EXHIBIT 10.1

(FPFR-LIBOR30)(R032204)4160000001 *LOAN5404*

PROMISSORY NOTE

FOR VALUE RECEIVED, ALKERMES, INC. a corporation located at the address stated below ("MAKER") promises, jointly and severally if more than one, to pay to the order of GENERAL ELECTRIC CAPITAL CORPORATION or any subsequent holder hereof (each, a "PAYEE") at its office located at 83 WOOSTER HEIGHTS ROAD, DANBURY, CT 06810 or at such other place as Payee or the holder hereof may designate (written notice of which will be provided by Payee to Maker), the principal sum of THREE MILLION SIX HUNDRED SEVENTY-SIX THOUSAND ONE HUNDRED FORTY AND 94/100 DOLLARS ($3,676,140.94), with interest on the unpaid principal balance, from the date hereof through and including dates of payment, at a floating per annum simple interest rate ("Contract Rate") as hereinafter calculated.

The Contract Rate for any given period ("Effective Period") following the first Effective Period shall be equal to the sum of (i) Five and Forty-Five Hundredths percent (5.45%) per annum plus (ii) a variable per annum interest rate ("Current LIBOR"), which shall be equal to the rate listed for one month London Interbank Offered Rate ("LIBOR") which is published in the "Money Rates" column of the Wall Street Journal, Eastern Edition (or, in the event such rate is not so published, in such other nationally recognized publication as Payee may specify) on the first Business Day of the calendar month in which the applicable Effective Period ends (notwithstanding any statement in such publication as to the effective date of any published rate). As used herein, the term "Business Day" shall mean and include any calendar day other than a day on which all commercial banks in the City of New York, New York are required or authorized to be closed.

The first Effective Period shall begin on the date hereof, and shall continue through the earlier of (w) the date the first Periodic Installment (or part thereof) is received by Payee and (x) the date on which the first Periodic Installment is due. Each subsequent Effective Period shall begin on the day after the last day of the previous Effective Period and shall continue through the earlier of (y) the date the earliest due and unpaid Periodic Installment (or part thereof) is received by Payee and (z) the date on which the next Periodic Installment is due. The Contract Rate for the first Effective Period shall be equal to the sum of (i) Five and Forty-Five Hundredths percent (5.45%) per annum plus (ii) a variable per annum interest rate, which shall be equal to the rate listed for one month London Interbank Offered Rate ("LIBOR"), which is published in the "Money Rates" column of the Wall Street Journal, Eastern Edition on the first Business Day of the current month in which the first Effective Period ends.

Subject to the other provisions hereof, the principal and interest on this Note is payable in lawful money of the United States in Thirty-Six (36) consecutive monthly installments as follows:

 Periodic
Installment                 Amount
----------------          -----------
Thirty-Five (35)          $105,834.93

each ("Periodic Installment") and a final installment which shall be in the amount of Four Hundred Seventy-Three Thousand Four Hundred Forty-Nine and 03/100 Dollars ($473,449.03) plus any outstanding principal and interest. The first Periodic Installment shall be due and payable on 2/01/05 and the following Periodic Installments shall be due and payable on the same day of each succeeding period (each, a "Payment Date"). All payments shall be applied first to interest and then to principal. The acceptance by Payee of any payment which is less than payment in full of all amounts due and owing at such time shall not constitute a waiver of Payee's right to receive payment in full at such time or at any prior or subsequent time. Interest shall be calculated on the basis of a 365 day year (366 day leap year) and will be charged at the Contract Rate for each calendar day on which any principal is outstanding.

The amount and number of the Periodic Installments will not change with fluctuations in the Contract Rate. Any increase in the Contract Rate shall be reflected by a corresponding decrease in the portion of the Periodic Installment credited to the remaining unpaid principal balance. Any decrease in the Contract Rate shall be reflected as a corresponding increase in the portion of the Periodic Installment credited to the remaining unpaid principal balance. Notwithstanding the foregoing, at the end of each three (3) month period commencing with the first Payment Date hereof, Maker agrees to pay to Payee forthwith an additional sum ("Quarterly Payment") sufficient to amortize the unpaid principal over the balance of the original term hereof at the Contract Rate applicable for the first Periodic Installment.

If, and for so long as, the amount of interest due exceeds the amount of the Periodic Installment, Maker agrees to pay forthwith, in addition to (i) any Periodic Installment then due and (ii) any Quarterly Payment, the amount by which said interest exceeds the Periodic Installment. In the event interest only is required to be paid during any period, the interest for such period shall be due and payable monthly as it accrues and shall be calculated on the unpaid principal balance existing at the commencement of such period.

The Maker hereby expressly authorizes the Payee to insert the date value is actually given in the blank space on the face hereof and on all related documents pertaining hereto.

This Note may be secured by a security agreement, chattel mortgage, pledge agreement or like instrument (each of which is hereinafter called a "SECURITY AGREEMENT").

Time is of the essence hereof. If any installment or any other sum due under this Note or any Security Agreement is not received within ten (10) days after its due date, the Maker agrees to pay, in addition to the amount of each such installment or other sum, a late payment charge of five percent (5%) of the amount of said installment or other sum, but not exceeding any lawful maximum. If (i) Maker fails to make payment of any amount due hereunder within ten (10) days after the same becomes due and payable; or (ii) Maker is in default under, or fails to perform under any term or condition contained in any Security Agreement, then the entire principal sum remaining unpaid, together with all accrued interest thereon and any other sum payable under this Note or any Security Agreement, at the election of Payee (written notice of which will be provided by Payee to Maker), shall immediately become due and payable, with interest thereon at the lesser of eighteen percent (18%) per annum or the highest rate not prohibited by applicable law from the date of such accelerated maturity until paid (both before and after any judgment).

Maker may not prepay in full or in part at any time any indebtedness hereunder without the express written consent of Payee in its sole discretion, provided however that if Maker prepays all indebtedness under this Note in connection with the closing of additional financing under the Master Lease Agreement dated as of October 16, 2002 in an amount equal to or greater than the original principal balance under this Note, then no premium or penalty shall be due.

It is the intention of the parties hereto to comply with the applicable usury laws; accordingly, it is agreed that, notwithstanding any provision to the contrary in this Note or any Security Agreement, in no event shall this Note or any Security Agreement require the payment or permit the collection of interest in excess of the maximum amount permitted by applicable law. If any such excess interest is contracted for, charged or received under this Note or any Security Agreement, or if all of the principal balance shall be prepaid, so that under any of such circumstances the amount of interest contracted for, charged or received under this Note or any Security Agreement on the principal balance shall exceed the maximum amount of interest permitted by applicable law, then in such event (a) the provisions of this paragraph shall govern and control, (b) neither Maker nor any other person or entity now or hereafter liable for the payment hereof shall be obligated to pay the amount of such interest to the extent that it is in excess of the maximum amount of interest permitted by applicable law, (c) any such excess which may have been collected shall be either applied as a credit against the then unpaid principal balance or refunded to Maker, at the option of the Payee, and (d) the effective rate of interest shall be automatically reduced to the maximum lawful contract rate allowed under applicable law as now or hereafter construed by the courts having jurisdiction thereof. It is further agreed that without limitation of the foregoing, all calculations of the rate of interest contracted for, charged or received under this Note or any Security Agreement which are made for the purpose of determining whether such rate exceeds the maximum lawful contract rate, shall be made, to the extent permitted by applicable law, by amortizing, prorating, allocating and spreading in equal parts during the period of the full stated term of the indebtedness evidenced hereby, all interest at any time contracted for, charged or received from Maker or otherwise by Payee in connection with such indebtedness; provided, however, that if any applicable state law is amended or the law of the United States of America preempts any applicable state law, so that it becomes lawful for the Payee to receive a greater interest per annum rate than is presently allowed, the Maker agrees that, on the effective date of such amendment or preemption, as the case may be, the lawful maximum hereunder shall be increased to the maximum interest per annum rate allowed by the amended state law or the law of the United States of America.

The Maker consents hereby to any and all extensions of time, renewals, waivers or modifications of, and all substitutions or releases of, security or of any party primarily or secondarily liable on this Note or any Security Agreement or any term and provision of either, which may be made, granted or consented to by Payee, and agrees that suit may be brought and maintained against Maker, at the election of Payee without joinder of any other as a party thereto, and that Payee shall not be required first to foreclose, proceed against, or exhaust any security hereof in order to enforce payment of this Note. The Maker hereby waives presentment, demand for payment, notice of nonpayment, protest, notice of protest, notice of dishonor, and all other notices in connection herewith, as well as filing of suit (if permitted by law) and diligence in collecting this Note or enforcing any of the security hereof, and agrees to pay (if permitted by law) all expenses reasonably incurred in collection, including Payee's actual attorneys' fees.

THE MAKER HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS NOTE, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN MAKER AND PAYEE RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS,

AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN MAKER AND PAYEE. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.) THIS WAIVER IS IRREVOCABLE MEANING THAT IT WAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE, ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION. IN THE EVENT OF LITIGATION, THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

This Note and other Debt Documents (as defined in any Security Agreement) constitute the entire agreement of the Maker and Payee with respect to the subject matter hereof and supercedes all prior understandings, agreements and representations, express or implied.

No variation or modification of this Note, or any waiver of any of its provisions or conditions, shall be valid unless in writing and signed by an authorized representative of Maker and Payee. Any such waiver, consent, modification or change shall be effective only in the specific instance and for the specific purpose given.

Any provision in this Note or any of the other Debt Documents which is in conflict with any statute, law or applicable rule shall be deemed omitted, modified or altered to conform thereto.

ALKERMES, INC.

______________________________   By: /s/ James Frates
(Witness)                            ----------------
______________________________   Name: James Frates
(Print name)
______________________________   Title: VP
(Address)
                                 Federal Tax ID #: 232472830

Address: 88 Sidney Street, Cambridge, Middlesex County, MA 02139

EXHIBIT 10.2

(R011304) *LOAN7000*

MASTER SECURITY AGREEMENT

dated as of DECEMBER 22, 2004 ("AGREEMENT")

THIS AGREEMENT is between GENERAL ELECTRIC CAPITAL CORPORATION (together with its successors and assigns, if any, "SECURED PARTY") and ALKERMES, INC. ("DEBTOR"). Secured Party has an office at 83 Wooster Heights Road, Danbury, CT 06810. Debtor is a corporation organized and existing under the laws of the state of Pennsylvania ("the State"). Debtor's mailing address and chief place of business is 88 Sidney Street, Cambridge, MA, 02139.

1. CREATION OF SECURITY INTEREST.

Debtor grants to Secured Party, its successors and assigns, a security interest in and against all property listed on any collateral schedule now or in the future annexed to or made a part of this Agreement ("COLLATERAL SCHEDULE"), and in and against all additions, attachments, accessories and accessions to such property, all substitutions, replacements or exchanges therefor, and all insurance and/or other proceeds thereof (all such property is individually and collectively called the "COLLATERAL"). This security interest is given to secure the payment and performance of all debts, obligations and liabilities of any kind whatsoever of Debtor to Secured Party, now existing or arising in the future, including but not limited to the payment and performance of certain Promissory Notes from time to time identified on any Collateral Schedule (collectively "NOTES" and each a "NOTE"), and any renewals, extensions and modifications of such debts, obligations and liabilities (such Notes, debts, obligations and liabilities are called the "INDEBTEDNESS").

2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.

Debtor represents, warrants and covenants as of the date of this Agreement and as of the date of each Collateral Schedule that:

(a) Debtor's exact legal name is as set forth in the preamble of this Agreement and Debtor is, and will remain, duly organized, existing and in good standing under the laws of the State set forth in the preamble of this Agreement, has its chief executive offices at the location specified in the preamble, and is, and will remain, duly qualified and licensed in every jurisdiction wherever necessary to carry on its business and operations;

(b) Debtor has adequate power and capacity to enter into, and to perform its obligations under this Agreement, each Note and any other documents evidencing, or given in connection with, any of the Indebtedness (all of the foregoing are called the "DEBT DOCUMENTS");

(c) This Agreement and the other Debt Documents have been duly authorized, executed and delivered by Debtor and constitute legal, valid and binding agreements enforceable in accordance with their terms, except to the extent that the enforcement of remedies may be limited under applicable bankruptcy and insolvency laws or by general equitable principles;

(d) No approval, consent or withholding of objections is required from any governmental authority or instrumentality with respect to the entry into, or performance by Debtor of any of the Debt Documents, except any already obtained;

(e) The entry into, and performance by, Debtor of the Debt Documents will not (i) violate any of the organizational documents of Debtor or any judgment, order, law or regulation applicable to Debtor, or (ii) result in any breach of or constitute a default under any contract to which Debtor is a party, or result in the creation of any lien, claim or encumbrance on any of Debtor's property (except for liens in favor of Secured Party) pursuant to any indenture, mortgage, deed of trust, bank loan, credit agreement, or other agreement or instrument to which Debtor is a party;

(f) There are no suits or proceedings pending in court or before any commission, board or other administrative agency against or affecting Debtor which could, in the aggregate, have a material adverse effect on Debtor, its business or operations, or its ability to perform its obligations under the Debt Documents, nor does Debtor have reason to believe that any such suits or proceedings are threatened;

(g) All financial statements delivered to Secured Party in connection with the Indebtedness have been prepared in accordance with generally accepted accounting principles, and since the date of the most recent financial statement, there has been no material adverse change in Debtors financial condition which has resulted or could reasonably be expected to result in Debtor being unable to perform its obligations under this Agreement for the remainder of the term of this Agreement;

(h) The Collateral is not, and will not be, used by Debtor for personal, family or household purposes;

(i) The Collateral is, and will remain, in good condition and repair and Debtor will not be negligent in its care and use;

(j) Debtor is, and will remain, the sole and lawful owner, and in possession of, the Collateral, and has the sole right and lawful authority to grant the security interest described in this Agreement;

(k) The Collateral is, and will remain, free and clear of all liens, claims and encumbrances of any kind whatsoever, except for (i) liens in favor of Secured Party, (ii) liens for taxes not yet due or for taxes being contested in good faith and which do not involve, in the judgment of Secured Party, any material risk of the sale, forfeiture or loss of any of the Collateral, and
(iii) inchoate materialmen's, mechanic's, repairmen's and similar liens arising by operation of law in the normal course of business for amounts which are not delinquent (all of such liens are called "PERMITTED LIENS"); and

(l) Debtor is and will remain in compliance in all material respects with all laws and regulations applicable to it including, without limitation, (i) ensuring that Debtor is not and shall not be (Y) listed on the Specially Designated Nationals and Blocked Person List maintained by the Office of Foreign Assets Control ("OFAC"), Department of the Treasury, and/or any other similar lists maintained by OFAC pursuant to any authorizing statute, Executive Order or regulation or (Z) a person designated under Section 1(b), (c) or (d) of Executive Order No. 13224 (September 23, 2001), any related enabling legislation or any other similar Executive Orders.

