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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">UNITED
      STATES</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SECURITIES
      AND EXCHANGE COMMISSION</font></div>
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      D.C. 20549</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><strong>FORM
      8-K</strong></font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CURRENT
      REPORT</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">PURSUANT
      TO SECTION 13 OR 15(</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">d</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">)
      OF</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">THE
      SECURITIES EXCHANGE ACT OF 1934</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date
      of
      Report (Date of earliest event reported): May 6, 2006</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><strong>Hana
      Biosciences, Inc.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Exact
      name of registrant as specified in its charter)</font></div>
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              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;<strong><font size="2">Delaware</font></strong></div>
            </td>
            <td width="33%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;<strong><font size="2">000-50782</font></strong></div>
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              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;<strong><font size="2">32-0064979</font></strong></div>
            </td>
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              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font size="2">(State
                or other jurisdiction of </font><font id="TAB2" style="COLOR: black; LETTER-SPACING: -2.95pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">incorporation)</font></div>
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              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;<font size="2">(Commission
                File Number)</font></div>
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              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;<font size="2">(IRS
                Employer Identification
                No.)</font></div>
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            <td width="33%">&#160;</td>
            <td width="33%">&#160;</td>
            <td width="33%">&#160;</td>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>400
      Oyster Point Blvd., Ste. 215, South San Francisco, CA</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>94080</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Address
      of principal executive offices)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Zip
      Code) </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(650)
      588-6404</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Registrant's
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      name or former address, if changed since last report)</font></div>
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      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
      provisions:</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-FAMILY: Wingdings">o</font>Written
      communications
      pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Wingdings">o</font>
      Soliciting material pursuant to Rule
      14a-12 under the Exchange Act (17 CFR 240.14a-12)</font></div>
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      Pre-commencement communications pursuant
      to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Wingdings">o</font>
      Pre-commencement communications pursuant
      to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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    <div>&#160;</div>
    <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      1.01. Entry into a Material Definitive Agreement. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      May 6,
      2006, the Company completed a transaction (the &#8220;Transaction&#8221;) with Inex
      Pharmaceuticals Corporation (&#8220;Inex&#8221;) pursuant to which the Company acquired
      exclusive, worldwide rights to develop and commercialize three oncology product
      candidates known as Marqibo&#174; (vincristine sulfate) Liposomes Injection,
      sphingosomal encapsulated vinorelbine and sphingosomal encapsulated topotecan
      (the &#8220;Products&#8221;). Marqibo&#174; is a novel, targeted sphingosomal encapsulated
      formulation of the FDA-approved cancer drug vincristine. Sphingosomal
      encapsulated vinorelbine and sphingosomal encapsulated topotecan are
      sphingosomal encapsulated versions of the FDA-approved chemotherapy drugs
      vinorelbine and topotecan, respectively. The Transaction was evidenced by a
      series of agreements between the Company and Inex. The material terms of each
      agreement are summarized below. In consideration for all of the intellectual
      property rights and assets acquired by the Company in the Transaction, the
      Company paid to Inex aggregate consideration of $11.5 million, of which $1.5
      million was paid in cash and the remaining $10 million was satisfied by issuing
      to Inex 1,118,568 shares of the Company&#8217;s common stock. The shares were valued
      at a price of $8.94 per share, which represented the average weighted volume
      price of the Company&#8217;s common stock over the 20 trading days preceding March 16,
      2006, the date of the parties&#8217; letter of intent regarding the Transaction. Prior
      to the Transaction, neither the Company nor its affiliates had any relationship
      with Inex.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(1)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>License
      Agreement</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to the terms of a license agreement dated May 6, 2006, between Inex and the
      Company (the &#8220;License Agreement&#8221;), Inex granted to the Company:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
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          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">an
                exclusive license under certain patents held by Inex and referred
                to in
                the License Agreement as the &#8220;Inex Patents,&#8221; to commercialize the Products
                for all uses throughout the world;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">an
                exclusive license under certain patents held by Inex referred to
