NEKTAR THERAPEUTICS, AEROGEN, INC., AND BAYER HEALTHCARE LLC CO-DEVELOPMENT, LICENSE AND CO-PROMOTION AGREEMENT

E XHIBIT 10.1

FOIA CONFIDENTIAL TREATMENT REQUESTED

E XECUTION C OPY

NEKTAR THERAPEUTICS,

AEROGEN, INC.,

AND

BAYER HEALTHCARE LLC

CO-DEVELOPMENT, LICENSE AND CO-PROMOTION AGREEMENT

AUGUST 1, 2007

[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

TABLE OF CONTENTS

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CO-DEVELOPMENT, LICENSE AND CO-PROMOTION AGREEMENT

T HIS C O -D EVELOPMENT , L ICENSE AND C O -P ROMOTION A GREEMENT (the “Agreement” ) is made and entered into as of the 1 ^st day of August, 2007 (the “Effective Date” ) among NEKTAR THERAPEUTICS , a Delaware corporation with a principal place of business at 150 Industrial Road, San Carlos, California 94070 U.S.A. ( “Nektar” ), AEROGEN, INC. , a Delaware corporation with a principal place of business at 150 Industrial Road, San Carlos, California 94070 U.S.A. ( “Aerogen” ), a wholly-owned subsidiary of Nektar, and BAYER HEALTHCARE LLC, a Delaware corporation with a principal place of business at 555 White Plains Road, Tarrytown, New York 01591 U.S.A. ( “Bayer” ). Nektar and Bayer are sometimes referred to herein individually as a “Party” and collectively as the “Parties” (which terms shall not include Aerogen). Except as otherwise provided in Section 20.14 hereof, references to “Nektar,” “Aerogen,” and “Bayer” shall not include their respective Affiliates.

R ECITALS

W HEREAS , Nektar is a biotechnology company engaged in the research, development, and commercialization of pharmaceutical compounds and devices for delivering such compounds;

W HEREAS , Bayer is a pharmaceutical company engaged in the research, development and commercialization of products useful in the amelioration, treatment and/or prevention of human diseases and conditions;

W HEREAS , Nektar has developed and is conducting clinical trials of a pharmaceutical product consisting of a liquid formulation of the antibiotic known as Amikacin delivered using a nebulizer device based on Nektar’s proprietary pulmonary drug delivery system;

W HEREAS , Bayer and Nektar desire to collaborate in certain activities to develop such product in both “ [***] ” and “ [***] ” configurations for the treatment of [***] infections;

W HEREAS , Bayer and Nektar desire to collaborate in the promotion and commercialization of such product to expand the availability of, and access by patients to, such product worldwide; and

W HEREAS , Bayer desires to obtain, and Nektar and Aerogen are willing to grant to Bayer, a license under Nektar’s and Aerogen’s proprietary technology to import, develop, commercialize, make, promote, market, use, offer for sale and sell a product based upon such pulmonary delivery of liquid Amikacin, on the terms and conditions provided in this Agreement.

A GREEMENT

N OW , T HEREFORE , in consideration of the foregoing and the covenants and promises contained in this Agreement and intending to be legally bound, the Parties agree as follows:

1. D EFINITIONS . As used herein, the following terms shall have the following meanings:

1.1 “[***]” has the meaning set forth in the [***] .

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

1.2 “[***]” has the meaning set forth in the [***] .

1.3 “ACCME Standards” means the standards set forth by the Accreditation Council for Continuing Medical Education relating to educating the medical community in the United States.

1.4 “Aerogen” has the meaning set forth in the Preamble.

1.5 “Affiliate” means a corporation, partnership, trust or other entity that directly, or indirectly through one or more intermediates, controls, is controlled by or is under common control with a specified Party. For such purposes, “control,” “controlled by” and “under common control with” shall mean the possession of the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting equity, voting member or partnership interests, control of a majority of the board of directors or other similar body, by contract or otherwise. In the case of a corporation, the direct or indirect ownership of more than fifty percent (50%) of its outstanding voting shares or the ability otherwise to elect a majority of the board of directors or other managing authority of the entity shall in any event be presumptively deemed to confer control, it being understood that the direct or indirect ownership of a lesser percentage of such shares shall not necessarily preclude the existence of control.

1.6 “Agent” means any Third Party that is hired by, licensed by, sublicensed by or otherwise contractually associated with a Party during the term of this Agreement to the extent useful or necessary for the Party to fulfill its obligations under this Agreement.

1.7 “Agreement” means this Co-Development, License and Co-Promotion Agreement, all amendments and supplements to this Co-Development, License and Co-Promotion Agreement and all schedules and exhibits to this Co-Development, License and Co-Promotion Agreement.

1.8 “Allowable Expenses” means those expenses incurred in connection with Commercialization of Product in the Shared Territory (excluding Pre-Launch Costs) that are consistent with the approved Commercialization Plan and Commercialization Budget for the Shared Territory and are specifically attributable to Product in the Shared Territory, and shall consist of (a) Cost of Goods Sold, (b) Marketing Expenses, (c) Distribution Expenses, (d) Post-Launch Product R&D Expenses, and (e) Regulatory Expenses (as such terms are defined in Exhibit 1.8). Allowable Expenses also includes all GSM Expenses (as defined in Exhibit 1.8), whether incurred with respect to the Shared Territory or the Royalty Territory, as more fully described in Exhibit 1.8.

1.9 “Amikacin” means the [***] .

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

1.10 “Applicable Law” means all applicable laws, rules, and regulations, including, without limitation, any rules, regulations, guidelines or other requirements of the Regulatory Authorities or other governmental authorities, that may be in effect from time to time in any relevant legal jurisdiction in the Territory.

1.11 “Bayer” has the meaning set forth in the Preamble.

1.12 “Change of Control” means that a Third Party shall have become the beneficial owner of securities representing fifty-one percent (51%) or more of the aggregate voting power of the then-outstanding voting securities of a Party, or any sale by a Party of all or substantially all of its business or assets pertaining to the Product.

1.13 “CIA” means the Corporate Integrity Agreement between the Office of Inspector General of the Department of Health and Human Services and Bayer Corporation dated January 23, 2001.

1.14 “Clinical Trials” means Phase I Clinical Trials, Phase II Clinical Trials, Phase III Clinical Trials, Phase IV Clinical Trials, and/or variations of such trials (e.g., Phase II/III) as those terms are defined by the FDA.

1.15 “CMC Data” means any and all Information contained in, as well as data supporting, the Chemistry, Manufacturing and Control sections (or sections corresponding thereto) of an NDA, or other equivalent regulatory filing, relating to the Product.

1.16 “Commencement” or “Commence” means, when used with respect to Clinical Trials (or the local equivalent), the date of enrollment of the first patient or subject in such Clinical Trials (or the local equivalent).

1.17 “Commercialization” means all activities undertaken relating to the manufacture for commercial use, marketing, and/or sale of the Product, including without limitation Pre-Launch Activities, advertising, education, planning, marketing, promotion, distribution, market and product support, and shall include post-launch medical activities such as Phase IV Clinical Trials anywhere in the world but shall exclude Development activities. “Commercialize” shall have a corresponding meaning.

1.18 “Commercialization Budget” has the meaning set forth in Section 7.1(b).

1.19 “Commercialization FTE” means the equivalent of an employee working [***] labor hours per year on Commercialization of Product.

1.20 “Commercialization FTE Rate” means the overall rate, as determined by the JFC pursuant to Section 3.3(b), to be applied to each Commercialization FTE employed by Bayer or Nektar providing support for or involved in Commercialization of Product in the Shared Territory, including without limitation [***] and [***] , in each year.

1.21 “Commercialization Plan” has the meaning set forth in Section 7.1(b).

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

1.22 “Commercial Launch” means the first arm’s length commercial sale of the Product by Bayer, an Affiliate of Bayer or a Sublicensee of Bayer to a Third Party (including without limitation any final sale to a distributor or wholesaler under any non-conditional sale arrangement) in a country where Regulatory Approval of such Product has been obtained by or on behalf of Bayer; provided, however, that in no event shall any sale or distribution of the Product for Pre-Launch Activities or use in a Clinical Trial be deemed a Commercial Launch.

