<PAGE>

                                                                   Exhibit 10.10
                                                                   -------------

                AGREEMENT ON ESSENTIAL TERMS FOR COLLABORATION

                                    between

                            KIRIN BREWERY CO, LTD.

                                      and

                        MEDAREX, INC. / GENPHARM, INC.

     THIS AGREEMENT ("Agreement"), effective as of December 27, 1999 ("Effective
Date"), is made and entered into by and between Kirin Brewery Co., Ltd., having
principal offices at 10-1 Shinkawa 2-chome, Chuou-ku, Tokyo 104-8288, Japan,
("Kirin"), and Medarex, Inc., having principal offices at 67 Beaver Avenue,
Annandale, New Jersey 08801, United States of America, including its wholly
owned subsidiary, GenPharm, Inc., having principal offices at 2350 Qume Drive,
San Jose, California 95131, United States of America ("Medarex").

     WHEREAS, Kirin and Medarex each have developed, and continue to refine and
further develop, novel technologies in the area of human antibodies utilizing
mice carrying human immunoglobulin loci; and

     WHEREAS, Medarex owns or otherwise controls the Medarex HuMAb-Mouse and
improvements thereto, and has a right to grant license rights under intellectual
property covering such Medarex HuMAb-Mouse ("HuMAb-Mouse") and improvements; and

     WHEREAS, Kirin owns or otherwise controls the Kirin Transchromosomic Mouse
("TC-Mouse") and improvements thereto, and the Kirin Human Artificial Chromosome
Mouse ("HAC-Mouse") and improvements thereto, and has a right to grant license
rights under intellectual property covering such TC-Mouse and improvements, and
such HAC-Mouse and improvements; and

     WHEREAS, Medarex desires to grant license rights to Kirin to permit Kirin
to utilize the HuMAb-Mouse, TC-Mouse, or HAC-Mouse and improvements thereto to
generate human antibodies and to develop and commercialize products derived from
targets selected by Kirin or its partners; and

     WHEREAS, Kirin desires to grant license rights to Medarex to permit Medarex
to utilize the TC-Mouse and improvements thereto, and the HAC-Mouse and
improvements thereto, to generate human antibodies and to develop and
commercialize products derived from targets selected by Medarex or its partners.
<PAGE>

     NOW, THEREFORE, in accordance with the facts and desires set forth above,
Kirin and Medarex hereby agree as follows:

1.   License Grants

     (a)  Subject to the terms and conditions set forth in this Agreement,
Medarex hereby grants to Kirin a right and license, together with a right to
enter into licensing arrangements with third parties as further described in
Section 14 below, under intellectual property owned or otherwise controlled by
Medarex, to the extent that Medarex can grant such a right and license, covering
the HuMAb-Mouse and improvements thereto and covering the TC-Mouse and/or HAC-
Mouse and improvements thereto, if any, including without limitation any mouse
strains developed by Medarex or Kirin by cross breeding the HuMAb-Mouse, the TC-
Mouse and the HAC-Mouse, to make, have made, use, have used, offer for sale,
sell, have sold, export and import human antibodies derived from targets
selected by Kirin or its partners (as further described below).  Medarex and
Kirin each acknowledge and agree that such grant will include all such
intellectual property pertaining to the license granted herein held by Medarex
as a result of a grant to Medarex of any right and license by a third party and
under which Medarex can grant sublicense rights. [*****].

     (b)  Subject to the terms and conditions set forth in this Agreement, Kirin
hereby grants to Medarex a right and license, together with a right to enter
into licensing arrangements with third parties as further described in Section
14 below, under intellectual property owned or otherwise controlled by Kirin, to
the extent that Kirin can grant such a right and license, covering the TC-Mouse
and improvements thereto, and the HAC-Mouse and improvements thereto, including
without limitation any mouse strains developed by Kirin or Medarex by cross
breeding the HuMAb-Mouse, the TC-Mouse and the HAC-Mouse, to make, have made,
use, have used, offer for sale, sell, have sold, export and import human
antibodies derived from targets selected by Medarex or its partners (as further
described below).  Kirin and Medarex each acknowledge and agree that such grant
will include all such intellectual property pertaining to the license granted
herein held by Kirin as a result of a grant to Kirin of any right and license by
a third party and under which Kirin can grant sublicense rights.

     (c)  It is the intent of the parties to provide access to their mouse
technology to each other in a manner that encourages commercial use.  Therefore,
the parties hereto will use their best efforts to provide for the right to
sublicense, to the other party and its sublicensees, in license agreements
entered into for intellectual property which would be necessary for either party
to practice first party's technology without an infringement of that
intellectual property.

