Exclusive License And Research Collaboration Agreement

Execution Copy

***Text Omitted and Filed Separately

with the Securities and Exchange Commission.

Confidential Treatment Requested

Under 17 C.F.R. Sections 200.80(b)(4)

and 240.24b-2.

EXCLUSIVE LICENSE AND RESEARCH COLLABORATION AGREEMENT

between

IDENIX PHARMACEUTICALS, INC.

and

METABASIS THERAPEUTICS, INC.






EXCLUSIVE LICENSE AND RESEARCH COLLABORATION AGREEMENT

THIS EXCLUSIVE LICENSE AND RESEARCH COLLABORATION AGREEMENT (the "Agreement" ) is entered into as of October 24, 2006 (the "Effective Date" ) by and between IDENIX PHARMACEUTICALS, INC. , a Delaware corporation ( "Idenix" ), having an address of 60 Hampshire Street, Cambridge, Massachusetts 02139, and METABASIS THERAPEUTICS, INC. , a Delaware corporation ( "Metabasis" ), having an address of 11119 North Torrey Pines Road, La Jolla, California 92037. In this Agreement, Idenix and Metabasis are each referred to individually as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS , Metabasis has developed Metabasis Technology (as hereinafter defined) for the discovery and optimization of liver targeted compounds and Idenix owns Idenix Nucleosides (as hereinafter defined);

WHEREAS , Idenix and Metabasis desire to enter into a business relationship to identify and develop the Collaboration Compounds (as hereinafter defined) and sell Products upon the terms and conditions set forth herein; and

WHEREAS , Idenix desires to obtain licenses under Metabasis Technology and Metabasis92 interest in Collaboration Technology and Joint Technology (as each such term is hereinafter defined) to develop and commercialize Products in the Field (as hereinafter defined), and Metabasis desires to grant such licenses, in each case upon the terms and conditions set forth herein.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, the Parties hereby agree as follows:

1. DEFINITIONS

Unless specifically set forth to the contrary herein, the following terms, whether used in the singular or plural, shall have the respective meanings set forth below. References to "Articles", "Sections" and "subsections" in this Agreement shall be to Articles, Sections and subsections respectively, of this Agreement unless otherwise specifically provided:

1.1 [***] shall have the meaning provided in Section 12.6(a).

1.2 "Affiliate" shall mean any company or entity controlled by, controlling, or under common control with a Party. For the purposes of this definition, the term "control" (including, with correlative meanings, the terms "controlled by" and "under common control with") as used with respect to a Party means (a) in the case of a corporate entity, direct or indirect ownership of voting securities entitled to cast more than fifty percent (50%) of the votes in the election of directors or (ii) in the case of a non-corporate entity, direct or indirect ownership of more than fifty percent (50%) of the voting securities with the power to direct the management and policies of such entity.

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1.3 "Collaboration Compound" shall mean a chemical entity that is synthesized solely by a Party or jointly by the Parties (or on behalf of a Party or the Parties) in the course of the Research Program during the Research Term that [***].

1.4 "Collaboration Know-How" shall mean any Information or Invention, to the extent directed to a Collaboration Compound or a method of making or using a Collaboration Compound, generated or conceived solely by a Party (or on its behalf) or jointly by the Parties (or on their behalf) in the course of the Research Program during the Research Term.

1.5 "Collaboration Patents" shall mean Patents first filed after the Effective Date with claims or portions thereof, to the extent that they describe or claim a Collaboration Compound or a method of making or using a Collaboration Compound, where such Invention is conceived solely by a Party (or on its behalf) or jointly by the Parties (or on their behalf) in the course of the Research Program during the Research Term; provided that any Patent with the same disclosure as an Idenix Patent described in Section 1.22(a) or a Metabasis Patent described in Section 1.38(a), such as a renewal, division, continuation (in whole), or request for continued examination (RCE), reissue, reexamination or the like, will be included in Section 1.22(a) or Section 1.38(a), as applicable, rather than this Section 1.5.

1.6 "Collaboration Technology" shall mean Collaboration Know-How and Collaboration Patents.

1.7 "Combination Therapy" shall mean a fixed dose product containing more than one (1) active pharmaceutical ingredient. [***]

1.8 "Committee" shall mean the joint research committee established to facilitate the Research Program as more fully described in Section 2.1.

1.9 "Confidential Information" shall have the meaning given such term in Section 7.1.

1.10 "Confidentiality Agreement" shall mean the confidentiality agreement, dated March 29, 2006, by and between the Parties.