1.23 “Commercially Reasonable Efforts” means, with respect to the Exploitation of the Product, the level of efforts and resources (including without limitation the promptness with which such efforts and resources would be applied) commonly used in the pharmaceutical industry with respect to a product of similar commercial potential at a similar stage in its development or product life, taking into consideration its safety and efficacy, its cost to develop, manufacture and bring to market, the prevalence of the indication, the competitiveness of alternative products of Third Parties, the Patent and other proprietary position of such product, the likelihood of Regulatory Approval, its profitability and all other relevant factors. Commercially Reasonable Efforts shall be determined on a market-by-market basis for the Product.

1.24 “Competitive Product” means a product containing an [***] that is labeled for amelioration, treatment or prevention of [***] and that includes technology that, [***] .

1.25 “Completion” means, when used with respect to a Clinical Trial (or the local equivalent), the date on which the Party conducting the Clinical Trial completes the final report for such Clinical Trial (or the local equivalent).

1.26 “Confidential Information” has the meaning set forth in Section 15.1.

1.27 “Control” means, with respect to any item of Information, Patent, Patent Application, know-how or other intellectual property right, the right to grant a license or sublicense with respect thereto as provided for in this Agreement, without violating the terms of any agreement or other arrangement with, or any legal rights of, or without requiring the consent of, any Third Party.

1.28 “Damages” has the meaning set forth in Section 14.1.

1.29 “Develop” or “Development” means all activities relating to obtaining Regulatory Approval of the Product and all manufacturing activities undertaken prior to Commercialization (including without limitation those activities reasonably required for the scale up of Manufacturing processes or equipment in preparation for commercial supply of Product). This includes, for example, (a) preclinical testing, toxicology, formulation, clinical studies, including without limitation Clinical Trials, and regulatory affairs and (b) manufacturing process development for bulk and finished forms of the Device or the Product, as applicable, production of clinical supply of Product, and manufacturing and quality assurance technical support activities prior to the commencement of Pre-Launch Activities, but excludes Manufacturing for Commercialization purposes.

1.30 “Development Budget” has the meaning set forth in Section 4.2(a).

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

1.31 “Development Costs” means the expenses incurred by a Party or for its account after the Effective Date that are consistent with the approved Development Plan and are specifically attributable to the Development of the Product.

1.32 “Development Plan” has the meaning set forth in Section 4.2(a).

1.33 “Device” means a nebulizer device comprising at least an [***] . The current embodiment of the Device is set forth in Exhibit 1.33.

1.34 “Device Budget” has the meaning set forth in Section 4.2(a).

1.35 “DMF” means, as the case may be, either a drug master file or a device master file maintained with the FDA and the equivalent thereof, if any, in jurisdictions outside the Shared Territory.

1.36 “Dollar” means a U.S. dollar, and “$” shall be interpreted accordingly.

1.37 “Drug Budget” has the meaning set forth in Section 4.2(a).

1.38 “EMEA” means the European Medicines Agency, or any successor thereto, which coordinates the scientific review of human pharmaceutical products under the centralized licensing procedure in the European Union.

1.39 “European Union” means the countries that are members of the European Union as of the Effective Date of this Agreement or that become members of the European Union thereafter.

1.40 “Exploitation” means the making, having made, using, having used, selling, having sold, offering for sale and/or otherwise disposing of, the Product, including, without limitation, all discovery, research, development (including without limitation the conduct of Clinical Trials), registration, modification, enhancement, improvement, manufacturing, labeling, storage, formulation, exportation, importation, optimization, transportation, distribution, promotion and marketing activities related thereto.

1.41 “FDA” means the United States Food and Drug Administration, or any successor thereto, having the administrative authority to regulate the marketing of human pharmaceutical products or biological therapeutic products, delivery systems and devices in the United States.

1.42 “Field” means the amelioration, treatment and/or prevention in humans of [***] .

1.43 “Force Majeure Event” has the meaning set forth in Section 20.4.

1.44 “Formulated Amikacin” means Amikacin in a liquid formulation existing as of the Effective Date or developed pursuant to this Agreement for use in Pulmonary Delivery by means of the Device.

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

1.45 “Fully Burdened Manufacturing Costs” means, as applicable to Device, Formulated Amikacin, or Product manufactured by Nektar or its Third Party supplier, Nektar’s or its Affiliate’s cost of manufacturing such Device, Formulated Amikacin, or Product for Development or Commercial purposes, which is equal to the sum of (a) for the Device, Formulated Amikacin or Product (or components thereof) made by Nektar, the costs of all direct material, direct labor, and allocable manufacturing overhead consumed, provided or procured by Nektar, in each case for the manufacture of the Device, Formulated Amikacin, or Product, and (b) for Device, Formulated Amikacin, or Product (or components thereof) made by Nektar’s Third Party supplier, the out-of-pocket costs paid to such Third Party supplier by Nektar, to the extent such costs in (a) and (b) are incurred by Nektar or its Affiliates and to the extent they are reasonably allocable to the manufacture of such Device, Formulated Amikacin, or Product. For clarity, Fully Burdened Manufacturing Cost shall not include any costs of scaling up Manufacturing for the Device or Formulated Amikacin, Development Costs, or capital expenses (but shall include depreciation on capital expenses incurred for the Manufacture of Device, Formulated Amikacin, or Product). Fully Burdened Manufacturing Cost shall be calculated in a manner consistent with GAAP, consistently applied.

1.46 “GAAP” means United States generally accepted accounting principles consistently applied.

1.47 “Global Brand Team” or “GBT” has the meaning set forth in Section 3.1.

1.48 “Global Phase IV Costs” means the expenses incurred in the conduct of Global Phase IV Trials.

1.49 “Global Phase IV Trial” means any Phase IV Clinical Trial that is conducted in order to benefit the Product in multiple countries, which countries include, but are not limited to, the Shared Territory, regardless of the country in which it is conducted.

1.50 “Global Project Team” or “GPT” has the meaning set forth in Section 3.1.

1.51 “Global Strategic Marketing Team” or “GSM” means the internal Bayer marketing group that will oversee the global marketing, strategy and planning for the Product, in which [***] will participate with respect to Product-related matters.

1.52 “Good Clinical Practices” or “GCP” means the standards, practices and procedures set forth in the guidelines entitled in “Good Clinical Practice: Consolidated Guideline,” including related regulatory requirements imposed by the FDA and (as applicable) any equivalent or similar standards in jurisdictions outside the Shared Territory.

1.53 “Good Laboratory Practices” or “GLP” means the regulations set forth in 21 C.F.R. Part 58 and the requirements expressed or implied thereunder imposed by the FDA and (as applicable) any equivalent or similar standards in jurisdictions outside the Shared Territory.

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

1.54 “Good Manufacturing Practices” or “GMP” means the regulations set forth in 21 C.F.R. Parts 210–211, 820 and 21 C.F.R. Subchapter C (Drugs), Quality System Regulations and the requirements thereunder imposed by the FDA, and, as applicable, any similar or equivalent regulations and requirements in jurisdictions outside the Shared Territory.

1.55 “IAS” means International Accounting Standards consistently applied.

1.56 “IFRS” means International Financial Reporting Standards consistently applied.

1.57 “IND” means an Investigational New Drug application for the Product, which must be approved by the FDA (or foreign equivalent) before shipment of such Product intended for administration to humans.

1.58 “Indemnified Party” has the meaning set forth in Section 14.3(a).

1.59 “Indemnifying Party” has the meaning set forth in Section 14.3(a).

1.60 “Information” means ideas, inventions, discoveries, concepts, formulas, practices, procedures, processes, methods, knowledge, know-how, trade secrets, technology, designs, drawings, computer programs, skill, experience, documents, apparatus, results, clinical and regulatory strategies, test data, including without limitation pharmacological, toxicological and clinical data, analytical and quality control data, manufacturing data and descriptions, Patent and legal data, market data, financial data or descriptions, devices, assays, chemical formulations, specifications, compositions of matter, product samples and other samples, physical, chemical and biological materials and compounds, and the like, in written, electronic or other form, now known or hereafter developed, whether or not patentable.

1.61 “Initial Public Disclosure” has the meaning set forth in Section 16.1.

1.62 “Inventions” has the meaning set forth in Section 11.2(a).

1.63 “Joint Finance Committee” or “JFC” has the meaning set forth in Section 3.1.

1.64 “Joint Inventions” has the meaning set forth in Section 11.2(a).

1.65 “Joint Patent Rights” has the meaning set forth in Section 11.3(a)(iii).

