SUPPLY AGREEMENT

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

SUPPLY AGREEMENT

THIS SUPPLY AGREEMENT (“Agreement”), made and entered into as of January 26, 2005 (the “Effective Date”) by and among ARIAD Pharmaceuticals, Inc., ARIAD Gene Therapeutics, Inc., both Delaware corporations with a principal place of business at 26 Landsdowne Street, Cambridge, Massachusetts 02139 (collectively, “ARIAD”), and Medinol Ltd., a corporation with a principal place of business at Kiryat Atidim, P.O. Box 58165, Tel Aviv, 61581, Israel (“MEDINOL”). ARIAD and MEDINOL are each hereafter referred to individually as a “Party” and together as the “Parties.” All capitalized terms used herein and not defined shall be defined as set forth in that certain License Agreement, dated as of even date herewith, between ARIAD and MEDINOL (the “License Agreement”).

WHEREAS, ARIAD intends to develop, manufacture and commercialize AP23573 as a therapeutic product for multiple clinical indications;

WHEREAS, MEDINOL intends to develop, manufacture and commercialize MEDINOL Licensed Products to deliver AP23573 for use in the Licensed Field;

WHEREAS, in furtherance of the development, manufacture and commercialization of MEDINOL Licensed Products, ARIAD and MEDINOL have entered into the License Agreement;

WHEREAS, in order to facilitate the development, manufacture and commercialization of MEDINOL Licensed Products pursuant to the License Agreement, pursuant to the terms and conditions of this Agreement, ARIAD agrees to provide, and MEDINOL agrees to purchase, the active pharmaceutical ingredient for AP23573 for use by MEDINOL in the development, manufacture and commercialization of MEDINOL Licensed Products for use in the Licensed Field; and

WHEREAS, ARIAD and MEDINOL desire to enter into this Agreement which sets forth the terms and conditions under which ARIAD will supply the active pharmaceutical ingredient for AP23573 to MEDINOL for use in MEDINOL Licensed Products;

NOW, THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, ARIAD and MEDINOL hereby agree as follows:

ARTICLE I.

DEFINITIONS

1.1.   Definitions . Terms defined in the License Agreement shall have the same meaning in this Agreement unless otherwise provided. The following additional terms, shall have the respective meanings set forth below:

(a)  “ Batch ” means a specific quantity of API that is intended to be of uniform character and quality within limits specified by ARIAD and is produced during the same cycle of manufacture using defined amounts of starting materials in a single reaction.

(b)  “Calendar Quarter ” means each quarterly period consisting of three consecutive calendar months ending on March 31, June 30, September 30, or December 31, respectively.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

(c)    “ Calendar Year ” means each successive period of twelve months commencing on January 1 and ending on December 31.

(d)    “ Certificate of Analysis ” means a document signed by an authorized representative of ARIAD or its licensee or Third Party manufacturer that describes the tests, specifications and results thereof for a particular Batch of API.

(e)     “ Certificate of Manufacturing Compliance ” means a document, signed by an authorized representative of ARIAD or its licensee or Third Party manufacturer, attesting that a particular Batch of API was manufactured, filled, packaged, held and shipped in accordance with applicable cGMPs, and all other applicable laws, rules, regulations or requirements of the countries listed on Appendix A .

(f)      “ Excess API Cost ” means, the difference, if any, between (i) the purchase price per gram of API ************************************************************* following expiration of the 24-month notice period of a Refusal to Supply by ARIAD, minus (ii) ********** amount equal to [*********] Dollars (U.S. [$*****]), subject to annual adjustment for inflation, from the Effective Date to the date of purchase by MEDINOL, using the United States Bureau of Labor Statistics Producer Price Index for Pharmaceutical Preparation Manufacturing published at www.bls.gov . To calculate the Excess API Cost, all payments made by MEDINOL for API in foreign currency shall be converted into United States Dollars at the conversion rate existing in the United States (as reported in The Wall Street Journal , Eastern Edition, for purchasing United States Dollars) on the last business day of the applicable calendar quarter in which the purchase of API took place.

(i)       “ICH” shall mean the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use.

(j)       “ Manufacturing Cost ” shall mean [****************************************************************************************

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Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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(k)       “ Manufacturing Facility ” means, collectively and individually, the manufacturing facility or facilities at which ARIAD shall manufacture, or arrange to have manufactured, API.

