<PAGE>
                                                                    EXHIBIT 10.1

CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                             COLLABORATION AGREEMENT

      THIS COLLABORATION AGREEMENT dated as of December 18, 2002, between Pfizer
Inc. ("Pfizer") a corporation organized under the laws of the State of Delaware
of 235 East 42nd Street, New York, New York 10017-5755, and Neurocrine
Biosciences, Inc. ("Neurocrine") a corporation organized under the laws of the
State of Delaware, 10555 Science Center Drive, San Diego, California 92121-1102.

      WHEREAS, the parties have executed a License Agreement dated as of the
date hereof (the "License Agreement") with respect to Neurocrine's compound
generically known as indiplon; and

      WHEREAS, the parties would like to set forth the terms and conditions
pursuant to which the parties will collaborate in connection with the
commercialization of Products in the Territory (as both terms are defined
below), and with respect to certain other matters as described herein.

      NOW, THEREFORE, the parties agree as follows:

                                    ARTICLE 1

                                   DEFINITIONS

      Any capitalized terms used herein which are not expressly defined in this
Agreement shall have the meaning set forth in the License Agreement. For
purposes of this Agreement, the following definitions shall also be applicable:

1.1   "Act" means both the Federal Food, Drug and Cosmetic Act, as amended, and
      the regulations promulgated under the foregoing.

1.2   "Affiliate" means any entity directly or indirectly controlled by,
      controlling, able to control, or under common control with, a party to
      this Agreement, but only for so long as such control shall continue. For
      purposes of this definition, "control" (including, with correlative
      meanings, "controlled by", "controlling" and "under common control with")
<PAGE>
      means possession, direct or indirect, of (a) the power to direct or cause
      direction of the management and policies of an entity (whether through
      ownership of securities or partnership or other ownership interests, by
      contract or otherwise), or (b) at least fifty percent (50%) of the voting
      securities (whether directly or pursuant to any option, warrant or other
      similar arrangement) or other comparable equity interests. For the
      avoidance of doubt, neither of the parties to this Agreement shall be
      deemed to be an "Affiliate" of the other solely as a result of their
      entering into this Agreement.

1.3   "Approval" means receipt of a final Approval Letter from FDA authorizing
      marketing and sale of Products.

1.4   "Bankruptcy Code" means 11 USC Sections 101-1330, as amended.

1.5   "Baseline Threshold" is defined in Section 8.2(b).

1.6   "beneficial ownership" (and other correlative terms) means beneficial
      ownership as defined in Rule 13d-3 under the United States Securities and
      Exchange Act of 1934, as amended; it being understood and agreed that
      "beneficial ownership" shall also include any securities: which any person
      or any of such person's Affiliates has the right to acquire (whether such
      right is exercisable immediately or only after the passage of time in no
      event to exceed six months from any applicable date) pursuant to any
      agreement, arrangement or understanding, or upon the exercise of
      conversion rights, exchange rights, rights, warrants or options, or
      otherwise.

1.7   "Business Day" means a day that is not a Saturday, Sunday or a day on
      which banking institutions in New York, New York or San Diego, California
      are authorized by Law to remain closed.

1.8   "Change in Control" or "Acquisition" means an event where:

      (a)   any person or group of persons (as the term "group" is interpreted
            pursuant to Rule 13d-5 of under the Securities Exchange Act of 1934,
            as amended) acquires beneficial ownership of capital stock of
            Neurocrine entitling the holder(s) thereof


                                       2
<PAGE>
            to more than fifty percent (50%) of the voting power of the then
            outstanding capital stock of Neurocrine with respect to the election
            of directors of Neurocrine pursuant to a tender offer for Neurocrine
            securities, or

      (b)   Neurocrine enters into a merger, consolidation, reorganization or
            similar transaction with another person (a "Business Combination
            Person"), whether or not Neurocrine is the survivor in such
            transaction and thereafter any of Neurocrine, the Business
            Combination Person or any other resulting person that is the
            surviving entity, as applicable, thereafter is (i) no longer
            generally engaged in drug discovery and development or (ii) in
            Pfizer's reasonable opinion, no longer able to perform its
            obligations hereunder or (iii) a direct or indirect division or
            subsidiary of a third party who is [***] (providing this shall not
            apply to a research and development joint venture between Neurocrine
            and [***] that does not otherwise fall within subparagraph (c)
            below) or (v) has at least [***] of any voting class of its capital
            stock beneficially owned, whether directly or indirectly (including
            as part of any group of persons), by any [***] or affiliate
            controlled by, controlling or under the common control of any [***]
            belongs (a "Group"), where such beneficial ownership by any such
            [***] or Group, as applicable, represents the largest percentage
            ownership of such capital stock by any single shareholder or Group
            of persons at such time; or

      (c)   Neurocrine or its Affiliate sells or otherwise transfers to any
            person(s) that is not an Affiliate in one or more related
            transactions not involving a merger, consolidation, reorganization
            or similar transaction, properties or assets representing more than
            fifty percent (50%) (except that with respect to any transfer that
            is a license, such license must represent of all or substantially
            all of





*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       3
<PAGE>
            Neurocrine's intellectual property assets) of (i) Neurocrine's
            consolidated total assets as reflected on its most recent Annual
            Report on Form 10-K or Quarterly Report on Form 10-Q, or (ii)
            Neurocrine's consolidated operating income for the most recent
            fiscal year as reflected on its most recent Annual Report on Form
            10-K, or (iii) any of the Neurocrine Technical Information or
            Neurocrine Patent Rights.

      For purposes of this definition of "Change in Control" (or "Acquisition"),
      references to Neurocrine shall be deemed to include all successors in any
      merger, consolidation, reorganization or similar transaction.

1.9   "CMC" means the chemistry, manufacturing and controls section of the
      Product NDA.

1.10  "Code" or "Codes" means the Code on Interactions with Healthcare
      Professionals promulgated by the Pharmaceutical Research and Manufacturers
      of America (PhRMA), and the American Medical Association Guidelines on
      Gifts to Physicians, as either of the foregoing may be amended, from time
      to time.

1.11  "Collaboration" means the collaboration between Neurocrine and Pfizer as
      set forth in this Agreement and the License Agreement.

1.12  "Combination Product" means any product which contains, in addition to the
      Product, one or more other therapeutically active ingredients.

1.13  "Commercialize" means directly or indirectly to market, sell, detail,
      promote or distribute, but in no event shall include an out-license or
      other divestiture of intellectual property to a person that markets,
      sells, details or distributes.

1.14  "Commercially Reasonable Efforts" means, those efforts and resources that
      Pfizer would use were it promoting and detailing its own pharmaceutical
      products which are of similar market potential as the Products, taking
      into account product labelling, market potential, past performance,
      economic return, the regulatory environment and competitive market
      conditions in the therapeutic area, all as measured by the facts and
      circumstances at the


                                       4
<PAGE>
      time such efforts are due. In evaluating economic return, Pfizer shall not
      consider the payments under this Agreement and the License Agreement to
      Neurocrine.

1.15  "Compound" means indiplon (NBI-34060) as more specifically described as
      Acetamide, N-Methyl-N-[3-[3-(2-thienylcarbonyl)_pyrazol - [1,5-a]
      pyrimidin-7-yl] phenyl] in any chemical form, including without
      limitation, salts, solvates, metabolites and prodrugs.

1.16  "Consensus Matter" shall be as defined in Section 3.9(b).

1.17  "Co-Promotion" or "Co-Promote" means the Detailing and Promotion of
      Products and Zoloft in the United States by Neurocrine and Pfizer as set
      forth in Article 6A.

1.18  "Co-Promotion Budget" is defined in Section 6A.3.

1.19  "Co-Promotion Term" means the period during which Neurocrine and Pfizer
      are Co-Promoting Products, Zoloft or other Pfizer Products under the terms
      and conditions set forth herein.

1.20  "Detail" means a face-to-face contact of either a Neurocrine or Pfizer
      Sales Representative, as the case may be, with a medical professional with
      prescribing authority (or, in the case of Sleep Specialists, medical
      professionals who are certified diplomates of the American Board of Sleep
      Medicine) during which scientific and/or medical information about the
      Products or Zoloft (as the case may be) is discussed. A Detail does not
      include a reminder or sample drop. Details shall be measured by each
      party's internal recording of such activity; provided that, such
      measurement shall be on the same basis as the recording party's
      measurement for its sales representatives detailing of such recording
      party's other products, consistently applied throughout the term of this
      Agreement. When used as a verb, the term "Detailing" means to engage in
      the activity of a Detail.

1.21  "Detail Report" is defined in Section 6A.4.


                                       5
<PAGE>
1.22  "Detail Requirement" means with respect to Neurocrine's Sales
      Representatives, [***].

1.23  "Development Costs" means the costs set forth in each relevant Development
      Plan; provided, however, for the avoidance of doubt, Development Costs
      shall in no event include any Out-of-Pocket Costs incurred or accrued by
      Neurocrine in the conduct of the Registration Program prior to the year
      2003 or any internal costs of Neurocrine.

1.24  "Development Plan" means collectively, the Registration Plan and the
      Supplemental Plan.

1.25  "Development Program" means collectively, the Registration Program and
      Supplemental Program.

1.26  "Effective Date" means the first date upon which the applicable waiting
      period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
      amended ("HSR Act") shall have expired or been terminated with respect to
      the License Agreement and this Agreement, as applicable, which in any
      event may only be a date no later than the 90th day following the date of
      this Agreement.

1.27  "FDA" means the United States Food and Drug Administration and any
      successor agency thereto.

1.28  "First Approval" means, with respect to IR Product or MR Product, the
      first Approval.

1.29  "Final Detail Requirement" is defined in Section 6A.4(b).

1.30  "GAAP" means US generally accepted accounting principles in effect from
      time to time.

1.31  [***].




*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       6
<PAGE>
1.32  "GMP" means the Good Manufacturing Practices regulations and guidance
      promulgated by the FDA under the Act as of the time of manufacture of the
      applicable Products.

1.33  "Governmental Authority" means any court, agency, department or other
      instrumentality of any foreign, federal, state, county, city or other
      political subdivision.

1.34  "Initial Five Year Period" is defined in Section 2.3.

1.35  [***].

1.36  "IR Product" means the immediate release formulation of the Compound,
      characteristics as set forth in Exhibit A of the License Agreement or any
      formulation with equivalent release characteristics.

1.37  "Launch" means the shipping of commercial quantities of a Product for
      commercial sale to unaffiliated third parties.

1.38  "Law" or "Laws" means all laws, statutes, rules, Codes, regulations,
      orders, decrees, judgments and/or ordinances of any Governmental
      Authority.

1.39  "Marketing Plan" is defined in Section 6A.3(c).

1.40  "Medical and Marketing Expenses" means all Out-of-Pocket Costs, paid or
      accrued by a party pursuant to the Marketing Plan and directly related to
      the Co-Promotion of the Products in the US Territory, including those in
      connection with:

      (a)   [***];


*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.



                                       7
<PAGE>
      (b)   [***];

      (c)   [***];

      (d)   [***]

      (e)   [***].

      [***]:

            (1)   [***]

            (2)   [***].

All other Out-of-Pocket Costs incurred in the Co-Promotion of the Products in
the US Territory, but not specifically identified above, but which have been
approved by the MC or provided for in the Marketing Plan, shall be accounted for
and deemed Medical and Marketing Expenses for all purposes of this Agreement.

1.41  "MR Product" means the modified release formulation of the Compound as set
      forth in Exhibit A of the License Agreement or any formulation with
      equivalent kinetic profile.



*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.




                                       8
<PAGE>
1.42  "Net Sales" means (a) gross sales of Pfizer, its Affiliates and
      sublicensees of Product to unaffiliated third parties in the applicable
      country, less (i) bad debts related to the Product and (ii) sales returns
      and allowances, including, without limitation, trade, quantity and cash
      discounts and any other adjustments, including, but not limited to, those
      granted on account of price adjustments, billing errors; rejected goods,
      damaged or defective goods, recalls, returns, rebates, chargeback rebates,
      fees, reimbursements or similar payments granted or given to wholesalers
      or other distributors, buying groups, health care insurance carriers or
      other institutions, adjustments arising from consumer discount programs,
      [***], customs or excise duties, sales tax, consumption tax, and other
      taxes (except income taxes) or duties relating to sales, and any payment
      in respect of sales to any governmental or regulatory authority in respect
      of any government-subsidized program; and (b) in the case of Combination
      Products, (aa) If Pfizer and/or its Affiliates separately sells in such
      country during such Year when it sells such Combination Product both (x)
      one or more Products as a single chemical entity and (y) other products
      containing active ingredient(s) as a single entity that are also contained
      in such Combination Product, the Net Sales attributable to such
      Combination Product during such Year shall be calculated [***]; (bb) if
      Pfizer and/or its Affiliates separately sells, in such country during such
      Year when it sells such Combination Product, one or more Products as a
      single chemical entity but do not separately sell, in such country, other
      products containing active ingredient(s) that are also contained in such
      Combination Product, the Net Sales attributable to such Combination
      Product during such Year shall be calculated by [***];



*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       9
<PAGE>
      (cc) if Pfizer and/or its Affiliates do not separately sell each Products
      contained in the Combination Product, the Net Sales attributable to such
      Combination Product shall be calculated [***].

      With respect to the determination of Net Sales of Combination Products
      above and in considering the financial feasibility of Launching a
      Combination Product, if one or both of the parties determines that the
      formula in (aa), (bb) or (cc), as the case may be, will result in
      commercialization of the Combination Product not being economically
      feasible or equitable, the parties will meet and discuss in good faith
      adjustments or alterations to the applicable formulas above to address the
      concerns of such party(ies).

1.43  "Neurocrine Field Force" is defined in Section 6A.1(a).

1.44  "Neurocrine Sales Force" is defined in Section 6A.1(a).

1.45  "NDA" means a New Drug Application filed with the FDA with respect to each
      Product.

1.46  "Not-Approvable Letter" means a letter or other official communication
      from FDA providing notice that an application filed with FDA may not be
      approved, as defined in FDA regulations set forth in 21 C.F.R. 314.120.

1.47  "Out-of-Pocket Costs" means costs and expenses paid or accrued to third
      parties, other than Affiliates or employees, by either party after the
      Effective Date.

1.48  "Pfizer Field Force" means a Pfizer field force comprised of full time
      Sales Representatives in the US Territory who are trained to Detail
      Products to psychiatrists and/or to Sleep Specialists.




*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.




                                       10
<PAGE>
1.49  "Pfizer Quarter" means each of the periods ending on each of the four (4)
      thirteen (13) week periods as used by Pfizer as reported in its quarterly
      and annual filings with the Securities and Exchange Commission, the first
      commencing on January 1 of any year.

1.50  "Position" as used in this Agreement denotes the priority position in
      which a Neurocrine Sales Representative Details the products in accordance
      with their established field force practices; "First Position" means that
      the relevant product is Detailed with the highest priority in accordance
      with their established field force practices; and "Second Position" means
      that the relevant product is Detailed with the second highest priority in
      accordance with their established field force practices.

1.51  "Product" means all pharmaceutical formulations and dosage forms which
      contain the Compound either alone or in combination with other
      therapeutically active ingredients.

1.52  "Product Studies" mean clinical, preclinical, safety, epidemiological
      studies and modeling, pharmacoeconomic studies, in each case including any
      ancillary or incidental development, investigation or research scheme
      pertaining thereto, that are designed: (a) to support regulatory authority
      or other Governmental Authority approval for marketing of Products; or (b)
      to support publications, promotional and educational activities, future
      labeling changes or new indications of the Compounds or the Products.

1.53  "Promote" means those activities other than Detailing undertaken by a
      party to encourage sales of Products including but not limited to, journal
      advertising, direct mail programs, direct-to-consumer advertising,
      convention exhibits and other forms of advertising and promotion.

1.54  "Registration Plan" means the annual plan with respect to the US Territory
      created by the DC for those pre-clinical and clinical studies to be
      conducted as part of the Registration Program.


                                       11
<PAGE>
1.55  "Registration Program" means the development program with respect to the
      US Territory conducted by Neurocrine as set forth on Schedule 5.3(a), as
      may be amended by the DC in accordance with Section 5.2.

1.56  "ROW Territory" means all countries in the world outside the US Territory.

1.57  "Sales Representative" means an individual who engages in Detailing and
      other promotional efforts in the field with respect to the Products and
      who has been trained and is employed by either party, and in the case of
      Neurocrine, includes a member of the Neurocrine Field Force.

1.58  "Sleep Specialist" means a sleep medicine specialist who is a certified
      diplomate of the American Board of Sleep Medicine.

1.59  "Specifications" means the specifications for the manufacture and
      packaging of the Products.

1.60  "Supplemental Plan" means the annual plan with respect to the US Territory
      created by the DC and the MC for those preclinical and clinical studies to
      be conducted as part of the Supplemental Program.

1.61  "Supplemental Program" means the development program with respect to the
      US Territory conducted by Pfizer described in Section 5.3(b), as may be
      amended by the DC and the MC from time to time.

1.62  "Territory" means the US Territory and the ROW Territory.

1.63  "Trademarks" means any trademark associated with the Products in the
      Territory, which may be selected by the MC in the US Territory and by
      Pfizer in the ROW Territory.

1.64  "US Territory" means the United States of America, including its
      territories, possessions and Puerto Rico.

1.65  "Year" means each calendar year during the term of this Agreement.




                                       12
<PAGE>
1.66  "Zoloft" means the compound generically known as sertraline and which is
      promoted or sold under the trademark Zoloft(R) as a single entity.

