License and Development Agreement

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Exhibit 10.3

Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

License and Development Agreement

By and between

Arrow International Limited
57 St. Christopher Street
Valletta, VLT 08, Malta

and

Sepracor Inc.
84 Waterford Drive
Marlborough, MA 01752
USA

This License and Development Agreement (this "Agreement"), dated as of April 30, 2008 is being entered into by and between Arrow International Limited, a Malta corporation having its principal office at 57 St. Christopher Street, Valletta, VLT 08, Malta, and its Affiliates (collectively referred to as "Arrow"), and Sepracor Inc., a corporation organized and existing under the laws of the State of Delaware and having its principal office at 84 Waterford Drive, Marlborough, MA 01752, USA ("Sepracor"). Each or both of Arrow and Sepracor are hereinafter referred to as "Party" or "Parties", as intended in the given context.

RECITALS

Sepracor wishes to commercialize inhalation pharmaceutical products containing Ciclesonide, alone (the "Standalone Product") and in combination with arformoterol (the "Combination Product").

Arrow controls certain Arrow Know-How and Arrow Patents relating to the Products, including technology essential to the Development of stable and acceptable preparations, suspensions, or other chemical mixtures of ingredient required to Develop a product containing a corticosteriod, including Ciclesonide.

Arrow and its Affiliates, such as Cobalt Pharmaceuticals Inc., is a high-volume, world-class manufacturer of pharmaceutical products. Through years of high-volume manufacturing of pharmaceutical products, including inhaled corticosteriods, Arrow has gained valuable proprietary know-how and technology relating to, among other things, the Development, analytical testing, and manufacture of stable suspension solutions for products containing a corticosteriod.

Sepracor has material capabilities, resources and experience in the development, clinical testing, regulatory approvals, commercialization, marketing and distribution of branded inhalation pharmaceutical products.

Arrow wishes to grant Sepracor an exclusive right and license under the Arrow Technology to Develop, distribute and Commercialize the Products.

Sepracor wishes to Develop and subsequently Commercialize the Products.

Arrow has the right to manufacture products pursuant to the Arrow Technology. The Parties do not intend that this Agreement include any current grant of manufacturing rights with respect to the Products or any other product or process.

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements hereinafter set forth, the sufficiency of which is hereby acknowledged, and intending to be legally bound, the Parties to this Agreement mutually agree as follows:

Article 1 Definitions

For the purposes of this Agreement, the following terms, whether used in the singular or plural, shall be ascribed the following meaning:

1.1 "Additional Product" means [**].

1.2 "Affiliate" of either Party means any corporation, firm, partnership, organization or entity, whether de jure or de facto, which such Party directly or indirectly controls, is controlled by or is under common control with. For the purpose of this definition, the term "control" means (i) direct or indirect ownership of fifty percent (50%) or more of the outstanding equity voting stock (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) of a Party or other entity or (ii) the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Party or other entity, whether through the ownership of voting securities, by contract, or otherwise.

1.3 "Arrow Know-How" means the Know-How Controlled by Arrow (for purposes of clarity, including Affiliates of Arrow) at any time during the Term in the Territory that may be useful to Sepracor in Sepracor's Development and Commercialization of the Products in the Territory.

1.4 "Arrow Patent(s)" shall mean any and all Patents or Patent Applications Controlled by Arrow (for purposes of clarity, including Affiliates of Arrow) at any time during the Term in the Territory with a claim relating to a Product or a component of a Product, or a method of manufacture or Formulation of any of the foregoing, or a method of treatment using any of the foregoing. The Arrow Patents in the Territory existing on the Effective Date are identified on Schedule 1.4 , as it may be amended from time to time. For the avoidance of doubt, an inclusion with respect to any Arrow Patent coming into existence after the Effective Date shall occur automatically upon the first filing of a provisional or non-provisional application in respect of such Arrow Patent in the Territory, and the subsequent amendment of Schedule 1.4 shall only serve declaratory purposes.

1.5 "Arrow Technology" means the Arrow Know-How and the Arrow Patents, collectively.