1.11 "Control" shall mean, with respect to any Information, Patent or other intellectual property right, possession by a Party of the ability (whether by ownership, license or otherwise) to grant access, a license or a sublicense to such Information or intellectual property right without violating the terms of any agreement or other arrangement with any Third Party (before taking into account the effect of any licenses granted by such Party to the other Party under this Agreement but after taking into account the effect of Section 9.1(a)). For the avoidance of doubt, any Information, Patent or other intellectual property right that a Party licenses under this Agreement to the other Party shall not be deemed to be under the "Control" of such other Party.

1.12 "Development Candidate" shall have the meaning provided in Section 4.1.

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1.13 "Failed Development Candidate" shall have the meaning provided in Section 5.4.

1.14 "Field" shall mean the treatment of chronic hepatitis C viral infections in humans.

1.15 "First Commercial Sale" shall mean, with respect to any Product, the first sale in a country after the governing health regulatory authority of such country has granted Regulatory Approval. For purposes of clarification, the first sale for end use or consumption of a Product in a country after conditional approval has been granted will constitute a First Commercial Sale for purposes of this Agreement.

1.16 "FTE" shall mean the equivalent of a full-time scientist92s work time over a [***] (including normal vacations, sick days and holidays).

1.17 "HepDirect Technology" shall mean (a) (i) any and all [***] and/or (ii) any method of making or using any of the foregoing (this clause (a), " HepDirect Base Technology "); which (b) [***].

1.18 "Idenix Core Patent" shall mean any Patent listed in Exhibit A .

1.19 "Idenix Indemnitee" shall have the meaning provided in Section 11.2.

1.20 "Idenix Know-How" shall mean any (a) Information or Invention, to the extent directed to any Idenix Nucleoside or Collaboration Compound or a method of making or using an Idenix Nucleoside or Collaboration Compound, that is Controlled by Idenix as of the Effective Date, (b) Information or Invention, to the extent directed to any Idenix Nucleoside or a method of making or using an Idenix Nucleoside, that first becomes Controlled by Idenix during the Research Term, and (c) Information or Invention, to the extent directed to a Collaboration Compound or a method of making or using a Collaboration Compound, that first becomes Controlled by Idenix after the Research Term but prior to the First Commercial Sale of any Product that contains such Collaboration Compound. Notwithstanding the foregoing, subsection (b) does not include any Information or Invention to the extent directed to a Collaboration Compound or a method of making or using a Collaboration Compound. For purposes of clarity, Idenix Know-How does not include Metabasis Know-How.

1.21 "Idenix Nucleoside" shall mean either of the [***] nucleosides, the [***] is specifically identified on Schedule I to the Research Plan as of the Effective Date and [***] shall be specified by Idenix in writing to Metabasis within [***] after the Effective Date, subject to written approval by Metabasis, not to be unreasonably withheld or delayed, and Schedule I to the Research Plan shall be automatically amended to include [***].

1.22 "Idenix Patents" shall mean (a) Patents with claims or portions thereof, to the extent directed to any Invention that is an Idenix Nucleoside or Collaboration Compound or a

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method of making or using an Idenix Nucleoside or Collaboration Compound, where such Patents are Controlled by Idenix as of the Effective Date, (b) Patents with claims or portions thereof, to the extent directed to any Invention that is an Idenix Nucleoside or a method of making or using an Idenix Nucleoside, where such Invention first becomes Controlled by Idenix during the Research Term (provided that any such Patent with the same disclosure as a Patent described in subsection (a), such as a renewal, division, continuation (in whole), or request for continued examination (RCE), reissue, reexamination or the like, will be included in subsection (a) rather than subsection (b)) and (c) Patents with claims or portions thereof, to the extent directed to any Invention that is a Collaboration Compound or a method of making or using a Collaboration Compound, where such Invention first becomes Controlled by Idenix after the Research Term but prior to the First Commercial Sale of any Product that contains such Collaboration Compound. Notwithstanding the foregoing, subsection (b), does not include any claims of such Patents or portions thereof to the extent directed to any such Invention that is a Collaboration Compound or a method of making or using a Collaboration Compound. For purposes of clarity, Idenix Patents do not include Metabasis Patents. The Idenix Patents existing on the Effective Date are listed on Exhibit C .

1.23 "Idenix Technology" shall mean the Idenix Know-How and Idenix Patents.

1.24 "IND" shall mean an Investigational New Drug application, Clinical Study Application, Clinical Trial Exemption, or similar application or submission for approval to conduct human clinical investigations filed with or submitted to a Regulatory Authority in conformance with the requirements of such Regulatory Authority.

