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                                                                    EXHIBIT 10.7

                                                                  EXECUTION COPY

                           EXCLUSIVE LICENSE AGREEMENT

      THIS EXCLUSIVE LICENSE AGREEMENT (this "Agreement") is made effective the
7th day of November, 2001, by and between Deltanoid Pharmaceuticals, Inc., a
Delaware corporation (hereinafter called "DPI"), and Quatrx Pharmaceuticals
Company (hereinafter called "Licensee"), a corporation organized and existing
under the laws of the State of Delaware. DPI and Licensee are each individually
referred to herein as a "Party" and collectively as the "Parties".

      WHEREAS, DPI owns certain inventions that are described in the "Licensed
Patents" defined below, and DPI is willing to grant a license to Licensee under
all of the Licensed Patents and Licensee desires a license under all of them;

      NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth below, the parties covenant and agree as follows:

SECTION 1. DEFINITIONS.

      "Affiliate" shall mean each and every business entity controlling,
controlled by or under common control with a Party. For purposes of this
definition, "control" shall mean ownership, directly or indirectly, of more than
fifty percent (50%) of the voting or income interest of the applicable business
entity.

      "Agreement" has the meaning set forth in the first paragraph.

      "Claim" has the meaning set forth in Section 9.1.

      "Compound" shall mean either **************************
***************************************************
***************************, or ***********************************
*********************** as claimed in a Licensed Patent.

      "Confidential Information" has the meaning set forth in Section 7.1.

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      "Cosmetic Product" shall mean any product approved, made, used, sold and
marketed for nonprescription cosmetic applications, which does not contain a
Product Compound unless (a) such Product Compound is
***************************************, and (b) the concentration of
*************************************** in the applicable product is no greater
than *******************.

      "Development Plan" has the meaning set forth in Section 3.2.

      "Disclosing Party" has the meaning set forth in Section 7.1.

      "DPI" has the meaning set forth in the first paragraph.

      "Effective Date" shall mean the date first above written as the effective
date of this Agreement.

      "Exploratory Clinical Trial" shall have the meaning set forth in Section
3.1.

      "FDA" shall mean the United States Food and Drug Administration.

      "First Commercial Sale" shall mean the first sale of a Product to a third
party (other than an Affiliate or sublicensee) in a jurisdiction after
regulatory approval for such sale has been obtained from the appropriate
regulatory authorities in such jurisdiction.

      "Invention" has the meaning set forth in Section 8.1.

      "Inventor" has the meaning set forth in Section 8.1.

      "License Rights" has the meaning set forth in Section 2.2.

      "Licensed Patents" shall mean the patent applications and patents listed
in Exhibit A, which is attached hereto and is incorporated herein by reference,
and any foreign counterparts thereof, and any continuations,
continuations-in-part, divisions, re-issues, additions, renewals and extensions
thereof, and any patents issuing therefrom, all to the extent owned or licensed
by DPI or which DPI has the right to license or sublicense to Licensee.

      "Licensee" has the meaning set forth in the first paragraph.

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      "Licensee Notice" has the meaning set forth in Section 2.2.

      "Net Sales" shall mean the gross receipts from sales in any country less
deductions for: (i) transportation and insurance charges; (ii) sales and excise
taxes, tax, tariff, duty or any other governmental charges or duties paid; (ii)
normal and customary trade, quantity and cash discounts and rebates allowed;
(iii) sales commissions; (iv) allowances on account of rejection or return by
customers; (v) credits, rebates, charge-back rebates, reimbursements or similar
payments actually granted or given to wholesalers and other distributors, buying
groups, health care insurance carriers, governmental agencies and other
institutions; (vi) payments or rebates actually paid in connection with state or
federal Medicare, Medicaid or similar programs. However, except where the
sublicensee or Affiliate is the end-user, any sale to a sublicensee or Affiliate
shall be excluded from the computation of Net Sales, but any subsequent sale by
the sublicensee or Affiliate to a third party other than another sublicensee or
Affiliate shall be included in the computation of Net Sales.

      "Party" or "Parties" has the meaning set forth in the first paragraph.

      "Product" shall mean any product which contains a Compound as one of its
active ingredients, the use, sale, offer for sale, manufacture, or importation
of which, if unlicensed, would infringe one or more Valid Claims of a patent
within the Licensed Patents.

      "Product Compound" shall mean a Compound which is the active ingredient in
a Product.

      "Royalty Term" shall mean, with respect to a particular Product in any
jurisdiction, the period of time commencing on the First Commercial Sale of such
Product in such jurisdiction and ending upon the expiration of the last to
expire Licensed Patent containing a Valid Claim which would be infringed by the
manufacture, use, importation, offer for sale, or sale of such Product in such
jurisdiction.

      "Selected Compound" shall have the meaning set forth in Section 3.1.

      "Technical Information" shall mean any and all know-how, trade secret and
other information of a technical nature relating to any Product or potential
Product, which is in the possession of DPI as of the Effective Date, and which
is necessary

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or useful to Licensee in furtherance of the research, development, manufacture
or marketing of such Product or potential Product.

