<PAGE>

                                                                    Exhibit 10.2
                                                                    ------------

                                                                    CONFIDENTIAL


                   RESEARCH AND COMMERCIALIZATION AGREEMENT


     THIS RESEARCH AND COMMERCIALIZATION AGREEMENT (the "Agreement"), effective
as of July 9, 1998, is entered by and between GenPharm International, Inc., a
wholly owned subsidiary of Medarex, Inc., and Medarex, Inc., a New Jersey
corporation, with a principal place of business at 1545 Route 22 East,
Annandale, New Jersey 08801 (together "Medarex"), and FibroGen, Inc. and its
wholly-owned subsidiary, FibroPharma, Inc., with a principal place of business
at 225 Gateway Boulevard, South San Francisco, California 94080 (together
"FibroGen").

                                  BACKGROUND

     A.   Medarex is the sole and exclusive owner of certain transgenic Mice
useful for the preparation of fully human monoclonal antibodies;

     B.   FibroGen desires to have Medarex conduct research with the Mice for
the development of fully human monoclonal antibodies to certain Antigens (as
defined below) and to evaluate the utility of such antibodies as potential
therapeutics involved in fibrosis or fibroproliferative disease, and Medarex is
willing to conduct such Research, on the terms and conditions herein; and

     C.   FibroGen wishes to acquire from Medarex an option to acquire a
commercial license for the use of monoclonal antibodies with specificity for the
Antigens to commercialize Products (as defined below), on the terms and
conditions herein.

     NOW, THEREFORE, Medarex and FibroGen agree as follows:

     1.   DEFINITIONS

     1.1  "Affiliate" means any corporation or other entity which is directly or
           ---------
indirectly controlling, controlled by or under the common control with FibroGen.
For the purpose of this Agreement, "control" shall mean the direct or indirect
ownership of fifty percent (50%) or more of the outstanding shares or other
voting rights of the subject entity to elect directors, or if not meeting the
preceding, any entity owned or controlled by or owning or controlling at the
maximum control or ownership right permitted in the country where such entity
exists.

     1.2  "Antibody" shall mean a human monoclonal antibody with binding
          --------
affinity for an Antigen, which antibody is derived from cells obtained from one
or more of the Mice.
<PAGE>

     1.3  "Antigen" shall mean each of [*****] antigens listed on Exhibit A
           -------
hereto as such list may be revised from time to time by the mutual agreement of
the parties.

     1.4  "Confidential Information" shall mean (i) any proprietary or
           ------------------------
confidential information or material in tangible form disclosed hereunder that
is marked as "Confidential" at the time it is delivered to the receiving party,
or (ii) proprietary or confidential information disclosed orally hereunder which
is identified as confidential or proprietary when disclosed and such disclosure
of confidential information is confirmed in writing within thirty (30) days by
the disclosing party.

     1.5  "Control" or "Controlled" shall mean possession of the ability to
           -------      ----------
grant the licenses or sublicenses as provided for herein without violating the
terms of any agreement or other arrangement with any third party.

     1.6  "Effective Date" means forty-five (45) days after the date of this
           --------------
Agreement.

     1.7  [*****]

     1.8  "FibroGen Technology" shall mean all United States and foreign patents
           -------------------
(including all reissues, extensions, substitutions, confirmations, re-
registrations, re-examinations, revalidations and patents of addition) and
patent applications (including, without limitation, all continuations,
continuations-in-part and divisions thereof) owned by FibroGen during the term
of the Agreement, in each case, which claims an invention which is necessary or
useful to make, use or sell Antibodies and/or Products.

     1.9  "Medarex Fees" shall mean any commercial fee, milestone payment and
           ------------
[*****] any research support payment made by FibroGen to Medarex pursuant to
Sections 2.2, 4.1 and 4.2.

     1.10 "Medarex Technology" shall mean the Patent Rights and Know How.
           ------------------

          1.10.1   "Know How" shall mean the Confidential Information and Mice
                    --------
owned or Controlled by Medarex during the term of the Agreement and transferred
to FibroGen by Medarex necessary or useful for the exercise of the Patent
Rights, including, without limitation, technical data, protocols and methods and
processes. For the avoidance of doubt, the Know How does not include any Patent
Rights.

          1.10.2   "Patent Rights" shall mean all United States and foreign
                    -------------
patents (including all reissues, extensions, substitutions, confirmations, re-
registrations, re-examinations, revalidations and patents of addition) and
patent applications (including, without limitation, all


***** REPRESENTS CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>

continuations, continuations-in-part and divisions thereof) owned or Controlled
by Medarex during the term of the Agreement, in each case, which claims an
invention which is necessary or useful for the use of the Antibodies or the
hybridoma cell lines transferred hereunder to make, use or sell Products.

     1.11  "Mice" shall mean immunizable transgenic mice containing unrearranged
            ----
human immunoglobulin genes.

     1.12  "Mice Materials" shall mean any parts or derivatives of the Mice
            --------------
prepared by Medarex in connection with the Research, including without
limitation, cells, hybridomas Antibodies, genes, DNA sequences or other
biological materials derived directly or indirectly from the Mice.

