COLLABORATION AND LICENSE AGREEMENT

Exhibit 10.34

***Text Omitted and Filed Separately
Confidential Treatment Requested
Under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2

COLLABORATION AND LICENSE AGREEMENT

     This Collaboration and License Agreement (the " Agreement ") is made and entered into effective as of December 3, 2004 (the " Effective Date ") by and between Micromet AG , having its principal place of business at Staffelseestrasse 2, 81477, Munich, Germany (" Micromet "), and Ares Trading S.A. , having its principal place of business at Zone Industrielle de l’Ouriettaz, CH-1170 Aubonne, Switzerland (" Serono "). Micromet and Serono each may be referred to herein individually as a " Party ," or collectively as the " Parties ."

Recitals

      A.  Micromet is developing a pharmaceutical product comprising a human antibody of IgG-1 subtype binding to EpCAM.

      B.  Serono is a pharmaceutical company with experience in the development and commercialization of pharmaceutical products.

      C.  Micromet and Serono desire to collaborate on the development of the Product (as defined below), to obtain marketing approval of the Product, and thereafter to have one or both Parties commercialize the Product.

     In consideration of the foregoing premises and the mutual promises and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

Agreement

1. Definitions

     When used in this Agreement, capitalized terms will have the meanings as defined below and throughout the Agreement.

      1.1 "Additional Indication" means any of the following Indications: [***].

      1.2 " Affiliate " means a legal entity that controls, is controlled by, or is under common control with a Party. For purposes of this definition only, "control" and, with correlative meanings, the terms "controlled by" and "under common control with" means (a) the possession, directly or indirectly, of the power to direct the management or policies of a legal entity, whether through the ownership of voting securities or by contract relating to voting rights or corporate governance, or (b) the ownership, directly or indirectly, of more than fifty percent (50%) of the voting securities or other ownership interest of a legal entity; provided , however , that if local law restricts foreign ownership, control will be established by direct or indirect

ownership of the maximum ownership percentage that may, under such local law, be owned by foreign interests.

      1.3 " Applicable Law " means the laws, rules, and regulations, including any statutes, rules, regulations, guidelines, or other requirements, that may be in effect from time to time and apply to the development, manufacture, registration, and marketing of the Product in the countries of the Territory, including any such statutes, rules, regulations, guidelines, or other requirements of the FDA or the EMEA.

      1.4 "Assignment Agreement" means the Assignment Agreement ("Übertragungs Vertrag") between Micromet GmbH and [***] and [***] entered into on [***].

      1.5 "BI" means Boehringer Ingelheim Pharma GmbH & Co. KG.

      1.6 " BI Process Development Agreement " means the Process Development Agreement between Micromet and BI dated as of December 15, 2003.

      1.7 "BI Process License Agreement" means the Process License Agreement between Micromet and BI entered into on December 15, 2003.

      1.8 " BLA " means a Biologics License Application filed with the FDA in conformance with Applicable Law.

      1.9 " CAT Agreement " means the Non-Exclusive Product License Agreement between Micromet and Cambridge Antibody Technology Limited entered into on September 3, 2003.

      1.10 " Clinical Trial Materials " means the Product formulated in accordance with applicable specifications, and placebo of such formulations, for administration to healthy volunteers or patients in clinical trials.

      1.11 " Collaboration Technology " means Joint Collaboration Technology, Micromet Collaboration Technology, and Serono Collaboration Technology.

      1.12 " Combination Study " has the meaning as defined in Section 3.1.5.

      1.13 " Commercialization " means the marketing, promotion, advertising, selling or distribution of the Product in a country after all Marketing Approvals have been obtained in such country. The term " Commercialize " has a correlative meaning.

      1.14 " Commercially Reasonable Efforts " means those diligent efforts consistent with the exercise of prudent scientific and business judgment, as applied by a Party to the development and commercialization of its own pharmaceutical products at a similar stage of development and with similar market potential.

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      1.15 "Confidential Information" has the meaning as defined in Section 9.1.

      1.16 " Control " and, with correlative meaning, the term " Controlled ", means, with respect to a Party and any Patent, Know-How, or other intellectual property right, the ability to grant the other Party access, a license or a sublicense (as applicable) or right to use such Patent, Know-How, or intellectual property right as provided in this Agreement without violating the terms of any agreement or other arrangement with any Third Party existing at the time such Party would be required under this Agreement to grant the other Party such access, license, sublicense or right of use.

      1.17 " Co-Promotion Option " has the meaning as defined in Section 5.1.

      1.18 " Co-Promotion Option Period " has the meaning as defined in Section 5.1.

      1.19 " Co-Promotion Period " has the meaning as defined in Section 5.2.

      1.20 " Co-Promotion Territory " means the territory of the United States or Europe or both, with respect to which Micromet has exercised the Co-Promotion Option.

      1.21 " Development Activities " means any activities to be performed pursuant to a Development Plan in connection with the development of the Product, including any in vitro or in vivo preclinical studies, clinical studies in humans, the preparation and filing of the BLA or MAA, the development of a commercial scale manufacturing process for the Product, and the manufacture of Clinical Trial Materials for use in clinical trials performed prior to the first Marketing Approval or as a condition of receiving such Marketing Approval.

      1.22 " Development Expenses " means, with respect to a Party, all direct and indirect costs and expenses incurred by such Party in carrying out Development Activities, calculated in accordance with generally accepted accounting principles consistently applied and such Party’s cost accounting systems, including (a) the cost of such individuals performing Development Activities by or on behalf of such Party calculated at the FTE Rate; (b) reasonable out-of-pocket expenses not included in the FTE Rate, as set forth in a Development Plan (such as expenses for dedicated equipment, reagents, etc.); (c) the Fully Burdened CTM Manufacturing Cost of, or purchase price paid for, Clinical Trial Materials manufactured or purchased for the performance of the Development Activities; and (d) manufacturing process development and other services provided by Third Parties in connection with the performance of the Development Activities. Development Expenses will not include [***].

      1.23 " Development Plan " means either or both of the Micromet Program Plan or the Serono Program Plan.

      1.24 " Development Program " means either or both of the Micromet Program or the Serono Program.

      1.25 " Dyax Agreement " means the License Agreement between Micromet and Dyax Corporation entered into on October 30, 2000.

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      1.26 " EMEA " means the European Medicines Evaluation Agency, or any successor agency thereof.

      1.27 " EpCam " means the whole or part of the human epithelial cell adhesion molecule EpCAM identified by the SWISS-PROT entry name TTD1_HUMAN and accession number P16422.

      1.28 " Europe " means (a) those countries that, as the Effective Date, are member states of the European Union, and (b) any country not included within the foregoing that, as of the date of first commercial sale of the Product following the receipt of the first Marketing Approval in a member state of the European Union, is a member state of the European Union, and in each case any successor states comprising the territory of such member states.

      1.29 " FDA " means the United States Food and Drug Administration, or any successor agency thereof.