                in the
                License Agreement as the &#8220;BCCA Patents,&#8221; to commercialize the Products for
                all uses throughout the world under the terms of certain&#160; research
                agreements between Inex and the British Columbia Cancer
                Agency;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">an
                exclusive sublicense under certain patents relating to the Products
                that
                Inex licensed from the University of Texas, M.D. Anderson Cancer
                Center
                (the &#8220;MDACC&#8221;) to commercialize the Products throughout the world under the
                terms of a license agreement between Inex and MDACC;
                and</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">an
                exclusive license to all technical information and know-how relating
                to
                the technology claimed in the Inex Patents and to all confidential
                information possessed by Inex relating to the Products, including
                all
                data, know-how, manufacturing information, specifications and trade
                secrets (the &#8220;Inex Technology&#8221;) to commercialize the Products for all uses
                throughout the world.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;The
      Company has the right to grant sublicenses to third parties and in such event
      the Company and Inex will share sublicensing revenue received by the Company
      at
      varying rates for each Product depending on such Product&#8217;s stage of clinical
      development.&#160; Under the License Agreement, the Company also granted back to
      Inex a limited, royalty-free, non-exclusive license in&#160;certain patents and
      technology owned or&#160;licensed to the Company solely for use in developing
      and commercializing liposomes having an active agent encapsulated, intercalated
      or entrapped therein.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company agreed to pay to Inex up to an aggregate of $30.5 million upon the
      achievement of various clinical and regulatory milestones relating to all
      Products. At the Company&#8217;s option, the milestones may be paid in cash or
      additional shares of the Company&#8217;s common stock. However, the total number of
      shares the Company&#8217;s common stock that may be issued to Inex in connection with
      the Transaction may not exceed 19.99 percent of the Company&#8217;s outstanding shares
      of common stock as of May 6, 2006. In addition to the milestone payments, the
      Company agreed to pay royalties to Inex based on net sales of the Products,
      against which the Company may offset a portion of the research and development
      expenses it incurs. In addition to the Company&#8217;s obligations to make milestone
      payments and pay royalties to Inex, the Company also assumed all of Inex&#8217;s
      obligations to its licensors and collaborators relating to the licensed
      technology, which include aggregate milestone payments of up to $2.5 million,
      annual license fees and additional royalties. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      License Agreement provides that the Company will use its commercially reasonable
      efforts to develop each Product, including causing the necessary and appropriate
      clinical trials to be conducted in order to obtain and maintain regulatory
      approval for each Product and preparing and filing the necessary regulatory
      submissions for each Product. The Company also agreed to provide Inex with
      periodic reports concerning the status of each Product. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company is required to use commercially reasonable efforts to commercialize
      each
      Product in each jurisdiction where a Product has received regulatory approval.
      The Company will be deemed to have breached its commercialization obligations
      in
      the United States, or in Germany, the United Kingdom, France, Italy or Spain,
      if
      for a continuous period of 180 days at any time following commercial sales
      of a
      Product in any such country, no sales of a Product are made in the ordinary
      course of business in such country by the Company (or a sublicensee), unless
      the
      parties agree to such delay or unless the Company is prohibited from making
      sales by a reason beyond its control. If the Company breaches this obligation,
      then Inex is entitled to terminate the license with respect to such Product
      and
      for such country.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
      the
      License Agreement, Inex, either alone or jointly with MDACC, will be the owner
      of patents and patent applications claiming priority to certain patents licensed
      to the Company, and the Company has an obligation to assign to Inex the
      Company&#8217;s rights to inventions covered by such patents or patent applications,
      and, when negotiating any joint venture, collaborative research, development,
      commercialization or other agreement with a third party, to require such third
      party to do the same.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      prosecution and maintenance of the licensed patents will be overseen by an
      IP
      committee having equal representation from the Company and Inex. The Company
      will have the right and obligation to file, prosecute and maintain most of
      the
      licensed patents, although Inex maintained primary responsability to prosecute
      certain of the licensed patents.&#160; The parties agreed to share the expenses
      of prosecution at varying rates.&#160;&#160;The Company also has the first
      right, but not the obligation, to enforce such licensed patents against third
      party infringers, or to defend against any infringement action brought by any
      third party.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company agreed to indemnify Inex for all losses resulting from the Company&#8217;s
      breach of its representations and warranties, its default under the License
      Agreement, its breach of any regulatory requirements, regulations and guidelines
      in connection with the products, complaints alleging infringement against Inex
      with respect to the Company&#8217;s manufacture, use or sale of a product, and any
      injury or death to any person or damage to property caused by any product
      provided by the Company or its sublicensee, except to the extent such losses
      are