     1.13  "Net Sales" shall mean [*****].
            ---------

     1.14  "Phase I", "Phase II"and "Phase III" shall mean Phase I (or Phase
            -------    --------      ---------
I/II), Phase II, and Phase III clinical trials, respectively, in each case as
prescribed by the U.S. Food and Drug Administration or a corresponding foreign
entity.

     1.15  "Product" shall mean any product for the treatment or diagnosis of
            -------
human disease containing an Antibody provided by Medarex or produced from any
hybridoma provided by Medarex or a portion thereof.

     1.16  "Research" shall mean the activities conducted by FibroGen and
            --------
Medarex in the Research Period in connection with the development and assessment
of the usefulness and effectiveness of the Antibodies.

     1.17  "Research Invention" shall mean any invention by Medarex or FibroGen
            ------------------
in connection with the performance of the Research.

     1.18  "Research Period" shall mean the period from the Effective Date until
            ---------------
the earlier of (i) [*****], unless the Research Period is extended pursuant to
Section 2.6, [*****], or (ii) the termination of the Research or the Agreement.

     1.19  "Sublicensee" shall mean a third party (except an Affiliate) to whom
            -----------
FibroGen has granted a license or sublicense to make, have made, import, use,
sell, offer for sale or otherwise exploit Products in the Territory.  As used in
this Agreement, "Sublicensee" shall also

***** REPRESENTS CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

<PAGE>

include a third party (except an Affiliate) to whom FibroGen has granted the
right to distribute a Product.

     1.20  "Sublicensee Revenues" shall mean [*****].
            --------------------

     1.21  "Territory" shall mean all countries of the world.
            ---------

     2.    RESEARCH

     2.1   Research.  Subject to the terms and conditions set forth herein,
           --------
during the Research Period Medarex will immunize Mice with up to [*****]
Antigens selected by FibroGen to produce Antibodies for evaluation by FibroGen
for commercial development. FibroGen shall have the right to have immunizations
for up to [*****] Antigens conducted concurrently. FibroGen shall be entitled to
have Medarex immunize a total of [*****] Mice each year; provided, however, that
with respect to [*****] Antigens to be selected by FibroGen ("Special
Antigens"), Medarex shall immunize [*****] Mice for each of the Special
Antigens. In any year in which immunizations for a Special Antigen are
conducted, the number of Mice which Medarex is obligated to immunize Mice
against Antigens other than Special Antigens shall be reduced by [*****] Mice
for each Special Antigen for which immunizations are conducted in such year. For
the remaining Antigens with respect to which immunizations are conducted,
Medarex shall immunize a minimum of [*****] Mice with the applicable Antigen.
[*****] Medarex shall use reasonably diligent efforts to conduct the Research in
a professional manner and agrees to commit the personnel, facilities and other
resources necessary to perform its obligations under the Research and the work
plan attached hereto as Exhibit B; provided, however, it does not warrant that
the Research shall result in the preparation of any Antibody suitable for
development as a Product [*****].

     2.2   Research Support.  During the Research, FibroGen shall pay to Medarex
           ----------------
a quarterly research support payment of [*****]. The first payment shall be due
forty-five (45) days from the Effective Date, and subsequent payments shall be
due on the quarterly anniversary thereof unless [*****]; provided that Medarex
is not in breach of this Agreement. However, if FibroGen fails to make any
research support payment for any reason, Medarex shall have no obligation to
conduct any further Research activities.

     2.3   Identification and Delivery of Antigens.  FibroGen shall promptly
           ---------------------------------------
notify Medarex of each Antigen prior to immunization of the Mice in the Research
and deliver to Medarex a mutually agreed quantity of such Antigen in a
substantially pure form prior to the immunization.


***** REPRESENTS CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>

     2.4  Delivery of Antibodies.  Upon the preparation of an Antibody for each
          ----------------------
Antigen, Medarex shall deliver to FibroGen [*****] of such Antibody and a
hybridoma cell line producing such Antibody for evaluation by FibroGen.

     2.5  Research License.  Medarex hereby grants to FibroGen and its
          ----------------
Affiliates an [*****] license solely to use the Antibodies and hybridoma cell
lines producing such Antibodies prepared by Medarex in connection with the
Research for research and evaluation purposes; [*****].

     2.6  Research Period.
          ---------------

          2.6.1  [*****]

          2.6.2  Extension.  With notice to Medarex at least thirty (30) days
                 ---------
prior to [*****], FibroGen may extend the term of the Research until [*****]
and, with notice to Medarex at least thirty (30) days prior to [*****], FibroGen
may further extend the term of the Research until [*****], and in each case,
FibroGen shall continue to make quarterly research support payments as provided
in Section 2.2. If FibroGen (i) extends the Research Period for [*****], and
(ii) exercises its option and acquires a commercial license pursuant to Section
3.1.2, then FibroGen shall [*****].

