AMENDMENT NO. 3 TO

EXHIBIT 10.40

AMENDMENT NO. 3

TO

XYREM SUPPLY AGREEMENT

THIS AMENDMENT NO. 3 dated this 21st day of March, 2005 (this “Amendment”) to Xyrem Supply Agreement dated June 30, 2000 by and between Orphan Medical, Inc., a Delaware corporation (“ORPHAN”), and DSM Pharmaceuticals, Inc. (formerly, Catalytica Pharmaceuticals, Inc.), a Delaware corporation (“DSM”):

W I T N E S S:

WHEREAS, ORPHAN and DSM have previously executed the Xyrem Supply Agreement, dated June 30, 2000, as amended by Amendment No. 1 dated November 9, 2000, and Amendment No. 2 dated August 19, 2002 (collectively, the “Agreement”); and

WHEREAS, DSM and ORPHAN desire to amend the Agreement as set forth in this Amendment;

NOW, THEREFORE, for and in consideration of the premises, the respective commitments and undertakings of ORPHAN and DSM set forth in this Amendment, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, ORPHAN and DSM hereby agree as follows:

Amendment No. 3: Page 1

During each Contract Year of this Agreement, and subject to the provisions of Section 7.2 hereof as well as other provisions herein, ORPHAN agrees to purchase all of its requirements for the Product in the Territory from DSM, but no less than the minimum quantities of Product indicated below:

DSM shall manufacture the Product in accordance with the Specifications and applicable cGMP requirements, and shall package, label, and/or otherwise prepare the Product for bulk delivery to an ORPHAN-designated distribution site.

Amendment No. 3: Page 2

Amendment No. 3: Page 3

(a) The conversion component of the Product Price, as set forth on Appendix D, shall be adjusted as of January 1 of each calendar year beginning January 1, 2006, and shall be equal to the conversion component of the Product Price for the prior calendar year, increased by a percentage amount equal to the percentage increase in the Producer Price Index for Finished Goods, Pharmaceutical Preparations, Ethical (Prescription), series code PCU-2834 #1, issued by the Bureau of Labor Statistics, U.S. Department of Labor, or comparable successor index, during the twelve (12) month period ending with the most recent month for which published monthly statistics are available as of the first day of such new price year (“PPI”). Increases in the conversion component Product Price pursuant to this Section 7.3(a) shall become effective as of January 1 of each calendar year for all shipment of Product during each such year.

(b) The materials component of the Product Price shall also be subject to adjustment from time to time as follows:

(i) Effective as of January 1, 2006 and each calendar year thereafter, the materials component may be increased by DSM by the amount of (A) the increase in costs incurred by DSM to third party suppliers for materials incorporated into the Product over the cost of such materials to DSM in the prior Contract Year, plus (B) a margin/overhead factor equal to twenty-five percent (25%) of such cost increase. DSM shall provide ORPHAN with written notification of any increase in the materials component of the Product Price at least sixty (60) days prior to the start of the calendar year to which such increase applies. ORPHAN shall have the option, upon reasonable notice to DSM, to appoint an independent financial auditor to verify the price increase; and DSM shall make available to the auditor appropriate documentation substantiating DSM’s cost increase. The auditor shall be subject to the confidentiality requirements of Article 14 and shall only disclose to ORPHAN the auditor’s opinion as to whether or not the price increase is consistent with the documentation of increased material costs. If there is any disagreement with respect to any price increase, the dispute shall be resolved in accordance with Article 18.

Amendment No. 3: Page 4

(ii) Notwithstanding the provisions of subpart (i), if, during any calendar year, DSM experiences an increase in the aggregate cost of the Materials incorporated into the Product of more than ten percent (10%) from the start of such calendar year, then DSM shall be entitled to increase the Materials component of the Purchase Price during such calendar year upon sixty (60) days prior written notification by utilizing the protocol set forth in subpart (i).”

Amendment No. 3: Page 5

“Other than termination by ORPHAN pursuant to Section 16.1(a) or Section 16.2 hereof, or termination by DSM pursuant to Section 16.1(d). . .”

{Signatures on following page}

Amendment No. 3: Page 6

IN WITNESS WHEREOF, each of DSM and ORPHAN has caused this Amendment No. 3 to be executed by a fully authorized corporate officer as of the date first set forth above.

Amendment No. 3: Page 7

APPENDIX D

Product Commercial Pricing

Batch Price: Domestic Bulk Packaging

Batch Price: Export Bulk Packaging

Assumptions for Bulk Packaging (Domestic and Export):

Batch Price: Domestic Current Package Configuration

Assumptions:

Batch Price: Domestic New Terms

Assumptions: