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                                                                    Exhibit 10.1

                                 PHOTOGEN, INC.
                             7327 Oak Ridge Highway
                               Knoxville, TN 37931
                               Voice: 865-769-4012
                                Fax: 865-769-4013



January 4, 2001


Reinhard Koenig, M.D., Ph.D., RAC
10300 Cavanaugh Court
Rockville, Maryland 20850

Dear Dr. Koenig:

                  We are pleased to extend to you our offer of employment to
join Photogen, Inc. ("Photogen" or "Company") as Senior Vice President of
Medical and Regulatory Affairs reporting directly to me, the President and Chief
Executive Officer.

                  Your employment will commence full time employment as of the
date of your acceptance. You will be provided a transition period ending on
March 31, 2001, during which you will wind up your current activities and
affairs and make arrangements to move your family to the Philadelphia area after
the close of your children's school year but not later than August 31, 2001. We
anticipate that your base of operations will be in the New Hope, Pennsylvania
area. During the transitional period, you may work from home in Maryland and
travel as needed to perform your duties.

                  Your salary, beginning January 8, 2001, for this position will
be $17,916.66 per month (less applicable withholding and deductions). Payments
will be made on a semi-monthly basis in accordance with Company policy. At the
end of your first twelve months of employment, you will receive a bonus of
$26,875. Bonuses, if any, for subsequent years of employment will be at the sole
discretion of the Board of Directors. Your expenses for Company approved travel
will be paid, subject to proper documentation.

                  The Company will provide you with the following benefits:

            o     Vacation of three weeks annually of which only one week can be
                  carried into the following year

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Reinhard Koenig, M.D., Ph.D., RAC
January 4, 2001
Page 2



            o     Nine Company holidays plus two discretionary "floating" days

            o     Company paid medical and dental coverage for you and eligible
                  dependents

            o     Salary deferral under our 401(k) Plan (currently, the Company
                  does not make any contribution to the 401(k) Plan)

            o     Long term disability B the company is working to obtain a plan
                  for all employees and you will be eligible for the plan

            o     Up to $50,000 for moving expenses, subject to documentation of
                  payment

            o     Indemnification Agreement

            o     Other benefits at the discretion of the Company

                  In addition, upon your acceptance of this offer, you will be
awarded incentive options to purchase 400,000 shares of Photogen Technologies,
Inc.'s common stock at an exercise price equal to the closing price per share on
the date of your acceptance of employment, under a four-year ratable vesting
schedule. These options are subject to the enclosed Option Award Agreement which
you are required to sign.

                  Your employment is at-will and can be terminated by you or
Photogen at any time with or without cause. However, if the Company terminates
your employment for any reason other than for cause during the first 12 months
of employment, the Company will pay you severance equal to six months of your
salary (less applicable withholding and deductions). If the Company terminates
you for any reason other than for cause after the first 12 months of employment,
the Company will pay you severance equal to 12 months of your then-current
salary (less applicable withholding and deductions). All severance payments will
be paid on a monthly basis in accordance with the Company's regular payroll
schedule. If you terminate your employment, the Company will not make any
severance payments.

                  The Company will be entitled to terminate your employment for
cause if you commit any act of dishonesty with respect to Company business, if
you misappropriate Company funds or other property, if you are charged with
criminal conduct (other than minor traffic violations), or if you breach the
Employee Confidentiality, Inventions and Noncompetition

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Reinhard Koenig, M.D., Ph.D., RAC
January 4, 2001
Page 3

Agreement. A termination for cause shall result in an immediate termination of
your employment without any severance payment and immediate termination of all
unexercised options to acquire Photogen Technologies, Inc. stock.

                  As a condition of your employment, you are also required to
sign the enclosed Employee Confidentiality, Inventions and Noncompetition
Agreement. You must also provide proof of citizenship or of your ability to be
employed in the United States.

                  Please signify your acceptance of our offer outlined above by
signing and dating this letter below and returning the original to my attention.
This offer is only open for a period of ten days. We look forward to you joining
the Photogen team.

                                        Sincerely,

                                        /s/ Taffy J. Williams

                                        Taffy Williams, Ph.D.
                                        President and Chief Executive Officer


ACCEPTED BY:

/s/ Reinhard Koenig

Reinhard Koenig, M.D., Ph.D., RAC

Dated:  January 4, 2001