Exhibit 10.1

TRANSITION SERVICES AGREEMENT

THIS TRANSITION SERVICES AGREEMENT (this “Agreement”) is dated as of this 30th day of April, 2004, by and between PHARMACOPEIA, INC., a Delaware corporation (“Pharmacopeia”), and ACCELRYS INC., a Delaware corporation and a wholly owned subsidiary of Pharmacopeia (Pharmacopeia and Accelrys Inc. are referred to herein collectively as “Accelrys”), on the one hand, and PHARMACOPEIA DRUG DISCOVERY, INC., a Delaware corporation (“PDD”), on the other hand.  Each of Accelrys and PDD is sometimes hereinafter referred to as a “Party” and together as the “Parties.”

WHEREAS, the Parties have entered into a Master Separation and Distribution Agreement (the “Distribution Agreement”) pursuant to which Pharmacopeia has agreed to distribute to its stockholders all of the outstanding shares of common stock of PDD (the “Distribution”);

WHEREAS, Pharmacopeia and Accelrys Inc., on the one hand, and PDD, on the other hand, have historically provided or shared, and currently provide or share, certain services to or with each other;

WHEREAS, in recognition of the historic and current relationship between the businesses, PDD is interested in receiving certain services from Accelrys, and Accelrys is interested in providing such services to PDD, during a transition period commencing on the date of the Distribution (the “Distribution Date”); and

WHEREAS, in recognition of the historic and current relationship between the businesses, Accelrys also is interested in receiving certain limited services from PDD, and PDD is interested in providing such services to Accelrys, during such transition period;

NOW, THEREFORE, in consideration of the mutual covenants and agreements, and upon the terms, and subject to the conditions, hereinafter set forth, the Parties hereby agree as follows:

Article 1                SERVICES

1.1.          Provision of Services .  During the Transition Period (as defined below), subject to the terms and conditions of this Agreement, (a) Accelrys agrees to provide to PDD and PDD agrees to receive from Accelrys the services described in Exhibit A hereto (each, an “Accelrys Service” and together, the “Accelrys Services”), and (b) PDD agrees to provide to Accelrys and Accelrys agrees to receive from PDD the services described in Exhibit B hereto (each, a “PDD Service and together, the “PDD Services”).  Each Accelrys Service and PDD Service (as applicable, a “Service”) shall be provided in good faith and at a level and quality comparable to that performed by Accelrys or PDD, as applicable, prior to the date of this Agreement, unless the Parties otherwise agree in writing.  Each of Exhibit A and Exhibit B hereto is incorporated into and constitutes a part of this Agreement.

1.2.          Consideration for Services .

a.     In consideration of the mutual covenants, agreements, undertakings, representations and warranties of the Parties set forth in the various agreements entered into in connection with the Distribution, including, without limitation, the Distribution Agreement and the agreements referenced therein, Accelrys and PDD expressly agree that, except to the extent specifically set forth in Exhibit A hereto, no fee shall be payable by PDD to Accelrys in exchange for or in consideration of the provision by Accelrys of any Accelrys Service and no fee shall be payable by Accelrys to PDD in exchange for or in consideration of the provision by PDD of any PDD Service.

b.     The Parties also agree to the Service acquisition and funding arrangements set forth on Exhibit C hereto, which is incorporated into and constitutes a part of this Agreement.

1.3.          Access .  Each of PDD and Accelrys will make available to the other Party all information and materials reasonably requested by such other Party to enable it to provide the Accelrys Services and the PDD Services, respectively.  Each of PDD and Accelrys will provide the other Party with reasonable access, upon reasonable prior notice, to its premises to the extent necessary for the purpose of providing the relevant Services.

1.4.          Independent Contractors .  In performing any service on behalf of the other Party, each of PDD and Accelrys will act under this Agreement solely as an independent contractor, and not as an agent of the Party for which the applicable Services are performed.