3. COLLATERAL.

(a) Until the declaration by Secured Party of any default hereunder, Debtor shall remain in possession of the Collateral; except that Secured Party shall have the right to possess (i) any chattel paper or instrument that constitutes a part of the Collateral, and (ii) any other Collateral in which Secured Party's security interest may be perfected only by possession. Secured Party may inspect any of the Collateral during normal business hours after giving Debtor reasonable prior notice. If Secured Party asks, Debtor will promptly notify Secured Party in writing of the location of any Collateral.

(b) Debtor shall (i) use the Collateral only in its trade or business,
(ii) maintain all of the Collateral in good operating order and repair, normal wear and tear excepted, (iii) use and maintain the Collateral only in compliance in all material respects with manufacturers recommendations and all applicable laws, and (iv) keep all of the Collateral free and clear of all liens, claims and encumbrances (except for Permitted Liens).

(c) Secured Party does not authorize and Debtor agrees it shall not (i) part with possession of any of the Collateral (except to Secured Party or for maintenance and repair), (ii) remove any of the Collateral from the continental United States, or (iii) sell, rent, lease, mortgage, license, grant a security interest in or otherwise transfer or encumber (except for Permitted Liens) any of the Collateral.

(d) Debtor shall pay promptly when due all taxes, license fees, assessments and public and private charges levied or assessed on any of the Collateral, on its use, or on this Agreement or any of the other Debt Documents. At its option, Secured Party may discharge taxes, liens, security interests or other encumbrances at any time levied or placed on the Collateral and may pay for the maintenance, insurance and preservation of the Collateral and effect compliance with the terms of this Agreement or any of the other Debt Documents. Debtor agrees to reimburse Secured Party, on demand, all costs and expenses reasonably incurred by Secured Party in connection with such payment or performance and agrees that such reimbursement obligation shall constitute Indebtedness.

(e) Debtor shall, at all times, keep accurate and complete records of the Collateral, and Secured Party shall have the right to inspect and make copies of all of Debtor's books and records relating to the Collateral during normal business hours, after giving Debtor reasonable prior notice.

(f) Debtor agrees and acknowledges that any third person who may at any time possess all or any portion of the Collateral shall be deemed to hold, and shall hold, the Collateral as the agent of, and as pledge holder for, Secured Party. Secured Party may at any time give notice to any third person described in the preceding sentence that such third person is holding the Collateral as the agent of, and as pledge holder for, the Secured Party.

4. INSURANCE.

(a) Debtor shall at all times that the Collateral is not in Secured Party's possession bear the entire risk of any loss, theft, damage to, or destruction of, any of the Collateral from any cause whatsoever.

(b) Debtor agrees to keep the Collateral insured against loss or damage by fire and extended coverage perils, theft, burglary, and for any or all Collateral which are vehicles, for risk of loss by collision, and if requested by Secured Party, against such other risks as Secured Party may reasonably require. The insurance coverage shall be in an amount no less than the full replacement value of the Collateral, and deductible amounts, insurers and policies shall be acceptable to Secured Party. Debtor shall deliver to Secured Party policies or certificates of insurance evidencing such coverage. Each policy shall name Secured Party as a loss payee, shall provide for coverage to Secured Party regardless of the breach by Debtor of any warranty or representation made therein, shall not be subject to co-insurance (other than standard deductibles), and shall provide that coverage may not be canceled or altered by the insurer except upon thirty (30) days prior written notice to Secured Party. Debtor appoints Secured Party as its attorney-in-fact to make proof of loss, claim for insurance and adjustments with insurers, and to receive payment of and execute or endorse all documents, checks or drafts in connection with insurance payments. Secured Party shall not act as Debtor's attorney-in-fact unless Debtor is in default hereunder. Proceeds of insurance in an amount in excess of $500,000 per claim shall be applied, at the option of Secured Party, to repair or replace the Collateral or to reduce any of the Indebtedness.

5. REPORTS.

(a) Debtor shall promptly notify Secured Party of (i) any change in the name of Debtor, (ii) any change in the state of its incorporation, organization or registration, (iii) any relocation of its chief executive offices, (iv) any relocation of any of the Collateral, (v) any of the Collateral being lost, stolen, missing, destroyed, materially damaged or worn out, or (vi) any lien, claim or encumbrance other than Permitted Liens attaching to or being made against any of the Collateral.

(b) Debtor will deliver to Secured Party financial statements as follows. Debtor agrees to provide quarterly unaudited statements and annual audited statements, certified by a recognized firm of certified public accountants, within 10 days after the statements are provided to the Securities and Exchange Commission ("SEC"). Annually, Debtor will be required to provide a board approved operating plan for the subsequent year, and a copy of the Debtor's Report of Independent Auditor. Debtor will also provide, on an as requested basis, other information, including monthly financial statements, as reasonably requested by the Secured Party. All quarterly and annual statements shall be prepared using generally accepted accounting principles ("GAAP") and shall be in compliance with SEC requirements.

6. FURTHER ASSURANCES.

(a) Debtor shall, upon request of Secured Party, furnish to Secured Party such further information, execute and deliver to Secured Party such documents and instruments (including, without limitation, Uniform Commercial Code financing statements) and shall do such other acts and things as Secured Party may at any time reasonably request relating to the perfection or protection of the security interest created by this Agreement or for the purpose of carrying out the intent of this Agreement. Without limiting the foregoing, Debtor shall cooperate and do all acts reasonably requested by Secured Party to continue in Secured Party a perfected first security interest in the Collateral, and shall obtain and furnish to Secured Party any subordinations, releases, landlord waivers, lessor waivers, mortgagee waivers, or control agreements, and similar documents as may be from time to time reasonably requested by, and in form and substance satisfactory to, Secured Party.

(b) Debtor authorizes Secured Party to file a financing statement and amendments thereto describing the Collateral and containing any other information required by the applicable Uniform Commercial Code. Debtor irrevocably grants to Secured Party the power to sign Debtor's name and generally to act on behalf of Debtor to execute and file applications for title, transfers of title, financing statements, notices of lien and other documents pertaining to any or all of the Collateral; this power is coupled with Secured Party's interest in the Collateral. Debtor shall, if any certificate of title be required or permitted by law for any of the Collateral, obtain and promptly deliver to Secured Party such certificate showing the lien of this Agreement with respect to the Collateral. Debtor ratifies its prior authorization for Secured Party to file financing statements and amendments thereto describing the Collateral and containing any other information required by the Uniform Commercial Code if filed prior to the date hereof.

(c) Debtor shall indemnify and defend the Secured Party, its successors and assigns, and their respective directors, officers and employees, from and against all claims, actions and suits (including, without limitation, related attorneys' fees) of any kind whatsoever arising, directly or indirectly, in connection with any of the Collateral, except for claims, actions or suites arising from the gross negligence or willful misconduct of the Secured Party.

7. DEFAULT AND REMEDIES.

(a) Debtor shall be in default under this Agreement and each of the other Debt Documents if:

(i) Debtor breaches its obligation to pay when due any installment or other amount due or coming due under any of the Debt Documents and fails to cure the breach within ten (10) business days;

(ii) Debtor, without the prior written consent of Secured Party, attempts to or does sell, rent, lease, license, mortgage, grant a security interest in, or otherwise transfer or encumber (except for Permitted Liens) any of the Collateral;

(iii) Debtor breaches any of its insurance obligations under
Section 4;

(iv) Debtor breaches any of its other obligations under any of the Debt Documents and fails to cure that breach within thirty (30) days after written notice from Secured Party;

(v) Any warranty, representation or statement made by Debtor in any of the Debt Documents or otherwise in connection with any of the Indebtedness shall be false or misleading in any material respect when made;

(vi) Any of the Collateral is subjected to attachment, execution, levy, seizure or confiscation in any legal proceeding or otherwise, or if any legal or administrative proceeding is commenced against Debtor or any of the Collateral, which in the reasonable commercial judgment of Secured Party subjects any of the Collateral to a material risk of attachment, execution, levy, seizure or confiscation and no bond is posted or protective order obtained to negate such risk;

(vii) Debtor breaches or is in default under any other agreement between Debtor and Secured Party;

(viii) Debtor or any guarantor or other obligor for any of the Indebtedness (collectively "GUARANTOR") dissolves, terminates its existence, becomes insolvent or ceases to do business as a going concern;

(ix) If Debtor or any Guarantor is a natural person, Debtor or any such Guarantor dies or becomes incompetent;

(x) A receiver is appointed for all or of any material part of the property of Debtor or any Guarantor, or Debtor or any Guarantor makes any assignment for the benefit of creditors;

(xi) Debtor or any Guarantor files a petition under any bankruptcy, insolvency or similar law, or any such petition is filed against Debtor or any Guarantor and is not dismissed within forty-five (45) days;

(xii) Debtor's improper filing of an amendment or termination statement relating to a filed financing statement describing the Collateral;

(xiii) There is a material adverse change in the Debtor's financial condition which results or could reasonably be expected to result in Debtor being unable to perform its obligations under this Agreement for the remainder of the term of this Agreement;

(xiv) Any Guarantor revokes or attempts to revoke its guaranty of any of the Indebtedness or fails to observe or perform any covenant, condition or agreement to be performed under any guaranty or other related document to which it is a party;

(xv) Debtor defaults under any other material obligation for (A) borrowed money, (B) the deferred purchase price of property or (C) payments due under any lease agreement; or

(xvi) At any time during the term of this Agreement Debtor sells more than 50% of its interest in the company to another corporation or business or all or substantially all of its assets without Secured Party's prior written consent, which consent will not be unreasonably withheld.

(b) If Debtor is in default hereunder, the Secured Party, at its option, may upon written notice to Debtor declare any or all of the Indebtedness to be immediately due and payable, without demand or notice to Debtor or any Guarantor. The accelerated obligations and liabilities shall bear interest (both before and after any judgment) until paid in full at the lower of eighteen percent (18%) per annum or the maximum rate not prohibited by applicable law.

(c) During a default hereunder, Secured Party shall have all of the rights and remedies of a Secured Party under the Uniform Commercial Code, and under any other applicable law. Without limiting the foregoing, Secured Party shall have the right to (i) notify any account debtor of Debtor under any account or any obligor on any instrument which constitutes part of the Collateral to make payment to the Secured Party, (ii) with or without legal process, peaceably enter any premises where the Collateral may be and take possession of and remove the Collateral from the premises or store it on the premises, (iii) sell the Collateral at public or private sale, in whole or in part, and have the right to bid and purchase at said sale, or (iv) lease or otherwise dispose of all or part of the

Collateral, applying proceeds from such disposition to the obligations then in default. If requested by Secured Party, Debtor shall promptly assemble the Collateral and make it available to Secured Party at a place to be designated by Secured Party which is reasonably convenient to both parties. Secured Party may also render any or all of the Collateral unusable at the Debtor's premises (subject to the rights of third parties) and may dispose of such Collateral on such premises without liability for rent or costs. Any notice that Secured Party is required to give to Debtor under the Uniform Commercial Code of the time and place of any public sale or the time after which any private sale or other intended disposition of the Collateral is to be made shall be deemed to constitute reasonable notice if such notice is given to the last known address of Debtor at least ten (10) days prior to such action.

(d) Proceeds from any sale or lease or other disposition shall be applied:
first, to all costs of repossession, storage, and disposition including without limitation attorneys', appraisers', and auctioneers' fees; second, to discharge the obligations then in default; third, to discharge any other Indebtedness of Debtor to Secured Party, whether as obligor, endorser, guarantor, surety or indemnitor; fourth, to expenses incurred in paying or settling liens and claims against the Collateral; and lastly, to Debtor, if there exists any surplus. Debtor shall remain fully liable for any deficiency.

