DISTRIBUTION AND SUPPLY AGREEMENT

Exhibit 4.3

DISTRIBUTION AND SUPPLY AGREEMENT

          THIS DISTRIBUTION AND SUPPLY AGREEMENT dated as of October 22, 2006, is by and between STIEFEL LABORATORIES, INC., organized and existing under the laws of the State of Delaware with a place of business at 255 Alhambra Circle, Coral Gables, Florida 33134 (“STIEFEL”) and CONNETICS CORPORATION, organized and existing under the laws of the State of Delaware, with a place of business at 3160 Porter Drive, Palo Alto, California 94304 (“CONNETICS”).

INTRODUCTION

     WHEREAS, CONNETICS sells, inter alia , the pharmaceutical product SORIATANE ^® in the Territory (as defined below); and

     WHEREAS, CONNETICS specializes in promoting and selling brand-name drug products for dermatological uses and does not directly engage in promoting and selling generic drug products for dermatological uses; and

     WHEREAS, STIEFEL specializes in promoting and selling generic drug products for dermatological uses; and

     WHEREAS, STIEFEL wishes to obtain an exclusive (even as to CONNETICS and its Affiliates, as defined in Section 1.1) right and license to market, distribute and sell a generic version of SORIATANE ^® in and for the United States of America, including its territories (the “Territory”), subject to the terms and conditions set forth herein; and

     WHEREAS, CONNETICS is willing to grant such an exclusive right and license to STIEFEL, subject to the terms and conditions set forth herein; and

     NOW, THEREFORE, in consideration of the mutual covenants and promises contained in

this Agreement and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

ARTICLE I. DEFINITIONS

     As used in this Agreement, the following terms, whether used in the singular or plural, shall have the following meanings:

     1.1 “ Affiliate ” means any corporation, company, partnership, joint venture and/or firm which controls, is controlled by or is under common control with a Party. For purposes of this Section 1.1, “control” shall mean (a) in the case of corporate entities, direct or indirect ownership of at least fifty percent (50%) of the stock or shares entitled to vote for the election of directors; and (b) in the case of non-corporate entities, direct or indirect ownership of at least fifty percent (50%) of the equity interest or the power to substantially direct the management and policies of such non-corporate entities.

     1.2 “ ANDA ” means Abbreviated New Drug Application, as filed with the FDA.

     1.3 “ cGMPs ” mean current Good Manufacturing Practices applicable to the Product, as established by the FDA.

     1.4 “ Commercial Launch ” means the announcement of the availability of the Product for sale or sale of the Product to an unrelated third party.

     1.5 “ Commercially Reasonable Efforts ” means efforts commensurate with the efforts a Party would extend or has extended to a product of similar commercial potential.

     1.6 “ Confidential Information ” means any communications between the Parties in furtherance of the purposes of this Agreement, including but not limited to documents, electronic

transmissions and the contents of the NDA not subject to public disclosure pursuant to statute or regulation.

     1.7 “ Effective Date ” means the date of the signature of the second (2 ^nd ) Party signing this Agreement.

     1.8 “Equivalent Product” means any oral dosage form of the product containing acitretin as the active ingredient, which is manufactured pursuant to an ANDA, 505(b)(2) application or other regulatory filing which was approved by the FDA and which filing was filed on the basis of CONNETIC’s NDA for Soriatane ^® (other than any product in any strength or dosage under the trademark or trade name Soriatane ^® ).

     1.9 “ FDA ” means the United States Food and Drug Administration.

     1.10 “ Generic Entry Date ” means the date of the first bona fide, arm’s length commercial sale of an Equivalent Product in the Territory by a Non-Party. ..

     1.11 “ NDA ” means the approved New Drug Applications for the Product, including all supplements and amendments thereto.

     1.12 “ Net Profits ” means Net Sales less the aggregate Transfer Price of the units of Product included in calculating such Net Sales.

     1.13 “ Net Sales ” mean the aggregate gross revenues derived by or payable to STIEFEL and its Affiliates from or on account of the sale of Products in the Territory, less (a) credits or allowances actually granted, if any, for price adjustments, retroactive price adjustments, freight and product liability insurance premiums , recalls, penalties for backorder, rejection or return of items previously sold, (b) rebates and cash discounts actually granted, (c) freight, postage and insurance charges and additional special packaging charges (not to exceed 2% of gross revenues), (d) excise taxes, sales taxes, duties or other taxes imposed upon and paid with respect to such sales (excluding

income or franchise taxes of any kind), and (e) costs associated with any dedicated marketing programs for the Products, all determined on a basis consistent with United States generally accepted accounting principles. Sales between or among STIEFEL and its Affiliates shall not be included in Net Sales unless STIEFEL or its Affiliates are the end user of Products.

     1.14 “ Party ” means CONNETICS or STIEFEL; “ Parties ” means CONNETICS and STIEFEL. “ Non-Party ” means any person other than CONNETICS, STIEFEL and their respective Affiliates.

