license under the PATENT RIGHTS and KNOW-HOW to make, have made, use, import, export, offer for sale and sell the LICENSED PRODUCTS. The license granted hereby is subject to the rights of the United States government, if any, as set forth in 35 U.S.C. Section 200, et seq .

2.2 UNIVERSITY reserves a royalty-free, non-exclusive right to practice under the PATENT RIGHTS for its own noncommercial research and educational purposes.

2.3 LICENSEE shall have the right to enter into sub-licensing arrangements for the rights, privileges and licenses granted hereunder upon notice to and prior written approval of UNIVERSITY, which approval shall not be unreasonably withheld or delayed. Any sublicensee shall have the right to grant further sublicenses as necessary to meet its obligations under any sublicense agreement with LICENSEE. Any further sublicensee will have no right to grant further sublicenses. Upon termination of this Agreement, any exclusive first level sublicensee shall have the right, but not the obligation, to replace LICENSEE and become a direct licensee with UNIVERSITY to the extent of such exclusivity under the same terms and conditions as this Agreement, provided that (i) such exclusive first level sublicensee provides written notice to University of its election to become a direct licensee within thirty (30) days of receipt of notice of termination of this Agreement, and (ii) to the extent LICENSEE has breached this Agreement due to a failure to make any payment when due after any cure period, such first level exclusive sublicensee first cures such breach.

2.4 Any sub-license granted by LICENSEE hereunder shall provide that the obligations to UNIVERSITY of Sections 2, 7, 8, 9, 10 and 13 of this Agreement shall be binding upon the sub-licensee as if it were party to this Agreement.

2.5 LICENSEE shall forward to UNIVERSITY a copy of any and all sub-license agreements promptly upon execution thereof, provided that LICENSEE may redact from such copies technical information that does not relate to consideration paid for, or other financial obligations relating to, the grant of the sublicense under the PATENT RIGHTS. LICENSEE shall not redact any information from such sublicense agreements material to determination of royalties under this Agreement or verification of sublicensee’s obligations to UNIVERSITY. Such copies and the non-public information reflected therein shall be kept confidential by UNIVERSITY.

3

2.6 The license granted hereunder shall not be construed to confer any rights upon LICENSEE by implication, estoppel or otherwise as to any intellectual property other than PATENT RIGHTS and KNOW-HOW.

ARTICLE 3 - DUE DILIGENCE

3.1 LICENSEE shall use REASONABLE COMMERCIAL EFFORTS to bring one or more LICENSED PRODUCTS to market and to continue active marketing efforts for such LICENSED PRODUCTS throughout the term of this Agreement.

3.2 Without limiting Section 3.1, above, LICENSEE shall adhere to each of the following milestones:

3.3 LICENSEE’s failure to perform in accordance with Section 3.1 or Section 3.2 shall constitute a material breach of this Agreement. Such breach shall entitle UNIVERSITY to terminate as provided in Section 10.1(a), below.

ARTICLE 4 - ROYALTIES AND OTHER CONSIDERATION

4.1 In consideration of the rights, privileges and license granted by UNIVERSITY hereunder, LICENSEE shall pay royalties and other consideration as follows:

4

4.2 Royalty payments pursuant to Section 4.1(c), above, shall be paid to UNIVERSITY in United States dollars and directed to the address set forth in Section 12 hereof within sixty (60) days after March 31, June 30, September 30 and December 31 of each calendar year during the term of this Agreement. LICENSEE shall have the right to reduce the royalty rate payable under Section 4.1(c) in any calendar quarter by [*] ([*]) of the royalty rate paid to any third party, by judgment, contract or otherwise, for the right to manufacture, use or sell any LICENSED PRODUCT in such calendar quarter; provided, however, that the royalty rate due UNIVERSITY hereunder shall in no event be reduced to less than [*] percent ([*]%) of NET SALES.

4.3 Commencing on the first anniversary of the effective date of the Original License Agreement, LICENSEE shall pay to UNIVERSITY a minimum annual royalty, which amount shall be creditable against royalties actually due to the UNIVERSITY with respect to NET SALES in such calendar year. The first such payment shall be One Hundred Thousand Dollars ($100,000). The amount of such annual payment shall increase each year by Twenty-Five Thousand Dollars ($25,000), up to a maximum of Two Hundred Fifty Thousand Dollars ($250,000) per year.

4.4 UNIVERSITY shall also receive: (i) [*] percent ([*]%) of all SUB-LICENSE REVENUES received by LICENSEE within the first twelve (12) months after the effective date of the Original License Agreement; (ii) [*] percent ([*]%) of all SUB-LICENSE REVENUES received more than twelve (12) months but fewer than twenty-four (24) months after the EFFECTIVE DATE OF THE Original License Agreement, and of such payments; and (iii) five percent (5%) of all SUB-LICENSE REVENUES received more than twenty-four (24) months after the Effective date of the Original License Agreement.

4.5 Payments pursuant to this Agreement which are overdue shall bear interest calculated from the due date until payment is received at the rate of eight percent (8%) per annum.

4.6 LICENSEE shall sell LICENSED PRODUCTS in the ordinary course to the UPMC Health System upon request solely for patient use and not for resale, at such price(s) and on such terms and conditions as such products of similar quantities are made available to similar health systems. For purposes of clarity , section 2.2 does not impose a restriction on University’s right to use the LICENSED PRODUCTS purchased from LICENSE