1.6 "Business Day" means any day on which banking institutions in the Commonwealth of Massachusetts, United States are open for business.

1.7 "Change of Control" with respect to a Party means (i) the acquisition (directly or indirectly, whether by merger, consolidation, purchase and sale, share exchange or otherwise) by any Third Party (other than an Affiliate or any trust or fund created under a profit-sharing or other benefit plan for employees of such Party) of a beneficial interest in the securities of such Party representing more than fifty percent (50%) of the combined voting power of such Party's then outstanding securities; or (ii) the transfer, sale or assignment of more than fifty percent (50%) of the assets of such Party to a Third Party other than an Affiliate of such Party; or (iii) any other transfer to a Third Party of the power to control such Party.

1.8 "Ciclesonide" means the compound ciclesonide including all its isomers, titrates, hydrates, metabolites, polymorphs, prodrugs, epimers, and salts.

1.9 "Commercialization" means any and all activities directed to importing, marketing, promoting, advertising, distributing, storing, offering for sale, using and selling a Product, including, without limitation, the distribution of promotional samples to targeted prescribers (to the extent applicable), in the Territory, and conducting Phase IV Studies of a Product. When used as a verb, "Commercialize" means to engage in Commercialization.

1.10 "Contract Year" means (a) with respect to the first Contract Year, the period beginning on the Effective Date and ending on December 31, 2008 (the "First Contract Year"), (b) with respect to each subsequent Contract Year other than the last Contract Year, the one (1) year period beginning on the day following the end of the First Contract Year and each succeeding one (1) year period thereafter, and (c) with respect to the last Contract Year, the period beginning on January 1 of such last Contract Year and ending on the date as of which this Agreement expires or is terminated (the "Last Contract Year"). Each Contract Year (other than the First Contract Year or the Last Contract Year) shall be divided into four (4) "Contract Quarters" comprised of successive three (3) month periods. In the First Contract Year, the first Contract Quarter shall end on the first day following the Effective Date that is the last day of a Contract Quarter, and in the Last Contract Year, the last Contract Quarter shall end upon expiration or termination of the Agreement.

1.11 "Control" or "Controlled" means that a right is owned, licensed, or otherwise possessed by a Party with the right to license or sublicense.

1.12 "Development" means the scientific, medical, technical, and clinical, regulatory and other activities necessary to obtain Regulatory Approval to Commercialize the Products in the Territory, including, without limitation, technical development, clinical development and the preparation, filing,

prosecution and administration of INDs, and/or NDAs, in accordance with a Development Plan that has been agreed pursuant to the terms and conditions of this Agreement. When used as a verb, "Develop" means to engage in Development.

1.13 "Development Costs" means for all studies or activities performed in accordance with Sepracor's Development Plan for any Product in the Territory, including the following: (a) all out-of-pocket costs and expenses incurred (i.e., paid to Third Parties or accrued therefor) by Sepracor or any of its permitted designees, (b) the costs of internal personnel engaged in the performance of such studies or activities, and (c) the costs of clinical supplies for such studies or activities, which costs shall include (i) the clinical supply price, (ii) out-of-pocket costs and expenses incurred in purchasing comparator drug and in packaging comparator drug and/or such Product, as applicable, shipping clinical supplies to centers, or disposal of clinical supplies, and (iii) actual costs of packaging clinical samples and comparator drug, as applicable, if done by a Party.

1.14 "Development Plan" means a plan designed by Sepracor to achieve the clinical Development of a specific Product or of a specific Improvement, as may be applicable, including, without limitation, (i) the budget and nature, number and schedule of Development activities, (ii) a time schedule for the implementation of the Development activities concerned, (iii) all such other issues as may reasonably have to be addressed under such Development Plan, as it may be amended by Sepracor from time to time in accordance with this Agreement.

1.15 "Effective Date" means the date of the execution of this Agreement by both Parties.

1.16 "FDA" means the U.S. Food and Drug Administration and any successor agency thereto.