          2.6.3  If No Extension; [*****]. If FibroGen fails to provide Medarex
                 ------------------------
with notice at least thirty (30) days prior to [*****] that it will not extend
the Research for [*****], then before [*****], if FibroGen has exercised its
option and acquires a commercial license pursuant to Section 3.1.2, FibroGen
[*****].

          2.6.4  [*****]

          2.6.5  [*****]

     2.7  Ownership.
          ---------

          2.7.1  Mice.  Except as provided in Section 3.3, title to the Mice and
                 ----
Mice Materials shall at all times remain with Medarex.


***** REPRESENTS CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>

          2.7.2  Intellectual Property.
                 ---------------------

     [*****]

          2.7.3  [*****]

     3.   OPTION; COMMERCIAL LICENSE

     3.1  Option; License.
          ---------------

          3.1.1  Option.  During the Research Period, FibroGen shall have an
                 ------
option to obtain an exclusive (even as to Medarex), worldwide commercial license
as set forth in Section 3.1.2 solely to develop Antibodies for use in the
development and commercialization of Products. FibroGen may exercise such option
by notice to Medarex during the Research Period specifying [*****] to be covered
by the commercial license and concurrently paying to Medarex the applicable
license fee due pursuant to Section 4.1. If FibroGen has not previously
exercised its option to acquire a commercial license and achieves any milestone
subject to Section 4.2, then FibroGen shall be deemed to have exercised its
option to acquire a commercial license and shall pay to Medarex the commercial
license fee due pursuant to Section 4.1 within thirty (30) days of the
achievement of such milestone, in addition to the applicable milestone fee due
pursuant to Section 4.2.

          3.1.2  Commercial License.  Effective upon FibroGen's election to
                 ------------------
acquire a commercial license, subject to the terms and conditions of this
Agreement, including without limitation, the payment of the license fee set
forth in Section 4.1, Medarex grants to FibroGen and its Affiliates the
following licenses:

          (a)    an exclusive, worldwide, non-transferable (except as set forth
in Section 14.3), royalty bearing license under the Medarex Technology with the
right to sublicense, to use hybridomas delivered by Medarex to FibroGen to make
or have made Antibodies, and

          (b)    an exclusive, worldwide, non-transferable (except as set forth
in Section 14.3), royalty bearing license under the Medarex Technology with the
right to sublicense, to use Antibodies made in the Research to make, have made,
import, have imported, use, offer for sale and sell Products.

     During the term of the commercial licenses above, Medarex shall not grant
any third party a license under the Medarex Technology which covers Antigens to
which Antibodies have been made in the Research or Mice Materials developed in
connection with the Research.

     3.2  [*****]


***** REPRESENTS CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>

     3.3  Title.  If FibroGen acquires a commercial license pursuant to Section
          -----
3.1.2, title to all Antibodies and cells capable of producing Antibodies
obtained by FibroGen during the Research Period and the term of such license
shall be vested in FibroGen.

     3.4  Regulatory Assistance.  If FibroGen acquires a commercial license to a
          ---------------------
particular Antibody, at the written request of FibroGen, Medarex shall provide
any documentation necessary or appropriate for regulatory filings relating to
the origin or modification of the Antibodies or the hybridoma.

     3.5  Retained Rights; No Further Rights.  Only the license granted pursuant
          ----------------------------------
to the express terms of this Agreement shall be of any legal force or effect. No
other license rights shall be granted or created by implication, estoppel or
otherwise. It is understood and agreed that Medarex shall retain rights to make,
have made, import, use, offer for sale, sell and otherwise commercialize Mice
which have not been used for the Research or immunized with any Antigen, itself
or with third parties for any uses.

     4.   CONSIDERATION

     4.1  Commercial License Fee.  If FibroGen acquires a commercial license
          ----------------------
from Medarex pursuant to Section 3.1.2 above, FibroGen shall pay to Medarex a
license fee of [*****]. The applicable license fee shall be paid to Medarex
concurrently with FibroGen's notice of its exercise of its option.

     4.2  Milestone Payments.  Within thirty (30) days following the occurrence
          ------------------
of the relevant events specified below with respect to each Product which
contains one of the Antibodies licensed by FibroGen (under a research license or
a commercial license) and is intended to be used as a therapeutic, FibroGen
shall pay to Medarex the following amounts:

                         Milestones                                  Amount
-----------------------------------------------------------     ---------------
[*****]

     4.3  Royalties and Sublicensee Revenues.
          ----------------------------------

          4.3.1  Royalty on Net Sales and Sublicense Revenues.
                 ---------------------------------------------

          (a)    In partial consideration for the commercial license, [*****]

          (b)    In addition to the above, in partial consideration for the
commercial license, [*****].


***** REPRESENTS CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>

          (c)    In addition to the above, in partial consideration for the
commercial license, [*****].

          (d)    In addition to the foregoing, [*****].

          (e)    [*****]

          4.3.2  [*****]

          4.3.3  [*****]

          4.3.4  Royalty Term.  The royalties due pursuant to this Section 4.3
                 ------------
shall be payable on a Product-by-Product and country-by-country basis in each
country as follows: [*****].