1.66 “Joint Steering Committee” or “JSC” has the meaning set forth in Section 3.1.

1.67 “Launch Budget” has the meaning set forth in Section 7.2(a).

1.68 “Launch Plan” has the meaning set forth in Section 7.2(a).

1.69 “Local Phase IV Costs” means the expenses incurred in the conduct of Local Phase IV Trials.

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

1.70 “Local Phase IV Trial” means any Phase IV Clinical Trial that is conducted in order to benefit the Product only in the country in which it is conducted.

1.71 “MAA” means a marketing authorization application filed with the EMEA for Regulatory Approval to import, market and sell the Product in the European Union.

1.72 “Manufacture” or “Manufacturing” means the activities to be performed by Nektar and Bayer in connection with the manufacture, testing (including without limitation quality control, quality assurance and lot release testing), bulk packaging and/or storage of Formulated Amikacin, the Device, and/or the Product, as applicable.

1.73 “Manufacturing and Supply Agreement” has the meaning set forth in Section 9.1(a).

1.74 “Milestone Payments” has the meaning set forth in Section 8.3.

1.75 “Minimum Acceptable Commercialization Profile” or “MACP” means the characteristics of Product that must be satisfied in order to enable Commercialization of the Product, as set forth in Exhibit 1.75.

1.76 “[***]” has the meaning set forth in Section 7.4.

1.77 “Nektar” has the meaning set forth in the Preamble.

1.78 “Nektar Know-How” means all Information that is (a) Controlled by Nektar or Aerogen as of the Effective Date or at any time during the term of this Agreement that is not publicly known, even though parts thereof may be known, and (b) useful or necessary to develop, make, use, sell, offer for sale, import or export Product for use in the Field. Nektar Know-How includes without limitation the [***] . Nektar Know-How includes Nektar’s or Aerogen’s interest in unpublished Inventions and unpublished Joint Inventions. Nektar Know-How does not include Nektar Patent Rights.

1.79 “Nektar Patent Rights” means (a) the Patents listed in Exhibit 1.79, (b) any Patents that issue from the Patent Applications listed in Exhibit 1.79, (c) any Patents and/or Patent Applications that claim priority to a Patent or Patent Application listed in Exhibit 1.79, including without limitation any continuation, continued prosecution application, divisional, reissue or re-examination, (d) any other Patent and/or Patent Application Controlled by Nektar or Aerogen as of the Effective Date or at any time during the term of this Agreement that claims a product, method, apparatus, material, manufacturing process or other technology necessary to develop, make, use, sell, offer for sale, import or export Formulated Amikacin, the Device, or Product, and (e) any foreign equivalents of 1.79(a), (b), (c) or (d). Nektar Patent Rights include, without limitation, the Patents and Patent Applications [***] . Nektar Patent Rights includes Nektar’s or Aerogen’s interest in Joint Patent Rights. Nektar Patent Rights do not include Nektar Know-How.

1.80 “Nektar Trademarks” means the trademarks set forth in Exhibit 1.80 and any Trademarks of Nektar or Aerogen that are developed during the term of this Agreement for use with the Product.

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

1.81 “Net Sales” means the gross amount billed by Bayer, its Affiliates or Sublicensees to Third Parties throughout the Territory for sales of the Product, less (a) sales returns and allowances, including trade, quantity and cash discounts and any other adjustments, including those granted on account of price adjustments, billing errors, rejected goods, damaged goods, returns, rebates, chargeback rebates, fees, reimbursements or similar payments granted or given to wholesalers or other distributors, buying groups, healthcare insurance carriers or other institutions, (b) accrued allowances for normal and customary trade, quantity and cash discounts, (c) an aggregate flat percentage of [***] (regardless of actual cost) for all of the following actually invoiced to the Third Party: freight, transportation, insurance, handling, packing and distribution charges, (d) the lower of [***] or the actual loss experience of the global Bayer-Schering Pharmaceuticals group in respect of bad debts written off, provided, however, that such amount shall not exceed [***] on an annual basis, (e) customs or excise taxes including import duties and other duties relating to sales, (f) any payment in respect to sales to any governmental authority in respect of any government subsidized program, including without limitation Medicare and Medicaid rebates and (g) any item substantially similar in character and/or substance to the above, all as determined in accordance with IFRS or IAS on a basis consistent with Bayer’s annual audited financial statements. In addition, Net Sales by Bayer hereunder are subject to the following:

(1) Any transfer, sale or other disposal of the Product by Bayer to an Affiliate of Bayer will not be included in Net Sales; in such case, Net Sales shall be calculated as above on the value charged or invoiced on the first arm’s length sale to a Third Party;

(2) If Bayer or its Affiliates or Sublicensees make a sale or other disposition of the Product to a customer in a particular country (i) other than on normal commercial terms or (ii) as part of a package of products and services, the Net Sales of the Product shall be deemed to be “the fair market value” of such Product (i.e., the value that would have been derived had said Product been sold as a separate product to a similar customer in the country concerned on normal commercial terms); and

(3) Use of the Product in clinical or pre-clinical trials or other research or development activities or disposal of the Product for non-profit purposes of a commercially reasonable program shall not give rise to any deemed sale for purposes of this definition.

For clarity, Net Sales excludes Net Sublicense Revenues.

1.82 “Net Sublicense Revenues” means all revenues or other consideration received by a Party from Third Parties as consideration for the grant of a sublicense or license under this Agreement in the Shared Territory, other than royalties received from such Third Parties on Net Sales.

1.83 “New Drug Application” or “NDA” means (a) the single application or set of applications for the Product and/or pre-market approval to make and sell commercially the Product, filed by Bayer with the FDA, and (b) any related registrations with or notifications to the FDA.

1.84 “Non-Publishing Party” has the meaning set forth in Section 16.1.

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

1.85 “OIG” means the Office of the Inspector General.

1.86 “Party” or “Parties” has the meaning set forth in the Preamble.

1.87 “Patent” means (a) letters patent (or other equivalent legal instrument), including without limitation utility and design patents, and including without limitation any extension, substitution, registration, confirmation, reissue, re-examination or renewal thereof and (b) all foreign or international equivalents of any of the foregoing in any country in the Territory.

1.88 “Patent Application” means (a) an application for letters patent, including without limitation a reissue application, a re-examination application, a continuation application, a continued prosecution application, a continuation-in-part application, a divisional application or any equivalent thereof that is pending at any time during the term of this Agreement before a government Patent agency and (b) all foreign or international equivalents of any of the foregoing in any country in the Territory.

1.89 “PDDS Platform Technology” means any technology, article of manufacture, component, system, discovery, or invention that relates to the [***] and methods of making or using the [***] . For the avoidance of doubt, [***] .

1.90 “Phase I Clinical Trial” means any clinical study conducted on sufficient numbers of human subjects to establish that the Product is reasonably safe for continued testing and to support its continued testing in Phase II Clinical Trials. “Phase I Clinical Trial” shall include without limitation any clinical trial that would satisfy requirements of 21 C.F.R. § 312.21(a).

1.91 “Phase II Clinical Trial” means any clinical study conducted on sufficient numbers of human subjects that have the targeted disease or condition of interest to investigate the safety and efficacy of the Product for its intended use and to define warnings, precautions, and adverse reactions that may be associated with such pharmaceutical product in the dosage range to be prescribed. “Phase II Clinical Trial” shall include without limitation any clinical trial that would satisfy requirements of 21 C.F.R. § 312.21(b).

1.92 “Phase III Clinical Trial” means any clinical study intended as a pivotal study for purposes of seeking Regulatory Approval that is conducted on sufficient numbers of human subjects to establish that the Product is safe and efficacious for its intended use, to define warnings, precautions, and adverse reactions that are associated with the Product in the dosage range to be prescribed, and to support Regulatory Approval of the Product or label expansion of such pharmaceutical product. “Phase III Clinical Trial” shall include without limitation any clinical trial that would or does satisfy requirements of 21 C.F.R. § 312.21(c), whether or not it is designated a Phase III Clinical Trial.

1.93 “Phase IV Clinical Trial” means clinical study of the Product on human subjects commenced after receipt of Regulatory Approval of the Product for the purpose of satisfying a condition imposed by a Regulatory Authority to obtain Regulatory Approval, or to support the marketing of such pharmaceutical product, and not for the purpose of obtaining initial Regulatory Approval of the Product.

