CONTRACT RESEARCH AND DEVELOPMENT AGREEMENT

Exhibit 10.8

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

CONTRACT RESEARCH AND DEVELOPMENT AGREEMENT

ON

INTERFERON-OMEGA (IFN-OMEGA)

TABLE OF CONTENTS

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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This Contract Research And Development Agreement (“Agreement”) is made effective as of 17 July, 1998 (“Effective Date”), by and among BioMedicines, Inc. (“BioMedicines), a incorporated in the state of Delaware in the United States of America, having its principal business offices at 909 Marina Village Parkway No. 583, Alameda, CA 94501, and Boehringer Ingelheim Pharma KG (“BI Pharma KG”) a German corporation having a place of business at Birkendorfer Stra b e 65, 88397 Biberach an der Riss, Federal Republic of Germany.

Background

BioMedicines has a license to certain proprietary rights in INTERFERON-OMEGA (“IFN-OMEGA”) from Boehringer Ingelheim International GmbH (“BII”), a German corporation, under a separate agreement dated 17 July, 1998 and which is referenced in toto hereby.

BI Pharma KG owns all of the appropriate and specialized cell culture, processing, protein purification aseptic filling and lyophilisation equipment, as well as suitable packaging and labeling facilities that are necessary and sufficient for the production of IFN-OMEGA, and, furthermore, employs personnel who have the requisite experience, knowledge, and expertise in production of proteins by cell culture and purification processes, as well as in the development and registration of biopharmaceutical products.

BioMedicines desires to have BI Pharma KG personnel evaluate the performance of the IFN-OMEGA production processes and sterile liquid filling of the resulting product in BI Pharma KG’s facilities and according to the provisions of this Agreement hereinafter to manufacture IFN-OMEGA for clinical trial and commercial purposes.

Agreement

In Consideration Of the mutual covenants set forth in this Agreement, BI Pharma KG and BioMedicines hereby agree as follows:

1.              Definitions

1.1           “ Affiliate ” shall mean any corporation or business entity controlled by, controlling or under common control with either BI or B/M, as the case may be.  For this purpose, control shall mean any of the following:

(a)            direct or indirect beneficial ownership of more than fifty percent (50%) of the voting stock of such entity;

(b)            a fifty percent (50%) or greater interest in the income of such entity;

(c)            a fifty percent (50%) or greater management control over a joint venture; or

(d)            any other relationship that, in fact, constitutes actual control.

1.2           “ BioMedicines ” shall mean BioMedicines Inc. as laid down first above.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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1.3           “ BI Pharma KG ” shall mean Boehringer Ingelheim Pharma KG as laid down first above.

1.4           “ BioMedicines Confidential Information ” shall mean all technical and other information relating to the Product that is disclosed or supplied to BI Pharma KG by BioMedicines pursuant to this Agreement whether patented or unpatented, including, without limitation, trade secrets, know-how, processes, concepts, experimental methods and results and business, scientific plans and financial information or data and shall retroactively include similar such BioMedicines confidential information previously provided to BII under confidentiality obligation that BII subsequently disclosed verbally or in writing to BI Pharma KG.

1.5           “ Cell Line(s) ” shall mean a CHO DX B11-SS cell line currently designated 2-1C4 (or any similar cell line designated differently) and any other cell line(s) developed pursuant to this Agreement.

1.6           “ Certificate of Analysis ” shall mean a document describing testing methods and results, the accuracy of which has been certified by a party, to be agreed upon between the parties in due time.

1.7           “ Effective Date ” shall mean the date first above written, which shall be the effective date of this Agreement.

1.8           “ GMP ” shall mean the regulatory requirements for good manufacturing practices promulgated by the United States Food and Drug Administration (FDA) under the Federal Food, Drug and Cosmetic Act, as amended, 21 C.F.R, § 210 et seq.  and 21 C.F.R. § 600-610, as applicable, or any manufacturing standards set now or in the future by the FDA or by the currently applicable regulations, directives, or decisions of the European Union (as now published in the Official Journal of the European Community (EC) or its successor publication or directed specifically to BI Pharma KG by the appropriate regulatory authorities.  Moreover, GMP shall be understood to be the higher or more stringent of the FDA or EC standards as mutually agreed by BI Pharma KG and BioMedicines.

1.9           “ License Agreement ” Shall mean the License Agreement concluded between BioMedicines and BII regarding IFN- OMEGA.

1.10         “ Master Cell Bank (MCB) ” shall mean reference deposit or collection of ampoules of the Cell Line 2-1C4 (or other cell lines as described above in Section 1.5) and that has currently been designated MCB 054 Th, and any successor or substantially similar but differently designated cell line and cell lines created pursuant to the Agreement.

1.11         “ Manufacturers Working Cell Bank(s) (MWCB) ” shall mean BI Pharma KG’s collection of [*] serially subcultivated cells that will be derived from the MCB. The MWCB’(s) will be used to establish seed cultures of the Cell Line to initiate the Process.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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1.12         “ Phase I ” shall mean all activities and work to be performed as laid down in the Master Project plan attached hereto as Appendix 1 (“Master Project Plan Interferon Omega; Proposed Development Plan”) which shall include manufacturing for purposes of commercialisation.