2.   Territory

     (a)  The Kirin Territory will be Asia as specifically indicated in Exhibit
A.

***** 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.

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<PAGE>

     (b)  The Medarex Territory will be outside Asia as specifically indicated
in Exhibit A.

     (c)  Medarex and Kirin agree to discuss in good faith, within two years
after the Effective Date, whether to add Australia and New Zealand to the Kirin
Territory.

     (d)  Medarex agrees that Medarex will not make a fully-human antibody
partnering deal with a corporate partner or customer whose headquarters is
located in the Kirin Territory.

     (e)  Kirin agrees that Kirin will not make a fully-human antibody
partnering deal with a corporate partner or customer whose headquarters is
located in the Medarex Territory.

     (f)  Notwithstanding (d) or (e) above, Medarex and Kirin and their
corporate partners or customers are free to produce, market, promote and sell
any antibody product derived from the mice worldwide.

     (g)  [*****].

     (h)  In addition, both parties agree that each party may advertise its
technology, including publishing papers regarding its technology and presenting
its technology at conferences, anywhere in the world.  In the event that such
activities give rise to inquiries from potential corporate partners or customers
in the other party's territory, the first party will respond to any such inquiry
and indicate that the other party is its sole licensee with respect to such
potential corporate partner or customer.  [*****].

3.   Target Information

     (a)  Medarex shall institute a mechanism whereby Medarex will notify its
partners by written documentation of the availability or non-availability of
targets.  If Kirin asks about the availability of a target and Medarex has
licensed the target to a third party Medarex shall send Kirin a copy of the
aforementioned documentation with the name of the partner redacted.

     (b)  The identity of targets chosen by Medarex or Kirin and its corporate
partners is confidential.  In particular, because of confidentiality constraints
imposed upon Medarex under agreement with corporate partners existing as of the
Effective Date, Medarex cannot disclose to Kirin the identity of targets chosen
by such partners.

     (c)  Notwithstanding the above, in recognition of equal partnership between
the parties, Medarex during the term of this Agreement, shall disclose to Kirin
the target identity of Medarex' and Medarex Affiliates' existing and future
internal projects.  For purposes of this Section 3(c), the term "Medarex
Affiliate" shall mean any corporation or other business entity controlled by,
controlling or under common control with Medarex, and the term "control" shall
mean direct 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.

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indirect beneficial ownership of more than 50% of the voting stock or equity, or
more than 50% interest in the income of such corporation or other business
entity; provided that, if local law requires a minimum percentage of local
ownership, control will be established by direct or indirect beneficial
ownership of 100% of the maximum ownership percentage that may, under such local
law, be owned by foreign interests. Furthermore, Medarex shall use its
reasonable efforts to obtain the permission of its partners partnered after the
Effective Date to disclose the identity of targets chosen by such partners as
further defined in Sections 14(b) and (c) below.

     (d)  Medarex acknowledges that Kirin will need to know whether a specific
target is available for Kirin's in-house projects or for collaboration with
potential corporate partners. Therefore, Kirin may ask Medarex if a specific
target is available for licensing, to which Medarex will respond in a timely
manner.  [*****]  If Kirin inquires about the availability of a specific target
from Medarex for Kirin's in-house development activities, a positive response
from Medarex will [*****].  Kirin may, however, inquire about the availability
of [*****] for Kirin's in-house development without having to designate those
three targets as in-house project targets.

4.   Target List Designation

     (a)  A list of targets designated by Kirin for in-house development,
subject to availability, will be maintained (the "Target List") and limited, at
all times, to [*****] agreed upon targets (the "List Limitation"). Kirin, in
year 2000, may designate, subject to availability, [*****] targets to be put on
the Target List. Subsequently, Kirin will be permitted to add up to [*****]
targets per calendar year to the Target List subject to the List Limitation. If
a third party requests rights to a target from Medarex, as evidenced by written
documentation (the identity of the party does not have to be disclosed to
Kirin), and such target is on the Target List, Kirin shall have a first right to
designate such target as a [*****] as described below.

     (b)  Kirin may designate up to [*****] available targets from the Target
List as "in-house project" targets, [*****] milestone payments, subject [*****]
obligations set forth in Section 8 below [*****].  An "in-house project" is a
project in which (i) substantially all of the research and development effort
comes from Kirin's internal research assets or, (ii) Kirin has entered into a
collaborative research and development effort in exchange for substantial
commercialization rights. Substantial commercialization rights should include at
least [*****].  For purposes of this Agreement, [*****] shall mean the [*****].