      due to Inex&#8217;s breach of representation or warranty, Inex&#8217;s default under the
      agreement, and the breach by Inex of any regulatory requirements, regulations
      and guidelines in connection with licensed patent and related know-how,
      including certain of Inex&#8217;s indemnification obligations to MDACC that will be
      passed through to us as a result. Inex has agreed to indemnify the Company
      for
      losses arising from Inex&#8217;s breach of representation or warranty, Inex&#8217;s default
      under the agreement, and the breach by Inex of any regulatory requirements,
      regulations and guidelines in connection with licensed patent and related
      know-how, except to the extent such losses are due to the Company&#8217;s breach of
      our representations and warranties, the Company&#8217;s default under the agreement,
      the Company&#8217;s breach of any regulatory requirements, regulations and guidelines
      in connection with the products, complaints alleging infringement against Inex
      with respect to the Company&#8217;s manufacture, use or sale of a product, and any
      injury or death to any person or damage to property caused by any product
      provided by the Company or its sublicensee. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">3</font></div>
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          <hr style="COLOR: black" noshade size="2">
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      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unless
      terminated earlier, the license grants made under the License Agreement expire
      on a country-by-country basis upon the later of (i) the expiration of the last
      to expire patents covering each Product in a particular country, (ii) the
      expiration of the last to expire period of product exclusivity covered by a
      Product under the laws of such country, or (iii) with respect to the Inex
      Technology, on the date that all of the Inex Technology ceases to be
      confidential information. The covered issued patents are scheduled to expire
      between 2014 and 2020. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Either
      the Company or Inex may terminate the License Agreement in the event that the
      other has materially breached its obligations thereunder and fails to remedy
      such breach within 90 days following notice by the non-breaching party. If
      such
      breach is not cured, then the non-breaching party may, upon 6 months&#8217; notice to
      the breaching party, terminate the license in respect of the Products or
      countries to which the breach relates. Inex may also terminate the license
      if
      the Company asserts or intends to assert any invalidity challenge on any of
      the
      patents licensed to the Company. The License Agreement also provides that either
      party may, upon written notice, terminate the agreement in the event of the
      other&#8217;s bankruptcy, insolvency, dissolution or similar proceeding. In the event
      Inex validly terminates the License Agreement, all data, materials, regulatory
      filings and all other documentation reverts to Inex.</font></div>
    <div>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(2)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>UBC
      Sublicense Agreement between the Company and Inex</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
      the
      UBC sublicense agreement, Inex granted to the Company an exclusive, worldwide
      sublicense under several patents relating to the sphingosomal encapsulated
      vinorelbine and sphingosomal encapsulated topotecan Products, together with
      all
      knowledge, know-how, and techniques relating to such patents (the &#8220;UBC
      Technology&#8221;). The UBC Technology is owned by the University of British Columbia
      and licensed to Inex pursuant to a License Agreement dated July 1, 1998. The
      UBC
      sublicense agreement provides that the Company will undertake all of Inex&#8217;s
      obligations contained in Inex&#8217;s license agreement with UBC, which includes the
      payment of royalties (in addition to the royalties owning to Inex under the
      license agreement between Inex and the Company) and an annual license fee.
      The
      provisions of the UBC sublicense agreement relating to the Company&#8217;s obligation
      to develop and commercialize the UBC Technology, termination and other material
      Company obligations are substantially similar to the terms of License Agreement,
      as discussed above.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(3)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Assignment
      of Agreement with Elan Pharmaceuticals, Inc.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to an Amended and Restated License Agreement dated April 3, 2003 (the &#8220;Elan
      License Agreement&#8221;), between Inex (including two of its wholly-owned
      subsidiaries) and Elan Pharmaceuticals, Inc., Inex held a paid up, exclusive,
      worldwide license to certain patents, know-how and other intellectual property
      relating to vincristine sulfate liposomes. In connection with the Transaction,
      Inex assigned to the Company all of its rights under the Elan License Agreement
      pursuant to an Assignment and Novation Agreement dated May 6, 2006 among the
      Company, Inex and Elan. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      assigned to the Company, the Elan License Agreement provides that Elan will
      own
      all improvements to the licensed patents or licensed know-how made by the
      Company or its sublicensees, which will in turn be licensed to the Company
      as
      part of the technology the Company licenses from Elan. Elan has the first right
      to file, prosecute and maintain all licensed patents and the Company has the
      right to do so if Elan decides that it does not wish to do so only pertaining
      to
      certain portions of the technology. Elan also has the first right to enforce
      such licensed patents and the Company may do so only if Elan elects not to
      enforce such patents. In addition, Elan also has the right but not the
      obligation to control any infringement claim brought against Elan.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company has indemnification obligations to Elan for all losses arising from
      the
      research, testing, manufacture, transport, packaging, storage, handling,
      distribution, marketing, advertising, promotion or sale of the products by
      the
      Company, its affiliates or sublicensees, any personal injury suits brought
