[*] indicates that a confidential portion of the text of this agreement
     has been omitted.


AMENDMENT NUMBER ONE TO TECHNOLOGY ACQUISITION AGREEMENT

     THIS AMENDMENT NUMBER ONE TO TECHNOLOGY ACQUISITION AGREEMENT is entered
into as of December 8, 1999, by and between XOMA (US) LLC ("XOMA") and Connetics
Corporation ("Connetics" or "CT").

     A.   XOMA (under the name "XOMA Corporation") and Connetics (under the name
          "Connective Therapeutics, Inc.") are parties to a Technology
          Acquisition Agreement effective as of June 3, 1994 (the
          "XOMA/Connetics Agreement"), and an Assignment and Assumption
          Agreement effective as of June 3, 1994, pursuant to which XOMA
          assigned to Connetics and Connetics assumed XOMA's rights and
          obligations under that certain Research Collaboration and License
          Agreement between XOMA and Dr. Arthur A. Vandenbark ("Vandenbark")
          effective February 27, 1990 (the "1990 Research Agreement") and that
          certain License Agreement between XOMA and Vandenbark effective
          February 27, 1990 (the "1990 License Agreement") (collectively, the
          "Assigned Agreements").

     B.   Connetics desires to assign all of its rights, title and interest in
          and to the Agreements to The Immune Response Corporation ("IRC") and
          XOMA is willing to agree to such assignment.

     C.   Prior to assuming Connetics' obligations under the Assigned
          Agreements, IRC has requested that certain amendments be made to the
          Assigned Agreements, and XOMA and Connetics agree to such changes in
          return for consideration from IRC.

         NOW, THEREFORE XOMA and Connetics hereby agree as follows:

                                    AGREEMENT

     Section 1 of the XOMA/Connetics Agreement is hereby amended to add the
following sections:


<PAGE>
                                      -2-

          1.23 "Affiliate" shall mean, with respect to any Person, any other
     Person which directly or indirectly controls, is controlled by, or is under
     common control with, such Person. A Person shall be regarded as in control
     of another Person if it owns, or directly or indirectly controls, greater
     than fifty percent (50%) of the voting stock or other ownership interest of
     the other Person, or if it directly or indirectly possesses the power to
     direct or cause the direction of the management and policies of the other
     Person by any means whatsoever.

          1.24 "New Drug Application" or "NDA" shall mean a New Drug
     Application, as defined in the U.S. Food, Drug and Cosmetic Act and its
     regulations promulgated thereunder, and any corresponding foreign
     application, registration or certification.

          1.25 "Pivotal Trial" shall mean a clinical trial that is designed to
     provide data establishing the safety and efficacy of a Product in support
     of an NDA, PLA or BLA.

          1.26 "Product License Application" or "PLA" shall mean a Product
     License Application, as defined in the U.S. Food, Drug and Cosmetic Act and
     the regulations promulgated thereunder, and any corresponding foreign
     application, registration or certification.

          1.27 "Valid Claim" shall mean (a) an issued claim under an issued
     patent within the Patent Rights, which has not (i) expired or been
     canceled, (ii) been declared invalid by an unreversed and unappealable
     decision of a court or other appropriate body of competent jurisdiction,
     (iii) been admitted to be invalid or unenforceable through reissue,
     disclaimer otherwise, or (iv) been abandoned, and (b) a claim of a patent
     application included within the Patent Rights as of the Effective Date.

     Section 2. Section 1.2 of the XOMA/Connetics Agreement is hereby amended to
read in its entirety as follows:

          1.2 "Agreement" shall mean this Technology Acquisition Agreement dated
     as of June 3, 1994, as amended December 8, 1999.

     Section 3. Section 1.3 of the XOMA/Connetics Acquisition Agreement is
hereby amended to read in its entirety as follows:


<PAGE>
                                      -3-

          1.3 "Assignment and Assumption Agreement" shall mean the agreement
     whereby XOMA assigned to CT its rights under and CT assumes XOMA's
     obligations under the Vandenbark License Agreement as provided in Section
     3.3 which is attached as Exhibit A to the XOMA/Connetics Agreement and
     incorporated by reference therein.

     Section 4. Section 1.6 of the XOMA/Connetics Agreement is hereby deleted.

     Section 5. Section 1.9 of the XOMA/Connetics Agreement is hereby deleted.