          4.3.5  Trade Secrets.  The parties acknowledge and agree that a
                 -------------
principal value contributed by Medarex is access to the Mice and Mice Materials
allowing accelerated time to market and enhanced probability of success, and
that Medarex may not own or control patents that cover the manufacture, sale or
use of a particular Product.  FibroGen acknowledges and agrees that a principal
value FibroGen receives hereunder is in such access, and accordingly FibroGen
shall [*****] and pay the royalties at the rates specified in Sections 4.3.1(a),
(b) and (c) and 4.3.2 during the term as set forth in Section 4.3.4, regardless
of whether the applicable Product is covered by a patent application or patent
within the Medarex Technology or FibroGen Technology.

     4.4  [*****]

     5.   PAYMENTS

     5.1  Timing of Royalty Payments.  All royalties due to Medarex shall be
paid [*****].

     5.2  Payment Method.  All amounts due Medarex hereunder shall be paid in
          --------------
U.S. dollars by wire transfer in immediately available funds to an account
designated by Medarex.

     5.3  Currency; Foreign Payments.  If any currency conversion shall be
          --------------------------
required in connection with the payment of any royalties hereunder, such
conversion shall be made by using the exchange rate for the purchase of U.S.
dollars reported by the Chase Manhattan Bank on the last business day of the
calendar quarter to which such royalty payments relate. If at any time legal
restrictions prevent the prompt remittance of any royalties owed on Net Sales in
any jurisdiction, FibroGen may notify Medarex and make such payments by
depositing the amount thereof in local currency in a bank account or other
depository in such country in the name of Medarex, and FibroGen shall have no
further obligations under this Agreement with respect thereto.


***** REPRESENTS CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>

     5.4   Taxes.  All royalty amounts required to be paid to Medarex pursuant
           -----
to this Agreement may be paid with deduction for withholding for or on account
of any taxes (other than taxes imposed on or measured by net income) or similar
governmental charge imposed by a jurisdiction other than the United States
("Withholding Taxes"). At Medarex's request, FibroGen shall provide Medarex a
certificate evidencing payment of any Withholding Taxes hereunder and shall
reasonably assist Medarex to obtain the benefit of any applicable tax treaty.

     6.    REPORTS AND RECORDS

     6.1   Royalty Reports.  FibroGen shall deliver to Medarex within  [*****] a
           ---------------
report setting forth in reasonable detail the calculation of the royalties
payable to Medarex for such calendar quarter, including the Products sold in
each country by FibroGen and its Sublicensees, the Net Sales thereof, and all
amounts received from Sublicensees for sales of Products.  Such reports shall be
Confidential Information of FibroGen subject to Article 9 herein.

     6.2   Inspection of Books and Records.  FibroGen shall maintain accurate
           -------------------------------
books and records which enable the calculation of royalties payable hereunder to
be verified. FibroGen shall retain the books and records for each quarterly
period for [*****] years after the submission of the corresponding report under
Section 5.1 hereof. Upon thirty (30) days prior notice to FibroGen, independent
accountants selected by Medarex, may have access to FibroGen's books and records
during FibroGen's normal business hours to conduct a review or audit, for the
purpose of verifying the accuracy of FibroGen's payments and compliance with
this Agreement. Any such inspection or audit shall be at Medarex's expense,
however, in the event an inspection reveals underpayment of [*****] or more in
any audit period, FibroGen shall pay the costs of the inspection [*****].

     7.    OTHER OBLIGATIONS

     7.1   Reports to Medarex.  During the term of this Agreement, FibroGen
           ------------------
shall keep Medarex reasonably informed of its activities subject to this
Agreement, including without limitation, the commercialization of Products, and
annually shall provide Medarex with a written report detailing such events and
activities. When the registration package requesting approval for commercial
sale of the Product is first filed in the U.S., the European Union and Japan,
and in each case when approval is received therefor, FibroGen will promptly
notify Medarex in writing.

     7.2   Reports to FibroGen.  During the term of this Agreement, Medarex
           -------------------
shall keep FibroGen reasonably informed of [*****].

***** REPRESENTS CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

<PAGE>

     7.3   Regulatory Filings.  FibroGen shall submit registration packages
           ------------------
requesting approval for commercial sale of the Product as soon as reasonably
practicable.  FibroGen (or its designee) shall file and hold title to all
regulatory applications, approvals and supplements thereto.  Medarex will
provide the necessary documentation for any regulatory filings relating to the
Mice, Antibodies and hybridoma cell line delivered to FibroGen and any other
assistance with respect to regulatory filings or agencies as may be reasonably
requested by FibroGen at FibroGen's expense.

     7.4   Abandoned Products.  FibroGen shall promptly notify Medarex should it
           ------------------
elect to abandon its rights to pursue commercialization of any Product in any
country.  Such notice will effectuate FibroGen's voluntary abandonment of its
right hereunder to market the Product in such country; provided, the abandonment
of the Product in any particular country hereunder shall not be construed to be
a termination of this Agreement with respect to the other countries or Products.