1.67  "Zoloft Net Sales" means (1)(a) gross sales of Pfizer, its Affiliates and
      sublicensees of Zoloft to unaffiliated third parties in the US Territory
      less, (b) returns and allowances, including, without limitation, trade,
      quantity and cash discounts and any other adjustments, including, but not
      limited to, those granted on account of price adjustments, billing errors,
      rejected goods, damaged or defective goods, recalls, returns, rebates,
      chargeback rebates, fees, reimbursements or similar payments granted or
      given to wholesalers or other distributors, buying groups, health care
      insurance carriers or other institutions, adjustments arising from
      consumer discount programs, customs or excise duties, sales tax,
      consumption tax, and other taxes (except income taxes) or duties relating
      to sales, and any payment in respect of sales to any governmental or
      regulatory authority in respect of any government-subsidized program,
      multiplied by (2) [***].

1.68  "Zoloft Patent Expiration Date" means June 30, 2006, or such later date
      that U.S. Patent No. 4,536,518 may expire.

1.69  "Zoloft Trademark" means the trademark Zoloft(R) and/or any other
      trademark associated with Zoloft in the US Territory owned or otherwise
      held by Pfizer or one of its Affiliates.

Whenever in this Agreement the term "includes" or "including" is used, unless
expressly limited such terms shall be without limitation to the enumerated or
listed items.

                                    ARTICLE 2

                          GRANT OF CO-PROMOTION RIGHTS

2.1   Grant of Rights. Subject to the terms of this Agreement, Pfizer grants to
      Neurocrine:

      (a)   the exclusive right to Promote and Detail (but not to sell) the
            Product together with Pfizer in the US Territory to psychiatrists
            and Sleep Specialists, as well as to such other specialists as the
            parties may mutually agree; and



*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       13
<PAGE>
      (b)   the non-exclusive right to Promote and Detail (but not to sell)
            Zoloft to psychiatrists in the US Territory, such right commencing
            on the date (in no event earlier than the filing with FDA of the NDA
            for the MR Product pursuant to Section 4.3) on which members of the
            Neurocrine Field Force (as defined below) successfully complete
            initial training in accordance with Schedule 2.5 attached hereto
            until the Zoloft Patent Expiration Date.

2.2   Compliance With Law and Codes.

      (a)   General. Both Pfizer and Neurocrine will Promote and Detail the
            Products and Zoloft in the US Territory in accordance with
            applicable Law, the terms of this Agreement and, with respect to the
            Product, the then-current Marketing Plan (except upon an event
            described in Section 3.5(c)). Neither party shall be required to
            undertake any action or inaction (including without limitation any
            Launch of any Product), or to incur expenditures in connection with
            any such action or inaction under this Agreement that it believes,
            in good faith, may violate any Law.

      (b)   Medical Education. Pfizer will in all material respects conform the
            practices and procedures for educating the medical community in the
            United States by Pfizer or Neurocrine representatives pursuant to
            the Marketing Plan to the Accreditation Council for Continuing
            Medical Education Standards for Commercial Support of Continuing
            Medical Education and any applicable FDA regulations, as the same
            may be amended from time to time (except with respect to grants for
            independent educational events which are not accredited, but for
            which the grantee certifies in writing to Pfizer or Neurocrine as to
            such grantee's independence).

2.3   Detailing Obligations. The Neurocrine Field Force shall Detail Products
      commencing on Launch of the first Product up to and including the end of
      the fifth full year (365 day period) from Launch of the first MR Product
      (such period, the "Initial Five Year Period"), in either the First
      Position or Second Position. After the Initial Five Year Period, [***].



*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.



                                       14
<PAGE>
2.4   Other Pfizer Products. Upon the Zoloft Patent Expiration Date, Pfizer and
      Neurocrine may discuss from time to time additional Pfizer products for
      the Neurocrine Field Force to co-promote and detail within the US
      Territory, provided that neither party shall be required to undertake any
      obligations with respect to such products unless mutually agreed.

2.5   Training.

      (a)   Pfizer shall, at its sole expense, provide initial sales and product
            training for Zoloft, and "launch track" training for the Product,
            for the initial two hundred (200) members of Neurocrine Sales Force
            as set forth in Schedule 2.5 and in accordance with Pfizer's
            existing training programs at such time. Pfizer shall not be
            obligated to provide any training for any additional Neurocrine
            personnel other than Neurocrine Field Force trainers. Pfizer shall
            provide ongoing training relating to the Product and Zoloft for
            trainers who at such time train the Neurocrine Field Force. Pfizer's
            training of the Neurocrine Sales Force will be conducted in
            accordance with applicable Law. The Neurocrine Sales Force will
            attend, at Neurocrine's expense, the United States national Product
            Launch meeting and periodic Product sales meetings along with the
            Pfizer sales force and Launch meetings in the ROW Territory. Except
            as provided above, the implementation of all ongoing training
            programs for the Neurocrine Sales Force will be the responsibility
            of Neurocrine, at its sole expense.

      (b)   Pfizer shall provide to Neurocrine mutually agreed upon quantities
            of training materials appropriate and adequate to train the
            Neurocrine Field Force for the Co-Promotion of the Products and
            Zoloft and consistent with the quantities of such materials used by
            Pfizer for the Pfizer Field Force. Pfizer shall at substantially


                                       15
<PAGE>
            the same time it begins use of such materials, provide to Neurocrine
            such agreed upon quantities of all Pfizer training materials,
            without charge to Neurocrine, relating to Products or Zoloft that
            are used by the Pfizer Field Force.

      (c)   Neurocrine shall at its own expense, comply with any training plan
            contained in the applicable Marketing Plan for post "launch track"
            Neurocrine Field Force training and any Zoloft training plan
            applicable to the Pfizer sales force Detailing Zoloft.

2.6   Promotional Materials. The Neurocrine Field Force and Pfizer Field Force
      will only utilize promotional, advertising, communication and educational
      materials (including all written, graphic, electronic, audio and video
      pieces and including journal advertisements, direct mail, direct to
      consumer advertising, internet postings, broadcast advertisements and
      sales aids (pens, cups, note pads and the like)) relating to the Products
      (collectively "Promotional Materials") and only conduct promotional
      activities for the Products which, in each case, have been approved in the
      Marketing Plan or otherwise by the MC (except following an event described
      in Section 3.5(c)). All Promotional Materials will be subject to
      regulatory review and approval by the MC (except following an event
      described in Section 3.5(c)). At substantially the same time any Product
      Promotional Materials and any Product related communication is sent in
      hard copy, electronically or by voicemail by Pfizer to the Pfizer Field
      Force, Pfizer will provide to Neurocrine with copies of all such materials
      (or notify Neurocrine as to such other communication, as applicable) for
      the Neurocrine Sales Force (which shall be equivalent to quantities of
      such materials provided to the Pfizer Field Force). Promotional Materials
      shall be allotted to Neurocrine according to Neurocrine's Detail
      Requirement for the applicable year. All promotional activities conducted
      by the Neurocrine Field Force and Pfizer Field Force shall be consistent
      with the Promotional Materials so approved and the then-current Marketing
      Plan. Pfizer shall own all rights to all Promotional Materials, including
      all copyrights thereto. Unless and until Promotional Materials are
      approved by the MC for publication or other general dissemination, each
      party shall maintain them in confidence pursuant to the terms of Article
      11. All Promotional Materials will bear the


                                       16
<PAGE>
      corporate names and logos/trademarks of Neurocrine and Pfizer in
      substantially equal prominence and frequency.

2.7   Samples. Following Launch of the first Product and in support of
      Neurocrine's Detailing and Promotional activities hereunder, Pfizer shall
      provide Neurocrine with Product samples as required in the applicable
      Marketing Plan, and Zoloft samples consistent with the allocation to the
      Pfizer Field Force. Samples will be allocated fairly between the
      Neurocrine Field Force and Pfizer sales force in accordance with the
      number of Details the respective field forces are required to undertake as
      set forth in the Marketing Plan. Pfizer shall ship such samples to a
      central location designated by Neurocrine. Neurocrine and Pfizer shall use
      samples strictly in accordance with the then-current Marketing Plan and
      shall store and distribute samples in full compliance, and otherwise fully
      comply, with all applicable Laws, including the requirements of the
      Prescription Drug Marketing Act of 1987, as amended (the "PDMA"). Pfizer
      and Neurocrine each will maintain those records required by the PDMA and
      all other Laws with respect to the samples allocated to each of them.
      Neurocrine and Pfizer shall be responsible for the filing of any necessary
      reports to FDA in connection with the PDMA with respect to the samples
      allocated to each of them. All costs and expenses associated with the
      manufacture, shipment and distribution (to Neurocrine's central location),
      warehousing and storage (until shipment to Neurocrine's central location),
      of Products samples shall be borne by Pfizer. Each party will destroy any
      samples not distributed by its Sales Representatives at its sole expense.

2.8   Responsibility for Medical and Marketing Expenses and Development Costs.
      Pfizer shall be responsible for all Medical and Marketing Expenses for the
      Products.

2.9   [Intentionally left blank].

2.10  Medical Inquiries. The MC and RC will provide the parties with information
      and materials relevant or appropriate to allow the parties' medical and
      sales professionals, as appropriate, to respond to those medical questions
      or inquiries from the medical and paramedical professions and consumers
      relating to any FDA approved use of the



                                       17
<PAGE>
      Products. Each of the parties will only use these materials, which shall
      be consistent with the relevant FDA-approved Product labeling, when
      answering such questions and inquiries so as to ensure that medical and
      sales professionals from both parties are responding to such questions or
      inquiries in the same manner. The MC and RC will provide the parties with
      information, materials and instructions to allow medical professionals
      from both parties to respond to medical questions or inquiries concerning
      matters not consistent with FDA approved Product labelling in accordance
      with applicable Pfizer procedures for responding to unsolicited medical
      inquiry requests on off-label use.

2.11  Meetings and Symposia and Marketing Activities. Neurocrine will have a
      role in implementing the marketing activities as set forth in the
      Marketing Plan. It is generally agreed that Product presentations,
      exhibits and booths at meetings and symposia will be a joint Pfizer and
      Neurocrine activity under the Marketing Plan and the cost thereof will be
      Medical and Marketing Expenses. To the extent not included within the
      Marketing Plan, Neurocrine at its sole expense shall have the right to
      make Product presentations and have its own exhibits and booths that
      feature the Products; provided that any such presentations, exhibits and
      booths are consistent with the Marketing Plan.

2.12  Commercially Reasonable Efforts. The parties covenant and agree to use, in
      the case of Pfizer, Commercially Reasonable Efforts, and in the case of
      Neurocrine, its commercially reasonable efforts, with respect to carrying
      out each of their respective decisions under Articles 2, 3, 4 (except as
      otherwise specified in Section 4.3(b)), 5, 6A and 6B, and their respective
      obligations under this Agreement.

                                    ARTICLE 3

                             MANAGEMENT OF ALLIANCE

3.1   Committees. In order to fulfill the objectives of this Agreement, the
      parties agree to establish a Steering Committee, a Joint Operating
      Committee ("JOC"), a Marketing Committee described in Article 6A ("MC"), a
      Development Committee described in Article 5 ("DC"), a Regulatory
      Committee described in Article 4 ("RC"), and a Product



                                       18
<PAGE>
      Supply Committee described in Article 6B ("PSC"), (collectively, the
      "Committees") and such other committees and subcommittees as may be
      established by mutual consent of Neurocrine and Pfizer. The members of
      each Committee and subcommittee, as designated by each party, shall be
      functionally aligned with each other, and each Committee shall have two
      co-chairpersons, one designated by each of Neurocrine and Pfizer.

3.2   Meetings. The co-chairpersons of the Steering Committee, the JOC, the MC,
      the DC, the RC, the PSC, or any other committee or subcommittee, shall
      call meetings quarterly (except the Steering Committee which shall meet at
      least three times annually), or as otherwise mutually agreed. Meetings may
      be held in person, by telephone, or by video conference call, and the
      location of each meeting shall alternate between sites selected by each
      co-chairperson, unless otherwise agreed. The decisions of each committee
      or subcommittee shall be by a vote of the co-chairpersons, each
      co-chairperson having one vote, and all decisions shall be by unanimous
      consent of the co-chairpersons, except as provided in Section 3.12.
      Additional participants may be invited by any representative to attend
      meetings when and where appropriate. The parties shall cause their
      respective representatives on the committees and subcommittees to use
      diligent efforts, acting in good faith, to resolve all matters presented
      to them as expeditiously as possible. In addition to the foregoing, either
      party may call a special meeting of the Steering Committee two (2) times
      per year, on fifteen (15) days notice to the other party. Meetings will
      alternate between the offices of the parties, unless otherwise agreed.
      Each party shall be responsible for expenses incurred by its employees and
      its members of the Steering Committee incurred in attending or otherwise
      participating in Steering Committee meetings.

3.3   Development Committee.

      (a)   The DC shall consist of research and development, new product
            development, regulatory and marketing/medical managers and such
            other relevant personnel involved in development of products (as
            needed) from each of Neurocrine and Pfizer, each of which shall
            confirm to the other its designees and which shall be


                                       19
<PAGE>
            responsible for oversight of the Development Program in the US
            Territory. The specific responsibilities of the DC are set forth in
            Section 5.2.

      (b)   Upon a material breach or material default of Neurocrine, the DC
            shall be disbanded and Pfizer shall have sole decision making
            authority and responsibility with respect to development of the
            Products, subject to Section 3.12.

      (c)   If the DC is unable to reach a decision on any issue within ten (10)
            Business Days after presentation, the issue shall be referred for
            resolution to the JOC.

3.4   Regulatory Committee.

      (a)   The RC shall consist of regulatory, research and development, safety
            and marketing medical managers and such other relevant personnel (as
            needed) from each of Neurocrine and Pfizer, each of which shall
            confirm to the other its designees and which shall be responsible
            for the regulatory compliance of the Development Program in the US
            Territory. The specific responsibilities of the RC are set forth in
            Section 4.2.

      (b)   If the RC is unable to reach a decision on any issue within ten (10)
            Business Days after presentation, the issue shall be referred for
            resolution to the JOC.

      (c)   Upon a material breach or material default of Neurocrine, the RC
            shall be disbanded and Pfizer shall have sole decision making
            authority and responsibility with respect to regulatory matters
            related the Products, subject to Section 3.12.

3.5   Marketing Committee.

      (a)   The MC shall consist of regulatory, and sales and marketing medical
            managers and such other relevant personnel (as needed) from each of
            Neurocrine and Pfizer, each of which shall confirm to the other its
            designees and which shall be


                                       20
<PAGE>
            responsible for marketing activities with respect to the Product in
            the US Territory. The specific responsibilities of the MC are set
            forth in Section 6A.3(b).

      (b)   Upon a material breach or material default of Neurocrine, the MC
            shall be disbanded and Pfizer shall have sole decision making
            authority and responsibility with respect to marketing the Products,
            subject to Section 3.12.

      (c)   Upon a reduction of Neurocrine's Co-Promotion activities pursuant to
            Section 6A.6(b), the MC shall be disbanded and Pfizer, subject to
            Steering Committee oversight with respect to marketing activities as
            would otherwise be provided in Section 3.12(b), shall have sole
            decision making authority and responsibility with respect to
            marketing the Product.

      (d)   If the MC is unable to reach a decision on any issue within ten (10)
            Business Days after presentation, the issue shall be referred for
            resolution to the JOC.

3.6   Product Supply Committee.

      (a)   The PSC shall consist of regulatory, clinical development, QA/QC,
            and pharmaceutical development and such other relevant personnel (as
            needed) from each of Neurocrine and Pfizer, each of which shall
            confirm to the other its designees and which shall be responsible
            for Product manufacturing and supply matters. The specific
            responsibilities of the PSC are set forth in Section 6B.1.

      (b)   Upon a material breach or material default of Neurocrine, the PSC
            shall be disbanded and Pfizer shall have sole decision making
            authority and responsibility with respect to marketing the Products,
            subject to Section 3.12.

      (c)   Upon Launch of both the IR Product and the MR Product, the PSC will
            be disbanded and Pfizer, subject to Steering Committee oversight
            with respect to marketing activities as would otherwise be provided
            in Section 3.12(b), will have sole decision making authority and
            responsibility for decisions related to manufacturing.


                                       21
<PAGE>
      (d)   If the PSC is unable to reach a decision on any issue within ten
            (10) Business Days after presentation, the issue shall be referred
            for resolution to the JOC.

3.7   Joint Operating Committee.

      (a)   The JOC will consist of the co-chairpersons of the each of the DC,
            the RC, the MC, and the PSC. The JOC shall be responsible for the
            following:

            (i)   Oversight of the development and commercialization of Products
                  hereunder in the US Territory;

            (ii)  Review and approval of the annual Registration Plans,
                  Supplemental Plans, Manufacturing Plans, Regulatory Plans and
                  Marketing Plans, and a review of quarterly updates from each
                  of the Committees;

            (iii) Review and discussion of the Critical Package (as defined in
                  Section 4.3(b)) and making all Go Decisions with respect to an
                  NDA Filing;

            (iv)  Resolution of disputes that cannot be resolved by the DC, the
                  RC, the MC and the PSC; and

            (v)   Raising disputes that cannot be resolved by the JOC to the
                  Steering Committee.

      (b)   Prior to each meeting of the JOC, the parties will distribute to
            each other written copies of all materials intended to be submitted
            at the JOC meeting plus, to the extent not set forth in the JOC
            materials, a written report from the Committees summarizing any
            other material data and information arising out of the development
            and marketing of Products. In the event that after receipt of any
            such report, either party shall request additional data or
            information, the party to whom such request is made shall promptly
            provide to the other party such data or information.



                                       22
<PAGE>
      (c)   Either party may call a special meeting of the JOC two (2) times per
            year, on fifteen (15) Business Days notice to the other party.
            Meetings will alternate between the offices of the parties, unless
            otherwise agreed. Each party shall be responsible for expenses
            incurred by its employees and its members of the JOC incurred in
            attending or otherwise participating in JOC meetings.

