“5.2 Milestones and Fees for Development of Licensed Products

Milestone Payments. Subject to the terms and conditions of this Agreement and in further consideration for the license granted herein, Licensee shall make each of the following one-time, non-refundable, non-creditable milestone payments to Merck based on attainment of the Development, regulatory and commercial milestones indicated below:

Sales Milestones. Denali shall pay to ​ a one-time milestone payment upon the first occurrence of the events listed in [(a) through (c)] below:

Development Reports. Licensee shall provide Merck with reasonably detailed reports describing its progress with respect to its Development efforts under this Agreement (hereinafter “Development Reports”). Such Development Reports shall be furnished annually until the First Commercial Sale. Each Development Report shall include the following information for the Licensed Product: a description of the Development work conducted during the year in reasonable detail, including clinical studies, formulation work, manufacturing work, and other testing work and regulatory activity; timelines for such work; and key decision gates and milestones anticipated for such work. All Development Reports created by Licensee shall be deemed the Proprietary Information of Licensee and are subject to the confidentiality obligations of Article IX.

The following two (2) events (the “Escrow Release Milestones”) will trigger the release from the Escrow Pool of the Escrowed Shares, the whole as more fully described in Schedule “B” attached hereto:

“Develop” or “Development” means the conduct of clinical drug development activities pertaining to a Development Candidate or Product, including toxicology, pharmacology, test method development, stability testing, process development, technology transfer, formulation development, delivery system development, quality assurance and quality control development, statistical analysis, clinical studies (including investigator-sponsored clinical trials, Supplemental Trials, Required Phase 4 Clinical Trials and any post-approval studies required by the relevant Regulatory Authority), regulatory affairs, pharmacovigilance, Regulatory Approval and Pricing Approval, and clinical study regulatory activities (including regulatory activities directed to obtaining pricing and reimbursement approvals). For clarity, Development will exclude any Research, Commercialization and Manufacturing activities.

Neuren and ACADIA have agreed to an initial Development Plan with respect to the Development of the Compound for Rett syndrome in the Territory, including development tasks, timelines and a budget, an overview of which is set out in a schedule delivered by separate letter agreement of the parties.

​ = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

Development Plan. An initial development plan is attached hereto as Exhibit A (such plan, as may be amended by time to time pursuant to this Agreement, the “Development Plan”). The Development Plan is a high-level summary of the Development activities Allergan anticipates being necessary to obtain Regulatory Approval for Licensed Products for the First Indication in the U.S. and ​ [[Unknown Identifier]] Countries for which Allergan is using Commercially Reasonable Efforts to Develop and seek Regulatory Approval for a Licensed Product in the First Indication. For as long as Development activities under this Agreement are ongoing, on or before each anniversary of the Effective Date, Allergan shall prepare an amendment, as appropriate, to the then-current Development Plan to reflect material changes or additions to the Development of Licensed Products for the First Indication in the U.S. and ​ [[Unknown Identifier]] Countries. Allergan shall submit all amendments to the Development Plan to UroGen and, upon such submission, the amended Development Plan will become effective and supersede the previous Development Plan.

Development Records. Allergan shall maintain, in good scientific manner, complete and accurate books and records pertaining to its Development activities hereunder, in sufficient detail to verify compliance with its obligations under this Agreement and which shall be appropriate for patent and regulatory purposes, in compliance with Applicable Law and properly reflect all work done and results achieved in the performance of its Development activities hereunder, which books and records shall record only such activities and shall not include or be commingled with records of activities outside the scope of this Agreement. Such books and records shall be retained by Allergan for at least ​ years after the expiration or termination of this Agreement in its entirety or for such longer period as may be required by Applicable Law.