<PAGE>   1

                                                                    EXHIBIT 10.8

                                                                    CONFIDENTIAL


                            LICENSE AGREEMENT BETWEEN


                              ARENA PHARMACEUTICALS


                                       AND


                           SS PHARMACEUTICAL CO., LTD.



                                Table of Contents


<TABLE>
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<S>                                                                                                 <C>
Article I.        Definitions                                                                          1


Article II.       Grant of License to Arena, Transfer of Technical Information                         4


Article III.      Compensation                                                                         4


Article IV.       Manufacturing Supply                                                                 7


Article V.        Information Exchange and Confidentiality                                             8


Article VI.       Patents and Inventions                                                               9


Article VII.      Patent Infringement and Enforcement                                                 10


Article VIII.     Representations and Warranties                                                      10


Article IX.       Indemnity                                                                           11


Article X.        Termination                                                                         12


Article XI.       Relationship of the Parties                                                         13


Article XII.      Miscellaneous Provisions                                                            13


Signature Blocks                                                                                      16
</TABLE>






   CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE PORTIONS MARKED AS ***.



                                  CONFIDENTIAL


<PAGE>   2
                                                                    CONFIDENTIAL

                                LICENSE AGREEMENT

              This License Agreement ("Agreement") is effective as of the
Effective Date (as defined below), by and between ARENA PHARMACEUTICALS, a
Delaware corporation having a place of business at 6166 Nancy Ridge Drive, San
Diego, California, 92121, United States of America ("Arena"), and SS
Pharmaceutical CO., LTD., a Japanese corporation having a place of business at
12-4, 2-Chome, Hamacho, Nihonbashi, Chuo-ku, Tokyo, 103 Japan ("SS
Pharmaceutical ").

              WHEREAS, SS Pharmaceutical is a pharmaceutical organization and
exclusively owns or has exclusive rights in and to a compound discovered and
developed by SS Pharmaceutical, referred to by SS Pharmaceutical as "T-82" (as
more fully defined below)

              WHEREAS, Arena is a biopharmaceutical organization focused on the
development of innovative therapeutics and desires to obtain certain world-wide
rights from SS Pharmaceutical in and to "T-82", in accordance with the terms of
this Agreement, to develop and commercialize such rights;

              WHEREAS, Arena and SS Pharmaceuticals each desire to enter into
this Agreement on the terms and conditions set forth herein.

              NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, Arena and SS Pharmaceuticals hereby agree as
follows:


                                    ARTICLE I
                                   DEFINITIONS

        Unless otherwise specifically provided herein, the following terms shall
have the following meanings (all referenced statutes set forth in the following
definitions are collectively appendixed to this Agreement as "Appendix A":

"Affiliate" when used with reference to a specified person, any person or entity
directly or indirectly controlling, controlled by or under common control with
the specified person, means the direct or indirect ownership of at least 50% of
the outstanding voting securities of an entity. The Parties agree that Dojin
Pharmaceutical Products Inc. shall be deemed and treated as an Affiliate of SS
Pharmaceutical.

"Annual" means a calendar year period of from January 1 through to and including
December 31 in any given year.

"Annual Net Sales" means the Annual amount of financial compensation received by
Arena for sales of T-82 Product in bona fide arm's length transactions to a
Third Party, after deduction of the following items:

        (a)   packing, transportation and insurance charges;

        (b)   credits or allowances given or made for rejection or return of
              previously sold T-82 Product;

        (c)   any tax or other governmental charge levied directly on the sale,
              transportation or delivery of T-82 Product and borne by Arena;

        (d)   any price reductions and/or price rebates, retroactive or
              otherwise imposed, by governmental authorities; and
<PAGE>   3
                                                                    CONFIDENTIAL

        (e)   any royalties which Arena is required to pay to a Third Party to
              make, have made, use, have used, sell, have sold, import or have
              imported T-82 and/or T-82 Product.

"Arena" means Arena and its Affiliates.

"Arena Exclusive Territory" means the universe, excluding only SS Pharmaceutical
Exclusive Territory and the Semi-Exclusive Territory.

"Best Reasonably Commercial Efforts" means efforts to achieve a designated
objective, which efforts are based upon reasonably prudent business factors and
considerations.

"Collaborator" means an individual or entity, other than an Affiliate, working
under the direction of, or in conjunction with, a Party.

"Effective Date" means the date on which the last of either Arena or SS
Pharmaceuticals has signed this Agreement.

"FDA" means the United States Food and Drug Administration.

"FDA Approval Date" means to date upon which Arena receives a written
communication from FDA granting Marketing Authorization for T-82 Product.

"GMP" means Good Manufacturing Practice in the manufacturing, processing,
packaging or holding of drugs as set forth in 21 C.F.R. Section 211 (including
any and all sub-parts thereto), including any and all amendments, modifications
or changes thereto as may be made in the future.

"Marketing Authorization" means the granting or authorization, by an appropriate
governmental agency, to commercialize a pharmaceutical product.

"Party" means either Arena or SS Pharmaceuticals, as the case may be; "Parties"
means both Arena and SS Pharmceuticals.

"Phase 1 Clinical Study" shall have the same meaning as set forth in 21 C.F.R.
Section 312.21(a)(1) and (2), including any and all amendments, modifications or
changes as may be made thereto in the future.