(e) Debtor agrees to pay all reasonable attorneys' fees and other costs incurred by Secured Party in connection with the enforcement, assertion, defense or preservation of Secured Party's rights and remedies under this Agreement, or if prohibited by law, such lesser sum as may be permitted. Debtor further agrees that such fees and costs shall constitute Indebtedness.

(f) Secured Party's rights and remedies under this Agreement or otherwise arising are cumulative and may be exercised singularly or concurrently. Neither the failure nor any delay on the part of the Secured Party to exercise any right, power or privilege under this Agreement shall operate as a waiver, nor shall any single or partial exercise of any right, power or privilege preclude any other or further exercise of that or any other right, power or privilege.
SECURED PARTY SHALL NOT BE DEEMED TO HAVE WAIVED ANY OF ITS RIGHTS UNDER THIS AGREEMENT OR UNDER ANY OTHER AGREEMENT, INSTRUMENT OR PAPER SIGNED BY DEBTOR UNLESS SUCH WAIVER IS EXPRESSED IN WRITING AND SIGNED BY SECURED PARTY. A waiver on any one occasion shall not be construed as a bar to or waiver of any right or remedy on any future occasion.

(g) DEBTOR AND SECURED PARTY UNCONDITIONALLY WAIVE THEIR RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER DEBT DOCUMENTS, ANY OF THE INDEBTEDNESS SECURED HEREBY, ANY DEALINGS BETWEEN DEBTOR AND SECURED PARTY RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN DEBTOR AND SECURED PARTY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT. THIS WAIVER IS IRREVOCABLE. THIS WAIVER MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING. THE WAIVER ALSO SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY OTHER DEBT DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION. THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

8. MISCELLANEOUS.

(a) This Agreement, any Note and/or any of the other Debt Documents may be assigned, in whole or in part, by Secured Party without notice to Debtor, and Debtor agrees not to assert against any such assignee, or assignee's assigns, any defense, set-off, recoupment claim or counterclaim which Debtor has or may at any time have against Secured Party for any reason whatsoever. Debtor agrees that if Debtor receives written notice of an assignment from Secured Party, Debtor will pay all amounts payable under any assigned Debt Documents to such assignee or as instructed by Secured Party. Debtor also agrees to confirm in writing receipt of the notice of assignment as may be reasonably requested by Secured Party or assignee.

(b) All notices to be given in connection with this Agreement shall be in writing, shall be addressed to the parties at their respective addresses set forth in this Agreement (unless and until a different address may be specified in a written notice to the other party), and shall be deemed given (i) on the date of receipt if delivered in hand or by facsimile transmission, (ii) on the next business day after being sent by express mail, and (iii) on the fourth business day after being sent by regular, registered or certified mail. As used herein, the term "business day" shall mean and include any day other than Saturdays, Sundays, or other days on which commercial banks in New York, New York are required or authorized to be closed.

(c) Secured Party may correct patent errors and fill in all blanks in this Agreement or in any Collateral Schedule consistent with the agreement of the parties, and will provide notice thereof to Debtor.

(d) Time is of the essence of this Agreement. This Agreement shall be binding, jointly and severally, upon all parties described as the "Debtor" and their respective heirs, executors, representatives, successors and assigns, and shall inure to the benefit of Secured Party, its successors and assigns.

(e) This Agreement and its Collateral Schedules constitute the entire agreement between the parties with respect to the subject matter of this Agreement and supersede all prior understandings (whether written, verbal or implied) with respect to such subject matter. THIS AGREEMENT AND ITS COLLATERAL SCHEDULES SHALL NOT BE CHANGED OR TERMINATED ORALLY OR BY COURSE OF CONDUCT, BUT ONLY BY A WRITING SIGNED BY BOTH PARTIES. Section headings contained in this Agreement have been included for convenience only, and shall not affect the construction or interpretation of this Agreement.

(f) This Agreement shall continue in full force and effect until all of the Indebtedness has been indefeasibly paid in full to Secured Party or its assignee, and shall thereupon terminate. The surrender, upon payment or otherwise, of any Note or any of the other documents evidencing any of the Indebtedness shall not affect the right of Secured Party to retain the Collateral for such other Indebtedness as may then exist or as it may be reasonably contemplated will exist in the future. This Agreement shall automatically be reinstated if Secured Party is ever required to return or restore the payment of all or any portion of the Indebtedness (all as though such payment had never been made).

(g) Upon prior written consent of Debtor, Debtor authorizes Secured Party to use its name, logo and/or trademark without notice to or consent by Debtor, in connection with certain promotional materials that Secured Party may disseminate to the public. The promotional materials may include, but are not limited to, brochures, video tape, internet website, press releases, advertising in newspaper and/or other periodicals, lucites, and any other materials relating the fact that Secured Party has a financing relationship with Debtor and such materials may be developed, disseminated and used without Debtor's review. Nothing herein obligates Secured Party to use Debtor's name, logo and/or trademark, in any promotional materials of Secured Party.

(h) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CONNECTICUT (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE COLLATERAL.

IN WITNESS WHEREOF, Debtor and Secured Party, intending to be legally bound hereby, have duly executed this Agreement in one or more counterparts, each of which shall be deemed to be an original, as of the day and year first aforesaid.

SECURED PARTY:                         DEBTOR:

GENERAL ELECTRIC CAPITAL CORPORATION   ALKERMES, INC.

By: /s/ John Edel                      By: /s/ James Frates
    -------------                          ----------------
Name: John Edel                        Name: James Frates

Title: SVP                             Title: VP

EXHIBIT 10.3

FINANCIAL COVENANTS

ADDENDUM NO. 001

TO MASTER SECURITY AGREEMENT

DATED AS OF DECEMBER 22, 2004

THIS ADDENDUM NO. 001 (this "ADDENDUM NO. 001") is made as of the 22 day of December 2004, amends and supplements the above referenced agreement (the "AGREEMENT"), between GENERAL ELECTRIC CAPITAL CORPORATION (together with its successors and assigns, if any, "SECURED PARTY") and ALKERMES, INC. ("DEBTOR") and is hereby incorporated into the Agreement as though fully set forth therein. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Lease.

The Agreement is hereby amended by adding the following:

FINANCIAL COVENANTS.

"(a) Debtor shall, at all times during the term of the Agreement, comply with the following:

Maintain minimum Unrestricted Cash (as defined below) equal to the greater of (i) $50,000,000 or (ii) 6 months of Monthly Cash Burn (as defined below). Unrestricted Cash is defined as cash, cash equivalents and investments in marketable securities with maturities of less than 12 months, less any such cash, cash equivalents and investments in marketable securities pledged to other parties. Monthly Cash Burn is defined as the sum of net income (or loss) plus non-cash charges for the most recent 3 months ended divided by 3, minus current portions of long-term debt divided by 12. Long-term debt shall include all indebtedness for borrowed money, other than indebtedness of limited-purpose or special-purpose subsidiaries of Debtor which indebtedness is non-recourse to Debtor so long as the terms and conditions of the governing documents of each such subsidiary and the purchase and sale agreement between Debtor and each such subsidiary are satisfactory to Secured Party.

All financial items in the preceding paragraph shall be derived in accordance with generally accepted accounting principles in the United States of America ("GAAP").

If this covenant is violated, Debtor will (i) provide Secured Party within ten (10) business days of such occurrence a security deposit in an amount equal to 75% of Debtor's then obligations to Secured Party under the Agreement and
(ii) execute any documentation requested by Secured Party related to the security deposit."

(b) COMPLIANCE REPORTS. Debtor's Authorized Representative shall certify periodically that Debtor is in compliance with the requirements of subsection
(a) above. Such notification and certification shall be provided within thirty
(30) days after the end of each fiscal

month (the "COMPLIANCE DATE"), reflecting such information as of the end of such fiscal month. If Debtor fails timely to provide such notification and compliance certificates, within fifteen (15) days after the Compliance Date, such failure shall be deemed a default under the Agreement if not cured within two (2) business days after notice from Secured Party. The reports required under this section are in addition to and not a substitute for the reports required under the REPORTS Section of the Agreement.

Except as expressly modified hereby, all terms and provisions of the Agreement shall remain in full force and effect. This Addendum No.00l is not binding or effective with respect to the Agreement until executed on behalf of Secured Party and Debtor by authorized representatives of Secured Party and Debtor.

IN WITNESS WHEREOF, Debtor and Secured Party have caused this Addendum No. 001 to be executed by their duly authorized representatives as of the date first above written.

SECURED PARTY:                                 DEBTOR:

GENERAL ELECTRIC CAPITAL CORPORATION           ALKERMES, INC.

By: /s/ John Edel                              By: /s/ James Frates
    -------------                                  ----------------
Name: John Edel                                Name: James Frates

Title: SVP                                     Title: VP

ATTEST

By:_______________________________________

EXHIBIT 10.4

WHEREVER CONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH OMISSIONS ARE DENOTED BY AN ASTERISK), SUCH CONFIDENTIAL INFORMATION HAS BEEN SUBMITTED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

FOURTH AMENDMENT TO DEVELOPMENT AGREEMENT
FIRST AMENDMENT TO MANUFACTURING AND SUPPLY AGREEMENT

This Agreement shall be the Fourth Amendment to the Development Agreement by and between Janssen Pharmaceutica International, a division of Cilag International AG, having its place of business in CH-6300 Zug, Switzerland ("JANSSEN") and Medisorb Technologies International, A Delaware limited partnership ("Medisorb"), which agreement has in the meantime been duly assigned from Medisorb to Alkermes Controlled Therapeutics Inc. II, a company organized and existing under the laws of the Commonwealth of Pennsylvania, 64 Sidney Street, Cambridge, MA 02139-4136, U.S.A. ("ACT II") by a deed of assignment dated. March 1, 1996.

This Agreement shall also be the First Amendment to the Manufacturing and Supply Agreement by and between JPI PHARMACEUTICA INTERNATIONAL, a division of Cilag AG International Zug, a company duly organized and existing under the laws of Switzerland, having its principal office in CH-6300 Zug, Kollerstrasse 38, Switzerland (hereinafter referred to as "JPI"), and JANSSEN PHARMACEUTICA Inc., 1125 Trenton-Harbourton Road, Titusville, NJ 08560, USA (hereinafter referred to as "JANSSEN US") and ACT II, which agreement has since been duly transferred from JANSSEN PHARMACEUTICA INC. TO JANSSEN PHARMACEUTICA PRODUCTS, L.P. (JPI and JANSSEN US collectively referred to herein as "JANSSEN").

WHEREAS JANSSEN and ACT II desire to amend certain terms of the Development Agreement and the Manufacturing and Supply Agreement with respect to the ownership of certain capital equipment.

NOW THEREFORE, the parties agree to amend the Development Agreement and the Manufacturing and Supply Agreement as follows:

1. Notwithstanding the provisions of Section 4 of the SECOND AMENDMENT to the Development Agreement and Section 2.2 of the Manufacturing and Supply Agreement, JANSSEN agrees to sell to ACT II and ACT II agrees to purchase from JANSSEN the equipment described on Exhibit A, attached hereto and made a part hereof (the "Equipment") for good and valuable consideration of $1.00 (one U.S. dollar).

2. THE EQUIPMENT IS SOLD "WHERE IS; AS IS" WITHOUT ANY REPRESENTATION OR WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY AS TO THE DESIGN, QUALITY OR CONDITION OF THE EQUIPMENT, ANY WARRANTY OF MERCHANTABILITY OR FITNESS OF THE

EQUIPMENT FOR ANY PARTICULAR PURPOSE OR AS TO THE OTHER MATTER RELATING TO THE EQUIPMENT OR ANY PART THEREOF. ACT II CONFIRMS THAT IT HAS SELECTED THE EQUIPMENT ON THE BASIS OF ITS OWN JUDGMENT AND EXPRESSLY DISCLAIMS RELIANCE UPON ANY STATEMENTS, REPRESENTATIONS OR WARRANTIES MADE BY JANSSEN.

3. ACT II HEREBY ASSUMES AND RELEASES JANSSEN FROM ANY AND ALL CLAIMS ARISING FROM THE USE OR OPERATION OF THE EQUIPMENT (OR THE FAILURE TO OPERATE OR OTHER IMPROPER FUNCTIONING OF THE EQUIPMENT), OR ANY PART THEREOF, FROM AND AFTER THE DATE HEREOF AND HEREBY INDEMNIFIES AND HOLDS HARMLESS JANSSEN FOR ANY AND ALL DAMAGES RESULTING FROM THE USE OR OPERATION OF THE EQUIPMENT (OR THE FAILURE TO OPERATE OR OTHER IMPROPER FUNCTIONING OF THE EQUIPMENT), OR ANY PART THEREOF, FROM AND AFTER THE DATE HEREOF, INCLUDING, WITHOUT LIMITATION, ALL INCIDENTAL OR CONSEQUENTIAL DAMAGES FOR LOSS OF REVENUE OR PROFIT, LOSS OF USE OF THE EQUIPMENT, DOWNTIME COSTS OR COST OF ANY SUBSTITUTE EQUIPMENT.