(l)       “ Manufacturing Fee ” means a fee for API paid to ARIAD by MEDINOL pursuant to Section 6.1.

(m)     “ Specifications ” means the written specifications for API in accordance with ICH guidelines and as described in Appendix C attached hereto, as amended from time to time by ARIAD based on ARIAD’s manufacturing experience with AP23573.

ARTICLE II.

ENGAGEMENT OF ARIAD

2.1      Engagement of Manufacturer . MEDINOL hereby engages ARIAD to perform the manufacturing and other services described herein, in accordance with the terms and conditions set forth herein, and ARIAD hereby accepts such engagement. ARIAD shall use commercially reasonable efforts, in accordance with this Agreement, to perform such services hereunder in accordance with the terms and conditions set forth herein.

ARTICLE III.

MANUFACTURE OF API

3.1.       Manufacture and Supply . ARIAD shall develop Specifications for and shall manufacture API in accordance with the Specifications. ARIAD shall supply API to MEDINOL in accordance with Article IV.

3.2.       Joint Manufacturing Committee . The Parties shall establish a joint manufacturing committee (“Joint Manufacturing Committee”), to meet, unless otherwise mutually agreed, once each calendar [*******] (or more often as the Parties may agree) during the Term in such time, place and manner as the Parties shall agree to review and discuss issues relating to the Specifications, manufacturing (e.g., scale up, process control, quality standards) and supply ( e.g., quantity forecast of API and regulatory information regarding API) of API. Each Party shall appoint at least one (1) representative to the Joint Manufacturing Committee, and may invite such other representatives of each Party to attend such meetings, as appropriate. Each Party’s initial representative on the Joint Manufacturing Committee shall be from the research and development and/or regulatory department of that Party. Each Party may replace its representative(s) with other representatives with appropriate expertise and authority upon written notice to the other Party.

3.3.       Requirements . Except as otherwise provided herein, MEDINOL shall purchase all of its requirements for API from ARIAD during the Term.

3.4.       Manufacturing Facility . ARIAD shall manufacture or arrange for the manufacture of API at a Manufacturing Facility that complies with cGMP and all other applicable laws and Regulatory Authority requirements of the countries set forth on Appendix A . MEDINOL understands that ARIAD may use the services of a duly qualified Third Party manufacturer to

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Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

manufacture API ordered by MEDINOL under this Agreement. ARIAD shall notify MEDINOL in writing of the identity of any Third Party manufacturer and the location of any Manufacturing Facility at which API will be manufactured. The Parties shall confer with respect to the implications on any application for Regulatory Approval in any country listed on Appendix A for the MEDINOL Licensed Product at least three (3) months prior to change in the Manufacturing Facility including the production of API by a Third Party manufacturer designated by ARIAD.

3.5.       Changes in Manufacturing Process; Specifications . ARIAD shall be responsible for performing, or causing its Third Party manufacturer to perform, all validation testing of the Manufacturing Facility and for validating all manufacturing processes in accordance with cGMPs and all other applicable Regulatory Authority requirements for the countries listed on Appendix A as appropriate for the phase of product development. ARIAD may amend or supplement the manufacturing process for API, the CMC Data for API and/or the Specifications for API in its sole discretion and with notice to MEDINOL. The written notice shall be in reasonable detail and provided as soon as practicable after the decision by ARIAD to make such alteration is made to allow MEDINOL, together with the Joint Manufacturing Committee, to evaluate any impact such alteration may have with respect to MEDINOL’s use of API in its development or manufacture of MEDINOL Licensed Products.

3.6.       Excipients and Packaging Components . ARIAD shall purchase, at its own expense, all excipients, packaging components, and other items of any nature whatsoever that ARIAD may use in manufacturing API for supply to MEDINOL hereunder. All right, title and interest in and to such items, and in and to all work-in-process incorporating such items, shall remain the sole property of ARIAD.

3.7.       Nondisclosure of Manufacturing Information . All information relating to the manufacture and the supply of API under this Agreement, including without limitation, the CMC Data, Specifications, assay methods for validating manufacturing processes, the identity of ARIAD’s Third Party manufacturer, the location of any Manufacturing Facility at which API will be manufactured and all discussions, proceedings, notes and documents produced by or for the Joint Manufacturing Committee (collectively, “Manufacturing Information”) shall be (i) treated as Confidential Information of ARIAD, (ii) maintained in a secure file with access limited to MEDINOL’s personnel responsible for manufacturing and regulatory affairs for the MEDINOL Licensed Products (and shall maintain a log tracking personnel access to such data), (iii) used by MEDINOL solely for internal purposes in performing its obligations under this Agreement and the License Agreement, and (iv) shall not be disclosed by MEDINOL to any Third Party except as permitted under Article 5 of the License Agreement.