"Phase 2 Clinical Study" shall have the same meaning as set forth in 21 C.F.R.
Section 312.21(b), including any and all amendments, modifications or changes
thereto as may be made thereto in the future.

"Phase 3 Clinical Study" shall have the same meaning as set forth in 21 C.F.R.
Section 312.21(c), including any and all amendments, modifications or changes
thereto as may be made thereto in the future.

"European Regulatory Agency" means a governmental agency of any major European
nation (i.e., United Kingdom, Germany, France, Italy and Spain) that has the
authority to issue or grant Marketing Authorization.

"Semi-Exclusive Territory" means China, Taiwan, Singapore, Malaysia, Indonesia,
Thailand, South Korea, North Korea, Philippines, and Burma.



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                                                                    CONFIDENTIAL

"SS Pharmaceuticals " means SS Pharmaceuticals and its Affiliates.

"SS Pharmaceutical Patent Rights" means all present and/or future patents
(including inventor's certificates) and all present and/or future applications
(including provisional applications) therefor throughout the world as the case
may be, and substitutions, extensions, reissues, renewals, divisions,
continuations, or continuation-in-part thereof or therefor, owned or controlled
(either fully or partially) by SS Pharmaceuticals, or under which SS
Pharmaceuticals may grant licenses or sublicenses, to the extent they related to
the T-82 and/or T-82 Product. A list of SS Pharmaceuticals Patent Rights is set
forth in Appendix B; such list shall be updated as necessitated by the issuance
or expansion of additional SS Pharmaceutical Patent Rights.

"SS Pharmaceutical Exclusive Territory" means Japan.

"Successful Completion" when used in conjunction with the phrases "Phase 1
Clinical Study"; "Phase 2 Clinical Study"; or "Phase 3 Clinical Study" means
that the results of such clinical study have been fully analyzed whereby the
results of such fully analyzed study would warrant a decision, based upon the
exercise of reasonably prudent business factors and considerations, to proceed,
for example, from one clinical study to the next; as an example, "Successful
Completion" of Phase 2 Clinical Study would mean that based upon review of the
fully analyzed data from Phase 2 Clinical Study, and by exercising reasonably
prudent business factors and considerations, initiation of Phase 3 Clinical
Study is warranted; as an additional example, "Successful Completion" of Phase 3
Clinical Study would mean that based upon review of the fully analyzed data from
Phase 3 Clinical Study, and by exercising reasonably prudent business factors
and considerations, seeking Marketing Authorization from a regulatory agency is
warranted.

"T-82" means a compound as disclosed and claimed in U.S. Patent Nos. 5,190,951;
5,240,934; and 5,300,517, including any and all derivatives of such compound
having similar activity (whether now existing or developed in the future by SS
Pharmaceutical), and further including related compounds having similar activity
to T-82 (whether now existing or developed in the future by SS Pharmaceutical).

"T-82 Manufacturing Costs" means the actual costs incurred by SS Pharmaceutical
in the manufacture of T-82 and/or T-82 Product under GMP standards.

"T-82 Product" means a finished dosage form of T-82 for use in humans.

"Technical Information" means all information, trade secrets, know-how, methods
of manufacture, processes, documents and materials, related to T-82 and/or T-82
Product, and other proprietary information, whether patentable or unpatentable,
related to T-82 and/or T-82 Product that are owned or possessed by SS
Pharmaceutical, whether now existing or hereafter developed.

"Technology" means SS Pharmaceutical Patent Rights and Technical Information.

"Third Party" means any entity other than a Party, Collaborator of Affiliate.



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                                                                    CONFIDENTIAL

"Valid Claim" means a claim, covering T-82 and/or T-82 Product, of an issued and
unexpired patent which claim has not been held unenforceable, unpatentable or
invalid by court or other governmental agency of competent jurisdiction and has
not been admitted to be invalid or unenforceable through reissue or disclaimer
or otherwise.

                                   ARTICLE II
                            GRANT OF LICENSE TO ARENA
                        TRANSFER OF TECHNICAL INFORMATION


        2.1 Grant. Subject to the terms and conditions of this Agreement, SS
Pharmaceutical grants to Arena the following:

             (a)    an exclusive right and license, exclusive even as to SS
                    Pharmaceutical, to use, have used, sell, have sold, import,
                    have imported, further develop, improve and otherwise
                    exploit in any manner the Technology in the Arena Exclusive
                    Territory, including the right to sublicense the rights
                    granted to Arena by SS Pharmaceutical hereunder;

             (b)    a semi-exclusive right and license (together with SS
                    Pharmaceuticals) to use, have used, sell, have sold, import,
                    have imported, further develop, improve and otherwise
                    exploit in any manner the Technology in the Semi-Exclusive
                    Territory, including the right to sublicense the rights
                    granted to Arena by SS Pharmaceutical hereunder.

        2.2 Transfer of Technical Information. Within forty-five (45) days
following the Effective Date, SS Pharmaceutical shall make available to Arena a
copy of all Technical Information owned or possessed by SS Pharmaceutical as of
the Effective Date.

        2.3 Improvements.

             (a)    SS Pharmaceutical shall notify Arena, in writing, of any SS
                    Pharmaceutical Patent Rights within thirty (30) days of the
                    discovery or development of such SS Pharmaceutical Patent
                    Rights;

             (b)    SS Pharmaceutical shall notify Arena, in writing, of any
                    Technical Information within thirty (30) days of the
                    discovery or development of such Technical Information.