     (c)  Rights to [*****] will accrue to Kirin, alternately, [*****] in one
year and [*****] in the next year, accruing at the beginning of each calendar
year until Kirin will have accumulated a total of [*****] opportunities.  Kirin
will have the right to substitute a new target from the Target List for an
existing [*****], but the total number of such substitutions may not exceed more
than [*****] during the term of this Agreement.  Any such substitution must
occur prior to [*****] after the commencement of Phase [*****] clinical trials
and will require payment of $[*****] to 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.

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at the time of the substitution request. If a third party requests rights to a
target from Medarex, as evidenced by written documentation (the identity of the
party does not have to be disclosed to Kirin), and such target is on the Target
List and Kirin designates such target as a [*****], such [*****] will not be
eligible for substitution except as otherwise indicated in this Section 4(c)
below. In addition, Kirin will be required to develop such a [*****] through the
IND filing stage (or its equivalent) unless Kirin provides scientific evidence
to Medarex that demonstrates that continued development of such [*****] is not
feasible. If, in Medarex' reasonable judgment, based upon Kirin's scientific
evidence obtained prior to commencement of Phase [*****] clinical trials,
continued clinical development of such a [*****] is not feasible, Kirin, after
paying Medarex [*****], may substitute a new target from the Target List for
such failed [*****]. In any such case, upon Medarex' request, Kirin will grant
to Medarex, at no cost other than provided below to Medarex, a right and license
under any and all intellectual property owned or otherwise controlled by Kirin,
including without limitation a right to use know-how and data, necessary or
useful for development of the failed [*****]. If Medarex decides to continue the
development of such failed [*****] and eventually commercializes a product based
on that Target, Medarex will reimburse Kirin the [*****] substitution fee.

     (d)  In addition to [*****] opportunities, Kirin will have an unlimited
(subject to the List Limitation) number of [*****] target opportunities, subject
to [*****] obligations set forth in Sections [*****] and [*****] below ("[*****]
Targets").  Not withstanding the above, once Kirin has paid to Medarex the
[*****] commercialization fee for a [*****] Target as set forth in this Section
4(d), such [*****] Target shall no longer be considered a target subject to the
List Limitation.  As a result, Kirin may have more than a total of [*****] in-
house targets at any time; provided, however, that the total of all [*****]
Targets and all [*****] Targets for which a commercialization fee has not been
paid does not exceed [*****].  Further, once a target has been commercialized in
any major country, that target shall be deleted from the Target List and an
additional target may be added to the Target List, which may be either a [*****]
Target or [*****] Target if Kirin has any remaining [*****] Targets available in
accordance with the above.

5.   Target Designation and Fee Target Commercialization Fee

     (a)  Within [*****] after the date that a target is included on the Target
List, Kirin shall designate whether such target is a [*****] Target or a [*****]
Target, or whether such target is of no further interest to Kirin.  Kirin may
extend its decision to designate any target on the Target List for [*****] by
providing, within 30 days prior to the date on which a target is to be
designated as either a [*****] Target or a [*****] Target, (i) written notice to
Medarex of such extension and (ii) payment to Medarex via wire transfer of a fee
equal to [*****].

     (b)  If Kirin designates a target as a [*****] Target, Kirin shall use one
of the accumulated [*****] Target Rights allocated to Kirin pursuant to Section
4(b) above.  Kirin may only use [*****] Target Rights that have accrued to Kirin
at the time of designation.  A target

***** 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.

                                       5
<PAGE>

[*****] below; provided, however that Kirin, at any time, may redesignate a
[*****] Target as a [*****] Target if Kirin has available previously unused
[*****] Target Rights to do so.

     (d)  If Kirin designates a target as a target in which Kirin has no further
interest, Kirin will have no further right or license with respect to such
target and Medarex shall have no obligation to Kirin regarding such target.
However, if Kirin later decides to resume the development of such target and if,
and only if, such target is still available, Kirin may designate such target as
a [*****] Target or a [*****] Target subject to the List Limitation.

6.   [*****] Milestones

     (a)  [*****]

     (b)  Each milestone payment shall be made to Medarex within 30 days after
the date of the achievement of the corresponding milestone set forth in the
table in this Section 6(a).

     (c)  No milestone payment shall be applied to or otherwise credited against
any other payment which may be due to Medarex under this Agreement.