ARTICLE IV.

FORECASTS, ORDERS AND DELIVERY

4.1.       Forecasting . Attached as Appendix B hereto is an estimate of the quantities of API that MEDINOL expects to purchase from ARIAD during the Calendar Quarter that begins soonest after the Effective Date (the “Initial Calendar Quarter”), and the succeeding [*****(*)] Calendar Quarters, on a quarterly basis. Thereafter, on or before the first day of each Calendar Quarter following the Initial Calendar Quarter, MEDINOL shall submit to ARIAD an updated forecast of its quarterly requirements of API (the initial forecast and each updated forecast, a “Forecast”) for such Calendar Quarter and the succeeding three (3) Calendar Quarters. Except as provided in Section 4.2, these forecasts shall be non-binding and shall be used by ARIAD for planning purposes only.

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Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

4.2.       Firm Orders . Notwithstanding the forecasts set forth on Appendix B , as of the Effective Date, MEDINOL shall submit to ARIAD a purchase order for such quantities of API as MEDINOL commits to purchase from ARIAD during the Initial Calendar Quarter, with a statement of the dates on which delivery is requested and shipping instructions (a “Firm Order”). Thereafter, at least forty-five (45) days before the beginning of each succeeding Calendar Quarter, MEDINOL shall submit to ARIAD a Firm Order for the quantities of API to be delivered to MEDINOL during such Calendar Quarter; provided, however, that the quantity of API specified in any Firm Order for delivery in a Calendar Quarter shall not be less than [***********] percent [(*%)] nor more than [*****************************] percent [(*%)] of the quantity of API specified in the then-current Forecast for API for such Calendar Quarter delivered on or before the first day of the Calendar Quarter preceding the Calendar Quarter for which the Firm Order is placed (the “then-current Forecast”) (For example, the Firm Order for the third Calendar Quarter of any year must be delivered at least forty-five (45) days before July 1 of such year and cannot be less than [*%] nor more than [*%] of the Forecast for such third Calendar Quarter delivered on or before April 1 of such year ) ; provided that MEDINOL may request excess quantities (i.e., in excess of [**************************] percent [(*%)] of the quantity of API specified in the then-current Forecast). ARIAD shall not be obligated to supply such excess quantities but shall use good faith efforts to do so. ARIAD shall notify MEDINOL, within five (5) days after receipt by ARIAD of each Firm Order submitted in accordance with this Section 4.2 and shall be obligated to manufacture and deliver the specified quantity of API in accordance with the delivery schedule set forth in such Firm Order. Each Firm Order shall specify the stage of development or commercialization of MEDINOL Licensed Products in which that Batch of API shall be used. ANY ADDITIONAL OR INCONSISTENT TERMS OR CONDITIONS OF ANY PURCHASE ORDER, ACKNOWLEDGMENT OR SIMILAR STANDARDIZED FORM GIVEN OR RECEIVED PURSUANT TO THIS AGREEMENT SHALL HAVE NO EFFECT AND SUCH TERMS AND CONDITIONS ARE HEREBY EXCLUDED.

4.3.       Changes in Orders . ARIAD shall use good faith efforts to comply with increases to Firm Orders that MEDINOL may request after receipt thereof by ARIAD, but shall not be obligated to do so.

4.4.       Delivery and Risk of Loss . ARIAD shall deliver the quantities of API in conformity with each Firm Order (as amended pursuant to Section 4.3), on the delivery date specified therein, to a destination designated in writing by MEDINOL. Delivery terms shall be F.O.B, freight and insurance prepaid, at ARIAD’s designated point of shipping. ARIAD shall arrange for (i) transportation of each shipment by common carrier designated by ARIAD and reasonably acceptable to MEDINOL and (ii) insurance for each such shipment which shall be reasonably acceptable to MEDINOL; the cost of such transportation and insurance being borne by and chargeable to MEDINOL. ARIAD shall deliver all API to MEDINOL in accordance with all applicable laws and regulations of the countries listed on Appendix A .

(a)                 I