             (c)    The obligations of Section 2.3 of this Agreement shall be
                    continuing throughout the term of this Agreement.


                                   ARTICLE III
                                  COMPENSATION

        3.1 Payments. All financial payments outlined in this Agreement shall be
made in U.S. dollars.

        3.2 Milestone Payments. When applicable, Arena shall make the following
milestone payments to SS Pharmaceutical:



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                                                                    CONFIDENTIAL


             (a)    Phase 2 Clinical Study Milestone Payment


                    (1)  Upon Successful Completion of Phase 2 Clinical Study of
                         T-82 for a first indication, Arena shall pay to SS
                         Pharmaceutical *************************
                         *************************.

                    (2)  Upon Successful Completion of Phase 2 Clinical Study of
                         T-82 for an indication other than the first indication
                         ("Phase 2 Subsequent Indication"), Arena shall pay to
                         SS Pharmaceutical *****************
                         *******************************.

                    (3)  The Parties agree that the maximum amount of Phase 2
                         Clinical Study Milestone Payment(s) that Arena would be
                         required to pay to SS Pharmaceutical under this
                         Agreement is ********************** *****************.

             (b)    Phase 3 Clinical Study Milestone Payment(s)

                    (1)  Upon Successful Completion of Phase 3 Clinical Study of
                         T-82 for a first indication, Arena shall pay to SS
                         Pharmaceutical *************************
                         *************************.

                    (2)  Upon Successful Completion of Phase 3 Clinical Study of
                         T-82 for an indication other than the first indication
                         ("Phase 3 Subsequent Indication"), Arena shall pay to
                         SS Pharmaceutical *****************
                         ****************************.

                    (3)  The Parties agree that the maximum amount of Phase 3
                         Clinical Study Milestone Payment(s) that Arena would be
                         required to pay to SS Pharmaceutical under this
                         Agreement is *********************************
                         **********************.

             (c)    FDA Marketing Approval Milestone(s).

                    (1)  Within thirty (30) days of FDA Approval Date for a
                         first indication, Arena shall pay to SS Pharmaceutical
                         *************************.

                    (2)  Within thirty (30) days of FDA Approval Date for an
                         indication other than a first indication ("Subsequent
                         Indication Marketing Authorization in U.S."), Arena
                         shall pay to SS Pharmaceutical ******************
                         *************.

                    (3)  The Parties agree that the maximum amount of FDA
                         Marketing Authorization Milestone(s) that Arena would



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                                                                    CONFIDENTIAL

                         be required to pay to SS Pharmaceutical under this
                         Agreement is ********************************.

             (d)    European Community Marketing Approval Milestone(s).

                    (1)  Within thirty (30) days of receipt by Arena from a
                         European Regulatory Agency of Marketing Authorization
                         for T-82 Product for a first indication, Arena shall
                         pay to SS Pharmaceutical **** ******* ****************
                         **********.

                    (2)  Within thirty (30) days of receipt by Arena from a
                         European Regulatory Agency of Marketing Authorization
                         for T-82 Product for an indication other than a first
                         indication ("Subsequent Indication Marketing
                         Authorization in Europe"), Arena shall pay to SS
                         Pharmaceutical *********************
                         *******************.

                    (3)  The Parties agree that the maximum amount of European
                         Community Marketing Approval Milestone(s) that Arena
                         would be required to pay to SS Pharmaceutical under
                         this Agreement is ********* **********************.

        3.3 Royalty.

             (a)    Arena shall pay to SS Pharmaceutical royalty payment(s)
                    based upon the total Annual Net Sales of T-82 Product (1) by
                    Arena in the Arena Exclusive Territory; and (2) by Arena in
                    the Semi-Exclusive Territory, structured as follows:

                    (1)  for total Annual Net Sales of T-82 Product (covered by
                         Valid Claims) of up to *********************
                         ************************ the royalty shall be ***
                         *******************************.

                    (2)  for total Annual Net Sales of T-82 Product (covered by
                         Valid Claims) of greater than ***************
                         *******************************, the royalty shall be
                         ******************************** of any such amount
                         above ************.

        3.4 Marketing Approval Efforts. Arena shall use its Best Reasonably
Commercial Efforts in diligently and effectively preparing for, prosecuting and
procuring Marketing Approval from FDA and European Regulatory Agency for T-82
Product in the Arena Exclusive Territory, and Marketing Approval for T-82
Product in the Semi-Exclusive Territory, at Arena's sole responsibility. Arena
further agrees to inform SS Pharmaceutical as to the status and progress of such
efforts during the term of this Agreement.

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                                                                    CONFIDENTIAL

                                   ARTICLE IV
                              MANUFACTURING SUPPLY

        4.1 Manufacture of T-82 and T-82 Product. SS Pharmaceutical agrees,
represents and warrants that it has facilities and capabilities necessary for
the manufacture of T-82 and the manufacture of T-82 Product under GMP standards,
and further agrees, represents and warrants that T-82 and T-82 Product shall be
manufactured by SS Pharmaceutical and supplied to Arena in accordance with GMP
standards.

