FIRST AMENDMENT TO RESEARCH COLLABORATION AND LICENSE AGREEMENT

A)

WHEREAS, AstraZeneca and Palatin are parties to that certain Research Collaboration and License Agreement effective as of January 30, 2007 (the “ Agreement ”);

B)

WHEREAS, as part of the Agreement, Palatin inter alia granted to AstraZeneca a license to the Licensed Patents (as defined in the Agreement) and the Parties agreed to collaborate to generate Collaboration Compounds (as defined in the Agreement) to be owned by AstraZeneca;

C)

WHEREAS, Palatin and AstraZeneca have concluded that there are additional compounds developed by Palatin, not covered or claimed by the Licensed Patents, which the Parties may desire to utilize for the purposes of the Agreement;

D)

WHEREAS, Palatin and AstraZeneca have further concluded that AstraZeneca has an interest in certain AZ Compounds (as defined below in this Amendment), *** ; and

E)

WHEREAS, the Parties, in view of the above, wish to amend the Agreement on the terms set forth herein.

1

Definitions and Construction .

Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement. Unless the context otherwise requires, reference to “the Agreement” or “this Agreement” shall be construed to mean the Agreement as amended by this Amendment.

2

Amendments to Article 1 (Definitions)

2.1

Sections 1.5, 1.67, 1.71, 1.73 and 1.74 of the Agreement are amended to read in their entirety as follows:

“1.5

“Agreement Compounds” means the Compound, the Collaboration Compound, the Additional Compound and, *** .

1.67

“ License ” shall include the Additional Licence, with both License and Additional License having the meaning set forth in Section 7.5.

1.71

“ Licensed Know-How ” means (i) the Information set out and described in *** and *** , but excluding any Information to the extent covered or claimed by the Licensed Patents and (ii) the Additional Know How.

1.73

“Licensed Patents” means the *** Patents, *** and any Patents claiming or covering any Licensed Improvement.

1.74

“Licensed Products” means *** .”

2.2

The following new Sections 1.104 - 1.115 are added to the Agreement:

“1.104

“Additional Compound” means *** .

1.105

"Additional Know-How" means any Information which *** .

1.106

"Additional License" has the meaning set forth in Section 7.5.4.

1.107

“Additional Licensed Patents” means *** .

1.108

 “ Additional Product ” means any product in a form suitable for applications for human, veterinary or agricultural use that contains an Additional Compound as the sole active ingredient.

1.109

“Amendment Effective Date” shall mean 27 June 2008.

1.110

"AstraZeneca Notice" shall have the meaning set forth in Section 3.10.

1.111

“AZ Chemical Space” means *** .

1.112

"AZ Compound" means any compound - ***. Notwithstanding the foregoing, the compounds *** .

1.113

"AZ Compound Patent" means a Patent that cover or claim one or more AZ Compound, *** .

1.114

"Designated Compound" shall have the meaning set forth in Section 3.9.

1.115

“ IPC ” or “ IP Steering Committee ” means the joint committee established by the Parties pursuant to Section 4.5.

1.116

"JEC Designation" shall have the meaning set forth in Section 3.9."

2.3

The Research Plan, Schedule 1.92 to the Agreement, is amended as set forth in Schedule 1.92 to this Amendment.

2.4

The term “Collaboration Compounds” shall, *** .

3

Amendments to Article 3 (Research Collaboration)

3.1

The following new Sections 3.9 – 3.12 are added to the Agreement:

“3.9

The chemical structure of any compound referred to in Section 7 of the Research Plan, *** .

3.10

AstraZeneca may, at its sole discretion, select one or more of any Designated Compound for licensing hereunder by ***

3.11

During the Evaluation Period for a certain Designated Compound, *** .

3.12

Should AstraZeneca (i) during the Evaluation Period for a certain Designated Compound notify Palatin *** ."

3.2

The following new sentence is inserted immediately after the second sentence in Section 3.4.1 of the Agreement:

“3.4.1

Without prejudice to the foregoing, Palatin shall, and shall cause its Affiliates, without additional compensation and at Palatin’s sole expense, to provide to AstraZeneca copies of any Additional Know-How which could be reasonably considered material to the Research Collaboration, not previously provided to AstraZeneca, *** .”