1.13         “ Phase II ” shall mean the future research and development activities and work to be performed according to a future agreement of the parties hereto, but excluding manufacturing for purposes of commercialisation.

1.14         “ Process ” shall refer to a BI Pharma KG developed and owned process for using the Cell Line, including defined procedures, equipment and analytical methodologies for in-process control, release testing and Product characterization, that has been used by BI Pharma KG to produce the Product at the [*] fermentation scale, or, if and when applicable, the modified process after adaptation to serum-free production by BI Pharma KG.

1.15         “ Product ” shall mean drug substance or final product of IFN-OMEGA produced by the Cell Line(s) in accordance with the Process.

1.16         “ Project ” shall mean the Phase I program described herein, in which BI Pharma KG will establish, implement, upscale and evaluate the serum-free Process at the respective fermentation scale in BI Pharma KG’s facility and equipment.  The primary objectives of the Project will be to perform registration runs at commercial scale in the BI Pharma KG facility, successfully demonstrate that equivalent Product (i. e. Product meeting the Specifications) can be reproducibly manufactured in BI Pharma KG’s facilities, and prepare the CMC part of a BLA registration dossier with all relevant data generated in the Project.  A proposed timeline for the Project is included in Appendix 1.

1.17         “ Project Fee ” shall have the meaning specified in Section 6 hereof.

1.18         “ Project Manager ” shall have the meaning specified in Section 2.1 hereof.

1.19         “ Project Team ” shall have the meaning specified in Section 2.2 hereof.

1.20         “ Start Date ” shall mean the date mutually agreed by BI Pharma KG and BioMedicines, which is anticipated to be on or about 1 August 1998.

1.21         “ Sublicensee ” shall mean a person or legal entity to which BioMedicines grants a sublicense of some or all of the rights granted to BioMedicines according to the License Agreement.

1.22         “ BI Pharma KG Confidential Information ” shall mean all technical and other information relating to the Cell Line, Process, Product and BI Pharma KG’s facilities and associated technologies that is disclosed or supplied to, or used on behalf of, BioMedicines by BI Pharma KG pursuant to this Agreement, whether patented or unpatented, including, without limitation, trade secrets, know-how, processes, concepts, experimental methods and results and business and scientific plans.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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1.23         “ Specifications ” shall mean the specifications for the Product and the respective test methods for release of drug substance and drug product as mutually agreed by the Project Team, as such specifications may be amended from time to time by mutual agreement of BioMedicines and BI Pharma KG according to the further development of the Process and Product.

2.              Cooperation between the Parties in the Course of the Project

2.1           Designation of Project Manager .  BI Pharma KG and BioMedicines shall each identify a Project Manager who will be responsible for communicating all instructions and information concerning the Project to the other party.  Each Project Manager will be available on an agreed upon regular basis for consultation at pre-arranged times during the course of the Project.  In the absence of the Project Manager, a substitute shall be appointed.  Additional modes or methods of communication and decision making may be implemented with the mutual consent of each party.

2.2           Cooperation .  In the course of the Project, BI Pharma KG will at all times take into consideration and implement the recommendations of BioMedicines as long as they do not unreasonably and adversely influence other BI Pharma KG biotech operations; in the absence of explicit instructions from BioMedicines, BI Pharma KG shall be entitled to employ its reasonable judgment in carrying out the Project.  BI Pharma KG shall be entitled to rely upon any instructions or directives provided by any BioMedicines representative and BI Pharma KG shall not be responsible for the failure to achieve any objective or the inability to adhere to any guideline if such failure or inability is caused by events beyond the reasonable control of BI Pharma KG or by instructions or directives provided by BioMedicines, if any.

BI Pharma KG shall permit BioMedicines, from time to time upon at least thirty (30) days’ prior notice to BI Pharma KG to conduct audits at BI Pharma KG’s facilities used for the Project during BI Pharma KG’s normal business hours and at a reasonable frequency.  While at any BI Pharma KG facility, BioMedicines personnel shall comply with all applicable BI Pharma KG security and safety policies and procedures.

3.              BioMedicines Responsibilities .

3.1           General .  BioMedicines will periodically and appropriately keep BI Pharma KG informed of the status of its activities around the Product as long as the same facilitate the development and manufacture of the Product according to this Agreement.

3.2           Specific .  As far as not specified herein the responsibilities of BioMedicines are defined in the License Agreement and possibly other separate agreements between BioMedicines and Boehringer Ingelheim International GmbH (BII), BI Pharma KG, or other BII Affiliates as appropriate.

4.              BI Pharma KG Responsibilities

4.1           Master Projectplan including Project Timeline .  In the course of this Agreement BI Pharma KG shall perform the work and tasks as laid down and detailed in the Master

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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Projectplan including Project Timeline, attached as Appendix 1 hereto.  Any third party contractors that BI Pharma KG intends to hire for the Project need the approval of BioMedicines, except for single quality control tasks.  Such quality control tasks and vendors will be identified to BioMedicines.