        4.2 Supply of T-82 and T-82 Product.

             (a)    For T-82 and T-82 Product supplied to Arena in accordance
                    with Section 4.1 of this Agreement which is not for sale by
                    Arena, such as for clinical trials ("Non-Commercial
                    Supply"), SS Pharmaceutical shall supply such Non-Commercial
                    Supply to Arena free of charge.

             (b)    For T-82 and T-82 Product supplied to Arena in accordance
                    with Section 4.1 of this Agreement which is commercialized
                    by Arena ("Commercial Supply"), SS Pharmaceutical shall
                    supply such Commercial Supply to Arena, *******************
                    ********, and invoice Arena for T-82 Manufacturing Costs
                    incurred by SS Pharmaceuticals in manufacturing Commercial
                    Supply, plus an additional ***************** of such costs
                    ("Commercial Supply Costs"). The Parties agree to discuss in
                    good faith Commercial Supply Costs prior to the first
                    shipment by SS Pharmaceutical of Commercial Supply, and to
                    agree upon Commercial Supply Costs within one-hundred and
                    eighty (180) days of the first shipment by SS Pharmaceutical
                    of Commercial Supply.

                    (1)  Arena shall be permitted to analyze any such Commercial
                         Supply within thirty (30) days of receipt thereof in
                         accordance with quality assurance standards mutually
                         agreed to by the Parties.

                    (2)  In the event that any Commercial Supply does not meet
                         such mutually agreed to quality assurance standards,
                         Arena shall:

                         a.   not be required to pay such invoiced Commercial
                              Supply Costs; and

                         b.   Arena may return (at SS Pharmaceutical's expense),
                              at Arena's sole discretion, such Commercial
                              Supply.

                    (3)  In the event that any such Commercial Supply meets such
                         mutually agreed to quality assurance standards, Arena
                         shall pay SS Pharmaceuticals, within thirty (30) days
                         of such analysis, such invoiced Commercial Supply
                         Costs.

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                                                                    CONFIDENTIAL

                    (4)  In order to verify the completeness and correctness of
                         Commercial Supply Costs, SS Pharmaceutical shall
                         maintain up to date books and records and Arena shall
                         each have the right to conduct, through independent
                         Certified Public Accountants, at any reasonable time
                         during business hours, and upon reasonable prior
                         notice, an audit of the accounting procedures and
                         records of SS Pharmaceutical in computing and
                         calculating Commercial Supply Cost due hereunder. The
                         auditor shall make available to SS Pharmaceutical and
                         Arena a report enumerating the period covered by the
                         audit T-82 Manufacturing Costs, and the Commercial
                         Supply Costs computed and calculated by the auditor.
                         The costs of such audit shall be borne by SS
                         Pharmaceutical in the event that a discrepancy of more
                         than ****************** is discovered through such
                         audit.

             (c)    In the event that SS Pharmaceutical is unable or unwilling
                    to provide Commercial Supply to Arena within a reasonable
                    period of time (not exceeding 90 days after written request
                    by Arena), then Arena shall have the right to have
                    Collaborator or Third Party manufacture and provide such
                    Commercial Supply to Arena.

             (d)    Drug Master File. SS Pharmaceuticals shall be responsible
                    for the preparation and submission of a drug master file
                    with FDA (as set forth in 21 C.F.R Section 314.420(b)) and,
                    if requested by Arena, European Regulatory Agency.

                                    ARTICLE V
                    INFORMATION EXCHANGE AND CONFIDENTIALITY

        5.1 Delivery of SS Pharmaceutical Patent Rights. During the term of this
Agreement, SS Pharmaceutical shall have a continuing obligation to provide any
and all information pertinent to SS Pharmaceutical Patent Rights to Arena.

        5.2 Delivery of Technical Information. During the term of this
Agreement, SS Pharmaceutical shall have a continuing obligation to provide any
and all information pertinent to Technical Information to Arena.

        5.3 Pre-Clinical and Clinical Data. The Parties agree to share all
available pre-clinical and clinical data related to T-82 and/or T-82 Product
which each Party develops, free of charge, including, but not limited to, any
New Drug Application prepared for filing with the FDA and/or European Regulatory
Agency by Arena.

        5.4 Confidentiality. All information provided by one Party to the other
Party or its agents under this Agreement shall be regarded as confidential to
the extent that such information is designated and marked as "CONFIDENTIAL",
except information which, as can be established by the receiving Party by
competent evidence:



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                                                                    CONFIDENTIAL

             (a)    was already known, otherwise than under an agreement of
                    secrecy or non-use, by the receiving Party at the time of
                    its disclosure by the furnishing Party;

             (b)    has passed into the public domain prior to or after its
                    disclosure by the disclosing Party otherwise than through
                    any act or omission attributable to officers, employees,
                    consultants or agents of the receiving Party; or

             (c)    was subsequently disclosed, otherwise than under an
                    agreement of secrecy or non-use, to the receiving Party by a
                    Third Party that had not acquired the information under an
                    obligation of confidentiality to the disclosing Party.

Notwithstanding the foregoing, each Party may disclose the other's confidential
information to the extent such disclosure is reasonably necessary to comply with
government regulations. The foregoing obligations of confidentiality shall
survive for five (5) years after any termination or expiration of this
Agreement. All financial terms of this Agreement are considered CONFIDENTIAL by
Arena.