      "Valid Claim" shall mean a claim contained in an issued patent, which
claim has not expired and has not been held unenforceable, unpatentable or
invalid by an unappealable decision of a court or other governmental agency of
competent jurisdiction.

      "WARF" shall mean Wisconsin Alumni Research Foundation, a nonstock,
nonprofit Wisconsin corporation.

      "WARF Agreement" shall have the meaning set forth in Section 3.1.

      "WARF Compound" shall have the meaning set forth in Section 3.1.

SECTION 2. GRANT.

2.1. License. DPI hereby grants to Licensee a worldwide, exclusive (even as to
DPI) license, with the right to grant sublicenses, under the Licensed Patents to
a compound (including any metabolites discovered by Deltanoid) selected from
***, ***, or ***, to make, have made, use, sell, have sold, and import for
topical treatments (topical treatments do not include patch delivery systems or
mucous membrane delivery systems, such as a suppository, intended for systemic
treatment) of skin diseases (including treatments of skin, hair and nails). DPI
agrees not to sell, market, or license any of the compounds that it currently
owns or has right to use to any other company for the topical treatment of skin
disease, including psoriasis, while this license is in effect. DPI specifically
excludes from the foregoing license and reserves for itself the exclusive right
to, and the right to license others to, make, have made, use, sell, have sold,
or import any Cosmetic Product which contains ***. If the selected compound is
***, or ***, or ***, DPI specifically excludes from the foregoing license and
reserves for itself the exclusive right to, and the right to license others to,
make, have made, use, sell, have sold, or import any treatment of cancer or
renal osteodystrophy. DPI will, if at all possible in view of a prior agreement
with

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******************* dated *****************, avoid using the selected compound
for development as a topical treatment for cancer. *****************************
****************************************************************************
*****************************************************************************
***************************************. Further, if DPI finds a new use for any
of its compounds in topical application (includes skin, hair and nails), Quatrx
will have a 90-day option to license or reach an agreement to license such use
for development as set forth in Section 2.2. In the case of these options, a new
and separate license agreement must be negotiated. DPI specifically excludes
from the foregoing license and reserves for itself the exclusive right to, and
the right to license others to, make, have made, use, sell, have sold, or import
Products approved, made, use, sold, and marketed for systemic applications.
Within 30 days of the date hereof, DPI shall deliver to Licensee copies of all
materials consisting of the Licensed Patents and Technical Information and shall
provide to Licensee all Technical Information that is not in a tangible medium.

      2.2 Option. If, at any time prior to the first anniversary of the
Effective Date, DPI determines to grant a license under the Licensed Patents to
make, have made, use, sell, have sold, export or import any products for
systemic treatment of psoriasis, or other skin diseases (including treatments of
skin, hair, and nails), DPI shall notify the Licensee in a writing which
references this Section and which describes in detail the rights which DPI
desires to license. If within ** days of receipt of such a written notice from
DPI, Licensee notifies DPI in writing that it desires to obtain such a license
(the "Licensee Notice"), the Parties shall negotiate the terms of such a license
exclusively with each other and in good faith for a period of ** days from the
date of the Licensee Notice. If the Parties are unable to agree on the terms of
a license to the License Rights, DPI shall be free to negotiate with third
parties for a license to the License Rights provided, however, that DPI for a
period of not longer than one year shall not grant to any such third party a
license to such License Rights on terms which in aggregate are more favorable
than the Licensee indicated it would accept in the foregoing ** day period.

SECTION 3. DEVELOPMENT.

      3.1. Exploratory Development. Within 30 days of the receipt by Licensee of
the results of all currently ongoing experiments involving Compounds, which
experiments are being conducted by DPI or its employees, officers, agents or
representatives (the "Ongoing DPI Experiments"), Licensee and DPI shall select a

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Compound for treatment of psoriasis, (the "Selected Compound") to be used in
clinical development which may include an exploratory clinical trial which may
compare such Compound against a certain compound licensed by Licensee from WARF
(the "WARF Compound") pursuant to that certain agreement between WARF and
Licensee (the "WARF Agreement"), with the goal of selecting the best compound
for full scale clinical development (the "Exploratory Clinical Trial"). Licensee
and DPI shall agree on the protocol for such clinical trial, provided that DPI
acknowledges that Licensee may not be permitted to disclose to DPI certain
information obtained by Licensee from WARF relating to the WARF Compound.
Licensee shall use its best commercial efforts to conduct such exploratory
clinical trial. Licensee shall notify DPI if it is proceeding with further
clinical development of the Selected Compound within the earlier of (i) ****
following availability of the results of the Exploratory Clinical Trial or (ii)
**** after the availability of clinical trial material containing the Selected
Compound and the WARF Compound which is sufficient to dose the number of
patients projected to participate in the Exploratory Clinical Trial. If Licensee
fails to provide DPI with such notice within the foregoing time frame, then all
rights under the Licensed Patents shall revert to DPI, this Agreement shall be
deemed to be terminated, and Licensee shall transfer to DPI the results of the
Exploratory Development Plan, subject to any obligations Licensee has to WARF
under the WARF Agreement.