4. THIS AMENDMENT SHALL BE EFFECTIVE AS OF DECEMBER 20, 2000.

WITNESS, the signature of all parties hereto by their duly authorized officers.

JANSSEN PHARMACEUTICA INTERNATIONAL
Represented by CILAG AG INTERNATIONAL

CILAG AG INTERNATIONAL

                             Landis + Gyr-Strasse 1
                             CH-6300 Zug

/s/ E. Rombouts                                          /s/ H. Schmid
----------------------                                   -----------------------
(title) EXECUTIVE DIRECTOR OPERATIONS                    (title) GENERAL MANAGER
E. ROMBOUTS                                              H. SCHMID

                                        ALKERMES CONTROLLED THERAPEUTICS INC. II

/s/ James Frates                                          /s/ Michael Landine
----------------------                                   ----------------------
(title) VICE PRESIDENT                                   (title) VICE PRESIDENT

                                            JANSSEN PHARMACEUTICA PRODUCTS, L.P.

                                                         /s/ Michael Chester
----------------------                                   -----------------------
(title)                                                  (title) SECRETARY

EXHIBIT A

[***]

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND HAS BEEN FILED SEPARATELY

EXHIBIT 10.5

WHEREVER CONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH OMISSIONS ARE DENOTED BY AN ASTERISK), SUCH CONFIDENTIAL INFORMATION HAS BEEN SUBMITTED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

THIRD AMENDMENT TO DEVELOPMENT AGREEMENT

SECOND AMENDMENT TO MANUFACTURING AND SUPPLY AGREEMENT
FIRST AMENDMENT TO LICENSE AGREEMENTS

This Third Amendment amends the Development Agreement (the "Development Agreement"), dated December 23, 1993, by and between Janssen Pharmaceutica International, a division of Cilag International AG, having its place of business in CH-6300 Zug, Switzerland ("JANSSEN") and Medisorb Technologies International, a Delaware limited partnership ("Medisorb"), which agreement has in the meantime been duly assigned from Medisorb to Alkermes Controlled Therapeutics Inc. II, a Pennsylvania corporation, 64 Sidney Street, Cambridge, MA 02139-4136, U.S.A. ("ACT II") by a deed of assignment dated March 1, 1996.

This Second Amendment amends the Manufacturing and Supply Agreement (the "Manufacturing Agreement"), dated August 6, 1997, by and between JANSSEN and Janssen Pharmaceutica Inc., a New Jersey corporation ("Janssen US") on the one hand, and ACT II on the other hand.

This First Amendment amends both the License Agreement (the "US License"), dated February 13, 1996, by and between Janssen US and Medisorb, which agreement has in the meantime been duly assigned from Medisorb to ACT II and the License Agreement (the "EX-US License"), dated February 21, 1996, by and between JANSSEN and Medisorb, which agreement has in the meantime been duly assigned from Medisorb to ACT II (both licenses together referred to as the "License Agreements").

WHEREAS, JANSSEN desires to evaluate the possibility of developing a
* formulation of the Product and ACT II is prepared to undertake such feasibility study under the terms set forth hereinafter.

NOW, THEREFORE, the parties, intending to be legally bound hereby, agree as follows:

All capitalised terms used herein shall have the meaning set forth in the Development Agreement, Manufacturing Agreement or License Agreements, as applicable, unless clearly indicated otherwise. This agreement will be referred to herein as this "Amendment".

1. ACT II and JANSSEN will undertake the activities set forth in the protocol for a * Product feasibility attached to this Amendment as Exhibit I (hereinafter "Protocol"). Such activities will be undertaken in accordance with the time and event schedule specified in the Protocol with a view to allow JANSSEN to evaluate candidate formulations against the target profile specified in the Protocol within a 12 month period following the effective date of this Amendment.

2. JANSSEN will reimburse ACT II for the activities to be undertaken by it in accordance with the budget provided for in the Protocol. ACT II will invoice JANSSEN and JANSSEN will pay ACT II within * following receipt of the invoice.

3. Following the internal analysis by JANSSEN of the various formulations prepared by ACT II, JANSSEN will promptly inform ACT II of its decision whether or not it wants to proceed with the development of a * Product. In the event JANSSEN elects to proceed with the further development, the parties will immediately meet to discuss a full development plan, including a time and event schedule and related budget. Such development plan shall be governed by the terms of the Development Agreement, as amended, unless specifically agreed otherwise.

4. Section 4.A of the Development Agreement shall be amended to add the following sentence; "The term of this Agreement, as the terms of this Agreement shall relate to performance of the Protocol, as defined in the Fourth Amendment to this Agreement, shall continue until completion of all activities in the Protocol are performed, and if Janssen elects to proceed with a * Product, until completion of the activities in the development plan to be agreed upon according to Section 3 of the Fourth Amendment to this Agreement."

5. In the event JANSSEN elects to proceed with a * Product development as aforementioned, JANSSEN's rights in connection with the * Product shall be governed by the terms of the License Agreements. In such an event, the parties hereby amend the License Agreements as follows:

(a) Section 1(i) of both the US License and the EX-US License (the definition of "Product") shall be amended to add the following sentence at the end of such section: "Any formulation of a Product which is designed to provide release of Risperdone over a * shall be referred to as a "*".

(b) Section 3(a) of the US License shall be amended to add the following sentences, to be inserted as the second and third sentences of such section: "Notwithstanding the foregoing, Janssen US shall pay or cause to be paid to Act II a running royalty at the rate of * of the Net Sales of each unit of * sold to customers in the Territory by Janssen US, its Affiliates and Sublicensees, if such unit of * was manufactured by Act II, or (ii) *, if such unit of * was manufactured by Janssen. Such royalties shall be payable quarter- annually in arrears within * days following the end of Janssen US's regular fiscal quarters in any year during the term hereof."

(c) Section 3(a) of the EX-US License shall be amended to add the following sentences, to be inserted as the second and third sentences of such section: "Notwithstanding the foregoing, Janssen. shall pay or cause to be paid to Act II a running royalty at the rate of (i) * of the Net Sales of each unit of * sold to customers in the Territory by Janssen, its Affiliates and Sublicensees, if such unit of * was manufactured by Act II, or (ii) *, if such unit of * was manufactured by Janssen. Such royalties shall be payable quarter- annually in arrears within * days following the end of each three (3) month period ending on March 31, June 30, September 30 or December 31 in any year during the term hereof."

6. (a) Section 1.10 of both the Manufacturing Agreement (the definition of "Product") shall be amended to add the following sentence at the end of such section: "Any formulation of a Product which is designed to provide release of Risperdone over a four-week period shall be referred to as a "*".

(b) Section 6.1 of the Manufacturing Agreement shall be amended to add the following sentences as the 4th, 5th and 6th sentences of such section: "For purposes of calculating the Manufacturing Fee due by JANSSEN/Janssen US for Manufacture the *, the volume breaks with the number of vials to determine the percentage (Exhibit D of the Manufacturing Agreement) will be adjusted to reflect the difference of mg per vial, the number of vials and the difference in manufacture cost. The final Fee will be agreed when all the manufacturing parameters are known to both parties." The attached model using * of the * versus the non-* (based on the manufacturing assumptions on the date of signature of this Amendment) shall be used as basis for said discussions.

(c) At the time that JANSSEN decides to proceed with the development of the * Product, the parties will then evaluate the total capacity required for both the * and the * formulations of the Product.

7. In the event that any findings generated as a result of the feasibility program are deemed patentable, the provisions of Article 5 of the License Agreements will apply to any such invention and JANSSEN and Janssen US' rights in relation thereto shall be governed by the provisions of Article 2 of said License Agreements.

8. ACT II recognises and acknowledges that JANSSEN is under no obligation to proceed with the further development of a * Product and that the decision to do so is at its sole discretion, irrespective of the outcome of the feasibility study,

9. This Amendment is deemed to be effective as of April 1, 2000.

WITNESS, the signature of all parties hereto by their duly authorized officers.

JANSSEN Pharmaceutica International, a division of Cilag International AG

/s/ Erik Rombouts
---------------------------------
Name:
Title:

ALKERMES CONTROLLED
THERAPEUTICS NC. II

/s/ Michael Landine
---------------------------------
Name: Michael Landine
Title: Vice President

JANSSEN PHARMACEUTICA INC.

/s/ Michael Chester
---------------------------------
Name: Michael Chester
Title: CORPORATE SECRETARY

*
SUMMARY

[***]

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND HAS BEEN FILED SEPARATELY

EXHIBIT 10.6

WHEREVER CONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH OMISSIONS ARE DENOTED BY AN ASTERISK), SUCH CONFIDENTIAL INFORMATION HAS BEEN SUBMITTED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

AGREEMENT

This Agreement (this "Agreement"), dated as of the 21st day of December, 2002 (the "Effective Date") is by and between JPI PHARMACEUTICA INTERNATIONAL, a division of Cilag AG International Zug, a company duly organized and existing under the laws of Switzerland, having its principal office in Landis & Byr Strasse 1 CH-6300 Zug, Switzerland ("JPI") and JANSSEN PHARMACEUTICA Inc., 1125 Trenton-Harbourton Road, Titusville, NJ 08560, USA ("Janssen US" and, together with JPI, "Janssen") on the one hand and Alkermes Controlled Therapeutics Inc. II, a company organized and existing under the laws of the Commonwealth of Pennsylvania, having its principal office at 88 Sidney Street, Cambridge MA 02139-4136, USA ("ACTII") on the other hand.

WHEREAS, Janssen and ACTII have developed a Risperidone depot formulation incorporating ACTII's proprietary technology concerning bioabsorbable polymer technologies and have entered into two License Agreements related thereto; and

WHEREAS, Janssen and ACTII entered into that certain Manufacturing and Supply Agreement, dated August 6,1997, as amended (the "Supply Agreement"), with respect to the commercial manufacture and supply of such Risperidone depot formulation to Janssen; and

WHEREAS, Janssen and ACTII entered into that certain Addendum to Manufacturing and Supply Agreement, dated as of August 1,2001 (the "Addendum") regarding the expansion of ACTII's manufacturing facilities, the financial responsibilities of each of the parties in connection with such expansion and to formally provide for a collaborative effort to develop the manufacturing facility and commercial supply of Product; and

WHEREAS, Janssen and ACTII desire to enter into this Agreement to provide for a prepayment of a portion of the Minimum Revenues owed by Janssen under the Addendum in exchange for credits against Manufacturing Fees to be owed over the next two years, the transfer and sale of certain manufacturing equipment, reassurance of the supply of Risperdal Consta and the planned plant expansion within the agreed upon quality standards and timelines, and expansion of the role of the Global Supply Team.

NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth below, and intending to be legally bound hereby, the parties agree as follows:

1. Definitions. Unless provided otherwise, any capitalized terms used in this Agreement and not defined herein, shall have the meaning set forth in the Supply Agreement or the Addendum.

2. Pre-Payment. Within * of the Effective Date, Janssen shall pre-pay to ACTII by wire transfer a portion of the Minimum Revenues owed under the Addendum equal to twenty-three million nine hundred four thousand ninety U.S. dollars ($23,904,090)(the "Pre-Payment Amount") which is a discounted value of the first two years of Minimum Revenues that total twenty five million two hundred fifty thousand U.S. dollars ($25,250,000).

3. Reconciliation.

(a) Reconciliation Credit. In each month of the calendar years 2003 and 2004, ACTII shall grant Janssen a certain credit against any Manufacturing Fees owed under the Supply Agreement (each such monthly credit a "Reconciliation Credit"). Each Reconciliation Credit during the calendar year 2003 shall be equal to nine hundred seventeen thousand U.S. dollars ($917,000). Each Reconciliation Credit during the calendar year 2004 shall be equal to one million one hundred eighty-seven thousand five hundred U.S. dollars ($1,187,500).

(b) Monthly Excess of Reconciliation Credit; Invoices; Excess of Actual Purchase Amount. If the amount of the Reconciliation Credit for any month exceeds the amount of Manufacturing Fees reflected in invoices issued by ACTII to Janssen in such month, then ACTII shall not issue any credit for such excess in such month but shall add such excess amount to the amount of the Reconciliation Credit applicable to the next succeeding month in such calendar year. The remaining applicable Reconciliation Credit (plus any excess from the preceding month in such calendar year) shall be reflected in and applied against Manufacturing Fees set forth in each invoice issued by ACTII to Janssen covering all Product delivered by ACTII to Janssen during calendar years 2003 and 2004. Any amount by which the Actual Purchase Amount exceeds the aggregate Reconciliation Credits for calendar year 2003 or 2004 shall be an Excess Credit (as defined in the Addendum) to be applied in all calendar years after 2004 as provided in the Addendum.