                                   ARTICLE VI
                             PATENTS AND INVENTIONS

        6.1 Title in Inventions. Each Party shall have and retain sole title in
inventions, whether or not patentable, made solely by it or on its behalf (as by
its employees or agents) in the course of work performed under this Agreement
which is directed to making, having made, using, having used, selling, having
sold, importing, or having imported subject matter falling within the scope of
SS Pharmaceutical Patent Rights. Any inventions made by at least one employee or
agent of SS Pharmaceutical and at least one employee or agent of Arena after the
Effective Date shall be referred to as "Joint Inventions", and all such Joint
Inventions shall be jointly owned by Arena and SS Pharmaceutical. The Parties
hereby agree to fully cooperate in the execution of all documents necessary to
effectuate such joint ownership in and to such Joint Inventions.

        6.2 Registration. The Parties agree that Arena has the right during the
term of this Agreement to be registered in any part of the territory in which
the rights granted hereunder apply as the exclusive licensee of SS
Pharmaceutical for SS Pharmaceutical Patent Rights. SS Pharmaceutical agrees to
cooperate in such registration. Upon any termination of this Agreement, Arena
agrees that it shall promptly take all steps necessary to remove Arena as a
registered licensee of such SS Pharmaceutical Patent Rights.

        6.3 Prosecution Patent Rights. Throughout the term of this Agreement, SS
Pharmaceutical shall be responsible for prosecution and maintenance of SS
Pharmaceutical Patent Rights, and SS Pharmaceutical shall take no action, nor
fail to take any required action, which shall jeopardize and/or abandon SS
Pharmaceutical Patent Rights, without the concurrence of Arena. As of the
Effective Date, Arena shall have the right, but not the obligation, to assist in
strategic decisions involving the prosecution of SS Pharmaceutical Patent Rights
in the Arena Exclusive Territory and in the Semi-Exclusive Territory, including,
but not limited to, the right to retain counsel for such prosecution and the
right to make all strategic decisions involving the prosecution of SS
Pharmaceutical Patent Rights. No extensions of time to respond to any official
action involving SS Pharmaceutical Patent Rights shall be permitted after the
Effective Date without the concurrence of Arena, and SS Pharmaceutical shall
provide Arena with a minimum of



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                                                                    CONFIDENTIAL

fourteen (14) days to review any proposed response to any official action prior
to the due date of such response.


                                   ARTICLE VII
                       PATENT INFRINGEMENT AND ENFORCEMENT

        7.1 Notification of Infringement. Each Party shall promptly notify the
other of any infringement (of which it becomes aware) of any of the SS
Pharmaceutical Patent Rights and/or Joint Inventions by Third Parties and shall
provide the other Party with any available evidence of such infringement.

        7.2 Suit for Infringement. Upon reasonable notice of infringement, Arena
shall have the opportunity to bring any suit or action for infringement of the
SS Pharmaceutical Patent Rights in the Arena Exclusive Territory and/or Joint
Inventions in any territory. Any such action shall be solely at Arena's expense,
and any amount recovered, whether by judgment, award, decree or settlement,
shall belong entirely to Arena. SS Pharmaceutical shall, if requested by Arena,
actively assist in the prosecution of such action. The Parties agree to
cooperate in any decision regarding any suit or action for infringement of the
SS Pharmaceutical Patent Rights in the Semi-Exclusive Territory.


                                  ARTICLE VIII
                          REPRESENTATION AND WARRANTIES

        8.1 Representations and Warranties of SS Pharmaceutical. SS
Pharmaceutical represents and warrants to Arena as follows:

             (a)    The execution and delivery of this Agreement have been duly
                    and validly authorized, and all necessary action has been
                    taken to make this Agreement a legal, valid and binding
                    obligation of SS Pharmaceutical enforceable in accordance
                    with its terms.

             (b)    The execution and delivery of this Agreement and the
                    performance by SS Pharmaceutical of its obligations
                    hereunder will not contravene or result in the breach of the
                    Certificate of Incorporation or Bylaws of SS Pharmaceutical
                    or result in any material breach or violation of or material
                    default under any material agreement, indenture, license,
                    instrument or understanding or, to the best of its
                    knowledge, result in any law, rule, regulation, statute,
                    order or decree to which SS Pharmaceutical or its Affiliates
                    is a party or by which any of them or any of their property
                    is subject.

             (c)    SS Pharmaceutical has not received notice of any claim that
                    any of the Technology infringe upon any Third Party's
                    know-how, patent or other intellectual property rights.

             (d)    SS Pharmaceutical is the exclusive owner of the SS
                    Pharmaceutical Patent Rights and is otherwise the exclusive
                    owner or licensee of all other Technology.



                                      -10-
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                                                                    CONFIDENTIAL

        8.2 Representations and Warranties of Arena. Arena represents and
warrants to SS Pharmaceutical as follows:

             (a)    It is a corporation duly organized, validly existing and in
                    good standing under the laws of the State of Delaware.

             (b)    The execution and delivery of this Agreement have been duly
                    and validly authorized, and all necessary action has been
                    taken to make this Agreement a legal, valid and binding
                    obligation of Arena enforceable in accordance with its
                    terms.