     8.    CONFIDENTIALITY

     8.1   Confidential Information.  Except as expressly provided herein, the
           ------------------------
parties agree that, for the term of this Agreement and for five (5) years
thereafter, the receiving party shall keep completely confidential and shall not
publish or otherwise disclose and shall not use for any purpose except for the
purposes contemplated by this Agreement any Confidential Information furnished
to it by the disclosing party hereto pursuant to this Agreement, except that to
the extent that it can be established by the receiving party by competent proof
that such Confidential Information:

                    (i)    was already known to the receiving party, other than
           under an obligation of confidentiality, at the time of disclosure;

                    (ii)   was generally available to the public or otherwise
           part of the public domain at the time of its disclosure to the
           receiving party;

                    (iii)  became generally available to the public or otherwise
           part of the public domain after its disclosure and other than through
           any act or omission of the receiving party in breach of this
           Agreement;

                    (iv)   was independently developed by the receiving party as
           demonstrated by documented evidence prepared contemporaneously with
           such independent development; or

                    (v)    was subsequently lawfully disclosed to the receiving
           party by a person other than a party hereto.
<PAGE>

     8.2   Permitted Use and Disclosures. Each party hereto may use or disclose
           -----------------------------
information disclosed to it by the other party to the extent such use or
disclosure is reasonably necessary in complying with applicable governmental
regulations or otherwise submitting information to tax or other governmental
authorities, conducting clinical trials, or making a permitted sublicense or
otherwise exercising its rights hereunder, provided that if a party is required
to make any such disclosure of another party's confidential information, other
than pursuant to a confidentiality agreement, it will give reasonable advance
notice to the latter party of such disclosure and, save to the extent
inappropriate in the case of patent applications, will use its reasonable
efforts to secure confidential treatment of such information prior to its
disclosure (whether through protective orders or otherwise).

     8.3   Public Disclosure. Except as otherwise required by law (without
           -----------------
consideration of contractual obligations to third parties), neither party shall
issue a press release or make any other public disclosure of the terms of this
Agreement without the prior approval of such press release or public disclosure.
Each party shall submit any such press release or public disclosure to the other
party, and the receiving party shall promptly review such press release or
public disclosure, but in no event more than fifteen (15) days to review and
approve any such press release or public disclosure, which approval shall not be
unreasonably withheld. If the receiving party does not respond within such
fifteen (15) day period, the press release or public disclosure shall be deemed
approved. In addition, if a public disclosure is required by law, including
without limitation in a filing with the Securities and Exchange Commission, the
disclosing party shall provide copies of the disclosure reasonably in advance of
such filing or other disclosure for the nondisclosing party's prior review and
comment. Upon execution of this Agreement, the parties shall agree to a redacted
version of this Agreement to be used for any and all submissions permitted under
this Section unless otherwise agreed by the parties in writing or required to
comply with law.

     8.4   Confidential Terms. Except as expressly provided herein, each party
           ------------------
agrees not to disclose any terms of this Agreement to any third party without
the consent of the other party; provided, with prior notice to the other party,
disclosures may be made as required by securities or other applicable laws, or
to a party's accountants, attorneys and other professional advisors.

     9.    REPRESENTATIONS AND WARRANTIES

     9.1   Medarex. Medarex represents and warrants that: (i) it is a
           -------
corporation duly organized validly existing and in good standing under the laws
of the State of New Jersey; (ii) the execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate action on the
part of Medarex; (iii) it is the sole and exclusive owner of all right, title
and interest in the Mice; (iv) it has the right to grant the rights and licenses
granted herein; [*****].


***** REPRESENTS CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>

     9.2   FibroGen. FibroGen represents and warrants that: (i) it is a
           --------
corporation duly organized validly existing and in good standing under the laws
of the State of Delaware; and (ii) the execution, delivery and performance of
this Agreement have been duly authorized by all necessary corporate action on
the part of FibroGen.

     9.3   Disclaimer of Warranties. THE MICE ARE PROVIDED "AS IS", AND EXCEPT
           ------------------------
AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, MEDAREX AND ITS RESPECTIVE
AFFILIATES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OR CONDITIONS OF ANY
KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE MICE, ANTIBODIES, PRODUCTS
OR MEDAREX TECHNOLOGY, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF THE PATENT RIGHTS
LICENSED HEREUNDER, OR NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF
THIRD PARTIES.

     9.4   Disclaimer. Except as otherwise expressly set forth in this Agreement
           ----------
nothing in this Agreement is or shall be construed as:

           (a)     A warranty or representation by Medarex as to the validity or
scope of any claim or patent within the Patent Rights;

           (b)     A warranty or representation that anything made, used, sold,
or otherwise disposed of under any license granted in this Agreement is or will
be free from infringement of any patent rights or other intellectual property
right of any third party;

           (c)     An obligation to bring or prosecute actions or suits against
third parties for infringement of any of the Patent Rights; or

           (d)     Granting by implication, estoppel, or otherwise any licenses
or rights under patents or other rights of Medarex or third parties, regardless
of whether such patents or other rights are dominant or subordinate to any
patent within the Patent Rights.


