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                                                                   EXHIBIT 10.96

                               [AXYS LETTERHEAD]



June 11, 1998


Mr. William Newell
1905 Ray Drive
Burlingame, CA  94010

Dear Bill:

It is my pleasure to provide you with this letter extending our formal offer to
have you join Axys Pharmaceuticals as our Vice President and General Counsel. In
this capacity, you will report directly to me, have the overall responsibility
for all the legal activity of the company and will become a member of the
Executive Committee, the most senior management group within the company.

Your starting salary will be $225,000 per annum, payable in accordance with
Axys' standard practices. Our current pay periods are on the 15th and last day
of each month. In addition to your salary, you will be eligible for a 25% bonus,
which will be prorated for 1998, and will be based on either 100% of the
company's performance against our stated corporate-wide objectives, or on a
50/50 basis, with 50% being dependent on corporate achievements and 50% on your
attainment of individual MBOs. As indicated, we will review the best format, for
this first year of your employment, after you have been on board for several
months. In the long term, the bonus program will be at the same level and same
conditions as other members of the Executive Committee.

You will also receive an initial option grant for 75,000 shares of Axys stock.
As you know, this will be priced the first day of your employment, will vest at
12.5% of total at the end of the first six months, and the remaining portion at
the rate of 1/42nd per month. If there are any unvested options, at a point in
time where the company would undergo a change in control, then you would
immediately vest in any remaining unvested options, provided, as we have
discussed, that your continued services were not deemed to be critical to the
acquirer and therefore an important component of any deal structure that would
be proposed. Additionally, I will recommend you for an additional grant of
25,000 shares during the first quarter of 1999.

We will pay a prorated portion of your current life insurance payments. As
indicated, we are changing our current life insurance programs in the company,
such that you would have approximately three times your annual salary in life
insurance coverage. That portion of your current $1.7 million life insurance
policy not otherwise covered by this, will be reimbursable by the company. As
mentioned, I would anticipate that this would amount to $1400-$1500 per year.

We will insure that the normal company benefits are provided to you. I am
including for your review a copy of our current brochure outlining those
benefits currently in place. As I believe you know, we are looking at some
changes to this program as we integrate the Sequana and Arris plans.


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I believe this sums up the various points we had discussed during our previous
meetings. I'll look forward to hearing from you formally regarding your
acceptance and, as mentioned, we are certainly very enthusiastic about your
joining our senior management team during July.

Best regards,


/s/ JOHN WALKER
------------------------
John Walker
Chairman
Chief Executive Officer

JW:cs

Enc.


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