(c) Expiration of Reconciliation Credits. At the end of each of the calendar years 2003 and 2004, any remaining Reconciliation Credit not applied to an invoice for Manufacturing Fees issued by ACTII to Janssen covering Product delivered by ACTII to Janssen during such calendar year shall expire and become null and void and shall not be used as a credit against any Manufacturing Fees owed by Janssen to ACTII in any future calendar year; provided, however, if in calendar years 2003 and 2004, Janssen orders at least enough Product so that invoices for such ordered Product would equal the aggregate Reconciliation Credits for such year and ACTII fails to deliver any amount of such Product for any reason other than a reason caused by Janssen (for example, a failure to or delay in delivering the required amounts of Compound, testing Product, validating shipping containers, receipt of test results, protocols, reports or approvals of Janssen required under the Quality Agreement for shipment of Product, receipt of delivery instructions, releasing Product by Janssen, etc.), then the remaining Reconciliation Credit in such year will (i) for a failure to deliver in 2003, be added to the total amount of Reconciliation Credits to be applied to invoices in calendar year 2004 and (ii) for a failure to deliver in 2004, be credited against Manufacturing Fees owed under the Supply Agreement in calendar year 2005.

4. Factoring; Repayment of Pre-Payment.

(a) Factoring of the Minimum Revenues. Janssen hereby acknowledges that it is ACTII's intention to explore the possibility of factoring the Minimum Revenues to an independent financial institution. In the event that such a factoring transaction is consummated and the net proceeds to ACTII are at least *, it is the intent of Janssen and ACTII that ACTII will pay to Janssen the amount, if

any, by which the Pre-Payment Amount exceeds the aggregate amount of Reconciliation Credits applied to Manufacturing Fees owed by Janssen, and no further Reconciliation Credits will be applied against Manufacturing Fees owing to ACTII by Janssen thereafter.

(b) Repayment of the Pre-Payment. ACTII may, at any time and for any reason, pay to Janssen the amount, if any, by which the Pre-Payment Amount exceeds the aggregate amount of Reconciliation Credits applied to Manufacturing Fees owed by Janssen, and no further Reconciliation Credits will be applied against Manufacturing Fees owing to ACTII by Janssen thereafter.

5. Equipment.

(a) Existing Line. Within * of the Effective Date, ACTII shall sell to Janssen (or its Affiliate designee) and Janssen (or its Affiliate designee) shall purchase from ACTII the equipment listed on Exhibit A in consideration of three U.S. dollars ($3).

(b) New Line. Within * of the Effective Date, ACTII shall sell to Janssen (or its Affiliate designee) and Janssen (or its Affiliate designee) shall purchase from ACTII the equipment listed on Exhibit B in consideration of the payment of *. Janssen (or its Affiliate designee) shall lease the equipment to ACTII pursuant to a * lease at a monthly lease payment of
* pursuant to a lease agreement in a form mutually satisfactory to the parties, provided that the terms of such lease agreement are consistent with this Agreement.

(c) Title; Documents of Transfer; Taxes. Upon payment therefor, Janssen (or its Affiliate designee) shall have title to and ownership of all equipment listed on Exhibits A and B (the "Janssen Equipment"). ACTII agrees to execute all deeds, assignments, bills of sale and other documents reasonably requested by Janssen to evidence and perfect Janssen's (or its Affiliate designee's) ownership of the Janssen Equipment, including the preparation and filing of a Form UCC-1 to provide notice of Janssen's (or its Affiliate designee's) ownership of the Janssen Equipment. ACTII shall be responsible for all applicable taxes, including personal property and sales taxes, excluding any income taxes owing by Janssen (or its Affiliate designee).

(d) The Janssen Equipment:

(i) will be located at ACTII's manufacturing facilities located at 265 Olinger Circle, Wilmington, Ohio (the "ACTII Facilities");

(ii) will be used by ACTII in performing its obligations under and as permitted by the Supply Agreement and the Addendum;

(iii) will at all times be owned by Janssen (or its Affiliate designee) and shall not be transferred, encumbered or maintained by ACTII in any manner inconsistent with Janssen's (or its Affiliate designee's) ownership rights;

(iv) will bear an identifying tag denoting Janssen's (or its Affiliate designee's) ownership; and

(v) will be maintained and repaired by ACTII as necessary to meet its supply obligations to Janssen.

(e) Facility Oversight and Management. ACTII shall be responsible for the design, construction, equipment, validation and maintenance of the ACTII Facilities, including the Janssen Equipment. Final decisions on management and utilization of the ACTII Facilities, including the Janssen Equipment, with regard to the Product shall be controlled by the provisions set forth in the Addendum. Final decisions on management and utilization of the ACTII Facilities with regard to any other product (provided that ACTII comply with the provisions of Section 2.1.5 of the Addendum) and the general operation of the ACTII Facilities as a whole shall reside with ACTII.

(f) Option to Purchase.

(i) Janssen's Option to Sell or Extend Lease. At the conclusion of the *, Janssen (or its Afiliate designee) shall either (A) require ACTII to purchase all of the Janssen Equipment at a purchase price equal to Janssen's (or its Affiliate designee's) then current net book value or (B) extend the term of the lease at a monthly lease payment of one U.S. dollar ($1). Janssen (or its Affiliate designee) shall exercise this option by notifying ACTII in writing within * of expiration of the *, which notice shall indicate whether ACTII will be required to purchase the Janssen Equipment or extend the lease term and, if ACTII will be required to purchase the Janssen Equipment, the purchase price and a closing date that is no less than * and no more than * after the date of the notice.

(ii) ACTII's Option. If the Supply Agreement is terminated by any party for any reason, other than termination by Janssen pursuant to Section 10.2.3 of the Supply Agreement, then ACTII shall have the option to purchase from Janssen (or its Affiliate designee) any or all of the Janssen Equipment at a purchase price equal to Janssen's (or its Affiliate designee's) then current net book value. ACTII may exercise this option by notifying Janssen (or its Affiliate designee) in writing within * of such termination, which notice shall include a list of all equipment that ACTII will purchase, the purchase price and a closing date that is no less than * and no more than * after the date of the notice.

(iii) Closing of the Equipment Purchase. On the closing date set forth in the notice given by Janssen (or its Affiliate designee) or ACTII under this Section 5, ACTII shall pay to Janssen (or its Affiliate designee) the purchase price and Janssen (or its Affiliate designee) shall execute all deeds, assignments, bills of sale and other documents reasonably requested by ACTII to evidence and perfect ACTII's ownership of the purchased equipment, including the preparation and filing of a Form UCC-3 termination statement.

6. Headcount Funding.

(a) Funding Time Period, Headcount Plan. Attached hereto as Exhibit C is the initial Headcount Plan for calendar years 2003 and 2004, which includes both the Existing Headcount and the Incremental Headcount, each as defined in the Headcount Plan. During calendar year 2003, Janssen shall finance
* of the Actual Cost (defined below) of the Incremental Headcount. Upon the approval of the Global Supply Team, Janssen shall finance * of the Actual Cost of the Incremental Headcount during calendar year 2004. The Global Supply Team shall periodically review and make any appropriate adjustments to the Headcount Plan, including both the Existing Headcount and the Incremental Headcount. No material changes may be made to the Headcount Plan without the prior approval of the Global Supply Team.

(b) Payments; Actual Cost. Each quarter ACTII shall provide a report to Janssen reflecting the actual Incremental Headcount worked on the Project or manufacture of the Product as provided in the Headcount Plan and the Actual Cost for such Incremental Headcount. Janssen shall pay to ACTII * of the amount in the report within thirty (30) days of receipt of the report, provided that the headcount and the amount reported is consistent with the Headcount Plan. "Actual Cost" shall mean the gross salary for the persons included in the invoice, plus * for fringe benefits, plus * for applicable administrative expenses.

(c) Repayment of Headcount Funding. Beginning in *, ACTII shall pay to Janssen up to * per month until the cumulative amount of such payments equals the aggregate amount of headcount funding Janssen has paid to ACTII under this Section 5.

7. Global Supply Team. ACTII and Janssen hereby affirm their commitment to the implementation of the provisions set forth in Article 5 of the Addendum and agree to the Global Supply Team process set forth in Exhibit D. In addition, the Global Supply Team's responsibilities shall be expanded to include formal involvement in headcount planning and staffing with regard to the Product at the ACTII Facilities in calendar years 2003 and 2004, which shall be substantially in accordance with the Headcount Plan.

8. Capacity Allocation. Further to the provisions of Article 5 of the Addendum and in addition to any other provision of the Supply Agreement and the Addendum in this respect, ACTII and Janssen will continue their collaborative efforts to ensure timely expansion of the capacity for the bulk manufacturing of Product and it is acknowledged that both parties believe that the Headcount Plan described in Article 6 hereof provides for resourcing necessary to allow for commercial approval of the second and third wet process lines by year-end 2004. In furtherance of the general principles set forth in Sections 2.1.5 and 5.1 of the Addendum, the parties furthermore agree that (i) the first wet process line shall be used exclusively for the manufacture of Product until such time supply chain conditions, as approved by the Global Supply Team, such approval not be unreasonably withheld, shall allow for alternative or shared use and (ii) that the utilization of the third wet process line at the ACTII Facilities shall be under the reasonable oversight of the Global Supply Team, until such time as the second wet process line is approved by regulatory agencies for the dedicated commercial manufacture of Product.

9. Long Term Capacity and Backup Plan. Further to Sections 2.8 and 2.9 of the Supply Agreement, beginning in early 2003, the parties will discuss in good faith the timing and specific conditions for potentially establishing an additional manufacturing facility for the manufacture of Product with Janssen or any of its Affiliates. Both parties will do so in a collaborative effort with a view to maximize the chances for an expedient and successful validation of such facility. Amongst others, ACTII will provide at the expense of Janssen and if necessary, commercially reasonable training and support-- under conditions still to be agreed -- including the transfer of all necessary data and instructions to achieve the said objectives. The parties acknowledge that the primary purpose of establishing this additional facility is to ensure uninterrupted world-wide supply of Product and, therefore, Janssen agrees that establishing and running such facility shall not affect the financial revenue stream to ACTII under the current agreements between the parties; and, furthermore, it is the parties' intent that these discussions would result in a mutually beneficial arrangement with no detriment to the net economic benefit to ACTII. The start up of commercial manufacturing of Product at such facility will be driven by operational needs and considerations determined by the parties. However, from the moment the volumes of Product ordered by Janssen over a period of time to be determined by the parties (such orders to be in form of firm orders pursuant to the forecast) exceed * of the capacity of the first and second wet process lines and the existing filling line at the ACTII Facilities over such period of time, Janssen will have the option to start up the facility for commercial manufacturing. Notwithstanding the foregoing, the start up of commercial manufacturing at such facility will be subject to and conditional upon the agreement of ACTII and Janssen to the appropriate economic mechanisms to preserve the net economic benefit to ACTII as aforementioned.

10. Miscellaneous.

(a) No Amendments to the Supply Agreement or Addendum. Nothing in this Agreement is intended to modify any provisions of the Supply Agreement or the Addendum; instead, the provisions of this Agreement are in addition to the provisions of such agreements.

(b) Prior Agreements. The parties hereto acknowledge that this Agreement, along with the Supply Agreement and the Addendum, contains the entire agreement between the parties pertaining to the subject matter contained herein and supersedes all prior agreements, understandings, letters or other instruments whatsoever, whether written or oral, between the parties or any of their affiliates with respect to such matters.

(c) Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and permitted assigns of the parties. This Agreement may only be assigned in connection with a permitted assignment of the Supply Agreement and Addendum.

(d) Governing Law; Dispute Resolution. This Agreement shall be governed by and construed under the laws of the State of New York. Resolution of any dispute among the parties arising out of or relating to this Agreement shall be according to the terms set forth in Section 12.9 of the Supply Agreement.

(e) Notices. Any notice required or permitted under this Agreement shall be sent in the manner and to the address or facsimile number provided in Section 12.10 of the Supply Agreement.

(f) Amendments and Waivers. This Agreement may not be amended, supplemented or otherwise modified except by an instrument in writing signed by both parties that specifically refers to this Agreement. Either party hereto may, only by an instrument in writing, waive compliance by the other party hereto with any term or provision of this Agreement on the part of such other party to be performed or complied with. The waiver by a party hereto of a breach of any term or provision of this Agreement shall not be construed as a waiver of any subsequent breach. Any amendment or waiver effected in accordance with this Section 8(f) shall be binding upon each party and its permitted assigns.

IN WITNESS WHEREOF, JPI, Janssen US and ACTII have caused this Agreement to be executed by their respective duly authorized officers on the date first set forth above.

JPI PHARMACEUTICA
INTERNATIONAL represented by CILAG
AG INTERNATIONAL ZUG

By: /s/ E. Rombouts         /s/ H. Schmid
    -------------------------------------
    Name: E. Rombouts           H. Schmid
    Title: Vice President       General
           Alliance Management  Manager

JANSSEN PHARMACEUTICA INC.

