Supply and Distribution Agreement

October 25, 2006

Donald Parman

Vice President and Secretary

SmithKline Beecham Corporation d/b/a GlaxoSmithKline

200 N. 16 ^lh Street Philadelphia, PA 19102 215-751-7633 215-751-5349 (fax)

Genaera Corporation

5110 Campus Drive

Plymouth Meeting, PA 19462

Attn: John L. Armstrong, Jr., President & CEO

Dear Mr. Armstrong:

Reference is hereby made to the Development, Supply and Distribution Agreement between SmithKline Beecham Corporation (d/b/a GlaxoSmithKline) ("GSK") and Genaera Corporation (f/k/a Magainin Pharmaceuticals, Inc.) ("Genaera"), dated February 12, 1997 (the "Agreement"). All capitalized terms used but not defined herein have the meanings ascribed to them in the Agreement.

As you know, the product known in the Agreement as MSI-78, or LOCILEX™, has been dormant for a number of years, due to the fact that the FDA did not approve LOCILEX™ in 1999 and since then, both GSK and Genaera have refocused