CONFIDENTIAL TREATMENT REQUEST

CLINICAL TRIAL SPONSORED RESEARCH AGREEMENT

This CLINICAL TRIAL SPONSORED RESEARCH AGREEMENT (this “ Agreement ”) is made effective as of December 5, 2008 (the “ Effective Date ”), by and between PALATIN TECHNOLOGIES, INC., a Delaware corporation having an address of Cedar Brook Corporate Center, 4C Cedar Brook Drive, Cranbury, New Jersey 08512 (“ Palatin ”) and ASTRAZENECA AB, a company incorporated in Sweden under no. 556011-7482 with offices at S-151 85 Södertälje, Sweden (“ AstraZeneca ”).

Recitals

(A)     WHEREAS, AstraZeneca and Palatin are parties to that certain Research Collaboration and License Agreement effective as of January 30, 2007 and amended effective as of June 27, 2008 (collectively, the “ License Agreement ”);

(B)     WHEREAS, as part of the License Agreement, Palatin inter alia granted to AstraZeneca a license to the Licensed Patents and Additional Licensed Patents and a License to certain Compounds and Additional Compounds for use within the Licensed Field (all as capitalized terms are defined in the License Agreement);

(C)     WHEREAS, Palatin is ***;

(D)     WHEREAS, AstraZeneca has determined that it is in its best interests to have ***; and

(E)     WHEREAS, the Parties, in view of the above, wish to enter into the Agreement on the terms set forth herein.

INFORMATION MARKED “***” IS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER RULE 24b-2 Agreement

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

1       Definitions

Unless otherwise specifically provided in this Agreement, the following terms shall have the following meanings:

1.1      “ Affiliate ” means, with respect to a Person, any Person that Controls, is Controlled by or is under common Control with such first Person. For purposes of this definition only, “ Control ” means (a) to possess, directly or indirectly, the power to direct the management or policies of a Person, whether through ownership of voting securities or by contract relating to voting rights or corporate governance, or (b) to own, directly or indirectly, more than fifty percent (50%) of the outstanding voting securities or other ownership interest of such Person.

1.2      “ Agreement ” has the meaning set forth in the preamble of this Agreement.

1.3      “ Applicable Law ” means the federal state and local laws, rules and regulations (as may be amended from time to time) applicable to the conduct of the Study, including without limitation (i) the United States Food, Drug and Cosmetic Act, as amended, and any rules and regulations promulgated thereunder, (ii) Title 21 Code of Federal Regulations ( “CFR” ) Parts 50, 54, 56 and 312, and (iii) all other applicable United States Food and Drug Administration ( “FDA” ) regulations and guidance (including without limitation, those with respect to standards of Good Clinical Practice (GCP) and adverse event reporting).

1.4      *** and any product in a form suitable for applications for human use that contains the compound as the sole active ingredient.

1.5      “ Calendar Quarter ” means each successive period of three (3) calendar months commencing on 1st January, 1st April, 1st July and 1st October.

1.6      “ Calendar Year ” means each successive period of twelve (12) calendar months commencing on 1st January.

1.7      “ Completion Date ” means the date of acceptance of the Final Study Report by AstraZeneca. The Final Study Report *** unless AstraZeneca prior to such date advises Palatin in writing of specific objections to or deficiencies in the Final Study Report, in which event ***.

1.8      “ Effective Date ” means the date as set forth in the preamble to this Agreement.

1.9      “ Existing Clinical Data ” means pre-clinical and clinical data relating to *** the Effective Date.

1.10      “ Existing CMC Data ” means chemistry, manufacturing and controls protocols and data *** the Effective Date.

1.11      “ FDA ” means the United States Food and Drug Administration and any successor agency thereto.

1.12      “ Final Study Report ” means the final report in respect of the Study written by or on behalf of Palatin and summarising the results of the Study as more particularly described in Schedule 1.12

1.13      “ FTE ” means the equivalent of one (1) professional staff member being at least a graduate or a similarly qualified employee or contract employee of Palatin having the requisite skills to fulfil Palatin’s obligations under this Agreement and devoting the equivalent hours of a full time employee. For purposes of this Agreement, “full time” shall mean *** as determined in accordance with Palatin’s regular project hour reporting system. An FTE shall be ***.

1.14      “ FTE Rate ” means the price of one (1) FTE per single Calendar Year. The FTE Rate shall ***. The FTE Rate reflects the fully burdened costs for an FTE. AstraZeneca shall not be responsible for any Palatin *** incurred in pursuit of the Study and services rendered by Palatin under this Agreement, above and beyond the FTE Rate, or for *** but shall be responsible for ***.