By: /s/ Alex Gordz
    -------------------------------------
    Name: Alex Gordz
    Title:

ALKERMES CONTROLLED
THERAPEUTICS INC. II

By: /s/ Michael J. Landine
    -------------------------------------
    Name: Michael J. Landine
    Title: Vice President

EXHIBIT A

[***]

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

EXHIBIT B

[***]

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

EXHIBIT C

[***]

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

EXHIBIT D

[***]

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

EXHIBIT 10.7

WHEREVER CONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH OMISSIONS ARE DENOTED BY AN ASTERISK), SUCH CONFIDENTIAL INFORMATION HAS BEEN SUBMITTED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

AMENDMENT TO AGREEMENT

THIS AMENDMENT (the "Amendment"), made and entered into as of December 16, 2003 to the Agreement (the "Agreement") made as of December 21, 2002 by and between JPI Pharmaceutica International, a division of Cilag AG International Zug ("JPI") and Janssen Pharmaceutica Inc. ("Janssen US" and together with JPI, "Janssen"), on the one hand, and Alkermes Controlled Therapeutics Inc. II ("ACT II"), on the other hand (any terms used but not defined herein shall have the meaning set forth in the Agreement);

WITNESSETH THAT:

WHEREAS, Janssen and ACT II have entered into the Agreement; and

WHEREAS, Janssen and ACT II now wish to enter into this Amendment to modify the terms and conditions for headcount funding set forth in the Agreement;

NOW, THEREFORE, in consideration of the premises, the mutual agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. Exhibit C1 attached hereto which sets forth the Additional Incremental Headcount shall be added to the Agreement and shall be deemed to be part of the Headcount Plan for calendar year 2004 and for the fourth quarter of calendar year 2003.

2. The second and third sentences of Section 6(a) of the Agreement shall be deleted in their entirety and replaced with the following new sentences: "During calendar year 2003, Janssen shall finance * of the Actual Cost (defined below) of the Incremental Headcount and any Additional Incremental Headcount, as defined in Exhibit C1. During calendar year 2004, Janssen shall finance * of the Actual Cost of the Incremental Headcount and the Additional Incremental Headcount."

3. The first sentence of Section 6(b) of the Agreement shall be deleted in its entirety and replaced with the following new sentence:
"Each quarter ACT II shall provide a report to Janssen reflecting the actual Incremental Headcount and any Additional Incremental Headcount worked on the Project or manufacture of the Product as provided in the Headcount Plan and the Actual Cost for such Incremental Headcount and any Additional Incremental Headcount."

4. Section 6(c) shall be deleted in its entirety and replaced with the following new sentence:
"Beginning in *, ACTII shall pay to Janssen up to * per month until the cumulative amount of such payments equals the aggregate amount of headcount funding Janssen has paid to ACTII under Section 6."

5. Except as expressly provided in this Amendment, all other terms, conditions and provisions of the Agreement shall continue in full force and effect as provided therein. This Amendment and the Agreement constitute the entire agreement between the parties hereto relating to the subject matter hereof and thereof and supersede all prior and contemporaneous negotiations, agreements, representations, understandings and commitments with respect thereto.

6. This Amendment may be executed in counterparts, each of which shall be deemed an original for all purposes, and all of such counterparts taken together shall constitute one and the same instrument.

IN WITNESS WHEREOF, Janssen and ACT II have executed and delivered this Amendment effective as of the date first set forth above.

        ALKERMES CONTROLLED                     JPI PHARMACEUTICA
        THERAPEUTICS INC. II               INTERNATIONAL represented by
                                            CILAG AG INTERNATIONAL ZUG

By:  /s/ JAMES FRATES                   By: /s/ ERIK ROMBOUTS  /s/ HEINZ SCHMID
     ------------------------------         -----------------------------------
Name: JAMES FRATES                      Name: ERIK ROMBOUTS        HEINZ SCHMID
Title:   VP                             Title: VP ALLIANCE MGMT GENERAL MANAGER

                                           JANSSEN PHARMACEUTICA INC.

                                        By: /s/ PETER MILLER
                                            -----------------------------------
                                        Name: PETER MILLER
                                        Title: PRESIDENT

EXHIBIT C1

[ * * * ]

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

EXHIBIT 10.8

WHEREVER CONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH OMISSIONS ARE DENOTED BY AN ASTERISK), SUCH CONFIDENTIAL INFORMATION HAS BEEN SUBMITTED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

AMENDMENT TO MANUFACTURING AND SUPPLY AGREEMENT

THIS AMENDMENT (the "Amendment") is made and entered into as of December 22, 2003 to the Manufacturing and Supply Agreement entered into as of August 6, 1997 by and between JPI PHARMACEUTICA INTERNATIONAL, a division of Cilag AG International Zug ("JPI"), JANSSEN PHARMACEUTICA INC. ("JANSSEN US") and
ALKERMES CONTROLLED THERAPEUTICS INC. II ("ACT II"), as amended (the "Agreement") (any terms used but not defined herein shall have the meaning set forth in the Agreement).

RECITALS:

WHEREAS, JPI, JANSSEN US and ACT II have entered into the Agreement; and

WHEREAS, the parties now wish to enter into this Amendment to clarify the terms for payment of the Manufacturing Fee as set forth in the Agreement by amending the terms and conditions of the Agreement as set forth below;

NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. Article 1.3 of the Agreement shall be deleted in its entirety and replaced with a new Article 1.3 which shall read as follows:

1.3 "Final Product" shall mean a Presentation Form approved and marketed by JANSSEN, their Affiliates and licensees, ready for sale to the final customer.

2. Article 1.5 of the Agreement shall be deleted in its entirety and replaced with Article 1.5(a) and Article 1.5(b) which shall read as follows:

1.5(a) "U.S. Licensed Net Selling Price" shall mean the * offered by JANSSEN, its Affiliates or licensees in a given calendar year (or such shorter period as may be applicable) to independent third parties for each Presentation Form of the Final Product for sale in the United States, its territories and possession, less deductions for (i) trade, cash and ordinary business discounts allowed; (ii) allowances or credits to customers on account of rejection or return of Final Product; and (iii) managed care rebates or allowances and mandatory price allowances imposed by governments.

If JANSSEN, its Affiliates or licensees sell any Presentation Form of the Final Product in the United States in such a manner that the * of the same is not readily identifiable then the * shall be whichever is the higher of (i) the fair market value of such Final Product or (ii) the proportion of the bundled price attributed to such Final Product by JANSSEN, its Affiliates or licensees whenever the Final Product is sold as o part of a package of products or services. For the purpose hereof "fair market

value" shall mean, without limitation, the value of such Final Product sold to similar third parties in similar quantities in the United States. If the fair market value cannot be determined in the United States, the fair market value will be negotiated by the parties in good faith.

1.5(b) "ROW Licensed Net Selling Price" shall mean the * offered by JANSSEN, its Affiliates or licensees in a given calendar year (or such shorter period as may be applicable) to independent third parties for each Presentation Form of the Final Product for sale in the Territory (other than the United States, its territories and possessions), less deductions for (i) trade, cash and ordinary business discounts allowed; (ii) allowances or credits to customers on account of rejection or return of Final Product; and (iii) managed care rebates or allowances and mandatory price allowances imposed by governments.

If JANSSEN, its Affiliates or licensees sell any Presentation Form of the Final Product in a country in the Territory (other than the United States, its territories and possessions) in such a manner that the * of the same is not readily identifiable then the * for that country shall be whichever is the higher of (i) the fair market value of such Final Product or (ii) the proportion of the bundled price attributed to such Final Product by JANSSEN, its Affiliates or licensees whenever the Final Product is sold as part of a package of products or services. For the purpose hereof "fair market value" shall mean, without limitation, the value of such Final Product sold to similar third parties in similar quantities. If the fair market value cannot be determined in any given country, the fair market value will be determined by the value of such Final Product sold to similar customers in countries with similar pricing and reimbursement structures and for similar quantities.

3. Article 1.7 of the Agreement shall be deleted in its entirety and replaced with a new Article 1.7 which shall read as follows:

1.7 "Manufacturing Fee" shall mean the fee to be paid by JPI and JANSSEN US to ACT II for each Presentation Form of the Product in consideration for the Manufacture of Products supplied to each of them in accordance with the terms hereof and which fee will be calculated as a percentage of the U.S. Licensed Net Selling Price and/or the ROW Licensed Net Selling Price, as applicable, for each Presentation Form of the Final Product in accordance with the mechanism set forth in Article 6.

4. A new Article 1.13 shall be added to the Agreement which shall read as follows:

1.13  "Presentation Form" shall mean a form of the Product or the Final Product
      determined by the amount of the single dose (either 25 mg., 37.5 mg. or 50
      mg.) of the depot formulation of Risperidone contained therein.

5.    Article 6 of the Agreement shall be deleted in its entirety and replaced

with a new Article 6 which shall read as follows:

6.1 In consideration of the manufacturing activities to be performed by ACT II hereunder, JPI and JANSSEN US will pay the Manufacturing Fee for the Products supplied to each of them.

The Manufacturing Fee will be calculated as a certain percentage of the U.S. Licensed Net Selling Price and/or ROW Licensed Net Selling Price, as applicable. Subject to the terms and conditions set forth in this Agreement, the actual percentage that shall apply with respect to a given calendar year will be determined in accordance with the mechanisms set forth in this Article 6 and Exhibit D attached hereto.

6.1.1 The Manufacturing Fee for calendar year 2002 has been established pursuant to Exhibit I hereto.

6.1.2 (a) Determination of Manufacturing Fee. Subject to the terms and conditions set forth in this Article 6.1.2, the Manufacturing Fees for calendar year 2003 and any subsequent calendar year will be calculated on the basis of the (i) U.S. Licensed Net Selling Prices and/or ROW Licensed Net Selling Prices for such calendar year (expressed in USD at the exchange rates then applied by JANSSEN in accordance with its normal accounting procedures), as applicable, for each Presentation Form of the Final Product and (ii) the total amount of Product expressed in units that has been Manufactured and shipped pursuant to Article 4 by ACT II for such calendar year.

(b) Determination of a Provisional Manufacturing Fee. For the sake of administrative ease, by *, JANSSEN and ACT II will agree in good faith on the "U.S. Provisional Manufacturing Fee" and the "ROW Provisional Manufacturing Fee" for each Presentation Form of the Product for the upcoming calendar year. The "U.S. Provisional Manufacturing Fee" for each such Presentation Form of the Product shall be calculated by taking the forecast submitted by JANSSEN in * for the upcoming calendar year in accordance with Exhibit E (the "* Forecast"), to determine an estimated total amount of Product to be ordered, then determining the applicable percentage from Exhibit D to the Agreement (based on the such estimated total amount of Product) (the "Applicable Percentage") and adding * to facilitate cash flow (the "Additional Percentage") to such Applicable Percentage to determine the "Provisional Manufacturing Fee Percentage." The Provisional Manufacturing Fee Percentage shall then be applied to JANSSEN's estimated U.S. Licensed Net Selling Price for the upcoming calendar year (which shall be determined by JANSSEN in good faith and submitted to ACT II by * of the prior calendar year) to determine the U.S. Provisional Manufacturing Fee. "ROW Provisional Manufacturing Fee " for each such Presentation Form of

the Product shall be calculated by taking (i) the * Forecast; and
(ii) JANSSEN's estimated ROW Licensed Net Selling Price for the upcoming calendar year (which shall be determined by JANSSEN in good faith and submitted to ACT II by * of the prior calendar year) and applying the Provisional Manufacturing Fee Percentage to the estimated ROW Licensed Selling Price to determine the ROW Provisional Manufacturing Fee. Subject to the other provisions of this Article 6.1.2, ACT II shall invoice JANSSEN US for all Product to be shipped to JANSSEN US in the subsequent calendar year at the U.S. Provisional Manufacturing Fee and shall invoice JPI for all Product to be shipped to JPI in the subsequent calendar year at the ROW Provisional Manufacturing Fee. Either the "U.S. Provisional Manufacturing Fee" and/or the "ROW Provisional Manufacturing Fee" may also be referred to as the "Provisional Manufacturing Fee."

(c) Recalculation of the Provisional Manufacturing Fee. Within * business days after the end of each calendar quarter JANSSEN shall send to ACT II a report setting forth for each Presentation Form of the Final Product (i) its actual U.S. Licensed Net Selling Price for the calendar year to date; (ii) its actual ROW Licensed Net Selling Price for the calendar year to date; and (iii) the actual number of units of Product ordered by JANSSEN pursuant to Exhibit E for the calendar year to date plus the number of units of Product forecast to be ordered by JANSSEN during the balance of the calendar year as set forth in the most recent forecast submitted in accordance with Exhibit E (specifying such units by Presentation Form and by geographical area (US - ROW)) ("Revised Annual Total Products"). The parties shall use such Revised Annual Total Products to recalculate the Applicable Percentage from Exhibit D by substituting such number for the comparable estimated number used to determine the then current Provisional Manufacturing Fee Percentage. The parties shall add an Additional Percentage to this Applicable Percentage to create a new Provisional Manufacturing Fee Percentage. The parties shall also apply the Applicable Percentage to the actual year-to-date US Licensed Net Selling Price and ROW Licensed Net Selling Price to determine an interim US Provisional Manufacturing Fee and an interim ROW Provisional Manufacturing Fee to be used for calculation purposes. The parties shall next use such newly calculated interim Provisional Manufacturing Fees to recalculate the total amount payable for Product shipped to JANSSEN during the current calendar year to date to determine if such recalculation would result in an underpayment or overpayment for such Product (a "Payment Differential") of more than *. The parties shall also calculate the total amount payable for Revised Annual Total Products using the newly calculated interim Provisional Manufacturing Fees as well as the prior Provisional Manufacturing Fees to determine if these amounts represent more than a * potential overpayment or underpayment for such Product. In the event that there is either a underpayment or overpayment of more than * or * as described above, then the party who has overpaid or who has been underpaid may request the other party to pay the Payment Differential within * of the end of such calendar quarter (such payment a "True Up"). In addition, in the event that there is a

True Up, the parties shall apply the newly calculated Provisional Manufacturing Fee Percentage to the actual year-to-date US Licensed Net Selling Price and ROW Licensed Net Selling Price to determine a revised US Provisional Manufacturing Fee and ROW Provisional Manufacturing Fee which shall become the Provisional Manufacturing Fees to be used during the balance of the calendar year, unless replaced by subsequently recalculated Provisional Manufacturing Fees in accordance with this paragraph.