      1.30 " Field " means the treatment of human diseases, disorders and conditions.

      1.31 " Final Study Report " has the meaning as defined in Section 3.1.

      1.32 " FTE " means [***] hours of scientific or technical work per year on or directly related to the execution or implementation of a Development Program carried out by a qualified individual by or on behalf of a Party. Scientific or technical work can include, but is not limited to, research, experimental laboratory work, developing manufacturing processes for the Product, conducting pre-clinical and clinical development of the Product, recording and writing up results, reviewing literature and references, holding scientific discussions, preparing and filing a BLA or MAA for the Product, and managing and directing scientific or technical staff.

      1.33 " FTE Rate " means (a) € [***] per FTE per annum for FTEs performed outside of the United States, and (b) US$[***] per FTE per annum for FTEs performed in the United States, which amounts described in each of the foregoing subsections include laboratory supplies and equipment (excluding items provided for separately under the applicable Development Program), equipment maintenance costs, utilities, waste removal, and a pro rata allocation of general and administrative expenses plus facilities expenses.

      1.34 "Fully Burdened CTM Manufacturing Cost" means the consolidated fully burdened cost incurred by Serono or on its behalf in the manufacture of Clinical Trial Materials, including (a) direct labor and material costs; (b) product quality assurance/control costs, to the extent allocable to the Clinical Trial Materials; (c) facility and equipment depreciation costs; (d) facility and equipment validation and control costs; (e) costs of transport, customs, clearance and storage of the Clinical Trial Materials (if necessary), duty, and insurance; and (f) applicable overhead reasonably allocable to the Clinical Trial Materials, in each case as determined in accordance with International Accounting Standards as applied by Serono consistently across its products. Fully-Burdened CTM Manufacturing Cost will exclude [***] and any [***]

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      1.35 " GCP " means the standards, practices and procedures set forth in the International Conference on Harmonization (ICH) guidelines entitled "Guidance for Industry E6 Good Clinical Practice: Consolidated Guidance," including related regulatory requirements imposed by the FDA, and equivalent foreign regulations or standards, as applicable.

      1.36 " GLP " means good laboratory practices regulations promulgated by the FDA, published at 21 C.F.R. § 58, as such regulations may be amended from time to time, and equivalent foreign regulations or standards, as applicable.

      1.37 " IND " means an Investigational New Drug Application filed with the FDA, and the equivalent application in jurisdictions outside the United States.

      1.38 " Indication " means a cancer of [***] or any [***] thereof, including [***], [***], [***], [***], [***], [***], [***], [***], [***], [***], [***], [***], [***], [***], [***], [***], and [***]. Any [***] that are clinically or pathologically distinct will be considered [***] (e.g. [***] and [***] are [***] and for the purpose of this definition [***], or [***] are cancers [***] and for the purpose of this definition [***]).

      1.39 " Interim Study Report " has the meaning as defined in Section 3.1.

      1.40 " JCC " has the meaning set forth in Section 5.4.2.

      1.41 " Joint Collaboration Technology " means any Patents and Know-How made, conceived or developed jointly by employees, agents or independent contractors of both Parties or their Affiliates during the course of, in furtherance of, and as a direct result of such employees, agents or independent contractors performing an activity pursuant to this Agreement.

      1.42 " Know-How " means (a) any scientific or technical information, results and data of any type whatsoever, in any tangible or intangible form whatsoever, that is not in the public domain or otherwise publicly known, including databases, practices, methods, techniques, specifications, formulations, formulae, knowledge, know-how, skill, experience, test data including pharmacological, medicinal chemistry, biological, chemical, biochemical, toxicological and clinical test data, analytical and quality control data, stability data, studies and procedures, and manufacturing process and development information, results and data, and (b) any biological, chemical, or physical materials that are not in the public domain or otherwise available to the public; all to the extent not claimed or disclosed in a Patent.

      1.43 " Licensed Know-How " means any Know-How Controlled by Micromet as of the Effective Date or during the Term that is made, conceived or developed by employees, agents or independent contractors of Micromet or its Affiliates and that is necessary or useful for the manufacture, use, or sale of the Product; but excluding any Know-How within the Micromet Collaboration Technology or Joint Collaboration Technology.

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      1.44 " Licensed Patents " means the Micromet Patents and the Third Party Patents.

      1.45 " Licensed Technology " means the Licensed Know-How, the Licensed Patents, the Micromet Collaboration Technology, and Micromet’s rights and interest in the Joint Collaboration Technology.

      1.46 " MAA " means a marketing approval application filed with the EMEA, and any corresponding applications in countries or territories other than the European Union or the United States.

      1.47 " Major Market " means the [***], the [***], [***], [***], [***], [***] and [***].

      1.48 " Marketing Approval " means the approval of a BLA or MAA, or any supplement thereof, and any pricing and reimbursement approvals to the extent required by Applicable Law prior to the sale of pharmaceutical products in a country or territory.

      1.49 " Marketing Costs " has the meaning as defined in Exhibit F .

      1.50 " Micromet Collaboration Technology " means any Patents and Know-How made, conceived or developed solely by employees, agents or independent contractors of Micromet or its Affiliates during the course of, in furtherance of, and as a direct result of such employees, agents or independent contractors performing an activity pursuant to this Agreement.

      1.51 "Micromet Contribution" has the meaning as defined in Section 5.3.1.

      1.52 " Micromet Patents " means the Patents listed on Exhibit A and any other Patents Controlled by Micromet as of the Effective Date or during the Term that are made, conceived or developed by employees, agents or independent contractors of Micromet or its Affiliates and are necessary or useful for the manufacture, use, or sale of the Product; but excluding any Patents within the Micromet Collaboration Technology or Joint Collaboration Technology,

      1.53 " Micromet Program " has the meaning as defined in Section 3.1.

      1.54 " Micromet Program Plan " has the meaning as defined in Section 3.1.

      1.55 " MT201 " means a human antibody of IgG-1 subtype binding to EpCAM with the sequence set forth in Exhibit B .

      1.56 " Net Profits " has the meaning as defined in Exhibit F .

      1.57 " Net Sales " means the gross amount invoiced by Serono, its Affiliates or Sublicensees for sales of the Product to any Third Party (other than any Sublicensee), less deductions with respect to: (a) normal trade, cash and quantity discounts allowed by Serono, its Affiliates or Sublicensees, including charge backs; (b) credits, allowances or adjustments

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allowed by Serono, its Affiliates or Sublicensees, including amounts allowed for returned or defective products; (c) insurance and transportation charges paid by Serono, its Affiliates or Sublicensees; (d) custom duties, value added taxes (VAT), sales taxes or other governmental charges paid by Serono, its Affiliates or Sublicensees in connection with such sales (but excluding what is commonly known as income taxes); (e) amounts debited by Serono, its Affiliates or Sublicensees on account of bad debts with respect to Net Sales previously invoiced; and (f) rebates or reimbursements actually granted by Serono, its Affiliates or Sublicensees to managed health care organizations, federal, state, or local governments (or their agencies), including Medicaid rebates. In the event any amounts debited on account of bad debts are subsequently recovered by Serono, its Affiliates or Sublicensees, such amounts will be added to Net Sales for the calendar quarter in which such recovery occurred.