1.15      “ Good Clinical Practice ” or “ GCP ” shall have the meaning defined by the ICH Harmonised Tripartite Guideline for Good Clinical Practice, at all times in its most recent version, and in 21 CFR Parts 50, 54, 56, and 312.

1.16      “ Good Manufacturing Practice ” or “ GMP ” means the principle of good manufacturing practice in respect of medicinal products for human use and investigational medicinal products for human use as required by Applicable Law.

1.17      “ Health Authority ” means the FDA and any applicable supra-national, federal, national, regional, state, provincial or local regulatory agency, department, bureau, commission, council or other government entity regulating or otherwise exercising authority with respect to *** or otherwise has power to regulate the conduct of the Study at a Study site or to inspect a Study site.

1.18      “ IND ” means an investigational new drug application filed with the FDA for authorisation to commence human clinical trials in the U.S. as defined in 21 CFR Part 312.

1.19      “ Indirect Taxes ” means value added taxes, sales taxes, consumption taxes and other similar taxes.

1.20      “ Informed Consent ” has the meaning set forth in 21 CFR Part 56.

1.21      “ Informed Consent Materials ” means the information to be provided to potential Subjects in the Study to secure their Informed Consent, including information about any compensation being provided to Subjects for their participation in the Study, pursuant to 21 CFR Part 56.

1.22      “ Institutional Review Board ” or “ IRB ” means an independent body, institutional, regional, national or supranational committee or review board as defined in 21 US CFR Part 56, whose responsibility it is to ensure the protection of rights, safety and well-being of human subjects in a clinical study and responsible for, among other things, reviewing and approving/providing opinion on, the Study Protocol and amendments, subject recruitment materials, methods and Informed Consent Materials.

1.23      “ Investigational Product ” means ***, which is studied or tested in the Study.

1.24      “ Investigator ” shall have the meaning set forth in Section 7.1.

1.25      “ Investigator’s Brochure ” means the compilation of all relevant clinical and non-clinical information and data on the Investigational Product.

1.26      “ JPT ” shall have the meaning set forth in Section 5.1.

1.27      “ License Agreement ” has the meaning set forth in the recitals of this Agreement.

1.28      “ Palatin Clinical Staff ” shall have the meaning set forth in Section 2.3.

1.29      “ Parties ” means AstraZeneca and Palatin and “Party” means either of AstraZeneca or Palatin.

1.30      “ Payments ” has the meaning set forth in Section 10.1.

1.31      “ Person ” means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, incorporated association, joint venture or similar entity or organization, including a government or political subdivision, department or agency of a government.

1.32      “ Regulatory Documentation ” means all protocols, including the Study Protocol, applications, registrations, licenses, authorisations and approvals, all correspondence submitted to or received from FDA or other Health Authorities (including minutes and official contact reports relating to any communications with FDA or other Health Authorities) and all supporting documents and all clinical results and tests, relating to use of Investigational Product in the Study.

1.33      “ Researchers ” shall mean all researchers, experts and other staff engaged by Palatin in the conduct of the Study, including the Palatin Clinical Staff and the Investigators.

1.34      “ Results ” means inventions, discoveries, know-how, data, documentation, reports, materials, writings, techniques and other information, recorded in any form, that are discovered, conceived or otherwise generated through the Study by Palatin or any of the Researchers (other than AstraZeneca).

1.35      “ Site ” shall have the meaning set forth in Section 7.1.

1.36      “ SMC ” shall have the meaning set forth in Section 6.1.

1.37      “ Study ” means ***, all as described in the Study Plan.

1.38      “ Study Documentation ” means all records, accounts, notes, reports and data, collected, generated or used in connection with the Study, whether in written, electronic, optical or other form, including all recorded original observations and notations of clinical activities such as case report forms and all other reports and records necessary for the evaluation and reconstruction of the Study.

1.39      “ Study Efficacy Data ” means Results from the Study relating to ***.

1.40      “ Study Plan ” means the plan attached hereto as Schedule 1.40 , outlining the Study and each Party’s undertakings and obligations, including the allocation of FTEs by Palatin and Third Party subcontracts in relation thereto as the same may be amended from time to time in accordance with Section 6.2.

1.41      “ Study Plan Budget ” shall mean the budget for the Study attached hereto as Schedule 1.41 , as it may be amended from time to time by written agreement of both Parties.