      (d)   Upon a material breach or material default of Neurocrine, the JOC
            shall be disbanded and Pfizer shall have sole decision making
            authority and responsibility with respect to manufacturing
            activities of the Products, subject to Section 3.12.

      (e)   If the JOC is unable to reach a decision on any issue within ten
            (10) Business Days after presentation, the issue shall be referred
            for resolution to the Steering Committee.

3.8   Steering Committee. The Steering Committee shall consist of an equal
      number of representatives from both Neurocrine and Pfizer with
      decision-making authority within their respective organizations.
      Neurocrine and Pfizer shall confirm to the other its designees. The
      Steering Committee shall address all of the significant and strategic
      issues within the purview of the various Committees, and shall be
      responsible for resolving any issues referred by the JOC. The Steering
      Committee will be presented with updates on the activities and
      achievements of the Committees and otherwise as provided below. Except as
      otherwise provided in Section 3.12, all decisions of the Steering
      Committee will be by unanimous vote of the co-chairpersons. Prior to each
      meeting of the Steering Committee, the parties will distribute to each
      other written copies of all materials intended to be submitted at the
      Steering Committee meeting plus, to the extent not set forth in the
      Steering Committee materials, a written report from the JOC summarizing
      any other material data and information arising out of the development and
      marketing of Products. In the event that after receipt of any such report,
      either party shall request additional data or information, the party to
      whom such request is made shall promptly provide to the other party such
      data or information. If the Steering Committee



                                       23
<PAGE>
      is unable to resolve any issue within thirty (30) days after presentation,
      the issue shall be referred for resolution pursuant to Section 3.9.

3.9   Final Decision Making Authority. If for any reason the Steering Committee
      cannot resolve any matter properly referred to it, the matter shall be
      referred to a senior pharmaceutical executive of Neurocrine and a senior
      pharmaceutical executive of Pfizer for resolution. Neither of such senior
      pharmaceutical executives shall at the time of determination be a member
      of any Committee or subcommittee, and at such time shall be senior to
      Committee or subcommittee members appointed by such party. If such senior
      pharmaceutical executives after discussing the matter in good faith and
      attempting to find a mutually satisfactory resolution to the issue, fail
      to come to consensus, the final decision-making authority shall be
      allocated as follows:

      (a)   The senior pharmaceutical executive of Neurocrine will have the
            final decision-making authority for decisions regarding:

            (i)   [***];

            (ii)  [***];

            (iii) [***]

            (iv)  [***].




*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.



                                       24
<PAGE>
      provided, however, that Neurocrine's final decision-making authority with
      respect to the above-mentioned items shall terminate, and Pfizer shall
      thereafter assume final decision-making authority, with respect to each of
      the IR Product and the MR Product on the earlier of [***].

      (b)   The following matters will be matters with respect to which
            consensus decision making by the parties will be required
            ("Consensus Matters"). Consensus Matters must be by unanimous
            decision of the parties and neither party will have final decision
            making authority with respect to these matters. The following
            matters are Consensus Matters:

            (i)   [***];

            (ii)  [***]

            (iii) [***];

            (iv)  [***].





*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.



                                       25
<PAGE>
      (c)   The senior pharmaceutical representative of Pfizer shall have the
            final decision-making authority with respect to the following:

            (i)   [***];

            (ii)  [***];

            (iii) [***];

            (iv)  [***]

            (v)   [***].

      (d)   If a committee or subcommittee has made a decision with respect to a
            matter without referral to the senior pharmaceutical executives as
            provided in this Section 3.9, a party cannot be deemed to have
            breached Section 2.12 of this Agreement with respect to such
            decision.

3.10  Decision-Making Authority. Notwithstanding anything to the contrary, none
      of the Committees or subcommittees contemplated by this Article 3, no
      senior executive of Neurocrine nor any senior pharmaceutical executive of
      Pfizer shall have authority to determine any of the matters for which (a)
      one or more of the parties is allocated decision-making authority
      elsewhere in this Agreement, (b) the Agreement provides is explicitly a
      Consensus Matter or for the mutual or joint agreement of the parties or
      (c) is in violation of any express provision of this Agreement or the
      License Agreement.



*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.




                                       26
<PAGE>
3.11  Alliance Managers. In addition to the Committees set forth above,
      Neurocrine and Pfizer each acknowledge and agree that it would be
      beneficial to the Collaboration for each to have a senior representative
      with a general understanding of the clinical, regulatory, manufacturing
      and commercial issues relating to Products to act as an alliance manager
      ("Alliance Manager"), and will appoint such a person to the extent each
      party in its sole discretion determines it is practical. It is envisioned
      that the Alliance Managers will serve as a single point of contact within
      each party with responsibility for facilitating communication and
      collaboration between the parties. The Alliance Managers may attend
      Committee meetings as appropriate and will be provided access to decision
      making representatives of both parties. Once appointed, each
      co-chairperson of each Committee will report any Committee issues,
      potential or pending disagreements and critical Committee decisions to its
      Alliance Manager. The Alliance Managers will work together to resolve such
      issues or potential disputes, and to enable the Committees to reach
      unanimous decisions with the intent of averting the escalation of such
      issues or potential disputes.

3.12  Committee Structure upon Neurocrine Material Default or Material Breach.
      Upon a material default or material breach of Neurocrine following the
      election of Pfizer under Section 13.3(c)(i) or (ii):

      (a)   Each of the MC (if not previously disbanded in accordance with
            Section 3.5), the PSC (if not previously disbanded in accordance
            with Section 3.6), the DC, the RC and the JOC will be disbanded, and
            each provision in this Agreement that refers to a decision,
            oversight or consultation with of any of the foregoing Committees,
            or requiring compliance or consistency with a Development Plan,
            Regulatory Plan, a Marketing Plan or a Manufacturing Plan, shall be
            deemed inoperative;

      (b)   The Steering Committee will remain in place. Pfizer will report to
            the Steering Committee prior to each scheduled meeting on the items
            set forth in Schedule 3.12 and the Steering Committee will make any
            decisions with respect to such matters reported requiring any
            decisions; provided, however, that if the co-


                                       27
<PAGE>
            chairpersons of the Steering Committee are unable to reach a
            decision on any issue within ten (10) Business Days after
            presentation, the Pfizer co-chairperson shall make the final
            decision;

      (c)   Pfizer shall make all decisions regarding the matters in Section
            3.9(a) and (b);

      (d)   Article 4, Article 5 and Article 6B shall be deemed amended such
            that Pfizer shall have sole responsibility and authority with
            respect to the matters described herein as being the responsibility
            of and/or under the authority of Neurocrine; and

      (e)   All other obligations of Pfizer under this Agreement, except as
            otherwise provided herein, shall survive until termination of this
            Agreement.

                                    ARTICLE 4

                         CLINICAL AND REGULATORY MATTERS

4.1   Clinical and Regulatory Matters in the U.S. Territory Prior to First
      Approval of Products. This Section 4.1 shall apply to clinical and
      regulatory matters prior to termination of Neurocrine's final
      decision-making authority pursuant to Section 3.9(a); and Neurocrine's
      activities hereunder will be under the guidance of the RC, whose
      activities are further described in Section 4.2 (and the JOC with respect
      to the matters in Section 4.3).

      (a)   Subject to the provisions of this Article 4, Neurocrine will retain
            all responsibilities as the sponsor of the Product IND until
            Approval, including, but not limited to, correspondence, reports and
            filings with FDA, responsibility for all clinical trials and data
            generated therefrom. Neurocrine will maintain the integrated
            database of all Product clinical trial data. All regulatory filings
            within the US Territory relating to the Products prior to First
            Approval of the IR Product and the MR Product shall be the property
            of Neurocrine and held in Neurocrine's or its Affiliate's name.





                                       28
<PAGE>
      (b)   Neurocrine will establish the timeline for and will prepare and file
            the NDA for IR Product and MR Product with the FDA (subject to
            Section 4.3).

      (c)   Notwithstanding anything in this Agreement to the contrary, in the
            event there is an Advisory Committee meeting with respect to the
            Product NDA, all preparations, strategies and actions with respect
            thereto will be a Consensus Matter.

      (d)   Notwithstanding anything in this Agreement to the contrary, all
            negotiations with FDA regarding Product labelling, including all
            pre-filing meetings and other meetings, teleconferences or other
            interactions with FDA concerning Product labelling, and all
            decisions regarding the proposed and final labelling included in the
            NDA filings will be a Consensus Matter.

      (e)   Notwithstanding anything in this Agreement to the contrary, the
            organization and strategies for responses to FDA inquiries with
            respect to the Registration Program and first NDA filing for IR
            Product and MR Product will be a Consensus Matter.

      (f)   Following NDA approval by the FDA, Pfizer will be responsible for
            communicating with the FDA regarding all NDA post-Approval
            requirements, activities and issues.

      (g)   Pfizer will be the sponsor of all filings with Governmental
            Authorities outside the US Territory; and within the US Territory
            with respect to the IR Product and the MR Product after First
            Approval of the IR Product and MR Product, respectively, and/or
            after Neurocrine's decision making shall have terminated in
            accordance with Section 3.9(a).

4.2   Regulatory Committee. The RC will operate within the framework of the
      governance structure set forth in Article 3. The responsibilities of the
      RC include, but are not limited to, the following:




                                       29
<PAGE>
      (a)   Overseeing the implementation of the plan for the registration and
            regulatory strategy (the "Regulatory Plan") for first NDA filing for
            IR Product and MR Product- in the US Territory as set forth on
            Schedule 4.2(a);

      (b)   Overseeing, monitoring and coordinating all regulatory (FDA) aspects
            of the (i) Registration Program and (ii) the Supplemental Program,
            including with respect to each, all regulatory actions,
            communications and filings (including matters pertaining to Product
            labelling) and submissions, including filings and submissions of
            supplements and amendments to FDA with respect to the Products;

      (c)   Facilitating the exchange of all US regulatory information and data
            between the parties;

      (d)   Establishing the schedule and implementation strategy for all FDA
            filings based on the Registration Program;

      (e)   Establishing the schedule and implementation strategy for all FDA
            filings based on the Supplemental Program;

      (f)   Providing updates on its activities and achievements to the JOC.

4.3   NDA Filing Decision.

      (a)   Neurocrine will make available to the JOC, and the JOC will track
            the completion of, each Registration Program clinical trial and will
            review all safety and efficacy data therefrom promptly following
            such data becoming available. The JOC will make all data available
            to representatives of Pfizer and Neurocrine senior management.
            Within thirty (30) days following such data availability from each
            Registration Program clinical trial, Pfizer and Neurocrine through
            their representatives on the JOC, will each report to the other any
            issues arising from the study that may require additional work. If
            any additional work is required as a result of such data, the JOC as
            a Consensus Matter will identify mutually agreed


                                       30
<PAGE>
            upon changes to the Registration Program to support the NDA filing,
            and such changes will be implemented by Neurocrine at Pfizer's cost.

      (b)   [***].

      (c)   Neurocrine shall not file an NDA with respect to any Product unless
            the parties have made a Go Decision in 4.3(b) above. Following any
            Go Decision, Neurocrine will have responsibility for preparing the
            complete and final NDA filing for the IR Product and/or MR Product
            as set forth in this Section 4.3(c) (the "NDA Package"). [***].








*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.



                                       31
<PAGE>
      (d)   [***].

      (e)   Subject to Section 4.3(d), Pfizer shall have the obligation to
            Launch such Product within ninety (90) days of such Approval;
            provided, however, that Pfizer's obligation to Launch within such
            time period will be delayed to the extent its failure to Launch is
            related to [***].





*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       32
<PAGE>
      (f)   In the event either party shall make a No Go Recommendation, the
            party making such recommendation will outline with specificity the
            basis for such recommendation and what data such party in good faith
            believes will be required to be added to the Registration Program to
            support an acceptable NDA filing. The Parties will mutually agree as
            a Consensus Matter on a clinical plan describing the supportive
            clinical program ("the Supportive Clinical Program") that will be
            required to support a Go Decision by the parties, Neurocrine will
            conduct and Pfizer will bear the costs of the Supportive Clinical
            Program under the same terms and conditions agreed for conduct of
            the Registration Program, and the Supportive Clinical Program will
            be deemed to be part of the Registration Program as set forth
            herein. Following completion of the Supportive Clinical Program, the
            procedure set forth in Section 4.3(b) above shall be repeated,
            unless Pfizer elects to terminate this Agreement in accordance with
            Section 13.3(a).

4.4   Additional FDA Requirements and Responses to FDA Inquiries Prior to First
      Approval. Prior to First Approval, as soon as practicable but in any event
      within four (4) Business Days of receipt by Neurocrine, Neurocrine will
      provide notice to Pfizer of any additional FDA requirements which FDA may
      impose with respect to the First Approval (including without limitation,
      additional clinical studies), and of all FDA inquiries requiring a
      response. This includes written, oral, electronic or any other requests
      received from FDA. Pfizer and Neurocrine shall mutually agree as a
      Consensus Matter upon any response to FDA. Promptly after receipt of any
      inquiry or the knowledge of a requirement, as the case may be, Neurocrine
      will provide Pfizer with copies of all





                                       33
<PAGE>
      correspondence from FDA. If such correspondence is an inquiry, the RC will
      discuss the FDA inquiry and outline the strategy for response. Neurocrine
      will draft the response to all inquiries promptly (the amount of time to
      generate the response will depend on the nature of the inquiry) and
      provide a draft to Pfizer. Pfizer will have ten (10) days in which to
      review and comment on the Neurocrine draft response. Neurocrine will
      review the Pfizer comments. If Neurocrine agrees with the Pfizer comments,
      Neurocrine will incorporate the comments and submit the response to the
      FDA. Neurocrine will contact the RC within three (3) days in the event
      Neurocrine disagrees with any Pfizer comment. If the members of the RC
      cannot agree on the matter it will be submitted to the JOC as a Consensus
      Matter. Immediately after filing any response with the FDA, and after
      producing contact reports with FDA, Neurocrine will provide copies of the
      same to Pfizer.

4.5   Labelling. Product labelling will bear Neurocrine's and Pfizer's trade
      dress and logo in substantially equal prominence and frequency, except as
      required by law. The parties will mutually agree upon any subsequent
      decisions prior to the First Approval with respect to the Product
      labelling for the first IR Product and the first MR Product as a Consensus
      Matter. Upon First Approval of each of the IR Product and MR Product,
      respectively, Pfizer shall have the sole responsibility for revising
      Product labelling for the approved Products, as needed, in consultation
      with the RC, as required by Law and shall notify Neurocrine in writing of
      the approval of any such labelling changes by FDA or any other
      Governmental Authority.

4.6   FDA Meetings. Neurocrine shall provide Pfizer with notice of all meetings,
      conferences, and discussions (including without limitation, Advisory
      Committee meetings or any other meeting of experts convened by regulatory
      authorities concerning any topic relevant to the Products) scheduled with
      FDA concerning any pending NDA or other regulatory matters relating to the
      Products within forty-eight (48) hours after the scheduling of such
      meeting, conference, or discussion. Pfizer shall be entitled to have an
      equal number of representatives present at all such meetings. Neurocrine
      and Pfizer, through the RC, shall use all reasonable efforts to agree in
      advance on the scheduling of such meetings and on


                                       34
<PAGE>
      the objectives to be accomplished at such meetings, conferences, and
      discussions and the agenda for the meetings, conferences, and discussions
      with FDA and other Governmental Authorities, and with respect to Advisory
      Committee Meetings, such items will agreed by the parties as a Consensus
      Matter as set forth in Section 4.1(c).

4.7   Data. To the extent not provided in Section 4.3 above, each party shall
      provide to the other party, through the RC, on a timely basis copies of
      all material pre-clinical and clinical data compiled in support of an NDA
      or other regulatory filings with respect to the Products.

4.8   Assignment of NDA. Subject to Section 3.4 and this Article 4, Neurocrine
      will submit an NDA to FDA for the first IR Product and the first MR
      Product under its name. Upon the First Approval for each of the IR Product
      and the MR Product, Neurocrine will promptly transfer the NDA and IND for
      such Product to Pfizer in accordance with all applicable FDA regulations,
      and thereafter, Pfizer will have full ownership, control of and
      responsibility for such NDA, the IND and for all subsequent FDA and other
      regulatory filings in the US Territory. Such transfer of ownership shall
      be commenced promptly following receipt of the respective Approval. Each
      of the parties shall take all reasonable steps to ensure an orderly
      transfer of each NDA following Approval.

4.9   ROW Regulatory Matters. After the Effective Date, Pfizer will assume sole
      ownership, control of and responsibility for all regulatory filings in the
      ROW Territory.

4.10  Clinical and Regulatory Matters after First Approval of Products.
      Following the First Approval of each of the IR Product and the MR Product:

      (a)   Subject to the oversight of the RC, Pfizer shall have exclusive
            responsibility and final authority for all matters relating to the
            nature and content of any NDA or supplemental NDAs submitted to the
            FDA for such Product.



                                       35
<PAGE>
      (b)   The IND, NDA and any other regulatory approval within the US
            Territory relating to Products shall be deemed the property of
            Pfizer and held in Pfizer's or its Affiliate's name.

      (c)   Pfizer shall have the sole responsibility for communicating with FDA
            about the Products, subject to the oversight of the RC.

      (d)   Pfizer, through the RC, will have final authority with regard to
            labelling discussions with FDA with respect to Products; and

      (e)   Pfizer, through the RC, shall provide Neurocrine with copies of all
            filings and submissions to and correspondence with Governmental
            Authorities relating to Products within ten (10) days of receipt,
            filing or submission by Pfizer.