     9.5   [*****]

     10.   INTELLECTUAL PROPERTY

     10.1  Patent Rights. [*****]
           -------------

     10.2  [*****]

     10.3  [*****]


***** REPRESENTS CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>

     10.4  Infringement Claims. If the manufacture, importation, sale or use of
           -------------------
the Product pursuant to this Agreement results in any claim, suit or proceeding
alleging patent infringement against Medarex or FibroGen, such party shall
promptly notify the other party hereto, and if the notified party has an
obligation to indemnify the other party pursuant to Section 12.1 or 12.2, such
party shall have the right to control the defense of such claim, suit or
proceeding. The defendant shall keep the other party hereto reasonably informed
of all material developments in connection with any such claim, suit or
proceeding. [*****].

     10.5  [*****].


     10.6  [*****]

     10.7  [*****]

     10.8  [*****]

     11.   DISPUTE RESOLUTION

     11.1  Mediation. If a dispute arises out of or relates to this Agreement,
           ---------
or the breach thereof, and if said dispute cannot be settled through
negotiation, the parties agree first to try in good faith to settle the dispute
by mediation under the Commercial Mediation Rules of the American Arbitration
Association, before resorting to arbitration, litigation, or some other dispute
resolution procedure.

     12.   INDEMNIFICATION

     12.1  Medarex. Medarex shall indemnify, defend and hold harmless FibroGen
           -------
and its directors, officers and employees (each a "FibroGen Indemnitee") from
and against any and all liabilities, damages, losses, costs or expenses
(including attorneys' and professional fees and other expenses of litigation
and/or arbitration) (a "Liability") resulting from a claim, suit or proceeding
made or brought by a third party against an FibroGen Indemnitee arising from or
occurring as a result of (i) any breach of the representations and warranties
set forth in Section 9.1, [*****], except to the extent caused by the negligence
or willful misconduct of FibroGen.

     12.2  FibroGen. FibroGen shall indemnify, defend and hold harmless Medarex
           --------
and its directors, officers and employees (each a "Medarex Indemnitee") from and
against any and all liabilities, damages, losses, costs or expenses (including
attorneys' and professional fees and other expenses of litigation and/or
arbitration) (a "Liability") resulting from a claim, suit or proceeding made or
brought by a third party against a Medarex Indemnitee, arising from or occurring
as a result of (i) any breach of the representations and warranties set forth in
Section 9.2, (ii) the conduct of the Research or the practice by FibroGen of any
right granted herein, or


***** REPRESENTS CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>

(iii) any development, testing, manufacture, importation, use, offer for sale,
sale or other distribution of any Product by FibroGen or its Affiliates or
Sublicensees (including, without limitation, product liability claims), except
in each case, (a) to the extent caused by the negligence or willful misconduct
of Medarex, [*****].

     12.3  Procedure. In the event that any Indemnitee intends to claim
           ---------
indemnification under this Article 12 it shall promptly notify the other party
(the "Indemnitor") in writing of such alleged Liability. The Indemnitor shall
have the sole right to control the defense and settlement thereof. The
Indemnitees shall cooperate with the Indemnitor and its legal representatives in
the investigation of any action, claim or liability covered by this Article 12.
The Indemnitee shall not, except at its own cost, voluntarily make any payment
or incur any expense with respect to any claim or suit without the prior written
consent of the Indemnitor, which the Indemnitor shall not be required to give.

     13.   TERM AND TERMINATION

     13.1  Term. The term of this Agreement shall commence on the date hereof.
           ----
Unless earlier terminated as provided in this Article 13, this Agreement shall
continue in full force and effect on a country-by-country and Product-by-Product
basis until there are no remaining royalty payment obligations in a country, at
which time the Agreement shall expire in its entirety in such country.

     13.2  Termination for Cause. Either party may terminate this Agreement in
           ---------------------
the event the other party has materially breached or defaulted in the
performance of any of its obligations hereunder, and such default has continued
for ninety (90) days after written notice thereof was provided to the breaching
party by the nonbreaching party. Any termination shall become effective at the
end of such ninety (90) day period unless the breaching party has cured any such
breach or default prior to the expiration of the ninety (90) day period.
Notwithstanding the above, in the case of a failure to timely pay any amounts
due hereunder, the period for cure of any subsequent default following notice
thereof shall be ten (10) days and, unless payment is made within such period
the termination shall become effective at the end of such period.

     13.3  Termination for Insolvency. If voluntary or involuntary proceedings
           --------------------------
by or against a party are instituted in bankruptcy under any insolvency law, or
a receiver or custodian is appointed for such party, or proceedings are
instituted by or against such party for corporate reorganization or the
dissolution of such party, which proceedings, if involuntary, shall not have
been dismissed within sixty (60) days after the date of filing, or if such party
makes an assignment for the benefit of creditors, or substantially all of the
assets of such party are seized or attached and not released within sixty (60)
days thereafter, the other party may immediately terminate this Agreement
effective upon notice of such termination.