      against Elan, any infringement claim, certain third party agreements entered
      into by Elan, and any acts or omissions of any of the Company&#8217;s
      sublicensees.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">4</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Elan
      License Agreement, unless earlier terminated, will expire on a country by
      country basis, upon the expiration of the life of the last to expire licensed
      patent in that country. Elan may terminate the Elan License Agreement earlier
      for the Company&#8217;s material breach upon 60 days&#8217; written notice if the Company
      does not cure such breach within such 60 day period (the Company&#160;may extend
      such cure period for up to 90 days if&#160;it proposes a course of action to
      cure the breach within the initial 60 day period and act in good faith to cure
      such breach), for the Company&#8217;s bankruptcy or going into liquidation upon 10
      days&#8217; written notice, or immediately if the Company or the Company&#8217;s sublicensee
      directly or indirectly disputes the ownership, scope or validity of any of
      the
      licensed technology or support any such attack by a third party.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(4)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Service
      Agreement</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      connection with the Transaction, the Company and Inex also entered into a
      Service Agreement dated May 6, 2006. Under the Service Agreement, the Company
      engaged Inex on a non-exclusive basis to perform various transition services
      relating to the transfer of technology, agreements and other matters useful
      to
      the Company in the period following the completion of the Transaction. The
      Service Agreement provides that the Company and Inex will jointly review a
      schedule each quarter that will describe the services requested of Inex for
      such
      period, together with a forecast of the estimated number of full-time employees
      of Inex required to perform such services and a schedule identifying the time
      by
      which the services are expected to be completed. Such services may include
      Inex&#8217;s assistance in transferring data and other materials relating to or useful
      in the development of the Products or its assistance assigning various testing
      and material supply agreements and relationships that Inex has established
      in
      connection with the Products. As consideration for Inex&#8217;s services, and in
      addition to the $11.5 million upfront payment paid in connection with the
      transaction, the Company will pay to Inex fees calculated on the number of
      actual time employees, contractors or consultants of Inex who perform such
      services based on a rate of $250,000 per full time employee
      equivalent.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Service Agreement expires on June 30, 2007, unless terminated earlier. The
      Company may terminate the Service Agreement upon 60 days&#8217; written notice for any
      reason. Upon 30 days&#8217; notice and an opportunity to cure, either party may
      terminate the Service Agreement in the event the other party fails to comply
      with a material term of the agreement or the service schedule (including any
      change orders to the service schedule). Either party may also terminate the
      agreement in the event the other makes an assignment for the benefit of
      creditors, becomes insolvent, files a bankruptcy petition or similar proceeding,
      which proceeding remains undismissed or unstayed for at least 60 days.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(5)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Transaction
      Agreement</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company and Inex entered into a Transaction Agreement on May 6, 2006 (the
      "Transaction Agreement"), which generally provided for the mechanics of closing
      the Transaction. The agreement contains several provisions relating to the
      assignment to the Company of various clinical trial and other agreements
      relating to the Products, as well as provisions obligating Inex to use its
      commercially reasonable efforts to cause the outright assignment to the Company
      of Inex&#8217;s license with MDACC and its rights to certain of the patents covered by
      the License Agreement.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Transaction Agreement also contains provisions relating to competition by the
      parties. More specifically, the Company agreed that, to the extent it develops,
      manufactures or commercializes a product that incorporates the Products
      encapsulated in a liposome not proprietary to Inex in a particular country
      during the term of the License Agreement, all licenses and sublicenses granted
      to the Company under the License Agreement with respect to such country and
      such
      Product will revert to Inex. The Transaction Agreement further provides that
      Inex will not, directly or indirectly, engage in the business of developing,
      manufacturing or commercializing any of the Products, including any future
      generation products for formulations containing vincristine, vinorelbine or
      topotecan.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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        </div>
      </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">5</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(6)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Asset
      Purchase Agreement</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company and Inex also entered an Asset Purchase Agreement on May 6, 2006. Under
      this agreement, Inex assigned to the Company various equipment, inventory and
      other assets useful in the development of the Products. The Company did not
      pay
      any additional consideration for such assets beyond the $11.5 million payment,
      discussed above.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(7)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Registration
      Rights Agreement</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to a Registration Rights Agreement dated May 6, 2006, the Company agreed to
      file
      a registration statement covering the resale of the 1,118,568 shares of common
      stock issued to Inex in connection with the Transaction on or before July 5,
      2006, and to use commercially reasonable efforts to have such registration
      statement declared effective by the Commission on or before November 2, 2006.