If a Combination Product (as defined below) is sold, then for the purpose of calculating royalties owed under this Agreement on sales of the Combination Product, Net Sales will be calculated as follows: first, Serono will determine the actual Net Sales of such Combination Product (calculated using the above described deductions) and then such amount will be multiplied by the fraction A/(A+B), where A is the weighted (by sales volume) average invoice price of the actual Product component of such Combination Product, and B is the weighted (by sales volume) average invoice price of the other active ingredient(s) or functional device of such Combination Product. If the invoice price of either the Product or the other active ingredient(s) or functional device of such Combination Product cannot be determined, Net Sales of such Combination Product will be equitably determined by the Steering Committee with unanimous agreement of all members and without application of the dispute resolution procedures set forth in Section 2.1.5. "Combination Product" means (a) a Product consisting of MT201 and one or more other active ingredients, or (b) a Product where MT201 (alone or with one or more other active ingredients) is contained in or otherwise administered to a patient by a functional device proprietary to Serono, an Affiliate of Serono or a Third Party; but in all cases excluding any inert ingredients or packaging materials.

Notwithstanding the foregoing, any amounts received on account of transfers of Product between Serono, its Affiliates or Sublicensees will be excluded from the calculation of Net Sales, and Net Sales will be calculated based on the final sale of such transferred product by Serono, its Affiliates or Sublicensees to any Third Party (who is not a Sublicensee). Further, transfers or dispositions of the Product for charitable or promotional purposes or for preclinical, clinical, manufacturing, regulatory or governmental purposes will not be deemed to be "sales."

      1.58 " Ongoing Trial " has the meaning as defined in Section 3.1.

      1.59 " Opt-Out Option " has the meaning as defined in Section 5.5.

      1.60 " Patents " means (a) all patents and patent applications in any country or supranational jurisdiction, and (b) any provisionals, substitutions, divisions, continuations, continuations in part, reissues, renewals, registrations, confirmations, patents of addition, reexaminations, extensions, supplementary protection certificates and the like, of any such patents or patent applications.

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      1.61 " Pivotal Trial " means a clinical trial that is of appropriate size and design to establish that a pharmaceutical product is safe and effective for its intended use, to define warnings, precautions and adverse reactions that are associated with the pharmaceutical product in the dosage range to be prescribed, and is required to support Marketing Approval of such pharmaceutical product or label expansion of such pharmaceutical product.

      1.62 " Product " means a product consisting of or comprising MT201.

      1.63 " Project Team " has the meaning as defined in Section 2.2.

      1.64 " Project Team Leader " has the meaning as defined in Section 2.2.

      1.65 " Rejected Indication " has the meaning set forth in Section 3.3.5.

      1.66 " Serono Collaboration Technology " means any Patents and Know-How that are necessary or used for the manufacture, use, or sale of the Product and that are made, conceived or developed solely by employees, agents or independent contractors of Serono or its Affiliates during the course of, in furtherance of, and as a direct result of such employees, agents or independent contractors performing an activity pursuant to this Agreement.

      1.67 " Serono Program " has the meaning as defined in Section 3.3.

      1.68 " Serono Program Plan " has the meaning as defined in Section 3.3.

      1.69 " Steering Committee " has the meaning as defined in Section 2.1.1.

      1.70 " Sublicensee " means a Third Party that is developing or Commercializing the Product pursuant to a license agreement with Serono or any of its Affiliates.

      1.71 " Technology Acquisition Agreement " means any agreement entered into before or after the Effective Date between a Party and a Third Party under which such Party is granted a license to or is assigned any of such Third Party’s Patents or Know-How that claim or cover the Product or the development, manufacture or Commercialization thereof.

      1.72 " Technology Acquisition Payments " means any license fees, milestone payments, royalties, or other cash payments made or payable by a Party to a Third Party under any Technology Acquisition Agreement in connection with the execution of such agreement or the development, manufacture or Commercialization of the Product.

      1.73 " Term " has the meaning as defined in Section 11.1.

      1.74 " Territory " means all countries and territories of the world.

      1.75 " Third Party " means any entity other than Micromet, Serono or their respective Affiliates.

      1.76 " Third Party Patents " means the Patents licensed to Micromet pursuant to the Dyax Agreement and the CAT Agreement, and any other Patents of a Third Party Controlled by

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Micromet as of the Effective Date that are necessary or useful for the manufacture, use, or sale of the Product.

      1.77 " United States " means the United States of America, its territories and possessions, including the Commonwealth of Puerto Rico.

      1.78 " Valid Claim " means: [***].

2. Collaboration Governance

      2.1 Steering Committee.

           2.1.1 Establishment. Within thirty (30) days following the Effective Date, the Parties will establish a steering committee (the " Steering Committee ") to oversee the development of the Product under this Agreement. Each Party will appoint three (3) employees to serve as their representatives on the Steering Committee. From time to time, Micromet and Serono each may replace any of its representatives on the Steering Committee upon written notice to the other Party. One member of the Steering Committee will be designated as the " Chairperson ." Micromet will designate the Chairperson for the period prior to the commencement of the Serono Program, and Serono will designate the Chairperson for the period following the commencement of the Serono Program. Subject to the provisions of this Section 2, the Steering Committee will establish its own procedural rules for its operation.

           2.1.2 Tasks of the Steering Committee. The Steering Committee will: (a) determine Indications to be pursued in the development of the Product; (b) review and approve, in its discretion, any updates or amendments to the Micromet Program Plan and accompanying budget for Development Expenses proposed by the Project Team; (c) develop the strategy for the Serono Program; (d) review and approve, in its discretion, the Serono Program Plan (including the allocation of Development Activities therein) and any updates or amendments thereto proposed by the Project Team; (e) monitor the progress of the activities undertaken by the Parties pursuant to the Development Program; (f) review the product lifecycle plans of the Parties for the Product, including indication and label expansions, new dosage forms, and new formulations

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or delivery systems; (g) agree upon a communication strategy for the Product; (h) attempt to resolve disputes among the members of the Project Team and (i) take such other actions as are expressly delegated to the Steering Committee in this Agreement. The Steering Committee will not have any power to amend this Agreement and will have only such powers as are specifically delegated to it under this Agreement.