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

1.94 “PhRMA Code” means the Pharmaceutical Research and Manufacturers of America Code on Interactions with Healthcare Professionals, as hereafter amended from time to time.

1.95 “Plan” means Development Plan, Commercialization Plan, or Launch Plan, as applicable.

1.96 “Pre-Launch Activities” means all Commercialization activities undertaken with respect to the Product in the Shared Territory prior to Commercial Launch and in preparation for the launch of the Product in the Shared Territory. Pre-Launch Activities shall include without limitation advertising, education, product-related public relations, health care economic studies, governmental affairs activities for reimbursement and formulary acceptance, sales force training, and other activities included within the Launch Plan or the Commercialization Plan that are to be conducted in the Shared Territory prior to the Commercial Launch of the Product and shall exclude all Development activities and the [***] .

1.97 “Pre-Launch Costs” means the costs, excluding Development Costs, specifically attributable to the Pre-Launch Activities in the Shared Territory that are generally consistent with the approved Launch Plan and the Commercialization Plan.

1.98 “Product” means the combination of (a) Formulated Amikacin and (b) the Device for use in the Pulmonary Delivery of Formulated Amikacin, which Product is developed in accordance with and pursuant to this Agreement. Product shall not include any products including nebulizer devices based upon the PDDS Platform Technology for use or sale with any active ingredients other than Amikacin, or any products including devices that are not based upon the PDDS Platform Technology.

1.99 “Product Profit and Loss” means the revenues and expenses resulting from the Commercialization activities (other than Pre-Launch Costs) for Product in the Shared Territory, and shall be equal to (a) Net Sales less Allowable Expenses plus (b) Net Sublicense Revenues.

1.100 “Project” means the collaborative Development and Commercialization of the Product to be conducted by or on behalf of Nektar and Bayer under this Agreement.

1.101 “Pulmonary Delivery” means the [***] .

1.102 “Regional Business Unit” or “RBU” has the meaning set forth in Section 3.1.

1.103 “Regulatory Approval” means (a) in the Shared Territory, approval by the FDA of an NDA or other applicable filing and satisfaction of related applicable FDA registration and notification requirements, if any, and (b) in any country other than the Shared Territory, approval by Regulatory Authorities having jurisdiction in such country of a single application or set of applications comparable to an NDA or other applicable filing and satisfaction of related applicable regulatory and notification requirements, if any, together with any other approval necessary to make and sell the Product commercially in such country, including without limitation any pricing approvals.

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

1.104 “Regulatory Authority” means any applicable supra-national, federal, national, regional, state, provincial or local regulatory agencies, departments, bureaus, commissions, councils or other government entities, including, without limitation, the FDA and the EMEA, regulating or otherwise exercising authority with respect to the Exploitation of the Product in the Territory.

1.105 “[***]” means the [***] .

1.106 “Royalty Territory” means the world, excluding the Shared Territory.

1.107 “Shared Territory” means the United States, its territories and possessions.

1.108 “Sublicensee” means any person or entity, including without limitation Affiliates of a Party, to which either (a) Bayer grants a sublicense to the extent useful or necessary as set forth under this Agreement (other than Nektar or its Affiliates), or (b) Nektar grants a sublicense to the extent useful or necessary for Nektar to fulfill its obligations under this Agreement (other than Bayer or its Affiliates).

1.109 “[***]” means that [***] .

1.110 “Territory” means the Royalty Territory and the Shared Territory.

1.111 “Third Party” means any person or entity other than Bayer, Nektar, or an Affiliate of either of them.

1.112 “Trademark” means any word, name, symbol, color, designation or device or any combination thereof, whether registered or unregistered, including, without limitation, any trademark, trade dress, service mark, service name, brand mark, trade name, brand name, logo or business symbol.

1.113 “[***]” has the meaning set forth in Section 7.3.

1.114 “Valid Claim” means, for a country, a claim of an unexpired issued Patent or a pending Patent Application filed and kept pending in good faith, where either or both (a) such Patent or Patent Application is included in either the Patents or Patent Applications licensed to Bayer under this Agreement, or (b) such claim directed to an Invention made solely or jointly by Nektar (whether or not assigned to Bayer pursuant to Article 11) that in the absence of ownership thereof or a license thereto, would be infringed by the Exploitation of the Product and that has not been (i) cancelled with prejudice, (ii) withdrawn from consideration without the ability to submit or refile, (iii) finally determined to be unallowable by the applicable governmental authority (and from which no appeal is or can be taken), (iv) finally determined to be invalid or unenforceable by a court of competent jurisdiction, (v) disclaimed, or (vi) abandoned. For purposes hereof, a claim in a Patent Application that has not been granted before the later to occur of (A) the date that is [***] , or (B) the date of [***] , shall not be considered to be a Valid Claim unless and until it is granted.

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

2. L ICENSE G RANTS

2.1 License Grants to Bayer.

(a) Royalty Territory License. Subject to the terms and conditions of this Agreement, Nektar and Aerogen hereby grant to Bayer:

(i) an exclusive (even as to Nektar, Aerogen and their Affiliates), royalty-bearing license, with the right to grant sublicenses in accordance with Section 2.3, under the Nektar Know-How and Nektar Patent Rights, to make, have made, use, have used, promote, develop, offer to sell, sell, have sold, import, have imported, export, have exported, and market Formulated Amikacin and Product in the Field throughout the Royalty Territory solely in connection with Exploitation of the Product in the Field throughout the Royalty Territory, provided that the foregoing license is subject to Nektar’s right to Manufacture as set forth in Article 9;

(ii) a non-exclusive, royalty-free license, under the Nektar Trademarks, with the right to grant sublicenses in accordance with Section 2.3, throughout the Royalty Territory, to use and display the Nektar Trademarks in connection with the Commercialization of the Product in the Field throughout the Royalty Territory, as provided under and in accordance with Section 7.7 and Article 17; and

(iii) a non-exclusive, royalty-bearing license, under the Nektar Know-How and Nektar Patent Rights, with the right to grant sublicenses in accordance with Section 2.3, in the Field throughout the Royalty Territory, to use, have used, promote, offer to sell, sell, have sold, import, have imported, export, have exported, and market the Device solely in connection with Exploitation of the Product in the Field throughout the Royalty Territory.

(b) Shared Territory License. Subject to the terms and conditions of this Agreement, Nektar and Aerogen hereby grant to Bayer:

(i) a co-exclusive (with Nektar and its Affiliates), license, subject to the payment of a share of profits as provided in this Agreement, with the right to grant sublicenses in accordance with Section 2.3, under the Nektar Know-How and Nektar Patent Rights, to make, have made, use, have used, promote, offer to sell, sell, have sold, import, have imported, export, have exported, and market Formulated Amikacin and the Product in the Field throughout the Shared Territory solely in connection with Exploitation of the Product in the Field throughout the Shared Territory, provided that the foregoing license is subject to Nektar’s right to Manufacture as set forth in Article 9;

(ii) a non-exclusive, royalty-free license, under the Nektar Trademarks, with the right to grant sublicenses in accordance with Section 2.3, throughout the Shared Territory, to use and display the Nektar Trademarks in connection with the Commercialization of the Product in the Field throughout the Shared Territory, as provided under and in accordance with Section 7.7 and Article 17; and

(iii) a non-exclusive license, under the Nektar Know-How and Nektar Patent Rights, subject to the payment of a share of profits as provided in this Agreement,

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

with the right to grant sublicenses in accordance with Section 2.3, in the Field throughout the Shared Territory, to use, have used, promote, offer to sell, sell, have sold, import, have imported, export, have exported, and market the Device solely in connection with Exploitation of the Product in the Field throughout the Shared Territory.

(c) The exclusive and co-exclusive licenses granted in Section 2.1(a)(i) and Section 2.1(b)(i), respectively, are subject to any pre-existing rights granted to a Third Party by Aerogen under the agreement attached in Exhibit 1.24.

2.2 Certain Covenants. Each Party covenants and agrees that (a) it shall not, and it shall cause its Affiliates and Sublicensees not to, use or practice the intellectual property rights licensed under this Agreement except as expressly permitted by this Agreement and (b) any use or practice of the intellectual property rights licensed under this Agreement except as expressly permitted by this Agreement that results in material harm to the other Party shall constitute a material breach of a material obligation of this Agreement.