     1.15 “ Product ” means a generic equivalent of Soriatane ^® (Acitretin) 10 mg and 25 mg capsules that are purchased by STIEFEL from CONNETICS.

     1.16 “ Specifications ” has the meaning given in Section 4.6(a).

     1.17 “ Territory ” has the meaning given to it in the Recitals, above.

     1.18 “ Transfer Price ” means the price charged by CONNETICS to STIEFEL for Products sold during the relevant reporting and payment quarter as established pursuant to Section 5.2.

ARTICLE II. GRANT

     2.1 License Grant . Subject to STIEFEL’S timely payment of CONNETICS’ profit share as provided in Article IV, CONNETICS hereby grants to STIEFEL an exclusive (even as to CONNETICS and its affiliated companies) right and license to promote and sell the Product in the Territory following Commercial Launch. Such grant includes the right to grant further sublicenses to STIEFEL’S Affiliates, only.

     2.2 Launch STIEFEL and CONNETICS shall confer to reach agreement upon the timing of the Commercial Launch of any Product, taking into account the actions required to be

undertaken by STIEFEL and CONNETICS pursuant to this Agreement and current and anticipated market conditions; provided that Commercial Launch occur on the Generic Entry Date or such earlier date as the Parties may agree in writing. From and after the Commercial Launch, STIEFEL shall use Commercially Reasonable Efforts to market and promote sales of the Product in the Territory. CONNETICS shall not be required to accept any orders of any Product from STIEFEL until it elects to do so, provided that once CONNETICS accepts an initial order for a Product from STIEFEL, CONNETICS shall accept subsequent orders for such Product from STIEFEL for as long as this Agreement remains in effect.

ARTICLE III. RESPONSIBILITIES OF THE PARTIES

     3.1 The NDA . Subject to Section 3.6, CONNETICS shall be solely responsible for, and shall, maintain the NDA throughout the term of this Agreement.

     3.2 Production . STIEFEL shall purchase its requirements of the Products for the Territory exclusively from CONNETICS, on the terms and conditions set forth in Article IV. CONNETICS agrees that during the term of this Agreement, all of the Products made by or for it shall be sold (respectively) only to STIEFEL. CONNETICS shall only be obligated to supply STIEFEL with its requirements of the Products from CONNETICS’ existing supplies of Products held by it on the date of this Agreement.

     3.3 Other Generic Products . Nothing in this letter shall be construed as to require CONNETICS to prevent the approval of ANDAs claiming equivalence to the Products; provided that CONNETICS agrees that neither it nor any of its Affiliates may (a) prepare, file or present any such ANDA, or (b) assist any non-Party in preparing or presenting such an ANDA.

     3.4 STIEFEL ANDAs . STIEFEL hereby confirms to CONNETICS that prior to the execution and delivery of this Agreement, no ANDA has been submitted to the FDA by or on behalf of STIEFEL or any of its Affiliates with respect to any such product.

     3.5 Marketing . The Products shall be sold by STIEFEL’s Affiliate, Glades Pharmaceuticals, LLC (“Glades”), without a trademark; provided that STIEFEL and Glades may inform customers that the Products are purchased from CONNETICS pursuant to this Agreement and refer to CONNETICS in such capacity in advertisements and packaging.

     3.6 Pricing to STIEFEL’S Customers . STIEFEL shall have sole discretion to set the prices and terms pursuant to which it or its Affiliates sells the Product.

     3.7 Branded Products . STIEFEL acknowledges that CONNETICS manufactures and sells Product under the brand name SORIATANE ^® and, except as otherwise provided herein, CONNETICS shall not be restricted from such sales activities by virtue of this Agreement.

     3.8 Sales Outside of the Territory . STIEFEL agrees that it shall not sell any Product supplied by Supplier to STIEFEL hereunder outside the Territory, or to any Person that STIEFEL has reasonable grounds to believe is likely to sell or distribute the Product outside of the Territory. If STIEFEL becomes aware that any of its customers have sold Product outside of the Territory, STIEFEL will (i) direct such customers in writing to cease making such sales of Product outside the Territory, (ii) take all necessary legal action at STIEFEL’s sole cost and expense to stop such Product sales, (iii) advise CONNETICS of such sales, (iv) provide a copy of the written direction and legal proceedings to CONNETICS and (v) be liable to CONNETICS for any lost sales of the Product in whole or in part caused by such sales outside of the Territory.

ARTICLE IV. SUPPLY OF PRODUCTS

     4.1 Prices. STIEFEL shall purchase the Products from CONNETICS at the Transfer Prices. The Transfer Prices will be subject to adjustment in order to be equal to 107.5% of CONNETICS’ fully allocated freight, duty, insurance, shipping, stability, raw materials, laboratory testing, manufacturing, and other directly attributable costs, including the cost of purchasing the Product from third parties (the Parties understand and agree that unused capacity is not a directly attributable cost) including costs billed to CONNETICS at a later date

related to the Products, with no further allowance for profit to CONNETICS or CONNETICS’ Affiliates. The Parties acknowledge that they have confirmed the initial transfer price by email.

