SUPPLY AND PURCHASE AGREEMENT

SUPPLY AND PURCHASE AGREEMENT

THIS SUPPLY AND PURCHASE AGREEMENT is made as of January 25, 2006, by and among Sucampo Pharmaceuticals, Inc., a Delaware corporation having its principal place of business at 4733 Bethesda Avenue, Suite 450, Bethesda, Maryland 20814 USA (“SPI”), Takeda Pharmaceutical Company Limited, a corporation organized under the laws of Japan having its principal place of business at 1-1, Doshomachi 4-chome, Chuo-ku, Osaka 540-8645, JAPAN (“Takeda”) and R-Tech Ueno, Ltd., a corporation organized under the laws of Japan having its principal place of business at 10F, Yamato Life Insurance Bldg., 1-1-7 Uchisaiwaicho, Chiyoda-ku, Tokyo 100-0011, JAPAN (“RTU”) (this “Agreement”). SPI, Takeda and RTU are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

Recitals

WHEREAS, Takeda has obtained from SPI an exclusive license to co-develop, use, sell, promote, offer for sale, import and distribute the Product (hereinafter defined) for the gastroenterology indications in the United States and Canada under a collaboration and license agreement as of October 29, 2004 (the “Collaboration and License Agreement”) and Takeda has the right to execute its rights and duties under the Collaboration and License Agreement through Takeda Affiliates and/or its sublicensees;

WHEREAS, SPI, Takeda and RTU have entered into a supply agreement as of October 29, 2004 (the “Supply Agreement”) pursuant to which the Parties acknowledged and agreed (i) Takeda has the right to execute its rights and duties under the Supply Agreement through Takeda Affiliates and/or its sublicensees and (ii) to enter into a definitive supply and purchase agreement for the purpose of determining more detailed terms and conditions for the manufacturing and supply of the Product to Takeda;

NOW THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, the Parties hereto have agreed as follows:

Article 1 INTRODUCTORY PROVISIONS

1.1 Defined Terms . The following terms, when used in capitalized form in this Agreement, shall have the meanings assigned to them in this Article. The terms when used in capitalized form in this Agreement and not defined in this Agreement shall have the same meanings as defined in the Supply Agreement.

“Binding Forecasts” shall have the meaning ascribed to such term in Section 6.2 hereof.

“JPY Equivalent” shall mean JPY one hundred seven point ninety-two (107.92).

“Manufacturing” means the compounding, component preparation, testing, and other procedures, or any part thereof, involved in manufacturing the Products in accordance with

the Manufacturing Specifications. The terms “Manufacture,” “Manufactured” and “Manufacturing” in this Agreement shall have the identical meaning.

“Manufacturing Specification(s)” shall mean the commercial specification for the manufacturing, quality control, packaging, labeling, shipping, delivery and storage of the Product and Samples to be agreed upon between the Parties but which at least satisfies specifications approved by FDA and TPDHC.

“Non-Conformity/Non-Conforming” shall have the meaning ascribed to such term in Section 7.1 hereof.

“Packaging” means the procedures of filling, inspecting, labeling, packaging and packing of the Products or any part thereof in accordance with the Manufacturing Specifications. The terms “Package,” “Packaged” and “Packaging” in this Agreement shall have the identical meaning.

“Product” shall mean any and all pharmaceutical preparations for human use that contains the Compound, a chemical equivalent, a salt, or a prodrug thereof as an active ingredient, in finished package form suitable for distribution to end users.

“RTU Contractor” shall mean a third party under contract with RTU in accordance with Section 2.3 of this Agreement to conduct any portion of Manufacturing and/or Packaging for which RTU is responsible under this Agreement.

“Sample(s)” shall mean the samples of the Product for promotional use.

Article 2 SUPPLY AND PURCHASE OBLIGATIONS OF THE PARTIES

2.1 Supply and Purchase Obligations . During the term of this Agreement, Takeda agrees to purchase all its demand on the Product exclusively from RTU, Takeda’s requirements for the Product and Samples for the Initial Territory in accordance with the terms and conditions set forth in this Agreement.

2.2 Product . Subject to the terms and conditions of this Agreement, RTU shall Manufacture, Package and supply Takeda with entire requirement of the Product and Samples of Takeda, or if applicable Takeda Affiliates or its sub-licensee(s), in a timely manner according to forecasted demands of Takeda in the Initial Territory. Except as provided in Article 8, Takeda agrees to purchase its requirements for the Product and Samples exclusively from RTU at the prices described in Article 3.