1.25 "Information" shall mean all tangible and intangible (a) techniques, technology, practices, trade secrets, inventions (whether patentable or not), methods, processes of manufacture, intermediates, dosing regimens, formulations, knowledge, know-how, skill, experience, test data and results (including pharmacological, toxicological and preclinical and clinical test data and results), analytical and quality control data, results or descriptions, software and algorithms and (b) compositions of matter, cells, cell lines, assays, animal models and physical, biological or chemical material.

1.26 "Invention" shall mean any invention, conception, actual reduction to practice, constructive reduction to practice, process, method, use, composition of matter, article of manufacture, discovery or finding, whether or not patentable.

1.27 "Joint Invention" shall mean any Invention conceived jointly by the Parties (or on their behalf) in the course of the Research Program during the Research Term; but excluding, in each case, Collaboration Technology, Idenix Technology and Metabasis Technology.

1.28 "Joint Patents" shall mean Patents claiming any Joint Invention.

1.29 "Joint Patent Counsel" shall have the meaning provided in Section 9.2(d)(i).

1.30 "Joint Technology" shall mean Joint Inventions and Joint Patents.

1.31 "Losses" shall have the meaning provided in Section 11.1.

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1.32 "Major European Market " shall mean: (a) any [***] of the following countries: [***]; or (b) [***].

1.33 "Major Market" shall mean the [***].

1.34 "Materials" shall have the meaning provided in Section 3.8.

1.35 "Metabasis Core Patents" shall mean any Patent listed in Exhibit B .

1.36 "Metabasis Indemnitee" shall have the meaning provided in Section 11.1.

1.37 "Metabasis Know-How" shall mean any (a) Information or Invention, to the extent directed to HepDirect Technology or Collaboration Compound or a method of making or using HepDirect Technology or a Collaboration Compound, that is Controlled by Metabasis as of the Effective Date and (b) Information or Invention, to the extent directed to HepDirect Technology or a method of making or using HepDirect Technology, that first becomes Controlled by Metabasis during the Research Term. Notwithstanding the foregoing, subsection (b) does not include any Information or Invention to the extent directed to a Collaboration Compound or a method of making or using a Collaboration Compound. For purposes of clarity, Metabasis Know-How does not include Idenix Know-How.

1.38 "Metabasis Patents" shall mean (a) Patents with claims or portions thereof, to the extent directed to any Invention that is HepDirect Technology or Collaboration Compound or a method of making or using HepDirect Technology or a Collaboration Compound, where such Patents are Controlled by Metabasis as of the Effective Date, and (b) Patents with claims or portions thereof, to the extent directed to any Invention that is HepDirect Technology or a method of making or using HepDirect Technology, where such Invention first becomes Controlled by Metabasis during the Research Term (provided that any such Patent with the same disclosure as a Patent described in subsection (a), such as a renewal, division, continuation (in whole), or request for continued examination (RCE), reissue, reexamination or the like, will be included in subsection (a) rather than subsection (b)). Notwithstanding the foregoing, subsection (b) does not include any claims of such Patents or portions thereof to the extent directed to any such Invention that is a Collaboration Compound or a method of making or using a Collaboration Compound. For purposes of clarity, Metabasis Patents do not include Idenix Patents. The Metabasis Patents existing on the Effective Date are listed on Exhibit D .

1.39 "Metabasis Technology" shall mean the Metabasis Know-How and Metabasis Patents.

1.40 "NDA" shall mean a New Drug Application (as more fully defined in 21 C.F.R. 314.5 et seq. ) and all amendments and supplements thereto filed with the FDA, or the equivalent application filed with any equivalent agency or governmental authority outside the United States of America (including any supra-national agency such as in the European Union), including all documents, data, and other information concerning a pharmaceutical product which are necessary for gaining Regulatory Approval to market and sell such pharmaceutical product.

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1.41 "Net Sales" shall mean, with respect to any Product, the gross invoiced sales price of such Product by Idenix and Sublicensees to Third Parties which are not Sublicensees (provided that, if any Sublicensee is the end user of such Product, the amount included in Net Sales shall be deemed to be the amount that would be billed to a Third Party end user in an arm92s length transaction), less the following deductions to the extent included in the gross invoiced sales price for such Product or otherwise directly paid or incurred by Idenix or Sublicensees with respect to the sale of such Product:

(a) normal and customary trade and quantity discounts, credits and allowances actually allowed and properly taken directly with respect to sales of such Product;

(b) amounts repaid or credited by reason of rejections, recalls, returns, rebates, government mandated rebates, and allowances;

(c) chargebacks and other amounts paid on sale or dispensing of such Product;

(d) retroactive price reductions that are actually allowed or granted;

(e) tariffs, duties, excise, sales, value-added or other taxes (other than taxes based on income);

(f) cash discounts for timely payment;

(g) delayed ship order credits;

(h) discounts pursuant to patient discount programs; and

(i) freight, shipping and insurance charges.