4.11  Adverse Drug Experience Reports and Product Complaints Prior to First
      Approval.

      (a)   Neurocrine, as IND holder, shall be responsible for the
            surveillance, receipt, evaluation and reporting of product
            complaints and reports of Adverse Drug Experiences (as defined in 21
            CFR 314.80 or 312.23) until the First Approval for IR Product and MR
            Product. During such period preceding such First Approval,
            Neurocrine shall promptly investigate product complaints and reports
            of Adverse Drug Experiences associated with use of the Product.
            Prior to the First Approval of IR Product and MR Product, Neurocrine
            shall submit reports of all Adverse Drug Experiences associated with
            the use of the unapproved Products and other required safety
            information to the FDA and other Governmental Authorities, in
            accordance with applicable Law. Neurocrine shall provide a copy of
            each such report to Pfizer contemporaneously with its submission of
            the report to FDA or other Governmental Authorities.

      (b)   Registration Program. Neurocrine will notify Pfizer of all Serious
            Adverse Drug Experiences (as defined in 21 CFR 314.80 or 312.32)
            occurring in any Product study conducted, sponsored or monitored by
            Neurocrine as part of the


                                       36
<PAGE>
            Registration Program within two (2) Business Days of the time such
            Serious Adverse Drug Experience becomes known to Neurocrine; and of
            all other Adverse Drug Experiences occurring in any Product study
            conducted, sponsored or monitored by Neurocrine within seven (7)
            days of the time such Adverse Drug Experience Report becomes known
            to the Neurocrine. All follow-up investigations concerning Adverse
            Drug Experiences and Serious Adverse Drug Experiences occurring in
            any Product study conducted, sponsored or monitored by Neurocrine as
            part of the Registration Program shall be conducted by Neurocrine
            and the results of such follow-up investigations will be delivered
            to Pfizer within two (2) Business Days of the time such follow-up
            information is obtained by Neurocrine.

      (c)   Supplemental Program. In the event Pfizer shall conduct, sponsor or
            monitor any Product clinical trials pursuant to the Supplemental
            Plan prior to assignment of the Product IND to Pfizer, Pfizer will
            notify Neurocrine, ACY and DOV, of all Serious Adverse Drug
            Experiences arising out of any such clinical trial within two (2)
            Business Days of the time such Serious Adverse Drug Experience
            becomes known to Pfizer; and of all Adverse Drug Experience arising
            out of any such clinical trial within five (5) days of the time such
            Adverse Drug Experience Report becomes known to Pfizer. Following
            assignment of the IND and NDA to Pfizer, Pfizer will notify
            Neurocrine, ACY and DOV of all Serious Adverse Drug Experiences
            within two (2) Business Days of the time such experiences becomes
            known to Pfizer, and of all other Adverse Drug Experience within
            five (5) days of the time such experiences becomes known to Pfizer.
            All follow-up investigations concerning Adverse Drug Experiences and
            Serious Adverse Drug Experiences occurring in any study conducted,
            sponsored or monitored by Pfizer shall be conducted by Pfizer and
            the results of such follow-up investigations will be delivered to
            Neurocrine within seven (7) days of the time such follow-up
            information is obtained by Pfizer.




                                       37
<PAGE>
4.12  Adverse Events and Product Complaints After First Approval.

      (a)   After First Approvals, Pfizer shall be responsible for the
            surveillance, receipt, evaluation, and reporting of product
            complaints and reports of Adverse Drug Experiences, worldwide,
            associated with the Products. To enable Pfizer to meet its reporting
            obligations to FDA, Neurocrine shall provide Pfizer, upon First FDA
            Approval, with all adverse event information in a mutually
            agreed-upon format.

      (b)   Upon and following the First Approval of each of the IR Product and
            MR Product, all Product complaints and reports of Adverse Drug
            Experiences associated with the use of the Products, shall be
            directed by Neurocrine, its Affiliates, employees, and agents, to
            Pfizer. Such complaints and reports shall be provided to Pfizer
            within two (2) Business Days of their receipt by Neurocrine, its
            affiliate, employee, or agent, provided that any complaints received
            by the Neurocrine Field Force will be reported in accordance with
            such procedures used by the Pfizer Field Force. Neurocrine shall
            also provide Pfizer with notice of other material safety information
            about one or both Products that Neurocrine may become aware of.

      (c)   Pfizer shall submit reports of all Adverse Drug Experiences
            associated with the use of the approved Product(s) and other
            required safety information (including periodic safety update
            reports (PSUR's) and Annual Safety Reports) to the FDA and other
            Governmental Authorities, in accordance with applicable legal
            requirements. Pfizer shall submit a copy of each such report to
            Neurocrine, contemporaneously with its submission of the report to
            FDA or other Governmental Authorities.

      (d)   For purposes of this Agreement, it is contemplated that following
            the First Approval for either the IR or MR Product, all Adverse Drug
            Experiences associated with the use of any Product will be filed by
            Pfizer as part of the NDA for the approved Product. Further, it is
            contemplated that Neurocrine's reports of Adverse Drug Experiences
            associated with the use of unapproved Product will



                                       38
<PAGE>
            reference the safety information filed by Pfizer as part of the NDA
            for the approved Product. Neurocrine shall submit a copy of each
            such report to Pfizer, contemporaneously with its submission of the
            report to FDA or other Governmental Authorities.

      (e)   The parties will develop additional written procedures for the
            surveillance, receipt, evaluation, and reporting of Product
            complaints and Adverse Drug Experiences, in accordance with these
            provisions and subject to the oversight of the RC.

4.13  Construction of Terms related to Separate Filings. The provisions of this
      Article may be alternatively construed to reflect the fact that the INDs
      and NDAs may be maintained or filed with respect to the IR Product and MR
      Product either separately or together, and that as of the date hereof, no
      such final decisions have been made. Accordingly, the parties agree that
      to the extent that the language set forth herein does not work as a
      practical and logistical matter with respect to the filing or maintenance
      of the INDs or NDAs (as the case may be), the parties will meet in good
      faith to discuss changes to allocations of responsibilities in order to
      effectuate the intent of the provisions set forth in this Article 4 or to
      otherwise comply with applicable Law.

                                    ARTICLE 5

                               PRODUCT DEVELOPMENT

5.1   Development Program and Budget. Products in the US Territory will be
      developed pursuant to Development Program. Pfizer shall pay all
      Development Costs, subject to Section 5.3(a) below. The Development
      Program will consist of a Registration Program conducted by Neurocrine as
      described in Section 5.3(a) below, and a Supplemental Program conducted by
      Pfizer as described in Section 5.3(b) below. Each of the parties
      respective obligations for the Registration Program and the Supplemental
      Program will be carried out under the guidance of the DC as described in
      Section 5.2 below.



                                       39
<PAGE>
5.2   Development Committee. The DC will operate within the framework of the
      governance structure set forth in Article 3. The responsibilities of the
      DC include, but are not limited to, the following:

      (a)   Developing the Supplemental Program in coordination with the MC;

      (b)   Preparing annual Registration Plans and Supplemental Plans, each of
            which shall include a budget, for submission to the JOC consistent
            with the terms of the Registration Program and Supplemental Program,
            for approval each Year from the Effective Date until the
            Co-Promotion Term for the Products ends;

      (c)   Overseeing and monitoring the conduct of the annual Supplemental
            Plan by Pfizer as specified in Section 5.3(b);

      (d)   Overseeing and monitoring the conduct of the annual Registration
            Plan, together with the JOC, by Neurocrine as specified in Section
            5.3(a);

      (e)   Facilitating the exchange of all development information and data
            relating to all Product Studies;

      (f)   Review and approval of protocols and selection of clinical study
            sites for all Registration Program Product Studies other than those
            listed in Schedule 5.3(a) and for all Supplemental Program Product
            Studies, and for revising any Investigator's Brochure(s) based on
            results of the Registration Program and Supplemental Program Product
            Studies or any additional FDA requirements;

      (g)   Implementation of Phase IIIb Product Studies; and

      (h)   Providing updates on its activities and achievements to the JOC.

Neither party shall make any material change to any annual Developmental Plan,
or any of the Developmental Program Product Studies, without the prior approval
of the DC, and all Development Plans and Development Costs provided therein
shall be consistent with the terms of this Agreement.




                                       40
<PAGE>
5.3   Development Programs for the US Territory. Product development activities
      in the US Territory will consist of the following Development Programs,
      each of which will be prepared and overseen by the DC, the RC and the MC,
      as set forth and consistent with the provisions set forth below:

      (a)   Registration Program. The Phase III development with respect to the
            US Territory for IR Product and MR Product each will be conducted
            under the Registration Program. [***]. The Registration Program will
            consist of the clinical and other activities for the NDA filings as
            are set forth on Schedule 5.3(a), and will be carried out pursuant
            to the annual Registration Plan. Neurocrine will have responsibility
            and authority for conducting and completing the Registration
            Program, subject to input of the DC, in coordination with the RC,
            the MC and the JOC. Pfizer shall pay all Development Costs for the
            Registration Program, except that Neurocrine shall be liable for
            payment of $15 million in 2003 payable quarterly in equal
            instalments of $3.75 Million each payable on the last day of March,
            June, September and December of 2003. [***]. The Registration
            Program will terminate with respect to each of the IR Product and MR
            Product upon First Approval of the IR Product and MR Product,
            respectively.

      (b)   Supplemental Program. Phase IIIb and IV development and Product
            Studies in the US Territory will be conducted under the Supplemental
            Program. [***].



*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.



                                       41
<PAGE>
            The Supplemental Program activities will be conducted by Pfizer
            under the direction of the MC, in coordination with the DC and RC.
            An initial summary of the Supplemental Program is attached hereto as
            Schedule 5.3(b), subject to change by the MC (in coordination with
            RC and the DC) to take into account product positioning, product
            labelling and marketing strategies, feasibility of study design, or
            as otherwise required or advisable under applicable Law or in
            response to acts or requests by Governmental Authorities. The DC
            will consider in good faith whether Neurocrine, to the extent
            feasible and appropriate, shall undertake responsibility for
            execution of certain studies conducted under the Supplemental
            Program.

5.4   ROW Program. Pfizer will have the sole authority with respect to
      development and registration for IR Product and MR Product outside the US
      Territory ("ROW Program").

                                   ARTICLE 6 A

                 FIELD FORCE, LAUNCH, CO-PROMOTION AND DETAILING

6A.1  Neurocrine Sales Force.

      (a)   (i)   Neurocrine shall have a sales force of two hundred (200) full
                  time employees in the US Territory comprised of Sales
                  Representatives who will specialize in Detailing to
                  psychiatrists and to Sleep Specialists ("Neurocrine Field
                  Force") and such sales professionals as Neurocrine


                                       42
<PAGE>
                  shall hire in its sole discretion (collectively, the
                  Neurocrine Field Force and other sales professionals, the
                  "Neurocrine Sales Force").

            (ii)  Except as specifically provided herein, Neurocrine shall have
                  exclusive control over the Neurocrine Sales Force. Nothing in
                  this Agreement shall be construed to conclude that any agents
                  or employees of Neurocrine are agents or employees of Pfizer
                  or subject to Pfizer's direction and control. Neurocrine shall
                  have sole authority over the terms and conditions of its
                  agents' and employees' employment, and shall select, engage,
                  and discharge its agents and employees.

            (iii) Neurocrine will be solely responsible for compensating its
                  agents and employees whom it assigns to perform services under
                  this Agreement, including paying salaries and expenses;
                  providing benefits; deducting federal, state and local payroll
                  taxes, FICA contributions, FUI, SUI and any similar taxes; and
                  paying Workers' Compensation premiums, unemployment insurance
                  contributions and any other payments required by federal,
                  state or local law to be made on behalf of employees.

      (b)   Subject to section 6A.1(c), Pfizer will begin paying an Allowance
            Fee (as defined below) with respect to the Neurocrine Sales Force
            commencing on the filing of the NDA Package, twenty (20) days after
            receipt of notice from Neurocrine that it has commenced hiring of
            the Neurocrine Sales Force, Pfizer will pay the first quarterly
            installment of the Allowance Fee for the first Allowance Year
            ("Allowance Year 1") as set forth in Section 6A.1(d) and based on
            the amounts set forth in Schedule 6A.1(b) (the "Hiring Schedule").
            Pfizer shall pay Neurocrine any subsequent quarterly installments on
            each subsequent ninetieth (90th) day after receipt of such notice.

      (c)   In the event that the First Approval of MR Product is not received
            by [***], and Neurocrine is still in the process of hiring members
            of the Neurocrine Sales Force, Neurocrine shall suspend all further
            hiring of the Neurocrine Sales

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       43
<PAGE>
            Force until receipt of such First Approval (such period, the
            "Suspension Period"). During the Suspension Period, Pfizer shall
            continue to be responsible for payment of the Allowance Fee with
            respect to the actual members of the Neurocrine Sales Force hired
            prior to the commencement of the Suspension Period (the
            "Proportional Allowance"). Pfizer shall be entitled to a credit
            against future Allowances for the portion of the Proportional
            Allowance paid by Pfizer for the Suspension Period that is greater
            than the portion of Zoloft Net Sales in excess of the Baseline
            Threshold (as defined below), if any. If during the Suspension
            Period, Zoloft Net Sales in excess of the Baseline Threshold exceed
            the Proportional Allowance paid by Pfizer, Neurocrine will be
            entitled to payment as set out in Section 8.2(b) below. If the First
            Approval has not been received prior to the time Zoloft is no longer
            being Co-Promoted, Pfizer will receive a credit against future
            Allowances on a pro rata basis in respect of periods where neither
            Zoloft nor the Products are being Co-Promoted.

      (d)   Pfizer shall, for the duration of this Agreement, compensate
            Neurocrine for the Neurocrine Sales Force by paying to Neurocrine
            [***] (an "Allowance") each Allowance Year (as defined below),
            except that for the Allowance Year(s) in which hiring of the
            Neurocrine Sales Force commenced, such Allowance will be determined
            pro rata in accordance with such Hiring Schedule (the amount of the
            Allowance actually paid annually shall be referred to as an
            "Allowance Fee"). From the beginning of Allowance Year 1 until end
            of the Allowance Year in which Launch of the first Product occurs
            Pfizer will pay the Allowance Fee in quarterly installments. With
            respect to each Allowance Year after Launch of the first Product,
            Pfizer will pay the Allowance Fee beginning on each anniversary of
            Allowance Year 1. For each Allowance Year after Allowance Year 1,
            the Allowance Fee shall be increased [***]. Each three hundred and
            sixty-five (365) day period beginning when hiring of the Neurocrine
            Sales Force has commenced shall be referred to as an "Allowance
            Year".


*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       44
<PAGE>

         (e)      Subject to Section 6A.1(f) below, for each Allowance Year
                  beginning in Allowance Year 1, Pfizer will pay a fee equal to
                  the following percentages of the Allowance Fee:


             YEAR                                           ALLOWANCE FEE (%)
             ----                                           -----------------
            [***]                                                [***]
--------------------------------------------------------------------------------
            [***]                                                [***]
--------------------------------------------------------------------------------
            [***]                                                [***]
--------------------------------------------------------------------------------
            [***]                                                [***]
--------------------------------------------------------------------------------

         (f)      In respect of the Allowance Fee for each quarterly installment
                  paid prior to an Allowance Year that begins after Launch,
                  Pfizer shall be entitled to a pro-rata credit against the
                  Allowance Fee in the following quarter, to the extent that
                  Neurocrine fails to hire the Neurocrine Sales Force that meets
                  or exceeds the quarterly goals set forth in the Hiring
                  Schedule in Schedule 6A.1(b).

         (g)      For the term of the Suspension Period, the reduction in
                  Allowance Fee based on Allowance Years as set forth in Section
                  6A.1(e) will be tolled such that no portion of the Suspension
                  Period will be counted toward Allowance Years as used to
                  determine Neurocrine's Allowance Fee hereunder.

6A.2     Product Sales. Pfizer shall be responsible for the distribution and
         sales of the Products in the Territory and shall book all sales for the
         Products. Pfizer shall have sole responsibility and authority in the US
         Territory for all decisions regarding the pricing of Products, and for
         all pricing and reimbursement approvals, subject to MC oversight.
         Pfizer shall have sole responsibility and authority in the ROW
         Territory for all decisions regarding the pricing of Products, and for
         all pricing and reimbursement approvals.

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       45
<PAGE>
6A.3     Co-Promotion.

  a)    (i)      Marketing Activities. The parties shall Co-Promote
                 the Products in the US Territory during the
                 Co-Promotion Term in accordance with the terms of
                 this Agreement and the applicable Marketing Plan, and
                 in compliance with all Laws. In conducting
                 Co-Promotion activities, Pfizer shall use
                 Commercially Reasonable Efforts and Neurocrine shall
                 use its commercially reasonable efforts to promote
                 the sale of the Products in the US Territory.

        (ii)     Pfizer will provide the Sales Representatives from each field
                 force with target lists for Details. The district managers of
                 Pfizer and Neurocrine will agree upon call schedules for the
                 Neurocrine Field Force and the Pfizer Field Force, consistent
                 with the Marketing Plan and with Section 6A.3(a)(iii) below.

        (iii)    It is understood that the Neurocrine Field Force and Pfizer
                 Field Force are intended, to the extent practical, to have
                 overlapping territories and target lists. The Neurocrine Field
                 Force target lists will contain a distribution of medical
                 professionals with prescribing authority with roughly similar
                 prescribing habits as those provided to the Pfizer Field Force.
                 The target lists will contain the names and contact information
                 for medical professionals with prescribing authority (or
                 non-prescribing Sleep Specialists). The Neurocrine Field Force
                 and the Pfizer Field Force will Detail the Products to such
                 medical professionals in accordance with such target list.