2.3 Sublicense Rights. Bayer’s right to grant sublicenses under the licenses granted to it under Section 2.1, and Nektar’s right to grant sublicenses under the licenses granted to it under Section 11.2(a)(ii) shall be subject to the following: (a) each Sublicensee shall agree to be bound by all of the applicable terms and conditions of this Agreement; (b) the terms of each sublicense granted by a Party shall provide that the Sublicensee shall be subject to the terms and conditions of this Agreement; (c) a Party’s grant of any sublicense shall not relieve the Party from any of its obligations under this Agreement; (d) the granting Party shall remain jointly and severally liable for any breach of a sublicense by a Sublicensee to the extent that such breach would constitute a breach of this Agreement, and any breach of the sublicense by the Sublicensee shall be deemed a breach of this Agreement by the Party to the extent that such breach would constitute a breach of this Agreement; (e) each Party will notify the other Party of the identity of any Sublicensee, and the territory in which it has granted such sublicense, promptly after entering into any sublicense; (f) Bayer will not have the right to grant sublicenses, under any rights granted to Bayer by Nektar in Sections 2.1(a)(i), to a Third Party during the term of this Agreement for the promotion or marketing of Product in [***] without Nektar’s prior written consent, which consent shall not be unreasonably withheld or delayed; (g) Bayer will not have the right to grant sublicenses under any rights granted to Bayer by Nektar in Section 2.1(b) to a Third Party during the term of this Agreement for the promotion or marketing of the Product in the Shared Territory without Nektar’s prior written consent, which consent shall not be unreasonably withheld or delayed; provided, however, that Bayer may grant sublicenses under any rights granted to Bayer by Nektar in Section 2.1(b) without Nektar’s prior written consent in the event that Nektar opts out pursuant to Section 8.2(b)(ii), this Agreement is terminated by Bayer pursuant to Section 18.4 for breach of this Agreement by Nektar, or Bayer elects a Royalty Conversion in accordance with Section 20.2(b); and (h) Nektar will not have the right to grant sublicenses, under any rights granted to Nektar by Bayer in Section 11.2(a)(ii), to a Third Party during the term of this Agreement for the promotion or marketing of Product in the Field in the Territory without Bayer’s prior written consent, which consent shall not be unreasonably withheld or delayed.

2.4 No Implied Rights or Licenses. Neither Party grants to the other Party any rights or licenses in or to any Patent or other intellectual property right, whether by implication, estoppel or otherwise, except to the extent expressly provided for under this Agreement.

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

2.5 Exclusivity. Notwithstanding any other provision of this Agreement, during the term of this Agreement, neither Party shall develop (including without limitation conducting or sponsoring Clinical Trials), market, sell, manufacture, or commercialize, directly or indirectly, any product containing any [***] amelioration, treatment or prevention of [***] , other than the Product under this Agreement. For clarity, the foregoing shall not limit either Party’s ability to develop, market, sell, manufacture or commercialize, directly or indirectly, any product containing an [***] amelioration, treatment or prevention of [***] .

2.6 Covenant Not to Sue. During the term of this Agreement, Bayer agrees that neither it nor its Sublicensees will, and Bayer shall cause its Affiliates not to, assert against Nektar, its subsidiaries, Affiliates or Sublicensees, any claim, or institute any action or proceeding, whether at law or equity, under any intellectual property rights, including without limitation Patents or Patent Applications, based on Nektar’s, its Affiliates’ or Sublicensees’ development, manufacture, use, practice, importation or sale of the Device, Formulated Amikacin or the Product in the Field and in the Territory pursuant to this Agreement. This covenant shall be binding upon, and inure to the benefit of, the Parties, their successors, and assigns.

2.7 Reserved Rights. This Agreement is subject to the rights reserved by [***] or by the U.S. government under Title 35 of the United States Code Sections 200 through 204.

3. G OVERNANCE

3.1 General. Promptly after the Effective Date, the Parties shall establish a joint steering committee (the “Joint Steering Committee” or “JSC” ) in accordance with Section 3.2(a) to oversee the Parties’ performance under this Agreement, and a joint finance committee (the “Joint Finance Committee” or “JFC” ) in accordance with Section 3.3(a) to oversee financial and budgetary aspects of the Parties’ activities under this Agreement. Additionally, Nektar shall have the right to appoint [***] to Bayer’s internal Global Project Team for the Product (the “Global Project Team” or “GPT” ) in accordance with Section 3.4(a), which will oversee the clinical Development of the Product pursuant to this Agreement, [***] to Bayer’s internal Global Brand Team for the Product (the “Global Brand Team” or “GBT” ) in accordance with Section 3.5(a), which will oversee the Commercialization of the Product pursuant to this Agreement, and [***] to Bayer’s internal U.S. Regional Business Unit for the Product (the “Regional Business Unit” or “RBU” ) in accordance with Section 3.6(a), which will implement strategies for Commercial Launch of the Product in the Shared Territory, and oversee such launch activities, subject to oversight of the GBT. Each of these committees and teams shall have the responsibilities and authority allocated to it in this Article 3 and elsewhere in this Agreement. Each of these committees and teams shall make decisions consistent with the goal of implementing the Plans and conducting other activities under this Agreement in a manner consistent with the optimization of Product Development and Commercialization. The representatives of each Party on any committee shall be responsible for ensuring that their decisions and actions are consistent with the views of, and have been approved by, the Party that appointed them. The following procedures shall apply to each of the committees established under this Agreement and to the GPT, RBU and GBT, as applicable.

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

3.2 Joint Steering Committee.

(a) Composition. Each Party shall appoint [***] to serve on the JSC. Bayer’s initial JSC representatives shall be [***] . Nektar’s initial JSC representatives shall be [***] . The initial JSC chairperson shall be [***] , who shall serve in such capacity for a period of twelve (12) months. Thereafter, the member of the JSC who shall serve as the JSC chairperson shall be designated alternately by each Party, with each chairperson serving for a period of twelve (12) months. Each Party may replace its JSC representatives by written notice to the other Party.

(b) Responsibilities. The JSC shall oversee and monitor the direction and course of the activities to be conducted hereunder. Without limiting the generality of the foregoing, the JSC shall: (i) review, provide comment on, and approve Plans and related budgets; (ii) review the activities and obligations of the Parties and the JFC under this Agreement; (iii) resolve any disputes or disagreements submitted to it by the JFC, the GPT, or the GBT, and, if applicable, submit disputes or disagreements that it does not resolve within the time provided in Section 3.2(c) to designated Executives of the Parties, as further described in Section 3.2(d); (iv) review all material data arising in the course of activities conducted pursuant to this Agreement by either Party; (i) appoint subcommittees as it deems appropriate for carrying out the Project; and (vi) perform such other functions as appropriate to further the purposes of this Agreement as determined by the Parties, including without limitation the periodic evaluation of performance against goals.

(c) Meetings and Voting. The JSC shall meet at least once a calendar quarter at times mutually agreed upon by the Parties. At least two (2) such meetings per calendar year must be held in person, and all other such meetings may be held by teleconference or videoconference. The location of the meetings of the JSC to be held in person shall alternate between sites designated by each Party, with the first such meeting to be held in San Carlos, California, U.S.A., and the second such meeting to be held in Berlin, Germany. Each Party shall bear all the expenses of its representatives on the JSC, and such expenses shall not be included in Allowable Expenses. The JSC chairperson shall issue an agenda reasonably in advance of each meeting and shall appoint one (1) member to keep accurate minutes of each meeting, which appointment shall be effective upon approval of the other Party, such approval not to be unreasonably withheld or delayed. Each of Bayer and Nektar shall have one (1) collective vote on the JSC regardless of how many representatives such Party has on the JSC, and any matter voted on shall require the unanimous vote of both Parties. If a disagreement among members of the JSC remains unresolved for more than thirty (30) days after the JSC first addresses such matter (or such longer period as the Parties may mutually agree upon), such disagreement shall be resolved in accordance with Section 3.2(d). The JSC shall have no power to amend or waive compliance with this Agreement.