***** REPRESENTS CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>

     13.4  Permissive Termination.

           13.4.1  FibroGen. FibroGen may terminate the Research and/or this
                   --------
Agreement with [*****] written notice to Medarex.

           13.4.2  Medarex. In that event that FibroGen fails to obtain a
                   -------
commercial license pursuant to Section 3.1 on or before the end of the Research
Period, Medarex may terminate the Agreement with written notice to FibroGen.

     13.5  Effect of Termination, Expiration or Completion of Research.
           -----------------------------------------------------------

           (a)     Accrued Rights and Obligations. Termination of this Agreement
                   ------------------------------
for any reason shall not release any party hereto from any liability which, at
the time of such termination, has already accrued to the other party or which is
attributable to a period prior to such termination nor preclude either party
from pursuing any rights and remedies it may have hereunder or at law or in
equity with respect to any breach of this Agreement. It is understood and agreed
that monetary damages may not be a sufficient remedy for any breach of this
Agreement and that the non-breaching party may be entitled to injunctive relief
as a remedy for any such breach.

           (b)     Return of Confidential Information. Upon any termination or
                   ----------------------------------
expiration of this Agreement, FibroGen and Medarex shall promptly return to the
other party all Confidential Information of the other; provided counsel of each
party may retain one (1) copy of such Confidential Information for archival
purposes and for ensuring compliance with Article 8.

           (c)     Stock on Hand. In the event this Agreement is terminated for
                   -------------
any reason, FibroGen shall have the right to sell or otherwise dispose of the
stock of any Product subject to this Agreement then on hand, subject to Articles
5 and 6 until the first anniversary of the effective date of such termination.

           (d)     Return of Mice and Mice Materials. Upon any termination of
                   ---------------------------------
this Agreement, FibroGen shall promptly return to Medarex, or destroy all
hybridomas provided by Medarex and all cells capable of producing Antibodies,
and in the event of such destruction an officer of FibroGen shall provide
Medarex with written certification thereof. [*****] Upon any termination or upon
completion of the Research and unless otherwise permitted by FibroGen, Medarex
shall [*****] return any quantities of Antigen not used in connection with the
Research to FibroGen.


***** REPRESENTS CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>

           (e)     Licenses. The option and license rights granted in Section
                   --------
3.1 shall terminate upon any termination of this Agreement, and in such event
FibroGen and its Affiliates and Sublicensees shall cease all development and
commercialization of Products.

           (f)     [*****]

     13.6  Survival. Sections [*****] 2.7, [*****], 3.5, 13.5 and 13.6, and
           --------
Articles 5, 6, 8, 9, 10, 11, 12 and 14 of this Agreement shall survive
termination of this Agreement for any reason.

     14.   MISCELLANEOUS

     14.1  Governing Law. This Agreement and any dispute, including without
           -------------
limitation any arbitration, arising from the performance or breach hereof shall
be governed by and construed and enforced in accordance with the laws of the
state of California, without reference to conflicts of laws principles.

     14.2  Independent Contractors. The relationship of the parties hereto is
           -----------------------
that of independent contractors. The parties hereto are not deemed to be agents,
partners or joint venturers of the others for any purpose as a result of this
Agreement or the transactions contemplated thereby.

     14.3  Assignment. This Agreement shall not be assignable by FibroGen to any
           ----------
third party hereto without the written consent of Medarex which consent to a
partial or entire assignment shall not be unreasonably withheld; except FibroGen
may assign this Agreement, without such consent, to an entity that acquires all
or substantially all of its business or assets to which this Agreement pertains,
whether by merger, reorganization, acquisition, sale, or otherwise. [*****]

     14.4  Notices. All notices, requests and other communications hereunder
           -------
shall be in writing and shall be personally delivered or sent by telecopy or
other electronic facsimile transmission or by registered or certified mail,
return receipt requested, postage prepaid, in each case to the respective
address specified below, or such other address as may be specified in writing to
the other parties hereto:

     If to Medarex or
     GenPharm International:  Medarex, Inc.
                              1545 Route 22 East
                              Annandale, NJ 08801
                              Attn: President


***** REPRESENTS CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>

     If to FibroGen:          FibroGen, Inc.
                              225 Gateway Boulevard
                              South San Francisco, CA 94080
                              Attn: President
                              cc: Corporate Counsel
                              phone:     (650) 866-7200
                              facsimile: (650) 866-7201

     14.5  Force Majeure. Neither party shall lose any rights hereunder or be
           -------------
liable to the other party for damages or losses (except for payment obligations)
on account of failure of performance by the defaulting party if the failure is
occasioned by war, strike, fire, Act of God, earthquake, flood, lockout,
embargo, governmental acts or orders or restrictions, failure of suppliers, or
any other reason where failure to perform is beyond the reasonable control and
not caused by the negligence, intentional conduct or misconduct of the
nonperforming party has exerted all reasonable efforts to avoid or remedy such
force majeure; provided, however, that in no event shall a party be required to
settle any labor dispute or disturbance.

