REDEMPTION AGREEMENT

This agreement is made as of January 30, 2007 between Denali Sciences, Inc., a Delaware corporation (“ Denali ”) and the holders of common stock in Denali set forth on Schedule A hereto (collectively, the “ Sellers ”).

The Sellers desire to sell to Denali, and Denali desires to re-purchase from each Seller, the amount of shares of Denali common stock set forth on Schedule A opposite their names (the “ Shares ”) according to the terms set forth herein.

The parties therefore agree as follows:

1.   Sale of the Shares . Subject to the terms of this agreement, and in reliance upon the representations, warranties, and covenants contained in this agreement, the Sellers shall sell the Shares to Denali, and Denali shall re-purchase the Shares from the Sellers, for an aggregate amount equal to $125,000 less Denali liabilities as of the effective date of the merger between Velcera Pharmaceuticals, Inc. (“ Velcera ”) and Denali Acquisition Corp., Denali’s wholly-owned subsidiary (“ MergerCo ”) (the “ Merger ”), multiplied by the percent of outstanding shares of Denali common stock held by parties to this agreement (the “ Purchase Price ”). Each Seller shall be entitled to his, her, or its pro rata share of the Purchase Price.

2.   Closing .

(a)   The purchase and sale of the Shares shall take place at a closing (the “ Closing ”), to occur immediately following the closing of the Merger. The parties hereto shall have no obligation to complete the Closing in the event the Merger is not consummated.

(b)   At the Closing:

(i) The Sellers shall deliver to Denali certificates representing the Shares, duly endorsed in form for transfer to Denali.

(ii) Denali shall pay to each Seller such Seller’s pro rata share of the Purchase Price for the Shares.

(iii) At any time or from time to time after the date hereof, at Denali’s request and without further consideration, the Sellers shall execute and deliver to Denali such other instruments of sale, transfer, conveyance, assignment and confirmation, provide such materials and information and take such other actions as Denali may deem necessary, desirable or helpful in order to more effectively transfer, convey and assign to Denali, and to confirm Denali’s title to, the Shares, and to otherwise carry out the purposes of this agreement.

3.   Representations of Sellers . Each Seller, severally, and not jointly, hereby represents to Denali as follows:

a.   Each Seller is the sole record and beneficial owner of the Shares owned by such Seller free and clear of any and all liens, pledges, security interests, options, claims, charges, restrictions or encumbrances of any kind or nature (“ Encumbrances ”) and upon the delivery of the Shares, Denali will receive good and marketable title to the Shares free and clear of all Encumbrances.

b.   The execution and delivery of this agreement and the consummation of the transactions contemplated hereby will not conflict with or result in a breach of any terms or constitute a default under any agreement or undertaking of Seller.

c.   To each Seller’s knowledge, the Shares are not the subject of any litigation or injunction. Seller has full power and authority and capacity to transfer the Shares.

d.   No third party consent, approval or notification for which Seller is responsible is necessary for Seller to effect the transactions contemplated by this agreement.

e.   Seller has had an opportunity to review Denali’s most recent financial statements, its corporate records, and the merger agreement related to the Merger. Seller further acknowledges to having had the opportunity to ask questions of and receive answers from Denali’s officers regarding any matters material to Seller’s decision to enter into this agreement.

f.   Seller has been encouraged to and has had the opportunity to review the merits of the sale of the Shares with tax and legal counsel and financial advisors as deemed appropriate.

g.   Seller either alone, or with the assistance of tax counsel, legal counsel, or other financial advisors, has such knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of selling the Shares.

h.   Seller has read this agreement in its entirety and is familiar with and acknowledges all of the provisions of this agreement including Denali’s representations.

4.   Representations of Denali . Denali hereby represents to Sellers as follows:

a.   Denali has full power and authority to enter into this agreement and to perform its obligations hereunder.

b.   The execution, delivery and performance of this agreement by Denali and the consummation of the transactions contemplated hereby have been duly and validly authorized by all requisite corporate action, and no other corporate proceedings are necessary to authorize the execution and delivery of this agreement.