In the event a Product (for purposes of this paragraph, the "relevant Product") comprises a Development Candidate and an additional active pharmaceutical ingredient sold in a country in combination for use as a fixed-dose Product as a Combination Therapy, and both a Product comprising the Development Candidate as the sole active ingredient and a pharmaceutical product containing such additional active pharmaceutical ingredient as the sole active ingredient are sold separately in such country, the Net Sales for the relevant Product in such country shall be calculated by multiplying Net Sales in such country (as would otherwise be determined in accordance with this definition of "Net Sales" (i.e., without giving effect to this paragraph or the immediately following paragraph)) by the fraction A/(A+B), where A is the gross invoiced sales price in such country of the Product comprising the Development Candidate as the sole active ingredient (when sold separately from the Combination Therapy), and B is the gross invoiced sales price in such country of the pharmaceutical product comprising the additional active pharmaceutical ingredient as the sole active ingredient (when sold separately from the Combination Therapy). Notwithstanding the foregoing, the fractional adjustment set forth in this paragraph shall not apply (and the fractional adjustment and procedures in the immediately following paragraph shall apply instead) in the event actual sales of the separate pharmaceutical product comprising the additional active pharmaceutical ingredient as the sole active ingredient are not more than incidental in such country.

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In the event a Product (for purposes of this paragraph, the "relevant Product") comprises a Development Candidate and an additional active pharmaceutical ingredient sold in a country in combination for use as a fixed-dose Product as a Combination Therapy, and either a Product comprising the Development Candidate as the sole active ingredient or the pharmaceutical product comprising the additional active pharmaceutical ingredient as the sole active ingredient is not sold separately in such country, the Net Sales for the relevant Product in such country shall be calculated by multiplying Net Sales in such country (as would otherwise be determined in accordance with this definition of "Net Sales" (i.e., without giving effect to this paragraph or the immediately preceding paragraph)) by the fraction A/(A+B), where A is the fair market value in such country of the Product comprising the Development Candidate as the sole active ingredient (when or if it were (as applicable) sold separately from the Combination Therapy), and B is the fair market value in such country of the pharmaceutical product comprising the additional active pharmaceutical ingredient as the sole active ingredient (when or if it were (as applicable) sold separately from the Combination Therapy). For purposes of calculating the fraction specified in the immediately preceding sentence, Idenix shall make a written proposal to Metabasis, for its review and approval, of the fair market value of each component of such fraction, reasonably supported by written documentation. If the Parties are unable to reach agreement on such matters, the provisions of Section 12.6 shall apply.

For clarification purposes, there shall be no fractional adjustment in the calculation of Net Sales (i.e., no effect shall be given to the immediately preceding two paragraphs) with respect to any Product comprising a Development Candidate that is sold together or promoted as a combination with a separate pharmaceutical product (including any interferon) for co-administration.

1.42 "Notice Date" shall have the meaning provided in Section 12.6(b).

1.43 "Patents" shall mean (a) all patents, certificates of invention, applications for certificates of invention, priority patent filings and patent applications, including without limitation patent applications under the Patent Cooperation and the European Patent Convention, together with (b) any renewal, division, continuation (in whole or in part), or request for continued examination (RCE) of any of such patents, certificates of invention and patent applications, and any and all patents or certificates of invention issuing thereon, and any and all reissues, reexaminations, extensions, divisions, renewals, substitutions, confirmations, registrations, revalidations, revisions, and additions of or to any of the foregoing, and any foreign counterparts of any of the foregoing and any other patents and patent applications claiming priority back to any of the foregoing.

1.44 "Phase 1 Clinical Trial" shall mean a human clinical trial in any country that is carried out to obtain data that can be submitted to the FDA in satisfaction of the requirements of 21 CFR 312.21(a).

1.45 "Phase 2 Clinical Trial" shall mean a human clinical trial in any country that is carried out to: (i) determine efficacy and dose range; and (ii) obtain data that can be submitted to the FDA in satisfaction of the requirements of 21 CFR 312.21(b). Notwithstanding the foregoing, Phase 2 Clinical Trial shall not include a phase 1b/2a clinical trial that includes a treatment period less than twelve (12) weeks in length.