           2.1.3 Steering Committee Meetings. The Steering Committee will meet not less than once every calendar quarter until completion of the Ongoing Trials; thereafter, the Steering Committee will meet not less than semi-annually. Meetings may be held in person or by means of telecommunication (telephone, video, or web conferences); provided that at least one meeting per year will be held in person. At least four (4) members of the Steering Committee will constitute a quorum for any meeting, provided that at least two (2) representatives from each Party are present. The Steering Committee may meet more frequently by agreement of the Parties or upon the request of either Party. The Chairperson will be responsible for organizing the meetings of the Steering Committee and for distributing the agenda of the meetings, which will include any report received from the Project Team Leaders, but will have no additional powers or rights beyond those held by the other representatives to the Steering Committee. The Chairperson will include on the agenda any item within the scope of the responsibility of the Steering Committee that is requested to be included by a Party, and will distribute the agenda to the Parties no less than seven (7) days before any meeting of the Steering Committee. Each Party may, in its discretion, invite non-voting employees, consultants or advisors (which consultants and advisors will be under an obligation of confidentiality no less stringent than the terms set forth in Section 9) to attend any meeting of the Steering Committee. Each Party will bear its own costs associated with holding and attending Steering Committee meetings.

           2.1.4 Meeting Minutes. Minutes will be kept of all Steering Committee meetings by the hosting Party and sent to all members of the Steering Committee for review and approval within fourteen (14) days after each meeting. If the meeting is held by means of telecommunication, Micromet will be deemed to be the hosting Party during the Micromet Program, and Serono will be deemed to be the hosting Party during the Serono Program. Minutes will be deemed approved unless any member of the Steering Committee objects to the accuracy of such minutes by providing written notice to the other members of the Steering Committee within fourteen (14) days of receipt of the minutes. In the event of any such objection that is not resolved by mutual agreement of the Parties, such minutes will be amended to reflect such unresolved dispute.

           2.1.5 Decision Making.

                (a)  Unless expressly otherwise set forth in this Agreement, the Steering Committee will take action by unanimous consent of the Parties, with each Party having a single vote, irrespective of the number of representatives actually in attendance at a meeting, or by a written resolution signed by the designated representatives of each of the Parties.

                (b)  If the Steering Committee is unable to reach unanimous consent on a particular matter within thirty (30) days of a formal vote requested by either Party on such matter, then either Party may provide written notice of such dispute to the Chief Executive

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Officer of the other Party; provided, however , that no such referral to the Chief Executive Officers will occur, and [***] will have the casting vote, with respect to matters relating to the [***].

                (c)  The Chief Executive Officers (or their respective designees, who will not be members of the Steering Committee or Project Team) of each of the Parties will meet at least once in person to discuss the dispute and use their good faith efforts to resolve the dispute within [***] after submission of such dispute to such officers.

                (d)  If any such dispute is not resolved by the Chief Executive Officers or their designees within [***] after submission of such dispute to such officers, then the Chief Executive Officer of [***] will have the authority to finally resolve such dispute (reasonably taking into consideration the position of [***]); provided, however , [***].

      2.2 Project Team.

           2.2.1 Establishment of the Project Team. At its first meeting, the Steering Committee will establish a joint project team consisting of an adequate number of employees of both Parties that will be responsible for managing the execution of Development Activities (the " Project Team "). The Project Team may change its number of representatives from time to time by mutual consent of its members. Each Party will designate one of its Project Team members as the co-leader of the Project Team (each, a " Project Team Leader "). The Project Team Leaders may, in their discretion, create sub-teams of the Project Team for the purpose of carrying out specific tasks provided for in this Agreement. From time to time, Micromet and Serono each may replace any of its representatives on the Project Team upon written notice to the other Party. The Project Team Leaders will alternate serving as the Chairperson of the Project Team, with each Project Team Leader acting as Chairperson for a period of one year. Micromet will designate the first Chairperson. The Chairperson will be responsible for administering Project Team meetings and circulating the agenda prior to each meeting, but will have no additional powers or rights beyond those held by the other representatives to the Project Team. Subject to the provisions of this Section 2, the Project Team will establish its own procedural rules for its operation.

           2.2.2 Tasks of the Project Team. The Project Team will: (a) propose any appropriate updates or amendments to the Micromet Program Plan or the accompanying budget for Development Expenses; (b) propose the Serono Program Plan (including the allocation of Development Activities therein) and the accompanying budget for Development Expenses as well as any appropriate updates or amendments thereto; (c) coordinate the activities undertaken by the Parties pursuant to the Development Program; and (d) take such other actions as are expressly delegated to Project Team by the Steering Committee. The Parties acknowledge and agree that certain portions of the Micromet Program Plan in the form attached to this Agreement as Exhibit G contain references to potential changes to the Micromet Program Plan or the studies to be performed pursuant to such plan, and that any such potential changes will become part of

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the Micromet Program Plan only upon unanimous consent of the Parties pursuant to the decision making processes set forth in Section 2.2.5 and 2.1.5.

           2.2.3 Meeting . The Project Team will meet not less than once every calendar quarter. Meetings may be held in person or by means of telecommunication (telephone, video, or web conferences); provided that at least one meeting per year will be held in person. At least four (4) members of the Project Team will constitute a quorum for any meeting, provided that at least two (2) representatives from each Party are present. The Project Team may meet more frequently by agreement of the Parties or upon the request of either Party. Each Party will bear its own costs associated with holding and attending Project Team meetings.

           2.2.4 Minutes. Minutes will be kept of all Project Team meetings by the hosting Party and sent to all members of the Project Team for review and approval within fourteen (14) days after each meeting. If the meeting is held by means of telecommunication, Micromet will be deemed to be the hosting Party during the Micromet Program, and Serono will be deemed to be the hosting Party during the Serono Program. Minutes will be deemed approved unless either Project Team Leader objects to the accuracy of such minutes by providing written notice to the other Project Team Leader within fourteen (14) days of receipt of the minutes. In the event of any such objection that is not resolved by mutual agreement of the Parties, such minutes will be amended to reflect such unresolved dispute.

           2.2.5 Decision Making. The Project Team will take action by unanimous consent of the Parties, with each Party having a single vote, irrespective of the number of representatives actually in attendance at a meeting or by a written resolution signed by both Project Team Leaders. If the Project Team is unable to reach unanimous consent on a particular matter within thirty (30) days of a formal vote requested by either Party on such matter, either Project Team Leader may refer such matter to the Steering Committee for resolution.

           2.2.6 Reporting. Within thirty (30) days after the end of each calendar quarter and at least one week prior to any Steering Committee meeting, the Project Team Leaders will provide to the Steering Committee a written progress report, which will describe the progress made in the performance of Development Activities since the last such report. In addition to the progress reports provided hereunder, it is contemplated that the Parties will maintain informal communications through the Project Team Leaders on their day-to-day activities under this Agreement.

           2.2.7 Dissolution. If Micromet does not exercise the Co-Promotion Option described in Section 5.1, then the Project Team will be disbanded upon the expiration of the Co-Promotion Option Period.