 (b)     Marketing Committee. The Marketing Committee will operate
         within the framework of the governance structure set forth in
         Article 3 and will be responsible for promotional activities
         in the US Territory. The responsibilities of the Marketing
         Committee include, but are not limited to, the following:


                                       46
<PAGE>
         (i)      Preparing annually all aspects of the Marketing Plan and
                  Co-Promotion Budget as described in Section 6A.3(c) below for
                  submission to the JOC for approval, except following an event
                  described in Section 3.5(c);

         (ii)     Monitoring compliance with the Marketing Plan;

         (iii)    Developing the Supplemental Program, in coordination with the
                  DC;

         (iv)     Coordinating with the DC with respect to future Product
                  development activities to be undertaken pursuant to the
                  Development Programs;

         (v)      Coordinating with the RC with regard to regulatory issues;

         (vi)     Developing positioning and market strategies consistent with
                  the Marketing Plan, including decisions to seek or include any
                  new indication for the Product;

         (vii)    Developing advertising material and strategies and promotional
                  materials for the Pfizer Sales Representatives and the
                  Neurocrine Field Force for the Product, designing, packaging
                  the Product, and planning and overseeing educational and
                  professional symposia, and speaker and activity programs for
                  the Products in the US Territory;

         (viii)   Developing and implementing, together with the DC, a
                  publications strategy for the Product;

         (ix)     Allocating responsibilities for making Product presentations
                  and creating Product exhibits and booths at significant
                  medical meetings and promotional events;

         (x)      Scheduling periodic joint meetings for the Pfizer Field Force
                  and Neurocrine Sales Force;

         (xi)     Overseeing and implementing Phase IV Product Studies;


                                       47
<PAGE>
         (xii)    Reviewing and adjusting the target lists previously provided
                  pursuant to Section 6A.12 prior to Launch; and

         (xiii)   Providing updates on the MC's activities and achievements to
                  the JOC.

For the sake of clarity, it is understood and agreed that the MC will not
address the promotion or Detailing of Zoloft or any other Pfizer products.

(c)      Marketing Plan and Budget. The MC shall develop a Marketing Plan (a
         "Marketing Plan") and a marketing budget (a "Co-Promotion Budget") for
         each Year during the Co-Promotion Term consistent with the terms of
         this Agreement, except following an event described in Section 3.5(c).
         The Co-Promotion Budget will include all Out-of-Pocket Costs of each
         party arising out of the conduct of the Marketing Plan and all such
         costs will be borne by Pfizer. Neurocrine shall not engage in any
         Co-Promotion activities except as provided in the Marketing Plan and/or
         approved by the MC. The Marketing Plan and the Co-Promotion Budget will
         describe the plan for commercialization of the Products in the US
         Territory, including: (a) general strategies for the Detailing and
         marketing of the Products and allocation of responsibilities for
         marketing activities; (b) each party's training, Detail Requirement and
         sampling activities, if any; (c) market and sales forecasts; (d)
         pricing and discounting analysis; (e) advertising, public relations,
         disease management programs and other promotional programs, including
         professional symposia and speaker and activity programs to be used in
         the Co-Promotion of the Products; (f) Phase III(b) and IV Product
         Studies and (g) budgeted Medical and Marketing Expenses for each of the
         foregoing. The Marketing Plan shall not address sales force incentives
         or compensation, and, each party shall have sole authority and
         responsibility for designing and executing any such program for its
         sales force. The Marketing Plan and the Co-Promotion Budget may be
         updated throughout the Year as deemed appropriate by the MC.


                                       48
<PAGE>
6A.4   Reports.

      (a)   Each party shall also provide the other party and the MC with a
            report as soon as practicable but in no event later than forty-five
            (45) days following the end of each calendar month during the
            Co-Promotion Term setting forth, in such detail and form as the
            parties shall agree, the number of Product Details made and the
            amount of samples distributed by such party's respective Sales
            Representatives in the US Territory during such month (the
            "Detailing Report"), provided, however, that the Detailing Report
            for the twelfth (12th) such calendar month in each Year shall be
            cumulative and reflect the number of Product Details made and
            samples distributed by such party's respective Sales Representatives
            in the US Territory during such Year. Neurocrine covenants that it
            shall develop an internal system for the purpose of reporting the
            number of Details of its Sales Representatives, and that it shall
            have such system fully implemented by the time it begins Detailing
            the Products.

      (b)   In addition, no earlier than forty-five (45) days and no later than
            sixty (60) days of the end of each Year during which Neurocrine is
            Detailing the Products in either a First Position or Second
            Position, Neurocrine may request from Pfizer and Pfizer shall
            provide within thirty (30) days, the average number of Product
            Details (excluding any Combination Products) per Sales
            Representative in the Pfizer Field Force who Detailed Products
            (excluding any Combination Products) to psychiatrists and Sleep
            Specialists during such Year. For purposes of Section 6A.7 below,
            the actual Neurocrine Detail Requirement during such Year (the
            "Final Detail Requirement") shall equal the lesser of (i) [***],
            multiplied by [***], and (ii) [***].

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       49
<PAGE>
      (c)   As the Year of Launch and the last Year during the Initial Five Year
            Period (each of the first and last Years, a "Partial Year") may not
            be full years, for purposes of calculating the Final Detail
            Requirement during the relevant period in each Partial Year (a
            "Detail Priority Period"), (i) Neurocrine shall also report in its
            cumulative Year - end report referred to in Section 6A.4(a) the
            number of Details performed during the such Detail Priority Period,
            and such number (as may be verified pursuant to Section 9.2) will be
            used in such Partial Year for purposes of calculating the number of
            reported Details in Section 6A.7(a), (ii) Pfizer shall report to
            Neurocrine upon its request in Section 6A.4(b) [***] number of
            Details in Section 6A.4(b)(i), (iii) the number in Section
            6A.4(b)(i) above shall equal [***], and (iv) the number in Section
            6A.4(b)(ii) above shall equal [***].

6A.5  Detailing. Neurocrine shall be responsible for performing its Detail
      Requirements with respect to the Products. During the Initial [***] Year
      Period, the Neurocrine Field Force will perform at least [***] of the
      Final Detail Requirement to be performed in respect of the Products, in a
      [***].

6A.6  Detail Priority.

      (a)   In the event a product other than Zoloft, a Pfizer Product and the
            Products is being Detailed by the Neurocrine Sales Force with [***],
            the Allowance Fee will be reduced by [***].

      (b)   In the event that neither Zoloft, a Pfizer Product nor a Product is
            being Detailed by the Neurocrine Field Force with [***], the
            Allowance Fee will be reduced to [***]. In addition, the Allowance
            Fee will be reduced to [***] in the event the Neurocrine Field Force
            markets a Competitive Product under Section 14.2(b)(ii). At the end
            of [***],

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       50
<PAGE>
      Neurocrine may reduce its Detail commitment with respect to Products to a
      level that is below [***] on notice to take effect to Pfizer at least (i)
      [***] prior to reduction if the reduction is to take effect when the
      Allowance is [***], and (ii) [***] prior to such reduction if the
      reduction is to take effect when the Allowance is [***] or less.

6A.7  Detail Shortfalls.

      (a)   In the event that Neurocrine fails to perform during the [***] at
            least [***] of its Final Detail Requirement with respect to the
            Products in a [***] (in the event of such failure, Neurocrine will
            be a "Shortfall Party") in any Year as reported pursuant to Section
            6A.4 and verified pursuant to Section 9.2, Neurocrine shall pay to
            Pfizer as liquidated damages, an amount equal to (i) [***] (the
            "Detail Cost"), multiplied by (ii) [***]; provided, however, that
            the Detail Shortfall Payment Amount shall not exceed the Detail
            Cost, multiplied by [***]. To the extent Neurocrine's Details are
            [***] of the Final Detail Requirement during the [***], in addition
            to the Detail Shortfall Payment Amount, Neurocrine's Commission
            Payment with respect to such Detail shortfall shall be reduced
            pursuant to Section 8.2(a)(ii).

      (b)   Pfizer shall give notice to Neurocrine that (i) Neurocrine is a
            Shortfall Party; or (ii) Pfizer wishes to verify Details pursuant to
            Section 9.2, in each case within one hundred and twenty (120) days
            of receipt of the last cumulative annual Detailing Report set forth
            in Section 6A.4(a) delivered after the end of each respective Year.
            Neurocrine shall pay the Detail Shortfall Payment Amount within
            thirty (30) days of notice and verification that it is a Shortfall
            Party, or within thirty (30)

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       51
<PAGE>
            days of the report by an independent accountant pursuant to Section
            6A.9, as applicable.

      (c)   The parties understand and agree that any Detail Shortfall Payment
            Amount or any reduction in the Commission Payment pursuant to
            Section 8.2(a)(ii) below shall be paid as liquidated damages and not
            as a penalty and that such sum represents a genuine pre-estimate of
            the loss the parties believe would be suffered as a result of such
            Detail shortfalls. Pfizer' right to receive payment of the Detail
            Shortfall Payment Amount under Section 6A.7(a) and any reduction in
            the Commission Payment pursuant to Section 8.2(a)(ii) shall be in
            lieu of any other compensation or remedy that Pfizer may have for
            such a shortfall, including for claim of breach of this Agreement on
            account of such Detail shortfall. In addition, reduction in the
            Commission Payment pursuant to Section 8.2(a)(ii) shall not survive
            termination of this Agreement, except in the event that at the time
            of such termination, Neurocrine's Commission Payment would already
            have or has already been permanently reduced pursuant to Section
            8.2(a)(ii)(B).

6A.8  Cost of Detailing/Sales Promotion. Subject to Section 6A.1, each party
      shall be solely responsible for its own costs and expenses incurred in
      providing the personnel necessary to provide the services described in
      this Article 6A.

6A.9  Audit. The number of Details shall be subject to external audit as
      provided in Article 9.

6A.10 Medical Claims. Neither party shall make any medical claim for the
      Products beyond the scope of the relevant regulatory approval(s) then in
      effect for the Products; provided that, both parties may distribute
      information concerning the Products or its use, including but not limited
      to scientific articles, reference publications, and healthcare economic
      information, to the extent such materials have been approved under a
      Marketing Plan.

6A.11 Third Party Reports. From time to time during the term hereof the MC shall
      agree upon the third party reports (such as those from IMS), to the extent
      permitted by such third party, which the parties wish to receive in
      connection with the Co-Promotion (and the


                                       52
<PAGE>
      determinations to be made under Section 6A.3(b) with respect to the
      Marketing Plan and Co-Promotion Budgets), and Neurocrine and Pfizer shall
      have equal access to such reports (to the extent permitted). The expenses
      of such reports shall be Medical and Marketing Expenses. Pfizer will
      provide to Neurocrine all Product market data, therapeutic segment data
      relevant to the Product that it is permitted to share by a third party
      provider through the MC (including IMS information and market research).

6A.12 Zoloft Co-Promotion.

      (a)   Upon the successful completion of training of the Neurocrine Sales
            Force (and as such Sales Representatives are successfully trained on
            a rolling basis) in accordance with Schedule 2.5, such Sales
            Representatives shall begin Detailing Zoloft in the US Territory
            until the earlier of (i) the Zoloft Patent Expiration Date and (ii)
            termination of this Agreement. Pfizer will provide Neurocrine with
            target lists for such Details. The target lists will contain the
            names and contact information for medical professionals with
            prescribing authority, and Neurocrine will be required to Detail
            Zoloft only to such professionals, unless Neurocrine obtains consent
            from Pfizer.

      (b)   Pfizer will also provide Neurocrine with all promotional materials
            and samples for Zoloft that it provides to its own Sales
            Representatives that Details Zoloft to psychiatrists with respect to
            Zoloft.

      (c)   Contract Sales Forces. Without the consent of Pfizer, Neurocrine may
            not use any contract sales force to Co-Promote or Detail Zoloft.

                                   ARTICLE 6B

                                  MANUFACTURING

6B.1  Product Supply Committee.

      (a)   Manufacturing activities prior to First Approval of IR Product and
            MR Product will occur under the supervision of the PSC, which shall
            be responsible for all


                                       53
<PAGE>
            Product pharmaceutical manufacturing and supply issues with respect
            to each of the IR Product and MR Product prior to First Approval of
            IR Product and First Approval of the MR Product, respectively,
            including, but not limited to, the following:

            (i)   Overseeing manufacturing activities under way as of the date
                  of signing, including formulation development, product
                  characterization studies, stability studies, and management of
                  clinical supplies of IR Product and MR Product as set forth in
                  the Manufacturing Plan attached hereto as Schedule 6B.1;

            (ii)  Overseeing the manufacturing of registration batches of
                  Product;

            (iii) Preparation and review of the CMC section of the NDA for each
                  of the IR Product and MR Product;

            (iv)  Overseeing manufacture of the Products for Launch;

            (v)   Establishing Specifications for purposes of the IR Product and
                  MR Product NDAs and for Launch of such Products;

            (vi)  Product manufacturing process validation and any pre-approval
                  inspection of the Product manufacturing subcontractors;

            (vii) Commencing and overseeing any new development activities and
                  manufacturing activities other than activities relating to (i)
                  through (vi) above;

            (viii) Coordinating with the RC and DC as appropriate;

            (ix)  amending the Manufacturing Plan on a periodic basis to reflect
                  the foregoing development activities of the parties; and

            (x)   Providing updates on the PSC's activities and achievements to
                  the JOC.


                                       54
<PAGE>
            (b)   Through the PSC, Neurocrine shall continue its work related to
                  formulation development, product characterization studies,
                  stability studies, clinical studies and registration batches
                  and other amounts of Products required by the CMC section of
                  the Product NDA and approved as part of the Manufacturing
                  Plan. All Out-of-Pocket Costs (other than Out-Of-Pocket Costs
                  incurred by Neurocrine prior to January 1, 2003) incurred in
                  the performance of the Manufacturing Plan will be borne by
                  Pfizer.

            (c)   Following First Approval, Pfizer, subject to Steering
                  Committee oversight, shall have final decision-making
                  authority with respect to the manufacture, supply, packaging
                  and distribution of Products, at its sole cost.

            (d)   Through the PSC prior to First Approval, the establishment of
                  Product specifications, new development and manufacturing
                  activities, including preparation of any materials for Launch,
                  Product manufacturing process validation prior to receipt of
                  NDA approval and any pre-approval inspection of the Product
                  manufacturing subcontractors will be decided as a Consensus
                  Matter. The "lock-down date" for CMC data is [***].

            (e)   Through the PSC, all decisions with respect to the regulated
                  starting materials and commercial manufacturing locations for
                  the Launch of the Product, will be decided as Consensus
                  Matters, provided that in the event such mutual agreement,
                  would delay filing of an NDA, Neurocrine shall have final
                  decision making authority consistent with the Manufacturing
                  Plan set forth on Schedule 6B.1.

            (f)   Neurocrine agrees that it will not amend, modify, supplement
                  or terminate any of its agreements with manufacturing
                  subcontractors, or enter into any agreements with
                  manufacturing subcontractors with respect to the Product,
                  without the consent of Pfizer.

6B.2  Assignment of Contracts. Promptly following the "lock-down date",
      Neurocrine will assign to Pfizer, and Pfizer will accept assignment of,
      all contracts between Neurocrine

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       55
<PAGE>
            and the manufacturing subcontractors set forth in the Product NDA.
            Pfizer may request prior to the "lock-down date" to be joined as a
            party to any contracts between Neurocrine and the manufacturing
            subcontractors. Thereafter, Pfizer will be responsible for all
            performance under those contracts (except to the extent Neurocrine
            is still a party to such agreements) and will make all decisions
            (except to the extent such decision is a Neurocrine decision
            pursuant to Section 3.9(a)) regarding those contracts and any future
            contracts Pfizer elects.

6B.3  Recalls, Market Withdrawals or Corrections. Each party will promptly
      notify the other if any batch or lot of Product is alleged or proved to be
      the subject of a recall, market withdrawal or correction in any country
      and the parties shall cooperate in the handling and disposition of such
      event. However, in the event of a disagreement as to any matters relating
      to such recall, market withdrawal or correction, Pfizer shall have the
      final authority, which shall be exercised reasonably and in good faith.
      Pfizer will bear all costs and expenses arising out of any recall, market
      withdrawal or correction, unless such recall, market withdrawal or
      correction arises or results directly and primarily from Neurocrine's
      Detailing and Promotion of the Products, in which case Neurocrine will
      bear such costs and expenses.

                                   ARTICLE 7

                               PAYMENT PROVISIONS

7.1   Payment Currency. All amounts due under this Agreement shall be paid to
      the designated party in United States dollars.

7.2   Payments. All payments under this Agreement shall be made on or before the
      due date by electronic transfer in immediately available funds to the
      respective account designated in writing by each party at least five (5)
      Business Days before the payment is due. Pfizer shall notify Neurocrine's
      Chief Financial Officer, or such other party as Neurocrine's Chief
      Financial Officer shall designate in writing, by facsimile transmission as
      to the date and amount of any payment that Pfizer shall make at least two
      (2) Business Days prior to such transfer. Neurocrine shall notify Pfizer's
      treasurer, or such other party as Pfizer's


                                       56
<PAGE>
      treasurer shall designate in writing, by facsimile transmission as to the
      date and amount of any payment that Neurocrine shall make at least two (2)
      Business Days prior to such transfer. All payments under this Agreement
      shall bear interest from the date due until paid at a rate equal to the
      prime rate of Citibank, NA as announced on the date such payment was due
      plus [***].