2.3 Subcontracts . RTU shall be responsible for Manufacturing and Packaging the Product and Sample at RTU’s own premises or by use of contractors selected by RTU. Any and all RTU Contractors shall have sufficient knowledge and expertise to carry out the Manufacture and/or Packaging, as the case may be, of the Product and Samples and sufficient capacity to meet the requirements of Takeda for the Product and Samples. Any such Manufacturing and/or Packaging by an RTU Contractor, however, shall not relieve RTU from

any of its obligations or covenants under this Agreement and/or the Supply Agreement. RTU shall inform Takeda and SPI of its contractor promptly after RTU’s appointment of its contractor.

2.4 Development Product . The Parties acknowledge that any Product to be used in connection with the conduct of clinical studies shall be provided to Takeda pursuant to the Collaboration and License Agreement.

Article 3 PRICE AND PAYMENT

3.1 Price for Product . The prices for the Manufacture, Packaging and supply of Product shall be:

     (a) the prices set forth in subsections 3.1(a)(i), (ii) and(iii), as applicable, until the earlier of (i) the [**] anniversary of the first Commercial Launch by Takeda (or, if applicable, Takeda Affiliates or its sub-licensee(s)) of any Product for the Initial Indications in the Initial Territory, or (ii) such time as the cumulative quantity of the Product (other than Samples and Product used for clinical studies) supplied to Takeda (or, if applicable, Takeda Affiliates or its sub-licensee(s)) reaches [**] capsules.

          (i) in the event NDA approval for the Product provides for BID dosing (i.e., intake twice daily) only, US$[**] (or US$[**] per capsule) for [**] of the total quantity of Product purchased by Takeda and JPY Equivalent of US$[**] (or US$[**] per capsule) for the remaining [**] of such total quantity;

          (ii) in the event NDA approval for the Product provides for QD dosing (i.e., intake once daily) only, US$[**] (or US$[**] per capsule) for [**] of the total quantity of Product purchased by Takeda and JPY Equivalent of US$[**] (or US$[**] per capsule) for the remaining [**] of such total quantity; and

          (iii) in the event NDA approval for the Product provides for both BID and QD dosing, then the price shall be determined by mutual agreement of the Parties (based on the ratio of BID and QD supplied to Takeda (or, if applicable, Takeda Affiliates or its sub-licensee(s)) within the range of US$[**] and US$[**] for [**] of the total quantity of Product purchased by Takeda and the JPY Equivalent of such determined price for the remaining [**] of such total quantity.

     (b) the price set forth in this subsection 3.1(b) after the earlier of (i) the [**] anniversary of the first Commercial Launch by Takeda (or, if applicable, Takeda Affiliates or its sub-licensee(s)) of any Product for the Initial Indications in the Initial Territory, or (ii) such time as the cumulative quantity of the Product (other than Samples and Product used for clinical studies) supplied to Takeda (or, if applicable, Takeda Affiliates or its sub-licensee(s)) reaches [**] capsules. Immediately following the occurrence of the applicable triggering event described in the prior sentence, the price shall be [**] percent ([**]%) of the Net Sales Revenue of the Product; provided, however, if only the QD dosage form (and nothing else) is Commercialized for the Initial Indications, then the price shall not exceed US$[**] (or US$[**] per capsule). In case there is a significant change in economic conditions beyond

the reasonable expectation and assumption, including those with regard to the Net Sales Revenue price of the Product, of the Parties as of the Effective Date, the Parties shall meet and discuss in good faith about the possibility of modifying such price.

3.2 Price for Samples .

     (a) The price for the Manufacturing and supply of Samples shall be US$[**], excluding Packaging costs. Takeda shall pay all reasonable direct costs (excluding any mark up) to Package the Samples.

     (b) RTU shall keep complete and accurate records of its Packaging costs for Sample in accordance with generally accepted accounting principles in Japan. Such records shall be maintained by RTU for a period of five (5) years. Not more frequently than once each year, Takeda, at its expense, shall have the right to conduct an examination or audit of said records of RTU in order to verify that amounts paid to RTU for Samples hereunder are correct. RTU shall cooperate fully with the auditor and to provide all reasonable access to records and employees necessary to promptly complete this audit. In the event any examination or audit of the records of RTU discloses an under- or overpayment hereunder, written notice of such fact, specifying the amount and basis of the under- or overpayment shall promptly be furnished to both parties by the auditor. In the event of an overpayment the amount thereof shall be credited against future amounts owed to RTU hereunder, or if there will be no such future amounts, RTU shall refund the overpayment to Takeda within [**] of such notice. In the event of an underpayment, Takeda shall pay the amount thereof to RTU within [**] after such disclosure.