      3.2. Further Clinical Development; Diligence and Termination. Licensee
shall be responsible for funding the clinical development of the Selected
Compound. Licensee shall develop the Selected Compound using efforts comparable
to those efforts Licensee makes with respect to other compounds in its
development portfolio. If Licensee receives the results of the Ongoing DPI
Experiments and Licensee has not conducted any clinical development activity
(including, without limitation, filing of an IND or causing an investigator to
file an IND, contracting with third parties to provide services to Licensee for
such development, engaging in activities relating to preparation for manufacture
of the applicable Compound or beginning preparation of clinical study protocols
for any Compound) on any Compound prior to the six month anniversary of the
later of (i) the Effective Date or (ii) the date Licensee receives the results
of the Ongoing DPI Experiments, then this Agreement and Licensee's rights
hereunder shall be terminated.

Licensee and DPI have agreed on certain development milestones for the
development of the Selected Compound which are listed on the attached Exhibit B.
Within 30 days of the Effective Date, the parties shall agree on a development
plan

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for the development of the Selected Compound, which shall include the milestones
set forth on Exhibit B (such plan is hereinafter referred to as the "Development
Plan"). The Development Plan shall include projected dates by which certain
development activities shall be completed as well as the underlying assumptions
upon which such projections are based. Licensee shall provide DPI with a
quarterly report of the status of development of the Selected Compound and the
Parties shall, upon request, review the status of the development of the
Selected Compound as compared to the proposed Development Plan. The Parties
acknowledge and agree that the Development Plan shall be regularly reviewed and
modified to reflect the actual experience of Licensee in conducting development
of the Selected Compound. If, at any time after the end of the initial 2
quarters from the date of final selection of the Selected Compound, DPI provides
Licensee with written notice that Licensee has failed to adhere to the
milestones contained in the Development Plan for reasons unrelated to the safety
or efficacy of the Selected Compound, the availability of clinical supplies or
patient recruitment, or other reasons beyond the reasonable control of Licensee,
then Licensee shall have up to 1 quarter to provide a detailed written response
to these concerns, highlighting additional steps to be taken, if appropriate. In
the event that Licensee still has not met the milestones set forth in the
Development Plan for reasons unrelated to the safety or efficacy of the Selected
Compound, the availability of clinical supplies or patient recruitment, or other
reasons beyond the reasonable control of Licensee, DPI may terminate this
Agreement.

SECTION 4. CONSIDERATION.

      4.1. License Fee. Licensee agrees to pay to DPI a license fee of $50,000,
due within 2 business days of the Effective Date.

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      4.2. Milestones. Licensee shall make the following milestone payments to
DPI within 30 days after the first achievement of each of the following
milestones:

<TABLE>
<CAPTION>
                 Milestone                             Payment
                 ---------                             -------
<S>                                                  <C>
********************************************         $   *******

********************************************         $   *******

********************************************         $   *******

</TABLE>

The milestone payments received by DPI under this Section 4 shall be
non-refundable and non-creditable. Each milestone payment referred to in this
Section 4 shall be made only once, regardless of whether additional formulations
of Products are, or more than one Product is, developed or commercialized.

      4.3. Royalty. Licensee agrees to pay to DPI a royalty payment on Net Sales
of each Product sold by Licensee and its Affiliates and permitted sublicensees
in each calendar year in jurisdictions where a Valid Claim would be infringed by
the manufacture, use or sale of such Product in such jurisdiction according to
the following rates, and during the Royalty Term applicable to the particular
Product in such jurisdictions:

            *% for such Net Sales up to $****** per year.

            *% for such Net Sales in excess of $********** and less than $***
            ******* in each calendar year.

            *% for such Net Sales of $*********** or more in each calendar
            year.

In the event that Licensee notifies DPI under Section 3.1 that Licensee elects
to develop the WARF compound instead of the Selected Compound for uses covered
under this DPI license, then Licensee agrees to pay to DPI a percentage of

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Licensee's Net Sales of the WARF Compound for such uses equal to **% of the
royalty which Licensee would have been required to pay to DPI if the product
containing the WARF Compound was a Product under this Agreement, provided that
such percentage shall only apply to such Net Sales in jurisdictions where the
manufacture, use or sale of such product would infringe a patent licensed by
Licensee from WARF under the WARF Agreement. The period of time over which
Licensee shall make such payments to DPI shall commence on the First Commercial
Sale of the product containing the WARF Compound and shall end on the date that
such product can be made, used and sold without infringing the patents licensed
by Licensee from WARF under the WARF Agreement in all jurisdictions in which
Licensee is generating such Net Sales. This Section 4.3 shall survive the
termination or expiration of this Agreement other than a termination for breach
of this Agreement by DPI.