      In
      the event the Company does not file such registration statement by July 6,
      2006,
      or in the event such registration statement is not declared effective by
      November 6, 2006, then the Company must issue to Inex an additional
      approximately 22,400 shares of its common stock. Inex agreed that it will not
      sell more than 25% of the shares issued in each three month period commencing
      on
      the effective date of the registration statement.</font></div>
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    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        </div>
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      <div id="HDR">
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        </div>
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    </div>
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      duly authorized. </font>
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            <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: "><strong>Hana
              Biosciences, Inc.</strong></font></td>
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            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Date:
              May 11, 2006&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">By:&#160;&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: "><u>/s/
              John P.
              Iparraguirre&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
              </u></font></td>
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            <td align="left"><font size="2">John P. Iparraguirre</font></td>
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            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Vice
              President, Chief Financial Officer</font></td>
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{"company-data": {"conformed-name": "Hana Biosciences Inc", "cik": "0001140028", "assigned-sic": "2834", "irs-number": "841588441", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-32626", "film-number": "06831372"}, "business-address": {"street1": "400 OYSTER POINT BOULEVARD", "street2": "SUITE 215", "city": "SOUTH SAN FRANCISCO", "state": "CA", "zip": "94080", "phone": "6505886404"}, "mail-address": {"street1": "400 OYSTER POINT BOULEVARD", "street2": "SUITE 215", "city": "SOUTH SAN FRANCISCO", "state": "CA", "zip": "94080"}, "former-company": {"former-conformed-name": "EMAIL REAL ESTATE COM INC", "date-changed": "20010504"}}
UNITED
      STATES
SECURITIES
      AND EXCHANGE COMMISSION
WASHINGTON,
      D.C. 20549
FORM
      8-K
CURRENT
      REPORT
PURSUANT
      TO SECTION 13 OR 15(
d
)
      OF
THE
      SECURITIES EXCHANGE ACT OF 1934
Date
      of
      Report (Date of earliest event reported): May 6, 2006
Hana
      Biosciences, Inc.
(Exact
      name of registrant as specified in its charter)
Delaware
000-50782
32-0064979
(State
                or other jurisdiction of
incorporation)
(Commission
                File Number)
(IRS
                Employer Identification
                No.)
400
      Oyster Point Blvd., Ste. 215, South San Francisco, CA
94080
(Address
      of principal executive offices)
(Zip
      Code)
(650)
      588-6404
(Registrant's
      telephone number, including area code)
(Former
      name or former address, if changed since last report)
Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
      provisions:
o
Written
      communications
      pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule
      14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant
      to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant
      to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
      1.01. Entry into a Material Definitive Agreement.
On
      May 6,
      2006, the Company completed a transaction (the "Transaction") with Inex
      Pharmaceuticals Corporation ("Inex") pursuant to which the Company acquired
      exclusive, worldwide rights to develop and commercialize three oncology product
      candidates known as Marqibo® (vincristine sulfate) Liposomes Injection,
      sphingosomal encapsulated vinorelbine and sphingosomal encapsulated topotecan
      (the "Products"). Marqibo® is a novel, targeted sphingosomal encapsulated
      formulation of the FDA-approved cancer drug vincristine. Sphingosomal
      encapsulated vinorelbine and sphingosomal encapsulated topotecan are
      sphingosomal encapsulated versions of the FDA-approved chemotherapy drugs
      vinorelbine and topotecan, respectively. The Transaction was evidenced by a
      series of agreements between the Company and Inex. The material terms of each
      agreement are summarized below. In consideration for all of the intellectual
      property rights and assets acquired by the Company in the Transaction, the
      Company paid to Inex aggregate consideration of $11.5 million, of which $1.5
      million was paid in cash and the remaining $10 million was satisfied by issuing
      to Inex 1,118,568 shares of the Company's common stock. The shares were valued
      at a price of $8.94 per share, which represented the average weighted volume
      price of the Company's common stock over the 20 trading days preceding March 16,
      2006, the date of the parties' letter of intent regarding the Transaction. Prior
      to the Transaction, neither the Company nor its affiliates had any relationship
      with Inex.
(1)
License
      Agreement
Pursuant
      to the terms of a license agreement dated May 6, 2006, between Inex and the
      Company (the "License Agreement"), Inex granted to the Company:
·
an
                exclusive license under certain patents held by Inex and referred
                to in
                the License Agreement as the "Inex Patents," to commercialize the Products
                for all uses throughout the world;
·
an
                exclusive license under certain patents held by Inex referred to
                in the
                License Agreement as the "BCCA Patents," to commercialize the Products for
                all uses throughout the world under the terms of certain  research
                agreements between Inex and the British Columbia Cancer
                Agency;
·
an
                exclusive sublicense under certain patents relating to the Products
                that
                Inex licensed from the University of Texas, M.D. Anderson Cancer
                Center
                (the "MDACC") to commercialize the Products throughout the world under the
                terms of a license agreement between Inex and MDACC;
                and
·
an
                exclusive license to all technical information and know-how relating
                to
                the technology claimed in the Inex Patents and to all confidential
                information possessed by Inex relating to the Products, including
                all
                data, know-how, manufacturing information, specifications and trade
                secrets (the "Inex Technology") to commercialize the Products for all uses
                throughout the world.