1.5.          Additional Resources Resulting From Changes in Business .  If it is necessary for either Accelrys or PDD to increase staffing or acquire equipment or make any investments or capital expenditures to accommodate an increase in the use of any Service beyond the level of use of such Service prior to the Distribution Date, as a result of an increase in volume of the business or a change in the manner in which the business is being conducted, such Party will inform the other Party in writing of such increase in staffing level, equipment acquisitions, investments or capital expenditures before any such cost or expense is incurred.  Upon mutual agreement of the Parties acting in good faith as to the necessity of any such increase, the Party to receive such Service will advance to the Party to provide the Service an amount equal to the actual costs and expenses to be incurred in connection therewith.  If such mutual agreement is not reached, the obligation of the Party required hereunder to furnish or cause to be furnished such Service will be limited to the level of use of such Service in effect prior to the proposed increase.

1.6.          Cooperation .  The Parties will use good faith efforts to reasonably cooperate with each other in all matters relating to the provision and receipt of Services.  Such cooperation will include seeking or applying for all consents, licenses or approvals necessary to permit each Party to perform its obligations hereunder.  The Parties will, for a period of five years after the Distribution Date, maintain documentation supporting the information contained in the Exhibits hereto and cooperate with each other in making such information available as needed, subject to appropriate confidentiality requirements.

1.7.          Disclaimer of Warranty .  EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE SERVICES TO BE PROVIDED UNDER THIS AGREEMENT ARE FURNISHED AS IS, WHERE IS, WITH ALL FAULTS AND WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE.

Article 2                TERM OF SERVICES

2.1.          Transition Period; Early Termination .  The provision of Services will commence on the Distribution Date and will terminate no later than the first anniversary of the Distribution Date (such period being referred to herein as the “Transition Period”), unless earlier terminated by the Party receiving the Service(s) or extended by mutual written agreement of the Parties.  In this connection, any Service may be cancelled or reduced in amount or scope by the recipient of the Service upon its provision of advance written notice thereof to the Service provider.

Article 3                LIABILITIES

3.1.          Consequential and Other Damages .  No provider of any Service hereunder will be liable to any person, whether in contract, tort (including negligence and strict liability) or otherwise, but excluding gross negligence, willful misconduct or bad faith, in connection with the provision of any

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Service pursuant to this Agreement, for any special, indirect, incidental or consequential damages whatsoever which in any way arise out of, relate to or are a consequence of the performance or nonperformance by such Service provider hereunder or the provision of, or failure to provide, any Service hereunder, including with respect to loss of profits, business interruptions or claims of customers (other than, with respect to customers, the Service recipient in its capacity as a customer of the Service provider).

3.2.          Limitation of Liability .  Except as set forth in this Agreement (including, without limitation, Exhibits A and C hereto), the liability of any provider of Services with respect to this Agreement or any act or failure to act in connection herewith (including, but not limited to, the performance or breach hereof, but excluding gross negligence, willful misconduct or bad faith in connection with the provision of or failure to provide any Service pursuant to this Agreement), or from the sale, delivery, provision or use of any Service provided under or covered by this Agreement, whether in contract, tort (including negligence and strict liability) or otherwise, will be limited to the obligation to re-perform the Service as contemplated by Section 3.3 below.

3.3.          Obligation To Re-perform .  In the event of any breach of this Agreement by any provider of Services with respect to the provider’s obligation hereunder to provide any Service (which breach such Service provider can reasonably be expected to remedy through the re-performance of the Service in a commercially reasonable and timely manner), the Service provider will promptly correct in all material respects such breach or re-perform in all material respects such Service, subject to Section 3.2, at the request of the recipient of the Service and at the expense of the Service provider.  To be effective, any such request by a recipient of Services must be in a written notice that specifies in reasonable detail the particular error, defect or breach and be delivered to the Service provider no more than sixty (60) days from the date such Service was provided.  Notwithstanding anything to the contrary contained in this Agreement (including, without limitation, this Section 3.3 and Section 3.2 above), nothing contained in this Agreement shall be construed to limit PDD’s ability to utilize the Services Fund to secure Services or acquire assets under the circumstances set forth in Exhibit C hereto

3.4.          Release and Indemnity .  Except as specifically set forth in this Agreement, PDD hereby releases Accelrys and each of Accelrys’ emp