      4.4. Minimum Royalty. Licensee further agrees to pay to DPI a minimum
royalty on the sale of Products, but not on the sale of products containing WARF
Compounds, of (i) $*** for the first consecutive $*** period following the First
Commercial Sale of the first Product in the United States, (ii) $*** for the
second such *** period, (iii) $*** for the third such *** period, (iv) $*** for
the fourth such *** period, and (v) $*** for the fifth such *** period and all
subsequent *** periods during the Royalty Term applicable to such Products.
Royalties paid to DPI pursuant to Section 4.3 for Net Sales in the *** period
applicable to each minimum royalty amount shall be credited against each such
minimum royalty. The minimum royalty amounts shall be due and owing within 30
days of the end of the *** period applicable to each such minimum royalty
amount.

      4.5. Accounting; Payments.

            4.5.1. Licensee shall keep and maintain complete books and records
containing an accurate accounting in sufficient detail of all data required to
enable verification of earned royalties and other payments due hereunder.

            4.5.2. Within 30 days after the end of each calendar quarter,
Licensee shall remit to DPI a statement of Net Sales by Licensee and by its
sublicensees on account for such quarter, which statement shall be accompanied
by the payment due to DPI pursuant to Section 4.3.

            4.5.3. DPI may request that the financial statements of Licensee and
of its sublicensees relating to the sale of Products shall be audited annually
by a

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nationally recognized independent certified public accountant reasonably
acceptable to Licensee for the purpose of verifying the amount of royalty
payments due. Such examination of books and records of Licensee and its
sublicensees shall take place during regular business hours during the term of
this Agreement and for two (2) years after its termination, provided however,
that such an examination shall not take place more than once a year and shall
not cover records for more than the preceding three (3) years, and provided that
such accountant shall agree to keep confidential all the information obtained by
such accountant during such audit and shall report to DPI only as to the
accuracy of the royalty statements and payments. If such accountant shall find
an underpayment to DPI, presentation of a written statement substantiating the
underpayment shall be provided to Licensee. If Licensee is not in agreement with
the findings of the accountant selected by DPI, then Licensee shall so notify
DPI in writing within 30 days of receipt by Licensee of said findings, in which
case the parties shall jointly appoint, within a further period of 30 days, an
independent certified public accountant to validate, at Licensee's expense,
DPI's accountant's findings, and the decision of said independent accountant
shall be final. If said independent accountant verifies that an underpayment has
occurred, the amount due and interest (accruing at the prevailing prime rate of
interest for commercial loans published in the Wall Street Journal, Eastern
Edition, from the date payment was due through the date of actual payment to
DPI) shall be paid to DPI within thirty (30) days.

            4.5.4. All payments due to DPI under this Agreement shall be made in
United States dollars and shall be sent by Licensee to DPI to the attention of
"President" at the address shown in Section 10. If Licensee receives Net Sales
in currency other than United States dollars, royalty payments due to DPI on
account of Net Sales shall be converted into United States dollars at the
conversion rate for the foreign currency as published in the eastern edition of
The Wall Street Journal as of the last business day of the applicable calendar
quarter.

            4.5.5. Any income or other tax that Licensee hereunder, its
Affiliates or sublicensees are required to withhold and pay on behalf of DPI
hereunder with respect to the royalties payable under this Agreement shall be
deducted from and offset against said royalties prior to remittance to DPI;
provided, however, that in regard to any tax so deducted, the Licensee shall
give or cause to be given to DPI such assistance as may reasonably be necessary
to enable DPI to claim exemption therefrom or credit therefor, and in each case
shall furnish DPI proper evidence of the taxes paid on its behalf.

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SECTION 5. REPRESENTATIONS AND WARRANTIES.

      5.1. DPI represents and warrants that it is the owner or Licensee of the
Licensed Patents or otherwise has the right to grant the licenses granted to
Licensee in this Agreement. DPI further represents and warrants that it has
licensed some or all of the Licensed Patents from WARF pursuant to that certain
License Agreement dated as of April 7, 2000, as amended, between DPI and WARF
and that it will use its best efforts to maintain such License Agreement in good
standing.

      5.2. DPI shall request that WARF prepare, file, prosecute and maintain
patents and patent applications claiming the inventions claimed in the Licensed
Patents in jurisdictions requested by Licensee. Licensee shall notify DPI in
writing indicating those jurisdictions in which Licensee desires DPI to make or
maintain such patents or patent applications. DPI reserves the right to request
that WARF file a patent application, at its own expense, in any countries not
requested by Licensee pursuant to this Section 5.

      5.3. Each of the Parties hereby represents and warrants to the other Party
as follows:

            5.3.1. This Agreement is a legal and valid obligation binding upon
such Party and enforceable in accordance with its terms. The execution, delivery
and performance of this Agreement by such Party does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a Party
or by which it is bound, nor violate any law or regulation of any court,
governmental body or administrative or other agency having jurisdiction over it.