                                   ARTICLE 8

                    ZOLOFT AND PRODUCT CO-PROMOTION PAYMENTS

8.1   Net Sales Report.

      (a)   Pfizer shall deliver electronically to Neurocrine the monthly and
            Year-to-date gross sales for the Products and Net Sales of the
            Products in the US Territory on a calendar monthly basis, within
            fifteen (15) days following the end of each calendar month following
            the Launch during the term of this Agreement. In addition, within
            twenty (20) days following the end of each Pfizer Quarter following
            the Launch during the term of this Agreement, Pfizer shall deliver
            to Neurocrine a report setting forth (i) the gross sales and Net
            Sales (including specific deductions used at arriving at Net Sales)
            of the Products during said Pfizer Quarter by dosage form and unit
            size, the amount of Product Commission Payments and the deductions
            contained in the definition of "Net Sales" the DOV Sublicense, (ii)
            adjustments (including reimbursements, recoupment of prior
            deductions, if any, to Net Sales reported for any previous Pfizer
            Quarter and (iii) any reduction in Commission Payments pursuant to
            Section 8.2(a)(ii), if any, with respect to any previous Pfizer
            Quarter. Within thirty (30) days following the end of each Pfizer
            Quarter, Pfizer shall pay to Neurocrine the amounts set forth in
            Section 8.2(a) below:

      (b)   Zoloft Net Sales Report. Within twenty (20) days following the end
            of each Pfizer Quarter following the commencement of Zoloft
            Detailing by Neurocrine, Pfizer shall deliver to Neurocrine a report
            setting forth (i) Zoloft Net Sales during

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       57
<PAGE>
            said Pfizer Quarter by dosage form and unit size, and the amount of
            Zoloft Commission Payments (as defined in Schedule 8.2), and (ii)
            any adjustments (including reimbursements or recoupments of prior
            deductions), if any, to Zoloft Net Sales reported for the previous
            Pfizer Quarter. Within thirty (30) days after the end of each Pfizer
            Quarter, Pfizer shall pay the amounts set forth in Section 8.2(b)
            below.

8.2   Commission Payment. For each Year during the term of this Agreement,
      Pfizer shall pay to Neurocrine, on a Pfizer Quarterly basis in accordance
      with Section 7.2, the amounts set forth in Section 8.2(a) and 8.2(b)
      (together the "Commission Payments").

      (a)   In respect of the Products, (i) the Commission Payment will be
            calculated, except as provided in clause (ii) below, based on a
            percentage of the Net Sales of the Products in the US Territory in
            each full Year from Launch during the term of this Agreement, as
            follows:


<TABLE>
<CAPTION>
                                          Percentage of Net Sales to be a
 Sales Year                                   Commission Payment
 ----------                               -------------------------------
<S>                                       <C>
  Year 1-2                                          [***]
   Year 3                                           [***]
Year 4 to end of Term                               [***]
</TABLE>

            (ii)  Notwithstanding clause (i) above, (A) with respect to any Year
                  during the Initial Five Year Period that Neurocrine has
                  performed less than [***] of its Final Detail Requirement, the
                  Commission Payment shall be reduced during such Year as
                  follows:
<TABLE>
<CAPTION>
              If the Percentage of Final Detail  Percentage of Net Sales to be a
 Sales Year           Requirement is:                   Commission Payment:
 ----------   ---------------------------------  -------------------------------

<S>           <C>                                <C>
   [***]                    [***]                              [***]
</TABLE>

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       58
<PAGE>
<TABLE>
<CAPTION>
<S>           <C>                                <C>
                            [***]                              [***]
                            [***]                              [***]
                            [***]                              [***]
                            [***]                              [***]

   [***]                    [***]                              [***]
                            [***]                              [***]
                            [***]                              [***]
                            [***]                              [***]
                            [***]                              [***]

   [***]                    [***]                              [***]
                            [***]                              [***]
                            [***]                              [***]
                            [***]                              [***]
                            [***]                              [***]
</TABLE>

provided that the reduction set forth in this clause (ii) shall not apply if
during the Initial Five Year Period, this Agreement terminates as a result of
Section 13.5 or upon a Change in Control.

and,

            (B)   If during the Initial Five Year Period, Neurocrine has
                  performed Details equal to less than [***] of its cumulative
                  Final Detail Requirement during the Initial Five Year Period,
                  the Commission Payment for the remainder of the Co-Promotion
                  Term shall be reduced as follows:

<TABLE>
<CAPTION>
                                                     Percentage of Net Sales to be a
If the Percentage of Final Detail Requirement is:          Commission Payment:
--------------------------------------------------   -------------------------------
<S>                                                  <C>
                  [***]                                           [***]
                  [***]                                           [***]
                  [***]                                           [***]
                  [***]                                           [***]
</TABLE>

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.



                                       59
<PAGE>
<TABLE>
<S>                                                  <C>
                  [***]                                           [***]
</TABLE>

            (1)   Notwithstanding this Clause (B), if Neurocrine fails to
                  perform at least [***] of its cumulative Final Detail
                  Requirement during the Initial Five Year Period, the reduction
                  in this Clause (B) shall not apply if (x) after 6 (six) full
                  years after US Launch, Neurocrine has averaged at least [***]
                  of its cumulative Final Detail Requirement, plus any Details
                  it performs pursuant to the Marketing Plan in the sixth (6th)
                  full year after US Launch.

            (2)   Any reduction pursuant to this clause (ii) shall be paid as an
                  adjustment to payments pursuant to Section 8.1(a) above.

            (3)   If during the Initial Five Year Period, Neurocrine has failed
                  to perform at least [***] of the Final Detail Requirement in
                  any Year but has averaged over the Initial Five Year Period at
                  least [***] of its cumulative Final Detail Requirement, Pfizer
                  shall repay to Neurocrine, as an adjustment, any amounts it
                  had previously been credited as an adjustment as a result of a
                  reduction pursuant to Section 8.2(b)(ii)(A).

      (b)   [***].

            For the avoidance of doubt, Pfizer shall have no obligation to pay
            the Zoloft Commission Payment to Neurocrine if Zoloft Net Sales in
            the US Territory fail to reach the Baseline Threshold nor shall
            Pfizer be permitted to credit, any shortfall against Zoloft
            Commission Payments payable to Neurocrine with respect to Zoloft Net
            Sales in the US Territory in future Years.

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       60
<PAGE>
8.3   Development Costs and Medical and Marketing Expense Payments. Beginning
      with the first quarter of 2003, Neurocrine shall, within twenty (20) days
      following the end of each calendar quarter, prepare and deliver to Pfizer
      a statement of Development Costs, manufacturing costs and Medical and
      Marketing Expenses for such calendar quarter, which statement shall set
      forth the Development Costs and Medical and Marketing Expenses incurred or
      accrued during the calendar quarter and the amounts due from Pfizer to
      Neurocrine. Pfizer will pay Neurocrine such amounts owed within thirty
      (30) days from the end of the applicable Pfizer Quarter.

8.4   Milestone Payments and Co-Promote Fees. Subject to the terms and
      conditions of this Agreement, Pfizer shall pay to Neurocrine the
      following:

<TABLE>
<CAPTION>
                EVENT                                   [***]        [***]
--------------------------------------------------------------------------------
<S>                                       <C>           <C>          <C>
(a)   Signing of this Agreement, subject  $50,000,000
      to Section 3.03 of  the
      License Agreement.
--------------------------------------------------------------------------------
(b)   FDA Acceptance [***]                              [***]        [***]
--------------------------------------------------------------------------------
(c)   FDA Approval [***]                                [***]        [***]
--------------------------------------------------------------------------------
</TABLE>

         The parties understand and agree that each of the payments referenced
in this Section 8.4 shall only be made once, and is subject to the following
terms and conditions:

            (i)   With respect to the events and payments referenced in Section
                  8.4(b), mutual agreement on [***] in Section 4.3(c) (except to
                  the extent that neither party may object to such filing as
                  provided therein), is a condition to payment of such
                  milestone.




*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       61
<PAGE>
            (ii)  With respect to the events and payments referenced in Section
                  8.4(c) mutual agreement on [***] in Section 4.3(d) [***], is a
                  condition to payment of such milestone.

8.5   All amounts payable by either party pursuant to any section under this
      Agreement shall be paid without offset against any amounts due such party
      under those sections, provided that in the event that Pfizer makes any
      direct payments [***], the amount of any sums due pursuant to Section
      8.4(b) and (c) shall be reduced by the amount of any such direct payments
      by Pfizer.

8.6   In consideration for Pfizer lending or causing one or more of its
      Affiliates to loan proceeds and make other advances of credit pursuant to
      the Secured Loan Agreement, dated as of the date hereof, (the "Loan
      Agreement") by and between Neurocrine and Pfizer, Neurocrine hereby
      acknowledges and agrees that Pfizer shall, in the event of default (as
      defined in the Loan Agreement) shall have occurred and is continuing after
      any applicable cure period, be entitled, in its absolute and sole
      discretion, to offset, in part or in full, from time to time, any and all
      amounts due and unpaid by Pfizer under this Agreement against any and all
      amounts due and unpaid under the Loan Agreement.

                                   ARTICLE 9

                             ACCOUNTING AND REPORTS

9.1   Books and Records. Each party shall keep comprehensive books and records
      relating to this Agreement on a full accrual basis of accounting in
      accordance with GAAP. Such books and records shall document all Detailing
      Reports and Net Sales, authorized expenses incurred or paid and any other
      costs incurred (including Medical and Marketing Expenses and Development
      Costs) or revenues earned relating to this Agreement and include all
      information subject to audit pursuant to Section 9.2. All such books and
      records shall be maintained for five (5) Years following the relevant Year
      or such longer period as is required by Law.


*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.




                                       62
<PAGE>
9.2   Audits. These audit and adjustment provisions apply with respect to all
      payments due from one party to another pursuant to this Agreement,
      including amounts payable pursuant to Sections 2.8, 5.3(a), 6A.1(c) and
      8.2; the credits described in Sections 6A.1(c) or 6A.1(f); and number of
      Details performed under Section 6A.5 and, 6A.7. Each party, and DOV and
      ACY shall have the right to have the applicable books and records of the
      other party audited by an independent certified public accountant that is
      nationally recognized as having expertise in the pharmaceutical industry,
      selected by a party (as to which firm the other party has no reasonable
      objection), under appropriate confidentiality provisions, for the sole
      purpose of verifying the accuracy of all financial, accounting and
      numerical information and calculations under this Agreement. Any such
      audit shall be conducted no more than once each Year by each of Pfizer or,
      Neurocrine during the term of this Agreement, and upon at least thirty
      (30) days' advance notice during normal business hours and in a manner
      that does not interfere unreasonably with the business of the audited
      entity. The results of any such audit shall be delivered in writing to
      each party and shall be final and binding upon the parties, other than in
      the case of manifest error, with respect to the matters set forth therein.
      Any underpayment or overbilling determined by such audit shall promptly be
      paid or refunded by the audited party. If the audited party has underpaid
      or overbilled an amount due under this Agreement by more than five percent
      (5%), the audited party shall also reimburse the other party for the cost
      of such audit (with the cost of the audit to be paid by the auditing party
      in all other cases), plus interest at the interest rate set forth in
      Section 7.2, from the date of any such underpayment or overpayment. If the
      audited party is shown to be a Shortfall Party, the provisions of Section
      6A.7 of this Agreement shall control. Except as ACY may require under the
      ACY License, such accountants shall not reveal to the party seeking
      verification the details of its review, except insofar as is necessary to
      describe the underpayment, overbilling or level of Details.

9.3   Sales Force Efforts. For two (2) Years following each Year, each party
      shall keep records relating to Details made by its Sales Representatives,
      and Detailing Reports, during such Year, including sampling of the
      Products. Such records shall be available for


                                       63
<PAGE>
      inspection and audit in accordance with Section 9.2 above to determine
      compliance with the terms hereof.

                                   ARTICLE 10

                    INTELLECTUAL PROPERTY RIGHTS AND LABELING

10.1  Trademark and Corporate Logos.

      (a)   Subject to the provisions of this Section 10.1, each party shall
            retain all right, title and interest in and to its respective
            corporate name and logo.

      (b)   The Products. For the term of this Agreement and the License
            Agreement, Products shall be promoted and sold worldwide solely
            under the Trademarks and shall use Pfizer's and Neurocrine's trade
            dress and logo with substantially equal prominence and frequency, to
            the extent legally permissible in the relevant jurisdiction. For the
            Co-Promotion Term, Pfizer grants to Neurocrine the non-exclusive
            right, free of charge, to use the Trademarks and the Pfizer logo in
            the Territory solely for the purpose of Neurocrine's Co-Promotion of
            the Products in accordance with the terms of this Agreement.
            Neurocrine grants to Pfizer the nonexclusive right, right free of
            charge, to use Neurocrine's logo in the Territory solely for
            purposes contemplated by this Agreement and the License Agreement.
            Pfizer shall remain the owner of the Trademarks and the Pfizer logo
            and the goodwill pertaining thereto, and Pfizer shall be solely
            responsible for registering and maintaining the Trademarks in the
            Territory. Neurocrine shall remain the owner of the Neurocrine logo
            and the goodwill pertaining thereto. Except as contemplated herein,
            Neurocrine shall have no rights in or to the Pfizer logo or the
            goodwill pertaining thereto. Except as contemplated herein, Pfizer
            shall have no rights in or to the Neurocrine logo or the goodwill
            pertaining thereto. Neurocrine shall utilize the Trademarks only for
            Promotional Materials or Products-related materials approved by
            Pfizer or for internal use within Neurocrine, and in each case only
            for the purposes contemplated herein. Neurocrine agrees that upon
            termination or expiration of this Agreement it will,


                                       64
<PAGE>
            except as set forth in Section 9.05 of the License Agreement,
            discontinue forthwith all use of the Trademarks.

      (c)   Zoloft. Zoloft shall be promoted and sold solely under the Zoloft
            Trademark and shall use Pfizer's trade dress and logo. During such
            portion of the Co-Promotion Term that Neurocrine is co-promoting
            Zoloft, Pfizer grants to Neurocrine the non-exclusive right, free of
            charge, to use the Zoloft Trademark and the Pfizer logo in the US
            Territory solely for the purpose of Neurocrine's Co-Promotion of
            Zoloft in accordance with the terms of this Agreement. Pfizer shall
            remain the owner of the Zoloft Trademark and the Pfizer logo and the
            goodwill pertaining thereto, and Pfizer shall be solely responsible
            for registering and maintaining the Zoloft Trademark in the US
            Territory. Except as contemplated herein, Neurocrine shall have no
            rights in or to the Zoloft Trademark or to the Pfizer logo or the
            goodwill pertaining thereto. Neurocrine shall utilize the Zoloft
            Trademark only for Promotional Materials or Zoloft-related materials
            approved by Pfizer or for internal use within Neurocrine, and in
            each case only for the purposes contemplated herein. Neurocrine
            agrees that upon the earlier of termination of this Agreement or the
            Zoloft Patent Expiration Date, it will discontinue forthwith all use
            of the Zoloft Trademark.

      (d)   Other Pfizer Products. Any other Pfizer products promoted under this
            Agreement ("Pfizer Products") shall be promoted and sold solely
            under the applicable trademarks for such Pfizer Product and shall
            use Pfizer's trade dress and logo. During such portion of the
            Co-Promotion Term that Neurocrine is co-promoting or detailing such
            Pfizer Product, Pfizer grants to Neurocrine the non-exclusive right,
            free of charge, to use the applicable trademarks and the Pfizer logo
            in the US Territory solely for the purpose of Neurocrine's
            Co-Promotion of such Pfizer Product in accordance with the terms of
            this Agreement. Pfizer shall remain the owner of any applicable
            trademark and the Pfizer logo and the goodwill pertaining thereto,
            and Pfizer shall be solely responsible for registering and
            maintaining such trademarks in the US Territory. Except as
            contemplated herein,


                                       65
<PAGE>

            Neurocrine shall have no rights in or to trademark for the Pfizer
            Products or to the Pfizer logo or the goodwill pertaining thereto.
            Neurocrine shall utilize the trademarks for the Pfizer Products only
            for Promotional Materials or related materials approved by Pfizer or
            for internal use within Neurocrine, and in each case only for the
            purposes contemplated herein. Neurocrine agrees that upon the
            earlier of termination of this Agreement or termination of such
            co-promotion or detailing activities, it will discontinue forthwith
            all use of such trademarks.

      (e)   Neurocrine shall inform Pfizer promptly of any infringement of or
            challenge to the Trademarks, Zoloft Trademarks or Pfizer Product
            trademarks in the US Territory, in each case whether actual or
            threatened, which comes to the notice of Neurocrine. Pfizer shall
            have the exclusive right, at its sole cost and expense, to take
            action in respect of the registration, defense, infringement and
            maintenance of the Trademarks, Zoloft Trademarks or Pfizer Product
            trademarks, and Neurocrine shall provide reasonable assistance and
            co-operation as Pfizer may reasonably request, at Pfizer's sole cost
            and expense.

      (f)   Copyrights and Proprietary Programs. Pfizer shall own all copyrights
            and trademarks relating to Promotional Materials, and regarding all
            sales training, patient education and disease management programs
            related to the Products, as well as any modifications developed in
            the future which are not specific to the Products.