     14.6  Injunctive Relief. Each party acknowledges that limitations and
           -----------------
restrictions on its possession and use of Mice, Mice Materials, Antibodies,
Antigens and Confidential Information hereunder are necessary and reasonable to
protect the other party, and expressly agrees that monetary damages would be
inadequate to compensate such party for any violation. The parties agree that
any such violation would cause irreparable injury to the other party and agrees
that without resorting to prior mediation or arbitration, and, in addition to
any other remedies that may be available in law, in equity or otherwise, the
injured party shall be entitled to obtain temporary and permanent injunctive
relief against any threatened violation of such limitations or restrictions or
the continuation of any such violation in any court of competent jurisdiction,
without the necessity of proving actual damages or the posting of any bond.

     14.7  Advice of Counsel. Medarex and FibroGen have each consulted counsel
           -----------------
of their choice regarding this Agreement, and each acknowledges and agrees that
this Agreement shall not be deemed to have been drafted by one party or another
and will be construed accordingly.

     14.8  Compliance with Laws. Each party shall furnish to the other party any
           --------------------
information requested or required by that party during the term of this
Agreement or any extensions hereof to enable that party to comply with the
requirements of any U.S. or foreign federal, state and/or government agency.

     14.9  Further Assurances. At any time or from time to time on and after the
           ------------------
date of this Agreement, either party shall at the request of the other party
hereto (i) deliver to the requesting party any records, data or other documents
consistent with the provisions of this Agreement,
<PAGE>

(ii) execute, and deliver or cause to be delivered, all such consents, documents
or further instruments of transfer or license, and (iii) take or cause to be
taken all such actions, as the requesting party may reasonably deem necessary in
order for the requesting party to obtain the full benefits of this Agreement and
the transactions contemplated hereby.

     14.10 Export Controls. FibroGen agrees that it will take all actions
           ---------------
necessary to insure compliance with all U.S. laws, regulations, orders or other
restrictions on exports and further will not sell, license or reexport,
directly, or indirectly, the Product(s) to any person or entity for sale in any
country or territory, if, to the knowledge of FibroGen based upon reasonable
inquiry, such sale, would cause the parties to be in violation of any such laws
or regulations in effect at the time of such sale. FibroGen agrees to secure
from any recipient of Product(s) adequate manually signed written assurances
prior to shipment from the United States as are required by the U.S. Export
Regulations.

     14.11 Severability. In the event that any provisions of this Agreement are
           ------------
determined to be invalid or unenforceable by a court of competent jurisdiction,
the remainder of the Agreement shall remain in full force and effect without
said provision. In such event, the parties shall in good faith negotiate a
substitute clause for any provision declared invalid or unenforceable, which
shall most nearly approximate the intent of the parties in entering this
Agreement.

     14.12 Waiver. It is agreed that no waiver by either party hereto of any
           ------
breach or default of any of the covenants or agreements herein set forth shall
be deemed a waiver as to any subsequent and/or similar breach or default.

     14.13 Complete Agreement. This Agreement, with its Exhibits, constitutes
           ------------------
the entire agreement, both written and oral, between the parties with respect to
the subject matter hereof, and that all prior agreements respecting the subject
matter hereof, either written or oral, expressed or implied, are merged and
canceled, and are null and void and of no effect. No amendment or change hereof
or addition hereto shall be effective or binding on either of the parties hereto
unless reduced to writing and duly executed on behalf of both parties.

     14.14 Use of Name. Neither party shall use the name or trademarks of the
           -----------
other party without the prior written consent of such other party.

     14.15 Headings. The captions to the several Sections and Articles hereof
           --------
are not a part of this Agreement, but are included merely for convenience of
reference only and shall not affect its meaning or interpretation.

     14.16 Counterparts. This Agreement may be executed in two counterparts,
           ------------
each of which shall be deemed an original and which together shall constitute
one instrument.
<PAGE>

     IN WITNESS WHEREOF, Medarex and FibroGen have executed this Agreement by
their respective duly authorized representatives.

MEDAREX, INC.                                FIBROGEN, INC.

By: /s/ Michael Appelbaum                    By: /s/ Thomas B. Neff
    ---------------------                        ------------------

Print Name: Michael Appelbaum                Print Name: Thomas B. Neff
            -----------------                            --------------

Title: Executive Vice President              Title: Chief Executive Officer
       ------------------------                     -----------------------


GENPHARM INTERNATIONAL, INC.

By: /s/ Michael Appelbaum
    ---------------------

Print Name: Michael Appelbaum
            -----------------

Title: President and Chief Executive Office
       ------------------------------------
<PAGE>

                                   EXHIBIT A
                                   ANTIGENS


[*****]


***** REPRESENTS CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>

                                   EXHIBIT B


[*****]


***** REPRESENTS CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.