            5.3.2. Such Party has not granted, and during the term of this
Agreement will not grant, any right to any third party relating to its
respective patents and know-how which would conflict with the rights granted to
the other Party hereunder.

            5.3.3. In the course of the development of the Compounds, such Party
has not used, and during the term of this Agreement will not use, any employee
or consultant that is debarred by the FDA or, to the best of such Party's
knowledge, is the subject of debarment proceedings by the FDA.

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            5.3.4. The Parties recognize that each may perform some or all of
its obligations under this Agreement through Affiliates. Each Party shall remain
responsible for, and hereby guarantees, the performance by its Affiliates and
shall cause its Affiliates to comply with the provisions of this Agreement in
connection with such performance. In the event of any dispute arising from the
performance by an Affiliate under this Agreement, the Party having such a
dispute may proceed directly against the other Party, without any obligation to
first proceed against the Affiliate.

SECTION 6. TERM AND TERMINATION.

      6.1. The term of this license shall begin on the effective date of this
Agreement and continue until this Agreement is terminated as provided herein.

      6.2. Licensee may terminate this Agreement at any time by giving at least
90 days written and unambiguous notice of such termination to DPI. Such a notice
shall be accompanied by a statement of the reasons for termination. However,
Licensee may not terminate Section 4.3 pertaining to royalties on the WARF
Compound.

      6.3. If Licensee at any time defaults in the timely payment of any monies
due to DPI hereunder or commits any breach of any other covenant herein
contained, and Licensee fails to remedy any such breach or default within 30
days after written notice thereof by DPI, DPI may, at its option, terminate this
Agreement by giving written notice of termination to Licensee.

      6.4. This Agreement shall be automatically terminated upon the
commencement of an involuntary case or other proceeding against Licensee seeking
liquidation, reorganization or other relief with respect to Licensee or its
debts under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, and such case or proceeding remains unstayed and
undismissed for a period of sixty (60) days, or an order for relief is entered
against Licensee under the federal bankruptcy laws as now or hereafter in
effect.

      6.5. This Agreement shall be automatically terminated if Licensee
commences a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consent to the entry of an order for
relief in an involuntary case under any such law, or consents to the appointment
or taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or

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similar official) of Licensee or for any substantial part of Licensee's
property, or Licensee makes any general assignment for the benefit of creditors,
or takes any corporate action to authorize any of the foregoing.

      6.7. Upon the termination of this Agreement, Licensee shall remain
obligated to provide an accounting for and to pay royalties earned up to the
date of the termination and any minimum royalties shall be prorated as of the
date of termination by the number of days elapsed in the applicable 12 month
period.

      6.8. Waiver by either party of a single breach or default, or a succession
of breaches or defaults, shall not deprive such party of any right to terminate
this Agreement in the event of any subsequent breach or default.

SECTION 7. CONFIDENTIALITY.

      7.1. Except as specifically permitted hereunder or as required to
research, develop, manufacture or market Products or potential Products, each
Party hereby agrees to hold in confidence and not use on behalf of itself or
others all data, samples, technical and economic information (including the
economic terms hereof), commercialization, clinical and research strategies and
know-how provided by the other Party (the "Disclosing Party") for a period of
five years from the date of disclosure and all data, results and information
developed pursuant to the Collaboration and solely owned by the other Party
(collectively the "Confidential Information"), except that the term
"Confidential Information" shall not include:

                  (i) information that is or becomes part of the public domain
through no fault of the non-Disclosing Party or its Affiliates;

                  (ii) information that is obtained after the date hereof by the
non-Disclosing Party or one of its Affiliates from any third party which is
lawfully in possession of such Confidential Information and not in violation of
any contractual or legal obligation to the Disclosing Party with respect to such
Confidential Information;

                  (iii) information that is known to the non-Disclosing Party or
one or more of its Affiliates prior to disclosure by the Disclosing Party, as
evidenced by the non-Disclosing Party's written records; and

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                  (iv) information that is necessary to be disclosed to any
governmental authorities or pursuant to any regulatory filings, provided that in
such case the non-Disclosing Party notifies the Disclosing Party reasonably in
advance of such disclosure and cooperates with the Disclosing Party to minimize
the scope or content of such disclosure.

      7.2. The Parties shall cooperate in the publication of the results of the
development. DPI shall not issue any press releases or other communications to
the general public without the prior written consent of Licensee, except to the
extent required by law, rule or regulation, and in such event, DPI shall provide
Licensee with a copy of such press release or communication at least 5 business
days prior to release and shall in good faith consider all comments or suggested
edits made by Licensee.

      7.3. The obligations of Section 7.1 shall survive the expiration or
termination of this Agreement for a period of 5 years.

SECTION 8. INTELLECTUAL PROPERTY RIGHTS.