             (c)    The execution and delivery of this Agreement and the
                    performance by Arena of its obligations hereunder will not
                    contravene or result in the breach of the Certificate of
                    Incorporation or Bylaws of Arena or result in any material
                    breach or violation of or material default under any
                    material agreement, indenture, license, instrument or
                    understanding or, to the best of its knowledge, result in
                    any law, rule, regulation, statute, order or decree to which
                    Arena or its Affiliates is a party or by which any of them
                    or any of their property is subject.


                                   ARTICLE IX
                                    INDEMNITY

        9.1 Indemnification by SS Pharmaceutical. SS Pharmaceutical will
indemnify and hold harmless Arena and its Affiliates, employees, officers,
directors, shareholders and agents (an "Arena Indemnified Party") from and
against all liability, loss, damages, costs and expenses (including reasonable
attorneys' fees) which Arena Indemnified Party may incur, suffer or be required
to pay resulting from or arising in connection with (i) the breach by SS
Pharmaceutical of any covenant, representation or warranty of SS Pharmaceutical
obtained in this Agreement, or (ii) the successful enforcement by Arena
Indemnified Party of any of the foregoing.

        9.2 Indemnification by Arena. Arena will indemnify and hold harmless SS
Pharmaceutical and its Affiliates, employees, officers, directors, shareholders
and agents (an "SS Pharmaceutical Indemnified Party") from and against all
liability, loss, damages, costs and expenses (including reasonable attorneys'
fees) which SS Pharmaceutical Indemnified Party may incur, suffer or be required
to pay resulting from or arising in connection with (i) the breach by Arena of
any covenant, representation or warranty of Arena obtained in this Agreement, or
(ii) the successful enforcement by SS Pharmaceutical Indemnified Party of any of
the foregoing.

        9.3 Conditions to Indemnification. The obligations of the indemnifying
party under Sections 9.1 and 9.2 of this Agreement are conditioned upon the
prompt notification to the indemnifying party of any of the aforementioned suits
or claims in writing within fifteen (15) days after receipt of notice by the
indemnified party of such suit or claim. The indemnifying party shall have the
right to assume the defense of any such suit or claim unless, in the reasoned
judgment of the indemnified party, such suit or claim involves an issue or
matter which could have a materially adverse effect on the business, operations
or assets of the indemnified party, in which event the indemnified party may
participate in the defense of such suit or claim at its sole cost and expense.
The provision for



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                                                                    CONFIDENTIAL

indemnification shall be void and there shall be no liability against a party as
to any suit or claim for which settlement or compromise or an offer of
settlement or compromise is made without the prior consent of the indemnifying
party.


                                    ARTICLE X
                                   TERMINATION

        10.1 Breach. Failure by either Party to comply with any of its material
obligations contained in the Agreement shall entitle the other Party to give
notice to the Party in default specifying the nature of the default and
requiring it to cure such default. If such default is not cured within ninety
(90) days after receipt of such notice, the notifying Party shall be entitled,
without prejudice to any of its other rights conferred on it by this Agreement,
to terminate this Agreement and the licenses granted to the breaching Party
hereunder with immediate effect by giving notice to such termination. The right
of either Party to terminate this Agreement as herein provided shall not be
affected in any way by its waiver of, or failure to take action with respect to,
any previous default.

        10.2 Termination of this Agreement.

             (a)    This Agreement shall terminate automatically upon expiration
                    of the last to expire SS Pharmaceutical Patent Rights,
                    subject, however, to continuation of the licenses granted
                    hereunder according to their respective terms, and the
                    survival of the Parties' respective obligations under
                    Section 5.4 regarding confidentiality, Article 9 regarding
                    indemnification, Section 12.8 regarding governing law and
                    Section 12.11 regarding notice.

             (b)    Upon written Notice, Arena may also terminate this Agreement
                    without cause by

                    (1)  returning SS Pharmaceutical Patent Rights to SS
                         Pharmaceutical;

                    (2)  providing or granting access to SS Pharmaceutical (or
                         its designee) all pre-clinical and clinical data
                         generated by Arena regarding T-82 and/or T-82 Product,
                         without cost to SS Pharmaceutical; and

                    (3)  providing or granting access to SS Pharmaceutical (or
                         its designee) any Marketing Approval obtained by Arena,
                         without cost to SS Pharmaceutical.

             (c)    SS Pharmaceutical shall be entitled to terminate this
                    Agreement in the event of

                    (1)  insolvency of Arena or commencement of bankruptcy
                         proceedings by Arena; or

                    (2)  dissolution of Arena by Arena, or liquidation of Arena
                         by Arena.



                                      -12-
<PAGE>   14
                                                                    CONFIDENTIAL

                    (3)  The Parties agree that in the event that Arena
                         sublicenses any of the rights granted to it under this
                         Agreement to a Third Party, such sublicense shall
                         include provisions whereby if such sublicensee(s)
                         becomes insolvent, commences bankruptcy proceedings,
                         dissolves, and/or liquidates its assets, any and all
                         rights granted by Arena to such sublicensee(s) shall
                         automatically revert back to Arena.

        10.3 Accrued Rights; Surviving Obligations. Termination or expiration of
this Agreement for any reason shall be without prejudice to any rights which
shall have accrued to the benefit of either Party prior to such termination or
expiration, nor shall such termination or expiration relieve either Party from
obligations which are expressly indicated to survive termination or expiration
of this Agreement.