     (d)  Before a milestone applicable to the second [*****] Target, or any
subsequent [*****] Target, pursuant to Section 6(a) would apply, all milestones
due with respect to previous [*****] Targets must be paid.  For example, if a
product attributed to the first [*****] Target has achieved all milestone events
up to [*****], and a product attributed to the [*****] milestone would be
payable to Medarex with respect to the [*****] Target.  If the first Target
subsequently receives a [*****] milestone would be payable to Medarex.

7.   [*****]

For purposes of this Agreement, "Net Sales" shall mean the gross amount invoiced
by Kirin, its affiliates and sublicensees to third parties on all sales of
products attributed to targets selected by Kirin in accordance with the terms of
this Agreement, less (i) discounts actually allowed, (ii) credits for claims,
allowances, retroactive price reductions or returned goods, (iii) prepaid
freight, and (iv) sales taxes or other governmental charges actually paid in
connection with sales of such products. For purposes of determining Net Sales, a
sale shall be deemed to have occurred on the earlier of generation of an invoice
therefor or shipment of the product for delivery.  The gross amount from sales
of products by Kirin, or an affiliate or sublicensee of Kirin to any affiliate
or sublicensee which is a reseller of such products shall be excluded from Net
Sales; provided that the gross amount from the subsequent sale of such products
by such affiliates or sublicensees of Kirin to unrelated parties shall be
included in Net Sales hereunder.

     (a)  In addition to [*****] as set forth in Section 7(a) above, Kirin shall
bear the [*****], if applicable, with respect to products attributed to [*****]
Targets designated by Kirin under this Agreement.

***** 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.

                                       6
<PAGE>

For purposes of determining Net Sales, a sale shall be deemed to have occurred
on the earlier of generation of an invoice therefor or shipment of the product
for delivery. The gross amount from sales of products by Kirin, or an affiliate
or sublicensee of Kirin to any affiliate or sublicensee which is a reseller of
such products shall be excluded from Net Sales; provided that the gross amount
from the subsequent sale of such products by such affiliates or sublicensees of
Kirin to unrelated parties shall be included in Net Sales hereunder.

     (a)  In addition to [*****] as set forth in Section 7(a) above, Kirin shall
bear the [*****], if applicable, with respect to products attributed to [*****]
Targets designated by Kirin under this Agreement.

8.   [*****]

9.   [*****]

10.  Other Payments

     (a)  Kirin will pay to Medarex, for a period of [*****] years after the
Effective Date, (i) [*****] of all partnering payments received by Kirin from
its partners in the Kirin Territory for use of the TC-Mouse, the HAC-Mouse, any
future TC-Mouse, any future HAC-Mouse, a TC/HAC-Mouse or any of these mice
crossbred with any HuMAb-Mouse (hereinafter, collectively, "Kirin Mice"), or any
HuMAb-Mouse or any future HuMAb-Mouse (hereinafter, collectively, referred to as
"Medarex Mice"), and (ii) [*****] of all partnering payments received from its
partners in the Medarex Territory for use of Kirin Mice and Medarex Mice.
Furthermore, Kirin will pay to Medarex, for a period of [*****] years after the
Effective Date, (iii) [*****] of all royalties received by Kirin from its
partners based on the sales in the Kirin Territory and (iv) [*****] of all
royalties received by Kirin from its partners based on the sales in the Medarex
Territory, of products developed using Kirin Mice and Medarex Mice.  Such
payments pursuant to (i) through (iv) collectively shall be referred to as
"Kirin Partner Payments."  For the purpose of this Agreement, "partnering
payments" include any payments received from partners or customers as
consideration for the license or technology access, such as up-front payments,
research licensing fees, commercialization fees and milestones, but exclude
royalty payments and fees, at fair market value, for services such as producing
antibodies and manufacturing antibody products.

     (b)  Except as provided in this Section 10(b) below, Medarex will pay to
Kirin, for a period of [*****] years after the Effective Date, (i) [*****] of
all partnering payments received by Medarex from its partners in the Medarex
Territory for use of Kirin Mice, and (ii) [*****] of all partnering payments
receiving by Medarex from its partners in the Kirin Territory for use of Kirin
Mice.  Furthermore, Medarex will pay to Kirin, for a period of [*****] years
after the Effective Date, (iii) [*****] of all royalties received by Medarex
from its partners based on the sales in the Medarex Territory and (iv) [*****]
of all royalties received by Medarex from its partners based on

***** 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.

                                       7
<PAGE>

the sales in the Kirin Territory, of products developed using Kirin Mice. Such
payments pursuant to (i) through (iv) collectively shall be referred to as
"Medarex Partner Payments." Notwithstanding the above, with respect to current
license agreements (but not with respect to future license agreements, or
extensions and revisions of a current agreement) with certain licensees of
Medarex that are licensees of Medarex as of the Effective Date and listed in
Exhibit B ("Special Licensees"), Medarex will pay to Kirin [*****] of all
partnering payments for use of Kirin Mice received by Medarex from such
licensees, provided, however, Medarex will pay to Kirin [*****] and [*****] of
all royalties received from such licensees relating to products created using
Kirin's Mice pursuant to (iii) and (iv) above.