      8.1. Inventorship of any invention that is developed, discovered or made
by a Party, solely or jointly with the other Party (as applicable, the
"Inventor") pursuant to work conducted under this Agreement (an "Invention")
shall be determined in accordance with United States laws of inventorship.
Subject only to the license rights granted under this agreement, each Party
shall own the entire right, title and interest in and to any Invention made
solely by such Party's employees or agents, and all intellectual property rights
therein and shall own an undivided one-half interest in and to any Invention
made jointly by the employees or agents of both Parties, and all intellectual
property rights therein. Each Party shall promptly notify the other Party if it
determines that an Invention has been made, including any such jointly owned
Invention.

      8.2. With respect to any patent that only claims Inventions that are
solely-owned by one Party hereunder, the Inventor shall have the right, at its
option and expense, to prepare, file and prosecute in its own name any patents
with respect to any such Invention and to maintain any patents issued thereon.
In connection with any such prosecution efforts, the other Party agrees to
cooperate reasonably with the Inventor at the Inventor's expense in the
preparation and prosecution of all such patents and in the maintenance of any
patents issued. This obligation shall survive the expiration or termination of
this Agreement.

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      8.3. Licensee will have first right to control the preparation, filing and
prosecution of joint patents and of maintenance of patents issuing thereon, and
DPI shall cooperate reasonably with Licensee in such prosecution efforts.
Licensee shall pay all expenses in connection with its preparation, filing and
prosecution of such patents. Licensee shall, from time to time (no more often
than once per calendar quarter), notify DPI of the actual amount of
out-of-pocket expenses incurred in such efforts, and DPI shall promptly
thereafter pay Licensee **% of such out-of-pocket expenses. Notwithstanding the
foregoing, DPI shall have no obligation to pay any fees in connection with the
prosecution of any joint patent unless the filing of such joint patent is agreed
to in writing by DPI, provided, however, that if DPI refuses to agree to the
prosecution of a joint patent in any jurisdiction, DPI shall assign and shall be
deemed to have assigned to Licensee all of DPI's right, title and interest in
such patent and patent application in such jurisdiction.

      8.4. As used in this Section 8, "out-of-pocket expenses" shall mean direct
costs, excluding internal labor costs (and any indirect costs associated
therewith).

      8.5. Each Party hereby grants to the other an exclusive (except as to the
licensing Party), worldwide right and license under all Inventions, know-how and
all patents owned or controlled by such Party to make, have made, use, import
and export all Compounds and any product containing any Compound as an active
ingredient, to the extent necessary to conduct the development of the Compounds.

SECTION 9. INDEMNIFICATION.

      9.1. Each Party hereby agrees to save, defend and hold the other Party and
its agents and employees harmless from and against any and all costs, expenses
(including reasonable attorneys' fees and amounts paid in settlement), damages
and liabilities claimed by a third party ("Claim") resulting directly or
indirectly from activities conducted by the indemnifying Party, its agents or
sublicensees, but only to the extent such Claim result from the negligence or
willful misconduct or breach of this Agreement by such Party or its employees
and agents and only to the extent such Claim do not also result from the
negligence or willful misconduct or breach of this Agreement by the Party
seeking indemnification or its agents or sublicensees.

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<PAGE>

      9.2. In the event that a Party is seeking indemnification under this
Section 9, it shall inform the other Party of a Claim as soon as reasonably
practicable after it receives notice of the Claim, shall permit the indemnifying
Party to assume direction and control of the defense of the Claim (including the
right to settle the Claim solely for monetary consideration), and shall
cooperate as requested in the defense and settlement of the Claim. The
indemnified Party shall not voluntarily make any payment or incur any expense in
connection with any claim or suit without the consent of the indemnifying Party,
provided that if the indemnifying Party does not assume direction and control of
the defense of the Claim, the indemnified Party may assume direction and control
of the defense of the Claim and, if successful, shall be reimbursed by the
indemnifying Party for costs incurred in connection with such defense.

      9.3. The terms of this Section 9 shall survive the termination or
expiration of this Agreement.

SECTION 10. MISCELLANEOUS.

            10.1. Dispute Resolution.

            10.1.1. Informal Resolution Procedure. The Parties recognize that
disputes as to certain matters may from time to time arise during the term of
this Agreement which relate to either Party's rights and/or obligations. It is
the objective of the Parties to establish procedures to facilitate the
resolution of disputes arising under this Agreement in an expedient manner by
mutual cooperation and without resort to litigation, if possible. To accomplish
this objective, the Parties agree to follow the procedures set in this Section
10.1 if and when an issue or dispute arises under this Agreement.

            10.1.2. Senior Executive Discussion. If representatives of both
Parties, other than their respective chief executive officers, are unable to
resolve any issue or dispute arising within their authority within thirty (30)
days thereof, or upon any other dispute or issue regarding a Party's rights or
obligations under the Agreement, any Party may, by written notice to the other,
have such dispute or issue referred to their respective chief executive officers
for attempted resolution by good faith negotiations. Upon such referral of an
issue or dispute for resolution, such designated officers shall meet promptly
thereafter and shall use good faith efforts to attempt to resolve such dispute
or issue. If the Parties are unable to

                                       16

<PAGE>

resolve such dispute after referral to their respective chief executive
officers, then either Party may pursue any legal or equitable remedies available
to it.