                                   ARTICLE XI
              RELATIONSHIP OF THE PARTIES - INDEPENDENT CONTRACTOR

        11.1 Nothing in this Agreement is intended or shall be deemed to
constitute a partnership, agency, employer-employee, or joint venture
relationship between the Parties. All activities by each Party hereunder shall
be provided as an independent contractor. No Party shall incur any debts or make
any commitments for the other, except to the extent, if at all, specifically
provided herein.


                                   ARTICLE XII
                            MISCELLANEOUS PROVISIONS

        12.1 Limitations on Assignment. Neither this Agreement nor any interest
hereunder shall be assignable or transferable by SS Pharmaceutical without the
prior written consent of Arena.

        12.2 Further Acts and Instruments. Each Party hereto agrees to execute,
acknowledge and deliver such further instruments and to do all such other acts
as may be necessary or appropriate to carry out the purpose and intent of this
Agreement.

        12.3 Entire Agreement. This Agreement constitutes and contains the
entire agreement of the Parties and supersedes any and all prior negotiations,
correspondence, understandings, Letters of Intent and agreements between the
Parties respecting the subject matter hereof. This Agreement may be amended or
modified or one or more provisions hereof waived only by a written instrument
signed by the Parties.

        12.4 Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded.

        12.5 Captions. The captions to this Agreement are for convenience only
and are to be of no force or effect in construing and interpreting the
provisions of this Agreement.

                                      -13-
<PAGE>   15
                                                                    CONFIDENTIAL

        12.6 Force Majeure. Neither Party shall be liable to the other for loss
or damages, or have any right to terminate this Agreement for any default or
delay, attributable to any act of God, flood, fire, explosion, breakdown or
plant strike, lockout, labor dispute, casualty, accident, war, revolution, civil
commotion, act of a public enemy, blockage, embargo, injunction, law, order,
proclamation, regulation, ordinance, demand or requirement of any government or
subdivision, authority or representative of any government, or any other cause
beyond the reasonable control of such Party.

        12.7 No Trade Name or Trademark License.

             (a)    No right, express or implied, is granted by this Agreement
                    to SS Pharmaceutical, Affiliates of SS Pharmaceutical, SS
                    Pharmaceutical Collaborators or SS Pharmaceutical licensees
                    to use in any manner the name "Arena," "Arena
                    Pharmaceuticals," or any trade name or trademark or Arena in
                    any business dealing which is not directly connected with
                    the performance of this Agreement; provided, however, that
                    SS Pharmaceutical shall have the right to use or disclose
                    the name Arena only to the extent and the manner as may be
                    required by law.

             (b)    No right, express or implied, is granted by this Agreement
                    to Arena, Affiliates of Arena, Arena Collaborators or Arena
                    licensees to use in any manner the name "SS Pharmaceutical"
                    or any trade name or trademark of SS Pharmaceutical in any
                    business dealing which is not directly connected with the
                    performance of this Agreement; provided, however, that Arena
                    shall have the right to use or disclose the name SS
                    Pharmaceutical only to the extent and the manner as may be
                    required by law.

             (c)    During the term of this Agreement, either Party may issue a
                    press release regarding the acceptance of this Agreement by
                    the Parties, with prior notification to the other Party.

        12.8 Governing Law; Consent to Jurisdiction. This Agreement shall be
governed by and construed under the laws of the State of Delaware, excluding any
conflict of law provisions.

        12.9 Expenses. Except as otherwise provided herein, each Party hereto
shall bear its legal and other expenses incurred in connection with the
negotiation, execution, delivery and performance of this Agreement.

        12.10 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.

        12.11 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the Party to be notified or upon
deposit with the United States Post Office registered or certified mail, postage
prepaid, or upon deposit with an internationally recognized express courier with
proof of delivery, postage prepaid and addressed to the Party to be notified at
the address or addresses indicated below, or at such



                                      -14-
<PAGE>   16
                                                                    CONFIDENTIAL

other address as such Party may designate by ten (10) days' advance written
notice to the other Party with copies to be provided as follows:

                  If to Arena, addressed to:

                           Arena Pharmaceuticals
                           6166 Nancy Ridge Drive
                           San Diego, CA  92121
                           Attention:       Jack Lief
                                            President and CEO
                           Fax: (619) 453-7210

                           with a copy to:  Richard P. Burgoon, Jr.
                                            Reed Smith Shaw & McClay LLP
                                            435 Sixth Avenue
                                            Pittsburgh, PA 15219
                           Fax: (412) 288-3063

                  If to SS Pharmaceutical, addressed to:

                          SS Pharmaceutical Co., Ltd.
                          12-4 Chome, Hamacho
                          Nihonbashi, Chuo-ku
                          Tokyo 103
                          Japan
                          Attention:        Hiroshi Numata, Ph.D.
                                            Board Director
                                            General Manager
                                            New Drug Planning & Coordination
                                            Business Development
                          Fax:  011-81-33865-9917



                                      -15-
<PAGE>   17
                                                                    CONFIDENTIAL

        WHEREUPON, the Parties have caused this Agreement to be executed by
their duly authorized agents, as of the dates listed below.

                                       ARENA PHARMACEUTICALS


Date:   January 23, 1998               By:   /s/ JACK LIEF
      --------------------                -----------------------------------
                                       Name: Jack Lief
                                       Title: President & CEO

                                       SS PHARMACEUTICAL CO., LTD.