3. Development Program

      3.1 Micromet Program. Subject to the terms and conditions of this Agreement, Micromet will perform the following activities (collectively, the " Micromet Program ") following the Effective Date, all as described in further detail in the plan attached to this Agreement as Exhibit G , which plan will include the development timelines and a budget of

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Development Expenses to be incurred pursuant to the Micromet Program (the " Micromet Program Plan "):

           3.1.1 Ongoing Trial . Completion of the following Phase II clinical trials of the Product being conducted by Micromet as of the Effective Date: MT201-201 (prostate cancer) and MT201-202 (metastatic breast cancer) (each, an " Ongoing Trial ");

           3.1.2 Interim Study Report . Compilation of initial statistical analysis of each Ongoing Trial (each, an " Interim Study Report "), to be performed [***] weeks after registration of the last patient in the applicable Ongoing Trial;

           3.1.3 Final Study Report . Preparation of a final study report for each Ongoing Trial (each, a " Final Study Report "), to be performed following database lock ([***] weeks after registration of the last patient) and completion of the applicable Ongoing Trial;

           3.1.4 BI Process Development Agreement . Management of Micromet’s collaboration relating to the development and scale-up of a manufacturing process for the Product pursuant to the BI Process Development Agreement;

           3.1.5 Combination Study . Performance of a Phase I clinical trial designed to demonstrate the safety of a combination of the Product with docetaxel (the " Combination Study "); and

           3.1.6 Ongoing Preclinical Work . Performance of certain additional preclinical activities relating to Product.

      3.2 Conduct of the Micromet Program .

           3.2.1 Efforts and Standards . Micromet will use Commercially Reasonable Efforts to conduct the Micromet Program, either itself or with or through Affiliates or Third Party contractors. Micromet will use or retain personnel with sufficient skills and experience as are required to accomplish efficiently and expeditiously the activities of the Micromet Program as set forth in the Micromet Program Plan in a good scientific manner and in compliance in all material respects with all Applicable Laws including GLP and GCP. Micromet will commit such amount of FTEs to conduct the Micromet Program as are necessary to accomplish the Micromet Program in a timely manner, and in any event no smaller amount of FTEs than are specified by the Micromet Program Plan. Serono will not be obligated to reimburse Micromet for any Development Expenses incurred by or on behalf of Micromet for the Micromet Program in excess of the total Development Expenses budgeted in the Micromet Program Plan, unless otherwise agreed in writing by Serono.

           3.2.2 Records . All preclinical work conducted by or on behalf of Micromet in the Micromet Program will be completely and accurately recorded, in sufficient detail and in good scientific manner, in separate laboratory notebooks distinct from other work being conducted by Micromet. Micromet will also retain all clinical trial records required by

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Applicable Law to be maintained. On reasonable notice, and at reasonable intervals but not more than [***], Serono will have the right to audit Micromet’s compliance with this Section 3.2.2.

      3.3 Serono Program.

           3.3.1 Scope. Promptly after receipt by Serono of the Interim Study Reports for both Ongoing Trials, the Steering Committee will develop a strategy for the development of the Product and the further Development Activities through Marketing Approval of the Product, other than the Development Activities included in the Micromet Program (the " Serono Program ").

           3.3.2 Serono Program Plan.

                (a)  During and promptly following the formulation of the Serono Program, the Project Team will prepare a plan describing the Development Activities to be performed during the Serono Program to enable the filing of BLAs and MAAs and the receipt of Marketing Approval for the Product in the Territory (the " Serono Program Plan "), including a budget of Development Expenses to be incurred pursuant to the Serono Program Plan and the procedures for the timely transfer to Serono of any preclinical and clinical analytical assays and clinical data, regulatory filings, and any other Licensed Know-How, materials, or data relating to the Product.

                (b)  Within [***] days after receipt by Serono of the Final Study Reports for both Ongoing Trials, the Project Team will review and update the draft Serono Program Plan, if necessary, and present the Serono Program Plan to the Steering Committee for review and approval. Within [***] days of its receipt, the Steering Committee will approve the Serono Program Plan, after, if necessary, making any revisions thereto to render such Plan approvable.

           3.3.3 Commencement. The Serono Program will commence upon approval by the Steering Committee of the initial Serono Program Plan pursuant to Section 3.3.2 above.

           3.3.4 Responsibilities.

                (a)  If Micromet has exercised the Co-Promotion Option with respect to both the United States and Europe, then the Parties, [***], will [***]. Subject to the foregoing, the Steering Committee will define the development strategy for each such Indication and approve the allocation of the Development Activities of the Serono Program Plan between the Parties in its discretion and the Project Team will coordinate the Development Activities undertaken by each Party for each such Indication.

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                (b)  If Micromet has not exercised the Co-Promotion Option, or has exercised it with respect to the United States or Europe only, then the Steering Committee will approve the allocation of the Development Activities of the Serono Program Plan between the Parties in its discretion; provided, however , that notwithstanding anything in this Agreement to the contrary, any Development Activities allocated to Micromet will be subject to Micromet’s written consent.

                (c)  Each Party will be responsible for the performance of such Development Activities as may be allocated to it under the Serono Program Plan pursuant to subsections (a) and (b) above. In any event, the Serono Program Plan will provide that Serono is responsible for performing all activities relating to Chemistry, Manufacturing and Controls (CMC) pursuant to the BI Process Development Agreement.

           3.3.5 Additional Indications.

                (a)  At any time during the Co-Promotion Period, Micromet may submit to the Steering Committee a written proposal to add to the Serono Program any Indication from the list of Additional Indications that is not then included in the Serono Program. If the Steering Committee approves the inclusion of such Indication in the Serono Program, then the Serono Program Plan will be updated to include the Development Activities to be performed by the Parties in connection with such Indication. If the Steering Committee does not approve the inclusion of any such Indication in the Serono Program (each such Indication, a " Rejected Indication "), then, notwithstanding anything in this Agreement to the contrary, Micromet will have the right, at its own option and expense, to plan and conduct the development of the Product for each such Rejected Indication; provided, however, that Micromet may not conduct development of the Product for more than [***] Rejected Indications simultaneously; and provided further, however , that Micromet may not conduct development of the Product for any Rejected Indication if such Indication has not been approved pursuant to Section 2.1.5 for inclusion in the Serono Program based on a determination made in good faith, on the basis of substantiated medical or scientific rationale, that conducting the development of the Product for such Indication could present safety issues that could compromise the Serono Program. Micromet agrees and acknowledges that if and for so long as the Product is being developed as part of the Serono Program for the [***].

                (b)  As Serono is responsible following the completion of the Micromet Program for conducting meetings and discussions related to the Product with regulatory authorities, including the FDA, Micromet will not, in the course of developing the Product for a Rejected Indication, conduct any such meetings or discussions without Serono’s participation or its prior written consent, which consent will not be unreasonably withheld. In addition, Micromet will not send any written materials to the FDA or any other regulatory authority regarding the Product unless such written materials have been reviewed and approved by Serono, which approval will not be unreasonably withheld. If Micromet receives any written or oral communications from the FDA or any other regulatory authority relating to the Product, Micromet will promptly notify Serono and provide a copy to Serono of any written

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communication, or notes of any oral communication. The Parties will confer regarding any response to such written or oral communication prior to its transmission by Serono to the FDA or other regulatory authority. Micromet will provide to Serono any safety data resulting from any clinical trials conducted of the Product in the Rejected Indication in accordance with Applicable Law and the safety reporting and data exchange agreement executed by the Parties pursuant to Section 3.8. Serono will be responsible pursuant to such safety reporting and data exchange agreement for reporting safety data to the FDA or other regulatory authorities.