     (c)  In addition, within twenty (20) days after the Effective Date, Kirin
will pay to Medarex an initial fee equal to $12 million.

     (d)  In addition, until the earlier of either [*****] years after the
Effective Date or payment by Kirin to Medarex of a total of $[*****] million,
including the initial fee equal to $12 million paid by Kirin to Medarex pursuant
to Section 10(c), Kirin will (i) pay to Medarex, in addition to amounts to be
paid to Medarex pursuant to Section 10(a) above, [*****] of the amount retained
by Kirin after payment of the Kirin Partner Payments in accordance with Section
10(a), and (ii) forego receipt of [*****] of the amount of Medarex Partner
Payments that Kirin would otherwise receive pursuant to Section 10(b).  Kirin's
agreement to forego receipt of a portion of Medarex Partner Payments will also
apply to any payments for use of Kirin Mice received by Medarex from Special
Licensees.

     (e)  For purposes of illustration, the following examples are provided to
summarize the distribution between Kirin and Medarex of payments received from
corporate partners:

          (i)  Kirin will receive [*****] of partnering payments received from
     its partners in the Kirin Territory and [*****] of royalties received from
     its partners based on sales in the Kirin Territory for use of Kirin Mice
     and Medarex will receive [*****] of such payments.  However, in addition,
     pursuant to Section 10(d), Medarex will receive [*****] of the [*****] of
     the payments retained by Kirin in accordance with Section 10(a) until the
     end of the period set forth in Section 10(d).

          (ii) Medarex will receive [*****] of partnering payments received from
     its partners in the Medarex Territory and [*****] of royalties received
     from its partners based on sales in the Medarex Territory for use of Kirin
     Mice and [*****] of all payments received from such partners for use of
     Medarex Mice and, subject to Section 10(d), Kirin will receive [*****] and
     [*****], respectively, of such payments.  However, in addition, pursuant to
     Section 10(d), Medarex will retain the [*****] of the amount of Medarex
     Partner Payments that Kirin would otherwise receive pursuant to Section
     10(b) until the end of the period set forth in Section 10(d).

***** 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.

                                       8
<PAGE>

          (iii)  Notwithstanding Sections 10(e)(i) and (ii) above, Medarex will
     receive [*****] of the partnering payments received by Medarex from Special
     Licensees corresponding to milestone payments for use of Kirin Mice and,
     subject to Section 10(d) whereby Kirin will forego receipt of a portion of
     payments for the period defined in such Section 10(d), Kirin will receive
     [*****] of such payments.

          (iv)   Kirin will receive [*****] of partnering payments received from
     its partners in the Kirin Territory and [*****] of royalties received from
     its partners based on sales in the Kirin Territory for use of Medarex Mice
     and Medarex will receive [*****] of such payments.  However, in case
     Medarex has a special relationship with such a potential corporate partner
     or customer in the Kirin Territory and has entered into agreement with such
     party in accordance with Section 2(d) above, Medarex will receive [*****]
     of such payments.

          (v)    Except as otherwise provided in Section 10(e)(iii), payments
     received from partners will be allocated between Kirin and Medarex based
     upon whether such payments originated from the Kirin Territory or the
     Medarex Territory.  "Originated" shall mean (1) in the case of partnering
     payments, paid by corporate partners or customers whose headquarters is
     located in each Territory, and (2) in the case of royalties, based on the
     sales of products in each Territory.

11.  Payment of Royalties, Records and Audit Rights

     (a)  Within 90 days after the first day of each calendar quarter after the
first commercial sale of a product, Kirin shall pay to Medarex earned royalties
due and payable to Medarex pursuant to Sections [*****] and [*****] for the
just-ended calendar quarter.