3.3 Payment .

     (a) RTU shall submit invoices to Takeda for each shipment of Product and/or Samples shipped to Takeda (or, if applicable, Takeda Affiliates and/or its sublicensees). Such invoices shall be paid by Takeda within [**] after the date the relevant invoice is received or the date of shipment, whichever is later.

     (b) With regard to Product supplied at the price set forth in Section 3.1(b), Takeda shall pay to RTU each month a provisional price to be mutually and separately agreed upon by SPI and Takeda not later than [**] following the occurrence of the applicable triggering event described in subsection 3.1(b). If the Parties are unable to reach agreement on such provisional price, then the provisional price shall be [**]% of the Net Sales Revenue of the latest six months divided by 6. Within ninety (90) days following each calendar year beginning with the calendar year in which the price set forth in Section 3.1(b) becomes effective, Takeda shall submit to SPI and RTU a report stating its Net Sales Revenue for such calendar year (or for the portion of such year for which the price set forth in Section 3.1(b) is applicable) and the amount equal to [**] percent ([**]%) of such Net Sales Revenue. If Takeda’s payments of such provisional price for such calendar year (i) are less than [**]% of Net Sales Revenue, Takeda shall pay RTU the shortfall within fifteen (15) days of submitting such report, or (ii) exceed [**]% of Net Sales Revenue, RTU shall pay Takeda the excess amount within fifteen (15) days of receiving such report.

     (c) All payments hereunder shall be made as follows:

     (i) Payments for the Product whose prices are set forth in subsections 3.1(a) shall be made in United States Dollars for [**] of the quantity of the Product purchased by Takeda and in JPY for the remaining [**] of such total quantity whose price is calculated by using JPY Equivalent.

     (ii) Payments for the Product whose prices are set forth in subsection 3.1(b) and the Samples shall be made in United States Dollars. The exchange rates from local currency to United States Dollars shall be the exchange rates (buying rates of United States Dollars) at the time of each shipment published in The Wall Street Journal (or any substitute source mutually agreed to by the Parties).

3.4 Development Product . Pursuant to Section 4.2(b)(vii) of the Collaboration and License Agreement, the costs for any Product and/or placebo used in connection with the conduct of clinical studies shall be deemed to be included within Development costs and any such costs therefore shall be paid by SPI or Takeda as provided in the Collaboration and License Agreement. The Parties acknowledge the price [**] of such Product is U.S.$[**]. The price for any placebo [**] supplied by RTU for use in connection with the conduct of clinical studies shall be US $[**] equal to [**] percent ([**]%) of Product). RTU shall supply and Takeda and SPI shall purchase their entire requirements for the Product from RTU in the standard order quantities of standard case lots (i.e. [**] per lot). RTU shall keep the Product and placebo in appropriate condition until the Product and placebo are required for use.

Article 4 MANUFACTURING AND QUALITY

4.1 RTU manufacturing . RTU shall be responsible for Manufacturing, Packaging, storing and shipping the Product, Samples and placebo to be supplied to Takeda and/or SPI hereunder. The Product, Samples and placebo shall be Manufactured, Packaged, stored and shipped in accordance with the Manufacturing Specifications, Applicable Regulations and Market Authorizations. Each batch of the Product, Samples and placebo shipped to Takeda and/or SPI will include (i) a certificate of analysis confirming that the Product, Samples and/or placebo meets the then-current Manufacturing Specifications; and (ii) a certificate of release approval stating that the Product, Samples and/or placebo were Manufactured and/or Packaged in accordance with current good manufacturing and control practices.

4.2 Modifications . In case RTU wishes to modify its Manufacturing or Packaging processes and procedures and/or to change the facilities and/or site where the Product, Samples or Compound are Manufactured and/or Packaged, RTU shall provide to Takeda and SPI in writing the information and the reason therefore sufficiently in advance. RTU shall ensure that any such approved modifications or changes are in compliance with Applicable Regulations and the Market Authorizations, and that such changes do not affect the Manufacturing Specifications or do not result in any interruption of supply of Product and Samples to Takeda and SPI (or, if applicable, Takeda Affiliates and/or its sublicensees). If any such changes are made or are to be made that are substantial or will require an amendment to the Market Authorizations, RTU shall be responsible, at its expense, for obtaining any necessary or advisable amendments to the Market Authorizations.

4.3 Quality Control and Audit .

     (a)  Testing. RTU shall perform quality