1.17 "First Commercial Sale" shall mean the first sale or other disposition for value of a Product, in a final dosage form packaged for the ultimate consumer, to an independent Third Party following applicable Regulatory Approval, by Sepracor, its Affiliates or permitted sublicensees.

1.18 "Formulation" or "Formulations" mean the Development of stable and acceptable preparations, suspensions, or other chemical mixtures of ingredient, as well as associated studies and analysis of properties, [**], required to develop INDs for a product, including the Products, all prepared according to Good Laboratory Practice Standards ("GLP") and other relevant laboratory practice standards.

1.19 "GAAP" means the "United States Generally Accepted Accounting Principles" as determined by the US Financial Accounting Standards Board (FASB).

1.20 "Gross Sales" means, with respect to any applicable period and any Product, the gross amounts invoiced by Sepracor, an Affiliate or sublicensee to unrelated Third Parties for sales of such Product.

1.21 "Improvement" means any Know-How, including, without limitation, findings, discoveries, inventions, additions, modifications, formulations or changes, whether patentable or not, made and Controlled by either Party during the Term insofar as such Improvement relates to a Product.

1.22 "IND" means an investigational new drug application submitted to the FDA in respect of a new drug.

1.23 "Know-How" means all scientific, medical, technical, clinical, regulatory, marketing and other information relating to a Product that is Controlled by a Party hereto, and that is in existence as of the Effective Date or comes into existence during the Term.

1.24 "NDA" means (a) a new drug application submitted to the FDA pursuant to 21 U.S.C. Section 355(b)(1), or any successor application or procedure and (b) all supplements and amendments, including supplemental new drug applications that may be filed with respect to the foregoing (each, a "SNDA").

1.25 "Net Sales" means, with respect to any period, the Gross Sales of the Products, less items recognized under GAAP, including, but not limited to, the following deductions to the extent included in the gross invoiced sales price for the Products or otherwise directly paid or incurred by Sepracor, its permitted Affiliates and its permitted sublicensees with respect to the sale of the Products and not otherwise recoverable by the paying party: (a) trade, quantity, or cash discounts, chargebacks, returns, allowances or rebates and actually allowed, given or accrued in the ordinary course of trading (including, but not limited to, cash, governmental and managed care rebates, hospital or other buying group chargebacks); (b) adjustments, rejections, recalls and returns to the extent made in the ordinary course of trading, to the extent the customer has been credited the original sales price or a portion thereof; (c) sales, excise, turnover, inventory, value-added, customs duties and similar taxes and governmental charges assessed on the sale of the Products; and (d) the portion of any management fees paid during the relevant time period to group purchasing organizations that relate specifically to the sale of such Products to such organizations, (e) any royalties payable by Sepracor to Third Parties in order to enable Sepracor to commercialize the Products in the Territory, (f) service fees paid or allowances conceded to wholesalers pursuant to distribution services agreements or similar contracts by and between Sepracor and wholesalers for logistic and other services such as, without limitation, stock-keeping.

Sales, transfers or dispositions of the Products for charitable, promotional (including samples), pre-clinical, clinical, or regulatory purposes with respect to which no consideration is received by Sepracor or its Affiliates, shall be excluded from Net Sales, as shall sales or transfers of the Products among a Party and its Affiliates.

Upon any sale or other disposal of any Product for any consideration other than an exclusively monetary consideration on bona fide arm's length terms then, for the purposes of calculating the Net Sales under this Agreement, such Product shall be deemed to be sold exclusively for money at the fair market price generally achieved for such Product in the Territory.

Any discounts or allowances made by Sepracor outside the ordinary course of trading shall not be accounted for in determining Sepracor's Net Sales. For clarity and without limitation, this shall apply to direct and indirect discounts and allowances to customers regarding a Product associated with product bundling and selling such Product in combination with other Sepracor products (so called "package deals"). Upon any sale or other disposal of any Product for any consideration outside the ordinary course of trading, for the purposes of calculating the Net Sales under this Agreement, the Products shall be deemed to be sold exclusively for money at the fair market price generally achieved in bona fide arm's length trading for such Products in the Territory when such Products are sold alone, and not with or in combination with products other than Products.