4

 Amendments to Article 4 (Management of the Research Collaboration)

4.1

The following new Section 4.5 is added to the Agreement:

“4.5

IP Steering Committee

4.5.1

  Responsibilities of the IPC. The Parties shall establish an IP Steering Committee consisting of Palatin and AstraZeneca representatives to *** review and resolve any other specific issues relating to IP Protection Rights brought before it by either Party. This Section 4.5 shall be without prejudice to the provisions set forth elsewhere in this Agreement regarding the filing, prosecution, maintenance, defence or enforcement of any Patents, any potential infringement of any Intellectual Property Right of any Third Party and the cooperation between the Parties in relation to the foregoing.

4.5.2

Modifications of the AZ Chemical Space. The Parties *** .

4.5.3

Review of Patent Filings. The Parties will provide *** .

4.5.4

  Formation of the IPC. The IPC shall consist of four (4) members, one patent expert and one chemist appointed by each Party. Each Party shall have the right to replace its IPC representatives upon written notice to the other Party, provided that any such substitute representative shall have substantially the equivalent position and experience as the representative that such person replaces.

4.5.5

  Disputes . The IPC shall endeavour to reach consensus on all matters brought before it with each Party having a single vote, irrespective of the number of representatives actually in attendance at a meeting; provided, however, that in the event the IPC is unable to resolve an outstanding matter before it, such matter shall be resolved by the CMC or, if the CMC is unable to resolve the matter, by the JEC, ***.

4.5.6

  Meetings and Quorum . The IPC shall meet at least quarterly and more frequently when required, at such dates and times as will be mutually agreed upon by the IPC. The meetings shall be held by means of teleconference or videoconference or, when held in person, at AstraZeneca AB’s facilities in Mölndal, Sweden, or at Palatin’s facilities in New Jersey, USA or such other locations as may be mutually agreed upon by the Parties. A quorum of the IPC shall require the presence of all four members of the IPC. In addition, the IPC may act without a formal meeting by a written memorandum signed by all of the members of the IPC.

4.5.7

  Expenses . Palatin and AstraZeneca each shall bear all expenses of its respective IPC members related to such members’ participation on the IPC and attendance at IPC meetings.

4.5.8

  Minutes . The IPC shall keep accurate minutes of its deliberations, which minutes shall record all proposed decisions and all actions recommended or taken. Drafts of minutes shall be delivered to the members of the IPC within twenty (20) days after the respective meeting. The Parties, on an alternating basis, shall prepare and circulate the draft minutes. Draft minutes shall be issued

in final form only with the approval and agreement of all of the members of IPC, such issuance not subject to final determination by the CMC or the JEC in the event of a dispute.

4.5.9

Dissolution of the IPC . The IPC shall be dissolved *** unless extended or earlier dissolved by mutual agreement of the Parties.

5

Amendments to Article 7 (Ownership and Grant of Rights)

5.1

The following new Sections 7.1(a) – 7.1(d) are inserted immediately following Section 7.1 of the Agreement:

“7.1(a)

AstraZeneca shall ***. Palatin shall promptly disclose to AstraZeneca in writing the development, making, conception or reduction to practice *** and shall, and does hereby, assign, and shall cause its Affiliates and its and their employees and agents, as applicable, ***. For the avoidance of doubt, compounds ***. The aforesaid shall, for the avoidance of doubt, *** pursuant to this Agreement.

7.1(b)

AstraZeneca shall ***.

7.1(c)

The term “ Agreement Compound ” (and, consequently and for the avoidance of doubt, the term “ Collaboration Compound ” as well as the reference to “Agreement Compound” in the definition of “ Product ” and (indirectly) in the definition of “ Licensed Product ”) shall, *** . Any such *** , i.e. meeting the requirements set forth in the preceding sentence, shall include any of *** .

7.1(d)

AstraZeneca will not at any time *** .”

5.2

The following new Sections 7.5.4 - 7.5.6 are added to the Agreement:

"7.5.4

Upon the AstraZeneca Notice, Palatin grants, *** (the "Additional License"). For the avoidance of doubt, any reference in this Agreement to the rights and exclusive position granted to AstraZeneca under *** .

7.5.5

Subject to Section 7.5.6, Palatin may conduct any research or development program outside the Licensed Field in which any Compound, *** , will be

utilized, provided, however, that *** . This Section 7.5.5 shall, in respect of any Compound which is covered or claimed by the *** .

7.5.6

Notwithstanding any other provision in this Agreement, Palatin will not, directly or through any Third Party, use or otherwise Exploit any Additional Compound or Additional Product used or useful in the Licensed Field other than in carrying out its obligations under the Research Collaboration. This Section 7.5.6 shall, in respect of any Additional Compound and Additional Product, apply in lieu of Section 7.5.3.”