     4.2 Payment . Terms of payment shall be net thirty (30) days from date of on which title of Product passes to STIEFEL as set forth in Section 4.3.

     4.3 Delivery . Delivery shall be FOB STIEFEL’S address as set forth in Section 10.4. CONNETICS shall, at its cost, ensure that adequate insurance coverage exists on the Product in transit to such delivery point in the event that such Product is damaged, destroyed, or lost, and shall bear all costs of such insurance. Title to Product shall pass to STIEFEL when STIEFEL shall label such Product for sale, and until such time, STIEFEL shall hold such Product on consignment, as bailee for and on behalf of CONNETICS, and title to such Product shall remain with CONNETICS. STIEFEL shall keep CONNETICS’ title to all Product consigned to STIEFEL free and clear of all liens and encumbrances arising through STIEFEL. STIEFEL’s storage facilities used to store the Product shall comply with all applicable federal, state and local laws, rules and regulations in the Territory, including, without limitation, all cGMPs, STIEFEL shall hold all consigned Products in compliance with cGMP, and shall provide documentation thereof upon request by CONNETICS. STIEFEL shall bear the risk of loss of consigned Products, and shall be responsible for insuring consigned Products against loss. Product held on consignment by STIEFEL will at all times remain under the control of CONNETICS and be held for and on behalf of CONNETICS by STIEFEL as bailee until such time as title to the Product is transferred to STIEFEL.

     4.4 Forecasts . Prior to the date of execution of this Agreement, STIEFEL has provided to CONNETICS an initial twelve (12) month forecast that estimates the quantity of the Products to be purchased by STIEFEL, including strengths and packaging sizes, during the initial twelve (12) months of this Agreement. Within thirty (30) days following the execution of this Agreement and thereafter on the first business day of each month during the term of this Agreement, STIEFEL shall provide to CONNETICS a rolling forecast that estimates the quantity of the Products to be purchased by STIEFEL, including strengths and packaging sizes, during the

upcoming twelve (12) months. With respect to such rolling forecasts, the first three (3) months of such forecast shall constitute a firm purchase order for the Products for such calendar period. Except for the first three (3) months of such rolling forecast that constitutes a purchase order as provided herein, such forecast shall constitute an estimate of STIEFEL’S requirements for the Products that is supplied for CONNETICS’ convenience only, is non-binding on STIEFEL and shall not itself be deemed an order of Products.

     4.5 Warranties . CONNETICS represents and warrants to STIEFEL that (a) each Product STIEFEL purchases from CONNETICS shall meet all specifications for the Product as set forth in the respective NDA, in all respects other than labeling (as will be updated by CONNETICS from time to time, the “Specifications”) through its marked expiration date; (b) each Product, when manufactured, packaged and sold to STIEFEL, shall comply with all applicable federal, state and local laws, rules and regulations in the Territory, including without limitation cGMPs; and (c) CONNETICS and CONNETICS’ supplier’s manufacturing and storage facilities used to produce or store the Product shall comply with all applicable federal, state and local laws, rules and regulations in the Territory, including, without limitation, all cGMPs. Within thirty (30) days of written notice from STIEFEL that any Product delivered to STIEFEL fails to meet any Specifications, CONNETICS shall replace such defective Product with an equal amount of Product conforming to all Specifications, at no charge to STIEFEL. In that event, STIEFEL will have the option to return or hold such non-conforming Product, at CONNETICS’ expense, pending final disposition of the non-conforming product. If a non-Party laboratory that does not otherwise provide goods or services to CONNETICS or STIEFEL, and is mutually acceptable to both parties, subsequently establishes that such Product indeed conformed with all Specifications at the time CONNETICS delivered it to STIEFEL, STIEFEL shall pay the full price of the quantity of Product it returned, plus the costs of such testing, plus ten percent (10%) of the full price of the quantity of Product it returned, and CONNETICS will, upon STIEFEL’S request, have such Product shipped to STIEFEL, at STIEFEL’S expense. If such laboratory establishes that such Product did not conform with all Specifications at the time CONNETICS delivered it to STIEFEL, CONNETICS will be solely responsible for the costs of such testing and all shipping costs.

     4. 7 Quality Control .

     (a) CONNETICS shall deliver to STIEFEL the NDA approval letter and other documentation required to import and to distribute the Products with its acceptance of STIEFEL’S first order for the Products. Prior to each shipment of Product hereunder, CONNETICS shall provide STIEFEL with a (i) Certificates of Analysis for each finished Product packaging lot present in such shipment, and (ii) a Certification of Conformance, containing a statement that each such batch present in such shipment was prepared in accordance with provisions of the NDA, any other applicable health registrations, and applicable cGMPs.

     (b) CONNETICS shall be responsible for conducting (i) an ong