      10.2. Assignment.

            10.2.1. Affiliates. Either Party may assign any of its rights or
obligations under this Agreement in any country to any Affiliates; provided,
however, that such assignment shall not relieve the assigning Party of its
responsibilities for performance of its obligations under this Agreement, and
further provided that if a proposed assignment would have an adverse financial
impact upon the other Party (e.g., by reason of changed tax treatment of
payments due under this Agreement), such assignment shall be subject to the
other Party's prior written consent.

            10.2.2. Merger, Acquisition Or Sale Of Assets. Subject to the terms
hereof, either Party may assign its rights or obligations under this Agreement
to a non-Affiliate only in connection with a merger or similar reorganization or
the sale of all or substantially all of its assets or the sale of all or
substantially all of its pharmaceutical and/or healthcare assets, or otherwise
without the prior written consent of the other Party. This Agreement shall
survive any such merger or reorganization of either Party with or into, or such
sale of assets to, another party and no consent for such merger, reorganization
or sale shall be required hereunder; provided, that in the event of such merger,
reorganization or sale, no intellectual property rights of the acquiring
corporation shall be included in the technology licensed hereunder.

            10.2.3. Binding Upon Successors And Assigns. This Agreement shall be
binding upon and inure to the benefit of the successors and permitted assigns of
the Parties. Any assignment not in accordance with this Agreement shall be void.

      10.3. Further Actions. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.

      10.4. No Trademark Rights. Except as otherwise provided herein, no right,
express or implied, is granted by this Agreement to use in any manner the name
DPI, Licensee or any other trade name or trademark of the other Party or its
Affiliates in connection with the performance of this Agreement.

                                       17

<PAGE>

      10.5. Notices. All notices hereunder shall be in writing and shall be
deemed given if delivered personally or by facsimile transmission (receipt
verified), telexed, mailed by registered or certified mail (return receipt
requested), postage prepaid, or sent by express courier service, to the Parties
at the following addresses (or at such other address for a Party as shall be
specified by like notice; provided, that notices of a change of address shall be
effective only upon receipt thereof).

      If to Licensee, addressed to:
           Quatrx Pharmaceuticals Company

           5430 Data Court, Suite 300
           Ann Arbor, MI 48108
           Attention: CEO
           Telephone: 734-913-0743
           Telecopy: 734-913-9900

      With a copy to:
           Butzel Long
           350 South Main Street, Suite 300
           Ann Arbor, MI 48104
           Attention: Jeffery M. Brinza, Esq.
           Telephone: 734-213-3605
           Telecopy: 313-225-7080

      If to DPI, addressed to:
           Deltanoid Pharmaceuticals, Inc.
           645 Science Drive
           Madison, WI 53711
           Attention: President
           Telephone: 608-238-7710
           Telecopy: 608-238-7715

                                       18

<PAGE>

      With a copy to:
           Michael Best & Friedrich LLP
           One South Pinckney Street, Suite 700
           Madison, WI 53703
           Attention: Gregory J. Lynch, Esq.
           Telephone: 608-257-3501
           Telecopy: 608-283-2275

      10.6. Limitation Of Liability. IN NO EVENT SHALL EITHER PARTY OR ITS
RESPECTIVE AFFILIATES AND PERMITTED SUBLICENSEES BE LIABLE FOR SPECIAL,
EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES, WHETHER IN CONTRACT, WARRANTY,
TORT, STRICT LIABILITY OR OTHERWISE, except to the extent such Party may be
required to indemnify the other Party from such damages claimed by third parties
under Article 9.

      10.7. Waiver. Except as specifically provided for herein, the waiver from
time to time by either of the Parties of any of their rights or their failure to
exercise any remedy shall not operate or be construed as a continuing waiver of
same or of any other of such Party's rights or remedies provided in this
Agreement.

      10.8. Severability. If any term, covenant or condition of this Agreement
or the application thereof to any Party or circumstance shall, to any extent, be
held to be invalid or unenforceable, then (i) the remainder of this Agreement,
or the application of such term, covenant or condition to the Parties or under
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law;
and (ii) the Parties hereto covenant and agree to renegotiate any such term,
covenant or application thereof in good faith in order to provide a reasonably
acceptable alternative to the term, covenant or condition of this Agreement or
the application thereof that is invalid or unenforceable, it being the intent of
the Parties that the basic purposes of this Agreement are to be effectuated.

      10.9. Ambiguities. Ambiguities, if any, in this Agreement shall not be
construed against any Party, irrespective of which Party may be deemed to have
authored the ambiguous provision.

                                       19

<PAGE>

      10.10. Governing Law. This Agreement is made pursuant to and shall be
governed by and construed in accordance with the laws of the State of Michigan,
United States, without reference to conflicts of laws' rules or principles.