5.3

The first sentence in Section 7.10 of the Agreement is amended to read as follows:

“7.10

Covenant Not to Sue . Neither Palatin nor any of its Affiliates shall ever, anywhere in the world, institute or prosecute (or in any way aid any Third Party in instituting or prosecuting), at law or in equity, any claim, demand, action or cause of action for damages, costs, expenses or compensation, or for an enjoinment, injunction, or any other equitable remedy, against AstraZeneca, its Affiliates, Sublicensees, suppliers, Distributors, vendors or customers alleging the infringement by AstraZeneca in its Exploitation of the Compounds, the Licensed Patents, the Licensed Know-How, the Licensed Improvements, the Collaboration Compounds, the Collaboration Patents, the AZ Compounds, the AZ Compound Patents or the Licensed Products or of any Patent that claims an invention that is based on, derived from or otherwise relates to the Results and is Controlled by Palatin or its Affiliates, so long as such Exploitation is in accordance with this Agreement.”

6

Amendments to Article 10 (Consideration)

6.1

The following new sentence is inserted immediately after the first sentence in Section 10.1 of the Agreement:

“For the sole purpose of determining the milestone payments payable by AstraZeneca to Palatin pursuant to this Article 10, (i) any Additional Compound shall, regardless of the

actual route of administration thereof, be regarded *** and (ii) any Additional Product shall, regardless of the actual route of administration thereof, be regarded *** .”

6.2

The initial passages of Section 10.1.2.1 of the Agreement are amended to read as follows:

“10.1.2.1

*** Agreement Compounds or Licensed Product

A)

Development Milestones for *** Agreement Compounds

i)

*** U.S. Dollars ***; or

ii)

*** U.S. Dollars ***; or

iii)

*** U.S. Dollars ***; and

iv)

*** U.S. Dollars ***; and

v)

*** U.S. Dollars ***; and

vi)

*** U.S. Dollars ***.

For the sake of clarity, with respect to the milestones set forth in clauses (i), (ii) and (iii) above, payment shall be made only upon the achievement of the first one of those three milestones.

[...]”

6.3

The first sentence in Section 10.2.1 of the Agreement is amended to read as follows:

“10.2.1

If a milestone payment set forth under Section 10.1.2.1 (A) or (B), i.e. for *** Agreement Compounds or Licensed Products, has been made or is due by AstraZeneca, the corresponding milestone payment set forth under Section *** Agreement Compounds or Licensed Products, shall be reduced with the sum already paid or due to be paid for such *** Agreement Compound or Licensed Product, whichever is applicable, with the exception, however, ***.”

6.4

Section 10.2.2 of the Agreement is amended to read as follows:

“10.2.2

Each of the payments set forth in Sections 10.1.2 and 10.1.3 shall be made by AstraZeneca no more than once under this Agreement, collectively amounting to an aggregate maximum amount of U.S. $300,000,000 for an *** Agreement Compound or Licensed Product, or, in case the payment under Section 10.1.2.1(A)(ii) or Section 10.1.2.1(A)(iii) becomes payable, U.S. $2,500,000 less, or U.S.$ 300,000,000 for an *** Agreement Compound or Licensed Product, irrespective of the number of CDs, Agreement Compounds and Licensed Products that have achieved the milestone events set forth in Section 10.1, or the number of countries or Major Markets in which such milestone events have been achieved.”

6.5

The following new Section 10.4 is added to the Agreement:

“10.4

Should AstraZeneca propose to Palatin other milestones or royalties than those set forth in this Article 10, excluding, *** to apply in respect of any Additional Compound or Additional Product having ***, then, upon receipt of such proposal, Palatin agrees to negotiate in good faith with AstraZeneca to agree on such other milestones or royalties (but for the avoidance of doubt, excluding ***, taking into account inter alia the *** of such Additional Compound or Additional Product having ***. For the avoidance of doubt, no such agreement on other milestones or royalties shall be valid and binding unless in writing and signed by authorised representatives of both Parties.”

7

Amendments to Article 15 (Patent Prosecution and Defence)

7.1

The following new Sections 15.8 - 15.12 are added to the Agreement:

“15.8

Prosecution of the Additional Licensed Patents . Subject to Section 15.9, ***, using legal counsel at its sole discretion, diligently file, prosecute (including any interferences, reissue proceedings and re-examinations) and maintain the Additional Licensed Patents in the Territory, all such filing, prosecution and maintaining within *** reasonable discretion, and *** shall bear all costs and

expenses of such activities, incl