1.26 "Patents" shall mean all existing patents and patent applications and all patent applications hereafter filed, including, without limitation, any continuations, continuations-in-part, divisions, reissues, reexaminations, utility models, provisionals or substitute applications, any patent issued with respect to any such patent applications, any reissue, reexamination, renewal, amendment or extension (including any supplementary protection certificate and any patent term extension) of any such patent, and any confirmation patent or registration patent or patent of addition based on any such patent, and all foreign counterparts of any of the foregoing.

1.27 "Person" means any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization or government or political subdivision thereof.

1.28 "Products" means the Standalone Product, the Combination Product, any Additional Product and any Improvement to the foregoing.

1.29 "Regulatory Approval" shall mean that all approvals, price approvals or approvals for reimbursements, product and/or establishment licenses, registrations, permits, or authorizations of any

federal, state or local regulatory agency, department, bureau or other governmental entity or Regulatory Authority, necessary for the manufacture, packaging, distribution, use, storage, importation, export, transport, marketing and sale of the Products for therapeutic use in humans in a country of the Territory have been obtained.

1.30 "Regulatory Authority" shall mean any national, supra-national, regional, state or local regulatory agency, department, bureau or other governmental entity in the Territory responsible for issuing any technical, medical and scientific licenses, registrations, authorizations and/or approvals of the Products including any marketing authorizations based upon such approvals and pricing, third party reimbursement or labeling approvals that are necessary for the manufacture, distribution, use, storage, importation, export, transport and sale of a Product in a country of the Territory.

1.31 "Territory" shall mean the world.

1.32 "Third Party" shall mean any Person other than the Parties and their Affiliates.

1.33 "Trademark" shall mean any trademark used in connection with the Commercialization of a Product.

Article 2 Grant of Rights

2.1 Exclusive License Grant. During the Term, Arrow grants to Sepracor the exclusive right and license under the Arrow Patents and Arrow Know-How to Develop, have Developed, market, have marketed, use, have used, Commercialize, have Commercialized, distribute, have distributed, offer for sale, sell and have sold the Products in the Territory and to package, distribute, sell, market and promote the Products in and throughout the Territory, including the right to grant sub-licenses, subject to all of the terms and conditions of this Agreement. Such right and license in the Territory shall be exclusive even as to Arrow, except to the extent necessary to enable Arrow to perform any obligations or activities that Arrow is required or permitted to perform under this Agreement. The license is subject to Arrow's right of manufacture in Section 10.1.

2.2 Manufacturing and Supply Rights Retained by Arrow. For the sake of clarity, the license in Section 2.1 does not include a right or license by Arrow regarding any Arrow Technology that Arrow has or may acquire to manufacture, have manufactured or supply the Products (or any sub-component or sub-process involved in the manufacture of the Products), such rights being retained by Arrow pursuant to Section 10.1.

2.3 Further Assurances . Arrow hereby agrees that it will do all such acts and execute all such further documents, conveyances, deeds, assignments, transfers, licenses and the like, and will cause the doing of all such acts on its own behalf and by each of its Affiliates and will cause the execution of all such further documents on its own behalf and by each of its Affiliates as are within its power as Sepracor may from time to time reasonably request be done and/or executed in order to consummate the transactions contemplated under this Agreement, as may be necessary or desirable to effect the purposes of this Agreement, or as may be appropriate to more effectively carry out and vest in Sepracor the grant of rights and licenses intended to be made under this Agreement, all at the sole cost and expense of Arrow.

Article 3 Development

3.1 Development of the Products. Sepracor and Arrow shall together be responsible for Development of the Products based upon the timing and requirements of the Development Plan as overseen by the Steering Committee. Both Sepracor and Arrow shall use their commercially reasonable efforts to Develop the Products, including that Arrow shall, upon Sepracor's request, provide and facilitate the transfer of Arrow Technology, including data, and enabling technology with respect to the Products.

3.2 Access to Data and Information. Sepracor shall own and have the right to access free of charge all information and data generated in all Development activities and all pre-clinical, clinical and marketing studies with respect to the Products.

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