The
      Company has the right to grant sublicenses to third parties and in such event
      the Company and Inex will share sublicensing revenue received by the Company
      at
      varying rates for each Product depending on such Product's stage of clinical
      development.  Under the License Agreement, the Company also granted back to
      Inex a limited, royalty-free, non-exclusive license in certain patents and
      technology owned or licensed to the Company solely for use in developing
      and commercializing liposomes having an active agent encapsulated, intercalated
      or entrapped therein.
The
      Company agreed to pay to Inex up to an aggregate of $30.5 million upon the
      achievement of various clinical and regulatory milestones relating to all
      Products. At the Company's option, the milestones may be paid in cash or
      additional shares of the Company's common stock. However, the total number of
      shares the Company's common stock that may be issued to Inex in connection with
      the Transaction may not exceed 19.99 percent of the Company's outstanding shares
      of common stock as of May 6, 2006. In addition to the milestone payments, the
      Company agreed to pay royalties to Inex based on net sales of the Products,
      against which the Company may offset a portion of the research and development
      expenses it incurs. In addition to the Company's obligations to make milestone
      payments and pay royalties to Inex, the Company also assumed all of Inex's
      obligations to its licensors and collaborators relating to the licensed
      technology, which include aggregate milestone payments of up to $2.5 million,
      annual license fees and additional royalties.
2
The
      License Agreement provides that the Company will use its commercially reasonable
      efforts to develop each Product, including causing the necessary and appropriate
      clinical trials to be conducted in order to obtain and maintain regulatory
      approval for each Product and preparing and filing the necessary regulatory
      submissions for each Product. The Company also agreed to provide Inex with
      periodic reports concerning the status of each Product.
The
      Company is required to use commercially reasonable efforts to commercialize
      each
      Product in each jurisdiction where a Product has received regulatory approval.
      The Company will be deemed to have breached its commercialization obligations
      in
      the United States, or in Germany, the United Kingdom, France, Italy or Spain,
      if
      for a continuous period of 180 days at any time following commercial sales
      of a
      Product in any such country, no sales of a Product are made in the ordinary
      course of business in such country by the Company (or a sublicensee), unless
      the
      parties agree to such delay or unless the Company is prohibited from making
      sales by a reason beyond its control. If the Company breaches this obligation,
      then Inex is entitled to terminate the license with respect to such Product
      and
      for such country.
Under
      the
      License Agreement, Inex, either alone or jointly with MDACC, will be the owner
      of patents and patent applications claiming priority to certain patents licensed
      to the Company, and the Company has an obligation to assign to Inex the
      Company's rights to inventions covered by such patents or patent applications,
      and, when negotiating any joint venture, collaborative research, development,
      commercialization or other agreement with a third party, to require such third
      party to do the same.
The
      prosecution and maintenance of the licensed patents will be overseen by an
      IP
      committee having equal representation from the Company and Inex. The Company
      will have the right and obligation to file, prosecute and maintain most of
      the
      licensed patents, although Inex maintained primary responsability to prosecute
      certain of the licensed patents.  The parties agreed to share the expenses
      of prosecution at varying rates.  The Company also has the first
      right, but not the obligation, to enforce such licensed patents against third
      party infringers, or to defend against any infringement action brought by any
      third party.
The
      Company agreed to indemnify Inex for all losses resulting from the Company's
      breach of its representations and warranties, its default under the License
      Agreement, its breach of any regulatory requirements, regulations and guidelines
      in connection with the products, complaints alleging infringement against Inex
      with respect to the Company's manufacture, use or sale of a product, and any
      injury or death to any person or damage to property caused by any product
      provided by the Company or its sublicensee, except to the extent such losses
      are
      due to Inex's breach of representation or warranty, Inex's default under the
      agreement, and the breach by Inex of any regulatory requirements, regulations
      and guidelines in connection with licensed patent and related know-how,
      including certain of Inex's indemnification obligations to MDACC that will be
      passed through to us as a result. Inex has agreed to indemnify the Company
      for
      losses arising from Inex's breach of representation or warranty, Inex's default
      under the agreement, and the breach by Inex of any regulatory requirements,
      regulations and guidelines in connection with licensed patent and related
      know-how, except to the extent such losses are due to the Company's breach of
      our representations and warranties, the Company's default under the agreement,
      the Company's breach of any regulatory requirements, regulations and guidelines
      in connection with the products, complaints alleging infringement against Inex
      with respect to the Company's manufacture, use or sale of a product, and any
      injury or death to any person or damage to property caused by any product
      provided by the Company or its sublicensee.