10.2  Third Party Agreements. Neurocrine covenants and agrees with Pfizer that
      Neurocrine:

      (a)   shall not execute or otherwise permit, and shall cause its
            Affiliates to refrain from executing or otherwise permitting, any
            amendment, modification or waiver to any of the licenses and
            agreements listed on Schedule 10.2 ("Third Party Agreements") which
            would have a material adverse effect on the Co-Promotion of the
            Products, without the prior written consent of Pfizer,


                                       66
<PAGE>
      (b)   shall not make any election or exercise any right or option (or omit
            to take any action which would), and shall cause its Affiliates to
            refrain from making any election or exercising any right or option
            (or omitting to take any action which would), terminate or
            relinquish in whole or in part any Third Party Agreements, if such
            election or exercise would have a material adverse effect on the
            Co-Promotion of the Products,

      (c)   shall comply, and shall cause its Affiliates to comply, with all of
            its or its Affiliates' obligations under the Third Party Agreements
            in all material respects,

      (d)   shall take, and shall cause its Affiliates to take, such reasonable
            actions as shall be necessary to keep in full force and effect the
            Third Party Agreements,

      (e)   shall give prompt notice to Pfizer, together with a review of
            outstanding issues if Pfizer so requests and subject to any
            obligations of confidentiality owed by Neurocrine or its Affiliates
            to the other party to such Third Party Agreements, of any actual or
            alleged defaults, breaches, violations, proposed amendments or
            proposed modifications of, or any proposed waivers under, any Third
            Party Agreement; and

      (f)   shall give prompt notice to Pfizer, together with a review of
            outstanding issues if Pfizer so requests and subject to any
            obligations of confidentiality owed by Neurocrine or its Affiliates
            to the other party to such Third Party Agreements, of any proposed
            amendments or proposed modifications of the Third Party Agreements
            which would conflict with Pfizer's rights hereunder.

                                   ARTICLE 11

                            CONFIDENTIAL INFORMATION

11.1  Treatment of Confidential Information. Until the earlier of (a) expiration
      of this Agreement or (b) if this Agreement is terminated prior to
      expiration, [***] following such termination, each party shall maintain
      Confidential Information (as

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       67
<PAGE>

      defined in Section 11.2) of the other party in confidence, and shall not
      disclose, divulge or otherwise communicate such Confidential Information
      to others, or use it for any purpose other than as permitted under this
      Agreement or in connection with the development, manufacture, marketing,
      promotion, distribution or sale of the Products pursuant to this Agreement
      or the License Agreement, and each party agrees to exercise its reasonable
      efforts to prevent and restrain the unauthorized disclosure of such
      Confidential Information by any of its directors, officers, employees,
      consultants, subcontractors, licensees or agents.

11.2  Confidential Information. "Confidential Information" means all materials,
      trade secrets or other information, including without limitation, any
      data, proprietary information and materials (whether or not patentable, or
      protectable as a trade secret) regarding a party's technology, Products,
      business information or objectives, which is disclosed in writing by a
      party to the other party and which is designated as confidential by the
      disclosing party. All information disclosed prior to the Effective Date by
      Neurocrine to Pfizer under or pursuant to the confidentiality agreement
      between the parties dated February 24, 2002, as amended, shall be deemed
      "Confidential Information" of Neurocrine. There should be excluded from
      the foregoing definition of Confidential Information such information or
      data which:

      (a)   was known by the receiving party prior to its date of disclosure to
            the receiving party as shown by the receiving party's written
            records; or

      (b)   either before or after the date of the disclosure to the receiving
            party is lawfully disclosed to the receiving party by third parties
            not in violation of any obligation to the other party; or

      (c)   either before or after the date of the disclosure to the receiving
            party becomes published or generally known to the public through no
            fault or omission on the part of the receiving party or its
            Affiliates; or


                                       68
<PAGE>
      (d)   is independently developed by or for the receiving party without
            reference to or reliance upon the Confidential Information; or

      (e)   is required to be disclosed by the receiving party to comply with
            applicable Laws, to defend or prosecute litigation or to comply with
            governmental regulations, provided that the receiving party provides
            prior notice of such disclosure to the other party and takes
            reasonable and lawful actions to avoid and/or minimize the degree of
            such disclosure.

11.3  Publications. During the course of this Agreement, each party will submit
      to the DC and MC for review and approval all peer-reviewed academic,
      scientific and medical publications relating to the Development Program
      and/or Products for review. The DC will have primary responsibility and,
      subject to Neurocrine's final decision-making authority in Section 3.9(a),
      will have final authority to approve all such publications as they
      primarily relate to the Registration Program, provided that the decision
      whether and how to publish as well as the timing of such publication shall
      be consistent with the publications strategy of the MC. With respect to
      all other such publications, MC will have primary responsibility and,
      subject to Pfizer's final decision-making authority in Section 3.9(c),
      will have final authority to approve all publications. The DC and MC shall
      each have no less than thirty (30) days to review each proposed
      publication. The review period may be extended for an additional thirty
      (30) days in the event the non-publishing party can demonstrate to the DC
      and MC a reasonable need for such extension including, but not limited to,
      the preparation and filing of patent applications. Such period may be
      further extended by the JOC. Pfizer and Neurocrine will each comply with
      standard academic practice regarding authorship of scientific publications
      and recognition of contribution of other parties in any publications
      relating to Development Programs and/or Products. Notwithstanding the
      foregoing, the parties shall endeavor as far as possible, for ease and
      convenience, to agree on a universal basis joint authorship in respect of
      such publications.



                                       69
<PAGE>
                                   ARTICLE 12

                 REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION

12.1  Neurocrine's Representations. Neurocrine hereby represents and warrants as
      of the date hereof as follows:

      (a)   Neurocrine has the corporate power and authority to execute and
            deliver this Agreement and to perform its obligations hereunder, and
            the execution, delivery and performance of this Agreement has been
            duly and validly authorized and approved by proper corporate action
            on the part of Neurocrine, and Neurocrine has taken all other action
            required by law, its certificate of incorporation or by-laws or any
            agreement to which it is a party or to which it may be subject
            required to authorize such execution, delivery and performance
            (other than compliance with all applicable requirements of the HSR
            Act). Assuming due authorization, execution and delivery on the part
            of Pfizer, this Agreement constitutes a legal, valid and binding
            obligation of Neurocrine, enforceable against Neurocrine, in
            accordance with its terms, except as such enforceability may be
            limited by bankruptcy, insolvency, reorganization, moratorium and
            similar laws relating to or affecting creditors generally or by
            general equitable principles (regardless of whether such
            enforceability is considered in a proceeding in equity or at law).

      (b)   The representations and warranties of Neurocrine contained in the
            License Agreement are true and correct in all respects.

      (c)   All manufacturing operations conducted by Neurocrine and its
            Affiliates (or by third parties on their behalf) relating to the
            manufacturing of the Products are, to Neurocrine's knowledge (after
            reasonable due inquiry), being conducted in material compliance with
            GMP and other applicable requirements and standards of any
            Governmental Authority in which such manufacturing is being
            conducted, except where any failure to do so will not have a
            material adverse effect on the Registration Program.



                                       70
<PAGE>
      (d)   As of the date hereof, Neurocrine has disclosed to Pfizer all
            material information known to Neurocrine or its Affiliates relating
            to (i) the drug quality, including stability, variability,
            impurities and delivery performance in each case relating to the
            Compound, and (ii) changes made by Neurocrine or its Affiliates
            after the initiation of Phase III clinical trials for the Products
            relating to formulation, packaging and method of manufacture and
            formulation and to processing parameters, and (iii) the status of
            discussions with FDA or any Governmental Authorities directly
            relating thereto.

12.2  Pfizer's Representations. Pfizer hereby represents and warrants as of the
      date hereof as follows:

      (a)   Pfizer has the corporate power and authority to execute and deliver
            this Agreement and to perform its obligations hereunder, and the
            execution, delivery and performance of this Agreement has been duly
            and validly authorized and approved by proper corporate action on
            the part of Pfizer, and Pfizer has taken all other action required
            by law, its certificate of incorporation or by-laws or any agreement
            to which it is a party or to which it may be subject required to
            authorize such execution and delivery (other than compliance with
            all applicable requirements of the HSR Act). Assuming due
            authorization, execution and delivery on the part of Neurocrine,
            this Agreement constitutes a legal, valid and binding obligation of
            Pfizer, enforceable against Pfizer in accordance with its terms,
            except as such enforceability may be limited by bankruptcy,
            insolvency, reorganization, moratorium and similar laws relating to
            or affecting creditors generally or by general equitable principles
            (regardless of whether such enforceability is considered in a
            proceeding in equity or at law).

      (b)   The representations and warranties of Pfizer contained in the
            License Agreement are true and correct in all respects.



                                       71
<PAGE>
12.3  Limitation of Damages/Sole Remedy.

      This Agreement is subject to the terms and conditions of Article 10 of the
      License Agreement.

                                   ARTICLE 13

                              TERM AND TERMINATION

13.1  Term.

      (a)   Notwithstanding to the contrary any of the provisions of this
            Agreement but subject to Section 13.1(b) below, this Agreement shall
            only become effective upon the Effective Date, and prior to the
            Effective Date neither Neurocrine nor Pfizer shall have any rights
            or obligations hereunder. Subject to Section 13.1 as of the
            Effective Date, this Agreement shall commence and continue in force
            until the later of (i) fifteen (15) years following Launch or (ii)
            expiration of the last to expire of the Neurocrine Patent Rights
            with Valid Claims in the US Territory, unless sooner terminated as
            provided herein.

      (b)   Effective immediately as of the date first written above, Neurocrine
            covenants and agrees that it will not negotiate, engage in or
            otherwise enter into any one or more transactions involving (i) any
            sale or grant of any rights to any Neurocrine Patent Rights or
            Neurocrine Technical Information (including without limitation any
            licenses or sublicenses), or (ii) any joint venture, co-promotion or
            similar relationship involving any Neurocrine Patent Rights or
            Neurocrine Technical Information. Effective immediately as of the
            date first written above, each of Pfizer and Neurocrine covenant and
            agree that Article 15 shall be in full force and effect. The parties
            understand and agree that the obligations set forth in this Section
            13.1(b) shall terminate on the 90th day following the date of this
            Agreement if, but only, if the Effective Date has not occurred on or
            before such 90th day (other than with respect to liability for any
            breaches of this Section 13.1(b) prior to such 90th day (which shall
            survive such termination)).


                                       72
<PAGE>
13.2  Termination for Breach.

      (a)   If Pfizer materially breaches or materially defaults in the
            performance or observance of any of the provisions of this Agreement
            or the License Agreement, and such material breach or material
            default is not cured within ninety (90) days or, in the case of
            failure to pay any amounts due hereunder sixty (60) days after the
            giving of notice by Neurocrine specifying such breach or default,
            Neurocrine shall have the right to terminate this Agreement in full
            upon a further thirty (30) days' notice.

      (b)   If Pfizer terminates all of its development activities for a period
            of six (6) months or longer in the US Territory at any time after it
            has the final decision making authority with respect to the
            Development Program (other than for regulatory restraints), [***].
            If Pfizer terminates the Development Program with respect to any
            country in the ROW Territory or otherwise fails to conduct any
            development activities directed to any such country, [***], Pfizer
            will thereafter have six (6) months to present [***]. If Pfizer
            fails within thirty (30) days to notify Neurocrine [***], Neurocrine
            shall have the right to terminate this Agreement with respect to
            such country effective upon thirty (30) days notice.

      (c)   For purposes of this Agreement, materiality in all cases shall be
            considered in the context of this Agreement and the License
            Agreement taken as a whole; provided, however, no party shall be
            deemed to be in material breach or material default if its actions
            or omissions primarily resulted from: (i) compliance with any
            specific unanimous decision of a committee or subcommittee under
            this Agreement, or (ii) compliance with any directive by the
            non-defaulting party for a matter in which



*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       73
<PAGE>
            the non-defaulting party or any of its designees, representatives or
            employees have exercised sole or final decision making authority
            under this Agreement, or (iii) compliance with the express terms of
            this Agreement or the License Agreement, or (iv) to the extent
            Pfizer uses efforts in substantial conformity with Commercially
            Reasonable Efforts or Neurocrine uses efforts in substantial
            conformity with commercially reasonable efforts consistent with
            Section 2.12. A material breach or material default in the
            performance of any of the provisions of this Agreement shall include
            a material inaccuracy in any representation or warranty contained
            herein.

      (d)   Upon the giving of any notice of default under Section 13.2(a), the
            parties will in good faith meet to see if a plan to remedy the
            alleged breach or default can be mutually agreed.

13.3  Other Termination:

      (a)   Discretionary. Upon one hundred and eighty (180) days prior notice
            to Neurocrine, Pfizer shall have the right at any time, without
            cause at Pfizer's sole discretion, to terminate this Agreement,
            whereupon this Agreement, together with the License Agreement, shall
            terminate one hundred and eighty (180) days after the date of such
            notice.

      (b)   Termination of License Agreement. This Agreement shall terminate
            following any termination by Pfizer of the License Agreement.

      (c)   Neurocrine. Subject to the terms hereof (including without
            limitation Section 13.3(a) above), upon the occurrence of any
            material default by Neurocrine:

            (i)   which material default or material breach relates to any of
                  the covenants and agreements of Neurocrine in Article 2 and 6A
                  (provided that, for the avoidance of doubt, the foregoing
                  shall exclude any breach of Neurocrine's obligations under
                  Section 6A.7(a) (such covenants and


                                       74
<PAGE>
                  agreements, the "Co-Promotion Covenants")), Pfizer may, upon
                  ninety (90) days prior notice, elect to terminate Neurocrine's
                  Co-Promotion rights with respect to Zoloft and any Pfizer
                  Products other than the Products, whereupon neither party
                  shall have any further rights or obligations with respect to
                  Zoloft or any Pfizer Products (other than Products), including
                  obligations under Article 2, Article 6A, Article 8, Article
                  10, Section 8.2(b) and Section 14.3, except for any
                  obligations that have accrued prior to such date of
                  termination, and in addition, the provisions of Section 3.12
                  will apply; and

            (ii)  which material default or material breach relates to any of
                  the covenants and agreements of Neurocrine under this
                  Agreement other than the Co-Promotion Covenants or under the
                  License Agreement, Pfizer may, upon ninety (90) days prior
                  written notice, elect that the provisions of Section 3.12 will
                  apply.

      All other terms and conditions of this Agreement, except as provided
      herein, shall remain in full force and effect. It is acknowledged and
      agreed by Pfizer that Pfizer shall not be entitled to terminate this
      Agreement for a material default covered by this Section 13.3(c), but
      Pfizer shall be entitled to indemnification and the right to obtain
      specific performance and other injunctive relief as provided in this
      Agreement.

      (d)   Upon sixty (60) days prior notice to Neurocrine, Pfizer shall have
            the right to terminate this Agreement upon an event described in
            Sections 13.5 or 13.7 hereunder, or upon a Change of Control. Upon
            termination of this Agreement pursuant to this Section 13.3, the
            provisions of Section 13.8 shall apply.

13.4  Bankruptcy. Each party may, in addition to any other remedies available to
      it by law or in equity, exercise the rights set forth below by written
      notice to the other party (the "Insolvent Party"), in the event the
      Insolvent Party shall have become insolvent or bankrupt, or shall have
      made a general assignment for the benefit of its creditors, or there shall
      have been appointed a trustee or receiver of the Insolvent Party or for
      all or a


                                       75
<PAGE>
      substantial part of its property, or any case or proceeding shall have
      been commenced or other action taken by or against the Insolvent Party in
      bankruptcy or seeking reorganization, liquidation, dissolution, winding-up
      arrangement, composition or readjustment of its debts or any other relief
      under any bankruptcy, insolvency, reorganization or other similar act or
      law of any jurisdiction now or hereafter in effect, and any such event
      shall have continued for sixty (60) days undismissed, unbonded and
      undischarged. All rights and licenses granted under or pursuant to this
      Agreement by Neurocrine and Pfizer are, and shall otherwise be deemed to
      be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses
      of rights to "intellectual property" as defined under Section 101 of the
      U.S. Bankruptcy Code. The parties agree that the parties as licensees of
      such rights under this Agreement shall retain and may fully exercise all
      of their rights and elections under the U.S. Bankruptcy Code. The parties
      further agree that, in the event of the commencement of a bankruptcy
      proceeding by or against either party under the U.S. Bankruptcy Code, the
      other party shall be entitled to a complete duplicate of (or complete
      access to, as appropriate) any such intellectual property and all
      embodiments of such intellectual property, and same, if not already in
      their possession, shall be promptly delivered to it (i) upon any such
      commencement of a bankruptcy proceeding upon its written request
      therefore, unless the party subject to such proceeding elects to continue
      to perform all of its obligations under this Agreement or (ii) if not
      delivered under (i) above, upon the rejection of this Agreement by or on
      behalf of the party subject to such proceeding upon written request
      therefore by the other party.

13.5  Neurocrine. In the event Neurocrine shall be an Insolvent Party, Pfizer
      may terminate this Agreement subject to Neurocrine's rights and Pfizer's
      obligations under Section 13.8.

13.6  Divestiture by Pfizer.

      (a)   If in connection with any proposed acquisition or merger or inquiry
            of Governmental Authority, Pfizer determines that in order to
            facilitate clearance or obtain approval from any Governmental
            Authority with responsibility for


                                       76
<PAGE>
            enforcing antitrust or competition Laws regarding such acquisition
            or merger or inquiry, it would be advisable, in Pfizer's business
            judgement, to assign or sublicense or otherwise transfer (any such
            assignment, sublicense or transfer, a "Divestiture Transaction")
            Pfizer's rights and obligations under this Agreement and the License
            Agreement to any third party, Pfizer shall notify Neurocrine thereof
            ("Notice of Divestiture"). The Notice of Divestiture shall not be
            required to disclose any details of any such proposed Divestiture
            Transaction.

      (b)   [***].

13.7  [***].