      10.11. Bankruptcy Provision. All rights and licenses granted by DPI to
Licensee under or pursuant to this Agreement 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 in Section 101 of the Bankruptcy
Code. The Parties agree that Licensee, as exclusive licensee of such rights
under this Agreement, shall retain and may fully exercise all of its rights and
elections under the Bankruptcy Code. The Parties further agree that, in the
event of the commencement of a bankruptcy proceeding by or against DPI under the
Bankruptcy Code, Licensee 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 its
possession, shall be promptly delivered to Licensee (i) upon such commencement
of a bankruptcy proceeding, unless DPI elects to continue to perform all of its
obligations under this Agreement; or (ii) if not delivered under (i) above, upon
rejection of this Agreement by or on behalf of DPI.

      10.12. Headings. The Section headings contained herein are for the
purposes of convenience only and are not intended to define or limit the
contents of said Sections.

      10.13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

      10.14. Entire Agreement. This Agreement and all exhibits attached hereto,
and all documents delivered concurrently herewith, set forth all the covenants,
promises, agreements, warranties, representations, conditions and understandings
between the Parties hereto with respect to the subject matter hereof and
supersede and terminate all prior agreements and understanding between the
Parties as to such subject matter. There are no covenants, promises, agreements,
warranties, representations, conditions or understandings, either oral or
written, between the Parties with respect to such subject matter other than as
set forth herein and therein. No subsequent alteration, amendment, change or
addition to this Agreement shall be binding upon the Parties hereto unless
reduced to writing and signed by the respective authorized officers of the
Parties. This Agreement shall

                                       20

<PAGE>

not constitute an amendment of either of the existing collaboration agreements
between the Parties, each of which will continue in full force and effect.

      10.15. Independent Contractors. Each Party acknowledges that neither it
nor any of its employees are employees of the other Party and that neither it
nor any of its employees are eligible to participate in any employee benefit
plans of the other Party. Each Party further acknowledges that neither it nor
any of its employees are eligible to participate in any such benefit plans even
if it is later determined that its or any of its employees' status during the
period of this Agreement was that of an employee of the other Party. In
addition, each Party hereby waives any claim that it may have under the terms of
any such benefit plans or under any law for participation in or benefits under
any of the other Party's benefit plans.

      10.16 Use Of Names. Neither Party shall use the name of the other Party in
relation to this transaction in any public announcement, press release or other
public document without the written consent of such other Party, which consent
shall not be unreasonably withheld or delayed; provided, however, that either
Party may use the name of the other Party in any document required to be filed
to obtain regulatory approval or to comply with applicable laws, rules or
regulations.

      10.17. Force Majeure. Neither Party shall lose any rights hereunder or be
liable to the other Party for damages or losses on account of failure of
performance by the defaulting Party if the failure is occasioned by government
action, war, fire, earthquake, explosion, flood, strike, lockout, embargo, act
of God, or any other similar or dissimilar cause beyond the control of the
defaulting Party, provided that the Party claiming force majeure has exerted all
reasonable efforts to avoid or remedy such force majeure.

      IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
on the dates indicated below.

QUATRX PHARMACEUTICALS                      DELTANOID
COMPANY                                     PHARMACEUTICALS, INC.

By:      /s/ Robert L. Zerbe                By:     /s/ Hector F. DeLuca
       -------------------------                   -----------------------------
       (Signature)                                          (Signature)

         Robert L. Zerbe                             Hector F. DeLuca
       -------------------------                   -----------------------------
       (Print Name)                                         (Print Name)

Title: Chief Executive Officer              Title: President and CEO

                                       21

<PAGE>

                                    EXHIBIT A

                                LICENSED PATENTS

<TABLE>
<CAPTION>
                                                         APPLICATION
REFERENCE                    PATENT        ISSUE           SERIAL
 NUMBER        COUNTRY       NUMBER         DATE           NUMBER
<S>            <C>          <C>         <C>              <C>
                  ***         ***           ***             ***
                  ***         ***           ***             ***
                  ***                                       ***
                  ***                                       ***
                  ***                                       ***
                  ***         ***           ***             ***
                  ***         ***           ***             ***
                  ***         ***           ***             ***
                  ***         ***           ***             ***
                  ***         ***
                  ***         ***
</TABLE>

-----------
*     ***


                                       22

<PAGE>

                                    EXHIBIT B

                   QUATRx/ DELTANOID TOPICAL PSORIASIS PROGRAM

KEY MILESTONE ESTIMATES FOR EARLY DEVELOPMENT

<TABLE>
<CAPTION>
                  KEY ACTIVITIES                                         ESTIMATED COMPLETION
-------------------------------------------------       -------------------------------------------------
<S>                                                     <C>
***                                                     ***

***                                                     ***

***                                                     ***

***                                                     ***

***                                                     ***

***                                                     ***

</TABLE>

***

                                       23