(d) Dispute Resolution. If the JSC is unable to resolve any dispute, controversy, or claim arising under this Agreement within thirty (30) days after it first addresses such matter (or such longer period as the Parties may mutually agree upon), then the dispute

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

shall be referred to senior executive officers of each Party having authority to make decisions in such matters ( “Executives” ) of each Party. In the event the Executives of each Party are unable to resolve the dispute within thirty (30) days after receiving notice of the dispute (or such longer period as the Parties may mutually agree upon), then the following shall apply: Matters submitted to the JSC and the Executives pursuant to this Section 3.2(d) that remain unresolved by the JSC or the Executives (i) that relate to matters set forth in Exhibit 3.2 in the column titled “Bayer Lead” shall be finally decided by Bayer, (ii) that relate to matters set forth in Exhibit 3.2 in the column titled “Nektar Lead” shall be finally decided by Nektar, (iii) that relate to matters set forth in Exhibit 3.2 in the column titled “Co-Lead” shall continue to be discussed by the Executives until such Executives agree upon a resolution of such matter, and (iv) that relate to matters not set forth in Exhibit 3.2 shall be submitted upon the initiative of either Party after expiration of the thirty (30) day Executive discussion period for resolution by a court of competent jurisdiction as set forth in Section 20.10. For clarity, matters relating to a Party’s alleged breach of its obligations under this Agreement shall not be finally decided by either Party but may be submitted for resolution by either Party after such matter has been discussed by the Executives for the foregoing thirty (30) day period to a court of competent jurisdiction as set forth in Section 20.10.

3.3 Joint Finance Committee.

(a) Composition. Each Party shall appoint [***] to serve on the JFC prior to the first meeting of the JFC. The initial JFC chairperson shall be appointed by Bayer and shall serve in such capacity for a period of twelve (12) months. Thereafter, the member of the JFC who shall serve as the JFC chairperson shall be designated alternately by each Party, with each chairperson serving for a period of twelve (12) months. Each Party may replace its JFC representatives by written notice to the other Party.

(b) Responsibilities. The JFC shall oversee the preparation and implementation of all Development Budgets, Launch Budgets, and Commercialization Budgets, establish a policy (no more than ninety (90) days after the Effective Date) for the appropriate level of detail to be reported in calculating Allowable Expenses and Product Profit and Loss, designate policies for the Parties’ reporting and recording of Allowable Expenses and calculation of Product Profit and Loss and other financial terms set forth in this Agreement, approve all variances from the applicable budgets, establish the Commercialization FTE Rate at least six (6) months prior to commencement of Commercialization activities in the Shared Territory (including without limitation Pre-Launch Activities), as well as determine appropriate annual adjustments to the Commercialization FTE Rate to reflect relevant price indices, and, as directed by the JSC, perform other activities as appropriate to effect the intent of this Agreement.

(c) Meetings and Voting. The JFC shall meet at least once per month, unless otherwise specified by the JSC, at times mutually agreed upon by the Parties. At least four (4) such meetings per calendar year must be held in person, and all other such meetings may be held by teleconference or videoconference. Each Party shall bear all the expenses of its representatives on the JFC. Such expenses shall not be included in Allowable Expenses. The location of the JFC meetings shall alternate between sites designated by each Party, with the first

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

such meeting of the JFC to be held in person to be in Berlin, Germany, and the second such meeting to be held in San Carlos, California, U.S.A. The JFC chairperson shall issue an agenda reasonably in advance of each meeting and shall appoint one (1) member to keep accurate minutes of each meeting, which appointment shall be effective upon approval of the other Party, such approval not to be unreasonably withheld or delayed. Each of Bayer and Nektar shall have one (1) collective vote on the JFC regardless of how many representatives such Party has on the JFC, and any matter voted on shall require the unanimous vote of both Parties. If a disagreement among members of the JFC remains unresolved for more than thirty (30) days after the JFC first addresses such matter (or such longer period as the Parties may mutually agree upon), such disagreement shall be submitted to the JSC for resolution. The JFC shall have no power to amend or waive compliance with this Agreement.

(d) All committees and teams identified in this Agreement shall prepare the budgets and plans for which they are responsible as provided for herein within ninety (90) days after the Effective Date.

3.4 Global Project Team.

(a) Composition. Nektar shall appoint [***] to serve on the GPT prior to the first meeting of the GPT. Bayer may appoint to the GPT [***]. The GPT chairperson shall be appointed by Bayer. Each Party may replace GPT representatives by written notice to the other Party.

(b) Responsibilities. Within ninety (90) days after the Effective Date, the GPT may propose updates to the Development Plan and Development Budget for approval by the GBT and then by the JSC, coordinate the supply of the Product for use in non-clinical and clinical trials of the Product, oversee the Parties’ implementation of the Development Plan and Development Budget as directed by the JSC, and perform other activities as appropriate to effect the intent of this Agreement.

(c) Meetings. The GPT shall meet at least once per calendar quarter. At least two (2) such meetings per calendar year must be held in person, and all other such meetings may be held by teleconference or videoconference. Each Party shall bear all the expenses of its representatives on the GPT. Such expenses shall not be included in Allowable Expenses. The location of the meetings of the GPT to be held in person shall be determined by Bayer. The GPT chairperson shall issue an agenda reasonably in advance of each meeting and shall appoint one (1) member to keep accurate minutes of each meeting, which appointment shall be effective upon approval of the other Party, such approval not to be unreasonably withheld or delayed. The GPT shall have no power to amend or waive compliance with this Agreement.

3.5 Global Brand Team.

(a) Composition. Prior to the first meeting of the GBT, Nektar shall appoint [***] to serve both on the GSM and [***] on the GBT. Bayer may appoint to the GBT [***], at least one of whom shall be a representative from the GSM. The GBT chairperson shall be such GSM representative. Each Party may replace GBT representatives by written notice to the other Party.

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

(b) Responsibilities. The GBT shall be responsible for preparation of launch, Commercialization and life cycle management strategies in the form of Launch Plans, Launch Budgets, Commercialization Plans and Commercialization Budgets for approval by the JSC, and shall oversee the Commercial supply of Formulated Amikacin, the Device and the Product, prepare materials for supporting Commercialization of the Product, plan training activities for [***] and sales representatives, determine if any Global Phase IV Trials are to be conducted, and perform other activities as appropriate to effect the intent of this Agreement. At least one (1) of each Party’s representatives shall also present to and gain approval from the representative’s own Party for the Launch Plans, Launch Budgets, Commercialization Plans and Commercialization Budgets, and any subsequent revisions thereto, before the GBT proposes such Launch Plans, Launch Budgets, Commercialization Plans, and Commercialization Budgets to the JSC.

(c) Meetings. The GBT shall meet at least once per calendar quarter. At least two (2) such meetings per calendar year must be held in person, and all other such meetings may be held by teleconference or videoconference. Each Party shall bear all the expenses of its representatives on the GBT. Such expenses shall not be included in Allowable Expenses, except that expenses of GBT members who are also members of the GSM shall be included in Allowable Expenses. The location of the meetings of the GBT to be held in person shall be determined by Bayer. The GBT chairperson shall issue an agenda reasonably in advance of each meeting and shall appoint one (1) member to keep accurate minutes of each meeting, which appointment shall be effective upon approval of the other Party, such approval not to be unreasonably withheld or delayed. The GBT shall have no power to amend or waive compliance with this Agreement.

3.6 U.S. Regional Business Unit.

(a) Composition. Nektar shall appoint [***] to serve on the RBU for the Shared Territory prior to the first meeting of the RBU for the Product. Bayer may appoint to the RBU for the Product [***]. The RBU chairperson shall be appointed by Bayer. Each Party may replace RBU representatives by written notice to the other Party.

(b) Responsibilities. The RBU shall oversee the implementation of the Launch Plan and the Commercialization Plan approved by the JSC for Commercial Launch in the Shared Territory and oversee the conduct of Local Phase IV Trials in the Shared Territory, subject to the oversight of the GBT.

(c) Meetings. The RBU shall meet at least once per calendar quarter. At least two (2) such meetings per calendar year must be held in person, and all other such meetings may be held by teleconference or videoconference. The location of the meetings of the RBU to be held in person shall be determined by Bayer. The expenses of RBU members shall be included in Allowable Expenses. The RBU chairperson shall issue an agenda reasonably in advance of each meeting and shall appoint one (1) member to keep accurate minutes of each meeting, which appointment shall be effective upon approval of the other Party, such approval not to be unreasonably withheld or delayed. The RBU shall have no power to amend or waive compliance with this Agreement.