     Section 6. Section 1.10 of the XOMA/Connetics Agreement is hereby amended
to read in its entirety as follows:

          1.10 "Net Sales" shall mean, with respect to any Product, the invoiced
     sales price of such Product billed by CT, its Affiliates or licensees of
     the TCR Technology to customers who are not Affiliates, less (to the extent
     incurred and absorbed by CT, its Affiliates or any such licensee) (a)
     credits, allowances, discounts and rebates to, and chargebacks from the
     account of, such customers for spoiled, damaged, out-dated, rejected or
     returned Product; (b) transportation and insurance costs incurred in
     transporting such Product in final form to such customers; (c) actual cash,
     quantity and trade discounts, rebates and other price adjustments or
     reduction programs; (d) sales, use, value-added and other direct taxes, or
     any other governmental charge imposed upon the production, importation, use
     or sale of the Product; (e) customs, duties, surcharges and other
     governmental charges incurred in the exportation or importation of such
     Product; and (f) bad debts accruals.

     Section 7. Section 1.13 of the XOMA/Connetics Agreement is hereby amended
to read in its entirety as follows:

          1.13 "Patents" shall mean (a) all United States and foreign (including
     regional authorities such as the European Patent Office) regular or
     provisional patent applications and issued patents listed on Schedule A;
     (b) all United States and foreign patents that have issued or issue from
     such patent applications, including utility, model and design patents and
     certificates of invention; (c) all divisionals, continuations,
     continuations-in-part, reissues, reexaminations, renewals, extensions or
     additions to any such patents and patent applications described in clauses
     (a) or (b) above.

     Section 8. Section 1.14 of the XOMA/Connetics Agreement is hereby deleted.


<PAGE>
                                      -4-

     Section 9. Section 1.16 of the XOMA/Connetics Agreement is hereby amended
to read in its entirety as follows:

          1.16 "Product" shall mean a composition or a product the manufacture,
     use, offer for sale, sale or import of which is within the scope of a Valid
     Claim.

     Section 10. Section 1.18 of the XOMA/Connetics Agreement is hereby amended
to read in its entirety as follows:

          1.18 "TCR Related Improvements" shall mean all technology and know-how
     developed by or on behalf of CT prior to December 8, 1999, to the extent
     such technology and know-how are related to the TCR Technology, other than
     TCR Sole Improvements.

     Section 11. Section 1.19 of the XOMA/Connetics Agreement is hereby amended
to read in its entirety as follows:

          1.19 "TCR Sole Improvements" shall mean all technology and know-how
     developed by or on behalf of CT prior to December 8, 1999, to the extent
     such technology and know-how are improvements of the TCR Technology and may
     have applications related to the TCR Technology.

     Section 12. Section 1.20 of the XOMA/Connetics Agreement is hereby amended
to read in its entirety as follows:

          1.20 "TCR Technology" shall mean the Patents and all other technology
     and know-how developed, owned or controlled by XOMA, including that
     technology acquired by XOMA pursuant to the Vandenbark Agreements and that
     technology described in Exhibit E to this Agreement.

     Section 13. Section 1.21 of the XOMA/Connetics Agreement is hereby amended
to read in its entirety as follows:

          1.21 "Vandenbark License Agreements" shall mean the Research
     Collaboration and License Agreement, between Dr. Vandenbark and XOMA dated
     as of February 27, 1990, and any and all amendments thereto.

     Section 14. Article 2 of the XOMA/Connetics Agreement is hereby amended to
read in its entirety as follows:


<PAGE>

                                      -5-

          2.  Assignment of TCR Technology.
              ----------------------------

          Subject to the terms and conditions of, and for the consideration set
     forth in this Agreement, XOMA, effective as of the Closing, did sell,
     convey, assign, transfer and deliver to CT and CT shall purchase and
     acquire from XOMA all right, title and interest in and to the TCR
     Technology, including without limitation the right to sue for and collect
     upon past infringements (the "Assignment"). The Assignment includes the
     right to all preclinical and clinical data related to a Product, which XOMA
     owned or controlled as of the Closing. XOMA agrees to execute and deliver
     to CT all instruments necessary to evidence and document such Assignment to
     CT as set forth in Section 6.5. XOMA hereby appoints CT its
     attorney-in-fact to execute and deliver on behalf of XOMA all such
     instruments upon XOMA's breach of its obligations under this Section 2,
     which breach is not cured within 30 days of receipt by XOMA of written
     notice from CT.