*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       77
<PAGE>
13.8  Survival of Obligations. Notwithstanding any termination of this
      Agreement, (a) neither party shall be relieved of any obligations incurred
      prior to such termination, including the payment obligations, and (b) the
      obligations of the parties with respect to (I) the protection and
      nondisclosure of Confidential Information (Article 11) shall survive
      termination of this Agreement, and (II) each other Section or Schedule of
      this Agreement which is expressed to survive termination or which is
      required to give effect to such termination or the consequences of such
      termination shall survive termination, and (III) subject to Section
      10.04(c)(vi) and Section 10.06 of the License Agreement, termination of
      this Agreement shall not release either party from any obligation or
      liability which shall have accrued at the time of termination or preclude
      either party from pursuing all rights at law and in equity with respect to
      any default under this agreement, (c) unless this Agreement expressly
      provides that termination shall be the sole and exclusive remedy for a
      particular breach hereof, either party's right to commence an action, suit
      or other proceeding claiming breach of this Agreement by the other party
      shall survive termination, and (d) Pfizer's obligations under Sections
      2.2, 2.12, Article 7, Section 8.2(a), Article 9, Section 10.1(b), Article
      11, Section 15.4 and Section 15.9 shall survive until such time as the
      License Agreement shall terminate. Notwithstanding anything in this
      Agreement to the contrary, in the event this Agreement is terminated prior
      to termination of the License Agreement, Neurocrine shall be entitled to
      receive 100% of the amounts it would have otherwise received pursuant to
      Section 8.2(a), until such time as the License Agreement is terminated or
      expires. Upon a termination of this


                                       78
<PAGE>
      Agreement by Pfizer, Neurocrine shall promptly return to Pfizer all
      written Confidential Information previously disclosed by Pfizer, and all
      copies thereof, and Neurocrine shall have no further right with respect
      to, and shall cease all activities related to Co-Promotion of the Products
      and Zoloft. Upon any other termination of this Agreement and the License
      Agreement, each party shall promptly return to the other party all written
      Confidential Information, and all copies thereof, of such other party,
      except as specifically provided in this Agreement and the License
      Agreement.

                                   ARTICLE 14

                                 NON-COMPETITION

14.1  Pfizer Non-Competition. If during the term of this Agreement Pfizer or any
      of its Affiliates intends to Commercialize a prescription pharmaceutical
      product having an Insomnia Indication in the Territory (a "Competitive
      Product"):

      (a)   if such Competitive Product's [***]:

            (i)   [***]

            (ii)  [***].

      (b)   if such Competitive Product's [***]:

            (i)   [***]



*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       79
<PAGE>
            (ii)  [***].

      [***].

      (c)   If Pfizer Launches any Competitive Product defined in Section
            14.1(b)(ii) ("Section 14.1(b)(ii) Product"), then neither Pfizer or
            its Affiliates shall:

            (i)   Engage in "negative promotional activities", [***].

            (ii)  [***].



*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       80
<PAGE>
            (iii) [***].

            (iv)  [***].

      (d)   Notwithstanding to the contrary any provisions of this Agreement or
            the License Agreement, in no event shall Pfizer be required under
            this Agreement or under the License Agreement to engage in any
            activity regarding a Product which Pfizer is prohibited from
            undertaking under Section 14.1(c) with respect to a Section
            14.1(b)(ii) Product, and Section 14.1(c) shall be applicable, on the
            same basis (mutatis mutandis), to promotional activities regarding
            the Product vis-a-vis any Competitive Product of Pfizer.

      (e)   In the event that [***] shall be deemed to be a Competitive Product,
            in addition to



*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       81
<PAGE>
            Pfizer's obligations with respect to such Product in Section 14.1(b)
            above, Neurocrine will have the rights in the US Territory as set
            forth in Section 14.3 below.

14.2  Neurocrine Non-Competition. If, during the term of this Agreement,
      Neurocrine or any of its Affiliates proposes to Commercialize a
      Competitive Product in any country of the Territory other than a country
      in the EU, Neurocrine or such Affiliate shall:

      (a)   if such Competitive Product's primary mechanism of action is through
            binding with [***], divest such Competitive Product;

      (b)   if such Competitive Product's primary mechanism of action is other
            than through binding with [***], at its sole discretion either:

            (i)   divest (by license, sale or similar transaction) such
                  Competitive Product; or

            (ii)  only if such commercialization would begin after the [***],
                  Commercialize such Competitive Product and terminate its right
                  to Co-Promote Products hereunder pursuant to Section 13.8.

14.3  [***].



*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.


                                       82
<PAGE>
14.4  Conflicts. For so long as this Agreement is in effect, in the event of any
      conflict between the provisions this Article 18 of this Agreement and
      Article 11 of the License Agreement, the provisions of Article 14 of this
      Agreement shall control.

                                   ARTICLE 15

                                  MISCELLANEOUS

15.1  Governing Law. This Agreement shall be governed by and interpreted in
      accordance with the internal laws of the State of New York, without regard
      to its conflicts of laws rules.

15.2  Jurisdiction. With respect to any suit, action or proceeding relating to
      this Agreement (each, a "Proceeding"), each party hereto irrevocably (i)
      subject to the final sentence of this Section 15.2, agrees and consents to
      be subject to (A) in the case of any Proceeding commenced by Pfizer, the
      exclusive jurisdiction of the United States District Court for the
      Southern District of California or any California state court sitting in
      San Diego, California, United States of America (any such court, the
      "California Court"), and (B) in the case of any Proceeding commenced by
      Neurocrine, the exclusive jurisdiction of the United States District Court
      for the Southern District of New York or any New York state court sitting
      in New York, New York, United States of America (any such court, the "New
      York Court") and (ii) waives any objection which it may have at any time
      to the laying of venue of any Proceeding brought in any such California
      Court or New York Court (collectively, the "Courts") as provided in this
      Section 15.2, waives any claim that such Proceeding has been brought in an
      inconvenient forum and further waives the right to object, with respect to
      such Proceeding, that such Court does not have any jurisdiction over such
      party. Notwithstanding the foregoing: (a) if the Court adjudicating such


                                       83
<PAGE>
      Proceeding refuses for any reason to exercise jurisdiction over the
      dispute, either party shall be free to bring such Proceeding in any other
      Court in such state as provided above and, in the event such other Courts
      refuse for any reason to exercise jurisdiction over the dispute, either
      party shall be free to bring such Proceeding in any other court, and (b)
      if any party (the "initiating party") commences a Proceeding in any Court,
      the other party (the "defendant party") shall possess and retain the right
      to assert in that same Proceeding all claims and defenses that the
      defendant party may have against the initiating party, including without
      limitation all counterclaims and setoffs, and (c) in the case of any suits
      for specific performance or other injunctive relief, the parties will seek
      to bring such actions in the Courts as provided in the first sentence of
      this Section 15.2, except where the applicable Courts as a result of
      jurisdictional requirements cannot issue the specific performance
      requested in a timely manner.

15.3  Waiver. Any term or condition of this Agreement may be waived at any time
      by the party that is entitled to the benefit thereof, but no such waiver
      shall be effective unless set forth in a written instrument duly executed
      by or on behalf of the party or parties waiving such term or condition.
      Neither the waiver by any party of any term or condition of this Agreement
      nor the failure on the part of any party, on one or more instances, to
      enforce any of the provisions of this Agreement or to exercise any right
      or privilege, shall be deemed or construed to be a waiver of such term or
      condition for any similar instance in the future or of any subsequent
      breach hereof. All rights, remedies, undertakings, obligations and
      agreements contained in this Agreement shall be cumulative and none of
      them shall be a limitation of any other remedy, right, undertaking,
      obligation or agreement.

15.4  Notices. All notices, instructions and other communications hereunder or
      in connection herewith shall be in writing, shall be sent to the address
      below and shall be: (a) delivered personally; (b) sent by registered or
      certified mail, return receipt requested, postage prepaid; (c) sent via a
      reputable nationwide overnight courier service; or (d) sent by facsimile
      transmission. Any such notice, instruction or communication shall be
      deemed to have been delivered upon receipt if delivered by hand, three (3)
      Business Days after it is sent by registered or certified mail, return
      receipt requested, postage prepaid, one (1)


                                       84
<PAGE>
      Business Day after it is sent via a reputable nationwide overnight courier
      service, or when transmitted with electronic confirmation of receipt, if
      transmitted by facsimile (if such transmission is on a Business Day;
      otherwise, on the next Business Day following such transmission).

      Notices to Pfizer shall be addressed to:

                       PFIZER INC.

                       235 East 42nd Street
                       New York, New York  10017-5755
                       Attention:  President, Pfizer Pharmaceutical Group
                       Fax:  212-808-8652

      with a copy to:  Senior Vice President and General Counsel
                       Fax:  212-808-8924

      Notices to Neurocrine shall be addressed to:

                       NEUROCRINE BIOSCIENCES, INC.

                       10555 Science Center Drive
                       San Diego, California 92121-1102

                       Attention:  Chief Executive Officer and President

                       Fax:  858-658-7605

      with a copy to:  General Counsel

Either party may change its address by giving notice to the other party in the
manner provided above.

15.5  Entire Agreement. This Agreement (including Schedules), together with the
      License Agreement, contains the complete understanding of the parties with
      respect to the subject matter hereof and supersedes all prior
      understandings and writings relating to the Co-Promotion of the Products.
      None of the terms or this Agreement shall be amended, supplemented or
      modified except in writing signed by the parties hereto.



                                       85
<PAGE>
15.6  Headings. Headings in this Agreement are for convenience of reference only
      and shall not be considered in construing this Agreement. References to
      Sections and Schedules are to Sections and Schedules of this Agreement
      unless otherwise specified.

15.7  Severability. If and solely to the extent that any provision of this
      Agreement shall be invalid or unenforceable, or shall render this entire
      Agreement to be unenforceable or invalid, such offending provision shall
      be of no effect and shall not effect the validity of the remainder of this
      Agreement or any of its provisions; provided, however, the parties shall
      use their respective reasonable efforts to renegotiate the offending
      provisions to best accomplish the original intentions of the parties.

15.8  Registration and Filing of the Agreement. To the extent, if any, that a
      party concludes in good faith that it is required under applicable Laws to
      file or register this Agreement or a notification thereof with any
      Governmental Authority, including without limitation the US Securities and
      Exchange Commission, or the US Federal Trade Commission, in accordance
      with applicable Laws, such party may do so and shall provide the other
      party to this Agreement with a written copy of all proposed filings or
      registrations to allow for a reasonably sufficient time for review and
      comment by the other party. The other party shall cooperate in such filing
      or notification and shall execute all documents reasonably required in
      connection therewith. In such situation, the parties will request
      confidential treatment of sensitive provisions of the Agreement, to the
      extent permitted by Law. The parties shall promptly inform each other as
      to the activities or inquiries of any such Governmental Authority relating
      to this Agreement, and shall cooperate to respond to any request for
      further information therefrom.

15.9  Assignment. This Agreement and all rights and obligations granted
      hereunder shall not be assignable by any party without the prior consent
      of the other, except that (a) Pfizer may assign this Agreement in
      connection with a Divestiture Transaction, and (b) Pfizer may assign this
      Agreement (and after all amounts under the Loan Agreement have been paid
      in full and terminated, Neurocrine may assign this Agreement), in whole or
      in part, to any Affiliate of such party or to any successor to
      substantially all of such party's business or assets; provided, however,
      in the case of Pfizer and Neurocrine, the assigning

                                       86
<PAGE>
      party shall remain responsible for all obligations hereunder if its
      Affiliate shall fail to perform hereunder.

15.10 Successors and Assigns. This Agreement shall be binding upon and inure to
      the benefit of the parties hereto and their respective successors and
      permitted assigns.

15.11 Counterparts. This Agreement may be executed in any number of
      counterparts, each of which, when executed, shall be deemed an original
      and all of which together shall constitute one and the same instrument.

15.12 Force Majeure. In the event of strikes, lock-outs or other industrial
      disturbances, rebellions, mutinies, epidemics, landslides, lightning,
      earthquakes, fires, storms, floods, sinking, drought, civil disturbances,
      explosions, acts or decisions of duly constituted municipal, state or
      national Governmental Authorities or of courts of law, as well as
      impossibility to obtain equipment, supplies, fuel or other required
      materials, in spite of having acted with reasonable diligence, or by
      reason of any other causes, which are not under the control of the party
      requesting the abatement of performance, or causes due to unexpected
      circumstances which may not be possible to eliminate or overcome with due
      diligence by such party ("Force Majeure"), the parties agree that, if
      either of them find themselves wholly or partially unable to fulfill their
      respective obligations in this Agreement by reasons of Force Majeure, the
      party affected will advise the other party in writing of its inability to
      perform giving a detailed explanation of the occurrence of the event which
      excuses performance as soon as possible after the cause or event has
      occurred. If said notice is given, the performance of the party giving the
      notification, except for the payment of funds and except as otherwise
      expressly provided in this Agreement, shall be abated, and any time
      deadlines shall be extended, for so long as performance may be prevented
      by such event of Force Majeure. Except as otherwise expressly provided in
      this Agreement and except for the payment of funds that are due and
      payable, neither party shall be required to make up any performance that
      was prevented by Force Majeure.

15.13 Non-Solicitation of Employees. During the Co-Promotion Term, neither party
      shall, directly or indirectly, recruit, or solicit any employee of the
      other party with whom such

                                       87
<PAGE>
      party has come into contact or interacted for the purposes of performing
      this Agreement, without the prior consent of the other party, except
      pursuant to general solicitations not targeted at such employees.

15.14 Press Releases.

      (a)   Coordination. The parties agree on the importance of coordinating
            their public announcements respecting this Agreement and the subject
            matter hereof. Neurocrine and Pfizer will, from time to time, and at
            the request of the other party discuss and agree on the general
            information content relating to this Agreement and the License
            Agreement which may be publicly disclosed.

      (b)   Announcements. The joint press release announcing the signing of the
            transactions contemplated by this Agreement and the License
            Agreement is attached hereto as Schedule 15.14 and will be promptly
            disseminated following signing.

      (c)   In addition, Pfizer acknowledges that certain events related to the
            progress of the Collaboration may be material to Neurocrine and
            therefore, the parties agree to make public disclosures, whether by
            press release or publication, regarding the fact of the completion
            of Phase III Product Studies and top line data therefrom, the filing
            of an NDA, the First Approval with respect to the IR Product and the
            MR Product and the occurrence of any serious adverse events. The
            above-referenced releases may be Neurocrine releases or joint
            Neurocrine/ Pfizer releases at Pfizer's option, and the parties
            agree to jointly draft and agree on the content of such disclosure.
            Except as otherwise provided in this Section 15.14, neither party
            will make any public announcement regarding the fact of execution of
            this Agreement by the parties hereof, the terms of or events related
            this Agreement, and/or the collaboration (other than the
            peer-reviewed publications which are subject to the publication
            provisions set forth in Section 11.3) without the prior consent of
            the other. Notwithstanding the foregoing, a party may make any
            disclosure where in a party's reasonable legal opinion it is
            required by applicable Law or applicable stock exchange regulation
            or order or other ruling of

                                       88
<PAGE>
            a competent court, provided that prior to such disclosure, the
            disclosing party shall use reasonable efforts to notify the other
            party prior to making such disclosure, and will provide the other
            party with an opportunity to review and comment prior to release,
            provided the disclosing party shall not be required to delay such
            disclosures by more than forty-eight (48) hours to receive and
            discuss such comments, so long as the disclosing party has provided
            to the other party as much advance notice as is reasonably
            practicable under the circumstances. Each party agrees that it shall
            reasonably cooperate with the other with respect to all disclosures
            regarding this Agreement to the Securities Exchange Commission and
            any other governmental or regulatory agencies, including requests
            for confidential treatment of proprietary information of either
            party included in any such disclosure.

15.15 Third Party Beneficiaries. None of the provisions of this Agreement shall
      be for the benefit of or enforceable by any third party, including,
      without limitation, any creditor of either party hereto. No such third
      party shall obtain any right under any provision of this Agreement or
      shall by reason of any such provision make any claim in respect of any
      debt, liability or obligation (or otherwise) against either party hereto.

15.16 Relationship of the Parties. Each party shall bear its own costs incurred
      in the performance of its obligations hereunder without charge or expense
      to the other except as expressly provided in this Agreement. Neither party
      shall have any responsibility for the hiring, termination or compensation
      of the other party's employees or for any employee compensation or
      benefits of the other party's employees. No employee or representative of
      a party shall have any authority to bind or obligate the other party to
      this Agreement for any sum or in any manner whatsoever, or to create or
      impose any contractual or other liability on the other party without said
      party's approval. For all purposes, and notwithstanding any other
      provision of this Agreement to the contrary, Neurocrine's legal
      relationship under this Agreement to Pfizer shall be that of independent
      contractor. Nothing in this Agreement nor the License Agreement shall be
      construed to establish a relationship of partners or joint venturers
      between the parties.



                                       89
<PAGE>
15.17 Further Assurances. Following the date hereof, Neurocrine and Pfizer
      shall, and shall cause each of their respective Affiliates to, from time
      to time, execute and deliver such additional instruments, documents,
      conveyances or assurances and take such other actions as shall be
      necessary or otherwise reasonably requested by Pfizer or Neurocrine, to
      confirm and assure the rights and obligations provided for in this
      Agreement, and render effective the consummation of the transactions
      contemplated thereby provided however that neither party will be required
      under this Section 15.17 to deliver instruments, documents, conveyances or
      assurances of any third party.

               [The remainder of this page is intentionally blank]


                                       90
<PAGE>
      IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date first written above.

PFIZER INC.                                  NEUROCRINE BIOSCIENCES, INC.


By: /s/ Henry A. McKinnell                 By: /s/ Gary A. Lyons
   ----------------------------------         ----------------------------------
Name:   Henry A. McKinnell                 Name:   Gary A. Lyons
     --------------------------------           --------------------------------
Title:  Chairman of the Board              Title:  President and Chief
        and Chief Executive Officer                Executive Officer
      -------------------------------            -------------------------------








                                       91