4.2           Documentation .  As soon as the data and documents are available to BI Pharma KG and needed for registration, as mutually agreed upon in the project plan, BI Pharma KG shall provide BioMedicines with all CMC-parts of a United States FDA Biologics License Application (BLA) or similar document(s) for European Registration as may be required to enable and facilitate regulatory approval(s) to market IFN-OMEGA: Such CMC-documents shall be provided to BioMedicines in English, shall be complete and accurate, and shall contain all data required to enable and facilitate regulatory approval(s).  The format(s) for such documents will be appropriate for the regulatory agency in question and mutually agreed.

4.3           Additional Work .  On request of BioMedicines BI Pharma KG shall perform additional work to sustain the progress of the Project on conditions in terms of money, time and scope to be subject to mutual agreement of the parties hereto.

5.              Project to be Conducted on Fixed-Fee Basis

The Project shall be conducted by BI Pharma KG for BioMedicines on fixed fee basis, in consideration of payment by BioMedicines of the Project Fee according to the Master Projectplan as laid down in Appendix 1.

BioMedicines acknowledges that the Project is experimental in nature and that no favorable or useful result can be assured by BI Pharma KG. Accordingly, BI Pharma KG shall not be responsible to BioMedicines for any failure of fermentations except for

contamination of (a) batch(es) due to BI Pharma KG’s mishandling or inability to obtain useful yields (Definition) of Product

and the Project Fee shall be payable in full regardless of result unless the Project is terminated prior to its scheduled completion pursuant to Section 13 hereof.

6.              Project Fee

Subject to Section 5 above, BioMedicines shall pay BI Pharma KG a Project Fee of [*] for the services provided in carrying out the Project.  This fee includes all fees for BI Pharma KG’s work according to Article 4 hereof.

Disposal of organic and hazardous waste is included in the Project Fee.  The Project Fee shall be payable in installments, each non-refundable when paid, as provided for in the Master Projectplan (Appendix 1).

Each invoice shall be payable within 30 days following receipt thereof.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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7.              Progress to Phase II

7.1           Start of a Possible Phase II .  If BioMedicines decides to conduct a Phase II the parties will have to agree on the conditions thereof (in terms of time and commercial conditions) in due time depending on the then prevailing capacity of BI Pharma KG.

8.              Ownership of / License to Project Data

8.1           Transfer of Project Data .  In consideration of the Project Fee, BI Pharma KG shall execute the Project in a timely manner (as further detailed in the Appendices) and shall make available to BioMedicines in a timely manner all information, data, or materials obtained or developed in the course of the Project necessary to evaluate, test, develop, register, market, or sell the Product.

8.2           Interim Reports .  BI Pharma KG agrees to provide interim reports to BioMedicines on a reasonable basis (max.  quarterly basis).

8.3           License for the Use of Project Data .  BioMedicines, its Affiliates or Sublicensees shall have a worldwide, royalty-free, exclusive license, with the right to sublicense, to Product-specific information and a non-exclusive license to otherwise non-Product-specific information (i.e., information that may also apply to other projects/products) to use BI Pharma KG Confidential Information that is used in carrying out the Process to evaluate, test, develop, register, market, and sell the Product.  These licenses, and sublicenses if any, shall expire automatically at the same time when the License Agreement expires.

9.              Commercial Production and Supply

9.1           BI Pharma KG’s Right and Obligation to Commercial Production and Supply .  The parties acknowledge and agree that, in case BioMedicines decides to commercialize the Product, BI Pharma KG has an exclusive right and obligation to produce and supply commercial quantities of Product (in bulk drug, final product and/or finished product form) for BioMedicines within the respective capacity of BI Pharma KG and the parties shall negotiate in good faith and consummate a supply agreement at the earliest reasonable opportunity for the supply by BI Pharma KG of commercial quantities of the respective Product for the term of the License Agreement.

9.2           Terms and Conditions .  Such supply agreement shall contain terms and conditions customary for such a supply agreement and shall be concluded between BioMedicines and BI Pharma KG or, at the sole discretion of BI PHARMA KG, with BII or any other Affiliate of BI Pharma KG as the case may be, provided however, that the main production activities shall remain at BI Pharma KG.

9.3           BI Pharma KG’s Inability to Manufacture .  Should BI Pharma KG be unable for any reason to manufacture sufficient quantities of Product, BI Pharma KG will take all necessary or desirable steps to facilitate the manufacture of Product by BioMedicines or by a third party.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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9.4           BioMedicines Forecast / Capacities / Exceeding Quantities .  In Appendix 2 BioMedicines has laid down its present forecast estimation of its, its Affiliates and Sublicensees total requirements of Product.  This forecast is non-binding; however, BI Pharma KG’s capacity planning for commercial supply is based on and limited by BioMedicines’s forecast.

If, for good reason, BI Pharma KG cannot produce and supply all requested commercial quantities of Product as outlined in BioMedicines forecast referenced above for whatever reason, BioMedicines will have the right to have the missing quantities, as long as BI Pharma KG is not able to produce and supply the respective quantities, produced elsewhere.

Moreover, the supply agreement shall provide for minimum quantities as follows:

BI Pharma KG’s will provide a reserved capacity for BioMedicines