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

3.7 Nektar Participation in Committees and Teams. Nektar’s membership in each of the JSC and JFC, and participation in each of Bayer’s internal GPT, GBT and RBU, shall be at its sole discretion, as a matter of right and not obligation, for the sole purpose of participation in governance, decision making and information exchange with respect to activities within the jurisdiction of such committee, team, or unit. At any time prior to the disbanding of, or withdrawing Nektar’s membership or participation in, such committee or internal team or unit pursuant to Section 3.8, Nektar shall have the right to withdraw from membership or participation in any or all of the committees, teams, or units upon thirty (30) days’ prior written notice to Bayer, which notice shall be effective as to the relevant committee, team, or unit specified in such notice upon the expiration of such thirty (30) day period ( “Withdrawal Notice” ). Following the issuance of a Withdrawal Notice for a given committee, team, or unit, (a) the applicable committee, team, or unit shall be disbanded or, if it is an internal Bayer team or unit, Nektar’s participation therein shall be withdrawn and Bayer may elect to continue such internal team or unit in its discretion, subject to this Section 3.7, (b) the decisions formerly made by the team or unit from which Nektar has elected to withdraw shall be made as set forth in Section 3.9, and (c) Nektar shall have the right to continue to receive the information it would otherwise be entitled to receive under the Agreement.

3.8 Disbanding of Committees and Withdrawal from Teams or Units. The Parties shall have the right to disband either or both of the JSC or JFC, and/or withdraw Nektar’s participation in each of Bayer’s internal GPT, GBT and RBU, upon mutual agreement. Additionally, to the extent the applicable committee is not disbanded or Nektar’s participation in the applicable team or unit is not withdrawn pursuant to Section 3.7, such committees, teams, or units shall be automatically disbanded or Nektar’s participation therein shall be withdrawn, as applicable, as set forth below:

(a) The JSC shall be automatically disbanded upon the later of (i) expiration or termination of the obligation to pay royalties in the Royalty Territory, or (ii) discontinuation of Commercialization activities in the Shared Territory.

(b) The JFC shall be automatically disbanded upon the later of (i) expiration or termination of the obligation to pay royalties in the Royalty Territory, or (ii) discontinuation of Commercialization activities in the Shared Territory.

(c) Nektar’s participation in the GPT shall be automatically withdrawn [***] years after the last to occur Regulatory Approval of the Product in the United States, Japan or Europe.

(d) Nektar’s participation in the GBT shall be automatically withdrawn upon the later of (i) expiration or termination of the obligation to pay royalties in the Royalty Territory, or (ii) discontinuation of Commercialization activities in the Shared Territory.

(e) Nektar’s participation in the RBU shall be automatically withdrawn upon the later of (i) expiration or termination of the obligation to pay royalties in the Royalty Territory, or (ii) discontinuation of Commercialization activities in the Shared Territory.

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

3.9 Decision Making After Withdrawal from or Disbanding of Committees. If Nektar elects to withdraw from the JSC and/or the JFC under Section 3.7, or if either such committee is disbanded pursuant to Section 3.8, then after such withdrawal or disbanding, the following shall apply to decisions formerly within the jurisdiction of the committee(s) from which Nektar has withdrawn or that has been disbanded:

(a) Decisions formerly within the jurisdiction of the JSC shall be submitted for resolution by senior officers of each Party, subject to the decision making processes and principles set forth in Sections 3.2(c) and 3.2(d) as if Sections 3.2(c) and 3.2(d) applied to decisions to be made by such senior officers rather than to decisions to be made by the JSC.

(b) Decisions formerly within the jurisdiction of the JFC shall be submitted for resolution by the JSC, if it then exists, or otherwise by senior officers appointed by each Party as described in Section 3.9(a).

4. D EVELOPMENT P ROGRAM

4.1 Project. Bayer and Nektar shall collaborate to Develop the Product. Nektar shall use Commercially Reasonable Efforts, and shall have primary control and direction in the Project for developing and Manufacturing Formulated Amikacin through the completion of Phase III Clinical Trials, developing and Manufacturing the Device, the conduct of the [***] , and the completion of Phase II Clinical Trials that are ongoing as of the Effective Date. Bayer shall use Commercially Reasonable Efforts, and shall have primary control and direction in the Project, for the clinical Development of the Product except for such [***] and Phase II Clinical Trials, the preparation and submission of regulatory filings for the Product, on a worldwide basis, and further CMC development of Formulated Amikacin and the final packaging of the Product, obtaining and maintaining all Regulatory Approvals for the Product in the Shared Territory and in the Royalty Territory, and generally for the Commercialization of the Product.

4.2 Development Plan and Development Budget.

(a) The Development of the Product shall be governed by a global Development plan ( “Development Plan” ), and the costs and expenses relating to the Development of the Product shall be governed by a Development budget ( “Development Budget” ), the initial forms of which are attached as Exhibits 4.2(a)(i) and 4.2(a)(ii), respectively. Updates thereto made pursuant to Section 4.2(b) shall be prepared by the GPT, for approval by the JSC. Each Development Plan shall include without limitation details of all Clinical Trials to be conducted by the Parties to support Regulatory Approval in the Territory, and related time lines, as well as other material activities necessary for Development of the Product in the Territory, and shall describe the proposed overall program of Development for the Product in each applicable country, including without limitation all preclinical studies, toxicology, pharmacology studies, formulation, process development, clinical studies, and regulatory plans and other elements of obtaining Regulatory Approval in each applicable country. The Development Plan and the Development Budget shall be updated at least once (1) per year and shall cover the following three (3) year period. The Parties have prepared a portion of the initial Development Plan specifically relating to the Device and a portion of the initial Development

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Budget relating to the Device ( “Device Budget” ) as well as a portion of the initial Development Plan specifically relating to Formulated Amikacin and a portion of the initial Development Budget relating to Formulated Amikacin ( “Drug Budget” ), respectively, as of the Effective Date, which initial budgets are attached as Exhibits 4.2(a)(iii) and 4.2(a)(iv), respectively.

(b) The GPT shall, on an annual basis, propose updates to the Development Plans and Development Budgets (including, for clarity, the Device Budget and the Drug Budget) for the following calendar year. The GPT shall submit such updated Development Plans and Development Budgets to the JSC (with such Development Budgets first being submitted to the JFC for review and endorsement), for review and approval by September 30 of each calendar year for the following calendar year. The JSC shall provide comments on each such updated Development Plan or Development Budget, as applicable, within fifteen (15) days following their submission. Within thirty (30) days following such original submission, the JSC shall either approve the Development Plan and Development Budget or approve a modified Development Plan and Development Budget prepared by the GPT and endorsed by the JFC, consistent with the objectives for the Product and the aims of the Project.

(c) If the actual costs incurred by Bayer under the Drug Budget in meeting Bayer’s obligations as set forth on Exhibit 4.2(a)(iv) exceed the approved amount set forth in the Drug Budget, Bayer may spend such additional amounts without reimbursement from Nektar; provided that, if aggregate actual costs incurred by Bayer exceed [***] of the aggregate approved amount set forth in the Drug Budget, the Parties agree to discuss whether the economic terms between the Parties should be restructured to reflect the investment of the additional funds. If the actual costs incurred by Nektar under the Device Budget in meeting Nektar’s obligations as set forth on Exhibit 4.2(a)(iii) exceed the approved amount set forth in the Device Budget, Nektar may spend such additional amounts without reimbursement from Bayer; provided that, if aggregate actual costs incurred by Nektar exceed [***] of the aggregate approved amount set forth in the Device Budget, the Parties agree to discuss whether the economic terms between the Parties should be restructured to reflect the investment of the additional funds.

4.3 Standard of Performance. Each Party, in performing its activities in connection with the Project, shall comply with all Applicable Laws, including without limitation where applicable, then-current GCP, GLP, and GMP.

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

4.4 Subcontracting Permitted.

(a) Bayer acknowledges and agrees that portions of the work to be performed by Nektar under the Project (including, without limitation, manufacture of the Device) may be performed on behalf of Nektar by Third Parties, provided that (i) Nektar shall first have obtained written confidentiality agreements with any such subcontractors and written assignments of, or equivalent rights under, all Patent rights and know-how that such subcontractors may develop by reason of work performed under this Agreement, (ii) Nektar may not subcontract obligations to co-promote in the Shared Territory without Bayer’s prior written consent (which consent may not be unreasonably withheld or delayed), unless the GBT has previously approved such subcontracting, and (iii) Nektar shall be and remain responsible to Bayer for the performance of its subcontractors.