     (b)  At the same time as each earned royalty payment is made to Medarex,
Kirin shall furnish to Medarex a detailed written report of Net Sales of each
product subject to the payment of earned royalties hereunder, and the
calculation of the earned royalties due and payable thereon, including a
description of any offsets or credits deducted there from, on a product-by-
product and country-by-country basis, for the calendar quarter upon which the
royalty payment is based.

     (c)  Kirin shall keep, and cause its affiliates and sublicensees to keep,
full, complete and proper records and accounts of all sales of products in
sufficient detail to enable the royalties payable on Net Sales of each such
product to be determined.  Medarex shall have the right to appoint an
independent certified public accounting firm to audit the records of Kirin and
its affiliates and sublicensees as necessary to verify the royalties payable
pursuant to this Agreement.  Kirin and its affiliates and sublicensees shall pay
to Medarex an amount equal to any additional royalties to which Medarex is
entitled as disclosed by the audit, plus interest thereon at the rate of 1.5%
per month. Such audit shall be at Medarex' expense; provided, however, that if
the audit discloses that 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.

                                       9
<PAGE>

was underpaid royalties with respect to any product by 5% or more for any
calendar quarter, then Kirin shall reimburse Medarex for any such audit costs.
Medarex may exercise its right to audit as to each of Kirin and its affiliates
or sublicensees no more frequently than once in any calendar year. The
accounting firm shall disclose to Medarex only information relating to the
accuracy of the royalty payments. Kirin and its affiliates and sublicensees
shall preserve and maintain all such records required for audit for a period of
3 years after the calendar quarter to which the record applies.

     (d)  The remittance of royalties payable on sales outside the United States
shall be payable to Medarex in United States Dollars at the official rate of
exchange of the currency of the country from which the royalties are payable, as
quoted in the United States of America edition of the Wall Street Journal for
the last business day of the calendar quarter in which the royalties are
payable. If the transfer of or the conversion into the United States Dollars of
any such remittance in any such instance is not lawful or possible, the payment
of such part of the royalties as is necessary shall be made by the deposit
thereof, in the currency of the county where the sale was made on which the
royalty was based, to the credit and account of Medarex or its nominee in any
commercial bank or trust company of Medarex' choice located in that country,
prompt written notice of which shall be given by Kirin to Medarex.

12.  Medarex In-House Targets Utilizing Kirin Mice

     The terms and conditions set forth in Sections 4-9 and Section 11 relating
to Kirin's obligations under this Agreement with targets and products will apply
to Medarex with respect to Medarex' in-house use of Kirin Mice in connection
with targets and products, except that (i) the payment required to substitute a
                           ------
new target for an existing [*****] Target set fort in Section 4(c) shall be
$[*****], (ii) all milestone payments payable by Medarex to Kirin with respect
to Medarex' [*****] Targets shall be equal to [*****] the amount set forth in
Section 6(a), and (iii) royalties payable by Medarex to Kirin with respect to
Medarex' [*****] Targets pursuant to Section [*****] shall be [*****] with any
third party royalty, if any, payable by Medarex.

13.  Ex-vivo, Diagnostic or Reagent Use Products

     Kirin and Medarex acknowledge and agree that the milestone and royalty
schedules set forth above are intended to apply to in-vivo therapeutic
applications of products.  The parties also acknowledge and agree that other
non-in vivo applications of products are possible and, in recognition of such
other applications, Kirin and Medarex agree to negotiate in good faith
reasonable fee schedules other than as set forth in Sections 6, 7 and 8 to
pertain to such non in-vivo therapeutic applications of products.

14.  License Arrangement Terms and Conditions

***** 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.

                                       10
<PAGE>

     (a)  Kirin and Medarex each agree that the terms and conditions of any
partnering arrangement entered into with a third party for the use of Kirin Mice
and Medarex Mice to develop antibody products will be such that the amount paid
either by Kirin to Medarex or by Medarex to Kirin pursuant to this Agreement as
a result of activities of such third party [*****].

     (b)  In addition, Kirin and Medarex each agree that the terms and
conditions of any partnering arrangement entered into with a third party for the
use of Kirin Mice and Medarex Mice to develop antibody products will provide
that such third party will provide notice to Kirin or Medarex, as the case may
be, in a timely manner as to (i) any product developed by use of technology
licensed to such third party under such licensing arrangement, and (ii) the
particular system used by such third party in development of each product,
whether or not such development is complete. Medarex will provide notice to
Kirin of who is using Kirin Mice and, in addition, will provide notice to Kirin
of the specific target that a Medarex partner is trying to develop using Kirin
Mice with the name of that partner at the earlier of either (iii) publication of
the fact that a human antibody was made utilizing Kirin Mice, or (iv) the
granting of a commercialization license to the partner for the target.