3
Unless
      terminated earlier, the license grants made under the License Agreement expire
      on a country-by-country basis upon the later of (i) the expiration of the last
      to expire patents covering each Product in a particular country, (ii) the
      expiration of the last to expire period of product exclusivity covered by a
      Product under the laws of such country, or (iii) with respect to the Inex
      Technology, on the date that all of the Inex Technology ceases to be
      confidential information. The covered issued patents are scheduled to expire
      between 2014 and 2020.
Either
      the Company or Inex may terminate the License Agreement in the event that the
      other has materially breached its obligations thereunder and fails to remedy
      such breach within 90 days following notice by the non-breaching party. If
      such
      breach is not cured, then the non-breaching party may, upon 6 months' notice to
      the breaching party, terminate the license in respect of the Products or
      countries to which the breach relates. Inex may also terminate the license
      if
      the Company asserts or intends to assert any invalidity challenge on any of
      the
      patents licensed to the Company. The License Agreement also provides that either
      party may, upon written notice, terminate the agreement in the event of the
      other's bankruptcy, insolvency, dissolution or similar proceeding. In the event
      Inex validly terminates the License Agreement, all data, materials, regulatory
      filings and all other documentation reverts to Inex.
(2)
UBC
      Sublicense Agreement between the Company and Inex
Under
      the
      UBC sublicense agreement, Inex granted to the Company an exclusive, worldwide
      sublicense under several patents relating to the sphingosomal encapsulated
      vinorelbine and sphingosomal encapsulated topotecan Products, together with
      all
      knowledge, know-how, and techniques relating to such patents (the "UBC
      Technology"). The UBC Technology is owned by the University of British Columbia
      and licensed to Inex pursuant to a License Agreement dated July 1, 1998. The
      UBC
      sublicense agreement provides that the Company will undertake all of Inex's
      obligations contained in Inex's license agreement with UBC, which includes the
      payment of royalties (in addition to the royalties owning to Inex under the
      license agreement between Inex and the Company) and an annual license fee.
      The
      provisions of the UBC sublicense agreement relating to the Company's obligation
      to develop and commercialize the UBC Technology, termination and other material
      Company obligations are substantially similar to the terms of License Agreement,
      as discussed above.
(3)
Assignment
      of Agreement with Elan Pharmaceuticals, Inc.
Pursuant
      to an Amended and Restated License Agreement dated April 3, 2003 (the "Elan
      License Agreement"), between Inex (including two of its wholly-owned
      subsidiaries) and Elan Pharmaceuticals, Inc., Inex held a paid up, exclusive,
      worldwide license to certain patents, know-how and other intellectual property
      relating to vincristine sulfate liposomes. In connection with the Transaction,
      Inex assigned to the Company all of its rights under the Elan License Agreement
      pursuant to an Assignment and Novation Agreement dated May 6, 2006 among the
      Company, Inex and Elan.
As
      assigned to the Company, the Elan License Agreement provides that Elan will
      own
      all improvements to the licensed patents or licensed know-how made by the
      Company or its sublicensees, which will in turn be licensed to the Company
      as
      part of the technology the Company licenses from Elan. Elan has the first right
      to file, prosecute and maintain all licensed patents and the Company has the
      right to do so if Elan decides that it does not wish to do so only pertaining
      to
      certain portions of the technology. Elan also has the first right to enforce
      such licensed patents and the Company may do so only if Elan elects not to
      enforce such patents. In addition, Elan also has the right but not the
      obligation to control any infringement claim brought against Elan.
The
      Company has indemnification obligations to Elan for all losses arising from
      the
      research, testing, manufacture, transport, packaging, storage, handling,
      distribution, marketing, advertising, promotion or sale of the products by
      the
      Company, its affiliates or sublicensees, any personal injury suits brought
      against Elan, any infringement claim, certain third party agreements entered
      into by Elan, and any acts or omissions of any of the Company's
      sublicensees.