(d) Annual Reconciliation. Within * days after the end of each calendar year, JANSSEN shall send to ACT II a report stating for each Presentation Form of the Final Product (i) its U.S. Licensed Net Selling Price for such calendar year; (ii) its ROW Licensed Net Selling Price for such calendar year; and (iii) the total number of units of Product shipped to JANSSEN during such calendar year (on a country-by-country basis). Any payment required by JANSSEN to ACT II or vice versa to compensate for any difference between the U.S. Provisional Manufacturing Fee and/or the ROW Provisional Manufacturing Fee (calculated in accordance with paragraphs
(b) and (c) above) and the applicable Manufacturing Fees as determined by such actual prices and total number of units of Product shipped shall be made to the appropriate Party no later than * of the year in which the report is delivered and in accordance with the provisions of Article 6.4.

(e) Calculation of Units During Calendar Years *. In calculating the total number of units of Product shipped to JANSSEN for each of calendar years *, whether or not such units of Product are actually shipped, the parties will deem as shipped (i) all Product ordered by JANSSEN prior to the end of * of each such calendar year and (ii) all Product ordered by JANSSEN in the * forecast for each such calendar year (the "* Forecast") submitted in accordance with the ordering procedures set forth in Exhibit E. Any Product ordered by JANSSEN other than as set forth above, even if such Product is shipped, will not, however, be deemed to be shipped when making such calculation, and will also not be deemed to be shipped when calculating the total number of units of Product shipped during any subsequent calendar year. Any units of Product ordered by JANSSEN as set forth above, but not shipped, shall be invoiced to JANSSEN when shipped at the Manufacturing Fee for the applicable calendar year, rather than at the then current Provisional Manufacturing Fee. From the calendar year * onwards, the Manufacturing Fee will be calculated based on the total number of units of Product actually shipped to JANSSEN for such calendar year.

(f) *

(g) *

(h) Illustrative Examples. Exhibit J hereto provides examples for illustrative purposes only of calculations made pursuant to paragraphs (b), (c), (d) and (e) hereof. In the event of any conflict between Exhibit J and this Agreement, the provisions of this Agreement shall control.

6.2 JANSSEN shall keep or cause to be kept accurate records in sufficient detail to enable the Manufacturing Fees for Products sold hereunder to be determined. JANSSEN, upon the written request (including reasonable notice) and at the expense of ACT II, and in any event not more frequently than once in any calendar year, shall permit an independent public accountant of national prominence selected by ACT II, and approved by JANSSEN (with approval not unreasonably to be withheld), to have access during normal business hours to those records as may be reasonably necessary to verify the accuracy of the Manufacturing Fees for Products sold for any calendar year ending not more man three (3) years prior to the date of the aforementioned written request. If such accountant determines that the Manufacturing Fees have been overstated or understated, then one party shall make a payment to the other party as necessary to correct the amount of the Manufacturing Fees paid for Product supplied hereunder, which payment shall be based on the difference between the actual and the misstated Manufacturing Fees. In addition, if such accountant reasonably determines that the Manufacturing Fees have been understated for the audited period by more than *, then JANSSEN shall pay the reasonable costs of such audit. ACT II agrees that all information subject to review under this Article 6.2 shall be deemed JANSSEN's Confidential Information subject to the terms and conditions of Article 7. ACT II shall retain and cause its independent accountant to retain all such information in confidence in accordance with Article 7 and such information may only be used for purposes germane to this Article 6.2.

6.3 ACT II shall invoice JPI or JANSSEN US for the Provisional Manufacturing Fee due with respect to each batch of Product supplied to each of them or their

respective designee when shipped pursuant to Article 4. JPI and JANSSEN US shall pay such, invoice within * after the date of the invoice.

6.4 All payments required to be paid hereunder shall be made in United States Dollars by wire transfer of immediately available funds to the financial institution, account number, account party's name and wire transfer information designated in writing by ACT II to JPI and JANSSEN US as the place of payment.

6.5 No party shall have the right to reduce, by set off, counterclaim, adjustment or otherwise, any amount owed by it to the other party pursuant to this Agreement, unless explicitly provided for otherwise.

6.6 JANSSEN shall bear all applicable national, federal, provincial, municipal and other governmental taxes (such as sale, use or similar taxes), duties, or import charges, except for any tax on profits or income of ACT II, that ACT II may be required to pay or collect as a result of the payments of the Manufacturing Fee or the Provisional Manufacturing Fee.

6.7 Within * after the end of each month, JANSSEN shall deliver to ACT II a report setting forth the dollar amount and the units of each Presentation Form of the Final Product sold during the prior month on a country-by-country basis. In addition, each month JANSSEN shall provide to ACT II the foreign currency exchange rates used to calculate the Final Product sales for each country.

6. Exhibit D shall be amended by deleting the words "Licensed Net Selling Price" and substituting the words "U.S. Licensed Net Selling Price and/or ROW Licensed Net Selling Price."

7. This Amendment and the Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to its conflict of law provisions.

8. Except as expressly provided in this Amendment, all other terms, conditions and provisions of the Agreement shall continue in full force and effect as provided therein. This Amendment and the Agreement constitute the entire agreement between the parties hereto relating to the subject matter hereof and thereof and supersede all prior and contemporaneous negotiations, agreements, representations, understandings and commitments with respect thereto.

[signature page follows]

IN WITNESS WHEREOF, JPI, JANSSEN US and ACT II have executed and delivered this Amendment effective as of the date first set forth above.

      ALKERMES CONTROLLED                      JPI PHARMACEUTICA
       THERAPEUTICS INC. II              INTERNATIONAL represented by
                                          CILAG AG INTERNATIONAL ZUG

By:    /s/ Michael Landine              By:  /s/  Erik Rombouts
       ---------------------                 ----------------------------------
Name:  Michael Landine                  Name: ERIK ROMBOUTS
Title: Vice President                   Title: VP ALLIANCE MGMT

                                        By:   /s/ Heinz Schmid
                                             ----------------------------------
                                        Name:  HEINZ SCHMID
                                        Title: GENERAL MANAGER

                                        JANSSEN PHARMACEUTICA INC.

                                        By: /s/ Peter Miller
                                            ------------------------------------
                                        Name: Peter Miller
                                        Title: President

EXHIBIT I

[***]

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

EXHIBIT J

[***]

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND HAS BEEN FILED SEPARATELY

EXHIBIT 10.9

WHEREVER CONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH OMISSIONS ARE DENOTED BY AN ASTERISK), SUCH CONFIDENTIAL INFORMATION HAS BEEN SUBMITTED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

FOURTH AMENDMENT TO MANUFACTURING AND SUPPLY AGREEMENT

THIS FOURTH AMENDMENT (the "Amendment") is made and entered into as of January 10, 2005 (the "Amendment Effective Date") to the Manufacturing and Supply Agreement entered into as of August 6, 1997, as amended, by and between JPI PHARMACEUTICA INTERNATIONAL, a division of Cilag AG International Zug ("JPI"), JANSSEN PHARMACEUTICA INC. ("JANSSEN US" and, together with JPI, "JANSSEN"), on the one hand, and ALKERMES CONTROLLED THERAPEUTICS INC. II ("ACT II"), on the other hand (the "Agreement").

RECITALS:

WHEREAS, JANSSEN and ACT II have entered into the Agreement; and

WHEREAS, JANSSEN and ACT II have also entered into an Addendum to the Agreement, dated as of August 1, 2001 (the "Addendum"), regarding the expansion of ACT II's manufacturing facilities; and

WHEREAS, the parties now wish to enter into this Amendment regarding the further expansion of ACT II's manufacturing facilities, and the financial responsibility of each of the parties in connection with such expansion;

NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. DEFINITIONS. Unless provided otherwise, any capitalized terms used in this Amendment that are not defined herein will have the meaning set forth in the Agreement or the Addendum. The following terms will have the following meanings:

"Depreciation Credit" means an amount calculated by dividing the Total Third Line Cost by the divisor of *, representing * for depreciation multiplied by * of Product per year.

"FTE" means a full-time technical person dedicated by ACT II to perform technical work on or directly related to the Third Line Plan, or in the case of less than a full-time dedicated technical person, a full-time equivalent technical person year, based upon a total of * (i.e., * of technical work on or directly related to the Third Line Plan.

"FTE Hourly Rate" means the amount of *.

"Total Third Line Cost" means the total amount of the costs incurred by ACT II, calculated as of the date of Validation Completion, for activities performed pursuant to the Third Line Plan, including without limitation the purchase of equipment and the design, engineering, construction and validation activities so performed. In no event, shall the Total Third Line Cost exceed the overall budget set forth in the Third Line Plan, unless such excess costs have been approved by JANSSEN.

2. THIRD LINE. ACT II will design, engineer, construct and validate a third wet process line at its manufacturing facility located in Wilmington, Ohio (the "Third Line"). A description of the design, engineering, construction and validation activities for the Third

Line, including the equipment to be installed therein and the timeline and budget for such design, engineering, construction and validation activities (the "Third Line Plan") will be established by the parties. A draft Third Line Plan including a project budget and project timeline is set forth in Exhibit A to this Amendment.

3. APPROVAL OF THIRD LINE PLAN. Within * of the Amendment Effective Date, the parties will meet to review and finalize the draft Third Line Plan. Any modifications to the draft Third Line Plan affecting the anticipated timelines, scope or budget thereof shall only become effective with the consent of both ACT II and JANSSEN, which consent shall not be unreasonably withheld or delayed. The final Third Line Plan will be attached to this Amendment as Exhibit A 1.

4. PERFORMANCE OF ACTIVITIES. Upon finalization of the Third Line Plan, ACT II will begin to perform, and to have performed, the activities set forth therein. ACT II will be responsible for the management of the design, engineering, construction and validation of the Third Line. The Global Supply Team, or a designated Sub-Team thereof, may, however, recommend actions to ACT II following periodic reviews of the design, engineering, construction and validation of the Third Line. Periodically ACT II may also notify the Global Supply Team of proposed amendments to the Third Line Plan. Within * of receipt of any proposed amendment to the Third Line Plan, the Global Supply Team, or the designated Sub-Team, will meet to evaluate the amendment to the Third Line Plan and to recommend actions; provided, however, that the scope, timelines or budget set forth in the Third Line Plan may only be amended with the consent of both ACT II and JANSSEN, which consent shall not be unreasonably withheld or delayed. ACT II will keep the Global Supply Team, or any designated Sub-Team, regularly informed, and at least on a quarterly basis, of issues and decisions affecting the design, engineering, construction and validation of the Third Line and will consult with the Global Supply Team, or any designated Sub-Team, before making any decisions with respect thereto whenever possible.

5. PAYMENT. JANSSEN US will reimburse ACT II at the * for design, engineering, construction and validation activities performed by * pursuant to the Third Line Plan and will also reimburse ACT II for any for any out-of-pocket costs incurred by ACT II in connection with such activities, including without limitation costs incurred for equipment, and third-party design, engineering, construction and validation services. Any costs for design, engineering, construction and validation activities that exceed the overall budget set forth in the Third Line Plan will be borne by and will be the responsibility of ACT II unless such excess costs have been approved by JANSSEN. The parties will regularly review the status of the budget in the Third Line Plan, in accordance with the anticipated spending schedule provided for in the Third Line Plan.

Notwithstanding the foregoing, the costs of manufacturing any necessary development and validation batches of the Product in connection with the validation of the Third Line will be borne by ACT II, it being understood that if any such Product is supplied to JANSSEN in accordance with the terms of the Agreement, ACT II will be paid the Manufacturing Fee for such Product. JANSSEN will provide Compound for the manufacture of such development and validation batches of the Product free of charge, and no Compound so supplied will be a factor in any yield variance calculation, including without limitation any calculation made pursuant to Section 2.7 of the Agreement.

6. PAYMENT PROCESS. ACT II will invoice JANSSEN US, or such other entity as JANSSEN US shall direct, on a * for design, engineering and construction activities based on the payment schedule set forth in Exhibit A.1, and JANSSEN US, or such

other designated entity, will pay ACT II within *. Upon approval of the process validation reports for the Third Line ("Validation Completion"), ACT II will invoice JANSSEN US, or such other entity as JANSSEN US shall direct, for the costs of all validation activities set forth in the Third Line Plan, and JANSSEN US, or such other designated entity, will pay ACT II within *. All payments required to be made hereunder will be made in United States dollars by wire transfer of immediately available funds to the financial institution, account number, and account party's name designated in writing from time to time by ACT II to JANSSEN US as the place of payment.