                (c)  At any time during which Micromet is developing the Product for a Rejected Indication, Micromet will provide to Serono a copy of any INDs, any interim analyses and final reports of clinical trials performed of the Product for such Rejected Indication, and will otherwise provide updates at the meetings of the Project Team and Steering Committee regarding the development of the Product for the Rejected Indication, including a detailed description of the development costs incurred by Micromet to date with respect to such development. Serono will have the right, not more than [***], to review source data of the clinical trials of the Product for the Rejected Indication that are available to Micromet. Micromet will conduct any clinical studies of the Product in the Rejected Indication in compliance in all material respects with all Applicable Laws including GCP. Serono may at any time during the period Micromet is developing the Product for a Rejected Indication elect to include such Rejected Indication as part of the Serono Program. Upon such election, (i) the Serono Program Plan will be updated to include the Development Activities to be performed by the Parties in connection with such Indication; (ii) Micromet will transfer to Serono any clinical data, regulatory filings including INDs, and any other Know-How, materials, or data that have been made, conceived or developed during the development of the Product for the Rejected Indication in an orderly fashion and in a manner such that the value of the delivered information and materials is preserved in all material respects; (iii) Micromet will assign or sublicense to Serono any Technology Acquisition Agreement entered into by Micromet pursuant to Section 6.3.1 with respect to the development of the Product for such Rejected Indication; (iv) Serono will [***]; (v) such Indication will cease to be a Rejected Indication; and (vi) Serono will [***].

                (d)  If Micromet has completed all Pivotal Trials of the Product in a Rejected Indication that, as reasonably determined in good faith in accordance with the decision making processes set forth in Section 2.1.5, are required to support Marketing Approval for the Product in such Rejected Indication, then such Indication will cease to be a Rejected Indication and will be deemed included in the Serono Program, and Micromet will transfer to Serono any clinical data and any other Know-How, materials, or data that have been made, conceived or developed during the development of the Product for the Rejected Indication in an orderly fashion and in a manner such that the value of the delivered information and materials is preserved in all material respects. Micromet will also assign or sublicense to Serono any Technology Acquisition Agreement entered into by Micromet pursuant to Section 6.3.1 with

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respect to the development of the Product for such Rejected Indication. Serono will thereafter prepare and file a BLA or MAA for the Product in such Rejected Indication. Within [***] days of acceptance of such BLA or MAA by the relevant regulatory authority, Serono will [***], and [***]. The Parties will update the marketing plan developed pursuant to Section 5 to include such Rejected Indication and will Commercialize the Product for such Rejected Indication under the terms of this Agreement.

                (e)  If the BI Process Development Agreement and the BI Process License Agreement have been assigned to Serono or Serono is then manufacturing Clinical Trial Materials, Serono will supply to Micromet Clinical Trial Materials required by Micromet for the development of any Rejected Indication [***]. Serono will use commercially reasonable efforts to ensure that capacity is available at a Serono manufacturing facility or a BI manufacturing facility to meet the foregoing obligation, provided that in the event of any capacity limitations, the supply of Clinical Trial Materials for the performance of the Serono Program or Product for the Commercialization of the Product will take precedence over the supply of Clinical Trial Materials required by Micromet for the development of such Rejected Indications.

           3.3.6 Records. All preclinical work conducted by or on behalf of the Parties in the Serono Program will be completely and accurately recorded, in sufficient detail and in good scientific manner, in separate laboratory notebooks distinct from other work being conducted by the applicable Party. Each Party will also retain all clinical trial records required by Applicable Law to be maintained in connection with the Serono Program or the development of any Rejected Indication. During any period when either both Parties are performing Development Activities under the Serono Program or Micromet is developing a Rejected Indication, on reasonable notice, and at reasonable intervals but not more than [***] [***], each Party will have the right to audit the other Party’s compliance with this Section 3.3.6.

      3.4 Diligence in Development.

           3.4.1 By Serono . Serono, itself or through one or more Affiliates, Sublicensees or other Third Parties, will use Commercially Reasonable Efforts to develop and obtain Marketing Approval for the Product in all Major Markets. Serono will perform the Serono Program in a good scientific manner and in compliance in all material respects with all Applicable Laws including GLP and GCP. All efforts of Serono’s Affiliates, Sublicensees and Third Party contractors will be considered efforts of Serono for the purpose of determining Serono’s compliance with its obligations under this Section 3.4.1. Serono’s fulfillment of its obligations to use Commercially Reasonable Efforts under this Section 3.4.1 will be conclusively established at any given time if, during the preceding [***] period, any one of the following situations applies: (a) with respect to any [***] period falling within the first [***] from the

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commencement of the Serono Program pursuant to Section 3.3.3, Serono, its Affiliates or Sublicensees [***]; (b) with respect to any subsequent [***] period, Serono, its Affiliates or Sublicensees [***]; (c) Serono, its Affiliates or Sublicensees [***]; (d) Serono, its Affiliates or Sublicensees [***]; or (e) the Parties collectively [***] with respect to [***] (i) at least [***] during such [***] period, or (ii) at least [***], in the aggregate, during such [***] period [***].

           3.4.2 By Micromet. Micromet will use Commercially Reasonable Efforts to perform its Development Activities under the Serono Program in a good scientific manner and in compliance in all material respects with all Applicable Laws including GLP and GCP. All efforts of Micromet’s Affiliates will be considered efforts of Micromet for the purpose of determining Micromet’s compliance with its obligations under this Section 3.4.2.

      3.5 Development Expenses.

           3.5.1 Obligation . Serono will bear all Development Expenses incurred by the Parties; provided , however , that (a) Serono will not have any obligation to make any payments in excess of [***] Euros ( € [***]) with respect to the Micromet Program as described in the plan attached to this Agreement as Exhibit G ; (b) Serono will not have any obligation to make any payments with respect to Micromet’s FTEs for the management of the Ongoing Trials, and (c) during the Co-Promotion Period, the allocation of Development Expenses incurred by the Parties for the Serono Program will be as set forth in Section 5.3.

