Waiver, Release and Option Agreement for Taribavirin

Exhibit 10.2

Waiver, Release and Option Agreement for Taribavirin

This Waiver, Release and Option Agreement for Taribavirin (the “Agreement”) is entered into and made effective as of the latest date of signature appearing below (the “Effective Date”) by and between Valeant Pharmaceuticals International, a Delaware corporation having offices located at One Enterprise, Aliso Viejo, California 92656 (“Valeant”), Schering Corporation, a New Jersey corporation having offices located at 2000 Galloping Hill Road, Kenilworth, New Jersey 07033 (“Schering”) and Schering-Plough Ltd., a Swiss corporation having offices located at Weystrasse 20, 6000 Lucerne 6, Switzerland (together with Schering referred to herein as “SP”). (Each of SP and Valeant is referred to from time to time herein individually as a “Party” or collectively as the “Parties”.)

WHEREAS, SP and Valeant (as successor in interest to ICN Pharmaceuticals, Inc. and RibaPharm, Inc.) are parties to that certain Agreement, dated November 14, 2000, (the “November 2000 Agreement”) which grants SP certain rights of first and last refusal with respect to certain products being developed by Valeant and/or its Affiliates, and

WHEREAS, Valeant is developing a proprietary product known as Taribavirin (as defined below) and desires to grant exclusive licenses to develop and commercialize Taribavirin to one or more independent third parties, and

WHEREAS, Valeant desires, and SP is willing to grant, a waiver and release from all of SP’s rights of first and last refusal under the November 2000 Agreement with respect to Taribavirin on the terms and conditions set forth in this Agreement,

NOW, THEREFORE, in consideration of the above and the mutual covenants set forth in this Agreement and other valuable consideration the sufficiency of which is hereby acknowledged by the Parties, the Parties agree as follows:

1. Definitions . All capitalized terms used in this Agreement (whether in the singular or plural) shall have their respective meanings as set forth herein, including without limitation the following:

1.1 “Affiliate” shall mean, with respect to each Party, any entity that directly or indirectly controls, is controlled by, or is under common control with, such Party, where control means the direct or indirect ownership of more than fifty percent (50%) of the outstanding voting securities of an entity, or such other relationship as results in actual control over the management, assets, business and affairs of an entity.

1.2 “F&LR Rights” shall mean all of the rights, options and other interests granted to SP and its Affiliates under Sections 5.1 and 5.2 of the November 2000 Agreement.

1.3 “Japan License Agreement” shall have the meaning set forth in Section 3 of this Agreement.

1.4 “Japan Option” shall have the meaning set forth in Section 3 of this Agreement.

1.5 “Japan Option Term” shall mean the period beginning on the Effective Date and ending on the earlier of: (i) thirty (30) calendar days after [**]; or (ii) the date on which Schering notifies Valeant that SP is exercising the Japan Option.

1.6 “Taribavirin” shall mean the compound known as taribavirin, any solvates (including without limitation hydrates), acids, bases, esters, salts, isomers, stereoisomers, racemates, enantiomers, tautomers, polymorphs and crystalline forms of any of the forgoing. For the avoidance of doubt, [**] are excluded from the definition of Taribavirin.

1.7 “Territory” shall mean all of the countries and territories in the world except for Japan.

2. Waiver and Release of Rights . SP (acting on behalf of itself, its Affiliates and its and their successors in interest) hereby expressly and irrevocably waives and releases all rights, options and other interests held by SP and/or its Affiliates under the November 2000 Agreement with respect to Taribavirin, including without limitation the F&LR Rights as applied to Taribavirin. The Parties acknowledge and agree that on and after the Effective Date, and subject to Sections 3, 4 and 5 of this Agreement, Valeant and its Affiliates shall be free to license or otherwise dispose of any and all rights, title and interest with respect to Taribavirin in the Territory without any further obligations to SP and/or its Affiliates.

3. Japan Option Rights . Valeant hereby grants to Schering the irrevocable exclusive option during the Japan Option Term to obtain an exclusive license to develop and commercialize Taribavirin products in Japan (the “Japan Option” ).

4. Exercise of Japan Option . Schering shall have the right, exercisable in its sole discretion, to exercise the Japan Option rights at any time during the Japan Option Term by providing Valeant with written notice to that effect. Upon receipt of such notice, Valeant and Schering (or its designated Affiliate) shall promptly negotiate and enter into an exclusive license agreement for Taribavirin in Japan (the “Japan License Agreement” ). The Japan License Agreement shall expressly include the terms and conditions set forth in Appendix 1 (attached to this Agreement) and such other reasonable and customary terms and conditions (consistent with Appendix 1) that are typical for such a license agreement.

5. Access to Information . During the Japan Option Term, Valeant shall keep Schering reasonably informed as to the status of development of Taribavirin in the Territory by or on behalf of Valeant or its third party licensees. Schering shall have the right, exercisable at any time after [**] but prior to the expiration of the Japan Option Term, to conduct a full due diligence review of any and all data and information generated by or on behalf of Valeant and/or any of its Affiliates, licensees or partners, in connection with the development of Taribavirin products in the Territory. Upon request by Schering, Valeant shall provide, and shall ensure that its Affiliates, licensees and/or partners provide, Schering’s employees, consultants and/or representatives with reasonable access to such data and information as is necessary to enable Schering to complete such due diligence review. Following completion of such due diligence review, Valeant shall, upon request during the remainder of the Japan Option Term, provide Schering with (1) an update of any additional material information related to the safety or efficacy of Taribavirin that is generated, and (2) copies of any substantive communications with the FDA or EMEA regarding an NDA or other application for marketing authorization approval for Taribavirin in the Territory.

6. Confidentiality. Schering acknowledges and agrees that all information and data received or otherwise made available to it under Section 5 is confidential and proprietary information of Valeant and/or its licensees or partners. Schering hereby represents, warrants and covenants that Schering and its Affiliates will use such information and data for the sole purpose of evaluating its rights to exercise the Japan Option. Upon expiration of the Japan Option Term, Schering shall upon request promptly return to Valeant or, at the request of Valeant, destroy all information and data received under Section 5. This section 6 shall survive the termination or expiration of the Japan Option Term and the Term of this Agreement for any reason.

7. Exclusivity Covenant . Valeant hereby represents, warrants and covenants that during the Japan Option Term it shall not, and shall ensure that its Affiliates do not, license, sell, transfer, assign or convey to any third party or to otherwise encumber any rights or interests in or to Taribavirin in Japan (including without limitation (i) any related Japanese patents, patent applications or trademarks, and (ii) any rights in Japan to use trade secrets, data, know-how, information or other intellectual property rights to Taribavirin and/or the manufacture or use of Taribavirin) that are owned or controlled by Valeant and/or its Affiliates. Valeant shall ensure that any licenses or other rights or interests with respect to Taribavirin that it or its Affiliates grants or conveys to any third party during the Japan Option Term are consistent with the foregoing exclusivity covenants, the rights granted to Schering under Sections 3, 4 and 5 of this Agreement, and the terms and conditions for the Japan License Agreement that are set forth in Appendix 1.

8. Publicity . Schering and Valeant shall agree on the form, content and timing of any initial press releases concerning this Agreement which the Parties intend to issue as soon as practicable after the Effective Date. In the event that either Party intends to issue any subsequent press release, public announcements or other further public disclosures relating to this Agreement, the terms and conditions hereof, and/or the performance by the Parties hereunder, it shall provide the other Party with a copy of its proposed release or public disclosure for review and