7. OWNERSHIP OF EQUIPMENT. JANSSEN US will own the pieces of equipment described in the Third Line Plan (the "Equipment"). To the extent that the provisions of this Amendment are in conflict with Section 2.2 of the Agreement,
Section 2.2 will be deemed to be amended with respect to the Equipment. To perfect JANSSEN US's ownership interest in the Equipment, ACT II, at JANSSEN's request, will file appropriate Uniform Commercial Code financing statements with respect to the Equipment. ACT II will keep the Equipment free and clear of all liens and encumbrances, other than those which may result from acts of JANSSEN. JANSSEN US will be responsible for paying any taxes, including without limitation personal property and sales taxes, that may accrue with respect to the Equipment.

8. USE OF EQUIPMENT. ACT II will have the right to use the Equipment during the term of the Agreement in accordance with the provisions of the Agreement and this Amendment, without obligation to make any payments to JANSSEN US with respect to such right of use other than as provided for in Section 11 hereof. ACT II will maintain each piece of Equipment in good operating order and repair, normal wear and tear excepted. ACT II agrees, at its own expense, to keep all Equipment insured in appropriate amounts for damage or loss.

9. DELIVERY OF EQUIPMENT UPON TERMINATION. Subject to ACT II's purchase rights as set forth in Section 11, upon termination or expiration of the Agreement, JANSSEN US may request that ACT II deliver to any destination in the United States any Equipment that is not permanently fixed to ACT II's facilities in Wilmington, Ohio and that can be removed from such facilities without destroying any portion thereof or significantly disrupting the operation thereof, as reasonably determined by ACT II. ACT II will promptly crate and ship such Equipment to such destination at JANSSEN US's cost and expense.

10. USE OF THIRD LINE. The parties agree that after the first and second wet process lines at ACT II's Wilmington, Ohio facility have been utilized to their appropriate capacity for the manufacture of the Product, as determined by the Global Supply Team taking into account the forecasts for the Product provided by JANSSEN in good faith pursuant to the Agreement, manufacture of the Product will be given priority on the Third Line. Subject to the foregoing limitation, ACT II will have the right at any time to manufacture products other than the Product using the Third Line, provided that (i) ACT II has provided * prior notice of such intended manufacturing activities to JANSSEN (the "Manufacturing Notice") and discussed such intended manufacturing activities with the Global Supply Team, and (ii) the Global Supply Team, using its reasonable judgment in good faith, has approved such use following review of a facility master plan to be provided by ACT II specifying the proposed production campaigns on the Third Line. Any such discussion with the Global Supply Team will be subject to ACT II's obligations of confidentiality (if any) to its collaborative partner for the products to be manufactured using the Third Line. Unless the Global Supply Team notifies ACT II within * of

receipt of the Manufacturing Notice that it does not approve the intended manufacturing activities, ACT II will have the right to manufacture products other than the Product using the Third Line, and ACT II will purchase the Equipment in accordance with the provisions of Section 11 hereof at the latest * prior to the date of manufacturing the first commercial batch of any such product on the Third Line.

11. PURCHASE OF EQUIPMENT. In addition to its purchase obligations under
Section 10 above, at any time, upon thirty (30) days prior written notice to JANSSEN, ACT II will have the right to purchase the Equipment. Any purchase by ACT II of the Equipment will be made at its then current book value, as set forth in JANSSEN US's financial statements, which book value will be determined by depreciating the Equipment and the related installation and validation costs set forth in the Third Line Plan in accordance with United States generally accepted accounting principles (US GAAP) consistently applied; provided, however, that if ACT II exercises its purchase right following the receipt of notice from JANSSEN of termination of the Agreement pursuant to Section 10.2.4 thereof, then ACT II will have the right to purchase the Equipment for consideration of Ten U.S. Dollars (US $10.00). JANSSEN US will depreciate the Equipment and the related costs on a straight- line basis over a period of *. Within * of receipt of the Manufacturing Notice or a notice from ACT II of intended purchase of the Equipment, JANSSEN will provide ACT II with notice of the Equipment's then current book value. ACT II will have the right to request an audit of JANSSEN US' determination of book value of the Equipment, which shall be conducted by an independent public accountant of national prominence at ACT II's expense. Such accountant will treat all information subject to audit under this Section 11 as confidential and will provide a report to ACT II and JANSSEN US regarding only the accuracy or inaccuracy of the book value determination. Following receipt of JANSSEN's notice regarding the book value of the Equipment (and any audit conducted by ACT II), JANSSEN US and ACT II will promptly execute and deliver appropriate bills of sale and other documents for the purchase of the Equipment. Upon the execution and delivery of such documents, this Amendment will be automatically amended to delete Sections 7 through 10 hereof, and JANSSEN will promptly file amendments terminating any Uniform Commercial Code financing statements that have been filed with respect to the Equipment.

12. DEPRECIATION CREDIT. If ACT II manufactures more than * of the Product on the Third Line during any calendar year, then ACT II will give JANSSEN a Depreciation Credit in accordance with the terms of this Section 12 for each batch of Product in excess of * that are so manufactured. For any calendar year in which more than * of the Product were manufactured on the Third Line, ACT II will grant to JANSSEN within * of the end of such calendar year a credit in the amount of: (i) the Depreciation Credit per batch of the Product, multiplied by
(ii) the number of batches of the Product in excess of * manufactured on the Third Line in such calendar year. JANSSEN shall have the right to apply this credit until it is exhausted against Manufacturing Fees payable for the Product supplied by ACT II during the subsequent calendar year.

13. LONG TERM CAPACITY. ACT II and JANSSEN agree that if, and only if, the Global Supply Team agrees in good faith, taking into account the forecasts for the Product provided by JANSSEN in good faith pursuant to the Agreement, that the volumes of the Product so ordered by JANSSEN will exceed the combined capacity of the first, second and third wet process lines and the existing filling lines at ACT II's Wilmington, Ohio facilities, then JANSSEN will have the option to establish its own manufacturing facility for the

manufacture of the Product by JANSSEN or any of its Affiliates. If the Global Supply Team so agrees, both parties will discuss in good faith the timing and specific conditions for the establishment of any such additional manufacturing facility with a view to maximizing the chances for an expedient and successful validation of such facility. Among other conditions to be negotiated by the parties in good faith and agreed upon in writing, ACT II will provide, if necessary and at the expense of JANSSEN, commercially reasonable training and support including the transfer of all necessary data and instructions to achieve such objectives. The parties agree that commercial manufacturing at such facility will not begin unless and until ACT II and JANSSEN have negotiated in good faith and agreed in writing upon appropriate economic mechanisms to preserve ACT II's net economic benefit under the current agreements between the parties with respect to the Product, including without limitation the Agreement, the Addendum, and the Agreement between the parties dated December 21, 2002, as amended. For the purpose of determining the net economic benefit referred to above, the parties will also consider a reasonable utilization percentage of the first, second and third wet process lines and the existing filling lines at ACT II's Wilmington, Ohio facilities. At the Effective Date of this Amendment, the parties contemplate such reasonable percentage to be * of the capacity thereof, unless the parties agree otherwise when negotiating such economic mechanisms referred to above. The parties furthermore agree that such percentage may vary as a result of *. The terms and conditions of this Section 13 will supersede the terms and conditions of Section 9 of the Agreement between the parties dated December 21, 2002, as amended.

14. OPERATING COSTS. Following the Validation Completion, ACT II will be responsible for the ongoing operating costs of the Third Line in accordance with the provisions of the Agreement.

15. PRESS RELEASE. Neither party will originate any written publicity, news release or public announcement, written or oral, relating to this Amendment, other than such announcements or filings that are required to be made by applicable law, rules or regulations (or the applicable rules of any securities exchange or market on which a party's or its affiliates' securities are listed or traded) or that are otherwise agreed by the parties or expressly permitted under this Amendment. An approved press release announcing this Amendment is attached hereto as Exhibit B. If in the reasonable opinion of a party's legal counsel, a public announcement is required to be made by applicable laws, rules or regulations (or the applicable rules of any securities exchange or market on which a party's or its affiliates' securities are listed or traded), then the disclosing party will provide the other party notice reasonable under the circumstances of such intended announcement and, to the extent feasible under circumstances, will consult with the other party with respect to the nature and scope of such intended announcement. Routine references to this Amendment and the arrangements hereunder will be allowed in the usual course of a party's business. Once information has been approved for disclosure or publication under this Section 15, either party may use such approved information in written publicity, news releases, public announcements and other future communications with third parties.

16. GOVERNING LAW. This Amendment will be governed by and construed in accordance with the laws of the State of New York without regard to its conflict of law provisions.

17. INTEGRATION. Except as expressly provided in this Amendment, all other terms, conditions and provisions of the Agreement will continue in full force and effect as provided therein. This Amendment, the Agreement and the Addendum constitute the entire agreement between the parties hereto relating to the subject matter hereof and thereof and supersede all prior and contemporaneous negotiations, agreements, representations, understandings and commitments with respect thereto. In the event of a conflict between the terms and conditions of the Agreement or the Addendum and the terms and conditions of this Amendment, the terms and conditions of this Amendment shall control.

[signature page follows]

IN WITNESS WHEREOF, JPI, JANSSEN US and ACT II have executed and delivered this Amendment effective as of the date first set forth above.

        ALKERMES CONTROLLED                   JPI PHARMACEUTICA
        THERAPEUTICS INC. II            INTERNATIONAL represented by
                                         CILAG AG INTERNATIONAL ZUG

By: /s/ Michael Landine                By: /s/ Heinz Schmid
   ___________________________            _____________________________
Name: Michael Landine                  Name: Heinz Schmid
     _________________________              ___________________________
Title: Vice President                  Title: General Manager
      ________________________               __________________________

                                       By: /s/ Gilber Eyer
                                          _____________________________
                                       Name: Gilber Eyer
                                            ___________________________
                                       Title: Finance Director
                                             __________________________

                                         JANSSEN PHARMACEUTICA INC.

                                       By: /s/ Janet Vergis
                                          ____________________________
                                       Name: Janet Vergis
                                            __________________________
                                       Title: President
                                             _________________________

EXHIBIT A

[***]

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

EXHIBIT B
PRESS RELEASE
[To be approved by the parties]

Contact:
Barbara Yates
Alkermes, Inc.
(617)583-6321

DRAFT - NOT FOR RELEASE

ALKERMES TO EXPAND PRODUCTION CAPACITY FOR
RISPERDAL(R) CONSTA(R)

CAMBRIDGE, MA, JANUARY 11, 2005 -- Alkermes, Inc. (Nasdaq: ALKS) today announced that the Company will expand production capacity for Risperdal(R) Consta(R)
[(risperidone) long-acting injection], an atypical antipsychotic medication approved for the treatment of schizophrenia. This expansion at Alkermes' Wilmington, Ohio, facility is designed to meet anticipated future demand for Risperdal Consta. Alkermes' partner, Janssen-Cilag, a wholly owned division of Johnson & Johnson, will help fund the building of the new manufacturing line. Under the terms of the agreement, Alkermes will be responsible for managing the design, engineering, construction, validation and all other aspects of the project based upon a mutually-developed project plan.

"The decision to expand our manufacturing capabilities highlights the success of Risperdal Consta," commented Richard Pops, Chief Executive Officer of Alkermes. "We are excited to build this third manufacturing line to support the plans to continue to meet the market needs for Risperdal Consta as an important product for patients."

About Alkermes, Inc.

Alkermes, Inc. is a pharmaceutical company that develops products based on sophisticated drug delivery technologies to enhance therapeutic outcomes in major diseases. The Company's lead commercial product, Risperdal Consta
[(risperidone) long-acting injection], is the first and only long-acting atypical antipsychotic medication approved for use in schizophrenia, and is marketed worldwide by Janssen-Cilag ("Janssen"), a wholly owned subsidiary of Johnson & Johnson. The Company's lead proprietary product candidate, Vivitrex(R)
[(naltrexone) long-acting injection], is a once-a-month injection for the treatment

of alcohol dependence. The Company has a pipeline of extended-release injectable products and pulmonary drug products based on its proprietary technology and expertise. Alkermes' product development strategy is twofold: the Company partners its proprietary technology systems and drug delivery expertise with several of the world's finest pharmaceutical companies and it also develops novel, proprietary drug candidates for its own account. The Company's headquarters are in Cambridge, Massachusetts, and it operates research and manufacturing facilities in Massachusetts and Ohio.

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. There can be no assurance that actual results will not differ materially from the forward-looking statements discussed in this press release. These forward-looking statements include risks and uncertainties that the third manufacturing line will be built on budget or will be validated on time, risks and uncertainties inherent in the collaboration with and dependence upon Johnson & Johnson, and risks and uncertainties regarding the drug discovery and development process. These statements reflect Alkermes' current beliefs; however, as with any pharmaceutical product, there remain substantial risks and uncertainties related to market acceptance. There are no guarantees regarding what the actual demand for Risperdal Consta may be nor whether Alkermes can manufacture Risperdal Consta on a commercial scale or economically. These and additional risks and uncertainties are described more fully in Alkermes' filings with the Securities and Exchange Commission under the Securities Exchange Act of 1934, such as its Annual Report on Form 10-K for the fiscal year ended December 31, 2003 under the heading "Risk Factors Related to Our Business" and its subsequently filed Quarterly Reports on Form 10-Q. Alkermes undertakes no duty to update forward-looking statements.