           3.5.2 Reports and Payment . Serono will pay to Micromet on or before the first day of each calendar quarter the amount of Development Expenses budgeted to be incurred by Micromet in such calendar quarter as set forth in the applicable Development Plan. Within thirty (30) days of the end of each calendar quarter, Micromet will provide Serono with quarterly reports containing a detailed account of Development Activities performed by Micromet and Micromet’s Development Expenses incurred during the preceding calendar quarter, including the number of individuals that performed Development Activities, the number of FTE hours worked by each such individual and the out-of-pocket expenses incurred by Micromet. All reported charges will be in accordance with the budget for Development Expenses for the applicable Development Plan. Any such report will be considered Confidential Information of Micromet, subject to the terms and conditions of Section 9. The Development Expenses set forth in such reports will be reconciled with Serono’s payments for such quarter. If such payments are in excess of Micromet’s accumulated Development Expenses, then the amount of such excess will be credited against the next payment of Development Expenses due by Serono hereunder (or, if no such payment is due, refunded by Micromet to Serono within [***] days of such determination). If Micromet’s accumulated Development Expenses exceed the amount paid by Serono, then Serono will pay the excess amount to Micromet within [***] days of the determination.

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      3.6 Development Plan Updates. In the course of the performance of the Development Program, the Project Team will update the applicable Development Plan as it deems necessary and appropriate. In addition, the Project Team will update the budget for Development Expenses set forth in the applicable Development Plan in order to reflect the changes to the Development Plan. Any changes to a Development Plan, including changes to the budget for Development Expenses, are subject to approval by the Steering Committee.

      3.7 Technology Transfer; Assignment of BI Process Development Agreement and BI Process License Agreement.

           3.7.1 Technology Transfers . Upon commencement of the Serono Program pursuant to Section 3.3.3, the Parties will transfer the Licensed Know-How to Serono in accordance with the Serono Program Plan. In addition, from time to time in connection with the performance by the Parties of the Serono Program Plan, the Parties will share any analytical assays and clinical data, regulatory filings, and any other Know-How, materials, or data relating to the Product that have not already been shared between the Parties. The costs incurred by the transferring Party in connection with any transfers made pursuant to this Section 3.7.1 will be [***].

           3.7.2 Assignment of BI Process Development Agreement and BI Process License Agreement . Promptly following the Effective Date, Micromet will use diligent efforts to obtain BI’s consent to the assignment of the BI Process Development Agreement and the BI Process License Agreement to Serono, and if Micromet has received such consent, Micromet will assign the BI Process Development Agreement and the BI Process License Agreement to Serono [***] of the Serono Program pursuant to Section 3.3.3. If such consent is not received by Micromet prior to the end of such [***], the Parties will in good faith negotiate an alternate arrangement under which Micromet will supply Clinical Trial Materials and Product to Serono for Serono’s performance of this Agreement or take any actions pursuant to the BI Process Development Agreement and the BI Process License Agreement that would permit Serono or its designee to manufacture Clinical Trials Materials and the Product. If Micromet is supplying Clinical Trial Materials or Product to Serono and Micromet is also developing the Product for a Rejected Indication, then in the event of any capacity limitations with respect to the manufacture of Clinical Trial Materials or Product, the supply of Clinical Trial Materials for the performance of the Serono Program or Product for the Commercialization of the Product will take precedence over the supply of Clinical Trial Materials required by Micromet for the development of such Rejected Indication.

      3.8 Regulatory Obligations during the Development Program. During the Micromet Program, Micromet will maintain a safety database with respect to any animal studies or clinical trials conducted with the Product by or on behalf of Micromet and will be responsible for maintaining INDs and conducting any other regulatory activities required for the conduct of the Micromet Program, including communicating and preparing and filing all reports (including adverse drug experience reports) with the FDA or other applicable regulatory authorities. If Micromet receives any written or oral communications from the FDA or any other regulatory

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authority relating to the Product, Micromet will promptly notify Serono and provide a copy to Serono of any written communication, or notes of any oral communication. The Parties will confer regarding any response to such written or oral communication prior to its transmission to the FDA or other regulatory authority. Upon Micromet’s exercise of its Co-Promotion Option, the Parties will execute a safety reporting and data exchange agreement specifying safety reporting requirements and methods for exchange of important safety information regarding the Product. Upon the commencement of the Serono Program pursuant to Section 3.3.3, the Parties will maintain a common safety database for animal studies and clinical trials of the Product, which database will be managed by Serono. Serono will thereafter be responsible for maintaining INDs and conducting any other regulatory activities required for the conduct of the Serono Program, including communicating and preparing and filing all reports (including adverse drug experience reports) with the FDA or other applicable regulatory authorities.

      3.9 Clinical Trial Materials. Micromet will be responsible for purchasing any additional Clinical Trial Materials from BI pursuant to the BI Process Development Agreement that are required to conduct the Ongoing Clinical Trials and the Combination Study. Serono will be responsible for manufacturing or purchasing all Clinical Trial Materials required to conduct the Serono Program. The costs of manufacturing or purchasing Clinical Trial Materials for the conduct of the Serono Program will be Development Expenses.

      3.10 Progress Reports. The Parties will inform each other of their Development Activities through their interactions in the Project Team and through progress reports submitted to the Steering Committee. To the extent not otherwise provided for herein, upon request of a Party, the other Party will provide the requesting Party copies of clinical trial protocols, preliminary reports and final reports of any clinical studies performed by it, and any other information or data reasonably requested by the other Party.

4. Unilateral Commercialization by Serono

      4.1 Principles of Commercialization. Serono will be solely responsible for Commercializing the Product in the Territory during the Term; provided , however , that, during the Co-Promotion Period, Section 5 will apply to the Parties’ co-promotion of the Product in the Co-Promotion Territory.

      4.2 Regulatory Obligations during Commercialization. Serono will own and maintain all regulatory filings and Marketing Approvals for the Product developed pursuant to this Agreement, including all INDs, BLAs and MAAs (other than those INDs held by Micromet pursuant to the Micromet Program prior to their transfer to Serono pursuant to Section 3.7 and those INDs held by Micromet pursuant to Section 3.3.5). As between the Parties, Serono will be solely responsible for all activities in connection with maintaining Marketing Approvals and other regulatory approvals required for the Commercialization and manufacture of the Product in the Territory, including communicating and preparing and filing all reports (including adverse drug experience reports) with the applicable regulatory authorities.

      4.3 Regulatory Meetings. Serono will promptly notify Micromet in writing and in advance of any meeting with or inspection by any regulatory authority related to the Product and provide copies of any written correspondence and documentation relating thereto. At

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Micromet’s option, and subject to Serono’s approval, which will not unreasonably be withheld, Micromet may have an employee or Third Party consultant participate in such meeting or inspection as an observer.

      4.4 Diligence in Commercialization. Serono will use Commercially Reasonable Efforts to launch the Product in a country after receiving all Marketing Approvals in such country, and thereafter will use Commercially Reasonable Efforts to Commercialize the Product in such country. Serono may sell the Product as part of a bundle with other Serono products or offer package deals to customers that include the Product, provided that for the calculation of Net Sales, the gross amount invoiced for the Product so treated will be deemed to be the weighted (by sales volume) average invoice price in the preceding calendar quarter for Product sold separately and the rebate or discount with respect to the Product may not exceed the weighted average rebate or discount on all other products sold as part of the bundle or package. Upon request of Micromet, Serono will provide to the Steering Committee a copy of the launch and annual marketing plans prepared by Serono with respect to the Commercialization of the Product, and any amendments or updates thereto.