     Section 15. Section 3.2 of the XOMA/Connetics Agreement is hereby deleted.

     Section 16. Section 3.3 of the XOMA/Connetics Agreement is hereby amended
to read in its entirety as follows:

          3.3 Assumption of Vandenbark License Agreement. As partial
     consideration for the purchase of the TCR Technology, CT shall assume and
     agree to perform all of the obligations of XOMA under the Vandenbark
     License Agreement; and, at Closing, CT shall execute and deliver to XOMA
     for delivery to Vandenbark the Assignment and Assumption Agreement in the
     form attached as Exhibit A to this Agreement. From and after the Closing
     Date, CT shall indemnify and hold harmless (except as set forth below) XOMA
     from all claims of loss or damage of any nature whatsoever arising out of
     or in connection with the Vandenbark License Agreement; provided, however,
     that XOMA shall indemnify and hold harmless CT from all claims of loss or
     damage of any nature whatsoever arising out of or in connection with any
     breach by XOMA of its obligations under the Vandenbark License Agreement.

     Section 17. Section 5.1 of the XOMA/Connetics Agreement is hereby amended
to read in its entirety as follows:

          5.1  Amount of Royalty.
               -----------------

          5.1.1 CT shall pay XOMA a royalty equal to [*] of Net Sales in each
     country where Products are sold by CT, its Affiliates and licensees.


<PAGE>

                                      -6-

          For purposes of Connetics' royalty obligations pursuant to Section
     5.1.1, in the event that Connetics materially narrows the scope of or
     abandons a claim within the Patent Rights, then the narrowed claim in the
     form existing as of the Effective Date or the abandoned claim in the form
     existing as of the Effective Date, as applicable, shall be considered a
     Valid Claim with respect to such Product for purposes of this Agreement for
     a period of [*] after the first commercial sale of such Product.
     Notwithstanding the foregoing, Connetics shall not abandon claims within
     the Patent Rights prior to [*].

     Section 18. Section 5.2 of the XOMA/Connetics Agreement is hereby amended
to read in its entirety as follows:

          5.2 Term of Royalty Payments. Royalty payments shall continue to
     accrue and be payable with respect to Net Sales of Products and will
     automatically expire on a country-by-country basis on the later of (i) [*]
     from first commercial sale of a Product in any country or (ii) the
     expiration (or revocation) of the last to expire (or be revoked) of the
     Valid Claims in such country with respect to a Product.

     Section 19. Section 5.3 of the XOMA/Connetics Agreement is hereby deleted.

     Section 20. Section 5.4 of the XOMA/Connetics Agreement is hereby amended
to read in its entirety as follows:

          5.4 Reports. During the term of this Agreement following the first
     commercial sale of a Product by CT or its Affiliates, or the grant of a
     sublicense hereunder by CT or its Affiliates, CT shall furnish to XOMA a
     quarterly written report showing in reasonably specific detail the
     calculation of amounts payable, if any, which shall have accrued hereunder
     during the reporting period. With respect to sales of Products invoiced or
     revenues received in United States dollars, all amounts shall be expressed
     in United States dollars. With respect to sales of Products invoiced or
     revenues received in a currency other than United States dollars, all
     amounts shall be expressed in the domestic currency of the party making the
     sale together with the United States dollar equivalent of the amounts
     payable, calculated using the average closing buying rate for such currency
     published in the United States Western Edition of The Wall Street Journal
     under the heading "Currency Trading - Exchange Rates" on the last business
     day of each month in the quarter prior to the date of payment. Reports
     shall be due on the thirtieth (30th) day following the close of each
     calendar quarter. CT shall keep complete and accurate records in sufficient
     detail to properly permit the calculation of amounts payable hereunder to
     be determined.


<PAGE>
                                      -7-

     Section 21. Section 5.5 of the XOMA/Connetics Agreement is hereby amended
to read in its entirety as follows:

          5.5 Exchange Control. If at any time legal restrictions prevent the
     prompt remittance by CT of part or all amounts with respect to any country
     where a Product is sold, the parties shall use their reasonable commercial
     efforts, in cooperation with the applicable authorities in such country or
     otherwise, to facilitate payment of all royalties affected thereby. If,
     notwithstanding the good faith efforts of the parties, such remittance is
     prevented, CT shall have the right, in its sole discretion, to make such
     payments by depositing the amount thereof in local currency to XOMA's
     account in a bank or other depository institution in such country.