     (c)  Furthermore, Kirin and Medarex each agree to include in any partnering
arrangement entered into with a third party after the Effective Date, for the
use of Kirin Mice and Medarex Mice to develop antibody products, terms and
conditions which will allow Kirin or Medarex, as the case may be, [*****].
Kirin and Medarex each agree to provide written notice to the other within 30
days after the effective date of a partnering arrangement.  Kirin and Medarex
each agree not to hold the other liable or bring any legal action against the
other based on any obligation of a party pursuant to this Section 14(c) or the
identity of any target disclosed pursuant to this Section 14(c).

15.  Partner Opportunities

     (a)  Medarex agrees to offer Medarex' corporate partners an opportunity to
negotiate with Kirin for commercialization rights or an option to acquire
commercialization rights in Japan and other Asian countries with respect to such
partner's fully human antibody product.  Time permitting and upon reasonable
request of Kirin, Medarex shall assist Kirin with the negotiation of a licensing
arrangement between Kirin and a Medarex partner.

     (b)  [*****]

16.  Reports and Joint Meetings

     (a)  [*****]

     (b)  Joint meetings between Kirin and Medarex shall occur on a regular
basis during the term of this Agreement. Such joint meetings shall occur on a
twice yearly basis alternating between

***** 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.

                                       11
<PAGE>

Japan and the United States of America. Each party shall bear its own expenses
relating to attending and participating in joint meetings. Each joint meeting
shall be attended by representatives of both Kirin and Medarex to discuss the
activities of the parties with respect to the technology licensed under this
Agreement.

     (c)  The parties' representatives will discuss the continued development by
the parties of the novel technologies licensed under this Agreement, the
development of products utilizing the technologies licensed under this
Agreement, and the progress in establishing licensing arrangements with third
parties in accordance with the rights and licenses granted under this Agreement.
In addition, each party's representatives will, subject to the provisions of
paragraph 14, provide information to the representatives of the other party
regarding: [*****]

17.  Confidentiality

     (a)  Each party shall hold in strict confidence and not use or disclose to
any third party (other than employees, affiliates, consultants and advisors who
are similarly bound in writing) any product, technical, marketing, financial,
business or other information, ideas or know-how identified in writing as
confidential ("Confidential Information") of or used by the other party;
provided, however, that Confidential Information of a party shall not include:

          (i)   Information which at the time of disclosure was previously known
     to the receiving party as demonstrated by written records;

          (ii)  Information which at the time of disclosure is published or
     otherwise generally available to the public; or

          (iii) Information which, after disclosure by the other party, is
     published or otherwise becomes generally available to the public through no
     breach of this Agreement by the receiving party.

     (b)  A party may disclose Confidential Information of the other:

          (i)   In connection with the order of a court or other governmental
     body;

          (ii)  As required by or in compliance with laws or regulations;

          (iii) In confidence, to accountants, banks and financing sources and
     their advisors; or

          (iv)  In confidence, to consultants and advisors in connection with a
     merger or acquisition or proposed merger or acquisition, or the like.

***** 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.

                                       12
<PAGE>

     (c)  The obligations of Kirin and Medarex under the terms of this Section
17 shall remain in full force and effect for 5 years after expiration of this
Agreement.

18.  Term of Agreement

     The term of this Agreement shall be [*****] years, at which time the
licenses of the partners to each other shall be fully paid up.  Notwithstanding
the previous sentence, any and all payment obligations with respect to products
launched in any country shall continue until expiration of the term of the
royalty payment obligation as set forth in Section 9.  Each and any third party
licenses in effect upon the expiration of this Agreement requiring payment,
performance or other obligations will continue in full force and effect in
accordance with the terms and conditions provided therein.

19.  Withholding Taxes

     Notwithstanding any provision of this Agreement, all payments remitted by
either of the parties to the other will be reduced by the applicable withholding
requirements of the applicable taxing jurisdiction.

20.  Notices

     Any notices to a party provided under this Agreement shall be given in
writing at the address of such party set forth above, or to such other address
as either party may substitute by written notice to the other in the manner
contemplated herein, and shall be deemed served when delivered or, if delivery
is not accomplished by reason or some fault of the addressee, when tendered.

21.

Legal Effect; Binding Arbitration

     (a)  This Agreement is intended as legal and binding contract, enforceable
in accordance with its terms by and against both Kirin and Medarex and is
intended to contain all of the essential terms between Kirin and Medarex
regarding the transactions contemplated by this Agreement and will be
incorporated [*****].