      4.5 Product Supply. Serono will be responsible for manufacturing or purchasing all commercial supplies of the Product in the Territory.

      4.6 Branding, Trademarks, Trade Dress, and Logos. Serono will be the owner of all trademarks, trade dress, logos, slogans, designs and copyrights developed for or used on or in connection with the Commercialization of the Product in the Territory. Serono will select the trademark or trademarks used to identify the Product that will be Commercialized in the Territory pursuant to this Agreement. Serono will oversee the filing, prosecution and maintenance of all trademark registrations for the Product in the Territory. Serono will be responsible for the payment of any and all costs relating to filing, prosecution, and maintenance of the trademark or trademarks for the Product in the Territory.

5. Joint Development and Commercialization

      5.1 Option. Micromet will have the right to elect to develop and Commercialize the Product in the United States and in Europe jointly with Serono (the " Co-Promotion Option ") pursuant to the provisions of this Section 5.1. Within [***] days of commencement of the Serono Program pursuant to Section 3.3.3 (the " Co-Promotion Option Period "), Micromet may exercise the Co-Promotion Option with respect to one or both of the United States and Europe by providing written notice of such exercise to Serono designating the territory or territories with respect to which Micromet desires to exercise the option (such territory or territories, the " Co-Promotion Territory "). Such exercise will be effective immediately upon receipt of such notice by Serono. If Micromet does not exercise the Co-Promotion Option during the Co-Promotion Option Period, and Serono’s actual expenditures for Development Expenses during the initial [***] following expiration of the Co-Promotion Option Period do not equal at least [***] percent of the amounts for Development Expenses for such period set forth in the Serono Program Plan, then Serono will promptly so notify Micromet. For [***] day period following such notice,

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Micromet may exercise its Co-Promotion Option (treating such period as the Co-Promotion Option Period), upon written notice to Serono and the payment of Micromet’s share (as described in Section 5.3.1) of Development Expenses incurred by Serono to the date of option exercise.

      5.2 Co-Promotion Period. The " Co-Promotion Period " will commence upon Micromet’s exercise of the Co-Promotion Option and will expire upon the earlier of: (a) if Micromet has exercised the Opt-Out Option pursuant to Section 5.5 with respect to the entire Co-Promotion Territory, the end of the period described in Section 5.5.2 or (b) termination of the Parties’ development and Commercialization of the Product in the Co-Promotion Territory.

      5.3 Development Expenses during Co-Promotion Period.

           5.3.1 Split of Expenses . During the Co-Promotion Period, the development of the Product will continue pursuant to the terms of Sections 2, 3, and 4, subject to the terms and conditions of this Section 5. Micromet will be responsible for and pay a certain percentage, as set forth in Exhibit E , of the Development Expenses incurred by the Parties in connection with the development of the Product in the Co-Promotion Territory during the Co-Promotion Period in accordance with the Serono Program Plan (such amount, the " Micromet Contribution ").

           5.3.2 Report of Development Expenses Incurred . Within [***] days of the end of each calendar quarter during the Co-Promotion Period during which Development Expenses have been incurred by either Party in connection with the development of the Product in the Co-Promotion Territory, each Party incurring such Development Expenses will deliver a report to the other Party. Each such report will contain a detailed account of Development Activities performed and Development Expenses incurred during the preceding calendar quarter, including the number of individuals that performed Development Activities, the number of FTE hours worked by each such individual and the [***] incurred. Any such report will be considered Confidential Information of the Party submitting it, subject to the terms and conditions of Section 9. All reported charges will be in accordance with the budget for Development Expenses for the Serono Program.

           5.3.3 Reconciliation . Following receipt of such reports, there will be a reconciliation of the Development Expenses incurred during such calendar quarter by each Party, with a subsequent payment by one Party to the other to the extent necessary so that each Party bears its appropriate percentage share of such Development Expenses. Such balancing payments by one Party to the other to reimburse the other Party for the purposes of cost sharing under this Agreement will be approved by the Project Team within [***] ([***]) days of the end of each calendar quarter with respect to which reports have been delivered hereunder and will be made within [***] ([***]) days thereafter.

           5.3.4 Grace Period . Notwithstanding the foregoing provisions of Section 5.3, in the event that the budget for the current calendar year in the Serono Program Plan most recently approved by the Steering Committee [***] compared to the budget for such calendar year in the last Serono Program Plan approved before the start of such calendar year, then

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Micromet will have the right to delay the payment of its share of the Development Expenses [***] of such prior approved budgeted amount for [***]months following the end of the current calendar year; provided, however , that any payments which are not made on the date such payments would otherwise be due will bear interest until paid at the lower of (a) [***] above the overnight LIBOR rate in effect on the due date, or (b) the maximum rate permitted by applicable law, calculated on the number of days such payment is delayed.

      5.4 Co-Promotion Terms.

           5.4.1 Co-Promotion Agreement . Within [***] days after completion of the final study report for the first Pivotal Trial for the Product anywhere in the Co-Promotion Territory, if such completion occurs during the Co-Promotion Period, the Parties will negotiate in good faith a co-promotion agreement governing the co-promotion of Product by the Parties in the Co-Promotion Territory that will include the provisions of this Section 5.4 and such other terms that are customary and appropriate for a co-promotion arrangement (the " Co-Promotion Agreement "). Until such Co-Promotion Agreement is negotiated, the Parties will Commercialize the Product in the Co-Promotion Territory in accordance with the provisions of this Section 5.4 and Section 4.

           5.4.2 Joint Commercialization Committee. The co-promotion of the Product in the Co-Promotion Territory will be governed by a Joint Commercialization Committee (the " JCC ") to be established by the Parties. Each Party will have equal representation on the JCC, which will meet at least once per calendar quarter, at mutually agreeable times and locations, to discuss and coordinate the launch of the Product in the Co-Promotion Territory, the marketing and promotion of the Product and the strategies and programs that should be developed to maximize Net Profits generated with the Product. In addition, if there is more than one territory within the Co-Promotion Territory, the Parties will establish a regional commercialization committee for each such territory, with each such committee having the responsibilities allocated to such committee by the JCC. The JCC will be responsible for issues relating to branding, labeling, positioning, life cycle management and post-approval clinical trials of the Product in the territories within the Co-Promotion Territory. Any regional commercialization committee established for a territory within the Co-Promotion Territory will be responsible for any region-specific operational issues as the JCC may delegate, will report to the JCC on a regular basis and will refer any dispute to the JCC.

           5.4.3 Dispute Resolution. The JCC will take action by unanimous consent of the Parties, with each Party having a single vote. If the JCC is unable to reach unanimous consent on a particular matter within thirty (30) days of a formal vote requested by either Party on such matter, either Party may refer