     Section 22. Section 5.6 of the XOMA/Connetics Agreement is hereby amended
to read in its entirety as follows:

          5.6 Records. CT shall keep for four (4) years from the date of each
     payment of amounts due pursuant to Section 5.1 complete and accurate
     records of sales and all other information necessary to calculate Net Sales
     of each Product in sufficient detail to allow the accrued royalties to be
     determined accurately. XOMA shall have the right to cause an independent,
     certified public accounting firm of nationally recognized standing (who has
     executed a confidentiality agreement with CT reasonably acceptable to CT)
     to audit such records at the place or places of business where such records
     are customarily kept in order to verify the accuracy of the reports of Net
     Sales and payments for the preceding four years. Such audits may be
     exercised during normal business hours once a year upon 30 days' advance
     written notice to CT. The accounting firm shall disclose to XOMA only
     whether the reports are correct or not and the specific details concerning
     any discrepancies. No other information shall be shared. XOMA shall bear
     the full cost of such audit unless such audit discloses a variance of more
     than 5% from the amount of the payments due under Section 4.1 of this
     Agreement, in which event, CT shall bear the full cost of such audit and
     shall pay to XOMA the amount payable. XOMA shall not disclose confidential
     information concerning payments and reports, and all information learned in
     the course of any audit or inspection unless such information is or becomes
     publicly known or available (unless such information becomes publicly known
     or available through breach of this Agreement), except to the extent
     necessary for XOMA to reveal such information in order to enforce its
     rights under this Agreement or if disclosure is required by law.

     Section 23. Section 5.7 of the XOMA/Connetics Agreement is hereby deleted.


<PAGE>
                                      -8-

     Section 24. Section 6.1 of the XOMA/Connetics Agreement is hereby amended
to read in its entirety as follows:

          6.1 CT hereby assumes sole responsibility for the prosecution,
     maintenance, enforcement and defense of the Patent Rights and the TCR
     Technology. CT shall use its commercially reasonable efforts to prosecute
     and maintain the Patent Rights consistent with CT's patent practices. XOMA
     shall assist CT, to the extent of any reasonable request of CT and at CT's
     expense, in CT's prosecution and maintenance of the Patent Rights in any
     and all countries, and to vest title thereto in CT or its successors and
     assigns. CT shall reimburse XOMA for all Costs incurred by XOMA under this
     Section 6.1; provided, however, that such assistance by XOMA which is
     reasonable and not costly shall be without charge to CT.

     Section 25. Section 6.2 of the XOMA/Connetics Agreement is hereby deleted.

     Section 26. Section 6.3 of the XOMA/Connetics Agreement is hereby deleted.

     Section 27. Section 7 of the XOMA/Connetics Agreement is hereby amended to
read in its entirety as follows:

          7.  Diligence Milestones.
              --------------------

          7.1 CT shall use its commercially reasonable efforts to commence (or
     to cause its Affiliate or licensee of the TCR Technology to commence) the
     first Pivotal Trial of a Product on or before [*]. For purposes of this
     provision, "commence" shall mean the date the first patient is enrolled. CT
     shall use its commercially reasonable efforts to submit (or to cause its
     Affiliate or licensee of the TCR Technology to submit) an NDA, PLA or BLA
     to the FDA by or before [*] .

          7.2 If CT is unable to achieve either of the diligence milestones
     prior to the applicable dates set forth in Section 7.1 for reasons outside
     of CT's reasonable control, CT shall prepare and submit to XOMA a
     reasonable plan for the continued diligent development of Products and a
     revised schedule for achieving the remaining diligence milestones (which
     shall extend the applicable dates to accommodate the delay caused by such
     reasons outside of CT's reasonable control).

          7.3 If (a) CT is unable to achieve either of the diligence milestones
     prior to the applicable dates set forth in Section 7.1 other than for
     reasons outside of CT's control, or (b) CT is unable to achieve remaining
     diligence milestones prior to the revised


<PAGE>
                                      -9-

      schedule submitted under Section 7.2, CT shall either (i) at its option in
      its sole  discretion,  make a one-time  payment to XOMA of $1,000,000,  or
      (ii)  otherwise,  convey to XOMA CT's rights in the TCR Technology and TCR
      Sole  Improvements  (and  transfer to XOMA of the know-how  within the TCR
      Technology and TCR Sole  Improvements).  In either event, CT shall have no
      further diligence obligations under this Agreement.