     (b)  In furtherance and not in limitation of the foregoing, it is the
intention of Kirin and Medarex to initiate promptly [*****] during which Kirin
and Medarex will conduct exclusive discussions relating to any additional terms
and conditions [*****] the entire and exclusive agreement between Kirin and
Medarex with respect to the subject matter hereof and shall supersede and cancel
all previous and contemporaneous registrations, agreements, commitments and
writings in respect thereof, including without limitation this Agreement.

     (c)  If the parties are not able to reach agreement on any such additional
terms [*****] described in Section 21 (b) above, the parties shall be entitled
to submit the dispute to binding

***** 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.

                                       13
<PAGE>

arbitration under the commercial rules of the American Arbitration Association
by three arbitrators appointed in accordance with such rules. The arbitration
proceedings and all written information provided in such arbitration shall be in
the English language. In such arbitration, each party shall submit [*****]. The
arbitrators shall select whichever of the versions, in part or in its entirety,
which more closely adheres to the [*****]. Such version [*****] shall then
embody the agreements of and between the parties governing the relationships
contemplated [*****]. The arbitration shall take place in San Diego, California.

22.  Assignment

     Neither this Agreement nor any interest hereunder shall be directly or
indirectly assigned or transferred (whether voluntarily, by operation of law or
otherwise) by either party without prior written consent of the other party:
provided, however, that either Kirin or Medarex may assign or transfer this
Agreement or any of its rights or obligations hereunder from the earlier of six
months from the effective date of this Agreement or [*****] (i) to any Kirin
affiliate or Medarex affiliate, respectively (ii) to any third party with which
it may merge or consolidate, or to which it may transfer all or substantially
all of its assets to which this Agreement relates, in each case without
obtaining the consent of the other party, if in any such event (including any
merger involving Kirin or Medarex), (A) the assigning party remains jointly and
severally liable with the relevant Kirin affiliate, Medarex affiliate or third
party assignee under this Agreement, and (B) the relevant Kirin affiliate or
Medarex affiliate assignee, third party assignee or surviving entity assumes in
writing all of the assigning party's obligations under this Agreement.  Any
purported assignment or transfer in violation of this section shall be void.

23.  Entire Agreement

     This Agreement constitutes the entire and exclusive agreement between Kirin
and Medarex with respect to the subject matter hereof and shall supersede and
cancel all previous and contemporaneous registrations, agreements, commitments
and writings in respect thereof.

24.  Language

     This Agreement is in the English language, which language shall be
controlling in all respects, and all versions hereof in any other language shall
be for accommodation only and shall not be binding upon the parties hereto.  All
communications and notices to be made or given pursuant to this Agreement shall
be in the English language.

25.  Counterparts

     This Agreement may be executed in counterparts, each of which shall be
deemed an original, but both of which together shall constitute one and the same
instrument.

***** 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.

                                       14
<PAGE>

     IN WITNESS WHEREOF, the undersigned are duly authorized to execute this
Agreement on behalf of Kirin and Medarex, as applicable.



KIRIN BREWERY  CO., LTD.                  MEDAREX, INC.,
("Kirin")                                 including its wholly owned subsidiary,
                                          GENPHARM, INC.
                                          ("Medarex")

By: /s/ Koichiro Aramaki                  By: /s/ Michael Appelbaum
    -------------------------------------     ----------------------------------
Print Name: Koichiro Aramaki, Ph.D.       Print Name: Michael Appelbaum
            -----------------------------             --------------------------
Title: President, Pharmaceutical Division Title: Executive V.P. - Medarex
       ----------------------------------        -------------------------------
                                                 President and C.O.O. GenPharm

                                       15
<PAGE>

                                   Exhibit A
                                   ---------

                                Kirin Territory

Afghanistan
Bahrain
Bangladesh
Brunei
Cambodia
East Timor
India
Indonesia
Iran
Iraq
Israel
Japan
Jordan
Kuwait
Laos
Lebanon
Malaysia
Mongolia
Myanmar
Nepal
North Korea
Oman
Pakistan
People's Republic of China
Philippines
Saudi Arabia
Singapore
South Korea
South Yemen
Sri Lanka
Syria
Taiwan
Thailand
Turkey
United Arab Emirates
Vietnam
Yemen

                                       16
<PAGE>

                                   Exhibit B
                                   ---------

                               Special Licensees


[*****]

***** 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.

                                       17