4
The
      Elan
      License Agreement, unless earlier terminated, will expire on a country by
      country basis, upon the expiration of the life of the last to expire licensed
      patent in that country. Elan may terminate the Elan License Agreement earlier
      for the Company's material breach upon 60 days' written notice if the Company
      does not cure such breach within such 60 day period (the Company may extend
      such cure period for up to 90 days if it proposes a course of action to
      cure the breach within the initial 60 day period and act in good faith to cure
      such breach), for the Company's bankruptcy or going into liquidation upon 10
      days' written notice, or immediately if the Company or the Company's sublicensee
      directly or indirectly disputes the ownership, scope or validity of any of
      the
      licensed technology or support any such attack by a third party.
(4)
Service
      Agreement
In
      connection with the Transaction, the Company and Inex also entered into a
      Service Agreement dated May 6, 2006. Under the Service Agreement, the Company
      engaged Inex on a non-exclusive basis to perform various transition services
      relating to the transfer of technology, agreements and other matters useful
      to
      the Company in the period following the completion of the Transaction. The
      Service Agreement provides that the Company and Inex will jointly review a
      schedule each quarter that will describe the services requested of Inex for
      such
      period, together with a forecast of the estimated number of full-time employees
      of Inex required to perform such services and a schedule identifying the time
      by
      which the services are expected to be completed. Such services may include
      Inex's assistance in transferring data and other materials relating to or useful
      in the development of the Products or its assistance assigning various testing
      and material supply agreements and relationships that Inex has established
      in
      connection with the Products. As consideration for Inex's services, and in
      addition to the $11.5 million upfront payment paid in connection with the
      transaction, the Company will pay to Inex fees calculated on the number of
      actual time employees, contractors or consultants of Inex who perform such
      services based on a rate of $250,000 per full time employee
      equivalent.
The
      Service Agreement expires on June 30, 2007, unless terminated earlier. The
      Company may terminate the Service Agreement upon 60 days' written notice for any
      reason. Upon 30 days' notice and an opportunity to cure, either party may
      terminate the Service Agreement in the event the other party fails to comply
      with a material term of the agreement or the service schedule (including any
      change orders to the service schedule). Either party may also terminate the
      agreement in the event the other makes an assignment for the benefit of
      creditors, becomes insolvent, files a bankruptcy petition or similar proceeding,
      which proceeding remains undismissed or unstayed for at least 60 days.
(5)
Transaction
      Agreement
The
      Company and Inex entered into a Transaction Agreement on May 6, 2006 (the
      "Transaction Agreement"), which generally provided for the mechanics of closing
      the Transaction. The agreement contains several provisions relating to the
      assignment to the Company of various clinical trial and other agreements
      relating to the Products, as well as provisions obligating Inex to use its
      commercially reasonable efforts to cause the outright assignment to the Company
      of Inex's license with MDACC and its rights to certain of the patents covered by
      the License Agreement.
The
      Transaction Agreement also contains provisions relating to competition by the
      parties. More specifically, the Company agreed that, to the extent it develops,
      manufactures or commercializes a product that incorporates the Products
      encapsulated in a liposome not proprietary to Inex in a particular country
      during the term of the License Agreement, all licenses and sublicenses granted
      to the Company under the License Agreement with respect to such country and
      such
      Product will revert to Inex. The Transaction Agreement further provides that
      Inex will not, directly or indirectly, engage in the business of developing,
      manufacturing or commercializing any of the Products, including any future
      generation products for formulations containing vincristine, vinorelbine or
      topotecan.
5
(6)
Asset
      Purchase Agreement
The
      Company and Inex also entered an Asset Purchase Agreement on May 6, 2006. Under
      this agreement, Inex assigned to the Company various equipment, inventory and
      other assets useful in the development of the Products. The Company did not
      pay
      any additional consideration for such assets beyond the $11.5 million payment,
      discussed above.
(7)
Registration
      Rights Agreement
Pursuant
      to a Registration Rights Agreement dated May 6, 2006, the Company agreed to
      file
      a registration statement covering the resale of the 1,118,568 shares of common
      stock issued to Inex in connection with the Transaction on or before July 5,
      2006, and to use commercially reasonable efforts to have such registration
      statement declared effective by the Commission on or before November 2, 2006.
      In
      the event the Company does not file such registration statement by July 6,
      2006,
      or in the event such registration statement is not declared effective by
      November 6, 2006, then the Company must issue to Inex an additional
      approximately 22,400 shares of its common stock. Inex agreed that it will not
      sell more than 25% of the shares issued in each three month period commencing
      on
      the effective date of the registration statement.
6
SIGNATURE
Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrant
      has
      duly caused this report to be signed on its behalf by the undersigned hereunto
      duly authorized.
Hana
              Biosciences, Inc.
Date:
              May 11, 2006
By:
/s/
              John P.
              Iparraguirre
John P. Iparraguirre
Vice
              President, Chief Financial Officer
7