Date:   16 January, 1998               By:   /s/ NAOKATA TAIDO
      --------------------------          -----------------------------------
                                       Name: Naokata Taido, Ph.D.
                                       Title:   President and CEO

************



                                      -16-
<PAGE>   18

                                                                    CONFIDENTIAL




                                                                      APPENDIX A

                              STATUTORY REFERENCES


















                                       A-1


<PAGE>   19
                                                                    CONFIDENTIAL

                                                                      APPENDIX B


                         SS PHARMACEUTICAL PATENT RIGHTS

United States:             US Patent No. 5,190,951
                           US Patent No. 5,240,934
                           US Patent No. 5,300,517

Japan:                     Japanese Patent No. 1,954,459

Taiwan:                    Taiwan Patent No. 57,676

Korea:                     Korean Application No. 18237/1991
                                    (Laid Open No. 92-8024)

Canada:                    Canadian Application No. 2,053,640-3
                                    (Laid Open No. 2,053,640)

Europe:                    European Application No. 91117581.8
                                    (Laid Open No. 0481429A2)















                                       B-1

<PAGE>   20


                              ADDENDUM NUMBER 1 TO
                       JANUARY 23, 1998 AGREEMENT BETWEEN
                            ARENA PHARMACEUTICALS AND
                           SS PHARMACEUTICAL CO., INC.

        This ADDENDUM NUMBER 1 TO JANUARY 23, 1998 AGREEMENT BETWEEN ARENA
PHARMACEUTICALS AND SS PHARMACEUTICAL CO., LTD. ("Addendum") is entered into as
of the date on which the last of either Arena Pharmaceuticals, Inc. ("Arena") or
SSP Co., Ltd. ("SSP") has signed this Addendum.

        WHEREAS, on January 23, 1998, Arena and SSP entered into a License
Agreement pertaining to a chemical compound referred to therein as T-82 ("T-82
Agreement"); and

        WHEREAS, in accordance with the terms of the T-82 Agreement, Arena has
initiated human clinical studies of T-82 within the United States; and

        WHEREAS, in conjunction with such clinical studies of T-82, Arena has
secured liability insurance coverage in the amount of ******************* per
occurrence/aggregate ("Clinical Study Insurance"); and

        WHEREAS, SSP has requested that during the clinical studies of T-82 in
the United States, SSP be named as an additional insured under the Clinical
Study Insurance; and

        WHEREAS, Arena, to the extent permitted by law, is desirous of naming
SSP as an additional insured under the Clinical Study Insurance during the
clinical studies of T-82 in the United States.

        NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

        1. The T-82 Agreement Remains in Full Force and Effect. Except as
expressly modified by this Amendment, no other changes are being made to the
T-82 Agreement and the T-82 Agreement shall remain in full force and effect.

        2. Amendment to the T-82 Agreement. The T-82 Agreement is hereby amended
as follows:

             A.     By ADDING the following new section 9.4(a) to page 12 of the
                    T-82 Agreement:

                    "(a). Arena shall, during the clinical investigation of
                    T-82, and to the extent permitted by law, add SS
                    Pharmaceutical as an additional insured to Arena's Insurance
                    Policy Number ADT 1089982314 ("Insurance"). Information
                    pertaining to such Insurance is as follows:

                          INSURANCE COMPANY: Columbia Casualty Company

                          COVERAGE:          Products-Completed Operation
                                             (Claims Covered)

   CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE PORTIONS MARKED AS ***.


<PAGE>   21

                          POLICY PERIOD:            January 18, 1999 to
                                                    January 18, 2000

                          LIMITS:                   ********** per
                                                    occurrence/aggregate

                          DEDUCTIBLE:               ****** per occurrence,
                                                    ******* aggregate

                          PREMIUM:                  *******

                    The Parties agree that the deductible shall be split on a
                    50:50 basis between Arena and SS Pharmaceutical for any
                    claim made under the above-defined coverage during the
                    above-defined policy period. The Parties further agree that
                    Arena shall pay for the above-defined premium. The Parties
                    further agree that in the event that SS Pharmaceutical
                    desires to increase the above-defined limits, SS
                    Pharmaceutical shall provide Notice to Arena and Arena shall
                    thereafter, and to the extent permitted by law, seek to have
                    such limits increased; SS Pharmaceutical agrees to pay any
                    additional premiums for any such increase in policy limits."


             B.     By ADDING the following new section 9.4(b) to page 12 of the
                    T-82 Agreement:

                    "(b). In the event that Arena is prohibited by law form
                    accomplishing the objective of Section 9.4(a) of this
                    Agreement, Section 9.4(a) shall be automatically null and
                    void, and such result shall have no effect on the remaining
                    terms and conditions of the Agreement."

        WHEREUPON, the Parties have caused this Addendum to be executed by their
duly authorized agents, as of the dates listed below.


                              ARENA PHARMACEUTICALS


Date:     April 5, 1999                By:   /s/ JACK LIEF
      -----------------                   -----------------------------------
                                              Name: Jack Lief
                                              Title: President & CEO

                                              SSP CO., LTD.


Date:     April 5, 1999                By:   /s/ NAOKATA TAIDO
      -----------------                   -----------------------------------
                                              Name: Naokata Taido, Ph.D.
                                              Title:   President & CEO

                       ***********************************