1.42      “ Study Protocol ” means the definitive protocol for the Study included within an IND or other Regulatory Documentation (including but not limited to in the event that the study is initiated by filing a protocol or other Regulatory Documentation under an existing IND held by Palatin) submitted by Palatin to the FDA to commence the Study, provided that such submission shall be made only following written approval of the SMC by authorized representatives of both Parties, it being understood that Sections 6.4.1. and 6.4.2. do not apply to such approval by the SMC.

1.43      “ Study Results ” means all Study Safety Data, all Study Efficacy Data and all other Results, collectively.

1.44      “ Study Safety Data ” means Results from the Study relating *** or any reportable experience pursuant to 21 CFR § 312.32 but excluding ***.

1.45      “ Study Year ” means each successive period of twelve (12) calendar months ending on the last day of each successive anniversary of the Calendar Quarter which includes the Effective Date, it being understood that the initial Study Year may be less than twelve (12) calendar months.

1.46      “ Subject ” means a person recruited to participate in the Study.

1.47      “ Term ” means the period beginning on the Effective Date and continuing until the Agreement terminates in accordance with Article 11

1.48      “ Third Party ” means any Person not including the Parties or the Parties’ respective Affiliates.

1.49      “ U.S. ” means the United States of America, including its territories, possessions and Puerto Rico.

2      ***

2.1       Sponsorship. Palatin shall be ***. Any reference to “sponsor” in this Agreement or a Schedule shall be ***.

2.2       Conduct of Study. Palatin will conduct the Study in the U.S. in accordance with this Agreement, the Study Plan, the Study Protocol and the Investigator’s Brochure, in good scientific manner and in compliance with all Applicable Law, including good laboratory practices, Good Manufacturing Practices and Good Clinical Practices, as well as any condition required by a Health Authority or an IRB. Palatin shall accomplish its responsibilities under this Agreement efficiently and expeditiously and, in particular, conduct the Study within agreed time schedules.

2.3       Facilities and Key Personnel . Palatin shall provide facilities, equipment and manpower that are reasonably necessary to carry out the work undertaken by Palatin under this Agreement at the Sites and such other facilities as may be set out in the Study Plan. The clinical staff designated by Palatin listed on Schedule 2.3 hereto (the “ Palatin Clinical Staff ”) shall be responsible for all Study activities undertaken by Palatin and shall supervise the work of all personnel and Third Party subcontractors engaged by Palatin in the Study. The Palatin Clinical Staff shall serve as the primary contact for AstraZeneca on all matters related to the Study, Study Plan and Study Protocol.

2.4       Subcontracting . Palatin shall, as between the Parties, be solely responsible for the conduct of the Study and completion of the activities set forth in the Study Plan. To the extent set forth in the Study Plan or otherwise explicitly approved by AstraZeneca in writing, Palatin will engage a Third Party contract research organization (“ CRO ”) or other Third Party subcontractors to carry out a portion of Study activities. For the avoidance of doubt, Palatin shall, when using such Third Party subcontractor, ensure that such Third Party subcontractor complies with the provisions of Articles 2 and 3, Sections 4.3., 4.4. and 4.5. and Article 7 (as applicable) and, notwithstanding anything else set forth herein, Palatin shall ***. Any permitted Third Party subcontract shall be subject to the applicable terms and conditions of this Agreement. Any fees or costs due to any Third Party subcontractor ***. AstraZeneca shall reimburse Palatin for such fees or costs to ***. Palatin shall invoice and AstraZeneca shall pay such reimbursement as provided in Section 4.6.

3       Reports and Inspection Rights

3.1      In addition to providing AstraZeneca with the Study Results in accordance with Section 8.1., Palatin shall submit written progress reports to AstraZeneca *** during the conduct of the Study, which reports shall include, but shall not be limited to, a summary of all work done and Study Results achieved during the relevant period.

3.2      Palatin shall submit ***, as *** is specified in the Study Plan, upon Palatin’s receipt thereof ***, it being understood that Sections 6.4.1. and 6.4.2. do not apply to such approval by the SMC. Notwithstanding anything else set forth herein, Palatin shall diligently undertake to have *** Date, provided that such *** may be extended by unanimous decision of the SMC, it being understood that Sections 6.4.1. and 6.4.2. do not apply to such approval by the SMC.

3.3      Palatin shall submit ***, it being understood that Sections 6.4.1. and 6.4.2. do not apply to such approval by the SMC.

3.4      Palatin shall submit the ***, it being understood that Sections 6.4.1. and 6.4.2. do not apply to such approval by the SMC.

3.5      Palatin shall, during the conduct of the Study and for *