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1.46 "Phase 3 Clinical Trial" shall mean a pivotal human clinical trial in any country that is carried out to obtain data that can be submitted to the FDA in satisfaction of the requirements of 21 CFR 312.21(c).

1.47 "Process Chemistry Know-How" shall mean any Information or Invention, to the extent directed to a process chemistry improvement to HepDirect Technology, that first becomes Controlled by Idenix following receipt of the information with respect to a Development Candidate pursuant to Section 3.4 but prior to the First Commercial Sale of any Product that contains such Development Candidate.

1.48 "Process Chemistry Patents" shall mean Patents with claims or portions thereof, to the extent directed to any Invention that is a process chemistry improvement to HepDirect Technology, that first becomes Controlled by Idenix following receipt of the information with respect to a Development Candidate pursuant to Section 3.4 but prior to the First Commercial Sale of any Product that contains such Development Candidate.

1.49 "Process Chemistry Technology" shall mean Process Chemistry Know-How and Process Chemistry Patents.

1.50 "Product" shall mean any preparation in final form containing a Development Candidate for sale by prescription, over-the-counter or any other method.

1.51 "Project Leader" shall have the meaning provided in Section 2.5.

1.52 "Proof of Concept" shall have the meaning provided in Schedule II to the Research Plan.

1.53 "Proposed Resolution Deadline" shall have the meaning provided in Section 12.6(c).

1.54 "Regulatory Approval" shall mean any and all approvals (including price and reimbursement approvals, if required), licenses, registrations, or authorizations of any Regulatory Authority in a particular jurisdiction that are necessary for the manufacture, use, storage, import, transport and/or sale of a Product in such jurisdiction in accordance with applicable laws.

1.55 "Regulatory Authority" shall mean any national or supranational governmental authority, including, without limitation, the FDA and the EMEA, that has responsibility in any country or other regulatory jurisdiction over the development and/or commercialization of Products. For purposes of this Agreement, "FDA" shall mean the U.S. Food and Drug Administration or any successor agency, and "EMEA" shall mean the European Medicines Agency or any successor agency.

1.56 "Research Plan" means the plan (the initial form of which has been agreed upon in writing by the Parties as set forth in the letter agreement dated as of the Effective Date) that sets out the research work to be performed by Metabasis and Idenix in conducting the Research Program, as such plan may be amended or modified by the Committee or by mutual written agreement of the Parties as contemplated under this Agreement.

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1.57 "Research Program" shall mean the research activities undertaken by either or both of the Parties as set forth in Article 3 and the Research Plan.

1.58 "Research Term" shall mean the duration of the Research Program, and "Initial Research Term " and "Extended Research Term" shall have the respective meanings given such terms in Section 3.6(a).

1.59 "Royalty-Extending Patent" shall mean any Specific Claim if a license to such Specific Claim granted pursuant to Section 4.2(a)(iii) provides Idenix or its Sublicensee with market exclusivity for the applicable Development Candidate or Product and such market exclusivity is due solely to the license granted to such Specific Claim.

1.60 "Royalty Term" shall mean, in the case of any Product in any country, the period of time commencing on the First Commercial Sale of such Product in such country and ending upon the later of (a) [***] after the date of First Commercial Sale of such Product in such country, and (b) the expiration of the last to expire of (i) the Metabasis Patents, Idenix Patents, Collaboration Patents, or Joint Patents containing a Valid Claim that would, absent ownership of or a license to such Patent, be infringed by the use or sale of such Product or the Development Candidate therein or by the manufacture of such Product or the Development Candidate therein (if ownership of or a license to such a Patent containing a Valid Claim of method of manufacturing such Development Candidate or Product would provide market exclusivity for the applicable Product) or (ii) any Royalty-Extending Patents.

1.61 "Specific Claims" shall have the meaning provided in Section 4.2(a)(iii).

1.62 "Sublicensee" shall mean an Affiliate or Third Party to which Idenix has (a) sublicensed some or all of Metabasis Technology or Collaboration Technology or any Royalty-Extending Patent, or (b) licensed some or all of Idenix Technology or Joint Technology to develop, make, have made, use, sell, have sold, offer for sale or import Development Candidates and Products in the Field during the Term.

1.63 "Term" shall have the meaning provided in Section 10.1.

1.64 "Territory" shall mean worldwide.

1.65 "Third Party" shall mean an entity other than Idenix and its Affiliates, and Metabasis and its Affiliates.

1.66 "Third Party Patent" shall have the meaning provided in Section 5.5(b)(iii).

1.67 "Title 11" shall ...