     Section 28. Section 10 of the XOMA/Connetics Agreement is hereby deleted in
its entirety.

     Section 29. Section 15.2 of the XOMA/Connetics Agreement is hereby deleted.

     Section 30. During the term of the XOMA/Connetics Agreement, neither XOMA
nor any of its Affiliates shall take any action or initiate any proceeding to
prevent the issuance of, invalidate, revoke or otherwise render unenforceable
any of the Patent Rights (as defined in the Assignment Agreement dated as of
December 8, 1999, between IRC and Connetics). Within ninety (90) days after the
date hereof, XOMA and its Affiliates shall terminate, dismiss and withdraw all
such actions and proceedings which were taken or initiated by it or any of its
Affiliates on or before the date hereof.

     Section 31. Without limiting the rights and remedies of IRC at law, in
equity or otherwise, if XOMA or any of its Affiliates (a) takes during the term
of the XOMA/Connetics Agreement any action or initiates any proceeding to
prevent the issuance of, invalidate, revoke or otherwise render unenforceable
any of the Patent Rights (as defined in the Assignment Agreement dated as of
December 8, 1999, between IRC and Connetics), or (b) fails within ninety (90)
days after the date hereof to terminate, dismiss and withdraw any such action or
proceeding which was taken or initiated by it or any of its Affiliates on or
before the date hereof, then, if IRC is not itself in material breach of this
the XOMA/Connetics Agreement or the IRC/XOMA Agreement, within ten (10) days
after written notice from IRC, (x) XOMA shall refund to IRC all amounts paid by
IRC to XOMA under the Agreement dated as of the date hereof, between IRC and
XOMA (the "IRC/XOMA Agreement"); (y) XOMA shall sell, assign and transfer to IRC
(at no cost to IRC) the number of shares of Common Stock of IRC issued to XOMA
under Section 3.1.2 of the IRC/XOMA Agreement (or if XOMA no longer owns the IRC
shares, XOMA shall pay to IRC an amount equal to the full amount of
consideration received for the sale of such shares); and (z) if IRC is not
itself in material breach of the XOMA/Connetics Agreement or the IRC/XOMA
Agreement, IRC(z) IRC shall have no further obligation to pay any amounts to
XOMA under the XOMA/Connetics Agreement or the IRC/XOMA Agreement.


<PAGE>
                                      -10-

     Section 32. Without limiting the rights and remedies of IRC at law, in
equity or otherwise, if Connetics, Vandenbark or any of their respective
Affiliates (a) takes during the term of the XOMA/Connetics Agreement any action
or initiates any proceeding to prevent the issuance of, invalidate, revoke or
otherwise render unenforceable any of the Patent Rights (as defined in the
Assignment Agreement dated as of December 8, 1999, between IRC and Connetics),
or (b) fails within ninety (90) days after the date hereof to terminate, dismiss
and withdraw any such action or proceeding which was taken or initiated by it or
any of its Affiliates on or before the date hereof, then, if IRC is not itself
in material breach of the XOMA/Connetics Agreement or the IRC/XOMA Agreement,
IRC shall have no further obligation to pay any amounts to XOMA under Section
3.1.1 of the IRC/XOMA Agreement.

     Section 33. IRC shall be a third party beneficiary of the provisions of
Sections 30, 31 and 32 of this Amendment.

     Section 34. Except as specifically modified or amended hereby, the
XOMA/Connetics Agreement shall continue in full force and effect and, as so
modified or amended, is hereby ratified, confirmed and approved. No provision of
this Amendment may be modified or amended except expressly in a writing signed
by both parties nor shall any terms be waived except expressly in a writing
signed by the party charged therewith. This Amendment shall be governed in
accordance with the laws of the State of California, without regard to
principles of conflicts of laws.


<PAGE>



     IN WITNESS WHEREOF, XOMA and Connetics have entered into this Amendment
Number One to Technology Acquisition Agreement as of the date first written
above.

"XOMA"                                   "Connetics"

XOMA (US) LLC                            Connetics Corporation
                                         a Delaware corporation


By:______________________________       _______________________________________
    Name:                               Thomas G. Wiggans
    Title:                              President and Chief Executive Officer