(b) Nektar acknowledges and agrees that portions of the work to be performed by Bayer under the Project (including, without limitation, manufacture of Formulated Amikacin for commercial use) may be performed on behalf of Bayer by Third Parties, provided that (i) Bayer shall first have obtained written confidentiality agreements with any such subcontractors and written assignments of, or equivalent rights under, all Patent rights and know-how that such subcontractors may develop by reason of work performed under this Agreement, (ii) Bayer may not subcontract obligations to co-promote in the Shared Territory, without Nektar’s prior written consent (which consent may not be unreasonably withheld or delayed), and (iii) Bayer shall be and remain responsible to Nektar for the performance of its subcontractors.

5. R EGULATORY M ATTERS

5.1 Pharmacovigilance Agreement. The Parties shall, within sixty (60) days after written request by the JSC, convene a meeting to negotiate in good faith the terms and conditions of a pharmacovigilance agreement ( “Pharmacovigilance Agreement” ), which shall establish all material economic, regulatory, business and technical terms under which the Parties shall collect, monitor, research, assess and evaluate information from healthcare providers and patients on the adverse effects, if any, of Formulated Amikacin, the Device and the Product, with a view to identifying new information about hazards associated with Formulated Amikacin, the Device and the Product and preventing harm to patients. Within ninety (90) days after the commencement of those negotiations, the Parties shall exercise Commercially Reasonable Efforts to execute a mutually satisfactory Pharmacovigilance Agreement.

5.2 Preparation of Regulatory Filings. Each Party, at such Party’s sole cost and expense unless otherwise provided for herein, shall be responsible for preparing, filing, and maintaining, and shall own, the regulatory filings relating to the Product as set forth below:

(a) At its expense, Nektar shall use Commercially Reasonable Efforts to prepare and maintain DMFs covering the Device, and Nektar shall own any such DMFs. Nektar shall also use Commercially Reasonable Efforts to prepare and maintain DMFs covering Formulated Amikacin and the Product; provided, however, that the Party conducting Manufacturing for Commercialization of the Formulated Amikacin and Product shall own and maintain any such DMFs, it being understood and agreed that during the term hereof, such

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Manufacture of Formulated Amikacin and Product may be conducted by Bayer. During the term of this Agreement, Nektar grants to Bayer and its Sublicensees a right of reference to the DMFs for the Device owned by Nektar to the extent necessary for, and for the purposes of, preparing, filing or maintaining INDs, NDAs, MAAs and other regulatory filings relating to the Product in the Shared Territory or the Royalty Territory, including without limitation CMC Data. Nektar shall share with Bayer relevant CMC Data (redacted, if deemed necessary in Nektar’s reasonable opinion) portions of such DMFs, with the right to inspect, upon Bayer’s request. The Party that owns a DMF shall be responsible for all interactions with Regulatory Authorities relating to such DMF. The foregoing notwithstanding, all Information required by Bayer for regulatory filings will be provided to Bayer by Nektar for all countries where such filings are required.

(b) At its expense, Bayer, its Affiliates and its Sublicensees shall use Commercially Reasonable Efforts to prepare, obtain and maintain all regulatory dossiers and Regulatory Approvals covering the Product in the Territory, and shall provide Nektar, [***] , with a copy of all documents included in such regulatory dossiers and Regulatory Approvals. Except as provided in Section 5.2(a), Bayer or its designee shall be the owner of all such filings and shall be responsible for all interactions with Regulatory Authorities relating thereto; provided, however, that at all times during the term hereof, Nektar shall have the opportunity to participate in all meetings and other communications with Regulatory Authorities relating to the Product, [***] . In addition to Bayer’s other obligations under this Section 5.2(b), Bayer shall keep Nektar informed, on a regular basis (but no less frequently than quarterly) of regulatory filings related to the Product.

(c) During the term of this Agreement, Bayer grants to Nektar a right of reference (including, without limitation, the right to inspect) to the CMC Data pertaining to the Product or for Nektar’s use in applications within the Field that do not conflict with Nektar’s covenants set forth in Section 2.5.

5.3 Notice of Communication with Regulatory Authorities. Bayer shall be responsible for reporting all adverse events and handling all complaints and communications (including without limitation with Regulatory Authorities) relating to the Product, except in those countries where the CE Mark owner for the Device is required to communicate Device pharmacovigilance directly to Regulatory Authorities (in which case Nektar shall report all adverse events and handle all complaints and communications, including without limitation with Regulatory Authorities, relating to the Device). Except as otherwise provided for in this Section 5.3, each Party shall provide quarterly summaries to the other Party of any oral or written communications to or from Regulatory Authorities on matters related to the Product or which may reasonably be deemed to impact Product Development, manufacture, Commercialization or Regulatory Approval. Notwithstanding the foregoing, if Nektar Manufactures Device or Formulated Amikacin at any time during the term of this Agreement, then Bayer shall notify Nektar of any oral communications, and provide Nektar with copies of any written communications, to or from Regulatory Authorities on matters related to the Device or Formulated Amikacin, as applicable, or which may reasonably be deemed to impact Device or Formulated Amikacin, as applicable, within three (3) business days of receipt of such communication, or such earlier date as required by Applicable Law or Regulatory Authority. Moreover, in each such case, Bayer shall give Nektar reasonable opportunity to review and comment on any proposed response to any such oral or written communications to or from Regulatory Authorities prior to submitting any response thereto, and provide Nektar with a copy of the final response as specified herein.

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

5.4 Regulatory Compliance.

(a) Each of Nektar and Bayer shall reasonably cooperate with the other Party in its efforts toward ensuring that all government price and gift reporting, sales, marketing and promotional practices with respect to the Product meet the standards required by Applicable Laws, including without limitation state and federal laws and regulations, as well as applicable guidelines concerning the advertising of prescription drug products, the OIG Compliance Guidance Program, the American Medical Association (the “AMA” ) Guidelines on Gifts to Physicians, the PhRMA Code, and the ACCME Standards.

(b) Each of Nektar and Bayer shall provide its employees and its contract sales force, if any, involved in sales, marketing, promotion, or price or gift reporting for the Product appropriate training on proper marketing and sales techniques. Such training will include, among other topics, FDA requirements and other state and federal regulations and guidelines concerning the advertising of prescription drug products, the OIG Compliance Guidance Program, the AMA Guidelines on Gifts to Physicians, the PhRMA Code, and the ACCME Standards. If requested by the other Party, each of Nektar and Bayer shall provide a written description of the training to the other Party no less frequently than on an annual basis.

(c) Nektar shall provide to Bayer upon request copies of all Nektar documents that are related to the pricing issues addressed in the CIA and other price reporting obligations of Bayer under Applicable Laws. This will include, but is not necessarily limited to, a list of all research and continuing medical education grants, the date of the grant, the amount of the grant, and, if requested by Bayer, the rationale for the grant.

(d) Each of Nektar and Bayer shall reasonably cooperate with the other Party to provide the other Party access to any and all information, data and reports required by the other Party in order to comply with the relevant provisions of the Medicare Modernization Act and any other Applicable Laws, including without limitation reporting requirements, in a timely and appropriate manner. Bayer shall ensure that its reporting to the Centers for Medicare and Medicaid Services and other federal and state healthcare programs related to the Product is true, complete and correct in all respects; provided, however, that Bayer shall not be held responsible for submitting erroneous reports if such deficiencies result from information provided by Nektar which itself was not true, complete and correct.

(e) Nektar shall endeavor to prepare and provide to Bayer any data or other information covered by this Section 5.4 in accordance with methodologies specified by Bayer, and shall advise Bayer if there is any respect in which it has been unable to do so. If Nektar has a question about whether a specific transaction or other event needs to be reported to Bayer pursuant to this Section 5.4, Nektar’s obligation shall be satisfied by delivery of a true, complete and correct report of such transaction or other event, without a determination as to the proper reporting or legal characterization of such matter.

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[***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

(f) Bayer shall notify Nektar in advance of submission of any material information provided by Nektar pursuant to this Section 5.4 that Bayer proposes to submit to any governmental entity. Bayer further agrees to seek confidential treatment of any such information relating to Nektar that it submits to any governmental entity to the extent permitted under the CIA and any Applicable Laws.

(g) Nektar and Bayer shall confer with each other on a regular basis to discuss and compare their respective procedures and methodologies relating to each Party